Document:

Registration Rights Agreement

 Exhibit 10.37 
 Execution Version 
 REGISTRATION RIGHTS AGREEMENT 

This REGISTRATION RIGHTS AGREEMENT, dated as of April 18, 2011 (as amended, supplemented or restated from time to time, this
“Agreement”), is entered into by and between MHI Hospitality Corporation, a Maryland corporation (the “Company”), and Richmond Hill Capital Partners, LP, a Delaware limited partnership (“RHCP”), and
Essex Illiquid, LLC, a Delaware limited liability company (together with RHCP, the “Investors”). 
 RECITALS

 WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of the date hereof, between the Company and the
Investors (the “Securities Purchase Agreement”), the Investors have agreed to purchase from the Company, and the Company has agreed to sell and issue to the Investors, a total of 25,000 shares of the Company’s Series A
Cumulative Redeemable Preferred Stock; 
 WHEREAS, as contemplated by the terms of, and as an inducement and condition precedent
to the Investors entering into the Securities Purchase Agreement, the Company has agreed to issue to the Investors one or more warrants (the “Warrant”), to purchase, upon the terms set forth therein, a total of 1,900,000 shares of
the Company’s common stock, par value $0.01 per share (as further defined below, “Common Stock”); and 

WHEREAS, in connection with and as contemplated by the terms of the Warrant, the Company desires to grant to the Investors certain
registration rights with respect to the Common Stock issuable upon the exercise of the Warrant. 
 NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

Section 1. Definitions. As used in this Agreement, the following terms have the following meanings: 

“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common
control with such Person. For the purposes of this definition, the term “control” (including the terms “controlling” and “controlled”) when 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. 
 “Automatic Shelf Registration Statement” has the meaning set forth in Section 3(a). 
 “Board” means the board of directors of the Company. 

“Commission” means the U.S. Securities and Exchange Commission. 

  
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 “Common Stock” means the common stock, par value $0.01 per share, of the
Company and any other common equity securities issued by the Company, and any other shares of stock issued or issuable with respect thereto (whether by way of a stock dividend or stock split, or in exchange for or upon conversion of such shares or
otherwise in connection with a combination of shares, distribution, reclassification, recapitalization, merger, consolidation or other corporate reorganization). 
 “Demand Notice” has the meaning set forth in Section 2(a). 
 “Demand Registration” has the meaning set forth in Section 2(a). 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 

“Holders” means the Investor Holders and their Permitted Third-Party Transferees. 

“Holding Period” means the period ending on the 180th day following the date of this Agreement. 

“Investor Holders” means the Investors and their Permitted Affiliate Transferees. 

“Permitted Affiliate Transferee” means any transferee of all or any portion of the Registrable Securities held by an
Investor that is an Affiliate of such Investor and has agreed in writing for the benefit of the Company to be bound by the provisions of this Agreement. 
 “Permitted Third-Party Transferee” means (i) any transferee (other than an Investor Holder or a Permitted Affiliate Transferee) of all or any portion of the Registrable Securities
held by an Investor Holder or (ii) the subsequent transferee of all or any portion of the Registrable Securities held by any Permitted Third-Party Transferee, in each case, that has agreed in writing for the benefit of the Company to be bound
by the provisions of this Agreement. 
 “Person” means an individual or a corporation, partnership, joint
venture, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 

“Piggyback Registration” has the meaning set forth in Section 4(a). 

“Prospectus” means the prospectus or prospectuses (whether preliminary or final) included in any Registration Statement
and relating to Registrable Securities, as amended or supplemented and including all material incorporated by reference in such prospectus or prospectuses. 
 “Registrable Securities” means, with respect to any Holder: (a) any shares of Common Stock held by such Holder at any time or issuable upon conversion, exercise or exchange of any
securities (including, without limitation, the Warrant) held by such Holder at any time; and (b) any other securities issued or issuable with respect to any shares described in 

  
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clause (a) above by way of a stock dividend or stock split or in connection with a combination of shares, distribution, reclassification, recapitalization, merger, consolidation or other
corporate reorganization (it being understood that for purposes of this Agreement, a Person shall be deemed to be a Holder of Registrable Securities whenever such Person has the right to then acquire or obtain from the Company any Registrable
Securities, whether or not such acquisition has actually been effected). 
 As to any particular securities constituting
Registrable Securities, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities has become effective under the Securities Act and such securities have been disposed
of pursuant to such Registration Statement; (ii) such securities have been sold to the public pursuant to and in compliance with all applicable conditions of Rule 144; (iii) such securities may be sold to the public in a single transaction
pursuant to and in compliance with all applicable conditions of Rule 144; (iv) such securities otherwise have been transferred, the Company has delivered to the transferee a new certificate or other evidence of ownership for such securities not
bearing a Securities Act restricted security legend and such securities may be resold or otherwise transferred by such transferee without subsequent registration under the Securities Act; or (v) such securities have ceased to be outstanding.

 “Registration Statement” means any registration statement of the Company filed or to be filed with the
Commission pursuant to the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including any Prospectus or free writing Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all documents or materials incorporated by reference in such registration statement. 
 “Rule 144” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission. 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 “Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable
to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder of Registrable Securities, except for the reasonable fees and disbursements of counsel for the Holders of Registrable Securities required to be paid by the
Company pursuant to Section 7. 
 “Shelf Registration Statement” means a Registration Statement
filed with the Commission on Form S-3 (or any successor form or other appropriate form under the Securities Act) providing for the registration, and the sale on a continuous or delayed basis, of the Registrable Securities pursuant to Rule 415 under
the Securities Act. 
 “Shelf Underwritten Offering” has the meaning set forth in Section 3(b).

 “Short-Form Registration” has the meaning set forth in Section 3(a). 

  
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 “WKSI” has the meaning set forth in Section 3(a). 

Section 2. Demand Registration. 
 (a) At any time and from time to time following the last day of the Holding Period, the Investor Holders may request in writing that the Company effect the registration under the Securities Act of all or
any portion of the Registrable Securities held by the Investor Holders (each, a “Demand Notice”). Promptly after its receipt of any Demand Notice (but in no event later than 10 business days following receipt thereof), the Company
shall deliver written notice thereof to all other Holders and shall use commercially reasonable efforts to file, as promptly as practicable but in no event later than 45 days after its receipt of such Demand Notice, a Registration Statement covering
all Registrable Securities that have been requested to be registered (i) in the Demand Notice and (ii) by any other Holders by written notice to the Company delivered within 10 days after the date on which the Company has given such
Holders notice of the Demand Notice, in accordance with the methods(s) of distribution specified by the Investor Holders in the Demand Notice. Any registration requested pursuant to this Section 2(a) or pursuant to
Section 3(a) is referred to herein as a “Demand Registration.” 
 (b) Subject
to Section 3(a), the Company shall not be required to effect more than two Demand Registrations (other than non-underwritten Short-Form Registrations pursuant to Section 3) and Shelf Underwritten Offerings in the aggregate;
provided, that a Registration Statement shall not count as a Demand Registration requested under Section 2(a) unless and until it has become effective and the Holders requesting such registration are able to register and sell at
least 50% of the Registrable Securities requested to be included in such registration. The Company shall not be obligated to effect any Demand Registration if the Registrable Securities to be included in such Registration Statement do not have an
anticipated aggregate public offering price (before any underwriting discounts and commissions), determined by the Company in good faith, of at least $1,000,000. The Company shall not be obligated to effect any Demand Registration during the period
starting with the date 60 days prior to the Company’s good faith estimate of the date of filing of, and ending on the 180th day immediately following the effective date of, any registration statement pertaining to securities of the Company
(other than (i) a registration effected solely to implement an employee benefit plan or a transaction to which Rule 145 under the Securities Act is applicable or (ii) a Registration Statement on Form S-4, S-8 or any successor form thereto
or another form not available for registering the Registrable Securities for sale to the public). The Company may postpone for up to 180 days the filing or effectiveness of a Registration Statement for a Demand Registration if the Board determines
in its reasonable good faith judgment that such Demand Registration would (i) materially interfere with a significant acquisition, corporate reorganization, capital transaction or other similar transaction involving the Company;
(ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange
Act; provided, that in such event the Investor Holders shall be entitled to withdraw the Demand Notice relating to such Demand Registration and, if such Demand Notice is withdrawn, such Demand Registration shall not count as one of the
permitted Demand Registrations hereunder and the Company shall pay all registration expenses in connection with such registration. The Company may delay a Demand Registration hereunder only once in any period of 12 consecutive months. 

  
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 (c) If the Investor Holders make a Demand Notice and elect to distribute the Registrable
Securities covered thereby in an underwritten offering, they shall so advise the Company as a part of the Demand Notice and the Company shall include such information in its notice to the other Holders. The Investor Holders shall select the managing
underwriter(s) in connection with such offering, subject to the prior written approval (not to be unreasonably withheld) by the Company of such managing underwriter(s). 
 (d) If a Demand Registration involves an underwritten offering and the managing underwriter advises the Company and the Investor Holders in writing that in its opinion the number of shares of Common Stock
proposed to be included in the Demand Registration exceeds the number of shares of Common Stock which can be sold in such underwritten offering and/or the number of shares of Common Stock proposed to be included in such registration would adversely
affect the price per share of the Registrable Securities proposed to be sold in such underwritten offering, the Company shall include in such Demand Registration: (i) first, the number of shares of Common Stock that the Holders propose
to sell, allocated pro rata among the respective Holders thereof on the basis of the number of Registrable Securities owned by each such Holder; and (ii) second, the number of shares of Common Stock proposed to be included
therein by any other Persons (including shares of Common Stock to be sold for the account of the Company and/or other holders of Common Stock), allocated among such Persons in such manner as they may agree. 

(e) The Company shall not include in any Demand Registration that does not involve an underwritten offering any securities which are not
Registrable Securities without the prior written consent (not to be unreasonably withheld) of the Investor Holders. 

Section 3. Short-Form Registration. 
 (a) (i) At all times following the last day of the Holding Period, the Company shall use commercially reasonable efforts to qualify for registration on Form S-3 or any comparable or successor form (a
“Short-Form Registration”) and, if available to the Company, such Short-Form Registration shall be a Shelf Registration Statement that shall provide for the offer and sale of Registrable Securities by the Holders from time to time.
At any time and from time to time following the last day of the Holding Period, the Investor Holders shall be entitled to up to two non-underwritten Short-Form Registrations per calendar year, if available to the Company, with respect to the
Registrable Securities held by the Investor Holders in addition to the registration rights provided in Section 2. The Company shall pay all expenses (subject to and in accordance with Section 7) in connection with any
Short-Form Registration. If any Demand Registration is proposed to be a Short-Form Registration and an underwritten offering, if the managing underwriter(s) shall advise the Company and the Investor Holders that, in its good faith opinion, it is of
material importance to the success of such proposed offering to file a registration statement on Form S-11 (or any successor or similar registration statement) or to include in such registration statement information not required to be included in a
Short-Form Registration, then the Company shall file a registration statement on Form S-11 or supplement the Short-Form Registration as reasonably requested by such managing underwriter(s). A Short Form Registration that is an underwritten offering
shall count as a “Demand Registration” pursuant to Section 2 for purposes of calculating how many “Demand Registrations” the Investor Holders have requested. 

  
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 (ii) Upon the filing of any Short-Form Registration, the Company shall use commercially
reasonable efforts to keep such Short-Form Registration effective with the Commission continuously at all times and to re-file such Short-Form Registration upon its expiration, and to cooperate in any shelf take-down, whether or not underwritten, by
amending or supplementing the Prospectus related to such Short-Form Registration as may be reasonably requested by the Investor Holders, or as otherwise required by applicable law or regulation, until such time as all Registrable Securities that
could be sold in such Short-Form Registration are no longer Registrable Securities. 
 (iii) To the extent the Company is a
well-known seasoned issuer (as defined in Rule 405 under the Securities Act) (a “WKSI”) at the time any Demand Notice for a Short-Form Registration is submitted to the Company and such Demand Notice requests that the Company file a
Shelf Registration Statement, the Company shall file an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) on Form S-3 (an “Automatic Shelf Registration Statement”) in accordance with the
requirements of the Securities Act and the rules and regulations of the Commission thereunder, which covers those Registrable Securities which are requested to be registered. If at any time following the filing of an Automatic Shelf Registration
Statement when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use commercially reasonable efforts to post-effectively amend the Automatic Shelf Registration Statement to a Shelf
Registration Statement on Form S-3 or file a new Shelf Registration Statement on Form S-3 or, if such form is not available, Form S-11, have such Shelf Registration Statement declared effective by the Commission and keep such Registration Statement
effective during the period during which such Short-Form Registration is required to be kept effective in accordance with Section 3(a)(ii). 
 (b) Any offering under a Shelf Registration Statement shall be underwritten (a “Shelf Underwritten Offering”) at the written request of Holders of Registrable Securities under such Shelf
Registration Statement that hold in the aggregate at least 50% of such Registrable Securities. The Holders of a majority of the Registrable Securities proposed to be included in such underwritten offering shall select the managing underwriter(s) in
connection with such offering, subject to the prior written approval (not to be unreasonably withheld) by the Company of such managing underwriter(s). 
 (c) If a Shelf Registration is a Shelf Underwritten Offering and the managing underwriter advises the Company and the Holders of Registrable Securities in writing that in its opinion the number of
Registrable Securities proposed to be included in such offering exceeds the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would
adversely affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such Shelf Registration the number of shares of Common Stock requested to be included therein by Holders of Registrable Securities,
allocated pro rata among all such Holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree. 

  
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 Section 4. Piggyback Registration. 

(a) Whenever the Company proposes to register any shares of its Common Stock under the Securities Act (other than (i) a registration
effected solely to implement an employee benefit plan or a transaction to which Rule 145 of the Securities Act is applicable or (ii) a Registration Statement on Form S-4, S-8 or any successor form thereto or another form not available for
registering the Registrable Securities for sale to the public), whether for its own account or for the account of one or more stockholders of the Company and the form of Registration Statement to be used may be used for any registration of
Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than 20 days prior to the filing of such Registration Statement) to the Holders of Registrable Securities of
its intention to effect such a registration and, subject to Sections 4(b) and 4(c), shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion from the
Holders of Registrable Securities within 10 days after the Company’s notice has been given to each such Holder. A Piggyback Registration shall not be considered a Demand Registration for purposes of this Agreement. 

(b) If a Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company and the managing underwriter
advises the Company and the Holders of Registrable Securities (if any Holders of Registrable Securities have elected to include Registrable Securities in such Piggyback Registration) in writing that in its opinion the number of shares of Common
Stock proposed to be included in such registration, including all Registrable Securities and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in
such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such
registration (i) first, the number of shares of Common Stock that the Company proposes to sell; (ii) second, the number of shares of Common Stock requested to be included therein by Holders of Registrable Securities,
allocated pro rata among all such Holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the number of shares of Common Stock
requested to be included therein by holders of Common Stock (other than holders of Registrable Securities), allocated among such holders in such manner as they may agree. 
 (c) If a Piggyback Registration is initiated as an underwritten offering on behalf of a holder of Common Stock other than Registrable Securities, and the managing underwriter advises the Company in
writing that in its opinion the number of shares of Common Stock proposed to be included in such registration, including all Registrable Securities and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds
the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in
such offering, the Company shall include in such registration (i) first, the number of shares of Common Stock requested to be included therein by the holder(s) requesting such registration and by the Holders of Registrable Securities,
allocated pro rata among such holders on the basis of the number of shares of Common Stock (on a fully diluted, as converted basis) and the number of Registrable Securities, as applicable, owned by all such holders or in such manner as
they may otherwise agree; and (ii) second, the number of shares of Common Stock requested to be included therein by other holders of Common Stock, allocated among such holders in such manner as they may agree. 

  
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 (d) If any Piggyback Registration is initiated as a primary underwritten offering on behalf
of the Company, the Company shall select the managing underwriter(s) in connection with such offering. 
 Section 5.
Lock-up Agreement. Each Holder of Registrable Securities agrees that in connection with any public offering of the Company’s Common Stock or other equity securities, and upon the request of the managing underwriter in such offering, such
Holder shall not, without the prior written consent of such managing underwriter, during the period commencing on the effective date of such registration and ending on the date specified by such managing underwriter (such period not to exceed 90
days), (a) offer, pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, hedge the beneficial ownership of or otherwise dispose of, directly or indirectly, any shares of Common Stock
or any securities convertible into, exercisable for or exchangeable for shares of Common Stock held immediately before the effectiveness of the registration statement for such offering, or (b) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing provisions of this Section 5 shall not apply to sales of Registrable Securities to be included in such offering pursuant to Section 2(a), 3(a) or 4(a), and shall
be applicable to the Holders of Registrable Securities only if all officers and directors of the Company and all stockholders owning more than 10% of the Company’s outstanding Common Stock are subject to the same restrictions. Each Holder of
Registrable Securities agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriter which are consistent with the foregoing or which are necessary to give further effect thereto.
Notwithstanding anything to the contrary contained in this Section 5, each Holder of Registrable Securities shall be released, pro rata, from any lock-up agreement entered into pursuant to this Section 5 in the
event and to the extent that the managing underwriter or the Company permit any discretionary waiver or termination of the restrictions of any lock-up agreement pertaining to any officer, director or holder of greater than 10% of the outstanding
Common Stock. 
 Section 6. Registration Procedures. If and whenever the Holders of Registrable Securities request
that any Registrable Securities be registered pursuant to the provisions of this Agreement, the Company shall use commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company shall as soon as reasonably practicable: 
 (a) subject to
Sections 2(a) and 3(a), prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and, if such Registration Statement is not automatically effective upon filing, use commercially
reasonable efforts to cause such Registration Statement to be declared effective as promptly as practicable after the filing thereof; 

  
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 (b) prepare and file with the Commission such amendments, post-effective amendments and
supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective until all of such Registrable Securities have been disposed of and to comply with the
provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such Registration Statement; 

(c) at least 10 business days before filing such Registration Statement, Prospectus or amendments or supplements thereto, furnish to one
counsel selected by Holders of a majority of such Registrable Securities copies of such documents proposed to be filed, which documents shall be subject to the review, comment and approval of such counsel; 

(d) notify each selling Holder of Registrable Securities, promptly after the Company receives notice thereof, of the time when such
Registration Statement has been declared effective or a supplement to any Prospectus forming a part of such Registration Statement has been filed; 
 (e) furnish to each selling Holder of Registrable Securities such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and any supplement
thereto (in each case including all exhibits and documents incorporated by reference therein) and such other documents as such seller may request in order to facilitate the disposition of the Registrable Securities owned by such seller; 

(f) use commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or “blue
sky” laws of such jurisdictions as any selling Holder requests and do any and all other acts and things which may be necessary or advisable to enable such Holders to consummate the disposition in such jurisdictions of the Registrable Securities
owned by such Holders; provided, that the Company shall not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be
required to do so but for this Section 6(f); 
 (g) promptly notify each selling Holder of such Registrable
Securities, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such Holder, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; 

(h) make available for inspection by any selling Holder of Registrable Securities, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other agent retained by any such Holder or underwriter all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s
officers, directors and employees to supply all information reasonably requested by any of the foregoing in connection with such Registration Statement; 

  
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 (i) provide a transfer agent and registrar (which may be the same entity) for all such
Registrable Securities not later than the effective date of such registration; 
 (j) use commercially reasonable efforts to
cause such Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed, on a national securities exchange selected by the Holders of a majority of such
Registrable Securities; 
 (k) in connection with an underwritten offering, enter into such customary agreements (including
underwriting and lock-up agreements in customary form) and take all such other customary actions as the Holders of such Registrable Securities or the managing underwriter of such offering reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation, making appropriate officers of the Company available to participate in “road show” and other customary marketing activities (including one-on-one meetings with
prospective purchasers of the Registrable Securities); 
 (l) otherwise comply with all applicable rules and regulations of the
Commission and use commercially reasonable efforts to make available to its stockholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder) no later than 30 days after
the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement
will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q, 10-K and 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act; 

(m) furnish to each selling Holder of Registrable Securities and each underwriter, if any, with (i) a legal opinion of the
Company’s outside counsel, dated the effective date of such Registration Statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), in form and substance as is
customarily given in opinions of the Company’s counsel to underwriters in underwritten public offerings; and (ii) a “comfort” letter signed by the Company’s independent certified public accountants in form and substance as
is customarily given in accountants’ letters to underwriters in underwritten public offerings; 
 (n) without limiting
Section 6(f) above, use commercially reasonable efforts to cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and
operations of the Company to enable the Holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof; 

(o) notify the Holders of Registrable Securities promptly of any request by the Commission for the amending or supplementing of such
Registration Statement or Prospectus or for additional information; 

  
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 (p) advise the Holders of Registrable Securities, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use commercially reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued; 
 (q) if any Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Company and if in its sole and exclusive judgment such Holder is or might be deemed to be
an underwriter or a controlling person of the Company, such Holder shall have the right to require (i) the insertion therein of language, in form and substance satisfactory to such Holder and presented to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included (including, without limitation, language to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company’s securities covered thereby and that such holding does not imply that such Holder shall assist in meeting any future financial requirements of the Company), or (ii) in the event that such reference to
such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder; 
 (r) otherwise use commercially reasonable efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby. 

Section 7. Expenses. All expenses (other than Selling Expenses) incurred by the Company in complying with its obligations
pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities, including, without limitation, all registration and filing fees, underwriting expenses (other than fees, commissions or discounts),
expenses of any audits incident to or required by any such registration, fees and expenses of complying with securities and “blue sky” laws, printing expenses, fees and expenses of the Company’s counsel and accountants and reasonable
fees and expenses of one counsel for the Holders of Registrable Securities participating in such registration as a group (selected by, in the case of a Demand Registration, the Investor Holders, and, in the case of all other registrations hereunder,
the Holders of a majority of the Registrable Securities included in the registration), shall be paid by the Company. All Selling Expenses relating to Registrable Securities registered pursuant to this Agreement shall be borne and paid by the Holders
of such Registrable Securities, in proportion to the number of Registrable Securities registered for each such Holder. 

Section 8. Indemnification. 
 (a) The Company shall indemnify and hold harmless, to the fullest extent permitted by law, each Holder of Registrable Securities, such Holder’s officers, directors, managers, members, partners,
stockholders and Affiliates, each underwriter, broker or any other Person acting on behalf of such Holder of Registrable Securities and each other Person, if any, who controls any of the foregoing Persons within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against all losses, claims, actions, damages, liabilities and expenses, joint or several, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar
as such losses, claims, actions, damages, liabilities or 

  
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expenses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, preliminary Prospectus, free writing
prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation by the
Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such
registration, qualification or compliance; and shall reimburse such Persons for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, action, damage or liability, except
insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein or by such Holder’s failure to deliver a copy of the Registration Statement, Prospectus, free-writing
prospectus or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished such Holder with a sufficient number of copies of the same prior to any written confirmation of the
sale of Registrable Securities. 
 (b) In connection with any registration in which a Holder of Registrable Securities is
participating, each such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law,
shall indemnify and hold harmless, the Company, each director of the Company, each officer of the Company who shall sign such Registration Statement, each underwriter, broker or other Person acting on behalf of the Holders of Registrable Securities
and each Person who controls any of the foregoing Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, actions, damages, liabilities or expenses resulting from any
untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such Holder; provided, that the obligation to indemnify shall be several, not joint and several, for each Holder and shall be limited to the net proceeds (after underwriting fees,
commissions or discounts) actually received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. 
 (c) Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in this Section 8, such indemnified party shall, if a claim in
respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. The failure of any indemnified party to notify an indemnifying party of any such action shall not (unless such failure shall
have a material adverse effect on the indemnifying party) relieve the indemnifying party from any liability in respect of such action that it may have to such indemnified party hereunder. In case any such action is brought against an indemnified
party, the indemnifying party shall be entitled to participate in and to assume the defense of the claims in any such action that are subject or potentially subject to indemnification hereunder, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to such 

  
 12 

 
indemnified party, and after written notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible
for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, that if (i) any indemnified party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the
indemnity provided hereunder, or (ii) such action seeks an injunction or equitable relief against any indemnified party or involves actual or alleged criminal activity, the indemnifying party shall not have the right to assume the defense of
such action on behalf of such indemnified party without such indemnified party’s prior written consent (but, without such consent, shall have the right to participate therein with counsel of its choice) and such indemnifying party shall
reimburse such indemnified party and any Person controlling such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity
provided hereunder. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. 

(d) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a
result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or
omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of
each Holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The
relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree
that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No
Person guilty or liable of fraudulent misrepresentation shall be entitled to contribution from any Person. 
 Section 9.
Rule 144 Compliance. With a view to making available to the Holders of Registrable Securities the benefits of Rule 144 under the Securities Act and any other rule or regulation of the Commission that may at any time permit a holder to sell
securities of the Company to the public without registration or pursuant to a registration on Form S-3 (or any successor form), the Company shall: 
 (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the date hereof; 

  
 13 

 (b) use commercially reasonable efforts to file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and the Exchange Act, at any time after the Company has become subject to such reporting requirements; and 

(c) furnish to any holder so long as the Holder owns Registrable Securities, upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 under the Securities Act and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or
furnished by the Company as such Holder may reasonably request in connection with the sale of Registrable Securities without registration. 
 Section 10. Participation in Underwritten Offerings. No Person may participate in any underwritten offerings hereunder unless such Person (a) agrees to sell such Person’s securities
on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements and these registration rights provided for hereunder; provided, that no Holder of Registrable Securities included in any underwritten registration shall be
required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding such Holder, such Holder’s ownership of its shares of Common Stock to be sold in the offering and such
Holder’s intended method of distribution) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto, except as otherwise provided in Section 8. 

Section 11. Suspension of Use of Registration Statement. 

(a) If the Board determines in its good faith judgment that the filing of a Shelf Registration Statement under Section 3(a)
or the use of any related Prospectus would be materially detrimental to the Company because such action would require the disclosure of material information the Company has a bona fide business purpose for preserving as confidential or
the disclosure of which would materially impede the Company’s ability to consummate a significant transaction, and that the Company is not otherwise required by applicable securities laws or regulations to disclose, upon written notice of such
determination by the Company to the Holders which shall be signed by the Chief Executive Officer, President or any Executive Vice President of the Company certifying thereto, the rights of the Holders to offer, sell or distribute Registrable
Securities pursuant to a Shelf Registration Statement or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Shelf Registration Statement shall be suspended until the earlier of
(i) the date upon which the Company notifies the Holders in writing that suspension of such rights for the grounds set forth in this Section 11(a) is no longer necessary and they may resume use of the

  
 14 

 
applicable Prospectus and (ii) the date upon which copies of the applicable supplemented or amended Prospectus is distributed to the Holders; provided, that the Company shall not be
entitled to exercise any such right more than two times in any 12-month period or less than 30 days from the termination of the prior suspension period; and, provided further, that such exercise shall not prevent the Holders from being
entitled to at least 180 days of effective registration with respect to the Shelf Registration Statement in any 365-day period. The Company agrees to give the notice under subsection (i) above as promptly as practicable following the date that
such suspension of rights is no longer necessary. 
 (b) If all reports required to be filed by the Company pursuant to the
Exchange Act have not been filed by the required date without regard to any extension, or if the consummation of any business combination by the Company had occurred or is probable for purposes of Rule 3-05 or Article 11 of Regulation S-X
promulgated under the Securities Act or any similar successor rule, upon written notice thereof by the Company to the Holders, the rights of the Holders to offer, sell or distribute Registrable Securities pursuant to a Shelf Registration Statement
or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to a Shelf Registration Statement shall be suspended until the date on which the Company has filed such reports or obtained and
filed the financial information required by Rule 3-05 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in a Shelf Registration Statement, and the Company shall use its reasonable best efforts to file the
required reports or obtain and file the financial information required to be included or incorporated by reference, as applicable, as promptly as practicable, and shall notify the Holders as promptly as practicable when such is no longer required.

 Section 12. Preservation of Rights. The Company shall not (a) grant any registration rights to third parties
which are more favorable than or inconsistent with the rights granted hereunder or (b) enter into any agreement, take any action, or permit any change to occur, with respect to its securities that violates or subordinates the rights expressly
granted to the Holders of Registrable Securities in this Agreement. 
 Section 13. Termination. This Agreement shall
terminate and be of no further force or effect when no Holder holds any Registrable Securities; provided, that the provisions of Sections 7, 8 and 14 shall survive any such termination. 

Section 14. Miscellaneous. 
 (a) No Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders of
Registrable Securities in this Agreement or take any action, or permit any change to occur, with respect to its securities which would adversely affect the ability of any Holder of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement. 
 (b) Notices. All notices, requests, consents, claims, demands,
waivers and other communications hereunder shall be in writing and shall be deemed to have been given (i) when delivered by hand (with written confirmation of receipt); (ii) when received by the addressee if sent by a nationally recognized
overnight courier (receipt requested); (iii) on the date sent by 

  
 15 

 
facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours
of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such
other address for a party as shall be specified in a notice given in accordance with this Section 14(b)). 
  

			
	If to the Company:	  	 410 West Francis Street

Williamsburg, VA 23185
 Facsimile: (757)
564-8801
 E-mail: drewsims@mhihospitality.com
 Attention: Andrew M. Sims, Chief Executive Officer

		
	with a copy to:	  	 Baker & McKenzie LLP

Facsimile: (202) 416-6955
 E-mail:
thomas.egan@bakermckenzie.com
 Attention: Thomas J. Egan, Jr.

If to any Holder, to such Holder’s address as set forth on its signature page hereto or in the register of stockholders maintained by
the Company. 
 (c) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns. In addition, the provisions of this Agreement which are for the benefit of Holders shall be for the benefit of and enforceable by any Permitted Affiliate Transferee and
any Permitted Third Party Transferee. Notwithstanding anything to the contrary in this Agreement, the Company may assign this Agreement in connection with a merger, reorganization or sale, transfer or contribution of all or substantially all of the
assets or stock of the Company to any of its subsidiaries or Affiliates, and, upon the consummation of any such merger, reorganization, sale, transfer or contribution, such subsidiary or Affiliate shall automatically and without further action
assume all of the obligations and succeed to all the rights of the Company under this Agreement. 
 (d) No Third-Party
Beneficiaries. Except as set forth in Section 8, nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and each such party’s respective heirs, successors and permitted assigns.

 (e) Amendment, Modification and Waiver. Except as otherwise provided herein, the provisions of this Agreement may only
be amended, modified, supplemented or waived with the prior written consent of the Company and the Holders of a majority of the Registrable Securities. No waiver by any party or parties shall operate or be construed as a waiver in respect of any
failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. Except as otherwise set forth in this Agreement, no failure to exercise, or
delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor 

  
 16 

 
shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. 
 (f) Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any
term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 

(g) Remedies. Each Holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Company acknowledges that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and the Company hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
 (h) Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or
conflict of law provision. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of New York
in each case located in the city of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by
mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 

(i) Waiver of Jury Trial. Each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of
any legal action arising out of or relating to this Agreement or the transactions contemplated hereby. 
 (j) Entire
Agreement. This Agreement, together with the Warrant and any related exhibits and schedules thereto, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes
all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. Notwithstanding the foregoing, in the event of any conflict between the terms and provisions of this Agreement and those of the
Warrant, the terms and conditions of this Agreement shall control. 

  
 17 

 (k) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect
as delivery of an original signed copy of this Agreement. 
 [SIGNATURE PAGE FOLLOWS] 

  
 18 

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

			
	MHI HOSPITALITY CORPORATION
		
	By:	 	 /s/ David R. Folsom

		 	Name:   David Folsom
		 	Title:     President and COO
	
	RICHMOND HILL CAPITAL PARTNERS, LP
		
	By:	 	 Richmond Hill Investment Co., LP,
 the Investment Manager

		
	By:	 	 /s/ Ryan P. Taylor

		 	Name:   Ryan P. Taylor
		 	Title:     Authorized Signatory
	
	ESSEX ILLIQUID, LLC
		
	By:	 	 Essex Equity Capital Management, LLC,
 the Investment Manager

		
	By:	 	 /s/ Ryan P. Taylor

		 	Name:   Ryan P. Taylor
		 	Title:     Authorized Signatory

  
 19Note Agreement

 Exhibit 10.38 
 NOTE AGREEMENT 
 NOTE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Note”), dated as of April 18 2011, by and between MHI Hospitality Corporation, a Maryland corporation (the “Borrower”) and each lender a party hereto from time to
time (together with their successors and assigns, each a “Lender”; and collectively, the “Lenders”) and Essex Equity High Income Joint Investment Vehicle, LLC, as agent for the Lenders (the
“Agent”). 
 RECITALS 
 WHEREAS, the Borrower has requested a senior secured term loan facility and the Lenders have agreed to provide a senior secured term loan facility but only to the extent and on the conditions set
forth herein. 
 WHEREAS, the Borrower will use the proceeds of the Loans (a) to cause its Subsidiary to refinance
the mortgage on the Crowne Plaza Jacksonville Riverfront property, (b) to pay its transaction fees and expenses in respect of this Note and the transactions contemplated hereby and (c) to finance ongoing working capital and general
corporate needs of the Borrower. 
 NOW THEREFORE, in consideration of the mutual agreements, provisions and covenants
contained herein, the parties agree as follows: 
 AGREEMENT 

1. Definitions. The following terms have the meanings set forth below: 

“Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001). 
 “Agent” has the meaning set forth in the
preamble hereto. 
 “Aggregate Amounts Due” has the meaning set forth in Paragraph
6(c). 
 “Appraiser” has the meaning set forth in Paragraph 8(a). 

“Articles Supplementary” means that certain Articles Supplementary for Series A Cumulative Redeemable
Preferred Stock of MHI Corporation. 

 “Asset Sale” means a sale, lease or sublease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other disposition to, or any exchange of property with, any Person (other than the Borrower or any Subsidiary of the Borrower), in one transaction or a series of transactions, of
all or any part of the businesses of the Borrower or any Subsidiary of the Borrower, assets or properties of any kind, whether real, personal, or mixed and whether tangible or intangible other than inventory, or other assets sold, leased, subleased,
assigned, conveyed, transferred or disposed of in the ordinary course of business. 
 “Assignee”
has the meaning set forth in Paragraph 18. 
 “Assignment” has the meaning set forth in
Paragraph 18. 
 “Bankruptcy Code” means title 11 of the United States Code entitled
“Bankruptcy” as now or hereafter in effect or any successive statutes. 
 “Borrower”
has the meaning set forth in the Preamble hereto. 
 “Business Day” means a day other than
Saturday or Sunday or other day on which commercial banks in New York City, New York are authorized or required by law or other governmental action to close. 
 “Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that Person. 
 “Capital Stock” means
any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership
interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing. 
 “Cash” means cash, money, currency or a credit balance in any Deposit Account (as defined in the UCC). 

“Cash Equivalents” means, as at any date of determination, (a) marketable securities (i) issued
or directly and unconditionally guaranteed as to interest and principal by the United States Government, or (ii) issued by any agency of the United States of America the obligations of which are backed by the full faith and credit of the United
States of America, in each case maturing within one year after such date; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (c) commercial paper maturing

  
 2 

 
no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P 1 from Moody’s;
(d) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any commercial bank organized under the laws of the United States of America or any state thereof or the District of
Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and
(e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than
$500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody’s. 

“Change of Control” means, at any time, (a) any Person or “group” (within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act) (i) shall have acquired beneficial ownership of 50% or more on a fully diluted basis of the voting and/or economic interest in the Capital Stock of the Borrower or (ii) shall have obtained the
power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of the Borrower; (b) the majority of the seats (other than vacant seats) on the board of directors (or similar governing
body) of the Borrower cease to be occupied by Persons who either (i) were members of the board of directors of the Borrower on the Closing Date, or (ii) were nominated for election by the board of directors of the Borrower, a majority of
whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors; or (c) any event, transaction or occurrence as a result of which Andrew M. Sims shall for any
reason cease to be actively engaged in the day-to-day management of the Borrower in the role such Person serves on the Closing Date, unless an interim or permanent successor reasonably acceptable to the board of directors of the Borrower is
appointed within ninety (90) days after the date on which such individual ceases to hold any such office. 

“Closing Date” has the meaning set forth in Paragraph 9. 

“Collateral” has the meaning set forth in Paragraph 8(b). 

“Collateral Documents” means any security agreements and any other documents entered into from time to
time (including, without limitation, the Pledge Agreement) in form and substance reasonably satisfactory to the Agent, in order to grant to the Agent, for its benefit and the benefit of the Lenders, a first priority security interest in the
Collateral. 
 “Commission” has the meaning set forth in Paragraph 12(p). 

“Commitment Fee” has the meaning set forth in Paragraph 5(b). 

“Credit Agreement” means that certain Credit Agreement, dated as of May 8, 2006, among the Borrower,
as borrower, Branch Banking Trust Company, and the other parties thereto, as such Credit Agreement shall be amended, restated or otherwise modified from time to time. 

  
 3 

 “Credit Agreement Collateral” means all of the assets and
property of the Borrower or any of its Subsidiaries, whether real, personal or mixed, with respect to which a consensual Lien is granted as security for any obligation under the Credit Agreement and any other loan document entered into in connection
therewith. 
 “Default” means a condition or event that, after notice or lapse of time or both,
would constitute an Event of Default. 
 “ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any successor thereto. 
 “Event of Default” has
the meaning set forth in Paragraph 10. 
 “Exchange Act” means the Securities Exchange Act
of 1934, as amended from time to time, and any successor statute. 
 “Filings” has the meaning
set forth in Paragraph 12(p). 
 “Funding Notice” shall have the meaning set forth in paragraph
3(a)(ii). 
 “GAAP” means generally accepted accounting principles in the United States as in
effect from time to time, consistently applied throughout the period to which reference is made. 

“Governmental Body” means any agency, bureau, commission, 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. 
 “Hotel Equity Value” has the meaning set forth in Paragraph 8(a). 

“Hotel Property” means a hotel (including land, building, improvements, equipment and all related
personal property used or useful in connection with such hotel operations) that is owned by the Borrower or a Subsidiary of the Borrower. 
 “Indebtedness” means, with respect to any Person, without duplication, the following: (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person
for the deferred purchase price of property or services other than accounts payable and accrued liabilities that would be classified as current liabilities under GAAP (as in effect on the Closing Date) which payables and expenses are incurred in
respect of property or services purchased in the ordinary course of business, (c) all obligations of such Person evidenced by notes, bonds, debentures or similar borrowing or securities instruments, (d) all obligations of such Person
created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, 

  
 4 

 
(e) all obligations of such Person as lessee under Capital Leases, (f) all obligations of such Person in respect of banker’s acceptances and letters of credit, (g) all
obligations of such Person secured by Liens on the assets and property of such Person, (h) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Capital Stock or other ownership or
profit interest in such Person or any other Person or any warrants, rights or options to acquire such Capital Stock, (i) all obligations of such Person in respect of any guaranty by such Person of any obligation of another Person of the type
described in clauses (i) through (h) of this definition, and (j) all obligations of another Person of the type described in clauses (a) through (i) secured by a Lien on the property or assets of such Person (whether or not
such Person is otherwise liable for such obligations of such other Person). 
 “Intercreditor
Agreement” has the meaning set forth in Paragraph 19. 
 “Interest Period” means
consecutive calendar quarterly periods, beginning on the date hereof and ending on the Maturity Date; provided that: (a) the initial Interest Period shall begin on the date hereof and shall end on June 30, 2011 and each subsequent
Interest Period will begin on the day following the last day of the preceding Interest Period (with such last day of such preceding Interest Period determined with reference to clauses (b) through (d) below); (b) any Interest Period
that would otherwise end on a day that is not a Business Day shall, subject to the provisions of clause (d) below, be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day; (c) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall, subject to clause (d) below, end on the last Business Day of a calendar month; and (d) any Interest Period that would otherwise end after the Maturity Date shall end on the Maturity Date. 

“Interest Rate” has the meaning set forth in Paragraph 5(a). 

“Lenders” has the meaning set forth in the Preamble hereto. 

“Lender Indemnified Persons” has the meaning set forth in Paragraph 16(b). 

“Lien” means any encumbrance, mortgage, pledge, hypothecation, charge, assignment, lien, restriction or
other security interest of any kind securing any obligation of any Person. 
 “Loans” has the
meaning set forth in Paragraph 2. 
 “Loan Documents” means any of this Note, the
Collateral Documents, and all other documents, instruments or agreements executed and delivered by the Borrower for the benefit of each Lender in connection herewith. 

“Margin Stock” shall have the meaning set forth in Regulation U of the Board of Governors of the Federal
Reserve system, as in effect from time to time. 

  
 5 

 “Material Adverse Effect” means a material adverse effect
on (a) the business, operations, properties, assets or condition (financial or otherwise) of the Borrower and all of its Subsidiaries taken as a whole, (b) the ability of the Borrower to perform its obligations hereunder or under of any of
the other Loan Documents, or (c) to the extent applicable, the Collateral. 
 “Maturity
Date” means the earliest of (a) the fourth anniversary of the date of this Note, (b) the date as of which all of the Preferred Stock (i) has been or (ii) is required to be, redeemed, repurchased or otherwise acquired for
value by the Borrower and (c) the date the Loans shall become due and payable in full hereunder, whether by acceleration or otherwise. 
 “Maximum Collateral Value” has the meaning set forth in Paragraph 8(c). 
 “Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal to: (a) cash payments received by the Borrower and any of its Subsidiaries from such Asset Sale,
minus (b) any bona fide direct costs incurred in connection with such Asset Sale to the extent paid or payable to non-affiliates, including without limitation (i) income or gains taxes payable by the seller as a result of any gain
recognized in connection with such Asset Sale during the tax period the sale occurs, (ii) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a
Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of such Asset Sale, (iii) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s
indemnities and representations and warranties to purchaser in respect of such Asset Sale undertaken by the Borrower or any of its Subsidiaries in connection with such Asset Sale; provided that upon releases of such reserve, the amount released
shall be considered Net Asset Sale Proceeds, and (iv) transaction costs of the Borrower and its Subsidiaries. 
 “Permitted Indebtedness” means the Indebtedness permitted pursuant to Paragraph 14. 
 “Permitted Liens” means the Liens permitted pursuant to Paragraph 14. 
 “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. 

“Pledge Agreement” means the Pledge Agreement and Irrevocable Proxy in the form of Exhibit B. 

“Preferred Stock” means the shares of Series A Cumulative Redeemable Preferred Stock, par value $0.01 per
share, of the Borrower. 

  
 6 

 “Required Lenders” means, at any time, one or more Lenders
having or holding a Loan and/or Term Loan Commitment, and representing more than 50% of the sum of the aggregate Loans and/or Term Loan Commitments of all Lenders. 

“Restricted Payment” means (a) any dividend or other distribution, direct or indirect, on account of
any shares of any class of Capital Stock of the Borrower or its Subsidiaries now or hereafter outstanding (except (i) a dividend payable solely in shares of that class of Capital Stock to the holders of that class or (ii) a dividend or
other distribution payable on account of the Preferred Stock), (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of the
Borrower or its Subsidiaries now or hereafter outstanding (other than any redemption by MHI Hospitality, L.P. of its units in exchange for cash or, at the Borrower’s option, shares of the Borrower’s common stock or redemption of Preferred
Stock); (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Borrower or its Subsidiaries now or hereafter outstanding other than
the Preferred Stock; (d) management or similar fees payable to any shareholder of the Borrower (other than management fees payable to the Borrower’s affiliated management company); and (e) any payments made in the form of compensation
(i) to an employee or consultant pursuant to his or her employment agreement or consulting agreement or (ii) to an officer or director of the Borrower as approved by the Borrower’s board of directors. 

“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 or entity means a
corporation, partnership, limited liability company, or other entity in which that person directly or indirectly owns or controls the shares of Capital Stock having ordinary voting power to elect a majority of the board of directors (or appoint
other comparable managers) of such corporation, partnership, limited liability company, or other entity. 

“Term Loan” has the meaning set forth in Paragraph 2. 

  
 7 

 “Term Loan Commitment” has the meaning set forth in
Paragraph 2. 
 “Term Loan Commitment Period” means the period commencing on the Closing
Date and ending on the earlier of (i) December 31, 2011, (ii) the date the Term Loan Commitments are fully funded and permanently reduced to zero and (iii) the Maturity Date. 

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect from time
to time in the State of New York or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction. All references in this Note to the provisions of the UCC shall include all successor
provisions under any subsequent version or amendment to any Article of the UCC. 
 “Warrant”
means that certain Warrant to Purchase Common Stock of MHI Hospitality Corporation dated as of April 18, 2011 issued by the Borrower to the Initial Holders (as defined therein) and any new Warrant to Purchase Common Stock issued thereunder or
under any such new Warrant, whether upon the exercise, division, combination or assignment thereof or otherwise. 
 2. Term
Loan. 
  

	 	(a)	Subject to the terms and conditions set forth herein, each Lender agrees during the Term Loan Commitment Period to make term loans (each a “Term Loan”
and collectively, the “Loans”) in its respective aggregate amount set forth on Schedule I hereto the “Term Loan Commitment”) to the Borrower. Any principal amount of the Term Loan subsequently repaid or prepaid may
not be reborrowed. Each Lender’s Term Loan Commitment shall terminate immediately and without further action upon expiration of the Term Loan Commitment Period. The aggregate principal amount of all Loans shall not exceed $10,000,000.00.

  

	 	(b)	Each Lender represents, warrants and covenants to the Borrower that it has and will maintain during the Term Loan Commitment Period sufficient capital to fund its pro
rata share of the Term Loan Commitment. 

 3. Borrowing Mechanics; Conditions to each Loan and Manner of
Payment. 
  

	 	(a)	Borrowing Mechanics. 

  

	 	(i)	Term Loans shall be made in an aggregate minimum amount of $500,000, and integral multiples of $500,000 in excess of that amount. 

 

	 	(ii)	Whenever the Borrower desires the Lenders to make a Term Loan, the Borrower shall deliver to each Lender a written notice setting forth a request for a Term Loan and
the principal amount of the Term Loan (such notice, a “Funding Notice”) no later than 11:00 a.m. (New York City time) at least three Business Days in advance of the proposed borrowing date, which borrowing date shall be a
Business Day. 

  
 8 

	 	(iii)	Notice of receipt of each Funding Notice in respect of Term Loans, together with the amount of each Lender’s pro rata share thereof, shall be provided by the
Borrower to each Lender. 

  

	 	(iv)	Each Lender shall make the amount of its Term Loan available to the Borrower no later than 4:00 p.m. (New York City time) on the applicable borrowing date by wire
transfer of same day funds in U.S. dollars; it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Term Loan requested hereunder nor shall any Term Commitment of
any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Term Loan requested hereunder. 

 

	 	(b)	Conditions to each Loan. The obligation of each Lender to make any Loan, on any date, including the Closing Date, is subject to the satisfaction, or waiver of
the following conditions precedent: 

  

	 	(i)	each Lender shall have received a fully executed and delivered Funding Notice; 

 

	 	(ii)	after making the Term Loans requested on such date, the Term Loans outstanding shall not exceed the Term Loan Commitments then in effect; 

 

	 	(iii)	as of such date, the representations and warranties contained herein and in the other Loan Documents shall be true and correct in all material respects on and as of
such date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date; and 

  

	 	(iv)	as of such date, no event shall have occurred and be continuing or would result from the borrowing of the applicable Loan that constitutes an Event of Default or a
Default. 

 4. Payment of Principal. 

 

	 	(a)	Maturity Date. Unless due earlier due to the occurrence of an Event of Default or pursuant to the provisions of Paragraphs 4(b) and 4(c) below, the
outstanding principal amount of the Loans shall be payable in full on the Maturity Date. 

  

	 	(b)	Optional Prepayment. The Borrower may, upon at least one (1) Business Day’s notice to the Lenders, prepay the Loans in part or in full at any time and
from time to time without penalty. 

  
 9 

	 	(c)	Mandatory Prepayment 

  

	 	(i)	Asset Sales. No later than the second Business Day following the date of receipt by the Borrower or any of its Subsidiaries of any Net Asset Sale Proceeds, the
Borrower shall permanently prepay the Loans in an aggregate amount equal to such Net Asset Sale Proceeds; provided that such prepayment shall not be required to the extent that the Net Asset Sale Proceeds are from an Asset Sale of the Credit
Agreement Collateral. 

  

	 	(ii)	Issuance of Equity Securities. Except as set forth in the Articles Supplementary, no later than the second Business Day following the date of receipt by the
Borrower or any of its Subsidiaries of any cash proceeds from a capital contribution to, or the issuance or sale of Capital Stock of the Borrower or any of its Subsidiaries (other than Capital Stock issued pursuant to any employee stock or stock
option compensation plan) the Borrower shall permanently prepay the Loans in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses. 

  

	 	(iii)	Issuance of Debt. No later than the second Business Day following the date of receipt by the Borrower or any of its Subsidiaries of any cash proceeds from the
incurrence of any Indebtedness of the Borrower or any of its Subsidiaries (other than with respect to any Indebtedness permitted to be incurred pursuant to Paragraph 14), the Borrower shall permanently prepay the Loans in an aggregate amount equal
to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses, which prepayment shall be applied to permanently prepay the Loans.
The provisions of this paragraph (iii) shall not be deemed to be implied consent to any such incurrence otherwise prohibited by the terms and conditions of this Note. 

 

	 	(iv)	Trigger Event. Except as set forth in the Articles Supplementary, following the occurrence of a “Trigger Event” (as such term is defined in the
Articles Supplementary), the Borrower shall permanently prepay the Loans and all other obligations outstanding under this Note on or before the later of the expiry of the Initial Period and the expiry of the Final Period (each as defined in the
Articles Supplementary), and in any event prior to the redemption of the Preferred Stock in accordance with Section 10 of the Articles Supplementary. 

  

	 	(v)	Term Loan Commitment Reduction. In the event the Borrower receives proceeds pursuant to a transaction described in clauses (i), (ii), (iii) or (iv) of
Paragraph 4(c), the Term Loan Commitment shall be reduced by an amount equal to the amount of the proceeds from such transaction. 

  

	 	(d)	 Manner of Payment. All payments of amounts due under this Note shall be made to each Lender not later than 1:00 p.m. New York City time on
the day when due 

  
 10 

	 	 
by wire transfer of immediately available funds in accordance with the wire transfer instructions for the Lenders delivered in writing to the Borrower. Whenever any payment hereunder shall be due
on a day other than a Business Day, such payment shall be made on the next succeeding Business Day. 

 5.
Payment of Interest and Fees. 
  

	 	(a)	Interest. The interest rate shall be 9.25% per annum (the “Interest Rate”). Each Loan shall bear interest on the unpaid principal amount
thereof from the date such Loan is made through the date of repayment of such Loan (whether at maturity, by acceleration or otherwise) at a rate per annum equal to the Interest Rate. Interest on the outstanding principal amount of this Note shall be
due and payable in arrears on (i) the first day of each Interest Period, (ii) the date of termination of the Loans pursuant to Paragraphs 4(b) and 4(c), and (iii) on the Maturity Date. Interest hereunder shall be calculated on the
basis of a 360-day year and the actual number of days elapsed. Upon the occurrence and during the continuance of an Event of Default described in Paragraph 10, the principal amount of all Loans and, to the extent permitted by applicable law, any
interest payments on the Loans or any fees or other amounts owed hereunder not paid when due, in each case whether at stated maturity, by notice of prepayment, by acceleration or otherwise, shall thereafter bear interest (including, without
limitation, interest, as provided in this Note, accruing after the filing of a petition initiating any insolvency proceedings, whether or not such interest accrues or is recoverable against the Borrower after the filing of such petition for purposes
of the Bankruptcy Code or is an allowed claim in such proceeding) payable on demand at a rate that is 2.0% per annum in excess of the interest rate otherwise payable hereunder with respect to the Loans. Payment or acceptance of the increased
rates of interest provided for in this Paragraph 5(a) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of any Lender.

  

	 	(b)	Commitment Fee. The Borrower agrees to pay to the Lenders an unused commitment fee (the “Commitment Fee”) equal to (i) the average of the
daily difference between (A) the Term Loan Commitment, and (B) the aggregate principal amount of outstanding Term Loans times (ii) a rate equal to 0.50% per annum. The Commitment Fee shall be calculated on the basis of a 360-day
year and the actual numbers of days elapsed and shall be payable quarterly in arrears on each Interest Payment date. 

 6. Evidence of Debt; Notes; Ratable Share 
  

	 	(a)	Lenders’ Evidence of Debt. Each Lender shall maintain on its internal records an account or accounts evidencing the Indebtedness of the Borrower to such
Lender, including the amounts of the Loans owed to it and each repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding on the Borrower, absent manifest error; provided, failure to make any such recordation,
or any error in such recordation, shall not affect the Borrower’s obligations in respect of any applicable Loans. 

  
 11 

	 	(b)	Promissory Notes. If so requested by any Lender by written notice to the Borrower prior to the Closing Date, or at any time thereafter, the Borrower shall
execute and deliver to such Lender a promissory note, in the form of Exhibit A to evidence such Lender’s Loans. 

  

	 	(c)	Ratable Share. Each Lender hereby agrees among themselves that if any of them shall, whether by voluntary prepayment, through the exercise of any right of setoff
or banker’s lien, by counterclaim or cross-action or by the enforcement of any right under the Loan Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees and other amounts then due and owing to such Lender hereunder or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to such
Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such
payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of the Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations
shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. The Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and
all rights of banker’s lien, setoff or counterclaim with respect to any and all monies owing by the Borrower to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder.

 7. Use of Proceeds. The Borrower shall use the proceeds of the Loans (a) to cause its Subsidiary to
refinance the mortgage with AFL-CIO Building Investment Trust on the Crowne Plaza Jacksonville Riverfront property, (b) to pay its transaction fees and expenses in respect of the Loan Documents and (c) to finance ongoing working capital
and general corporate needs of the Borrower. No part of the proceeds of the Loans borrowed hereunder will be used for the purpose of buying or carrying any Margin Stock or to extend credit to others for the purpose of buying or carrying any Margin
Stock, in either case in a manner which would violate or conflict with Regulations T, U or X of the Board of Governors of the Federal Reserve System. 

  
 12 

 8. Obligations Secured. To secure the repayment of the Loans and all obligations
together with all modifications, extensions and renewals thereof: 
  

	 	(a)	Upon the refinancing and/or repayment of the outstanding secured Indebtedness of any Subsidiary which directly owns a Hotel Property theretofore constituting Credit
Agreement Collateral, the Borrower shall engage an independent real estate appraisal firm of recognized national standing in the field of hotel valuation (the “Appraiser”) to determine the fair market value of such Hotel Property.
The Borrower shall instruct the Appraiser to render its determination in a written report and shall use its commercially reasonable efforts to cause the Appraiser to render such determination within forty-five (45) days from such refinancing
and/or repayment. The fees and expenses of the Appraiser shall be paid by the Borrower. The valuation (or, if a range, the mean valuation) determined by the Appraiser for such Hotel Property, less the amount of any mortgage thereon (other than a
mortgage to the Agent for the benefit of the Lenders), shall be the “Hotel Equity Value” for such Hotel Property. Thereafter, the Borrower shall (and shall cause the applicable Subsidiary to), at the option of the Lenders, grant a
security interest to the Agent for itself and for the benefit of the Lenders, (i) in all of the Capital Stock of such Subsidiary and any and all additions, substitutions, dividends, distributions (in the form of cash, property, stock or other
securities) and other rights related or in addition to the foregoing, and any and all proceeds therefrom, or (ii) on any unencumbered Hotel Property of such Subsidiary on a first priority basis. 

 

	 	(b)	To the extent that (i) assets comprised of Hotel Properties that do not constitute Credit Agreement Collateral become unencumbered or (ii) the Borrower
succeeds in procuring, without condition or cost to the Borrower, all third-party consents or waivers necessary to permit a pledge of the Capital Stock of the Subsidiary owning such Hotel Property, then the Borrower shall cause the Appraiser to
determine the Hotel Equity Value of such Hotel Properties in accordance with the procedure outlined in Paragraph 8(a). Thereafter, the Borrower shall (and shall cause the applicable Subsidiary to) grant a security interest to the Agent for
itself and for the benefit of the Lenders (A) in the case of (i) above, in any unencumbered Hotel Property of such Subsidiary on a first priority basis, or (B) in the case of (ii) above, in all of the Capital Stock of the
Subsidiary and any and all additions, substitutions, dividends, distributions (in the form of cash, property, stock or other securities) and other rights related or in addition to the foregoing, and any and all proceeds therefrom. Assets in which a
security interest is granted to the Agent and the Lenders pursuant to Paragraph 8(a) or this Paragraph 8(b) are herein referred to collectively as the “Collateral”). 

 

	 	(c)	 Notwithstanding anything to the contrary herein, in the event that Collateral is comprised of two or more Hotel Properties, then the aggregate amount
of Hotel Equity Value of the Hotel Properties constituting Collateral shall not exceed (except to the extent that a Hotel Property cannot be divided then the Maximum Collateral Value may be exceeded to the extent of such Hotel Property Equity Value)
a value of four times the sum of the undrawn Term Loan Commitments and the aggregate principal amount of outstanding Term Loans (the “Maximum Collateral Value”), then, the Agent shall take such actions reasonably requested by the
Borrower and at the cost and expense of the Borrower, to release the Liens 

  
 13 

	 	 
on Collateral in order to effect the release of the Hotel Equity Value of the Hotel Properties constituting Collateral that is in excess of the Maximum Collateral Value to the extent of such
excess Hotel Equity Value but not below the Maximum Collateral Value. For the avoidance of doubt, to the extent the release of Collateral would cause the Hotel Equity Value of the Hotel Properties constituting Collateral to be below the Maximum
Collateral Value then such release shall not occur. Following such release, and until such time that the Hotel Equity Value of the Hotel Properties constituting Collateral no longer exceeds the Maximum Collateral Value, the provisions of Paragraphs
8(a) and 8(b) shall not apply during such period. At any time following such release, if (i) the Collateral is no longer comprised of two or more Hotel Properties or (ii) the Hotel Equity Value of the Hotel Properties constituting
Collateral is less than the Maximum Collateral Value, then the Borrower shall grant Liens to the Agent (for itself and for the benefit of the Lenders) in accordance with Paragraphs 8(a) and 8(b) to the extent necessary to cause the Collateral to be
comprised of not less than two Hotel Properties and the Hotel Equity Value of the Hotel Properties constituting Collateral to be in an amount not in excess (except to the extent that a Hotel Property cannot be divided then the Maximum Collateral
Value may be exceeded to the extent of such Hotel Property Equity Value) of the Maximum Collateral Value. For purposes of determining Hotel Equity Value and Maximum Collateral value for this Paragraph 8(c), the following shall apply: either the
Borrower or the Agent may, solely at its own cost and expense, engage from time to time an Appraiser to determine the Hotel Equity Value for one or more Hotel Properties (provided that a determination by an Appraiser pursuant to this Paragraph 8(c)
shall not be made with respect to a given Hotel Property more than once in any twelve (12) month period), and the valuation resulting from the most recent such appraisal shall be the Hotel Equity Value used for purposes of this Paragraph 8(c).

  

	 	(d)	Notwithstanding the provisions of Paragraph 8(a) and 8(b) above, in any case where such provisions would otherwise entitle the Agent to obtain a first priority mortgage
lien on an unencumbered Hotel Property, the Borrower shall have a period of ninety (90) days from the date as of which such Hotel Property became unencumbered, at the Borrower’s option, either (i) to grant such first priority mortgage
lien to the Agent (for itself and for the benefit of the Lenders) or (ii) to prepay the Loans in full from the proceeds of new third-party mortgage financing obtained in respect of such Hotel Property. 

 

	 	(e)	In the event that, pursuant to the operation of this Paragraph 8, the Agent (for itself and for the benefit of the Lenders) obtains a first priority mortgage lien on
all Hotel Properties owned by a Subsidiary, the Capital Stock of which is pledged in favor of the Agent, such pledge of Capital Stock shall terminate and be released. 

 

	 	(f)	 At such time as the Collateral shall be available to the Agent and the Lenders, the Borrower shall take all such actions with respect to such newly
granted Liens at the cost and expense of the Borrower, including, without limitation, delivery of the Collateral Documents and any certificated Capital Stock to the Agent, the

  
 14 

	 	 
filing of any necessary UCC financing statements and any legal opinions of counsel to the Borrower with respect to the creation and perfection of such Liens in form reasonably satisfactory to the
Agent. 

 9. Closing Conditions. The agreement of the Lenders to make the Loans is subject to the
satisfaction prior or concurrently with the making of such Loans of the conditions precedent set forth in this Paragraph 9 (the date that all such conditions have been satisfied hereinafter referred to as the “Closing Date”):

 The Lender shall have received: 
  

	 	(a)	Note. This Note, executed and delivered by a duly authorized officer of each of the parties hereto; 

 

	 	(b)	Secretary’s Certificate. The Lenders shall have received a certificate of the secretary or assistant secretary of the Borrower with respect to (i) the
certificate of incorporation of the Borrower as amended or amended and restated to date, (ii) the bylaws of the Borrower, as amended or amended and restated to date, (iii) the resolutions of the board of directors, approving each Loan
Document to be delivered by the Borrower under the Loan Documents and the performance of the obligations of the Borrower thereunder, and (iv) the names and true signatures of the officers of the Borrower or such other persons authorized to sign
each Loan Document to which the Borrower is a party and the other documents to be delivered by it under the Loan Documents. 

  

	 	(c)	Good Standing Certificates. The Lenders shall have received a good standing certificate from the applicable Governmental Body of the Borrower’s jurisdiction
of incorporation, organization or formation and in each jurisdiction in which it is qualified as a foreign corporation or other entity to do business, each dated a recent date prior to the Closing Date. 

 

	 	(d)	Opinion of Counsel. The Lenders shall have received an originally executed copy of the favorable written opinions of Baker & McKenzie LLP, counsel for
the Borrower, in the form of Exhibit C as to such other matters as the Lenders may reasonably request, dated as of the Closing Date, and otherwise in form and substance satisfactory to the Lenders. 

 

	 	(e)	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 Lenders, singly or in the aggregate, materially impairs any of the transactions contemplated by the Loan Documents, or that could have a Material
Adverse Effect. 

  

	 	(f)	No Material Adverse Effect. No Material Adverse Effect shall have occurred after giving effect to the Loans made on the Closing Date. 

  
 15 

	 	(g)	Preferred Stock. The Borrower shall have received capital in the amount of $25,000,000 from the issuance of Preferred Stock, the terms of which shall be
substantially similar to Exhibit D. 

 10. Event of Default. In the event: 

 

	 	(a)	that the Borrower fails to pay the principal of or interest on this Note when due under this Note; 

 

	 	(b)	that any representation, warranty or certification made by the Borrower in this Note, any other Loan Document, or in any document executed or delivered from time to
time relating to this Note or any other Loan Document is materially untrue, misleading or incomplete in its recital of any facts at the time as of which representation, warranty or certification, as the case may be, is made;

  

	 	(c)	that the Borrower shall fail to comply with any other covenant contained in this Note or any other Loan Document and such failure continues uncured for a period of
thirty (30) days; 

  

	 	(d)	to the extent applicable, that there exists an Event of Default under any of the Collateral Documents; 

 

	 	(e)	(i) of the failure of the Borrower or any of its Subsidiaries to pay when due any principal of or interest on or any other amount payable in respect of one or more
items of Indebtedness in an individual principal amount of $500,000 or more or with an aggregate principal amount of $1,000,000 or more, in each case beyond the grace period, if any, provided therefor, or (ii) of the breach or default by the
Borrower or any of its Subsidiaries with respect to any other material term of (A) one or more items of Indebtedness in the individual or aggregate principal amounts referred to in clause (e)(i) above or (B) any loan agreement, mortgage,
indenture or other agreement relating to such item of Indebtedness, in each case (x) not waived by the applicable holder or holders of such Indebtedness and (y) beyond the grace period, if any, provided therefor, if as a result of such
breach or default, (1) the holder or holders of such Indebtedness (or a trustee on behalf of such holder or holders), declares an “event of default” with respect to such Indebtedness or agreement, (2) such “event of
default” continues to exist, and (3) such Indebtedness becomes due and payable (or redeemable) prior to its stated maturity; 

  

	 	(f)	(i) either this Note or any other Loan Document shall cease to be in full force and effect or shall be declared null and void, (ii) only to the extent
applicable, the Agent for itself and on behalf of the Lenders shall not have or shall cease to have a valid and perfected lien, pledge, security interest or claim on any collateral purported to be covered by any of the Collateral Documents with the
priority required by the Collateral Documents, (iii) the Borrower or any of its Subsidiaries shall contest the validity or enforceability of any of this Note or any other Loan Document, or (iv) the Borrower shall repudiate its obligations
under this Note or any other Loan Document; 

  
 16 

	 	(g)	that any money judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of $500,000 or (ii) in the
aggregate at any time an amount in excess of $1,000,000 (in either case to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered or filed against the
Borrower or any or its Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of 30 days (or in any event later than 5 days prior to the date of any proposed sale thereunder);

  

	 	(h)	that there is a Change of Control; or 

  

	 	(i)	of the voluntary or (unless stayed within sixty (60) days following commencement) involuntary bankruptcy, receivership, liquidation, insolvency, reorganization,
arrangement, assignment for the benefit of creditors or similar proceedings (or upon filing of a petition or notice therefor) involving or affecting any Borrower 

 (any such event set forth in clauses (a), (b), (c), (d), (e), (f), (g), (h) or (i) above being, an “Event of Default”), then the Agent may, and at the request of the Required
Lenders shall, at its option: 
  

	 	(i)	with respect to clauses (a) through (h), accelerate the maturity of this Note and declare this Note to be due and payable in full, whereupon the entire balance of
this Note, including accrued and unpaid interest hereon (including any interest fees and expenses that, but for the provisions of the Bankruptcy Code, would have accrued, whether or not a claim is allowed for such interest, fees or expenses in any
bankruptcy proceeding), shall forthwith mature and become due and payable and the Term Loan Commitments shall terminate; provided, however, that upon the occurrence of any event in (i) above, this Note shall automatically, and
without any notice, be accelerated and the entire principal hereof and all other amounts hereunder shall become immediately due and payable and the Term Loan Commitments shall automatically terminate; 

 

	 	(ii)	to the extent available, exercise all rights and remedies in respect of the Collateral available to a secured party under the UCC (whether or not the UCC applies to the
affected Collateral), by law or otherwise; 

  

	 	(iii)	(i) initiate legal proceedings to compel the Borrower to cause or cause the judicial enforcement of (x) the implementation of an equity issuance and/or
(y) the exercise of commercially reasonable efforts to pursue a negotiated, arm’s-length sale of any Hotel Property of a Subsidiary who owns a Hotel Property; and 

 

	 	(iv)	exercise any and all other rights and remedies it may have under other agreements and under applicable law. 

  
 17 

 11. Additional Terms. The Borrower hereby (a) agrees to pay all costs of
collection, including without limitation, reasonable attorneys’ fees, if the principal of or interest on this Note is not paid in full upon demand, (b) waives presentment for payment, protest and demand, notice of non-payment, notice of
protest, demand, dishonor, non-payment, default, acceleration, intent to accelerate, diligence in collecting this Note and all other presentments, notices, demands and acts that otherwise might condition or restrict a right to immediate payment of
this Note upon demand, (c) shall make all payments hereunder immediately upon demand without any set-off, counterclaim, defenses, withholding (for taxes or otherwise), or reduction of any kind, and (d) agrees that each Lender, at its sole
option, may apply any amounts otherwise due to the Borrower by the Lenders to the payment of this Note. 
 12.
Representations and Warranties of the Borrower. The Borrower hereby represents and warrants to the Lenders as follows: 
  

	 	(a)	Existence and Power. Each of the Borrower and its Subsidiaries (i) is an entity duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and (ii) has all necessary power and authority to execute and deliver this Note and the other Loan Documents and to consummate the transactions contemplated hereby and thereby. 

 

	 	(b)	Authorization; Binding Effect. The execution and delivery by the Borrower of this Note and the other Loan Documents, the performance by the Borrower of its
obligations under this Note and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby has been duly authorized by all necessary action on the part of the Borrower. This Note and the other Loan Documents
are the legal, valid and binding obligation of the Borrower enforceable against it in accordance with its terms, except that such enforcement (i) may be limited by bankruptcy, insolvency, moratorium or similar laws affecting creditors’
rights generally and (ii) is subject to the availability of equitable remedies, as determined in the discretion of the court before which such a proceeding may be brought. 

 

	 	(c)	Contravention. Neither the execution, delivery and performance of this Note and the other Loan Documents by the Borrower nor the consummation of the transactions
contemplated hereby by the Borrower will (with or without notice or lapse of time or both) (i) violate or breach any provision of any Borrower’s organizational or governing documents, (ii) violate or breach any statute, law, rule,
regulation or order by which the Borrower or any of its assets or properties, may be bound or affected, or (iii) 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 Borrower is a party or by which the Borrower or any of its assets or properties may be bound or affected. 

 

	 	(d)	 Consents. All approvals, consents, authorizations or orders of, notices to or registrations or filings with, or any other action by, any
governmental authority or other person or entity have been obtained which are required in connection with 

  
 18 

	 	(i) the due execution and delivery by the Borrower of this Note and the other Loan Documents and the performance of the Borrower’s obligations hereunder and
thereunder, (ii) the consummation of the transactions contemplated hereby by the Borrower, and (iii) the exercise by the Lenders of their rights and remedies under this Note and the other Loan Documents. 

 

	 	(e)	Laws and Taxes. The Borrower 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 Borrower and its Subsidiaries by any law or by any Governmental Authority. The Borrower 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 Borrower, its Subsidiaries or their respective assets, including unemployment, social security, and real estate taxes. The Borrower 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 Borrower 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 Borrower and its Subsidiaries which are outstanding on this date, and the Borrower 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. 

  

	 	(f)	Title. Each of the Borrower and its Subsidiaries has good and marketable title to their respective assets reflected on the most recent consolidated balance sheet
submitted to the Lenders, free and clear from all Liens, except for Permitted Liens. 

  

	 	(g)	Defaults. The Borrower and its Subsidiaries are in compliance with all material agreements applicable to them and there does not now exist any default or
violation by the Borrower and its Subsidiaries of or under any of the terms, conditions or obligations of (a) its articles of incorporation, or by-laws or (b) any other material contract, agreement or instrument to which the Borrower and
its Subsidiaries are a party or by which they are bound. 

  

	 	(h)	Solvency. The Borrower and each Subsidiary is Solvent. 

  

	 	(i)	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
December 31, 2010. 

  

	 	(j)	Litigation. There are no legal or other proceedings or investigations pending or threatened against the Borrower 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. 

  
 19 

	 	(k)	Absence of Events of Default. No event has occurred and is continuing and no condition exists which constitutes an Event of Default. 

 

	 	(l)	Absence of Other Defaults. The Borrower and its Subsidiaries are not in default under 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. 

  

	 	(m)	Margin Regulations. The Borrower and its Subsidiaries are not engaged in the business of extending credit to others for the purpose of buying or carrying Margin
Stock. Neither the making of the Loans nor any use of proceeds of any such Loans will violate or conflict with the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System, as amended from time to time.

  

	 	(n)	Exchange Act Filings; etc. The Borrower 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 Borrower 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 Borrower contained in the Loan Documents are untrue or incorrect in any material respect when made and on the Closing Date.

 13. Affirmative Covenants. The Borrower covenants and agrees that until payment in full of all
obligations under this Note, the Borrower shall perform all the following covenants: 
  

	 	(a)	 Financial Reporting. The Borrower shall furnish to the Lenders: (i) as soon as available but in any event, within ninety (90) days
after the close of each fiscal year of the Borrower, the audited consolidated financials of the Borrower and its Subsidiaries for such fiscal year, certified by its accountants; (ii) within one Business Day of filing any Filing with the
Commission, a copy of such Filing; (iii) as soon as available but in any event within forty-five (45) days after the end of each fiscal quarter of the Borrower, the unaudited consolidated financials of the Borrower and its Subsidiaries for
such quarter, certified by their chief financial 

  
 20 

	 	 
officer pursuant to a financial officer certification; (iv) as soon as available but in any event within thirty (30) days after the end of each fiscal month, the unaudited consolidated
financials of the Borrower and its Subsidiaries for such month, certified by their chief financial officer pursuant to a financial officer certification; (v) together with the quarterly unaudited and annual audited consolidated financials, a
certificate of the Borrower’s chief financial officer certifying that no Default or Event of Default has occurred, or if a Default or an Event of Default has occurred, the actions taken by the Borrower with respect thereto; and (vi) any
other information or reports supplied to any of the Borrower’s other lenders, including but not limited to the quarterly financial covenant compliance report with supporting detailed calculations attached. 

 

	 	(b)	Books and Records. The Borrower shall keep true and accurate books of account in accordance with GAAP and shall permit the Lenders and/or any of their designated
representatives, upon reasonable notice and at the expense of the Borrower, to visit and inspect the premises of the Borrower and its Subsidiaries to examine the books of account of the Borrower (and to make copies and/or extracts therefrom) and to
discuss the affairs, finances and accounts of such persons with, and to be advised as to the same by, the officers of such persons and to be advised as to such or other business records upon the request of the Lenders. 

 

	 	(c)	Legal Existence. The Borrower shall maintain its corporate/legal existence and business, maintain its assets in good operating conditions and repair (subject to
ordinary wear and tear), keep its business and assets adequately insured, maintain its chief executive office in the United States, continue to engage in the same lines of business, and comply in all material respects with all legal regulations,
including, without limitation, ERISA and environmental laws. 

  

	 	(d)	Notice of Defaults. The Borrower shall notify the Lenders promptly in writing (i) of the occurrence of any Default or Event of Default, (ii) of its
obtaining knowledge of any noncompliance with ERISA or any environmental law or proceeding in respect thereof which could have a material adverse effect on such person, (iii) of any change of address of the Borrower, (iv) of the
Borrower’s obtaining knowledge of any threatened or pending litigation or similar proceeding affecting it involving claims in excess of $100,000 in the aggregate or any material change in any such litigation or proceeding previously reported,
(v) of the Borrower’s obtaining knowledge of claims in excess of $100,000 in the aggregate against any of its assets or properties and (vi) of any new or change, amendment, modification or supplement in any management contract between
MHI Hotels Services LLC or any successor or assigns along with a copy of such new, changed, amended, modified or supplemented management agreement. 

  

	 	(e)	Use of Proceeds. The Borrower shall use the proceeds of the Loans only as permitted by Paragraph 7 hereof. 

 

	 	(f)	Cooperation. The Borrower shall cooperate with the Lenders, take such action, execute such documents, and provide such information as the Lenders may from time
to time reasonably request in order further to effect the transactions contemplated by and the purposes of the Loan Documents. 

  
 21 

	 	(g)	Taxes. The Borrower shall pay when due (including any extension thereof) all taxes, assessments and other governmental charges imposed upon it or its assets,
franchises, business, income or profits before any penalty or interest accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which by law might be a Lien upon any of its assets,
provided that (unless any material item or property would be lost, forfeited or materially damaged as a result thereof) no such charge or claim need be paid if it is being diligently contested in good faith, if the Lenders are notified in
advance of such contest and if the Borrower establishes an adequate reserve or other appropriate provision required by GAAP. 

  

	 	(h)	Compliance with Laws. The Borrower shall comply with all federal, state and local laws, regulations and orders applicable to the Borrower and its Subsidiaries or
their assets in all respects material to the Borrower’s and its Subsidiaries’ business or assets and shall immediately notify the Lender of any violation of any rule, regulation, statute, ordinance, order or law relating to the public
health or the environment and of any complaint or notifications received by the Borrower and any of its Subsidiaries regarding to any environmental or safety and health rule, regulation, statute, ordinance or law. The Borrower shall obtain and
maintain any and all licenses, permits, franchises, governmental authorizations, patents, trademarks, copyrights or other rights necessary for the ownership of its properties and the conduct of its business and as may be required from time to time
by applicable law. 

  

	 	(i)	Further Assurances. The Borrower shall promptly, upon request by the Lenders, correct any defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment or recordation of the Loan Document. Promptly upon request by the Lenders, the Borrower shall execute, acknowledge, deliver, record, file and register, any and all such further acts, deeds, conveyances, documents, when
available to be delivered pursuant to Paragraph 8, the Collateral Documents (together with any additional security agreements, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements contemplated thereby) and
continuations, notices of assignment, transfers, certificates, assurances and other instruments as the Lenders may require from time to time in order to carry out more effectively the purposes of each Loan Document. 

14. Certain Negative Covenants. Until payment in full of all obligations under this Note, the Borrower will not and shall cause
its Subsidiaries to not: 
  

	 	(a)	Indebtedness. Incur or create any Indebtedness other than as set forth on Schedule 14(a) (“Permitted Indebtedness”); 

  
 22 

	 	(b)	Liens. Mortgage, assign, pledge, transfer or otherwise permit any Lien other than as set forth on Schedule 14(b) (“Permitted Liens”).

  

	 	(c)	Merger; Disposition or Acquisition of Assets. (a) merge or consolidate with any entity; (b) amend or change its articles of incorporation, articles of
organization or code of regulations/bylaws, in each case, in a manner that has a material adverse effect on the Borrower’s ability to perform its obligations under any Loan Document; (c) except with respect to the disposition of one or
more Hotel Properties, sell, lease, transfer or otherwise dispose of, or grant any Person an option to acquire, or sell and leaseback, all or any substantial portion of its assets, whether now owned or hereafter acquired (in each case other than in
the ordinary course of business); provided that the Net Asset Sale Proceeds from the disposition of Hotel Properties shall be applied pursuant to Paragraph 4(c)(i); or (d) acquire, purchase or otherwise obtain assets or property,
including shares of Capital Stock, other than in the ordinary course of business and in any event in amount in excess of $2,000,000. 

  

	 	(d)	Fiscal Year; Fiscal Quarter. The Borrower shall not change its or any of its Subsidiaries’ fiscal year or fiscal quarter without the prior written consent
of the Lenders. 

  

	 	(e)	Restricted Payments. Neither the Borrower nor any of its Subsidiaries through any manner or means or through any other Person to, directly or indirectly,
declare, order, pay, make or set apart, or agree to declare, order, pay, make or set apart, any sum for any Restricted Payment except (i) as required by the Internal Revenue Code of 1986, as amended, to maintain its status as a Real Estate
Investment Trust, (ii) Restricted Payments by a wholly-owned direct or indirect Subsidiary of the Borrower to its immediate parent entity and (iii) other Restricted Payments so long as at the time of, and after giving effect to such
Restricted Payment, the Borrower has at least $10,000,000 in Cash or Cash Equivalents (provided that for purposes of this Paragraph 14(e), up to $5,000,000 in the undrawn Term Loan Commitments may be included in the calculation of Cash at any
time). 

  

	 	(f)	No Amendment to Credit Agreement. The Borrower shall not, and shall not permit any “Loan Party” (as defined in the Credit Agreement) or other
Subsidiary to, amend, supplement, restate or otherwise modify any terms of any Loan Document (as defined in the Credit Agreement) that could reasonably be expected to be materially adverse to the interests of the Agent and the Lenders without the
prior written consent of the Required Lenders. For the avoidance of doubt, such terms would include, without limitation, changes to any of the following: maturity date, interest rate, collateral amount of debt, default provisions or default
remedies. 

  

	 	(g)	Subsidiaries. The Borrower shall not form, or cause to be formed, any other Subsidiary if the formation of such Subsidiary would have a material adverse effect
on the Lenders. 

  
 23 

 15. Taxes; Withholding, etc. 

 

	 	(a)	Payments to Be Free and Clear. All sums payable by the Borrower under this Note shall (except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any tax imposed, levied, collected, withheld or assessed by or within any governmental authority. 

  

	 	(b)	Withholding of Taxes. If the Borrower is required by law to make any deduction or withholding on account of any tax from any sum paid or payable by the Borrower
to the Lenders under this Note, (i) the Borrower shall notify the Lenders of any such requirement or any change in any such requirement as soon as such Borrower becomes aware of it, (ii) the Borrower shall pay any such tax before the date
on which penalties attach thereto, such payment to be made for its own account, and (iii) the sum payable by the Lenders in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary
to ensure that, after the making of that deduction, withholding or payment, the Lenders receive on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made.

 16. Expenses; Indemnification. 

 

	 	(a)	Expenses. The Borrower agrees to promptly pay (i) all the actual and reasonable costs and expenses of the administration of this Note, the Loan Documents
and all other documents, instruments or agreements executed and delivered by Borrower for the benefit of any Lender in connection herewith, and any amendments, consents, waivers or other modifications to this Note, the Loan Documents and such other
documents, instruments or agreements executed and delivered by the Borrower for the benefit of any Lender in connection herewith, including, without limitation, the reasonable fees, expenses and disbursements of counsel to the Lenders, and
(ii) after the occurrence of a Default, all costs and expenses, including attorneys’ fees and costs of settlement, incurred by the Lenders in enforcing any obligations under this Note or in collecting any payments due from the Borrower
under this Note by reason of such Default or in connection with any refinancing or restructuring of this Note provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings.

  

	 	(b)	Indemnification. The Borrower shall indemnify the Lenders and their respective affiliates, shareholders, partners, managers, members, directors, officers,
employees, agents and affiliates (collectively, the “Lender Indemnified Persons”) against and hold each Lender Indemnified Person harmless from any and all liabilities, losses, damages, costs, expenses (including reasonable
attorneys’ fees and expenses) that the Lender Indemnified Persons may suffer or become subject to arising out of or in connection with this Note, the use of proceeds hereof or any claim, litigation, investigation or proceeding relating to any
of the foregoing, regardless of whether any Lender Indemnified Person is a party thereto. No Lender Indemnified Person shall be liable for any indirect or consequential damages in connection with its obligations hereunder or its activities related
to this Note. 

  
 24 

 17. Successors and Assigns. This Note will be binding upon and inure to the benefit
of and is enforceable by the respective successors and permitted assigns of the parties hereto. This Note may not be assigned by the Borrower hereto without the prior written consent of the Lenders. Any assignment or attempted assignment in
contravention of Paragraph 17 will be void ab initio and will not relieve the assigning party of any obligation under this Note. 
 18. Assignments and Participations. Commencing on the third anniversary of the date hereof, each Lender may assign (each, an “Assignment”) to one or more Persons (each, an
“Assignee”) all or a portion of its rights and obligations under this Note (including all or a portion of such Lender’s Loans and Term Loan Commitment, as the case may be); provided that: (1) such Assignee acknowledges the
terms of the Intercreditor Agreement and agrees to be bound by the terms of the Intercreditor Agreement pursuant to an agreement reasonably satisfactory to the Credit Agreement Agent (as defined in the Intercreditor Agreement) and (2) no
Assignment shall be made to the Borrower or any of its affiliates. Each Assignment shall be subject to the following: 
  

	 	(a)	Consent. Assignments shall be subject to the prior written consent of the Borrower, provided that no consent of the Borrower shall be required for an assignment
to a Lender or an affiliate of a Lender or, if an Event of Default has occurred and is continuing; or 

  

	 	(b)	Minimum Transfer. Except in the case of an Assignment to a Lender or an affiliate of a Lender the amount of the Loan of the assigning Lender subject to each such
Assignment (determined as of the date of the Assignment) shall not be less than $1,000,000 or an assignment of the entire remaining amount of the assigning Lender’s Loan (if less than $1,000,000) unless the Borrower otherwise consents, provided
that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing; 

  

	 	(c)	 Participations. Each Lender may sell participations to one or more Persons (other than to the Borrower or any of its affiliates) in all or a
portion of such Lender’s rights and obligations under this Note (including all or a portion of such Lender’s Loans and Term Loan Commitment, as the case may be); provided that (i) such Lender’s obligations under this Note shall
remain unchanged, (ii) such Lender shall remain solely responsible to the Borrower for the performance of such obligations, and (iii) the Borrower shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Note. Any agreement or instrument pursuant to which such Lender sells a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the participant, agree to any amendment, modification or waiver to
(i) extend the final scheduled maturity of any Loan in which such participant is participating, or 

  
 25 

	 	 
reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect, (ii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Note or
(iii) when applicable, release all or substantially all of the Collateral supporting the Loans hereunder. 

 19. Intercreditor Agreement. The terms of this Note and the indebtedness evidenced by this Note are subject to that certain Intercreditor Agreement dated as of April 18, 2011 (the
“Intercreditor Agreement”) by the Borrower and Lenders in favor of the Credit Agreement Agent and the Credit Agreement Lenders referred to in such Intercreditor Agreement 

20. Miscellaneous. 
  

	 	(a)	Notices. Except as otherwise expressly provided herein, all notices and other communications made or required to be given pursuant to this Note shall be made in
writing and delivered personally, by overnight courier or by registered mail to the parties at the following address or sent by facsimile, with confirmation received, to the facsimile number specified below (or at such other address or facsimile
number as will be specified by a party by like notice given at least five calendar days prior thereto). All notices, requests, demands and other communications will be deemed delivered when actually received. 

If to the Borrower, at: 
 MHI Hospitality Corporation 
 410 W. Francis Street 

Williamsburg, Virginia 23185 
 Attn: David R. Folsom and Patrick Fiel, Esq. 
 Telephone: (757) 229-5648

 Facsimile: (757) 564-8801 

  
 26 

 With a copy to: 
 Baker & McKenzie LLP 
 815 Connecticut Avenue, NW 

Washington, D.C. 20006-4078 
 Attn: Thomas J. Egan, Esq. 
 Telephone:   +1 202 452 7050 

Facsimile:   +1 202 416 6955 
 If to the Lenders, at: 
 c/o Essex Equity Capital Management, LLC 

375 Hudson Street, 12th Floor 
 New York, New York 10014 
 Attn: Ryan Taylor 

Telephone:    (646) 833-3258 
 Facsimile:     (866) 758-8541 
 with a copy to:

 Richards Kibbe & Orbe LLP 
 One World Financial Center 
 New York, New York 10281 

Attn: Larry G. Halperin, Esq. 
 Telephone:    (212) 530-1800 

Facsimile:     (212) 530-1801 
  

	 	(b)	Counterparts. This Note 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. 

  

	 	(c)	Amendments. This Note may not be amended, modified or waived except by an instrument in writing signed on behalf of each of the parties hereto.

  

	 	(d)	Governing Law. This Note 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 such jurisdiction, without reference to conflicts of laws provisions. 

  

	 	(e)	Entire Agreement. This Note and the Loan 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. 

  

	 	(f)	Severability. If any term or other provision of this Note is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Note will nevertheless remain in full force and effect. 

  
 27 

	 	(g)	No Third-Party Rights. This Note is not intended, and will not be construed, to create any rights in any parties other than the Borrower and the Lenders, and no
person or entity may assert any rights as third-party beneficiary hereunder. 

  

	 	(h)	Submission to Jurisdiction. Each of the Borrower and the Lenders hereby (i) agrees that any action, suit or proceeding with respect to this Note 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, (ii) accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of such courts,
(iii) 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 (iv) 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 Paragraph 19(a) above. 

  

	 	(i)	Waiver of Jury Trial. EACH OF THE BORROWER AND THE LENDERS HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHT UNDER THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR TO BE DELIVERED IN CONNECTION WITH THIS NOTE AND AGREES THAT ANY ACTION, SUIT OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

  

	 	(j)	Ambiguities. This Note was negotiated between legal counsel for the parties and any ambiguity in this Note will not be construed against the party who drafted
this Note. 

  

	 	(k)	No Waiver; Remedies. No failure or delay by any party in exercising any right, power or privilege under this Note 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. 

 

	 	(l)	Patriot Act. The Lenders hereby notify the Borrower that pursuant to the requirements of the Act, they may be required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lenders to identify Borrower in accordance with the Act. 

 

	 	(m)	 Right of Setoff. If an Event of Default shall have occurred and be continuing, the Lenders and each of their respective affiliates are hereby
authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Lender or any such affiliate to or for the credit 

  
 28 

	 	 
or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Note or any other Loan Document to the Lender, irrespective of whether
or not the Lender shall have made any demand under this Note or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office of the Lender different from the branch or office
holding such deposit or obligated on such Indebtedness. The rights of the Lender and its affiliates under this Paragraph are in addition to other rights and remedies (including other rights of setoff) that the Lenders or their respective affiliates
may have. The Lenders agree to notify the Borrower promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application. 

[signature page follows on next page] 

  
 29 

					
	BORROWER:	 	MHI HOSPITALITY CORPORATION
			
		 	By:	 	 /s/ David R. Folsom

		 		 	Name:    David R. Folsom
		 		 	Title:      President and COO

SIGNATURE PAGE TO NOTE AGREEMENT 

					
	LENDER:	 	ESSEX EQUITY HIGH INCOME JOINT INVESTMENT VEHICLE, LLC
		
		 	By:  Essex Equity Capital Management, LLC, the Investment Manager
			
		 	By:	 	 /s/ John Liu

		 	Name:	 	John Liu
		 	Title:	 	Chief Executive Officer
		
	AGENT:	 	ESSEX EQUITY HIGH INCOME JOINT INVESTMENT VEHICLE, LLC
		
		 	By:  Essex Equity Capital Management, LLC, the Investment Manager
			
		 	By:	 	 /s/ John Liu

		 	Name:	 	John Liu
		 	Title:	 	Chief Executive Officer

 SIGNATURE
PAGE TO NOTE AGREEMENT 

 SCHEDULE I 
 LENDERS’ COMMITMENTS 
  

					
	 Lenders
	  	Term Loan Commitment	 
	 Essex Equity High Income Joint Investment Vehicle, LLC
	  	$	10,000,000	  
		  	 	 	 
	 TOTAL
	  	$	10,000,000

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