Document:

Exhibit 10.27

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (“Agreement”)
is made and entered into as of the [*] day of [*], 2017, by and between Hospitality Investors Trust, Inc., a Maryland corporation
(the “Company”), and [*] (“Indemnitee”).

 

WHEREAS, the Company has requested that Indemnitee
serve as a director or officer of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result
of his or her service; and

 

WHEREAS, as an inducement to Indemnitee to [continue
to]1 serve as such director or officer,
in recognition of the need to provide Indemnitee with substantial protection against personal liability, and in order to provide
such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment
to the Company's charter or bylaws, any change in the composition of the Board of Directors or any change in control or business
combination transaction relating to the Company), the Company has agreed to indemnify Indemnitee and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings, as provided herein;

 

[WHEREAS, Indemnitee has certain rights to indemnification
and advancement of expenses pursuant to an existing indemnification agreement, dated as of December 31, 2014, by and between the
Company, the Indemnitee and the other indemnitee parties thereto (the “Prior Agreement”);]2

 

[WHEREAS, Indemnitee may have certain rights
to indemnification, advancement of expenses and/or insurance provided by the Designating Stockholder (as hereinafter defined) (or
their affiliates), which Indemnitee, the Company and the Designating Stockholder (or their affiliates) intend to be secondary to
the primary obligation of the Company to indemnify and advance expenses to Indemnitee as provided herein, with the Company’s
acknowledgement of and agreement to the foregoing being a material condition to Indemnitee’s willingness to serve as a director
of the Company;]3 and

 

WHEREAS, the parties by this Agreement desire
to [supersede the rights of the Indemnitee to indemnification and advancement of expenses pursuant to the Prior Agreement in its
entirety as of the Effective Date and] 4
set forth their agreement regarding indemnification and advance of expenses;

 

NOW, THEREFORE, in consideration of the premises
and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

 

1
Include only for directors and officers subject to the Prior Agreement.

2
Include only for directors and officers subject to the Prior Agreement.

3
Include only for directors designated by the Designating Stockholder.

4
Include only for directors and officers subject to the Prior Agreement.

 

     

     

    

 

Section 1.          Definitions.
For purposes of this Agreement:

 

(a)          
“Applicable Legal Rate” means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments
as of the day that it is determined that Indemnitee must repay any advanced expenses.

 

(b)          “Change
in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether
or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such
a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power
of all of the Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior
approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining
such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of
assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors
then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or
event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members
of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board
of Directors or nomination for election by the Company’s stockholders was approved by the affirmative vote of at least two-thirds
of the directors then in office who were directors as of the Effective Date or whose election or nomination for election was previously
so approved.

 

(c)          
“Corporate Status” means the status of a person (including at any time prior to the Effective Date) as a present or
former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee, representative or agent of any other foreign or domestic corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request
of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of
the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served
as a director, trustee, officer, partner, manager, managing member, fiduciary, employee, representative or agent of any corporation,
partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (1) of which a majority
of the voting power or equity interest is or was owned directly or indirectly by the Company or (2) the management of which
is controlled directly or indirectly by the Company and/or (ii) if, as a result of Indemnitee’s service to the Company
or any of its affiliated entities, Indemnitee is subject to duties by, or required to perform services for, an employee benefit
plan or its participants or beneficiaries, including as fiduciary or deemed fiduciary thereof.

 

    	 	2	 

     

    

 

(d)          [“Designating
Stockholder” means Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC.]5

 

(e)          “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
and/or advance of Expenses is sought by Indemnitee.

 

(f)          “Effective
Date” means the date set forth in the first paragraph of this Agreement.

 

(g)          “Expenses”
means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in
a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including,
without limitation, the premium for, security for and other costs relating to any cost bond supersedeas bond or other appeal bond
or its equivalent.

 

(h)          “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification
agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification
or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any
person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

(i)          “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of a
civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature,
including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically
agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate
in the institution of a Proceeding, such situation shall also be considered a Proceeding.

 

(j)          [“Purchase
Agreement” shall mean the Securities Purchase, Voting and Standstill Agreement, dated January 12, 2017, by and among the
Company (f/k/a American Realty Capital Hospitality Trust, Inc.), Hospitality Investors Trust Operating Partnership, L.P. (f/k/a
American Realty Capital Hospitality Operating Partnership, L.P.), and the Designating Stockholder, as the same may be amended,
modified or supplemented from time to time in accordance with its terms.]6

 

 

5
Include only for directors designated by the Designating Stockholder.

6
Include only for directors designated by the Designating Stockholder.

 

    	 	3	 

     

    

 

Section 2.          Services
by Indemnitee. In consideration of the Company’s covenants and commitments hereunder, the Indemnitee agrees to serve
as a director or officer of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the
Company to continue Indemnitee’s service to the Company. This Agreement shall not be deemed an employment contract between
the Company (or any other entity) and Indemnitee.

 

Section 3.          General.
Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided
in this Agreement and (b) as permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided,
however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided
in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement and any additional
indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (the “MGCL”).

 

Section 4.          Standard
for Indemnification. Subject to the limitations in Section 5, if, by reason of Indemnitee’s Corporate Status, Indemnitee
is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties,
fines and amounts paid in settlement and all Expenses actually incurred by Indemnitee or on Indemnitee’s behalf in connection
with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee
was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services
or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

 

Section 5.          Certain
Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not
be entitled to:

 

(a)          indemnification
for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the
course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf
of or performing services for the Company; (iii) such loss or liability was not the result of (A) gross negligence or willful misconduct,
in the case that the Indemnitee is an independent director of the Company or (B) negligence or misconduct, in the case that the
Indemnitee is not an independent director of the Company; and (iv) such indemnification is recoverable only out of the Company’s
net assets and not from the Company’s stockholders;

 

    	 	4	 

     

    

 

(b)          indemnification
for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following
conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities
law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction
as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that
indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification
has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities
regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities
laws;

 

(c)          indemnification
hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged, in a final adjudication of the
Proceeding not subject to further appeal, to be liable to the Company;

 

(d)          indemnification
hereunder if Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable on the
basis that personal benefit was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether
or not involving action in the Indemnitee’s Corporate Status; or

 

(e)          indemnification
or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce
this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company’s
charter or bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of
Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise.

 

Section 6.          Court-Ordered
Indemnification. Subject to the limitations in Section 5(a) and (b), a court of appropriate jurisdiction, upon application
of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following
circumstances:

 

(a)          if
such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall
order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

 

(b)          
if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances,
whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has
been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification
as the court shall deem proper without regard to any limitation on such court ordered indemnification contemplated by Section 2-418(d)(2)(ii)
of the MGCL.

 

Section 7.          Indemnification
for Expenses of an Indemnitee Who is Wholly or Partly Successful. Subject to the limitations in Section 5, to the extent that
Indemnitee was or is, by reason of his or her Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding
and is successful, on the merits or otherwise, in the defense of such Proceeding, Indemnitee shall be indemnified by the Company
for all Expenses actually incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims,
issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually
incurred by Indemnitee or on Indemnitee’s behalf in connection with each such claim, issue or matter, allocated on a reasonable
and proportionate basis. For purposes of this Section 7, and without limitation, the termination of any claim, issue or matter
in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue
or matter.

 

    	 	5	 

     

    

 

Section 8.          Advance
of Expenses for an Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be,
made a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate
entitlement to indemnification hereunder, advance all Expenses incurred by or on behalf of Indemnitee in connection with (a) such
Proceeding which is initiated by a third party who is not a stockholder of the Company, or (b) such Proceeding which is initiated
by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically
approves such advancement, and which relates to acts or omissions with respect to the performance of duties or services on behalf
of the Company, within ten days after the receipt by the Company of a statement or statements requesting such advance or advances
from time to time, whether prior to or after final disposition of such Proceeding, and may be in the form of, in the reasonable
discretion of Indemnitee (but without duplication) (a) payment of such Expenses directly to third parties on behalf of the
Indemnitee, (b) advancement to the Indemnitee of funds in an amount sufficient to pay such Expenses or (c) reimbursement to
Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement
has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A
or in such form as may be required under applicable law as in effect at the time of the execution thereof to reimburse the portion
of any Expenses advanced to Indemnitee, together with the Applicable Legal Rate of interest thereon, relating to claims, issues
or matters in the Proceeding as to which it shall ultimately be determined by non-appealable judgment of a court of competent jurisdiction
that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7
of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the
Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8
shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s
financial ability to repay such advanced Expenses and without any requirement to post security therefor.

 

Section 9.          Indemnification
and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee
is or may be, by reason of Indemnitee’ s Corporate Status, made a witness or otherwise asked to participate in any Proceeding,
whether instituted by the Company or any other person, and to which Indemnitee is not a party, Indemnitee shall be advanced all
Expenses and indemnified against all Expenses actually incurred by Indemnitee or on Indemnitee’ s behalf in connection therewith
within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from
time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee.

 

    	 	6	 

     

    

 

Section 10.         Procedure
for Determination of Entitlement to Indemnification.

 

(a)          To
obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and
to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and
at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any
such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors
in writing that Indemnitee has requested indemnification.

 

(b)          Upon
written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law,
with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control
shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with
Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall
not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such
a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely
of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with
Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld or delayed, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if
so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined
that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made by the Company within ten days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement
to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant
to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement
to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

 

(c)          The
Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.

 

    	 	7	 

     

    

 

Section 11.         Presumptions
and Effect of Certain Proceedings.

 

(a)          In
making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof, by
clear and convincing evidence, to overcome that presumption in connection with the making of any determination contrary to that
presumption.

 

(b)          The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea
of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption
that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

 

(c)          The
knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director,
trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to
Indemnitee for purposes of determining any other right to indemnification under this Agreement.

 

Section 12.         Remedies
of Indemnitee.

 

(a)          lf
(i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) an advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no
determination of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days
after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7
or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification
pursuant to any other section of this Agreement or the charter or bylaws of the Company is not made within ten days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate
court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such
indemnification or advance of Expenses. Alternatively, Indemnitee , at Indemnitee’s option,
may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration
within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a);
provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce his
or her rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard
to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.

 

    	 	8	 

     

    

 

(b)          In
any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled
to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving
that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial
proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law,
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.

 

(c)          If
a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12,
absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification.

 

(d)          In
the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in
arbitration to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually incurred by him
or her in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that
Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

 

(e)          Interest
shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial
Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period
(i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance
with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the determination
of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such
payment is made to Indemnitee by the Company.

 

Section 13.         Defense
of the Underlying Proceeding.

 

(a)          Indemnitee
shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request
or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding.
The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right
of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend
in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only
to the extent the Company is thereby actually so prejudiced.

 

    	 	9	 

     

    

 

(b)          Subject
to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that
the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such
Proceeding under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall
not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof,
the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably
satisfactory to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b)
shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.

 

(c)          Notwithstanding
the provisions of Section l3(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate
Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall
not be unreasonably withheld, conditioned or delayed, that Indemnitee may have separate defenses or counterclaims to assert with
respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes,
based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, conditioned or delayed,
that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or
(iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented
by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not
be unreasonably withheld, conditioned or delayed, at the expense of the Company. In addition, if the Company fails to comply with
any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this
Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be
provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the
prior approval of the Company, which approval shall not be unreasonably withheld, conditioned or delayed, at the expense of the
Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter.

 

Section 14.         Representations
and Warranties of the Company. The Company hereby represents and warrants to Indemnitee as follows:

 

(a)          Authority.
The Company has all necessary corporate power and authority to enter into, and be bound by the terms of, this Agreement, and the
execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company.

 

    	 	10	 

     

    

 

(b)          Enforceability.
This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’
rights generally or general equitable principles, and to the extent limited by applicable federal or state securities laws.

 

Section 15.         Non-Exclusivity;
Survival of Rights; Subrogation.

 

(a)          The
rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the charter or bylaws of the Company, any agreement or a
resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise[;
provided, however, that this Agreement supersedes and replaces the rights to indemnification and advancement of Expenses
of the Indemnitee set forth in the Prior Agreement]7.
Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of the charter or bylaws of the Company, this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal, regardless of
whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal.
No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall
be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion
or employment of any other right or remedy.

 

(b)          [Except
for any rights the Company may have pursuant to the terms of any Transaction Document (as defined in the Purchase Agreement), the
Company hereby unconditionally and irrevocably waives, relinquishes and releases, and covenants and agrees not to exercise, any
rights that the Company now has against the Designating Stockholder (or any of its affiliates) or Indemnitee that arise from or
relate to the existence, payment, performance or enforcement of the Company’s obligations under this Agreement or under any
other indemnification agreement (whether pursuant to contract, bylaws or charter) with any person or entity, including, without
limitation, any right of subrogation (whether pursuant to contract or common law), reimbursement, exoneration, contribution or
indemnification, or to be held harmless, and any right to participate in any claim or remedy of Indemnitee (including of Indemnitee
against the Designating Stockholder (or any of its affiliates)), whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right to take or receive from the Designating Stockholder
(or any of its affiliates) or Indemnitee, directly or indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right.]8

 

(c)          
In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee with respect to any insurance referred to in Section 16(a) hereof, who shall execute all papers required
and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company
to bring suit to enforce such rights [(except with respect to any rights of recovery against the Designating Stockholder)]9.

 

 

7
Include only for directors and officers subject to the Prior Agreement.

8
Include only for directors designated by the Designating Stockholder.

9
Include only for directors designated by the Designating Stockholder.

 

    	 	11	 

     

    

 

Section 16.         Insurance.

 

(a)          The
Company (i) has, prior to the date hereof, obtained directors and officers liability insurance, covering Indemnitee for any claim
made against Indemnitee by reason of his or her Corporate Status and covering the Company for any indemnification or advance of
Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of his or her Corporate Status[, with
an underwriter and with terms (including premiums, deductibles and coverage limits) reasonably satisfactory to the Designating
Stockholder]10, and (ii) will, after
the date hereof, use its reasonable best efforts to maintain such insurance in full force and effect and shall pay the premium
therefor pursuant to the terms thereof for a period of at least five (5) years following the date that Indemnitee ceases to serve
as a director or officer of the Company so long as such directors and officers liability insurance remains available to the Company
on commercially reasonable terms during such time; provided, that the Company shall not reduce the coverage of such directors
and officers liability insurance without [the prior written consent of the Designating Stockholder]11
[providing prior written notice to Indemnitee pursuant to Section 25(a) below]12.

 

(b)          Without
in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee
arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties,
fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred
to in Section 16(a). The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect
the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution
and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of
the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which
Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in
the respective policies.

 

 

10
Include only for directors designated by the Designating Stockholder.

11
Include only for directors designated by the Designating Stockholder.

12
Include for all directors and officers other than directors designated by the Designating Stockholder.

 

    	 	12	 

     

    

 

Section 17.         Coordination
of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or
payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise, and, if following receipt by Indemnitee of any such payment, Indemnitee
is required to return such payment (or any portion of such payment) to the payor thereof, the Company shall be obligated to Indemnitee
in respect of such amounts to the extent that such amounts would otherwise be indemnifiable or payable or reimbursable as Expenses
hereunder [; provided, however, that (i) the Company hereby agrees that it is the indemnitor of first resort under
this Agreement and under any other indemnification agreement (i.e., their obligations to Indemnitee under this Agreement or any
other agreement or undertaking to provide advancement and/or indemnification to Indemnitee are primary and any obligation of the
Designating Stockholder (or any affiliate thereof other than the Company) to provide advancement or indemnification for the same
Expenses, liabilities, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with or in respect of such Expenses, liabilities, judgments, penalties, fines and amounts
paid in settlement) incurred by Indemnitee are secondary), and (ii) if the Designating Stockholder (or any affiliate thereof other
than the Company) pays or causes to be paid, for any reason, any amounts otherwise indemnifiable hereunder or under any other indemnification
agreement (whether pursuant to contract, bylaws or charter) pursuant to which Indemnitee is entitled to indemnification from the
Company or any affiliate of the Company, then (x) the Designating Stockholder (or such affiliate, as the case may be) shall be
fully subrogated to all rights of Indemnitee with respect to such payment and (y) the Company shall fully indemnify, reimburse
and hold harmless the Designating Stockholder (or such other affiliate) for all such payments actually made by the Designating
Stockholder (or such other affiliate) to the extent the Company is otherwise liable pursuant to the charter or bylaws of the Company
to Indemnitee for such payments made by the Designating Stockholder]13.

 

Section 18.         Contribution.
If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any
reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5,
then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be joined in such Proceeding
or would be liable if joined in such Proceeding), to the fullest extent permissible under applicable law and this Agreement, the
Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred
by Indemnitee, whether for Expenses, judgments, penalties, and/or amounts paid or to be paid in settlement, in connection with
any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right
of contribution it may have at any time against Indemnitee.

 

Section 19.         Reports
to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of
any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or
in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment
of any such indemnification or advance of Expenses or prior to such meeting.

 

Section 20.         Duration
of Agreement; Binding Effect.

 

(a)          
This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve
as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability
company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at
the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including
any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement), which date
shall in no event be earlier than the date on which the applicable statute of limitations period with respect to any possible Proceeding
expires.

 

 

13
Include only for directors designated by the Designating Stockholder.

 

    	 	13	 

     

    

  

(b)          The
indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable
by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee
who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing
member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of
the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.

 

(c)          The
Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.

 

(d)          The
Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable
and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity
of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall
not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled
to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that,
in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such
requirement of such a bond or undertaking.

 

Section 21.         Severability.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal
or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and
shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed
to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph
or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

    	 	14	 

     

    

 

Section 22.         Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

 

Section 23.         Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

 

Section 24.         Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section 25.         Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

		(a)	If to Indemnitee, to the address set forth on the signature
page hereto.

 

		(b)	If to the Company, to:

 

Hospitality Investors Trust, Inc.

405 Park Avenue, 14th Floor

New York, NY 10022

Attn: General Counsel

 

or to such other address as may have been furnished in writing to
Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

Section 26.         Governing
Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland,
without regard to its conflicts of laws rules.

 

    	 	15	 

     

    

  

Section 27.         [Third
Party Beneficiaries. The Designating Stockholder (and its affiliates) are express third party beneficiaries of this Agreement,
are entitled to rely upon this Agreement, and may specifically enforce the Company’s obligations hereunder (including but
not limited to the obligations specified in Section 15 and Section 17 of this Agreement) as though a party hereunder.]14

  

 

14
Include only for directors designated by the Designating Stockholder.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	16	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.

 

	 	HOSPITALITY INVESTORS trust, Inc.
	 	 
	  	By: 	       
	 	Name: Jonathan P. Mehlman
	 	Title: Chief Executive Officer and President

 

	 	INDEMNITEE
	 	 
	 	 
	 	
        Name: 

	 	 
	 	Address: 	 
	 	 	 
	 	 	 

 

     

     

    

  

EXHIBIT A

 

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES
ADVANCED

 

To: The Board of Directors of Hospitality Investors Trust, Inc.

 

Re: Affirmation and Undertaking

 

Ladies and Gentlemen:

 

This Affirmation and Undertaking is being provided
pursuant to that certain Indemnification Agreement, dated the [*] day of [*], 2017, by and between Hospitality Investors Trust,
Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”),
pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the “Proceeding”).

 

Terms used herein and not otherwise defined
shall have the meanings specified in the Indemnification Agreement.

 

I am subject to the Proceeding by reason of
my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that
at all times, insofar as I was involved as a director or officer of the Company, in any of the facts or events giving rise to the
Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal
benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe
that any act or omission by me was unlawful.

 

In consideration of the
advance by the Company for Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”),
I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material
to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate
dishonesty, (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any
criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the
portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon,
relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.

 

    	 	A-1	 

     

    

  

IN WITNESS WHEREOF, I have executed this Affirmation
and Undertaking on this _____ day of _______________, 20____.

 

	 	 
	 	 
	 	Name:

 

    	 	A-2Exhibit 10.5

 

EMPLOYMENT AGREEMENT

 

 

THIS AGREEMENT is entered into as
of the date set forth below, by and between VILLAGE BANK MORTGAGE CORPORATION, a Virginia corporation (the “Corporation”),
and GEORGE KAROUSOS (the “Executive”) and is made effective January 24, 2017.

 

W I T N E S S E T H:

 

WHEREAS, the Corporation desires
to retain the services of the Executive as President and Chief Executive Officer of the Corporation on the terms and conditions
set forth herein and, for purpose of effecting the same, the Board of Directors of the Corporation has approved this Employment
Agreement and authorized its execution and delivery on the Corporation’s behalf to the Executive;

 

WHEREAS, the Executive has significant
experience serving in senior mortgage leadership positions, and the Corporation desires to employ the Executive as a key executive
officer of the Corporation whose dedication, availability, advice and counsel to the Corporation is deemed important to the Board
of Directors of the Corporation, the Corporation and its stockholders;

 

WHEREAS, the Executive desires to
accept employment under this agreement and the services of the Executive, his experience and knowledge of the affairs of the Corporation,
and his reputation and contacts in the industry are valuable to the Corporation;

 

WHEREAS, the Corporation wishes to
attract and retain such well-qualified executives and it is in the best interests of the Corporation and of the Executive to secure
the services of the Executive;

 

WHEREAS, the Corporation considers
the establishment and maintenance of a sound management to be part of its overall corporate strategy and to be essential to protecting
and enhancing the best interests of the Corporation and its stockholders; and

 

WHEREAS, the Corporation desires
to safeguard its proprietary confidential information, retain its employees and protect itself against unfair competition.

 

NOW, THEREFORE, to assure the Corporation
of the Executive’s dedication, the availability of his advice and counsel to the Corporation, and to induce the Executive
to remain and continue in the employ of the Corporation and for other good and valuable consideration, the receipt and adequacy
whereof each party hereby acknowledges, the Corporation and the Executive hereby agree as follows:

 

		1.	EMPLOYMENT: The Corporation agrees to, and does hereby employ, the Executive, and the Executive agrees to, and
does hereby accept such employment in the position of President of the Corporation until January 31, 2017 and as President and
Chief Executive Officer for the period beginning on January 31, 2017 until November 28, 2018 unless terminated by either party
as set forth herein.

 

     

     

    

 

		2.	EXECUTIVE DUTIES: The Executive agrees that, during the term of his employment under this Agreement and in his
capacity of President and Chief Executive Officer, he will devote his full business time and energy to the business, affairs and
interests of the Corporation and serve it diligently, to the best of his ability and in accordance with general business standards.
The Executive, however, may devote reasonable time and energy to charitable and civic activities that enhance the reputation and
good standing of the Executive and the Corporation in the community. The Executive shall comply with all policies, standards and
regulations of the Corporation now or hereafter promulgated. The services and duties to be performed by the Executive shall be
those appropriate to his office and title as currently and from time to time hereafter specified in the Corporation’s Bylaws
or otherwise specified by the President and Chief Executive Officer of Village Bank, the parent company of the Corporation.

 

		3.	COMPENSATION:

 

		(a)	Base Salary. The Corporation agrees to pay the Executive, as compensation for all services rendered by him to the Corporation
during the period of his employment under this Agreement, base salary in an annual amount of no less than $175,000.00, which shall
be payable in monthly, semi-monthly or bi-weekly installments in conformity with Corporation’s policy relating to salaried
employees. Such salary may be increased in the discretion of the President and Chief Executive Officer of Village Bank in accordance
with the policies and procedures of the Corporation, Village Bank and Village Bank and Trust Financial Corp.

 

		(b)	Profit Based Cash Incentive Plan. Beginning January 1, 2017, Executive shall be eligible to receive a profit based cash
incentive payment (the “Profit Based Incentive Plan”) on a calendar year basis, in an amount up to 6.5% of the annual
pretax profitability of the Corporation before deducting the total amount of profitability based incentives payable to the Corporation’s
executive positions provided that the total amount of all profit based cash incentive payments to the Corporation’s executive
employees cannot exceed 10% of the Corporation’s pretax profitability before such incentives as further outlined in detail
in a separate incentive plan document.

 

		(c)	Volume Based Incentive Plan. Effective January 1, 2017, Executive shall be eligible to receive a volume based incentive
payment (the “Volume Based Incentive Plan”) in an amount equal to .03% (3bps) of the total dollar amount of loans issued
by the Corporation and purchased by investors less the total dollar amount of loans repurchased by the Corporation as further outlined
in detail in a separate incentive plan document.

 

    2 

     

    

 

		(d)	Recruiting Incentive. On the first pay date following Executive’s start date with the Corporation, the Corporation
paid Executive a “Recruiting Incentive” in the amount of $50,000 subject to statutory withholdings and other deductions
authorized by Executive. The Recruiting Incentive shall be considered earned after twenty-four (24) months of employment (the “Stay
Period”). If Executive is terminated for Cause (as defined in Section 6(c) herein) or resigns his employment without Good
Reason (as defined in Section 6(b)(3) herein), prior to expiration of the Stay Period, Executive agrees to reimburse the Corporation
an amount equal to $2,083.33 ($50,000/24) multiplied by the number of months remaining in the Stay Period.

 

		(e)	Employee Benefits. During the term of employment under this Agreement, the Executive will be entitled to participate
in all employee benefit plans, practices and programs maintained by the Corporation, as in effect from time to time (collectively,
the “Employee Benefit Plans”), on a basis which is no less favorable than is provided to other similarly situated officers
of the Corporation, to the extent consistent with applicable law and the terms of the applicable Employee Benefit Plans. The Corporation
reserves the right to amend or cancel any Employee Benefit Plan at any time in its sole discretion, subject to the terms of such
Employee Benefit Plan and applicable law.

 

		4.	ILLNESS: In the event the Executive is unable to perform the essential functions of his job on a consistent basis,
with or without reasonable accommodations, for a period of four (4) consecutive months by reason of illness or other physical or
mental disability, the Corporation may terminate this Agreement without further or additional compensation being due the Executive
from the Corporation pursuant to this Agreement, except benefits accrued through the date of such termination under Employee Benefit
Plans of the Corporation. These benefits shall include long-term disability and other insurance or other benefits then regularly
provided by the Corporation to disabled employees of senior executive status, as well as any other insurance benefits so provided,
for which Executive qualifies. Notwithstanding any other provision in this Agreement, the Corporation will comply with the Americans
with Disabilities Act.

 

		5.	DEATH: In the event of the Executive’s death during the term of this Agreement, this Agreement shall terminate
as of the end of the month in which the Executive dies. This Section 5 shall not affect the rights of any person under other contracts
between the Executive and the Corporation or under any life insurance policy.

 

		6.	TERMINATION AND SEVERANCE:

 

		(a)	Employment At Will. Executive’s employment with the Corporation is “at will” and may be terminated
by the Executive or the Corporation at any time for any lawful reason upon thirty (30) days’ written notice to the other.
Except as specifically set forth herein, Executive will not be entitled to further compensation following termination of his employment.

 

    3 

     

    

 

		(b)	Eligibility for Severance. Notwithstanding the forgoing paragraph, if, during the twenty-four (24) month period following
Executive’s first date of employment with the Corporation: (1) Executive is involuntarily terminated by the Corporation without
Cause; (2) Executive is involuntarily terminated from employment without Cause within twelve months after a Change of Control of
Village Bank and Trust Financial Corp. (“VBFC”) or the Corporation; or (3) Executive suffers a material adverse change
to the salary, Profit Based Incentive Plan or Volume Based Incentive Plan set forth in Sections 3(a), 3(b) and 3(c) herein such
that the total compensation opportunity immediately after the change is materially lower than the total compensation opportunity
immediately before the change (“Good Reason”), and provided that the Executive signs a release and waiver
of claims reasonably satisfactory to the Corporation and such release and waiver has become effective and Executive complies with
the restrictive covenants set forth in Section 7:

 

		(i)	Executive shall be paid a lump sum “Severance Benefit” in an amount equal to six (6) months salary at Executive’s
then existing pay rate, less statutory withholdings and other deductions authorized by Executive; and

 

		(ii)	The Corporation will forgive any unamortized portion of the Recruiting Incentive paid to Executive as set forth in Section
3(d) herein.

 

		(c)	Cause. For the purpose of this Agreement, “Cause” shall mean:

 

		(i)	material failure of the Executive to perform his duties under this Agreement, unlawful or unethical business conduct, dishonesty,
willful violation of any law, rule, or regulation (other than traffic violations or similar offenses), a material violation of
the Corporation’s work rules, Code of Ethics or policies, or a material breach of this Agreement. The Board of Directors
shall not, however, terminate the Executive’s employment based on the Executive’s material failure to perform his duties
under this Agreement, his material violation of the Corporation’s work rules, Code of Ethics or policies, or his material
breach of this Agreement, without first providing him written notice of any such failure or breach and a reasonable period of time,
not less than ten (10) days, in which to remedy such failure or breach.

 

		(ii)	If the Executive is suspended and/or prohibited from participating in the conduct of the Corporation’s affairs by a notice
served under the Federal Deposit Insurance Act or any other regulatory authority, the Corporation’s obligations under this
Agreement shall be terminated and the Corporation thereafter shall have no obligation to make any further payments under this Agreement.

 

		(d)	Change of Control.

 

    4 

     

    

 

		(i)	For purposes of this Agreement, a “Change of Control” of VBFC shall mean (i) the acquisition by any “person”
or “group” (as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)),
other than VBFC, any subsidiary of VBFC, or any employee benefit plan of VBFC or any subsidiary of VBFC, directly or indirectly,
as “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of VBFC representing fifty percent
(50%) or more of either the then outstanding shares or the combined voting power of the then outstanding securities of VBFC; (ii)
either a majority of the directors of VBFC elected at VBFC’s most recent annual stockholders meeting shall have been nominated
for election other than by or at the direction of the “incumbent directors” of VBFC, or the “incumbent directors”
shall cease to constitute a majority of the directors of VBFC (the term “incumbent director” shall mean any director
who was a director of VBFC on January 1, 2017 and any individual who becomes a director of VBFC subsequent to January 1, 2017 and
who is elected or nominated by or at the direction of at least two-thirds of the then incumbent directors; (iii) VBFC consummates
a reorganization, merger, share exchange, consolidation or other business combination (a “Reorganization”) with any
other “person” or “group” (as defined in Sections 13(d) and 14(d) of the Exchange Act) or affiliate thereof,
other than a Reorganization that would result in the outstanding common stock of VBFC immediately prior thereto continuing to represent,
either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof,
at least fifty percent (50%) of the common stock of VBFC or such surviving entity or a parent or affiliate thereof outstanding
immediately after the Reorganization; (iv) a plan of complete liquidation of VBFC or an agreement for the sale or disposition by
VBFC of all or substantially all of VBFC’s assets.

 

		(ii)	For purposes of this Agreement a “Change of Control” of the Corporation shall mean (i) the sale of 50% or more
interest in the Corporation to a person or group not currently affiliated with the Corporation, or (ii) a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s
assets.

 

		7.	RESTRICTIVE COVENANTS:

 

		(a)	During the term of this Agreement and throughout any further period that he is an employee of the Corporation, and for the
longer of:

 

		(i)	six (6) months from and after the date that Executive
is (for any reason) no longer employed by the Corporation; or

 

		(ii)	for a period of six (6) months from the date of entry
by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by the Executive,

 

    5 

     

    

 

the Executive covenants and agrees that he will not,
directly or indirectly, compete with the Corporation by performing job functions similar to those he is performing under this Agreement,
including the supervision of employees engaged in banking operations similar to those in which the Corporation is engaged, for
any bank or bank holding company within thirty-five (35) miles of the headquarters of the Corporation or within five (5) miles
of any Village Bank branch that was in operation at the time the Executive’s employment with the Corporation ceased.

 

		(b)	During the term of this Agreement and throughout any further period that he is an employee of the Corporation, and for the
longer of:

 

		(i)	six (6) months from and after the date that the Executive
is (for any reason) no longer employed by the Corporation; or

 

		(ii)	for a period of six (6) months from the date of entry
by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by the Executive,

 

the Executive will not, directly or indirectly, on behalf
of the Executive or any other person or entity, solicit or induce, or attempt to solicit or induce, any person currently employed
by the Corporation to terminate the employee’s employment with the Corporation.

 

		(c)	During the term of this Agreement and throughout any further period that he is an employee of the Corporation, and for the
longer of:

 

		(i)	six (6) months from and after the date that the Executive
is (for any reason) no longer employed by the Corporation; or

 

		(ii)	for a period of six (6) months from the date of entry
by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by the Executive,

 

the Executive will not, except to the extent necessary
to carry out his duties as an employee of the Corporation, directly or indirectly provide Competitive Services (as defined below)
to any Customer (as defined below), and shall not, directly or indirectly, on behalf of the Executive or any other person or entity,
solicit or divert away or attempt to solicit or divert away any Customer of the Corporation for the purpose of selling or providing
Competitive Services, provided the Corporation is then still engaged in the sale or provision of Competitive Services.

 

		(d)	It is agreed that notwithstanding the above to the contrary, Executive may engage in business ventures as long as they are
not competitive with the Corporation.

 

    6 

     

    

 

		(e)	For purposes of this Agreement, the term “Customer” means any individual or entity to whom or to which the Corporation
provided Competitive Services, and with whom or with which the Executive had contact in connection with the delivery of such Competitive
Services, within two years of the date on which the Executive’s employment terminates.

 

		(f)	For purposes of this Agreement, “Competitive Services” means providing commercial and consumer financial products
and services that, as of the date of this Agreement or as of the date of termination of employment, as the case may be, are provided
to Customers of the Corporation, whether such services are provided directly by the Corporation or by others under a contractual
arrangement with the Corporation.

 

		(g)	The Executive agrees that the covenants in this Section 7 are reasonably necessary to protect the legitimate interests of the
Corporation, are reasonable with respect to the time and territory and do not interfere with the interests of the public. The Executive
further agrees that the descriptions of the covenants contained in this Section 7 are sufficiently accurate and definite to inform
the Executive of the scope of the covenants. Finally, the Executive agrees that the consideration set forth in this Agreement is
full, fair and adequate to support the Executive’s obligations hereunder and the Corporation’s rights hereunder. The
Executive acknowledges that in the event the Executive’s employment with the Corporation is terminated for any reason, the
Executive will be able to earn a livelihood without violating such covenants.

 

		(h)	The parties have attempted to limit the Executive’s right to compete only to the extent necessary to protect the Corporation
from unfair competition. The parties recognize, however, that reasonable people may differ in making such a determination. Accordingly,
the parties intend that the covenants contained in this Section 7 to be completely severable and independent, and any invalidity
or unenforceability of any one or more such covenants will not render invalid or unenforceable any one or more of the other covenants.

 

		(i)	The Executive agrees that, given the nature of the positions held by the Executive with the Corporation, each and every one
of the covenants and restrictions set forth in this Agreement above are reasonable in scope, length of time and geographic area
and are necessary for the protection of the significant investment of the Corporation in developing, maintaining and expanding
its business. Accordingly, the parties hereto agree that in the event of any breach by the Executive of any of the provisions of
Sections 7 and/or 14 of this Agreement that monetary damages alone will not adequately compensate the Corporation for its losses
and, therefore, that it shall be entitled to any and all legal or equitable relief available to it, specifically including, but
not limited to, injunctive relief, and the Executive shall be liable for all damages, including actual and consequential damages,
costs and expenses, and legal costs and actual attorneys fees incurred by the Corporation as a result of taking action to enforce,
or recover for any breach of Section 7 or 14.

 

		(j)	The Executive covenants that he is not the subject of any contract that prevents him from executing this Agreement and performing
the duties of President and Chief Executive Officer. The Executive further covenants that he is not subject to any covenants or
obligations not to compete and is not subject to any other restrictions or obligations which would prevent him from fulfilling
the duties specified in this Agreement.

 

    7 

     

    

 

		8.	NOTICES: For the purposes of this Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

 

	 	If to the Executive: 	George Karousos
	 	 	16430 Shefford Drive
	 	 	Midlothian, Virginia 23112
	 	 	 
	 	If to the Corporation:	William G. Foster, President and Chief Executive Officer
	 	 	Village Bank
	 	 	P. O. Box 330
	 	 	Midlothian, Virginia 23112
	 	 	 
	 	With a copy to:	Craig D. Bell, Esquire
	 	 	Chairman of Village Bank and Trust Financial Corp.
	 	 	McGuireWoods LLP
	 	 	Gateway Plaza
	 	 	800 Canal Street
	 	 	Richmond, Virginia 23219

 

or at such other address as any party may have furnished
to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

		9.	MODIFICATION, WAIVERS, APPLICABLE LAW: No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing, signed by the Executive and on behalf of the Corporation by such
officer as may be specifically designated by the Board of Directors of the Corporation. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provision or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been
made by either party, which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the Commonwealth of Virginia.

 

    8 

     

    

 

		10.	INVALIDITY, ENFORCEABILITY: The invalidity or unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

		11.	SUCCESSOR RIGHTS: This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts would still be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to his executor or, if there is no such executor, to his estate.

 

		12.	HEADINGS: Descriptive headings contained in this Agreement are for convenience only and shall not control or
affect the meaning or construction of any provision hereof.

 

		13.	ARBITRATION: With the exception of Sections 7 and 14 and the enforcement of these sections in accordance with
Section 7(i), all other claims under this Agreement will be resolved by binding arbitration. Any dispute, controversy or claim
arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators, in Richmond, Virginia in accordance with the Employment Arbitration Rules and Mediation Procedures Rules of the American
Arbitration Association then in effect. The Corporation shall pay all administrative fees associated with such arbitration. Judgment
may be entered on the arbitrator’s award in any court having jurisdiction. Unless otherwise provided in the rules of the
American Arbitration Association, the arbitrators shall, in their award, allocate between the parties the costs of arbitration,
which shall include reasonable attorneys’ fees and expenses of the parties, as well as the arbitrator’s fees and expenses,
in such proportions as the arbitrators deem just.

 

		14.	CONFIDENTIALITY: Executive covenants and agrees that any and all proprietary information maintained as confidential
by the Corporation and concerning the customers or businesses and services of the Corporation of which he has knowledge as a result
of his association with the Corporation in any capacity, shall be deemed confidential in nature and shall not, without the proper
written consent of the Corporation, be directly or indirectly used, disseminated, disclosed or published by the Executive to third
parties other than in connection with the usual conduct of the business of the Corporation, or as required by law or the Corporation’s
Code of Ethics. Such information shall expressly include, but shall not be limited to, confidential and proprietary information
concerning the Corporation’s trade secrets within the meaning of the Virginia Trade Secrets Act, business operations, business
records, documented customer lists or other confidential customer information. Upon termination of employment, the Executive shall
deliver to the Corporation all property in his possession which belongs to the Corporation including all originals and copies of
documents, forms, records or other information, in whatever form it may exist, concerning the Corporation or its business, customers,
products or services. This Section 14 shall not be applicable to any information which, through no misconduct or negligence of
Executive, has been disclosed to the public by anyone other than Executive.

 

    9 

     

    

 

		15.	409A COMPLIANCE:

 

		(a)	The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code (“Code”)
Section 409A. Accordingly, to the maximum extent permitted under Code Section 409A, the terms of this Agreement, including, without
limitation, “termination” and “termination of employment,” and similar terms, shall be interpreted to be
in compliance with Code Section 409A. In no event whatsoever shall the Corporation be liable for any additional tax, interest or
penalty that may be imposed on the Executive by Code Section 409A or damages for failing to comply with Code Section 409A.

 

		(b)	Notwithstanding any other payment schedule provided herein to the contrary, if the Executive is deemed on the date of termination
to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then each of the following
shall apply:

 

		(i)	With regard to any payment that is considered deferred compensation under Code Section 409A payable on account of a “separation
from service,” such payment shall be made on the date which is the earlier of (x) the expiration of the six (6)-month period
measured from the date of such ‘separation from service’ of the Executive, and (y) the date of the Executive’s
death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period,
all payments delayed pursuant to this Section 15 (whether they would have otherwise been payable in a single sum or in installments
in the absence of such delay) shall be paid to the Executive in a lump sum, and all remaining payments due under this Agreement
shall be paid or provided in accordance with the normal payment dates specified for them herein; and

 

		(ii)	To the extent that any benefits to be provided during the Delay Period is considered deferred compensation under Code Section
409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Code Section
409A, the Executive shall pay the cost of such benefits during the Delay Period, and the Corporation shall reimburse the Executive,
to the extent that such costs would otherwise have been paid by the Corporation or to the extent that such benefits would otherwise
have been provided by the Corporation at no cost to the Executive, the Corporation’s share of the cost of such benefits upon
expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Corporation in accordance with
the procedures specified herein.

 

		(c)	All expenses or other reimbursements under this Agreement shall be made promptly and in any event on or prior to the last day
of the taxable year following the taxable year in which such expenses were incurred by the Executive (provided that if any such
reimbursements constitute taxable income to the Executive, such reimbursements shall be paid no later than March 15th
of the calendar year following the calendar year in which the expenses to be reimbursed were incurred), no such reimbursement or
expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any
other taxable year and the Executive’s right to reimbursement shall not be subject to liquidation in exchange for any other
benefit.

 

    10 

     

    

 

		(d)	For purposes of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement
shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies
a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days”), the actual
date of payment within the specified period shall be within the sole discretion of the Corporation.

 

		(e)	In no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code
Section 409A be offset by any other payment pursuant to this Agreement or otherwise.

 

		16.	REGULATORY REQUIREMENTS AND CLAWBACK: Notwithstanding anything contained in this Agreement to the contrary, it
is understood and agreed that the Corporation (or any of its successors in interest) shall not be required to make any payment
or take any action under this Agreement if:

 

		(a)	such payment or action is prohibited by any governmental agency having jurisdiction over the Corporation or any of its subsidiaries
(hereinafter referred to as “Regulatory Authority”) because the Corporation or any of its subsidiaries is declared
by such Regulatory Authority to be insolvent, in default or operating in an unsafe or unsound manner; or

 

		(b)	such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to the
Corporation, including, without limitation, the Emergency Economic Stabilization Act of 2008 and the Federal Deposit Insurance
Act, each as now in effect or hereafter amended, (ii) would be prohibited by or would violate any applicable rules, regulations,
orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise
would be prohibited by any Regulatory Authority.

 

		(c)	Executive agrees that any incentive based compensation or award that he receives, or has received, from the Corporation under
this Agreement or otherwise, will be subject to clawback by the Corporation as may be required by applicable law or stock exchange
listing requirement and on such basis as the Board of Directors of the Corporation determines, but in no event with a look-back
period of more than three years, unless required by applicable law or stock exchange listing requirement.

 

    11 

     

    

 

		17.	POSSIBLE REDUCTION IN PAYMENT AND BENEFITS:  No amounts will be payable and no benefits will be provided under
this Agreement to the extent that such payments or benefits, together with other payments or benefits under other plans, agreements
or arrangements, would make the Executive liable for the payment of an excise tax under Code Section 4999 or any successor provision.
The amounts otherwise payable and the benefits otherwise to be provided under this Agreement shall be reduced in a manner determined
by the Corporation (by the minimum possible amount) that is consistent with the requirements of Code Section 409A until no amount
payable to the Executive will be subject to such excise tax. All calculations and determinations under this Section 21 shall be
made by an independent accounting firm or independent tax counsel appointed by the Corporation (the “Tax Advisor”)
whose determinations shall be conclusive and binding on the Corporation and the Executive for all purposes. The Tax Advisor may
rely on reasonable, good faith assumptions and approximations concerning the application of Code Section 280G and Code Section
4999. The Corporation shall bear all costs of the Tax Advisor.

 

 

 

 

 

 

 

 

 

(Signatures
appear on the following page)

 

    12 

     

    

 

 

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

 

 

	 	 	 	EXECUTIVE	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	ATTEST: 	 	 	By: 	 	 
	 	 	 	 	         George Karousos	 
	 	 	 	 	 	 
	 	 	 	Date: 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	VILLAGE BANK MORTGAGE 	 
	 	 	 	CORPORATION	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	ATTEST: 	 	 	By: 	 	 
	 	 	 	 	         William G. Foster	 
	 	 	 	 	         Vice President	 
	 	 	 	Date:	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

    13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}]]