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EXHIBIT 10.1

 HIGHLAND HOSPITALITY CORPORATION 
  
 2003 OMNIBUS STOCK INCENTIVE PLAN 
  
 1. PURPOSE 
  

The Highland Hospitality Corporation 2003 Omnibus Stock Incentive Plan is intended to promote the best interests of Highland Hospitality Corporation
and its stockholders by (i) assisting the Corporation and its Affiliates in the recruitment and retention of persons with ability and initiative, (ii) providing an incentive to such persons to contribute to the growth and success of the
Corporation’s businesses by affording such persons equity participation in the Corporation and (iii) associating the interests of such persons with those of the Corporation and its affiliates and stockholders. 
  
 2. DEFINITIONS 
  
 As used in the Plan the following definitions shall apply: 
  
 A. “Affiliate” means any Subsidiary, any Parent, any
entity (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled fifty percent (50%) or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest)
by the Corporation or one of its Affiliates, and any other entity in which the Corporation or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee. 
  
 B. “Award” means any Option, Stock Award, Performance Unit
or Performance Share granted hereunder. 
  
 C.
“Board” means the Board of Directors of the Corporation. 
  
 D. “Cause” means in the case where the Participant does not have an employment, consulting or similar agreement in effect with the Corporation or its Affiliate or where there is such an
agreement but it does not define “cause” (or words of like import), conduct related to the Participant’s service to the Corporation or an Affiliate for which either criminal or civil penalties against the Participant may be sought,
misconduct, insubordination, material violation of the Corporation’ or its Affiliate’s policies, disclosing or misusing any confidential information or material concerning the Corporation or any Affiliate or material breach of any
employment, consulting agreement or similar agreement, or in the case where the Participant has an employment agreement, consulting agreement or similar agreement that defines a termination for “cause” (or words of like import),
“cause” as defined in such agreement; provided, however, that with regard to any agreement that defines “cause” on occurrence of or in connection with change of control, such definition of “cause” shall not apply until
a change of control actually occurs and then only with regard to a termination thereafter. 

 E. “Code” means the Internal Revenue Code of 1986, and any amendments thereto.

  
 F. “Committee” means the Compensation
Policy Committee of the Board acting as administrator of the Plan pursuant to Section 3 hereof. The Committee shall consist solely of three (3) or more Directors who are (i) Non-Employee Directors (within the meaning of Rule 16b-3 under the Exchange
Act) for purposes of exercising administrative authority with respect to Awards granted to Eligible Persons who are subject to Section 16 of the Exchange Act; (ii) to the extent required by the rules of the New York Stock Exchange,
“independent” within the meaning of such rules; and (iii) at such times as an Award under the Plan by the Corporation is subject to Section 162(m) of the Code (to the extent relief from the limitation of Section 162(m) of the Code is
sought with respect to Awards and administration of the Awards by a committee of “outside directors” is required to receive such relief) “outside directors” within the meaning of Section 162(m) of the Code. Notwithstanding the
preceding designation of the Compensation Policy Committee and the qualifications for membership on the Committee, prior to the date that the Corporation has a class of equity securities registered under the Exchange Act, he “Committee”
means the Board. 
  
 G. “Common Stock”
means the common stock, $0.01 par value, of the Corporation. 
  
 H. “Consultant” means any person, other than an employee, performing consulting or advisory services for the Corporation or any Affiliate, or a director of an Affiliate. 
  
 I. “Continuous Service” means that the
Participant’s service with the Corporation or an Affiliate, whether as an employee, Director or Consultant, is not interrupted or terminated. A Participant’s Continuous Service shall not be deemed to have been interrupted or terminated
merely because of a change in the capacity in which the Participant renders service to the Corporation or an Affiliate as an employee, Consultant or Director or a change in the entity for which the Participant renders such service. The
Participant’s Continuous Service shall be deemed to have terminated either upon an actual termination or upon the entity for which the Participant is performing services ceasing to be an Affiliate of the Corporation. The Committee shall
determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by the Corporation, including sick leave, military leave or any other personal leave. 
  
 J. “Corporation” means Highland Hospitality
Corporation, a Maryland corporation. 
  
 K.
“Corporation Law” means the general corporation law of the jurisdiction of incorporation of the Corporation. 
  
 L. “Deferral Period” means the period of time during which Deferred Shares are subject to deferral limitations under Section 7.C of the
Plan. 
  
 M. “Deferred Shares” means the
an award pursuant to Section 7.C of the Plan of the right to receive shares of Common Stock at the end of a specified Deferral Period.  
  

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 N. “Director” means a member of the Board. 
  
 O. “Disability” means that a Participant covered by a
Corporation- or Affiliate-funded long term disability insurance program has incurred a total disability under such insurance program and a Participant not covered by such an insurance program has suffered a permanent and total disability within the
meaning of Section 22(e)(3) of the Code or any successor statute thereto. 
  
 P. “Eligible Person” means an employee of the Corporation or an Affiliate (including an entity that becomes an Affiliate after the adoption of the Plan), a Director or a Consultant to the
Corporation or an Affiliate (including an entity that becomes an Affiliate after the adoption of the Plan). 
  
 Q. “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 R. “Fair Market Value” means, on any given date, the
current fair market value of the shares of Common Stock as determined as follows: 
  
 (i) If the Common Stock is traded on New York Stock Exchange or is listed on a national securities exchange, the closing price for the day
of determination as quoted on such market or exchange which is the primary market or exchange for trading of the Common Stock or if no trading occurs on such date, the last day on which trading occurred, or such other appropriate date as determined
by the Committee in its discretion, as reported in The Wall Street Journal or such other source as the Committee deems reliable; 
  
 (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high and the low asked prices for the Common Stock for the day of determination; or 
  
 (iii) In the absence of an established market for the Common Stock, Fair Market Value shall be determined by the Committee in good faith.

  
 S. “Incentive Stock Option” means an
Option (or portion thereof) intended to qualify for special tax treatment under Section 422 of the Code. 
  
 T. “Nonqualified Stock Option” means an Option (or portion thereof) which is not intended or does not for any reason qualify as an
Incentive Stock Option. 
  
 U. “Option”
means any option to purchase shares of Common Stock granted under the Plan. 
  
 V. “Parent” means any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation if each of the corporations (other than the Corporation) owns stock
possessing at least fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  

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 W. “Participant” means an Eligible Person who is selected by the Committee to
receive an Option or Stock Award and is party to any Stock Option Agreement or Stock Award Agreement required by the terms of such Option or Stock Award. 
  

X. “Performance Agreement” means an agreement described in Section 8.I of the Plan. 
  
 Y. “Performance Objectives” means the performance objectives
established pursuant to the Plan for Participants who have received grants of Performance Shares or Performance Units or, when so determined by the Committee, Deferred Shares or Restricted Stock Awards. Performance Objectives may be described in
terms of Corporation-wide objectives or objectives that are related to the performance of the individual Participant or the Affiliate, subsidiary, division, department or function within the Corporation or Affiliate in which the Participant is
employed or has responsibility. Any Performance Objectives applicable to Awards to the extent that such and Award is intended to qualify as “performance-based compensation” under Section 162(m) of the Code shall be limited to specified
levels of or increases in the Corporation’s or a business unit’s return on equity, earnings per share, total earnings, earnings growth, return on capital, return on assets, economic value added, earnings before interest and taxes, earnings
before interest, taxes, depreciation and amortization, sales growth, gross margin return on investment, increase in the Fair Market Value of the shares, share price (including but not limited to growth measures and total shareholder return), net
operating profit, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on investments (which equals net cash flow divided by total capital), internal rate of return, increase in net present value or
expense targets. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Corporation (including an event described in Section 9.B.), or the manner in which it conducts is business, or
other events or circumstances render the Performance Objectives unsuitable, the Committee may modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and
equitable provided, however, that no such modification shall be made to an Award intended to qualify as performance-based compensation under Section 162(m) of the Code unless the Committee determines that such modification will not result in loss of
such qualification or the Committee determines that loss of such qualification is in the best interests of the Corporation.  
  
 Z. “Performance Period” means a period of time established under Section 8 of the Plan within which the Performance Objectives relating
to a Performance Share, Performance Unit, Deferred Share or Restricted Stock Award are to be achieved.  
  
 AA. “Performance Share” means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 8
of the Plan.  
  
 BB. “Performance Unit”
means a bookkeeping entry that records a unit equivalent to $1.00 awarded pursuant to Section 8 of the Plan. 
  
 CC. “Plan” means this Highland Hospitality Corporation 2003 Omnibus Stock Incentive Plan. 
  

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 DD. “Restricted Stock Award” means an award of Common Stock under Section 7.A.

  
 EE. “Securities Act” means the
Securities Act of 1933 as amended. 
  
 FF. “Stock
Award” means a Restricted Stock Award, award of Deferred Shares or award of Stock Appreciation Rights. 
  
 GG. “Stock Appreciation Right” means an award of a right of the Participant to receive a payment in accordance with the provisions
of Section 7.B. 
  
 HH. “Stock Award
Agreement” means an agreement (written or electronic) between the Corporation and a Participant setting forth the specific terms and conditions of a Stock Award granted to the Participant under Section 7. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan and shall include such terms and conditions as the Committee shall authorize. 
  
 II. “Stock Option Agreement” means an agreement (written or electronic) between the Corporation and a Participant setting forth
the specific terms and conditions of an Option granted to the Participant. Each Stock Option Agreement shall be subject to the terms and conditions of the Plan and shall include such terms and conditions as the Committee shall authorize. 

 
 JJ. “Subsidiary” means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the Corporation if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing at least fifty percent (50%) of the total combined voting
power of all classes of stock in one of the other corporations in such chain. 
  
 KK. “Ten Percent Owner” means any Eligible Person owning at the time an Option is granted more than ten percent (10%) of the total combined voting power of all classes of stock of the
Corporation or of a Parent or Subsidiary. An individual shall, in accordance with Section 424(d) of the Code, be considered to own any voting stock owned (directly or indirectly) by or for his brothers, sisters, spouse, ancestors and lineal
descendants and any voting stock owned (directly or indirectly) by or for a corporation, partnership, estate, trust or other entity shall be considered as being owned proportionately by or for its stockholders, partners or beneficiaries.

  
 3. ADMINISTRATION 
  
 A. Administration. The Committee shall serve as the administrator of
the Plan. If permitted by the Corporation Law, and not prohibited by the charter or the bylaws of the Corporation, the Committee may delegate a portion of its authority to administer the Plan to an officer or officers of Corporation designated by
the Committee. 
  
 B. Powers of the Committee.
Subject to the provisions of the Plan, and subject at all times to the terms and conditions of the delegation of authority from the Board, the Committee 
  

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 shall have the authority to implement, interpret and administer the Plan. Such authority shall include, without
limitation, the authority: 
  
 (i) To construe and
interpret all provisions of the Plan and all Stock Option Agreements, Performance Award Agreements and Stock Award Agreements under the Plan. 
  
 (ii) To determine the Fair Market Value of Common Stock. 
  
 (iii) To select the Eligible Persons to whom Awards, are granted from time-to-time hereunder. 
  
 (iv) To determine the number of shares of Common Stock
covered by an Option or Stock Award; determine whether an Option shall be an Incentive Stock Option or Nonqualified Stock Option; and determine such other terms and conditions, not inconsistent with the terms of the Plan, of each Award. Such terms
and conditions include, but are not limited to, the exercise price of an Option, purchase price of Common Stock subject to a Stock Award, the time or times when Options or Stock Awards may be exercised or Common Stock issued thereunder, the right of
the Corporation to repurchase Common Stock issued pursuant to the exercise of an Option or a Stock Award and other restrictions or limitations (in addition to those contained in the Plan) on the forfeitability or transferability of Options, Stock
Awards or Common Stock issued pursuant to Awards. Such terms may include conditions as shall be determined by the Committee and need not be uniform with respect to Participants. 
  
 (v) To amend, cancel, extend, renew, accept the surrender of, modify or accelerate the vesting of or lapse
of restrictions on all or any portion of an outstanding Option or Stock Award; and to determine the time at which a Stock Award or Common Stock issued under the Plan may become transferable or nonforfeitable. 
  
 (vi) To prescribe the form of Stock Option Agreements,
Performance Award Agreements and Stock Award Agreements; to adopt policies and procedures for the exercise of Options or Stock Awards, including the satisfaction of withholding obligations; to adopt, amend, and rescind policies and procedures
pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of the Plan. 
  
 (vii) Any decision made, or action taken, by the Committee or in connection with the administration of the Plan shall be final, conclusive and binding on
all persons having an interest in the Plan. 
  
 4.
ELIGIBILITY 
  
 A. Eligibility for
Awards. Incentive Stock Options may be granted only to employees of the Corporation or a Parent or Subsidiary. Other Awards may be granted to any Eligible Person selected by the Committee. 
  

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 B. Substitution Awards. The Committee may make Stock Awards and may grant Options under the Plan
by assumption, substitution or replacement of performance shares, phantom shares, stock awards, stock options, stock appreciation rights or similar awards granted by another entity (including an Affiliate), if such assumption, substitution or
replacement is in connection with an asset acquisition, stock acquisition, merger, consolidation or similar transaction involving the Corporation (and/or its Affiliate) and such other entity (and/or its affiliate). Notwithstanding any provision of
the Plan (other than the maximum number of shares of Common Stock that may be issued under the Plan), the terms of such assumed, substituted or replaced Stock Awards or Options shall be as the Committee, in its discretion, determines is appropriate.

  
 5. COMMON STOCK
SUBJECT TO PLAN 
  
 A. Share Reserve and Limitations on Grants. Subject to adjustment as provided in Section 9, the maximum aggregate number of shares of Common Stock that may be (i) issued under the Plan pursuant to the exercise of Options, (ii) issued
pursuant to Restricted Stock Awards, Deferred Shares or Performance Shares, and (iii) covered by Stock Appreciation Rights is 1,777,000 shares of Common Stock, which amount shall, if the underwriters for the initial registered public offering of the
Corporation’s Common Stock exercise their over-allotment option to purchase additional shares of Common Stock pursuant to their underwriting agreement, be increased 45 days following the consummation of the initial registered public offering of
the Corporation’s Common Stock by the lesser of (x) five percent (5%) of the number of shares of Common Stock issued by the Corporation pursuant to exercise of the underwriter’s over-allotment option with respect to such public offering or
(y) 225,000 shares. No Participant may receive Awards representing more than 500,000 shares in any one calendar year. In addition, the maximum number of Performance Units that may be granted to a Participant in any one calendar year is 750,000 for
each full or fractional year included in the Performance Period for the grant of Performance Units during such calendar year. This limitation shall be applied as of any date by taking into account the number of shares available to be made the
subject of new Awards as of such date, plus the number of shares previously issued under the Plan and the number of share subject to outstanding Awards as of such date. 
  
 B. Reversion of Shares. If an Option or Stock Award is terminated, expires or becomes unexercisable, in whole or in
part, for any reason, the unissued or unpurchased shares of Common Stock (or shares subject to an unexercised Stock Appreciation Right) which were subject thereto shall become available for future grant under the Plan. Shares of Common Stock that
have been actually issued under the Plan shall not be returned to the share reserve for future grants under the Plan; except that shares of Common Stock issued pursuant to a Stock Award which are repurchased or reacquired by the Corporation at the
original purchase price of such shares (including, in the case shares forfeited back to the Corporation, no purchase price), shall be returned to the share reserve for future grant under the Plan. For avoidance of doubt, this Section 5B shall not
apply to any per Participant limit set forth in Section 5A. 
  

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 C. Source of Shares. Common Stock issued under the Plan may be shares of authorized and unissued
Common Stock or shares of previously issued Common Stock that have been reacquired by the Corporation. 
  
 6. OPTIONS 
  
 A. Award. In accordance with the provisions of Section 4, the Committee will designate each Eligible Person to whom an Option is to be granted and
will specify the number of shares of Common Stock covered by such Option. The Stock Option Agreement shall specify whether the Option is an Incentive Stock Option or Nonqualified Stock Option, the vesting schedule applicable to such Option and any
other terms of such Option. No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock Option. 
  
 B. Exercise Price. The exercise price per share for Common Stock subject to an Option shall be determined by the Committee, but shall comply with
the following: 
  
 (i) The exercise price per
share for Common Stock subject to a Nonqualified Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value on the date of grant. 
  

(ii) The exercise price per share for Common Stock subject to an Incentive Stock Option: 
  

	 	•	granted to a Participant who is deemed to be a Ten Percent Owner on the date such option is granted, shall not be less than one hundred ten percent (110%) of the Fair Market Value
on the date of grant. 

  

	 	•	granted to any other Participant, shall not be less than one hundred percent (100%) of the Fair Market Value on the date of grant. 

  
 C. Maximum Option Period. The maximum period during which an Option
may be exercised shall be determined by the Committee on the date of grant, except that no Option shall be exercisable after the expiration of ten years from the date such Option was granted. In the case of an Incentive Stock Option that is granted
to a Participant who is or is deemed to be a Ten Percent Owner on the date of grant, such Option shall not be exercisable after the expiration of five years from the date of grant. The terms of any Option may provide that it is exercisable for a
period less than such maximum period. 
  
 D. Maximum Value of
Options which are Incentive Stock Options. To the extent that the aggregate Fair Market Value of the Common Stock with respect to which Incentive Stock Options granted to any person are exercisable for the first time during any calendar year
(under all stock option plans of the Corporation or any of its Subsidiaries or Parent) exceeds $100,000 (or such other amount provided in Section 422 of the Code), the Options are not Incentive Stock Options. For purposes of this section, the Fair
Market Value of the Common Stock will be determined as of the time the Incentive Stock Option with respect to the Common Stock is granted. This section will be applied by taking Incentive Stock Options into account in the order in which they are
granted. 
  

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 E. Nontransferability. Options granted under the Plan which are intended to be Incentive Stock
Options shall be nontransferable except by will or by the laws of descent and distribution and during the lifetime of the Participant shall be exercisable by only the Participant to whom the Incentive Stock Option is granted. If the Stock Option
Agreement so provides or the Committee so approves, a Nonqualified Stock Option may be transferred by a Participant through a gift or domestic relations order to the Participant’s family members to the extent in compliance with applicable
securities registration rules. The holder of a Nonqualified Stock Option transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option during the period that it was held by the Participant; provided
that unless the Committee approves a subsequent transfer, such Option shall be nontransferable by the initial transferee of such Option except by will or by the laws of descent and distribution. Except to the extent transferability of a Nonqualified
Stock Option is provided for in the Stock Option Agreement or is approved by the Committee, during the lifetime of the Participant to whom the Nonqualified Stock Option is granted, such Option may be exercised only by the Participant. No right or
interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant. 
  
 F. Vesting and Termination of Continuous Service. Except as provided in a Stock Option Agreement, the following rules shall apply: 
  
 (i) Options will vest as provided in the Stock Option
Agreement. An Option will be exercisable only to the extent that it is vested on the date of exercise. Vesting of an Option will cease on the date of the Participant’s termination of Continuous Service and the Option will be exercisable only to
the extent the Option is vested on the date of termination of Continuous Service. 
  
 (ii) If the Participant’s termination of Continuous Service is for reason of death or Disability, the right to exercise the Option
(to the extent vested) will expire on the earlier of one (1) year after the date of the Participant’s termination of Continuous Service, or the expiration date under the terms of the Stock Option Agreement. Until the expiration date, the
Participant or, in the event of the Participant’s death (including death after termination of Continuous Service but before the right to exercise the Option expires) Participant’s heirs, legatees or legal representative may exercise the
Option, except to the extent the Option was previously transferred pursuant to Section 6.E. 
  
 (iii) If the Participant’s termination of Continuous Service is an involuntary termination without Cause or a voluntary termination
(other than a voluntary termination described in Section 6.F(iv)), the right to exercise the Option (to the extent that it is vested) will expire on the earlier of three months (3) after the date of the Participant’s termination of Continuous
Service, or the expiration date under the terms of the Stock Option Agreement. If the Participant’s termination of Continuous Service is an involuntary termination without Cause or a voluntary termination (other than a voluntary termination
described in Section 6.F(iv)) and the Participant dies after his or her termination of Continuous Service but before the right to exercise the Option has expired, the right to exercise the Option (to the extent vested) shall expire on the earlier of
one (1) year after 
  

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 the date of the Participant’s termination of Continuous Service or (iv) the date the Option expires
under the terms of the Stock Option Agreement, and, until expiration, the Participant’s heirs, legatees or legal representative may exercise the Option, except to the extent the Option was previously transferred pursuant to Section 6.E.

  
 (iv) If the Participant’s termination of
Continuous Service is for Cause or is a voluntary termination at any time after an event which would be grounds for termination of the Participant’s Continuous Service for Cause, the right to exercise the Option shall expire as of the date of
the Participant’s termination of Continuous Service. 
  
 G. Exercise. An Option, if exercisable, shall be exercised by completion, execution and delivery of notice (written or electronic) to Corporation of the Option which states (i) the Option holder’s intent to exercise the Option,
(ii) the number of shares of Common Stock with respect to which the Option is being exercised, (iii) such other representations and agreements as may be required by the Corporation and (iv) the method for satisfying any applicable tax withholding as
provided in Section 10. Such notice of exercise shall be provided on such form or by such method as the Committee may designate, and payment of the exercise price shall be made in accordance with Section 6.H. Subject to the provisions of the Plan
and the applicable Stock Option Agreement, an Option may be exercised to the extent vested in whole at any time or in part from time to time at such times and in compliance with such requirements as the Committee shall determine. A partial exercise
of an Option shall not affect the right to exercise the Option from time to time in accordance with the Plan and the applicable Stock Option Agreement with respect to the remaining shares subject to the Option. An Option may not be exercised with
respect to fractional shares of Common Stock. 
  
 H.
Payment. 
  
 (i) Unless otherwise
provided by the Stock Option Agreement, payment of the exercise price for an Option shall be made in cash or a cash equivalent acceptable to the Committee. With the consent of and in accordance with such conditions as required by the Committee,
payment of all or part of the exercise price of an Option may also be made by surrendering shares of Common Stock to the Corporation, or if the Common Stock is traded on an established securities market, the Committee may approve payment of the
exercise price by a broker-dealer or by the Option holder with cash advanced by the broker-dealer if the exercise notice is accompanied by the Option holder’s written irrevocable instructions to deliver the Common Stock acquired upon exercise
of the Option to the broker-dealer. 
  
 (ii) If
Common Stock is used to pay all or part of the exercise price, the sum of the cash or cash equivalent and the Fair Market Value (determined as of the date of exercise) of the shares surrendered must not be less than the exercise price of the shares
for which the Option is being exercised. 
  
 (iii) On or after the date any Option other than an Incentive Stock Option is granted, the Committee may determine that payment of the exercise price may also be made in whole 
  

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 or part in the form of Restricted Stock or other Common Stock that is subject to a risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the Committee, whenever the exercise price is paid in whole or in part in accordance with this Section 6.H(iii), the Stock received by the Participant upon such exercise shall be subject to
the same risks of forfeiture or restrictions on transfer as those that applied to the consideration surrendered by the Participant, provided that such risks of forfeiture and restrictions on transfer shall apply only to the same number of shares
received by the Participant as applied to the forfeitable or restricted shares surrendered by the Participant. 
  
 (iv) On or after the date any Option is granted, the Committee may provide for the automatic grant to the Participant of a reload Option
in the event that the Participant surrenders shares in satisfaction of the exercise price upon the exercise of an Option as authorized under this Section 6.H. Each reload Option shall pertain to a number of shares equal to the number of shares
utilized by the Participant to exercise the original Option, shall have an exercise price equal to Fair Market Value on the date that the reload Option is granted and shall expire on the stated exercise date of the original Option. 
  
 I. No Repricing of Options. The Committee may not without the approval
of the stockholders of the Corporation lower the exercise price of an outstanding Option, whether by amending the exercise price of the outstanding Option or through cancellation of the outstanding Option and reissuance of a replacement or
substitute Option; provided that stockholder approval shall not be required for adjustments made in connection with a capitalization event described in Section 9.B. in order to prevent enlargement, dilution or diminishment of rights. 
  
 J. Stockholder Rights. No Participant shall have any rights as a
stockholder with respect to shares subject to an Option until the date of exercise of such Option and the certificate for shares of Common Stock to be received on exercise of such Option has been issued by the Corporation. 
  
 K. Disposition. A Participant shall notify the Corporation of any sale
or other disposition of Common Stock acquired pursuant to an Incentive Stock Option if such sale or disposition occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of the Common Stock to the Participant.
Such notice shall be in writing and directed to the Secretary of the Corporation. 
  
 7. STOCK AWARDS 
  
 A. Restricted Stock Awards. Each Stock Award Agreement for a Restricted Stock Award shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate. The terms and
conditions of the Stock Award Agreements for Restricted Stock Awards may change from time to time, and the terms and conditions of separate Restricted Stock Awards need not be identical, but each Restricted Stock Award shall include (through
incorporation of the provisions hereof by references in the agreement or otherwise) the substance of each of the following provisions. 
  

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 (i) Purchase Price. The Committee may establish a purchase price for Common Stock
subject to a Restricted Stock Award. 
  
 (ii)
Consideration. The purchase price, if any, of Common Stock acquired pursuant to the Restricted Stock Award shall be paid either: in cash at the time of purchase, or in any other form of legal consideration that may be acceptable to the
Committee in its discretion. 
  
 (iii)
Vesting. Shares of Common Stock acquired under a Restricted Stock Award may, but need not, be subject to a share repurchase option in favor of the Corporation in accordance with a vesting schedule to be determined by the Committee. Any grant
or the vesting thereon may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 8 of the Plan regarding Performance Shares and Performance Units.

  
 (iv) Participant’s Termination of
Service or Failure of Vesting. In the event of a Participant’s termination of Continuous Service before vesting or other failure of the Common Stock to vest, then, unless otherwise provided in the Stock Award Agreement, the Participant
shall forfeit shares of Common Stock held by a Participant under the terms of a Restricted Stock Award which have not vested and for which no purchase price was paid by the Participant and the Corporation may repurchase or otherwise reacquire
(including by way of forfeiture by the Participant) any or all of the shares of Common Stock held by the Participant which have not vested under the terms of the Stock Award Agreement for such Restricted Stock Award and for which a purchase price
was paid by the Participant at such purchase price. 
  
 (v) Transferability. Rights to acquire shares of Common Stock under a Restricted Stock Award shall be transferable by the Participant only upon such terms and conditions as are set forth in the Stock Award Agreement for such
Restricted Stock Award, as the Committee shall determine in its discretion, so long as Common Stock granted under the Restricted Stock Award remains subject to the terms of the Stock Award Agreement. 
  
 (vi) Additional Rights. Any grant may require that
any or all dividends or other distributions paid on the shares acquired under a Restricted Stock Award during the period of such restrictions be automatically sequestered and reinvested on an immediate or deferred basis in additional shares of
Common Stock which may be subject to the same restrictions as the underlying Award or such other restrictions as the Committee shall determine. Unless provided otherwise in the Stock Award Agreement, Participants holding shares of Common Stock
subject to restrictions under a Stock Award Agreement may exercise full voting rights with respect to the shares. 
  
 B. Stock Appreciation Rights. Each Stock Award Agreement for Stock Appreciation Rights shall be in such form and shall contain such terms and
conditions as the Committee shall deem appropriate. The terms and conditions of Stock Appreciation Rights may change from time to time, and the terms and conditions of separate Stock Appreciation Rights need not be identical, 
  

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 but each Stock Appreciation Right shall include (through incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions: 
  
 (i) Benefit Provided. Each Stock Appreciation Right shall provide the Participant with the right to receive payment in cash or shares of Common Stock having a Fair Market Value, as designated in the Stock Award
Agreement for such Stock Appreciation Rights, of an amount equal to the difference between the base amount provided for each share of Common Stock as described in the Stock Award Agreement and the Fair Market Value of the Common Stock on the date of
exercise of such Stock Appreciation Right or a percentage thereof (not to exceed 100%). 
  
 (ii) Tandem Awards. Stock Appreciation Rights may be granted either alone or a tandem with other awards, including Options, under
the Plan; provided, however, if the Stock Appreciation Rights are granted in tandem with another Option, the base amount provided for each share of Common Stock in the applicable Stock Award Agreement shall be equal to the exercise price per
share provided for in the Option. 
  
 (iii)
Vesting. The Stock Award Agreement for a Stock Appreciation Right shall provide the vesting schedule applicable to such award and may, but need not, provide that shares of Common Stock acquired upon exercising a Stock Appreciation Right are
subject to a repurchase option in favor of the Corporation. 
  
 (iv) Participant’s Termination of Service or Failure of Vesting. In the event of a Participant’s termination of Continuous Service or other failure of the Stock Appreciation Right or Common Stock to
vest the Participant shall forfeit such unvested Stock Appreciation Rights, and the Corporation, if so provided in the Stock Award Agreement, may repurchase or otherwise reacquire (including by way of forfeiture by the Participant) any or all of the
shares of Common Stock held by the Participant which have not vested under the terms of the Stock Appreciation Right. 
  
 (v) Transferability. Rights to acquire cash or shares of Common Stock under a Stock Appreciation Rights shall be nontransferable
except by will or by the laws of descent and distribution and during the lifetime of the Participant shall be exercisable by only the Participant to whom the Stock Appreciation Rights are granted. 
  
 C. Deferred Shares. The Committee may authorize grants of Deferred
Shares to Participants upon such terms and conditions as the Committee may determine in accordance with the following provisions: 
  
 (i) Each grant shall constitute the agreement by the Corporation to issue or transfer shares of Common Stock to the Participant in the
future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify. 
  

 13 

 (ii) Each grant may be made without additional consideration from the Participant or in
consideration of a payment by the Participant that is less than the Fair Market Value on the date of grant. 
  
 (iii) Each grant shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed by the
Committee on the date of grant, and any grant or sale may provide for the earlier termination of such period in the event of a change in control of the Corporation or other similar transaction or event. 
  
 (iv) During the Deferral Period, the Participant shall not
have any right to transfer any rights under the subject Award, shall not have any rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or after the date of grant, authorize the payment
of dividend or other distribution equivalents on such shares in cash or additional shares on a current, deferred or contingent basis. 
  
 (v) Any grant of the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee
in accordance with the applicable provisions of Section 8 of the Plan regarding Performance Shares and Performance Units. 
  
 (vi) Each grant shall be evidenced by an agreement delivered to and accepted by the Participant and containing such terms and provisions
as the Committee may determine consistent with the Plan. 
  
 8.
PERFORMANCE SHARES AND PERFORMANCE UNITS. 
  
 The Committee may also authorize grants of Performance Shares and Performance Units, which shall become payable to the Participant upon the achievement of
specified Performance Objectives, upon such terms and conditions as the Committee may determine in accordance with the following provisions: 
  
 A. Each grant shall specify the number of Performance Shares or Performance Units to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors. 
  
 B.
The Performance Period with respect to each Performance Share or Performance Unit shall commence on the date established by the Committee and may be subject to earlier termination in the event of a change in control of the Corporation or similar
transaction or event. 
  
 C. Each grant shall specify the
Performance Objectives that are to be achieved by the Participant. 
  
 D. Each grant may specify in respect of the specified Performance Objectives a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be
made if performance is at or above such minimum acceptable level but falls short of the maximum achievement of the specified Performance Objectives. 
  

 14 

 E. Each grant shall specify the time and manner of payment of Performance Shares or Performance
Units that shall have been earned, and any grant may specify that any such amount may be paid by the Corporation in cash, shares of Common Stock or any combination thereof and may either grant to the Participant or reserve to the Committee the right
to elect among those alternatives. 
  
 F. Any grant of
Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee on the date of grant. Any grant of Performance Units may specify that the amount payable, or the number of shares of
Common Stock issued, with respect thereto may not exceed maximums specified by the Committee on the date of grant. 
  
 G. Any grant of Performance Shares may provide for the payment to the Participant of dividend or other distribution equivalents thereon in cash or
additional shares of Common Stock on a current, deferred or contingent basis. 
  
 H. If provided in the terms of the grant and subject to the requirements of Section 162(m) of the Code (in the case of Awards intended to qualify for exception therefrom), the Committee may adjust Performance
Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the date of grant that are unrelated to the performance of the Participant and result in
distortion of the Performance Objectives or the related minimum acceptable level of achievement. 
  
 I. Each grant shall be evidenced by an agreement that shall be delivered to and accepted by the Participant, which shall state that the Performance
Shares or Performance Units are subject to all of the terms and conditions of the Plan and such other terms and provisions as the Committee may determine consistent with the Plan. 
  
 9. CHANGES IN CAPITAL STRUCTURE 
  
 A. No Limitations of Rights. The existence of outstanding Options or
Stock Awards shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Corporation’s capital structure or its
business, or any merger or consolidation of the Corporation, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 
  
 B. Changes in Capitalization. If the Corporation shall effect (i) any stock dividend, stock split, subdivision or
consolidation of shares, recapitalization or other capital readjustment, (ii) any merger consolidation, separation of the Corporation (including a spin-off or split-up), 
  

 15 

 reorganization, partial or complete liquidation or other distribution of assets (other than ordinary dividends or
distributions) without receiving consideration therefore in money, services or property, or (iii) any other corporate transaction having a similar effect, then (iv) the number, class, and per share price or base amount of shares of Common Stock
subject to outstanding Options and Stock Awards shall be equitably adjusted by the Committee as it in good faith determines is required in order to prevent enlargement, dilution, or diminishment of rights, (v) the number and class of shares of
Common Stock then reserved for issuance under the Plan and the maximum number of shares for which Awards may be granted to a Participant during a specified time period shall be adjusted as the Committee deems appropriate to reflect such transaction,
and (vi) the Committee shall make such modifications to the Performance Objectives for each outstanding Award as the Committee determines are appropriate in accordance with Section 2, “Performance Objectives.” The conversion of convertible
securities of the Corporation shall not be treated as effected “without receiving consideration.” The Committee shall make such adjustments, and its determinations shall be final, binding and conclusive. 
  
 C. Merger, Consolidation or Asset Sale. If the Corporation is merged
or consolidated with another entity or sells or otherwise disposes of substantially all of its assets to another entity while Options or Stock Awards remain outstanding under the Plan, unless provisions are made in connection with such transaction
for the continuance of the Plan and/or the assumption or substitution of such Options or Stock Awards with new options or stock awards covering the stock of the successor entity, or parent or subsidiary thereof, with appropriate adjustments as to
the number and kind of shares and prices, then all outstanding Options and Stock Awards which have not been continued, assumed or for which a substituted award has not been granted shall, become exercisable immediately prior to and terminate
immediately as of the effective date of any such merger, consolidation or sale. 
  
 D. Limitation on Adjustment. Except as previously expressly provided, neither the issuance by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, for
cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Corporation convertible into such shares or other securities, nor
the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of Common
Stock then subject to outstanding Options or Stock Awards. 
  
 10. WITHHOLDING OF TAXES 
  
 The Corporation or an Affiliate shall have the right, before any certificate for any Common Stock is delivered, to deduct or withhold from any payment owed to a Participant any amount that is necessary in order to
satisfy any withholding requirement that the Corporation or Affiliate in good faith believes is imposed upon it in connection with Federal, state, or local taxes, including transfer taxes, as a result of the issuance of, or lapse of restrictions on,
such Common Stock, or otherwise require such Participant to make provision for payment of any such withholding amount. Subject to such conditions as may be established by the Committee, the Committee may permit a Participant to (i) have Common Stock
otherwise issuable under an 
  

 16 

 Option or Stock Award withheld to the extent necessary to comply with minimum statutory withholding rate requirements for
supplemental income, (ii) tender back to the Corporation shares of Common Stock received pursuant to an Option or Stock Award to the extent necessary to comply with minimum statutory withholding rate requirements for supplemental income, (iii)
deliver to the Corporation previously acquired Common Stock, (iv) have funds withheld from payments of wages, salary or other cash compensation due the Participant, or (v) pay the Corporation or its Affiliate in cash, in order to satisfy part or all
of the obligations for any taxes required to be withheld or otherwise deducted and paid by the Corporation or its Affiliate with respect to the Option or Stock Award. 
  
 11. COMPLIANCE WITH LAW AND APPROVAL
OF REGULATORY BODIES 
  
 A. General Requirements. No Option or Stock Award shall be exercisable, no Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under the Plan except in compliance
with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Corporation is a party, and the rules of all domestic stock exchanges or quotation systems
on which the Corporation’s shares may be listed. The Corporation shall have the right to rely on an opinion of its counsel as to such compliance. Any share certificate issued to evidence Common Stock when a Stock Award is granted or for which
an Option or Stock Award is exercised may bear such legends and statements as the Committee may deem advisable to assure compliance with federal and state laws and regulations. No Option or Stock Award shall be exercisable, no Stock Award shall be
granted, no Common Stock shall be issued, no certificate for shares shall be delivered, and no payment shall be made under the Plan until the Corporation has obtained such consent or approval as the Committee may deem advisable from regulatory
bodies having jurisdiction over such matters. 
  
 B.
Participant Representations. The Committee may require that a Participant, as a condition to receipt or exercise of a particular award, execute and deliver to the Corporation a written statement, in form satisfactory to the Committee, in which
the Participant represents and warrants that the shares are being acquired for such person’s own account, for investment only and not with a view to the resale or distribution thereof. The Participant shall, at the request of the Committee, be
required to represent and warrant in writing that any subsequent resale or distribution of shares of Common Stock by the Participant shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act
of 1933, which registration statement has become effective and is current with regard to the shares being sold, or (ii) a specific exemption from the registration requirements of the Securities Act of 1933, but in claiming such exemption the
Participant shall, prior to any offer of sale or sale of such shares, obtain a prior favorable written opinion of counsel, in form and substance satisfactory to counsel for the Corporation, as to the application of such exemption thereto.

  
 12. GENERAL PROVISIONS

  
 A. Effect on Employment and Service. Neither the
adoption of the Plan, its operation, nor any documents describing or referring to the Plan (or any part thereof) shall (i) confer upon 
  

 17 

 any individual any right to continue in the employ or service of the Corporation or an Affiliate, (ii) in any way affect
any right and power of the Corporation or an Affiliate to change an individual’s duties or terminate the employment or service of any individual at any time with or without assigning a reason therefor, or (iii) except to the extent the
Committee grants an Option or Stock Award to such individual, confer on any individual the right to participate in the benefits of the Plan. 
  
 B. Use of Proceeds. The proceeds received by the Corporation from the sale of Common Stock pursuant to the Plan shall be used for general corporate
purposes. 
  
 C. Unfunded Plan. The Plan, insofar as it
provides for grants, shall be unfunded, and the Corporation shall not be required to segregate any assets that may at any time be represented by grants under the Plan. Any liability of the Corporation to any person with respect to any grant under
the Plan shall be based solely upon any contractual obligations that may be created pursuant to the Plan. No such obligation of the Corporation shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Corporation.

  
 D. Further Restrictions on Transfer. Any Award made
under the Plan may expressly provide that all or any part of the shares of Common Stock that are: (i) to be issued or transferred by the Corporation upon the exercise of an Option or Stock Appreciation Right, upon termination of the Deferral Period
applicable to Deferred Shares or upon payment under any grant of Performance Shares or Performance Units, or (ii) no longer subject to a substantial risk of forfeiture and restrictions on transfer referred to in Section 7.A of the Plan, shall be
subject to further restrictions on transfer. 
  
 E.
Fractional Shares. The Corporation shall not be required to issue fractional shares pursuant to the Plan. The Committee may provide for elimination of fractional shares or the settlement of such fraction shares in cash. 
  
 F. Rules of Construction. Headings are given to the Sections of the
Plan solely as a convenience to facilitate reference, and shall not be used in interpreting, construing or enforcing any provision hereof. The reference to any statute, regulation, or other provision of law shall be construed to refer to any
amendment to or successor of such provision of law. To the extent that any provision of the Plan would prevent any Option that was intended to qualify under particular provisions of the Code from so qualifying, such provision of the Plan shall be
null and void with respect to such Option, provided that such provision shall remain in effect with respect to other Options, and there shall be no further effect on any provision of the Plan. 
  
 G. Foreign Employees. In order to facilitate the making of any grant
or combination of grants under the Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals, or who are employed by the Corporation or any affiliate outside of the United States, as the Committee
may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of, the Plan as it may consider
necessary or appropriate for such purposes without thereby affecting the terms of the Plan, as then in effect, unless the Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders of the Corporation.

  

 18 

 H. Choice of Law. The Plan and all Stock Option Agreements and Stock Award Agreements entered into
under the Plan (except to the extent that any such Stock Option Agreement or Stock Award Agreement otherwise provides) shall be governed by and interpreted under the laws of the jurisdiction of incorporation of the Corporation excluding (to the
greatest extent permissible by law) any rule of law that would cause the application of the laws of any jurisdiction other than the laws of the jurisdiction of incorporation of the Corporation. 
  
 13. AMENDMENT AND TERMINATION

  
 14. 
  
 The Board may amend or terminate the Plan from time to time; provided,
however, that with respect to any amendment that (i) increases the aggregate number of shares of Common Stock that may be issued under the Plan, (ii) changes the class of employees eligible to receive Incentive Stock Options or (iii)
stockholder approval is required by the terms of any applicable law, regulation, or rule, including, without limitation, any rule of New York Stock Exchange, or any national securities exchange on which the Common Stock is publicly traded, each such
amendment shall be subject to the approval of the stockholders of the Corporation within twelve (12) months of the date such amendment is adopted by the Board. Except as specifically permitted by a provision of the Plan (other than Section 3.B.),
the Stock Option Agreement or Stock Award Agreement or as required to comply with applicable law, regulation or rule, no amendment to the Plan or a Stock Option Agreement or Stock Award Agreement shall, without a Participant’s consent,
adversely affect any rights of such Participant under any Option or Stock Award outstanding at the time such amendment is made; provided, however, that an amendment that may cause an Incentive Stock Option to become a Nonqualified Stock Option, and
any amendment that is required to comply with the rules applicable to Incentive Stock Options, shall not be treated as adversely affecting the rights of the Participant. 
  
 15. EFFECTIVE DATE AND DURATION OF
PLAN 
  
 A. The Plan became effective
upon adoption by the Board, subject to approval within twelve (12) months by the stockholders holding of a majority of the shares of entitled to vote thereon. Unless and until the plan has been approved the stockholders of the Corporation, no Option
or Stock Award may be exercised, and no shares of Common Stock may be issued under the Plan. In the event that the stockholders of the Corporation shall not approve the Plan within such twelve (12) month period, the Plan and any previously granted
Option or Stock Award shall terminate. 
  
 B. Unless
previously terminated, the Plan will terminate ten (10) years after the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders, except that Options and Stock Awards that are granted under
the Plan prior to its termination will continue to be administered under the terms of the Plan until the Options and Stock Awards terminate or are exercised. 
  

 19 

 Certificate of Secretary 
  
 I, the undersigned secretary of Highland Hospitality Corporation (the “Corporation”), do hereby certify that the
attached copy of the Highland Hospitality Corporation 2003 Omnibus Stock Incentive Plan was adopted by the Board of Directors of the Corporation on December 15, 2003 and approved by the stockholders of the Corporation on December 15, 2003.

  

			
	  
  
 /s/    Tracy M.J. Colden

	 	  
  
 December 15, 2003

	Secretary	 	Date

  

 20EXHIBIT 10.18

  
 HIGHLAND HOSPITALITY CORPORATION 
  
 and 
  
 FRIEDMAN, BILLINGS, RAMSEY & CO.,
INC. 
  

  
 WARRANT AGREEMENT 
  
 Dated as of December 19, 2003 
  

  

 WARRANT AGREEMENT 
  
 This Warrant Agreement (the “Agreement”) is made as of December 19, 2003 between HIGHLAND HOSPITALITY CORPORATION,
a Maryland corporation (the “Company”),as the issuer of the Warrants (as defined below) and FRIEDMAN, BILLINGS, RAMSEY & CO., INC. (“FBR”). 
  
 RECITALS 
  
 A In connection with its initial public offering (the “Offering”), the Company proposes to sell, pursuant to an Underwriting Agreement dated
December 15, 2003 (the “Underwriting Agreement”) between the Company and FBR, as representative of the underwriters named therein, 30,000,000 shares (the “Initial Shares”) of Common Stock, par value $.01 per share, of the Company
(the “Common Stock”), to certain underwriters, for which FBR is acting as lead representative (the “Underwriters”) and up to 4,500,000 shares of Common Stock, to cover over-allotments, if any. 
  
 B. The Company deems it advisable, in consideration for the services
rendered to the Company by FBR as lead underwriter in connection with the Offering, to issue to FBR warrants (the “Warrants”) entitling the holders thereof to purchase 888,488 shares of Common Stock on the terms and conditions set forth
herein. The shares of Common Stock issuable upon exercise of the Warrants are referred to as the “Warrant Shares.” 
  
 C. The Company desires to enter into this Agreement to set forth the terms and conditions of the Warrants and the rights of the holders. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained, the parties hereto agree as follows: 
  
 ARTICLE I 
 ISSUANCE, EXECUTION, EXPIRATION AND TRANSFER OF WARRANT 
 CERTIFICATES 
  
 SECTION 1.01. Form of Warrant Certificates. The Warrants shall be evidenced by certificates in temporary or definitive fully registered form (the
“Warrant Certificates”) substantially in the form of Exhibit A and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange, or to conform to usage, or as consistently herewith may be determined by the officers executing such Warrant Certificates as evidenced by their
execution of the Warrant Certificates. Each Warrant Certificate shall evidence the right, subject to the provisions of this Agreement and of the Warrant Certificate, to purchase the number of shares of Common Stock stated therein, adjusted as
provided for in Article III hereof, upon payment of the Exercise Price (as defined in Section 2.01). 
  
 SECTION 1.02. Execution of Warrant Certificates. Each Warrant Certificate, whenever issued, shall be dated as of the date of signature thereof by
the Company either upon initial issuance or upon exchange, substitution or transfer, shall be signed manually by, or bear the facsimile signature of, the Chairman of the Board or the President or a Treasurer or a Vice President of the Company and
shall be attested by the manual or facsimile signature of the 

 Secretary or an Assistant Secretary of the Company. In case any officer of the Company whose manual or facsimile
signature has been placed upon any Warrant Certificate shall have ceased to be such before such Warrant Certificate is issued, it may be issued with the same effect as if such officer had not ceased to be such at the date of issuance. Any Warrant
Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of the execution
of this Agreement any such person was not such an officer. 
  
 SECTION 1.03. Issuance, Delivery and Registration of Warrant Certificates. The Company shall issue and deliver, at the closing of the sale of the Initial Shares to the Underwriter as provided in the Underwriting Agreement, to FBR or
its permitted designees, a Warrant Certificate representing the Warrants, in substantially the form of Exhibit A. Additionally, the Company shall sign and deliver Warrant Certificates upon exchange, transfer or substitution for one or more
previously signed Warrant Certificates as hereinafter provided. The Company shall maintain books for the registration of transfer and registration of Warrant Certificates (the “Warrant Register”). 
  
 SECTION 1.04. Transfer and Exchange of Warrant Certificates. The
Company, from time to time, shall register the permitted transfer of any outstanding Warrant Certificates in the Warrant Register upon surrender at the principal office of the Company of Warrant Certificates accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Company, duly executed by the Warrantholder (as defined in Section 5.12) or the Warrantholder’s attorney duly authorized in writing, and evidence, satisfactory to the Company, of
compliance with the provisions of Section 5.04. Upon any such registration of transfer, a new Warrant Certificate shall be signed by the Company and issued to the transferee and the surrendered Warrant Certificate shall be canceled by the
Company. Warrant Certificates may be exchanged at the option of the holder thereof, upon surrender, properly endorsed, at the principal office of the Company, with written instructions, for other Warrant Certificates signed by the Company entitling
the registered holder thereof, subject to the provisions thereof and of this Agreement, to purchase in the aggregate a like number of shares of Common Stock as the Warrant Certificate so surrendered. The Company may require the payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any such exchange or transfer. 
  
 ARTICLE II 
 SHARES OF COMMON STOCK
ISSUABLE, EXERCISE PRICE, EXPIRATION DATE 
 AND EXERCISE OF WARRANTS 
  
 SECTION 2.01. Warrant Shares Issuable; Exercise Price; Expiration Date. Each Warrant Certificate shall entitle the
registered holder thereof, subject to the provisions thereof and of this Agreement, to purchase from the Company at any time from the closing date of the sale of the Initial Shares pursuant to the Underwriting Agreement (the “Closing
Date”) until the close of business on the fifth anniversary of the Closing Date (or, if such date is not a Business Day (as defined below), the first following Business Day) the number of shares of Common Stock stated therein, adjusted as
provided in Article III, upon payment of $10 per share (which price is equal to the initial public offering price), adjusted as provided in Article III. Such price, as it may be adjusted from time to time as provided in Article III, is referred to
as the “Exercise Price.” Each share of Common Stock issuable upon exercise of a Warrant is referred to as a “Warrant Share.” Each Warrant not exercised during the period set forth above shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall cease, at the end of such 
  

 2 

 period. For purposes of this Agreement, the term “Business Day” means any day of the week other than a
Saturday, Sunday or a day which in The City of New York or in the city in which the principal office of the Company is located shall be a legal holiday or a day on which banking institutions are authorized or required by law to close. 
  
 SECTION 2.02. Exercise of Warrants. (a) Warrants may be exercised by
surrendering the Warrant Certificate evidencing such Warrants at the principal office of the Company, with the Election to Exercise form set forth on the reverse of the Warrant Certificate duly completed and signed, and by paying in full to the
Company (i) in cash, or (ii) by certified or official bank check or (iii) by any combination of the foregoing, the Exercise Price for each Warrant Share as to which Warrants are then being exercised and any applicable taxes, other than taxes that
the Company is required to pay under subsection (d) below. A Warrantholder may exercise such holder’s Warrant for the full number of Warrant Shares issuable upon exercise thereof or any lesser number of whole Warrant Shares. 
  
 (b) As soon as practicable after the exercise of any
Warrants and payment by the Warrantholder of the full Exercise Price for the Warrant Shares as to which such Warrants are then being exercised, the Company shall requisition from the transfer agent for the shares of Common Stock and deliver to or
upon the order of such Warrantholder a certificate or certificates for the number of full Warrant Shares to which such Warrantholder is entitled, registered in the name of such Warrantholder or as such Warrantholder shall direct to the Company in
writing. Fractional Warrant Shares that otherwise would be issuable in respect of such exercise shall be paid in cash as provided in Section 2.03, and the number of Warrant Shares issuable to such Warrantholder shall be rounded down to the
next nearest whole number. If such Warrant Certificate shall not have been exercised in full, the Company will issue to such Warrantholder a new Warrant Certificate exercisable for the number of shares of Common Stock as to which such Warrant shall
not have been exercised. The Company will cancel all Warrants so surrendered. 
  
 (c) Each person in whose name any such certificate for Warrant Shares is issued shall for all purposes be deemed to have become the holder of record of such Warrant Shares on the date on which the Warrant Certificate
was surrendered to the Company and payment of the Exercise Price and any applicable taxes was made to the Company, irrespective of the date of delivery of such certificate for Warrant Shares. 
  
 (d) The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares. The Company will not be required, however, to pay any tax imposed in connection with any transfer involved in the issue of the Warrant Shares in a name other than that of the Warrantholder. In
such case, the Company will not be required to issue any certificate for Warrant Shares until the person or persons requesting the same shall have paid to the Company the amount of any such tax or shall have established to the Company’s
satisfaction that the tax has been paid or that no tax is due. 
  
 SECTION 2.03. No Fractional Shares to Be Issued. If more than one Warrant Certificate shall be surrendered for exercise at one time by the same holder, the number of full Warrant Shares which shall be issuable upon exercise thereof
shall be computed on the basis of the aggregate number of Warrants so surrendered. The Warrantholders, by their acceptance of the Warrant Certificates, expressly waive their right to receive any fraction of a Warrant Share or a share certificate
representing a fraction of a Warrant Share. In lieu thereof, the Company will purchase such fractional interest for an amount in cash equal to the current market value of such fractional interest, as reasonably determined by the Company. 

 

 3 

 SECTION 2.04. Cancellation of Warrants. The Company shall cancel any Warrant Certificate delivered
to it for exercise, in whole or in part, or delivered to it for transfer, exchange or substitution, and no Warrant Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company
shall mark as canceled any such Warrant Certificates. 
  
 ARTICLE III 
 ADJUSTMENT OF EXERCISE PRICE; MERGER, ACQUISITION, ETC.; 
 RESERVATION OF SHARES OF COMMON STOCK; PAYMENT OF TAXES 
  
 SECTION 3.01. Adjustment of Exercise Price and Number of Warrant Shares.(a) The Exercise Price shall be subject to adjustment from time to time as
provided in this Article III. After each adjustment of the Exercise Price, each Warrantholder shall at any time thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant to the provisions of such Warrant immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment. 
  
 (b) For purposes of making adjustments of the Exercise Price pursuant to this Article III, the “Current Market Price” shall be determined as of the date of the grant, issuance or sale, whichever is earlier, as the case may be,
giving rise to the adjustment and shall be equal to the last sale price with respect to shares of Common Stock as reported on the New York Stock Exchange on such date. If there are no reported transactions on the New York Stock Exchange on such
date, the “Current Market Price” shall be the average of the highest current independent bid and lowest current independent offer for the shares. 
  
 (c) Notwithstanding anything herein to the contrary, the Exercise Price and Number of Warrant Shares shall not be adjusted if (i) the sale
price of any shares of Common Stock is equal to or greater than the Current Market Price as of the date of the Company’s commitment to sell, (ii) the exercise price of any Options (determined as described in the relevant sections of any Options
(as defined in Section 3.03(a)) is equal to or greater than 95% of the Current Market Price as of the date of grant, (iii) the sale or issuance price (determined as described in Section 3.03(b)) of any Convertible Securities (as
defined in Section 3.03(a)) is equal to or greater than the Current Market Price as of the date of the Company’s commitment to sell or (iv) notwithstanding clause (i) and (iii) any shares of Common Stock or Convertible Securities are
issued or sold in a firm commitment underwritten registered public offering or in a private placement in which shares of Common Stock are issued at a market rate discount. 
  
 SECTION 3.02. Exercise Price Adjustment Formula. Subject to Section 3.01, if, during the period in which
Warrants are exercisable, the Company sells any shares of Common Stock for a price per share that is less than the Current Market Price in effect at the time of such sale, the Exercise Price immediately shall be adjusted by multiplying the Exercise
Price by (a) an amount equal to the sum of (i) the number of shares of Common Stock outstanding and deemed (in accordance with the provisions of Section 3.03) to be outstanding immediately prior to such sale multiplied by the Current Market
Price at the time of such issuance or sale and (ii) the total consideration received and deemed (in accordance with the provisions of Section 3.03) to be received by the Company upon such issuance and sale and (b) dividing the result by an
amount equal to (i) the sum of (A) the amount determined in (a) and (B) the product of the number of shares issued or sold multiplied by the Current Market Price, minus (ii) the consideration received. 
  

 4 

 SECTION 3.03. Constructive Issuance of Shares. (a) Subject to Section 3.01, if the Company
grants any rights, warrants or options (collectively referred to as “Options”) to subscribe for or purchase any shares of Common Stock or any securities (collectively referred to as “Convertible Securities”) convertible into or
exchangeable for shares of Common Stock, whether or not any such Options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price per share for which shares of Common Stock are issuable upon the
exercise of such Options or upon conversion or exchange of such Convertible Securities (determined by dividing (i) the total consideration received or receivable by the Company for the granting of such Options, plus any additional consideration
payable to the Company upon the exercise of such Options, plus in the case of any such Options which relate to Convertible Securities, any additional consideration payable to the Company upon the conversion or exchange thereof by (ii) the maximum
number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities) shall be less than the Current Market Price in effect as of the time of granting such Options, the maximum
number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of all Convertible Securities issuable upon the exercise of such Options shall be deemed, upon the granting of such Options, to be outstanding
and to have been issued for such price per share. Except as provided in Section 3.03(c), no further adjustment of the Exercise Price shall be made upon the issue or sale of shares of Common Stock upon the exercise of such Options or the conversion
or exchange of such Convertible Securities. 
  
 (b) Subject to Section 3.01, if the Company issues or sells any Convertible Securities (other than securities referred to in Section 3.03(a)), whether or not the right to convert or exchange any such Convertible Securities is
immediately exercisable, and the price per share for which the shares of Common Stock are issuable upon such conversion or exchange (determined by dividing (i) the total consideration received or receivable by the Company for the issue or sale of
such Convertible Securities, plus any additional consideration payable to the Company upon the conversion or exchange of such Convertible Securities by (ii) the maximum number of shares of Common Stock issuable upon the conversion or exchange of
such Convertible Securities) shall be less than the Current Market Price in effect as of the time of such issue or sale of the Convertible Securities, the maximum number of shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed, upon the issue or sale of such Convertible Securities, to be outstanding and to have been issued for such price per share. Except as provided in Section 3.03(c), no further adjustment of the Exercise
Price shall be made upon the issue or sale of shares of Common Stock upon conversion or exchange of any such Convertible Securities. 
  
 (c) Subject to Section 3.01, if the exercise price provided for in any Option referred to in Section 3.03(a), or the rate at
which any Convertible Security referred to in Section 3.03(a) or Section 3.03(b) is convertible into or exchangeable for shares of Common Stock, shall change or a different exercise price or rate shall become effective at any time or
from time to time, the Exercise Price immediately shall be adjusted to the Exercise Price that would have obtained had the adjustments made and required to be made under this Section 3.03 upon the grant, issuance or sale of such Options or
such Convertible Securities been made upon the basis of (i) the issuance of the number of shares of Common Stock theretofore delivered upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities and the total
consideration received therefor, (ii) the issuance of all shares of Common Stock and all other Options or Convertible Securities and the total consideration received therefor and (iii) the 
  

 5 

 original issuance at the time of such change of exercise price or rate of any such Options or Convertible
Securities then outstanding and the total consideration received therefor. On the expiration of any such Option or the termination of any such right to convert or exchange any such Convertible Securities, the Exercise Price immediately shall be
adjusted to the Exercise Price that would have obtained (iv) had the adjustments made upon the issuance of such Options or such Convertible Securities been made upon the issuance of only the number of shares of Common Stock actually delivered and
the total consideration received therefor upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities and (v) had adjustments been made on the basis of the Exercise Price as adjusted under clause (iv) of this
Section 3.03(c) for all issues or sales of shares of Common Stock, Options or Convertible Securities made after the issuance of such Options or Convertible Securities. If the exercise price provided for in any Option referred to in Section
3.03(a), or the rate at which any Convertible Security referred to in Section 3.03(a) or Section 3.03(b) is convertible or exchangeable for shares of Common Stock, shall decrease at any time pursuant to applicable provisions
thereof designed to protect against dilution, the Exercise Price immediately shall be decreased in the case of delivery of shares of Common Stock upon the exercise of any such Option or upon the conversion or exchange of any such Convertible
Securities, to the Exercise Price that would have obtained had the adjustments made upon the issue or sale of such Option (as defined in Section 3.03(a)) or such Convertible Security (as defined in Section 3.03(b)) been made upon the
basis of the issuance of the shares of Common Stock so delivered and the total consideration received therefor. 
  
 (d) If any shares of Common Stock or any Convertible Securities or any Option shall be issued or sold for cash, the consideration received
by the Company shall be deemed to be the amount paid by the purchaser therefor without deduction of any expense incurred or any underwriting commission, concession or discount paid or allowed by the Company in connection therewith. If any shares of
Common Stock or any Convertible Securities or any Option shall be issued or sold for a consideration other than cash, the consideration received by the Company shall be deemed to be the fair value of such consideration as determined by the Board of
Directors of the Company without deduction of any expense incurred or any underwriting commission, concession or discount paid or allowed by the Company in connection therewith. If any shares of Common Stock or any Convertible Securities or any
Option shall be issued in connection with a merger of another corporation into the Company, the consideration received by the Company shall be deemed to be the fair value as determined by the Board of Directors of the Company of such portion of the
assets of such merged corporation as the Board of Directors shall reasonably determine to be attributable to such shares of Common Stock or such Option or Convertible Securities, as the case may be. 
  
 SECTION 3.04. Stock Dividends. If the Company shall declare a dividend
or any other distribution upon any capital stock which is payable in shares of Common Stock or Convertible Securities, the Exercise Price shall be reduced to the quotient obtained by dividing (i) the number of shares of Common Stock outstanding
immediately prior to such declaration multiplied by the then effective Exercise Price by (ii) the total number of shares of Common Stock outstanding immediately after such declaration. All shares of Common Stock and all Convertible Securities
issuable in payment of any dividend or other distribution upon the capital stock of the Company shall be deemed to have been issued or sold without consideration. 
  
 SECTION 3.05. Stock Splits and Reverse Stock Splits. If the Company shall subdivide its outstanding shares of Common
Stock into a greater number of shares, the Exercise Price shall be proportionately reduced and the number of Warrant Shares issuable upon exercise of each Warrant shall be proportionately increased. If the Company shall combine the outstanding
shares 
  

 6 

 of Common Stock into a smaller number of shares, the Exercise Price shall be proportionately increased and the number of
Warrant Shares issuable upon exercise of each Warrant shall be proportionately decreased. 
  
 SECTION 3.06. Reorganizations and Asset Sales. If any capital reorganization or reclassification of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or
substantially all of the assets of the Company shall be effected in such a way that the holders of the shares of Common Stock shall be entitled to receive securities or assets with respect to or in exchange for shares of Common Stock, adequate
provision shall be made, prior to and as a condition of such reorganization, reclassification, consolidation, merger or sale, whereby each Warrantholder shall have the right to receive, upon exercise of the Warrants upon the terms and conditions
specified herein and in lieu of the Warrant Shares otherwise receivable upon the exercise of such Warrants, such securities or assets as may be issued or payable with respect to or in exchange for a number of shares of Common Stock equal to the
number of Warrant Shares otherwise issuable had such reorganization, reclassification, consolidation, merger or sale not taken place. In any such case, appropriate provision shall be made so that the provisions of this Agreement shall be applicable
with respect to any securities or assets thereafter deliverable upon exercise of the Warrants. The Company shall not effect any such consolidation, merger or sale unless prior to or simultaneously with the consummation thereof, the survivor or
successor corporation resulting from such consolidation or merger or the purchaser of such assets shall assume by written instrument delivered to each holder of Warrants the obligation to deliver to such holder such securities or assets as such
holder may be entitled to receive, subject to payment of the Exercise Price. 
  
 SECTION 3.07. Covenant to Reserve Shares for Issuance on Exercise.(a) At all times the Company will cause an appropriate number of shares of Common Stock to be duly and validly authorized and reserved and will
keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issue upon exercise of Warrants as herein provided, the full number of shares of Common Stock, if any, then issuable if all outstanding Warrants then
exercisable were to be exercised. The Company covenants that all shares of Common Stock that shall be so issuable shall be duly and validly issued and, upon payment of the Exercise Price, fully paid and non-assessable. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient for such purpose, the Company will take such action as, in the opinion of its counsel, may be necessary to increase its authorized but unissued Common Stock to such number of
shares as shall be sufficient for such purpose. Prior to or upon the issuance of any Warrant Shares, the Company shall secure the listing of such Warrant Shares upon any securities exchange upon which shares of Common Stock are then listed.

  
 (b) The Company shall authorize and direct
its current and future transfer agents for the shares of Common Stock at all times to reserve such number of authorized shares as shall be requisite for such purpose. The Company will supply such transfer agents with duly executed stock certificates
for such purposes. Promptly after the date of expiration of the Warrants, no shares shall be reserved in respect of such Warrants. 
  
 SECTION 3.08. Statements on Warrants. The form of Warrant Certificate need not be changed because of any adjustment made pursuant to this Article
III, and Warrant Certificates issued after such adjustment may state the same Exercise Price and the same number of shares of Common Stock as are stated in the Warrant Certificates initially issued pursuant to this Agreement. The Company, however,
may at any time in its sole discretion (which shall be conclusive) make any change in the form of Warrant Certificate that it may deem appropriate and that does not affect the substance thereof; and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant Certificate or otherwise, may be in the form as so changed. 
  

 7 

 Notice of Change in Securities Issuable and Exercise Price. Whenever the securities issuable or
deliverable in exchange for Warrants are or the Exercise Price is changed pursuant to this Article III, the Company promptly shall mail to each Warrantholder a notice, executed by its Chief Financial Officer, setting forth in reasonable detail the
facts requiring the change and specifying the effective date of such change and the number or amount of the change. Failure to publish such notice, or any defect in such notice, shall not affect the legality or validity of any such change.

  
 SECTION 3.09. References to Common Stock. Unless the
context otherwise indicates, all references to Common Stock in this Agreement and in the Warrant Certificates, in the event of a change under this Article III, shall be deemed to refer also to any other securities issuable or deliverable in exchange
for Warrants pursuant to such change. 
  
 ARTICLE IV

 OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS 
  
 SECTION 4.01. No Rights as Shareholders. Nothing contained in this Agreement or in any Warrant Certificate shall be
construed as conferring on any Warrantholder any rights whatsoever as a shareholder of the Company, including the right to vote at, or to receive notice of, any meeting of shareholders of the Company; nor shall the consent of any such holder be
required with respect to any action or proceeding of the Company; nor shall any such holder, by reason of the ownership or possession of a Warrant or the Warrant Certificate representing the same, either at, before or after exercising such Warrant,
have any right to receive any cash dividends, stock dividends, allotments or rights, or other distributions (except as specifically provided herein), paid, allotted or distributed or distributable to the shareholders of the Company prior to the date
of the exercise of such Warrant, nor shall such holder have any right not expressly conferred by such holder’s Warrant or Warrant Certificate. 
  
 SECTION 4.02. Mutilated or Missing Warrant Certificates. If any Warrant Certificate is lost, stolen, mutilated or destroyed, the Company in its
discretion may issue, in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and substitution for the Warrant Certificate lost, stolen or destroyed, upon receipt of a proper affidavit or other
evidence satisfactory to the Company (and surrender of any mutilated Warrant Certificate) and bond of indemnity in form and amount and with corporate surety satisfactory to the Company in each instance protecting the Company, a new Warrant
Certificate of like tenor and exercisable for an equivalent number of shares of Common Stock as the Warrant Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant Certificate shall constitute an original contractual obligation of
the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant Certificate at any time shall be enforceable by anyone. An applicant for such a substitute Warrant Certificate also shall comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe. All Warrant Certificates shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement of lost, stolen,
mutilated or destroyed Warrant Certificates, and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement of negotiable instruments or other
securities without their surrender. 
  

 8 

 SECTION 4.03. Liquidation, Merger, etc.; Notice to Warrantholders. If: 
  
 (a) the Company shall authorize the issuance to all holders
of Common Stock of rights or warrants to subscribe for or purchase capital stock of the Company or of any other subscription rights or warrants; or 
  
 (b) the Company shall authorize the distribution to all holders of Common Stock of evidences of its indebtedness or assets (other than
cash dividends or cash distributions payable out of current earnings, retained earnings or earned surplus or dividends payable in Common Stock); or 
  
 (c) there shall be proposed any consolidation or merger to which the Company is to be a party and for which approval of the holders of
Common Stock is required, or the conveyance or transfer of the properties and assets of the Company substantially as an entirety, or such other merger or transaction described in Section 3.06 hereof; or 
  
 (d) there shall be proposed the voluntary or involuntary
dissolution, liquidation or winding up of the Company; 
  
 the Company shall cause
to be given to each Warrantholder, by first-class mail, postage prepaid, a written notice stating (i) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such rights, warrants or distribution are to be
determined or (ii) the date on which any consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of
record of shares of Common Stock shall be entitled to exchange the shares for securities or other property, if any, deliverable upon the consolidation, merger, conveyance, transfer, reorganization, reclassification, dissolution, liquidation or
winding up. Such notice shall be mailed at the same time as any notice of such transaction shall be given to holders of Common Stock in the case of a notice pursuant to (i) above at least ten calendar days before the record date specified and in the
case of a notice pursuant to clause (ii) above at least 20 calendar days before the earlier of the dates specified. Notwithstanding the foregoing, a press release or filing by the Company with the Securities and Exchange Commission containing the
information required by this Section 4.03 shall be deemed to constitute notice to the Warrantholders required by this Section 4.03. 
  
 ARTICLE V 
 MISCELLANEOUS

  
 SECTION 5.01. Registration of Warrant Shares. 

 
 (a) The Company shall cause the Warrant Shares to be
registered under the Securities Act of 1933, as amended (the “Securities Act”) on the first anniversary of the effective date (the “Effective Date”) of the registration statement (No. 333-108671) filed by the Company on Form S-11
under the Securities Act of 1933 and will use its best efforts to keep such registration effective through the close of business on the fifth anniversary of the Effective Date. 
  
 (b) If, at any time prior to the close of business on the fifth anniversary of the Effective Date, there is
no registration statement in effect for the Warrant Shares, the Company, upon the written request of the holders of the Warrants and of Warrant Shares representing an aggregate of 50% or more of the Warrant Shares, will file with the Securities and

  

 9 

 Exchange Commission under the Securities Act, such registration statements and amendments thereto and
such other filings as may be required to permit the public offering and sale of such Warrant Shares in compliance with the Securities Act. The Company shall be required to register Warrant Shares no more than once pursuant to this Section
5.02(b). 
  
 (c) Each holder of Warrants
shall pay any transfer tax payable with respect to such holder’s Warrant Shares and the fees and expenses of such holder’s counsel. All other expenses of registration under Section 5.02(a) or Section 5.02(b) shall be borne by
the Company. 
  
 (d) The Company will agree to
indemnify the holders of Warrant Shares that are included in a registration statement or amendments to existing registration statements pursuant to this Section 5.02 substantially to the same extent as the Company has agreed to indemnify the
Underwriters in the Underwriting Agreement and such holders will agree to indemnify the Company and any Underwriter with respect to information furnished by them in writing to the Company for inclusion therein substantially to the same extent as the
Underwriters have indemnified the Company in the Underwriting Agreement. 
  
 SECTION 5.02. Enforcement of Warrant Rights. All rights of action are vested in the respective Warrantholders. Any holder of any Warrant, in his own behalf and for his own benefit, may enforce, and may
institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, his right to exercise his Warrant for the purchase of the number of Warrant Shares issuable or deliverable in exchange
therefor, in the manner provided in the Warrant and in this Agreement. 
  
 SECTION 5.03. Negotiability and Ownership. The Warrants issued hereunder shall not, for a period of one year following the Effective Date, be sold, transferred, assigned or hypothecated by the holders thereof except (a) to persons
who are directors, officers or affiliates of FBR who represent to the Company that they are “accredited investors” as that term is defined in Rule 501 under Regulation D of the Securities Act or (b) in the case of an individual, pursuant
to such individual’s last will and testament or the laws of descent and distribution and, in any case, only in compliance with the Securities Act and Rule 2710 of the National Association of Securities Dealers, Inc. Manual, or any successor
rule. For the purposes of this Section 5.03, the terms “officers,” and “partners” shall refer to those persons who are officers or partners, as the case may be, of FBR or any of its affiliates, as the case maybe, or who
become officers or partners of FBR or any of its affiliates at any time before the expiration of the Warrants regardless of whether such persons are officers or partners of FBR or any of its affiliates at the time they sell, transfer, assign or
hypothecate a Warrant. Any attempt to sell, transfer, assign or hypothecate in contravention of this Section shall be null and void. 
  
 SECTION 5.04. Warrant Legend. (a) Each Warrant shall contain a legend in substantially the following form: 
  
 “THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT ARE SUBJECT TO THE CONDITIONS SPECIFIED IN THE WARRANT AGREEMENT, DATED DECEMBER 19, 2003 BETWEEN HIGHLAND HOSPITALITY CORPORATION AND FRIEDMAN, BILLINGS, RAMSEY & CO., INC. ANY ATTEMPT TO TRANSFER THIS WARRANT OR ANY SHARE OF
COMMON STOCK ISSUED UPON EXERCISE OF THIS WARRANT TO ANY UNAUTHORIZED TRANSFEREE, SHALL BE NULL AND VOID. NO TRANSFER IN VIOLATION OF SAID AGREEMENT SHALL BE EFFECTIVE. THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE AND
CURRENT 
  

 10 

 REGISTRATION STATEMENT OR POSTEFFECTIVE AMENDMENT THERETO UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT. THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED WITHOUT AN EFFECTIVE AND CURRENT
REGISTRATION STATEMENT OR POSTEFFECTIVE AMENDMENT THERETO FOR SUCH SHARES UNDER THE ACT OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THIS ACT.” 
  
 (b) Each certificate representing Warrant Shares, unless
registered pursuant to Section 5.01, shall contain a legend substantially in the following form: 
  
 “THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED WITHOUT AN EFFECTIVE AND CURRENT REGISTRATION STATEMENT OR POSTEFFECTIVE
AMENDMENT THERETO FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THAT ACT. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE CONDITIONS SPECIFIED IN THE WARRANT AGREEMENT, DATED DECEMBER 19, 2003, BETWEEN HIGHLAND HOSPITALITY CORPORATION AND FRIEDMAN, BILLINGS, RAMSEY & CO., INC. ANY ATTEMPT TO TRANSFER THE SHARES REPRESENTED BY THIS CERTIFICATE TO ANY
UNAUTHORIZED TRANSFEREE, SHALL BE NULL AND VOID. NO TRANSFER IN VIOLATION OF SAID AGREEMENT SHALL BE EFFECTIVE.” 
  
 SECTION 5.05. Supplements and Amendments.(a) Notwithstanding the provisions of Section 5.05(b), FBR, without the consent or concurrence of
the registered holders of the Warrants, may enter into one or more supplemental agreements or amendments with the Company for the purpose of evidencing the rights of Warrantholders upon consolidation, merger, sale, transfer or reclassification
pursuant to Section 3.06, making any changes or corrections in this Agreement that are required to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provision
herein or any clerical omission or mistake or manifest error herein contained, or making such other provisions in regard to matters or questions arising under this Agreement as shall not adversely affect the interests of the holders of the Warrants
or be inconsistent with this Agreement or any supplemental agreement or amendment. 
  
 (b) With the consent of the registered holders of at least a majority in number of the Warrants at the time outstanding, the Company at
any time and from time to time by supplemental agreement or amendment may add any provisions to or change in any manner or eliminate any of the provisions of this Agreement or of any supplemental agreement or modify in any manner the rights and
obligations of the Warrantholders and of the Company; provided, however, that no such supplemental agreement or amendment, without the consent of the registered holder of each outstanding Warrant affected thereby, shall: 
  
 (i) alter the provisions of this Agreement so as to affect
adversely the terms upon which the Warrants are exercisable; or 
  
 (ii) reduce the number of Warrants outstanding the consent of whose holders is required for any such supplemental agreement or amendment. 
  

 11 

 SECTION 5.06. Notices. Any notice or demand authorized by this Agreement to be given or made by
the holder of any Warrant to or on the Company shall be sufficiently given or made if sent by mail first-class, postage prepaid, addressed (until another address is filed in writing by the Company with the Representative), as follows: 
  

			
	 Highland Hospitality Corporation
	  	 
	 8405 Greensboro Drive, Suite 500
	  	 
	 McLean, Virginia 22102
	  	 
	 Attention: President
	  	 
		
	 with a copy to
	  	 
		
	 Highland Hospitality Corporation
	  	 
	 8405 Greensboro Drive, Suite 500
	  	 
	 McLean, Virginia 22102
	  	 
	 Attention: General Counsel
	  	 

  
 Any notice or demand
authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on FBR shall be sufficiently given or made if sent by mail first-class, postage prepaid, addressed (until another address is filed in writing by
the Representative with the Company), as follows: 
  

			
	 Friedman, Billings, Ramsey & Co., Inc.
	  	 
	 1001 Nineteenth Street North
	  	 
	 Arlington, Virginia 22209
	  	 
	 Attention: James R. Kleeblatt
	  	 

  
 Any notice or demand
authorized by this Agreement to be given or made to the holder of any Warrants shall be sufficiently given or made if sent by first-class mail, postage prepaid to the last address of such holder as it shall appear on the Warrant Register.

  
 SECTION 5.07. Applicable Law. The validity,
interpretation and performance of this Agreement and of the Warrant Certificate shall be governed by the law of the State of Maryland, without giving effect to the principles of conflicts of law thereof. 
  
 SECTION 5.08. Benefits of this Agreement. Nothing in this Agreement
expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the holders of the Warrants any right, remedy or
claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise or agreement hereof, and all covenants, conditions, stipulations, promises and agreements in this Agreement contained shall be for the sole and exclusive
benefit of the parties hereto and their successors and of the holders of the Warrants. 
  
 SECTION 5.09. Registered Warrantholders. Prior to due presentment for registration of transfer, the Company may deem and treat the person in whose name any Warrants are registered in the Warrant Register as the
absolute owner thereof for all purposes whatsoever (notwithstanding any notation of ownership or other writing thereon made by anyone other than the Company) and the Company shall not be affected by any notice to the contrary or be bound to
recognize any equitable or other claim to or interest in any Warrants on the part of any other person and shall not be liable for any registration of transfer of Warrants that are registered or to be registered in the name of a fiduciary or the
nominee of a fiduciary. The terms “Warrantholder” and “holder of any “Warrants” and all other similar terms used herein shall mean such person in whose name Warrants are registered in the Warrant Register. 
  

 12 

 SECTION 5.10. Inspection of Agreement. A copy of this Agreement shall be available at all
reasonable times for inspection by any Warrantholder at the principal office of the Company. The Company may require any such Warrantholder to submit his Warrant Certificate for inspection by it before allowing such Warrantholder to inspect a copy
of this Agreement. 
  
 SECTION 5.11. Headings. The Article
and Section headings herein are for convenience only and are not a part of this Agreement and shall not affect the interpretation thereof. 
  
 SECTION 5.12. Counterparts. The Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an
original. 
  

 13 

 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto under their respective
seals as of the day and year first above written. 
  

			
	 HIGHLAND HOSPITALITY CORPORATION

		
	 By:
	 	 /s/    Tracy M. J. Colden

	 	 	 Name: Tracy M. J. Colden

	 	 	 Title: Executive Vice President

	
	 FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

		
	 By:
	 	 /s/    James R. Kleebatt

	 	 	 Name: James R. Kleebatt

	 	 	 Title: Senior Managing Director

  

 14 

 Exhibit A 
  
 FORM OF WARRANT CERTIFICATE 
  

			
	 No. 1
	 	888,488 Warrants

  
 THIS WARRANT AND THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO THE CONDITIONS SPECIFIED IN THE WARRANT AGREEMENT, DATED DECEMBER 19, 2003 BETWEEN HIGHLAND HOSPITALITY CORPORATION AND FRIEDMAN, BILLINGS, RAMSEY & CO., INC. ANY
ATTEMPT TO TRANSFER THIS WARRANT OR ANY SHARE OF COMMON STOCK ISSUED UPON EXERCISE OF THIS WARRANT TO ANY UNAUTHORIZED TRANSFEREE, SHALL BE NULL AND VOID. NO TRANSFER IN VIOLATION OF SAID AGREEMENT SHALL BE EFFECTIVE. THIS WARRANT MAY NOT BE SOLD OR
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE AND CURRENT REGISTRATION STATEMENT OR POSTEFFECTIVE AMENDMENT THERETO UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER THE ACT. THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED WITHOUT AN EFFECTIVE AND CURRENT REGISTRATION STATEMENT OR POSTEFFECTIVE AMENDMENT THERETO FOR SUCH SHARES
UNDER THE ACT OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER THIS ACT. 
  
 WARRANTS 
 TO PURCHASE SHARES OF
COMMON STOCK OF 
 HIGHLAND HOSPITALITY CORPORATION 
  
 Highland Hospitality Corporation, a Maryland corporation (the “Company”), for value received, hereby certifies
that 
  
 Friedman, Billings, Ramsey & Co., Inc. 
  
 or registered assigns, is the owner of the number of Warrants, set forth
above, each of which represents the right, subject to the terms and conditions hereof and of the Warrant Agreement hereafter referred to (the “Warrant Agreement”), to purchase from the Company at any time, or from time to time, from the
first anniversary of the date of original issuance of the Warrants to the close of business on the fifth anniversary of such date (or, if such date is not a Business Day (as defined below), the first following Business Day) (the “Exercise
Period”), the number of shares of Common Stock, par value $.01 per share, of the Company (the “Common Stock”) described in the Warrant Agreement (each share of Common Stock issuable upon exercise of a Warrant is referred to as a
“Warrant Share”). Subject to the terms and conditions of the Warrant Agreement, the exercise price per Warrant represented by this Warrant Certificate shall be $10 per share, as it may be adjusted as provided in Article III of the Warrant
Agreement, payable in full as to each Warrant exercised at the time of exercise. The term “Exercise Price” as used herein refers to the foregoing price per share in effect at the time of exercise of the Warrants. 
  
 This Warrant may be exercised in whole or in part at any time or from time to
time during the Exercise Period. The portion of any Warrant not exercised during the Exercise Period shall become void, and all rights hereunder and all rights in respect hereof and under the Warrant Agreement shall cease at the end of the Exercise
Period. 
  

 A-1 

 Each such purchase of Warrant Shares shall be made, and shall be deemed effective for the purpose of
determining the date of exercise, only upon surrender hereof to the Company at the principal office of the Company, with the form of Election to Exercise on the reverse hereof duly filled in and signed, and upon payment in full to the Company of the
Exercise Price (i) in cash or (ii) by certified or official bank check or (iii) by any combination of the foregoing, all as provided in the Warrant Agreement and upon compliance with and subject to the conditions set forth herein and in the Warrant
Agreement. 
  
 This Warrant Certificate is issued under and in
accordance with the Warrant Agreement dated as of December 19, 2003 (the “Warrant Agreement”), between the Company and Friedman, Billings, Ramsey & Co., Inc., and is subject to the terms and provisions of the Warrant Agreement, which
terms and provisions are hereby incorporated by reference herein and made a part hereof. A copy of the Warrant Agreement is available for inspection by the registered holder at the principal office of the Company upon presentation of this Warrant
Certificate. 
  
 The Company shall not be required upon the
exercise of the Warrants represented hereby to issue fractions of Warrant Shares or to distribute share certificates that evidence fractional Warrant Shares. Every holder of this Warrant Certificate expressly waives its right to receive any fraction
of a Warrant Share or a share certificate representing a fraction of a Warrant Share. Fractional Warrant Shares that otherwise would be issuable in respect of such exercise shall be paid in cash as provided in the Warrant Agreement, and the number
of Warrant Shares issuable to such Warrantholder shall be rounded down to the next nearest whole number. If the Warrants represented by this Warrant Certificate are not exercised in full, the Company will issue to the Warrantholder a new Warrant
Certificate exercisable for the number of shares of Common Stock as to which the Warrants shall not have been exercised. 
  
 This Warrant Certificate may be exchanged either separately or in combination with other Warrant Certificates at the principal office of the Company for
new Warrant Certificates representing the same aggregate number of Warrants as were evidenced by the Warrant Certificate or Warrant Certificates exchanged, upon surrender of this Warrant Certificate and upon compliance with and subject to the
conditions set forth herein and in the Warrant Agreement. 
  
 This
Warrant Certificate is transferable (subject to restrictions set forth in the Warrant Agreement) at the principal office of the Company by the registered holder hereof in person or by his attorney duly authorized in writing, upon (i) surrender of
this Warrant Certificate and (ii) compliance with and subject to the conditions set forth herein and in the Warrant Agreement. Upon any such transfer, a new Warrant Certificate or new Warrant Certificates of different denominations, representing in
the aggregate a like number of Warrants, will be issued to the transferee. Every holder of Warrants, by accepting this Warrant Certificate, consents and agrees with the Company and with every subsequent holder of this Warrant Certificate that until
due presentation for the registration of transfer of this Warrant Certificate on the Warrant Register maintained by the Company, the Company may deem and treat the person in whose name this Warrant Certificate is registered as the absolute and
lawful owner for all purposes whatsoever and the Company shall not be affected by any notice to the contrary. 
  

 A-2 

 Nothing contained in the Warrant Agreement or in this Warrant Certificate shall be construed as
conferring on the holder of any Warrants or his transferee any rights whatsoever as a shareholder of the Company. 
  
 The Warrant Agreement and each Warrant Certificate, including this Warrant Certificate, shall be deemed a contract made under the laws of the State of
Maryland and for all purposes shall be construed in accordance with the laws of the State of Maryland without giving effect to the principles of conflicts of law thereof. 
  

 A-3 

 IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed under its
corporate seal. 
  
 Dated: December 19, 2003 
  

									
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 HIGHLAND HOSPITALITY CORPORATION

					
	 	 	 (CORPORATE SEAL)
	 	 	 	By:	 	 /s/    Tracy M.J. Colden

	 	 	 	 	 	 	 	 	 Name: Tracy M.J. Colden

	 	 	 	 	 	 	 	 	 Title: Executive Vice President

	 	 	 ATTEST:
  
 _________________________
	 	 	 	 	 	 

  

 A-4 

 ELECTION TO EXERCISE 
  
 (To be executed upon exercise of Warrant) 
  
 TO. : 
  
 The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder,
                     shares of Common Stock, as provided for therein, and tenders herewith payment of the purchase price in full in the form
of cash or a certified or official bank check (or combination thereof) in the amount of $                    . 
  
 Please issue a certificate or certificates for such shares of Common Stock in
the name of: 
  

									
	PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:	 	 	 	 	 	 Name
  
	 	  

				
	
	 	 	 	Address	 	  

	 	 	 	 	Signature	 	  

	 	 	 	 	  

				
	 	 	 	 	 	 	Note: The above signature should correspond exactly with the name on the face of this Warrant Certificate or with the name of assignee appearing in the assignment form
below.

			
	 	  	 
	 Dated:
                            ,          
  
	  	 

 ASSIGNMENT 
  

(To be executed only upon assignment of Warrant Certificate) 
  
 For value received,
                         hereby sells, assigns and transfer unto
                         the within Warrant Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint                          attorney, to transfer said Warrant Certificate on the
books of the within-named Company, with full power of substitution in the premises. 
  
 Dated:                         ,
             
  

			
	

	 NOTE:
	 	The above signature should correspond exactly with the name on the face of this Warrant Certificate

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