Document:

EX-4.5

 Exhibit 4.5 

AMENDMENT NO. 3 TO WARRANT 

To Purchase Common Stock of 

Sotherly Hotels Inc. 
 THIS
AMENDMENT NO. 3 (this “Amendment”) to the Warrant dated as of April 18, 2011 (as amended by an Amendment to Warrant dated as of December 21, 2011 and by an Amendment No. 2 to Warrant dated as of July 10,
2012 (“Amendment No. 2”), the “Warrant”) issued by Sotherly Hotels Inc., a Maryland corporation formerly known as MHI Hospitality Corporation (the “Company”), to Essex Illiquid, LLC and
Richmond Hill Capital Partners, LP as the Initial Holders identified on Schedule 1 to the Warrant, is made and entered into by the Company, and agreed and acknowledged by such Initial Holders, as of October 23, 2013 (the “Amendment
Date”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Warrant. 
 WHEREAS, the
Company and the Initial Holders desire, for their mutual convenience and benefit, to amend further the Warrant on the terms and subject to the conditions set forth in this Amendment. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 1. Article I of the Warrant is hereby
amended: 
  

	 	(a)	by restating the definition of “Company” therein in its entirety as follows: 

“‘Company’ means Sotherly Hotels Inc., a Maryland corporation, and any successor corporation.” 

 

	 	(b)	by restating the definition of “Warrant” therein in its entirety as follows: 

“‘Warrant’ means the warrant dated as of the Closing Date issued to the Initial Holders, as amended as of
December 21, 2011, as of July 10, 2012 and as of October 23, 2013, and as further amended or restated from time to time, and all warrants issued upon the partial exercise, transfer or division of or in substitution for any
Warrant.” 
 2. Section 3.2 of the Warrant is hereby amended by deleting and restating the first sentence thereof as follows: 

“The Initial Holders may not offer, sell, assign, hypothecate, pledge or otherwise transfer this Warrant during the period ending on
April 18, 2015 (the ‘Holding Period’) without the prior written consent of the Company, which consent may be granted or withheld in its sole and absolute discretion; provided, that for the avoidance of doubt, such
restriction shall not apply to the offer, sale, assignment, 

 
hypothecation, pledge or transfer of any Common Stock received by any Initial Holder upon the exercise of this Warrant during the Holding Period, subject to, in each case, applicable securities
laws.” 
 3. Section 7.7 of the Warrant is hereby deleted and shall be of no further force or effect. 

4. Schedule 1 to the Warrant is hereby deleted and replaced in its entirety by Schedule 1 to this Amendment. 

5. This Amendment shall be deemed to be incorporated into the Warrant and made a part thereof. All references to the Warrant in any other
document shall be deemed to be references to the Warrant as modified by this Amendment. Except as specifically amended or modified herein, the Warrant shall continue in full force and effect and shall be enforceable in accordance with each of the
terms thereof. To the extent that the terms of this Amendment conflict with the terms of the Warrant, the terms of this Amendment shall be deemed to govern. 

6. This Amendment 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. 
 7. This
Amendment 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. 

8. This Amendment may not be amended, modified or waived except by an instrument in writing signed on behalf of each of the parties hereto.

 [Signature page follows.] 

  
 2 

 IN WITNESS WHEREOF, the Company, intending to be legally bound, has executed this Amendment
effective as of the Amendment Date. 
  

					
	SOTHERLY HOTELS INC.
		
	By:	 	 /s/ David R. Folsom

		 	Name:	 	David R. Folsom
		 	Title:	 	President and Chief Operating Officer

 Attest: 
  

			
	 /s/ Robert E. Kirkland IV

	Name:	 	Robert E. Kirkland IV
	Title:	 	Compliance Officer
	
	AGREED AND ACKNOWLEDGED BY THE INITIAL HOLDERS

  

					
	ESSEX ILLIQUID, LLC
		
	By:	 	Richmond Hill Investments, LLC,
		 	its Investment Manager
		
	By:	 	 /s/ Ryan P. Taylor

		 	Name:	 	Ryan P. Taylor
		 	Title:	 	Managing Director and Authorized Signatory
	
	RICHMOND HILL CAPITAL PARTNERS, LP
		
	By:	 	Richmond Hill Investment Co., LP,
		 	its Investment Manager
		
	By:	 	 /s/ Ryan P. Taylor

		 	Name:	 	Ryan P. Taylor
		 	Title:	 	Authorized Signatory

 SIGNATURE PAGE TO AMENDMENT
NO. 3 TO WARRANT 

 Schedule 1 

INITIAL HOLDERS 
  

					
	 Initial Holder
	  	Number of Shares	 
	 Essex Illiquid, LLC
	  	 	920,000	  
	 Richmond Hill Capital Partners, LP
	  	 	80,000	  
		  	  
	  
	 
	 Total
	  	 	1,000,000EX-10.43

 Exhibit 10.43 

WARRANT REDEMPTION AGREEMENT 

THIS WARRANT REDEMPTION AGREEMENT (this “Agreement”) is entered into as of October 23, 2013, by and among Sotherly
Hotels Inc., a Maryland corporation formerly known as MHI Hospitality Corporation (the “Company”), as issuer of the Warrant (as hereinafter defined), and Essex Illiquid, LLC, a Delaware limited liability company (“Essex
Illiquid”), and Richmond Hill Capital Partners, LP, a Delaware limited partnership (“Richmond Hill”, and together with Essex Illiquid, the “Initial Holders”), as the initial holders of the Warrant.
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Warrant. 
 WHEREAS, reference is made to
that certain Warrant dated as of April 18, 2011 (as amended by an Amendment to Warrant dated as of December 21, 2011, an Amendment No. 2 to Warrant dated as of July 10, 2012, and an Amendment No. 3 to Warrant to be dated the
date hereof, the “Warrant”); and 
 WHEREAS, the Company desires to redeem a portion of the Warrant, and the Initial
Holders have agreed to such redemption, all on the terms and subject to the conditions of this Agreement. 
 NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 

1. The Company hereby redeems a portion of the Warrant corresponding to an aggregate of 900,000 Issuable Warrant Shares (the “Redeemed
Warrant Shares”), of which number 828,000 shall be redeemed from among those Issuable Warrant Shares subject to exercise rights by Essex Illiquid and 72,000 shall be redeemed from among those Issuable Warrant Shares subject to exercise
rights by Richmond Hill. 
 2. The aggregate consideration payable by the Company in respect of the redemption of the Redeemed Warrant
Shares shall be $3,200,000.00 (the “Redemption Consideration”), of which $2,944,000.00 shall be payable by the Company to Essex Illiquid and $256,000.00 shall be payable by the Company to Richmond Hill. Immediately upon execution
and delivery of this Agreement by the parties hereto, the Company shall pay the entirety of the Redemption Consideration to the Initial Holders by wire transfer of immediately available funds to a bank account designated by each Initial Holder
for such purpose. Upon payment in full of the Redemption Consideration, the Redeemed Warrant Shares shall no longer be Issuable Warrant Shares under the Warrant, and all exercise and other rights of the Initial Holders in respect of the Redeemed
Warrant Shares under the Warrant shall terminate and be extinguished. 
 3. Each of the Initial Holders (a) represents and warrants to
the Company that it owns that portion of the Warrant attributable to such Initial Holder under the terms of the Warrant free and clear of all liens and encumbrances and has not transferred any of its right, title or interest in and to the Warrant
and (b) agrees and acknowledges that the Redemption Consideration represents fair value for the portion of the Warrant redeemed hereby and that no adjustment to the Redemption Consideration shall be made regardless of the future performance of
the Company or any of the Company’s equity securities. 

 4. (a) The parties hereto agree that the Initial Holders shall have the jointly exercisable right
to nominate Ryan P. Taylor for election by the shareholders of the Company to the board of directors of the Company. Any such nomination shall be subject to prior approval by the Company’s Nominating, Corporate Governance and Compensation
Committee. Such nomination right shall terminate and no longer be exercisable by the Initial Holders as of the earlier of (i) the date of which the Warrant has terminated, expired or been exercised in full (provided that the exercise in full of
the Warrant as to only one of the Initial Holders shall terminate such nomination right only as to that Initial Holder) and (ii) the first date as of which the Initial Holders have, in the aggregate, beneficial ownership of less than 5% of the
outstanding shares of the common stock of the Company on a fully-diluted basis. Such nomination right shall not be transferable to any assignee of the Initial Holders. 

(b) Notwithstanding anything to the contrary herein, however, the preceding paragraph (a) and the nomination right described therein
shall have no force or effect whatsoever unless and until the NASDAQ Stock Market shall first have given its unconditional consent in writing, in form and substance reasonably acceptable to the Company, to the granting of such nomination right by
the Company. 
 5. Simultaneously with the execution and delivery of this Agreement, the parties hereto shall enter into an Amendment
No. 3 to Warrant substantially in the form attached hereto as Exhibit A. 
 6. For the avoidance of doubt, any successor Holder shall
not be an “Excepted Holder” within the meaning of the Articles of Amendment and Restatement of the Company, as amended. 
 7. This
Agreement may be executed simultaneously in one or more counterparts, and by different parties hereto in separate counterparts, each of which when executed will be deemed an original, but all of which taken together will constitute one and the same
instrument. 
 8. This Agreement will be governed by, and construed in accordance with, the laws of the state of New York applicable to
contracts executed in and to be performed entirely within such jurisdiction, without reference to conflicts of laws provisions. 
 9. This
Agreement may not be amended, modified or waived except by an instrument in writing signed on behalf of each of the parties hereto. 

[Signature page follows.] 

  
 2 

 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this
Agreement as of the date first written above. 
  

					
	THE COMPANY:
	
	SOTHERLY HOTELS INC.
		
	By:	 	 /s/ David R. Folsom

		 	Name:	 	David R. Folsom
		 	Title:	 	President and Chief Operating Officer
	
	THE INITIAL HOLDERS:
	
	ESSEX ILLIQUID, LLC
		
	By:	 	Richmond Hill Investments, LLC,
		 	its Investment Manager
		
	By:	 	 /s/ Ryan P. Taylor

		 	Name:	 	Ryan P. Taylor
		 	Title:	 	Managing Director and Authorized Signatory
	
	RICHMOND HILL CAPITAL PARTNERS, LP
		
	By:	 	Richmond Hill Investment Co., LP,
		 	its Investment Manager
		
	By:	 	 /s/ Ryan P. Taylor

		 	Name:	 	Ryan P. Taylor
		 	Title:	 	Authorized Signatory

  
 SIGNATURE
PAGE TO WARRANT REDEMPTION AGREEMENT 

 EXHIBIT A 

Form of Amendment No. 3 to Warrant 

[see attached] 

 AMENDMENT NO. 3 TO WARRANT 

To Purchase Common Stock of 

Sotherly Hotels Inc. 
 THIS
AMENDMENT NO. 3 (this “Amendment”) to the Warrant dated as of April 18, 2011 (as amended by an Amendment to Warrant dated as of December 21, 2011 and by an Amendment No. 2 to Warrant dated as of July 10,
2012 (“Amendment No. 2”), the “Warrant”) issued by Sotherly Hotels Inc., a Maryland corporation formerly known as MHI Hospitality Corporation (the “Company”), to Essex Illiquid, LLC and
Richmond Hill Capital Partners, LP as the Initial Holders identified on Schedule 1 to the Warrant, is made and entered into by the Company, and agreed and acknowledged by such Initial Holders, as of October 23, 2013 (the “Amendment
Date”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Warrant. 
 WHEREAS, the
Company and the Initial Holders desire, for their mutual convenience and benefit, to amend further the Warrant on the terms and subject to the conditions set forth in this Amendment. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 10. Article I of the Warrant is
hereby amended: 
  

	 	(a)	by restating the definition of “Company” therein in its entirety as follows: 

“‘Company’ means Sotherly Hotels Inc., a Maryland corporation, and any successor corporation.” 

 

	 	(b)	by restating the definition of “Warrant” therein in its entirety as follows: 

“‘Warrant’ means the warrant dated as of the Closing Date issued to the Initial Holders, as amended as of
December 21, 2011, as of July 10, 2012 and as of October 23, 2013, and as further amended or restated from time to time, and all warrants issued upon the partial exercise, transfer or division of or in substitution for any
Warrant.” 
 11. Section 3.2 of the Warrant is hereby amended by deleting and restating the first sentence thereof as follows:

 “The Initial Holders may not offer, sell, assign, hypothecate, pledge or otherwise transfer this Warrant during the period ending on
April 18, 2015 (the ‘Holding Period’) without the prior written consent of the Company, which consent may be granted or withheld in its sole and absolute discretion; provided, that for the avoidance of doubt, such
restriction shall not apply to the offer, sale, assignment, 

  
 5 

 
hypothecation, pledge or transfer of any Common Stock received by any Initial Holder upon the exercise of this Warrant during the Holding Period, subject to, in each case, applicable securities
laws.” 
 12. Section 7.7 of the Warrant is hereby deleted and shall be of no further force or effect. 

13. Schedule 1 to the Warrant is hereby deleted and replaced in its entirety by Schedule 1 to this Amendment. 

14. This Amendment shall be deemed to be incorporated into the Warrant and made a part thereof. All references to the Warrant in any other
document shall be deemed to be references to the Warrant as modified by this Amendment. Except as specifically amended or modified herein, the Warrant shall continue in full force and effect and shall be enforceable in accordance with each of the
terms thereof. To the extent that the terms of this Amendment conflict with the terms of the Warrant, the terms of this Amendment shall be deemed to govern. 

15. This Amendment 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. 
 16. This
Amendment 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. 

17. This Amendment may not be amended, modified or waived except by an instrument in writing signed on behalf of each of the parties hereto.

 [Signature page follows.] 

  
 6 

 IN WITNESS WHEREOF, the Company, intending to be legally bound, has executed this Amendment
effective as of the Amendment Date. 
  

					
	SOTHERLY HOTELS INC.
		
	By:	 	  

		 	Name:	 	David R. Folsom
		 	Title:	 	President and Chief Operating Officer

 Attest: 
  

			
	  

	Name:	 	Robert E. Kirkland IV
	Title:	 	Compliance Officer

 AGREED AND ACKNOWLEDGED 
 BY THE
INITIAL HOLDERS 
  

					
	ESSEX ILLIQUID, LLC
		
	By:	 	Richmond Hill Investments, LLC,
		 	its Investment Manager
		
	By:	 	  

		 	Name:	 	Ryan P. Taylor
		 	Title:	 	Managing Director and Authorized Signatory
	
	RICHMOND HILL CAPITAL PARTNERS, LP
		
	By:	 	Richmond Hill Investment Co., LP,
		 	its Investment Manager
		
	By:	 	  

		 	Name:	 	Ryan P. Taylor
		 	Title:	 	Authorized Signatory

  
 SIGNATURE
PAGE TO AMENDMENT NO. 3 TO WARRANT 

 Schedule 1 

INITIAL HOLDERS 
  

					
	 Initial Holder
	  	Number of Shares	 
	 Essex Illiquid, LLC
	  	 	920,000	  
	 Richmond Hill Capital Partners, LP
	  	 	80,000	  
		  	  
	  
	 
	 Total
	  	 	1,000,000

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