Document:

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE  HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF  1933,  AS  AMENDED,  OR  APPLICABLE  STATE  SECURITIES  LAWS. THE SECURITIES  MAY  NOT  BE  OFFERED  FOR  SALE,  SOLD,  TRANSFERRED  OR ASSIGNED   (I)   IN   THE   ABSENCE   OF   (A)   AN   EFFECTIVE   REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR  (B)  AN  OPINION  OF  COUNSEL  (WHICH  COUNSEL  SHALL  BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION  IS  NOT  REQUIRED  UNDER  SAID  ACT  OR  (II)  UNLESS  SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

 

Principal Amount: Up to $68,000

 

Date: January 23, 2020

 

 

PROMISSORY NOTE

 

Appiphany Technologies Holdings, Corp., (hereinafter called the “Company”), hereby promises to pay to the order of GHS Investments, LLC, a Nevada Limited Liability Company, or its registered assigns (the “Holder”) the sum of up to $68,000 on the "Maturity Date", as defined below, together with any interest as set forth herein, and to pay interest on the unpaid principal balance hereof at the rate of ten percent (10%) (the “Interest Rate”) per  annum from the date hereof (the “Issue Date”) until the same becomes  due  and  payable,  whether  at  maturity  or  upon  acceleration  or  by  prepayment  or otherwise. 

 

This Note is being issued with a ten percent (10%) pro-rata issuance discount and with $2,000 being withheld by the Holder to offset transaction costs. The Maturity Date for each funded Tranche shall be nine (9) calendar months from the date the funds are received by the Company and the Holder shall obtain beneficial ownership over those amounts funded in accordance with the Securities Purchase Agreement of even date. 

 

This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Following any Event of Default, all amounts owing pursuant to this Note shall bear interest at the lower of (a) the rate of twenty percent (20%) per annum from the due date thereof until the same is paid  or (b) the maximum rate allowed by law (“Default Interest”).  Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.  All payments due hereunder (to the extent not converted into common stock) shall be made in lawful money of the United States of America. 

  

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All payments shall be made at such address as the Holder shall hereafter give to the Company by written notice made in accordance with the provisions of this Note.  Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date.  As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.  Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the supporting documents of same date (attached hereto). 

 

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

The following terms shall apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1Conversion Right.  The Holder shall have the right at any time following  execution of this Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion  Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates  of more than 4.99% of the outstanding shares of Common Stock.  For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of  the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice  of conversion, (the “Notice of Conversion”), delivered to the Company by the Holder in accordance with the Sections below; provided that the Notice of Conversion is submitted by  facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Company before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”).   

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The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in the notice  of conversion, (the “Notice of Conversion”), delivered to the Company by the Holder in accordance with the Sections below.  

 

The term “Conversion Amount” means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Company’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus (3) at the Company’s  option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder.

 

1.2Conversion Price. Subject to the adjustments described herein, and provided that no Event of Default (as defined below) has occurred, the Conversion Price shall equal to $ 0.00048, which equals 60% multiplied by the lowest Traded Price for the Common Stock on the Trading Day preceding the execution of the Note.(the “Fixed Conversion Price”) (subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). Notwithstanding anything herein to the contrary, upon delivery by the Holder to the Borrower of a Default Notice setting forth the Event of Default under the Note, the Fixed Conversion Price shall be extinguished and of no further force or effect and the Variable Conversion Price (as defined below) shall immediately and irrevocably be effective. The “Variable Conversion Price” shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%) (the Variable Conversion Price or the Fixed Conversion Price, as applicable the “Conversion Price”). “Market Price” means the lowest Traded Price for the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.  

 

To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under law. The Borrower agrees to honor all conversions submitted pending this adjustment. If the shares of the Borrower’s Common Stock have not been delivered within three (3) business days to the Holder, the Notice of Conversion may be rescinded. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTCQB or on the principal securities exchange or other securities market on which the Common Stock is then being traded. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include 

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Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price.

 

 

 

1.3Authorized Shares.   The Company covenants that during the period the conversion  right exists the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time)(the “Reserved Amount”).  The Reserved Amount shall be increased from time to time in accordance with the Company’s obligations. 

 

The Company represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  In addition, if the Company shall issue any securities or make any change to its capital structure which would change the number of shares  of  Common  Stock  into  which  the  Notes  shall  be  convertible  at  the  then  current Conversion Price, the Company shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.  

 

The Company (i) acknowledges that it will irrevocably instruct its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Note.

 

If, at any time the Company does not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note. 

 

(b)Pro Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Borrower shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute. 

 

 

1.4Method of Conversion. 

 

(a)Mechanics of Conversion.  This Note may be converted by the Holder, in whole or in part, at any time following execution by  submitting  to  the  Company  a  Notice  of  Conversion  (by  facsimile,  e-mail  or  other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time). 

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(b)Surrender of Note Upon Conversion.  Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall not be  required to physically surrender this Note to the Company unless the entire unpaid principal amount of this Note is so converted.  The Holder and the Company shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Note upon each such conversion.  In the event of any dispute or discrepancy, such records of the Holder shall, prima facie, be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof. 

 

(c)Payment of Taxes.  The Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Company shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for  the Holder’s account) requesting the issuance thereof shall have paid to the Company the amount of any such tax or shall have established to the satisfaction of the Company that such tax has been paid. 

 

(d)Delivery of Common Stock Upon Conversion.   Upon receipt by the Company from the Holder of a facsimile transmission or e-mail (or other reasonable means of  communication)  of  a  Notice  of  Conversion  meeting  the  requirements  for  conversion  as provided in this Section, the Company shall  issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. 

 

Within Five (5) business days of having received common stock pursuant to a Notice of Conversion and prior to having traded any shares from that specific conversion, Holder may elect to rescind the Notice of Conversion and return the shares, at Holder's expense, to the Company's Transfer Agent. In the event of such rescission, the principal amount outstanding under this Note shall be adjusted to include the Conversion Amount which was deducted from the Note as part of the rescinded Notice of Conversion.  

 

(e)Obligation of Company to Deliver Common Stock.  Upon receipt by the  Company of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid  interest on this Note shall be reduced to reflect such conversion, and, unless the Company defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,  

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on such conversion.  If the Holder shall have given a Notice of Conversion as provided herein, the  Company’s  obligation  to  issue  and  deliver  the  certificates  for Common  Stock  shall  be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other  obligation  of  the  Company  to  the  holder  of  record,  or  any  setoff,  counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the  Holder of any obligation to the Company, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with such conversion.  The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Company before 6:00 p.m., New York, New York time, on such date.

 

(f)Delivery of Common Stock by Electronic Transfer.In lieu of delivering  physical  certificates  representing  the  Common  Stock  issuable  upon  conversion, provided  the   Company  is  participating  in  the  Depository  Trust  Company  (“DTC”)  Fast Automated  Securities  Transfer   (“FAST”)  program,  upon  request  of  the  Holder  and  its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system. 

 

(g)Failure to Deliver Common Stock Prior to Deadline.  Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the  Deadline the Company shall pay to the Holder $100 per day in cash, for each day beyond  the Deadline that the Company fails to deliver such Common Stock.  Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Company by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall  be  convertible  into  Common  Stock  in  accordance  with  the  terms  of  this  Note. The Company agrees that the right to convert is a valuable right to the Holder.  The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible  to  qualify. Accordingly  the  parties  acknowledge  that  the  liquidated  damages provision contained in this Section are justified.  Any delay or failure of performance by the Company hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement,  Force Majeure shall mean a cause or event that is not reasonably foreseeable and not caused by the Company, including acts of God, fires, floods, explosions, riots wars, hurricanes, etc.  

 

1.5Concerning  the  Shares. The  shares  of  Common  Stock  issuable  upon conversion of this Note may not be sold or transferred unless  (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of  counsel (which opinion shall be in form, substance and  

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scope customary for opinions of counsel in comparable transactions) to the effect that the shares to  be  sold  or  transferred  may  be  sold  or  transferred  pursuant  to  an  exemption  from  such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided herein (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

 

“NEITHERTHEISSUANCEANDSALEOFTHESECURITIES REPRESENTED  BY  THIS  CERTIFICATE  NOR  THE  SECURITIES  INTO WHICH THESE  SECURITIES    ARE  EXERCISABLE  HAVE  BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED  FOR  SALE,  SOLD,  TRANSFERRED  OR  ASSIGNED  (I)  IN  THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN  OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY   ACCEPTABLE FORM, THAT REGISTRATION  IS  NOT  REQUIRED  UNDER  SAID  ACT  OR  (II)  UNLESS SOLD   PURSUANT  TO  RULE  144  OR  RULE  144A  UNDER  SAID  ACT. NOTWITHSTANDING   THE   FOREGOING,   THE   SECURITIES   MAY   BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER   LOAN   OR   FINANCING   ARRANGEMENT   SECURED   BY   THE SECURITIES.” 

 

The legend set forth above shall be removed and the Company shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Company or its transfer agent shall have received an  opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule

144 without any restriction as to the number of securities as of a particular date that can then be immediately sold.In  the event  that  the Company does  not  accept  the opinion  of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to this note. 

 

1.6Effect of Certain Events. 

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(a)Effect of Merger, Consolidation, Etc.  At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Company, the effectuation by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of, or the consolidation, merger or other business  combination of the Company with or into any other Person (as defined below) or Persons when the Company  is not the survivor shall either:   (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Company shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person”  shall  mean  any  individual,  corporation,  limited  liability  company,   partnership, association, trust or other entity or organization. 

                                    (b)  Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be  any  merger,  consolidation,  exchange  of  shares,  recapitalization,  reorganization,  or  other similar event, as a result of which shares of Common Stock of the Company shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Company or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares  of  Common  Stock  immediately  theretofore  issuable  upon  conversion,  such  stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full  immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this  Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the  Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof.  The Company shall not affect any transaction described in this Section 1.6(b) unless (a) it  first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of  the  special  meeting  of  shareholders  to  approve,  or  if  there  is  no  such  record  date,  the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during  which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring  entity  (if not the Company) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges. 

 

(c)     Adjustment Due to Distribution.  If the Company shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Company’s shareholders in  cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”),   

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then the Holder of this Note shall be entitled, upon any conversion of this Note after the date of record for  determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been  payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.

 

(d)Adjustment Due to Dilutive Issuance.   If, at any time when any Notes issued under the Securities Purchase Agreement of even date herewith are issued and outstanding, the Company issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock in connection with a financing transaction based on a variable price formula (the “Alternative Variable Price Formula”) that is more favorable to the investor in such financing transaction than the formula for calculating the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the formula for the Conversion Price will be adjusted to match the Alternative Variable Price Formula.  If it is unclear whether the Alternative Variable Price Formula is better or worse, then Holder, in its sole discretion, may elect at the time of such issuance whether to switch to the Alternative Variable Price Formula or not.
 

(e)Purchase Rights.   If, at any time when any Notes are issued and outstanding, the Company issues any convertible securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common  Stock,  then  the  Holder  of  this  Note  will  be  entitled  to  acquire,  upon  the  terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock  acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. 

 

(f)Notice of Adjustments.  Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Company, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of a  certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based.  The Company shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note. 

 

1.7Security  As Security for the Company's obligations contained herein and in all Notes issued by the Company to the Holder, following any Event of Default which remains uncured for one hundred twenty (120) calendar days, the Holder shall be granted an unconditional first priority interest in and to, any and all property of the Company and its subsidiaries, of any kind or description, tangible or intangible, whether now existing or  

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hereafter arising or acquired until the balance of all Notes has been reduced to $0. "Any and all property," as described herein shall be inclusive of, but not limited to, assets reported by the Company on its SEC filings, cash, inventory, accounts receivable, intellectual property rights, equipment and or property. The Investor is authorized to make all filings the Investor, in its discretion, deems necessary to evidence its security interests.

 

1.8Status as Shareholder.  Upon submission of a Notice of Conversion by a Holder, (i)  the  shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion of this  Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common  Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Company to comply with the terms  of this Note.  Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Company) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Company shall, as soon as  practicable,  return  such  unconverted  Note  to  the  Holder  or,  if  the  Note  has  not  been surrendered, adjust its records to reflect that such portion of this Note has not been converted.  In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Company’s failure to convert this Note. 

 

1.9Prepayment.  Maker may prepay this Note upon 3 business days written notice. and in accordance with the following schedule: If within 60 calendar days from the execution of this Note, 110% of all outstanding principal and interest due on each outstanding Note in one payment;  On or after 60 calendar days from the execution of the Note and within 120 days from execution, 120% of all outstanding principal and interest due on each outstanding Note in one payment. Between 121 and 180 days from the date of execution, the Note may be prepaid for 125% of all outstanding amounts due on each outstanding Note in one payment  

 

Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice.  On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the applicable prepayment amount to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date.  If the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

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ARTICLE II.  CERTAIN COVENANTS

 

2.1Distributions on Capital Stock.  So long as the Company shall have any obligation under this Note, the Company shall not without the Holder’s written consent (a) pay, declare or set apart for  such  payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect  of  its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Company’s disinterested directors. 

 

2.2Restriction on Stock Repurchases.  So long as the Company shall have any obligation under this Note, the Company shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Company or any warrants, rights or options to purchase or acquire any such shares. 

 

 

2.3Borrowings.  So long as the Issuer shall have any obligation under this Note,  the  Issuer  shall  not,  without  providing the  Holder  with written notice,  create,  incur,  assume guarantee,  endorse,  contingently  agree  to  purchase  or  otherwise  become  liable  upon  the obligation  of  any  person,  firm,   partnership,  joint  venture  or  corporation,  except  by  the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on  the date hereof and of which the Issuer has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors, service providers  or  financial  institutions  incurred  in  the  ordinary  course  of  business  or  (c) borrowings, the proceeds of which shall be used to repay this Note. 

 

 

2.4Sale of Assets.  So long as the Company shall have any obligation under this Note, the Company shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business.   Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition. 

 

2.5Advances and Loans.  So long as the Company shall have any obligation under this Note, the Company shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers,  directors, employees, subsidiaries and affiliates of the Company, except loans, credits or advances (a) in  existence or committed on the date hereof and which the Company has informed Holder in writing prior to  the date hereof, (b) made in the ordinary course of business or (c) not in excess of $50,000 or (d) made as part of a strategic acquisition or  

11

investment.

 

2.6Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not, without the prior written consent of the Holder,  enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(l0) Transaction while this Note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand Dollars $15,000, will be assessed and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance of this Note. 

 

2.7Preservation of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary. 

 

2.8Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder. 

 

2.9 Repayment from Proceeds. While any portion of this Note is outstanding, if the Borrower receives cash proceeds from any source or series of related or unrelated sources, including but not limited to, from payments from customers, the issuance of equity or debt, the conversion of outstanding warrants of the Borrower, the issuance of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business day of Borrower’s receipt of such proceeds, inform the Holder of such receipt, following which the Holder shall have the right in its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of the outstanding amounts owed under this Note.  Failure of the Borrower to comply with this provision shall constitute an Event of Default.  In the event that such proceeds are received by the Holder prior to the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein. 

 

 

 

ARTICLE III.  EVENTS OF DEFAULT

 

If any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1Failure  to  Pay  Principal  or  Interest.The  Company  fails  to  pay  the  

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principal  hereof  or  interest  thereon  when  due  on  this  Note,  whether  at  maturity,  upon acceleration or otherwise.

 

3.2Conversion  and  the  Shares.The  Company  fails  to  issue  shares  of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do  so)  upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this  Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Company directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or  hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall  continue  uncured  (or  any  written  announcement,  statement  or  threat  not  to  honor  its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion.  It is an obligation of the Company to remain current in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Company to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Company’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Company to the Holder within forty eight (48) hours of a demand from the Holder. 

 

3.3Breach of Covenants.   The Company breaches any covenant or other term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement. 

 

3.4Breach of  Representations  and  Warranties.Any representation  or warranty of the Company made herein or in any agreement, statement or certificate given in 

writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5Receiver or Trustee. The Company or any subsidiary of the Company shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed. 

 

3.6Judgments.  Any money judgment, writ or similar process shall be entered or filed against the Company or any subsidiary of the Company or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of  

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twenty (20)  days  unless  otherwise  consented  to  by the  Holder,  which  consent  will  not  be unreasonably withheld.

 

3.7Bankruptcy. Bankruptcy,  insolvency,   reorganization   or   liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law  for  the  relief of debtors  shall  be instituted  by or against  the Company or any subsidiary of the Company. 

 

3.8Delisting of Common Stock / Bid Price. The Company shall fail, within 80 days of the execution of this Note, to maintain in good standing  the listing  of  the Common Stock on the OTC Markets or an equivalent replacement exchange, the Nasdaq  National Market, the Nasdaq SmallCap Market or the New York Stock Exchange or if the Company's shall lose the "bid" price for its common stock on any given trading day.  
 

3.9Failure to Comply with the Exchange Act. The Company shall fail, within 80 days of the execution of this Note, to timely comply with the reporting requirements of the Exchange Act; and/or the Company shall cease to be subject to the reporting requirements of the Exchange Act. 

 

3.10Liquidation. Any dissolution, liquidation, or winding up of Company or any substantial portion of its business. 

 

3.11Cessation of Operations. Any cessation of operations by Company or Company admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Company’s ability to continue as a “going concern” shall not be an admission that the Company cannot pay its debts as they become due. 

 

3.12Maintenance of Assets. The failure  by  Company  to  maintain  any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future). 

 

3.13Financial Statement Restatement.The   restatement   of   any   financial statements filed by the Company with the SEC for any date or period from two years prior to the Issue Date of this  Note and until this Note is no longer outstanding,  if the result of such restatement  would,  by  comparison  to  the  original  financial  statement,  have  constituted  a material adverse effect on the rights of the Holder with respect to this Note or supporting documents.  

 

3.14Reverse Splits. The  Company  effectuates  a  reverse  split  of  its 

Common Stock without prior written notice to the Holder.

 

 

3.15Replacement of Transfer Agent. In the event that the Company proposes to replace its transfer agent, the Company fails to provide, prior to the effective date of such replacement, a fully executed  Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement  (including but not limited to the provision to  

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irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Company and the Company.

 

3.16Cross-Default.  Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Company of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace  periods, shall, at the option of the Holder, be considered a default under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement or  hereunder. “Other  Agreements”  means,  collectively,  all  agreements  and  instruments between,  among  or by: (1) the Company, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other Agreements” shall not  include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future debt of Company. 

 

Upon the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date), the  Note  shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default  Sum  (as  defined  herein). UPON  THE   OCCURRENCE  AND  DURING  THE CONTINUATION  OF  ANY  EVENT  OF  DEFAULT  SPECIFIED  IN  SECTION  3.2,  THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE COMPANY SHALL  PAY  TO  THE  HOLDER,  IN  FULL  SATISFACTION  OF  ITS  OBLIGATIONS HEREUNDER,  AN  AMOUNT  EQUAL  TO:  (Y)  THE  DEFAULT  SUM  (AS  DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on  this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or

3. 15 exercisable through the delivery of written notice to the Company by such Holders (the “Default Notice”),  and upon the occurrence of an Event of Default specified the remaining sections of Articles III, the  Note shall become immediately due and payable and the Company shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) .

 

If the Company fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any time, so long as the Company remains in default (and so long and to the extent that there are sufficient authorized shares), to require the Company, upon written notice, to immediately issue, in lieu of 

15

the Default Amount, the number of shares of Common Stock of  the Company equal to the Default Amount divided by the Conversion Price then in effect.

 

 

ARTICLE IV. MISCELLANEOUS

 

4.1Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holder in the  exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or  partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other  right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 

 

4.2Notices.   All notices, demands, requests, consents, approvals, and other communications  required  or  permitted  hereunder  shall  be  in  writing  and,  unless  otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage  prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand  delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during 

normal business hours where such notice is to be received) or (b) on the second business day following  the  date  of  mailing  by  express  courier  service,  fully  prepaid,  addressed  to  such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

 

If to the Company, to:

Appiphany Technologies Holdings Corp.

6160 Warren Pkwy, Suite 100

Frisco, Texas 75034

 

If to the Holder:

GHS Investments, LLC. 

420 Jericho Turnpike Suite 102

Jericho, NY 11753

 

4.3Amendments.  This Note and any provision hereof may only be amended by an instrument in writing signed by the Company and the Holder.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented. 

16

 

4.4Assignability.This Note shall be binding upon the Company and its successors  and assigns, and shall inure to be the benefit of the Holder and its successors and assigns.  Notwithstanding anything in  this  Note to the contrary, this Note may be pledged  as  collateral  in  connection  with  a  bona  fide  margin   account  or  other  lending arrangement.
 

4.5Cost of Collection.   If default is made in the payment of this Note, the 

Company shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

4.6Governing  Law.This Note shall  be  governed  by  and  construed  in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any  action  brought  by  either  party  against  the  other  concerning  the  transactions contemplated by this Note shall be brought only in the state or federal courts located in the County, City and State of New York.   The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be  deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.   Each party hereby irrevocably waives personal service of process and consents to process being served in any suit,  action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient  service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. 

 

4.7Certain  Amounts.Whenever  pursuant  to  this  Note  the  Company  is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Company and the Holder agree  that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Company represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note.  The Company and the Holder hereby agree that such amount of stipulated  damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment  without the opportunity to convert this Note into shares of Common Stock. 

 

4.8Purchase Agreement.  By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Securities Purchase Agreement and supporting  

17

documents . 

 

4.9Notice of Corporate Events.Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Company shall provide the Holder with prior notification of any meeting of the Company’s shareholders (and copies of proxy materials and other information sent to shareholders).   In the event  of any taking by the Company of a record of its shareholders for the purpose of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Company or any proposed liquidation, dissolution or winding up of the Company, the Company shall mail a notice to the Holder,  at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time.  The Company shall make a public announcement of any event  requiring  notification  to  the  Holder  hereunder  substantially  simultaneously  with  the notification to the Holder in accordance with the terms of this Section 4.9. 

 

4.10Remedies.The  Company  acknowledges  that  a  breach  by  it  of  its obligations  hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. 

 

 

 

 

 

 

 

SIGNATURE PAGE TO FOLLOW

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IN WITNESS WHEREOF, Company has caused this Note to be signed in its name by its duly authorized officer:

 

 

APPIPHANY TECHNOLOGIES HOLDINGS, CORP. 

 

By:  
 

Print:______________________________

Title/Date:__________________________

19

20Exhibit 10.1

 

Amended
and Restated EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 8th day of January, 2020 (the “Effective
Date”), by and between EagleBank, a Maryland chartered commercial bank (the “Bank”), and Charles Levingston (“Executive”).

 

RECITALS:

 

WHEREAS, Executive is
currently employed by the Bank as its Executive Vice President & Chief Financial Officer; and

 

WHEREAS, the Bank desires
to continue Executive’s employment with the Bank as its Executive Vice President & Chief Financial Officer, and Executive
agrees to accept such continued employment, in accordance with the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration
of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.            EMPLOYMENT. The Bank agrees to continue to employ Executive, and Executive agrees
to continue to be employed as Executive Vice President & Chief Financial Officer of the Bank and Bancorp (as defined below),
subject to the terms and provisions of this Agreement.

 

2.            CERTAIN DEFINITIONS. As used in this Agreement, the following terms have the meanings
set forth below:

 

2.1.           
“Affiliate” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled
by or under common control with such Person, (ii) any Person owning or controlling fifty percent (50%) or more of the outstanding
voting interests of such Person, (iii) any officer, director, general partner, managing member, or trustee of, or Person serving
in a similar capacity with respect to, such Person, or (iv) any Person who is an officer, director, general partner, member, trustee,
or holder of fifty percent (50%) or more of the voting interests of any Person described in clauses (i), (ii), or (iii) of this
sentence. For purposes of this definition, the terms “controlling,” “controlled by,” or “under common
control with” shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

2.2.           “Bancorp” means Eagle Bancorp, Inc., a Maryland corporation, publicly traded as a bank holding company.

 

2.3.           “Bank” is defined above. If the Bank is merged into any other Entity, or transfers substantially all of its
business operations or assets to another Entity, the term “Bank” shall be deemed to include such successor Entity for
purposes of applying Article 8 of this Agreement.

 

     

     

    

 

2.4.           “Bank Entities” means and includes any of the Bank, Bancorp and their Affiliates.

 

2.5.           “Bank Regulatory Agency” means any governmental authority, regulatory agency, ministry, department, statutory
corporation, central bank or other body of the United States or of any other country or of any state or other political subdivision
of any of them having jurisdiction over the Bank or any transaction contemplated, undertaken or proposed to be undertaken by the
Bank, including, but not necessarily limited to:

 

(a)           the Federal Deposit Insurance Corporation or any other federal or state depository insurance organization or fund;

 

(b)           the Federal Reserve System, the Maryland Division of Financial Institutions, or any other federal or state bank regulatory
or commissioner’s office;

 

(c)           any Person established, organized, owned (in whole or in part) or controlled by any of the foregoing; and

 

(d)           any predecessor, successor or assignee of any of the foregoing.

 

2.6.           “Board” means the Board of Directors of the Bank.

 

2.7.           “Code” means the Internal Revenue Code of 1986, as amended.

 

2.8.           “Competitive Business” means the banking and financial services business, which includes, without limitation,
consumer savings, commercial banking, the insurance and trust business, the savings and loan business and mortgage lending, or
any other business in which any of the Bank Entities is engaged or has invested significant resources within the prior six (6)
month period in preparation for becoming actively engaged; provided that after the Termination Date, such period shall be deemed
to end on the Termination Date.

 

2.9.           “Competitive Products or Services” means, as of any time during the Term, those products or services of the
type that any of the Bank Entities is providing, or is actively preparing to provide, to its customers.

 

2.10.         “Disability” means a mental or physical condition which, in the good faith opinion of the Board, renders Executive,
with or without reasonable accommodation, unable or incompetent to carry out the essential functions of the position or the material
job responsibilities which Executive held or the material duties to which Executive was assigned at the time the disability was
incurred, which has existed for at least three (3) months and which in the opinion of a physician mutually agreed upon by the Bank
and Executive (provided that neither party shall unreasonably withhold such agreement) is expected to be permanent or to
last for an indefinite duration or a duration in excess of nine (9) months.

 

2.11.         “Entity” means any partnership, corporation, limited liability company, trust, joint venture, unincorporated
association, or other entity or association.

 

2.12.         “Person” means any individual or Entity.

 

    -2-

     

    

 

2.13.         “Section 409A” means Section 409A of the Code and the regulations and administrative guidance promulgated thereunder.

 

2.14.         “Term” means the period commencing on the Effective Date and ending on the Termination Date.

 

2.15.         “Termination Date” means the date upon which Executive ceases to provide services to the Bank and Bancorp hereunder.

 

Other terms are defined throughout this Agreement and have the
meanings so given them.

 

3.            Term; Position.

 

3.1.           Position. Executive shall serve as Executive Vice President & Chief Financial Officer of the Bank and Executive
Vice President of Bancorp during the Term.

 

3.2.           No Restrictions. Executive represents and warrants to the Bank that Executive is not subject to any legal obligations
or restrictions that would prevent or limit Executive’s entering into this Agreement and performing Executive’s responsibilities
hereunder.

 

4.            Duties of Executive.

 

4.1.           Nature and Substance. Executive shall provide such services and perform such duties, functions, and assignments as
are normally incident to the position of Executive Vice President & Chief Financial Officer, and such additional functions
and services as the Chief Executive Officer may from time to time direct. Executive shall report directly to the Chief Executive
Officer of the Bank. Executive agrees to devote Executive’s full business time and attention to the performance of Executive’s
duties and responsibilities under this Agreement, and shall use Executive’s best efforts and discharge Executive’s
duties to the best of Executive’s ability for and on behalf of the Bank Entities and toward their successful operation.

 

4.2.           Compliance with Law. Executive shall comply with all laws, statutes, ordinances, rules and regulations relating to
Executive’s employment and duties.

 

5.            Compensation; Benefits. As full compensation for all services rendered pursuant
to this Agreement and the covenants contained herein, the Bank shall pay to Executive the following:

 

5.1.           Salary. During the Term, Executive shall be paid a salary (“Salary”) of $383,040 on an annualized basis.
The Bank shall pay Executive’s Salary in equal installments in accordance with the Bank’s regular payroll periods as
may be set by the Bank from time to time. Executive’s Salary may be further increased from time to time, at the discretion
of the Board. Executive may also be entitled to certain incentive bonus payments as determined by Board approved incentive plans.

 

5.2.           Vacation and Leave. Executive shall be entitled to such vacation and leave as may be provided for under the current
and future leave and vacation policies of the Bank for executive officers.

 

    -3-

     

    

 

5.3.          
Office Space. The Bank will provide customary office space and office support to Executive.

 

5.4.           Parking. Paid parking at Executive’s regular worksite will be provided by the Bank at its expense.

 

5.5.           Car Allowance. The Bank will pay Executive a monthly car allowance of Seven Hundred Fifty Dollars ($750).

 

5.6.           Non-Life Insurance. During the Term, Executive will be eligible to participate in group health, disability and other
insurance as the Bank may maintain for its employees from time to time.

 

5.7.           Life Insurance.

 

  5.7.1.     
Executive may obtain a term life insurance policy (the “Policy”) on Executive in the amount of Seven Hundred
Fifty Thousand Dollars ($750,000), the particular product and carrier to be chosen by Executive in Executive’s discretion.
Executive shall have the right to designate the beneficiary of the Policy. If the Policy is obtained, Executive shall provide the
Bank with a copy of the Policy, and the Bank will reimburse Executive, during the Term of this Agreement, the premiums for the
Policy upon submission by Executive to the Bank of the invoices therefor, provided that such reimbursement shall be made before
the end of the calendar year following the year in which such expense was incurred by Executive. In the event Executive is rated
and the premium exceeds the standard rate for a Seven Hundred Fifty Thousand Dollar ($750,000) policy, the Policy amount shall
be lowered to the maximum amount that can be purchased at the standard rate for a Seven Hundred Fifty Thousand Dollar ($750,000)
policy. For example, if Executive is rated and the standard rate for a Seven Hundred Fifty Thousand Dollar ($750,000) policy would
acquire a Five Hundred Thousand Dollar ($500,000) policy, the Bank would only be required to pay the premium for a Five Hundred
Thousand Dollar ($500,000) policy. If a Policy is obtained and it is cancelled or terminated, Executive shall immediately notify
the Bank of such cancellation or termination.

 

  5.7.2.     
The Bank may, at its cost, obtain and maintain “key-man” life insurance and/or Bank- owned life insurance on
Executive in such amount as determined by the Board from time to time. Executive agrees to cooperate fully and to take all actions
reasonably required by the Bank in connection with such insurance.

 

5.8.           Expenses. The Bank shall, promptly upon presentation of proper expense reports therefor, pay or reimburse Executive,
in accordance with the policies and procedures established from time to time by the Bank for its officers, for all reasonable and
customary travel (other than local use of an automobile for which Executive is being provided the car allowance) and other out-of-pocket
expenses incurred by Executive in the performance of Executive’s duties and responsibilities under this Agreement and promoting
the business of the Bank, including approved membership fees, dues and the cost of attending business related seminars, meetings
and conventions.

 

5.9.           Retirement Plans. Executive shall be entitled to participate in any and all qualified pension or other retirement
plans of the Bank which may be applicable to personnel of the Bank.

 

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5.10.       Other Benefits. While this Agreement is in effect, Executive shall be entitled to all other benefits that the Bank
provides from time to time to its officers and such other benefits as the Board may from time to time approve for Executive, subject
to applicable eligibility requirements.

 

5.11.       Eligibility. Participation in any health, life, accident, disability, medical expense or similar insurance plan or
any qualified pension or other retirement plan shall be subject to the terms and conditions contained in such plan as amended from
time to time in the Bank’s sole discretion. All matters of eligibility for benefits under any insurance plans shall be determined
in accordance with the provisions of the applicable insurance policy issued by the applicable insurance company.

 

5.12.       Equity Compensation. Executive shall be eligible to receive awards of options, SARs and /or Restricted Stock under
the 2016 Stock Plan of Bancorp (or any successor plan), from time to time, at the discretion of the Compensation Committee of the
Board of Directors of Bancorp or such other committee as is then administering such plan.

 

6.            Conditions Subsequent to Continued Operation and Effect of Agreement.

 

6.1.         Continued Approval by Bank Regulatory Agencies. This Agreement and all of its terms and conditions, and the continued
operation and effect of this Agreement and the Bank’s continuing obligations hereunder, shall at all times be subject to
the continuing approval of any and all Bank Regulatory Agencies whose approval is a necessary prerequisite to the continued operation
of the Bank. Should any term or condition of this Agreement, upon review by any Bank Regulatory Agency, be found to violate or
not be in compliance with any then-applicable statute or any rule, regulation, order or understanding promulgated by any Bank Regulatory
Agency, or should any term or condition required to be included herein by any such Bank Regulatory Agency be absent, this Agreement
may be rescinded and terminated by the Bank if the parties hereto cannot in good faith agree upon such additions, deletions or
modifications as may be deemed necessary or appropriate to bring this Agreement into compliance.

 

7.            Termination of Agreement. The Term of this Agreement may be terminated as provided
below in this Article 7.

 

7.1.         Definition of Cause. For purposes of this Agreement, “Cause” means:

 

(a)           any act of theft, fraud, intentional misrepresentation of a material matter, personal dishonesty or breach of fiduciary
duty or similar conduct by Executive with respect to any of the Bank Entities or the services to be rendered by him or her under
this Agreement;

 

(b)           any failure of this Agreement to comply with any Bank Regulatory Agency requirement which is not cured in accordance with
Section 6.1 within a reasonable period of time after written notice thereof;

 

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(c)           any Bank Regulatory Agency action or proceeding against Executive as a result of Executive’s negligence, fraud, malfeasance
or misconduct;

 

(d)           indictment of Executive for, or Executive’s conviction of or plea of nolo contendere at the trial court level
to, a felony, or any crime of moral turpitude, or involving dishonesty, deception or breach of trust;

 

(e)           any of the following conduct on the part of Executive that has not been corrected or cured by Executive within thirty (30)
days after having received written notice from the Bank describing such conduct (provided, however, that the Bank shall not be
required to provide Executive with notice and opportunity to cure more than two (2) times in any twelve (12) month period):

 

(i)           habitual absenteeism, or the failure by or the inability of Executive to devote full time and attention to the performance
of Executive’s duties pursuant to this Agreement (other than by reason of Executive’s death or Disability);

 

(ii)          intentional material failure by Executive to carry out the stated lawful and reasonable directions, instructions, policies,
rules, regulations or decisions of the Board which are consistent with Executive’s position;

 

(iii)         any action (including any failure to act) or conduct by Executive in violation of a material provision of this Agreement
(including but not limited to the provisions of Article 8 hereof, which shall be deemed to be material);

 

(f)           the use of drugs, alcohol or other substances by Executive to an extent which materially interferes with or prevents Executive
from performing Executive’s duties under this Agreement;

 

(g)           Executive’s commission of unethical business practices, acts of moral turpitude, financial impropriety, fraud or dishonesty
in any material matter which the Board in good faith determines could adversely affect the reputation, standing or financial prospects
of the Bank or its Affiliates; or

 

(h)           willful or intentional misconduct on the part of Executive that results, or that the Board in good faith determines may
result, in substantial injury to the Bank or any of its Affiliates.

 

7.2.           Termination by the Bank for Cause. After the occurrence of any of the conditions specified in Section 7.1, the Bank
shall have the right to terminate the Term for Cause on written notice to Executive, effective immediately.

 

7.3.           Termination by the Bank without Cause. The Bank shall have the right to terminate the Term at any time on written
notice without Cause, for any or no reason, such termination to be effective on the date on which the Bank gives such notice to
Executive or such later date as may be specified in such notice.

 

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7.4.           Termination for Death or Disability. The Term shall automatically terminate upon the death of Executive or upon the
Board’s determination that Executive is suffering from a Disability.

 

7.5.           Termination by Executive. Executive shall have the right to terminate the Term at any time, such termination to be
effective on the date ninety (90) days after the date on which Executive gives such notice to the Bank unless Executive and the
Bank agree in writing to a later date on which such termination is to be effective the “Notice Period”). After receiving
notice of termination, the Bank may require Executive to devote Executive’s good faith energies to transitioning Executive’s
duties to Executive’s successor and to otherwise helping to minimize the adverse impact of Executive’s resignation
upon the operations of the Bank Entities. If Executive fails or refuses to fully cooperate with such transition, the Bank may immediately
terminate Executive and such termination shall not be treated as a termination by the Company without Cause. At any time during
the Notice Period, the Bank may elect to relieve Executive of some or all of Executive’s duties, responsibilities, privileges
and positions for the remainder of the Notice Period, in its sole discretion and any such reduction shall not give Executive any
right to terminate under Section 9.2(b).

 

7.6.           Pre-Termination Salary and Expenses. Without regard to the reason for, or the timing of, the termination of the Term:
(a) the Bank shall pay Executive any unpaid Salary due for the period prior to the Termination Date; and (b) following submission
of proper expense reports by Executive, the Bank shall reimburse Executive for all expenses incurred prior to the Termination Date
and subject to reimbursement pursuant to Section 5.8 hereof. These payments shall be made promptly upon termination and within
the period of time mandated by law.

 

7.7.           COBRA if Termination by the Bank without Cause. If the Term is terminated by the Bank without Cause, and Executive
timely elects to continue Executive’s health insurance benefits under COBRA, then provided that Executive signs and delivers
to the Bank no later than twenty-one (21) days after the Termination Date a General Release and Waiver substantially in the form
attached as Exhibit A hereto, and that such release becomes irrevocable in accordance with its terms (the “Release
Requirement”), the Bank shall, for a period of one (1) year, or until Executive no longer qualifies for such continuation
under COBRA, if lesser, continue to provide the monthly applicable employer’s share of health insurance premiums (determined
as if Executive’s employment had not ceased). In the event Executive breaches any provision of Article 8 of this Agreement
or if he or she becomes entitled to payments pursuant to Section 9.3 in connection with a Change in Control, Executive’s
further entitlement to any benefits payable pursuant to this Section 7.7 shall thereupon immediately cease and terminate.

 

7.8.           Termination After Change in Control. Section 9.2 sets out provisions applicable to certain circumstances in which
the Term may be terminated in connection with a Change in Control.

 

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8.            Confidentiality; Non-Competition; Non-Interference.

 

8.1.           Confidential Information, Executive, during employment, will have, and has had, access to and become familiar with
various confidential and proprietary information of the Bank Entities and/or relating to the business of the Bank Entities (“Confidential
Information”), including, but not limited to: business plans; operating results; financial statements and financial information;
contracts; mailing lists; purchasing information; customer data (including lists, names and requirements); feasibility studies;
personnel related information (including compensation, compensation plans, and staffing plans); internal working documents and
communications; and other materials related to the businesses or activities of the Bank Entities which is made available only to
employees with a need to know or which is not generally made available to the public. Failure to mark any Confidential Information
as confidential, proprietary or protected information shall not affect its status as part of the Confidential Information subject
to the terms of this Agreement.

 

8.2.           Nondisclosure. Executive hereby covenants and agrees that he or she shall not, directly or indirectly, disclose or
use, or authorize any Person to disclose or use, any Confidential Information (whether or not any of the Confidential Information
is novel or known by any other Person); provided however, that this restriction shall not apply to the use or disclosure of Confidential
Information (i) to any governmental entity to the extent required by law, (ii) which is or becomes publicly known and available
through no wrongful act of Executive or any Affiliate of Executive or (iii) in connection with the performance of Executive’s
duties under this Agreement. No provision of this Agreement, including but not limited to this Section 8.2, shall be interpreted,
construed, asserted or enforced by the Bank Entities to (i) prohibit Executive from reporting possible violations of federal law
or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Commission, the
Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of
federal law or regulation, or (ii) require notification or prior approval by the Bank or
Bancorp of any such report; provided that, Executive is not authorized to disclose communications with counsel that were made for
the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar
privilege. Further, nothing contained in this Agreement, or any release and waiver delivered in accordance with this Agreement,
shall be interpreted, construed, asserted or enforced by the Bank or Bancorp to prohibit or disqualify Executive from being awarded,
receiving and/or enjoying the benefit of, any award, reward, emolument or payment, or other relief of any kind whatsoever, from
any agency, which is provided based upon Executive’s provision of information to any such agency as a whistleblower under
applicable law or regulation. The Bank and Bancorp hereby waive any right to assert or enforce the provisions of this Agreement
in a manner which would impede any whistleblower activity in accordance with applicable law or regulation. Furthermore,
Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade
secret that is made (i) in confidence to a federal, state or local government official, either directly or indirectly, or to an
attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law or (ii) in a complaint
or other document filed in a lawsuit or proceeding, if such filings are made under seal.

 

8.3.           Documents. All files, papers, records, documents, compilations, summaries, lists, reports, notes, databases, tapes,
sketches, drawings, memoranda, and similar items (collectively, “Documents”), whether prepared by Executive, or otherwise
provided to or coming into the possession of Executive, that contain any Confidential or proprietary information about or pertaining
or relating to the Bank Entities (the “Bank Information”) shall at all times remain the exclusive property of the Bank
Entities. Promptly after a request by the Bank or automatically upon the Termination Date, Executive shall take reasonable efforts
to (i) return to the Bank all Documents in any tangible form (whether originals, copies or reproductions) and all computer disks
or other media containing or embodying any Document or Bank Information and (ii) purge and destroy all Documents and Bank Information
in any intangible form (including computerized, digital or other electronic format), and Executive shall not retain in any form
any such Document or any summary, compilation, synopsis or abstract of any Document or Bank Information.

 

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8.4.           Non-Competition. Executive hereby acknowledges and agrees that, during the course of employment, in addition to Executive’s
access to Confidential Information, Executive has become, and will become, familiar with and involved in all aspects of the business
and operations of the Bank Entities. Executive hereby covenants and agrees that during the Term until one (1) year after the Termination
Date (the “Restricted Period”), Executive will not at any time (except for the Bank Entities), directly or indirectly,
in any capacity (whether as a proprietor, owner, agent, officer, director, shareholder, organizer, partner, principal, manager,
member, employee, contractor, consultant or otherwise):

 

(a)           provide any advice, assistance or services of the kind or nature which he or she provided to any of the Bank Entities or
relating to business activities of the type engaged in by any of the Bank Entities within the preceding two years, to any Person
who owns or operates a Competitive Business or to any Person that is attempting to initiate or acquire a Competitive Business (in
either case, a “Competitor”) if (i) such Competitor operates, or is planning to operate, any office, branch or other
facility (in any case, a “Branch”) that is (or is proposed to be) located within a fifty (50) mile radius of the Bank’s
headquarters or any Branch of the Bank Entities and (ii) such Branch competes or will compete with the products or services offered
or planned to be offered by the Bank Entities during the Restricted Period; or

 

(b)           sell or solicit sales of Competitive Products or Services to Persons within such 50 mile radius, or assist any Competitor
in such sales activities.

 

Notwithstanding
any provision hereof to the contrary, this Section 8.4 does not restrict Executive’s right to (i) own securities of
any Entity that files periodic reports with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended; provided that Executive’s total ownership constitutes less than two percent (2%) of the
outstanding securities of such company and that such ownership does not does not violate: (A) the Code of Conduct or any other
policy of the Bank, including any policy related to inside information; (B) any applicable securities law; or (C) any applicable
standstill or other similar contractual obligation of the Bank. The parties acknowledge that they have also entered into that certain
Non-Compete Agreement as of April 7, 2017, as may be amended from time to time, which is in addition to and not in lieu of any
of the restrictions hereunder (the “Non-Compete Agreement”).

 

8.5.           Non-Interference. Executive hereby covenants and agrees that during the Restricted Period, he or she will not, directly
or indirectly, for himself/herself or any other Person (whether as a proprietor, owner, agent, officer, director, shareholder,
organizer, partner, principal, member, manager, employee, contractor, consultant or any other capacity):

 

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(a)           induce or attempt to induce any customer, supplier, officer, director, employee, contractor, consultant, agent or representative
of, or any other Person that has a business relationship with, any Bank Entity, to discontinue, terminate or reduce the extent
of its or his/her relationship with any Bank Entity or to take any action that would disrupt or otherwise damage any such relationship;

 

(b)           solicit any customer of any of the Bank Entities for the purpose of providing any Competitive Products or Services to such
customer (other than any solicitation to the general public that is not disproportionately directed at customers of any Bank Entity);
or

 

(c)           solicit any employee of any of the Bank Entities to commence employment with, become a consultant or independent contractor
to or otherwise provide services for the benefit of any other Competitive Business.

 

In
applying this Section 8.5:

 

(i)           the term “customer” shall be deemed to include, at any time, any Person to which any of the Bank Entities had,
during the six (6) month period immediately prior to such time, (A) sold any products or provided any services or (B) submitted,
or been in the process of submitting or negotiating, a proposal for the sale of any product or the provision of any services;

 

(ii)          the term “supplier” shall be deemed to include, at any time, any Person which, during the six (6) month period
immediately prior to such time, (A) had sold any products or services to any of the Bank Entities or (B) had submitted to any of
the Bank Entities a proposal for the sale of any products or services;

 

(iii)         for purposes of clause (c), the term “employee” shall be deemed to include, at any time, any Person who was
employed by any of the Bank Entities within the prior six (6) month period (thereby prohibiting Executive from soliciting any Person
who had been employed by any of the Bank Entities until six (6) months after the date on which such Person ceased to be so employed);
and

 

(iv)         If during the Restricted Period any employee of any of the Bank Entities accepts employment with or is otherwise retained
by any Competitive Business of which Executive is an owner, director, officer, manager, member, employee, partner or employee,
or to which Executive provides material services, it shall be presumed that such employee was hired in violation of the restriction
set forth in clause (c) of this Section 8.5, with such presumption to be overcome only upon Executive’s showing by a preponderance
of the evidence that he or she was not directly or indirectly involved in the hiring, soliciting or encouraging such employee to
leave employment with the Bank Entities.

 

8.6.           Injunction. In the event of any breach or threatened or attempted breach of any provision of this Article 8 by Executive,
the Bank shall, in addition to and not to the exclusion of any other rights and remedies at law or in equity, be entitled to seek
and receive from any court of competent jurisdiction (i) full temporary and permanent injunctive relief enjoining and restraining
Executive and each and every other Person concerned therein from the continuation of such violative acts and (ii) a decree for
specific performance of the applicable provisions of this Agreement, without being required to furnish any bond or other security.

 

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8.7.        Reasonableness.

 

8.7.1.      
Executive has carefully read and considered the provisions of this Article 8 and, having done so, acknowledges that he or
she fully understands them, that he or she has had an opportunity to consult with counsel of Executive’s own choosing regarding
the meaning and effect of such provisions, at Executive’s election, and he or she agrees that the restrictions and agreements
set forth in this Article 8 are fair and reasonable and are reasonably required for the protection of the interests of the Bank
Entities and their respective businesses, shareholders, directors, officers and employees. Executive agrees that the restrictions
set forth in this Agreement will not impair or unreasonably restrain Executive’s ability to earn a livelihood. Executive
further acknowledges that Executive’s services have been and shall continue to be of special, unique and extraordinary value
to the Bank Entities.

 

8.7.2.      
If any court of competent jurisdiction should determine that the duration, geographical area or scope of any provision or
restriction set forth in this Article 8 exceeds the maximum duration, geographic area or scope that is reasonable and enforceable
under applicable law, the parties agree that said provision shall automatically be modified and shall be deemed to extend only
over the maximum duration, geographical area and/or scope as to which such provision or restriction said court determines to be
valid and enforceable under applicable law, which determination the parties direct the court to make, and the parties agree to
be bound by, such modified provision or restriction.

 

8.8.        Additional Obligations.

 

8.8.1.       Non-disparagement.
Executive shall not during or after Executive’s employment disparage any officers, directors, employees, business, products,
or services of the Bank Entities, except when compelled to do so in connection with a government investigation or judicial proceeding,
or as otherwise may be required or protected by law.

 

8.8.2.     
Cooperation. During and after Executive’s employment, Executive shall fully cooperate with the reasonable requests
of the Bank Entities, including providing information, with regard to any matter that Executive has knowledge of as a result of
Executive’s employment or prior employment with the Bank Entities. Executive further agrees to comply with any reasonable
request by the Bank Entities to assist in relation to any investigation into any actual or potential irregularities, including
without limitation assisting with any threatened or actual litigation concerning the Bank Entities, giving statements/affidavits,
meeting with legal and/or other professional advisors, and attending any legal hearing and giving evidence; provided that the Bank
Entities shall reimburse Executive for any reasonable out-of-pocket expenses properly incurred by Executive in giving such assistance.
Executive agrees to notify the Bank immediately if Executive is contacted by any third parties for information or assistance with
any matter concerning the Bank Entities and agrees to co-operate with the Bank Entities with regard to responding to such requests.

 

9.            Change in Control.

 

9.1.        Definition. “Change in Control” means and shall be deemed to have occurred if:

 

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(a)           there shall be consummated (i) any consolidation, merger, share exchange, or similar transaction relating to Bancorp, or
pursuant to which shares of Bancorp’s capital stock are converted into cash, securities of another Entity and/or other property,
other than a transaction in which the holders of Bancorp’s voting stock immediately before such transaction shall, upon consummation
of such transaction, own at least fifty percent (50%) of the voting power of the surviving Entity, or (ii) any sale of all or substantially
all of the assets of Bancorp, other than a transfer of assets to a related Person which is not treated as a change in control event
under § 1.409A-3(i)(5)(vii)(B) of the U.S. Treasury Regulations;

 

(b)           any person, entity or group (each within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) shall become the beneficial owner (within the meaning of Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of securities of Bancorp representing more than fifty percent (50%) of the voting power
of all outstanding securities of Bancorp entitled to vote generally in the election of directors of Bancorp (including, without
limitation, any securities of Bancorp that any such Person has the right to acquire pursuant to any agreement, or upon exercise
of conversion rights, warrants or options, or otherwise, which shall be deemed beneficially owned by such Person); or

 

(c)           over a twelve (12) month period, a majority of the members of the Board of Directors of Bancorp are replaced by directors
whose appointment or election was not endorsed by a majority of the members of the Board of Directors of Bancorp in office prior
to such appointment or election.

 

Notwithstanding
the foregoing, if the event purportedly constituting a Change in Control under Section 9.1(a), Section 9.1(b), or Section
9.1(c) does not also constitute a “change in ownership” of Bancorp, a “change in effective control” of
Bancorp or a “change in the ownership of a substantial portion of the assets” of Bancorp within the meaning of Section
409A, then such event shall not constitute a “Change in Control” hereunder.

 

9.2.           Change in Control Termination. For purposes of this Agreement, a “Change in Control Termination” means
that while this Agreement is in effect:

 

(a)           Executive’s employment with the Bank is terminated without Cause (i) within one hundred twenty (120) days immediately
prior to and in conjunction with a Change in Control or (ii) within twelve (12) months following consummation of a Change in Control;
or

 

(b)           Within twelve (12) months following consummation of a Change in Control, Executive’s title, duties and or position
have been materially reduced such that Executive is not in comparable positions in the publicly traded holding company and in the
bank (with materially comparable compensation, benefits, contractual terms and conditions and responsibilities to the position
he or she held immediately prior to the Change in Control, and with a primary worksite that is within twenty-five (25) miles of
Executive’s primary worksite as of the date hereof), and within thirty (30) days after notification of such reduction he
or she notifies the Bank that he or she is terminating Executive’s employment due to such change in Executive’s employment
unless such change is cured within thirty (30) days of such notice by providing him or her with a comparable position (including
materially comparable compensation and benefits and a primary worksite within twenty-five (25) miles of Executive’s primary
worksite as of the date hereof). If Executive’s employment is terminated under this Section, Executive’s last day of
employment shall be mutually agreed to by Executive and the Bank, but shall be not more than sixty (60) days after such notice
is given by Executive.

 

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9.3.           
Change in Control Payment. If there is a Change in Control Termination pursuant to Section 9.2, Executive shall be
paid a lump-sum cash payment (the “Change Payment”) equal to 1.99 times (the “Multiplier”) the sum of (a)
Executive’s Salary at the highest rate in effect during the twelve (12) month period immediately preceding Executive’s
Termination Date and (b) Executive’s cash bonus(es) paid in the most recent twelve (12) months, such Change Payment to be
made to Executive on the date forty-five (45) days after the later of (i) the Termination Date or (ii) the date of the Change in
Control; provided, however, that the Bank shall be relieved of its obligation to pay the Change Payment if Executive fails to fulfill
the Release Requirement. In addition, and subject to Executive’s fulfillment of the Release Requirement, Executive shall
continue to participate for three (3) years after a Change in Control Termination, in the health and life insurance plans generally
available to employees of the Bank, subject to the terms and conditions of such plans, including eligibility requirements. Notwithstanding
anything to the contrary in this Section 9.3, (y) any payment pursuant to this Section 9.3 shall be subject to (i) any delay in
payment required by Section 10.2 hereof and (ii) any reduction required pursuant to Section 10.1 hereof, as applicable and (z)
shall not include any equity awards pursuant to Section 5.12 above or otherwise.

 

10.          Compliance with Certain Restrictions.

 

10.1.          Section 280G. If any payment or distribution by the Bank Entities to or for the benefit of Executive, whether paid
or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement or the lapse or termination of any restriction on or the vesting or exercisability
of any payment or benefit (each a “280G Payment”), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) or to any similar tax imposed by state or local law (such tax or taxes are hereafter
collectively referred to as the “Excise Tax”), then the aggregate amount of 280G Payments payable to Executive shall
be reduced to the aggregate amount of 280G Payments that may be made to Executive without incurring an excise tax (the “Safe-Harbor
Amount”) in accordance with the immediately following sentence; provided that such reduction shall only be imposed if the
aggregate after-tax value of the 280G Payments retained by Executive (after giving effect to such reduction) is equal to or greater
than the aggregate after-tax value (after giving effect to the Excise Tax) of the 280G Payments to Executive without any such reduction.
Any such reduction shall be made in the following order: first, by reduction of cash payments; second, by cancellation of accelerated
vesting of equity awards; and third, by reduction of other benefits payable to Executive, in each case, in reverse chronological
order, beginning with payments or benefits that are to be paid latest.

 

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10.2.      Section 409A.

 

10.2.1.    
It is the intention of the parties hereto that this Agreement and the payments provided for hereunder shall not be subject
to, or shall be in accordance with, Section 409A, and thus avoid the imposition of any tax and interest on Executive pursuant to
Section 409A(a)(1)(B) of the Code, and this Agreement shall be interpreted and construed consistent with this intent. Executive
acknowledges and agrees that he or she shall be solely responsible for the payment of any tax or penalty which may be imposed or
to which he or she may become subject as a result of the payment of any amounts under this Agreement.

 

10.2.2.    
Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” at the
time of Executive’s “separation from service”, any payment of “nonqualified deferred compensation”
(in each case as determined pursuant to Section 409A) that is otherwise to be paid to Executive within six (6) months following
Executive’s separation from service, then to the extent that such payment would otherwise be subject to interest and additional
tax under Section 409A(a)(1)(B) of the Code, such payment shall be delayed and shall be paid on the first business day of the seventh
calendar month following Executive’s separation from service, or, if earlier, upon Executive’s death. Any deferral
of payments pursuant to the foregoing sentence shall have no effect on any payments that are scheduled to be paid more than six
(6) months after the date of separation from service.

 

10.2.3.    
 If any of the payments hereunder are subject to the Release Requirement, and the period in which Executive may consider
executing the release begins in one calendar year and ends in the following calendar year, the date on which such payments will
be made shall be no earlier than the first day of the second calendar year within such period.

 

10.2.4.    
All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements
of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable,
the requirements that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period
of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect
the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made
on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement
is not subject to set off or liquidation or exchange for any other benefit.

 

10.3.      Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or
foreign income taxes it determines may be appropriate.

 

11.          Assignability. Executive shall have no right to assign this Agreement or any of
Executive’s rights or obligations hereunder to another party or parties. The Bank may assign this Agreement to any of its
Affiliates or to any Person that acquires a substantial portion of the operating assets of the Bank. Upon any such assignment by
the Bank, references in this Agreement to the Bank shall automatically be deemed to refer to such assignee instead of, or in addition
to, the Bank, as appropriate in the context.

 

    -14-

     

    

 

12.          Governing Law; Venue. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland applicable to contracts executed and to be performed therein, without giving effect to the
choice of law rules thereof. Any action to enforce any provision of this Agreement may be brought only in a court of the State
of Maryland within Montgomery County or in the United States District Court for the District of Maryland. Accordingly, each party
(a) agrees to submit to the jurisdiction of such courts and to accept service of process at its address for notices and in the
manner provided in Section 13 for the giving of notices in any such action or proceeding
brought in any such court and (b) irrevocably waives any objection to the laying of venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient or inappropriate forum.

 

13.          Notices. All notices, requests, demands and other communications required to be
given or permitted to be given under this Agreement shall be in writing and shall be conclusively deemed to have been given as
follows: (a) when hand delivered to the other party; (b) when received by facsimile at the facsimile number set forth below, provided,
however, that any notice given by facsimile shall not be effective unless either (i) a duplicate copy of such facsimile notice
is promptly given by depositing the same in a United States post office first-class postage prepaid and addressed to the applicable
party as set forth below or (ii) the receiving party delivers a signed, written confirmation of receipt for such notice either
by facsimile or by any other method permitted under this Section; or (c) when deposited in a United States post office with first-class
certified mail, return receipt requested, postage prepaid and addressed to the applicable party as set forth below; or (d) when
deposited with a national overnight delivery service reasonably approved by the parties (Federal Express and DHL WorldWide Express
being deemed approved by the parties), postage prepaid, addressed to the applicable party as set forth below with next- business-day
delivery guaranteed; provided that the sending party receives a confirmation of delivery from the delivery service provider. Any
notice given by facsimile shall be deemed received on the date on which notice is received except that if such notice is received
after 5:00 p.m. (recipient’s time) or on a non-business day, notice shall be deemed given the next business day). Any notice
sent by United States mail shall be deemed given three (3) business days after the same has been deposited in the United States
mail. Any notice given by national overnight delivery service shall be deemed given on the first business day following deposit
with such delivery service. For purposes of this Agreement, the term “business day” shall mean any day other than a
Saturday, Sunday or day that is a legal holiday in Montgomery County, Maryland. The address of a party set forth below may be changed
by that party by written notice to the other from time to time pursuant to this Article.

 

	 	To:	Executive
    as set forth by Executive’s signature below
	 	 	 
	 	To:	EagleBank
	 	 	c/o Susan Riel, CEO
	 	 	7830 Old Georgetown Road
	 	 	Bethesda, MD 20814
	 	 	Fax No.: 301-841-9872
	 	 	Email: sriel@eaglebankcorp.com

 

    -15-

     

    

 

14.          Entire Agreement. This Agreement and the Non-Compete Agreement contain all of
the agreements and understandings between the parties hereto with respect to the employment of Executive by the Bank, and supersede
all prior agreements, arrangements and understandings related to the subject matter hereof. No oral agreements or written correspondence
shall be held to affect the provisions hereof. No representation, promise, inducement or statement of intention has been made by
either party that is not set forth in this Agreement or the Non-Compete Agreement, and neither party shall be bound by or liable
for any alleged representation, promise, inducement or statement of intention not so set forth.

 

15.          Headings. The Article and Section headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

 

16.          Severability. Should any part of this Agreement for any reason be declared or
held illegal, invalid or unenforceable, such provision or portion of such provision shall be deemed severed herefrom and such determination
shall not affect the legality, validity or enforceability of any remaining portion or provision of this Agreement, which remaining
portions and provisions shall remain in force and effect as if this Agreement has been executed with the illegal, invalid or unenforceable
portion thereof eliminated.

 

17.          Amendment; Waiver. Neither this Agreement nor any provision hereof may be amended,
modified, changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement
of the amendment, modification, change, waiver, discharge or termination is sought. The failure of either party at any time or
times to require performance of any provision hereof shall not in any manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term, provision or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver
of the breach of any other term, provision or covenant contained in this Agreement.

 

18.          Gender and Number. As used in this Agreement, the masculine, feminine and neuter
gender, and the singular or plural number, shall each be deemed to include the other or others whenever the context so indicates.

 

19.          Binding Effect. This Agreement is and shall be binding upon, and inures to the
benefit of, the Bank, its successors and assigns, and Executive and Executive’s heirs, executors, administrators, and personal
and legal representatives.

 

[signatures on following page]

 

    -16-

     

    

 

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

 

	 	EAGLEBANK
	 	 
	 	By:	/s/
    Susan G. Riel          1/29/20
	 	Name:	Susan
    G. Riel
	 	Title:	Chief
    Executive Officer
	 	 
	 	Executive
	 	 
	 	/s/
    Charles D. Levingston
	 	Charles
    D. Levingston
	 	 
	 	Notice
    Address:        

 

    	 	 	 

     

    

 

Exhibit A

 

Form of

General Release and Waiver of All Claims

 

Charles Levingston
(“you”) executes this General Release And Waiver of All Claims (the “Release”) as a condition of receiving
certain payments and other benefits in accordance with the terms of Section 7.7 and Section 9.3 of that certain Amended and Restated
Employment Agreement dated as of January 8, 2020 (the “Employment Agreement”)] and Section 3.1 of the Non-Compete Agreement
dated as of January 8, 2020 (“Non-Compete Agreement”). All capitalized terms used but not otherwise defined herein
shall have the same meaning as in your Employment Agreement and Non-Compete Agreement.

 

1.            RELEASE.

 

You hereby release and
forever discharge EagleBank and Eagle Bancorp, Inc. (each, a “Company”) and each and every one of their former or current
subsidiaries, parents, affiliates, directors, officers, employees, agents, parents, affiliates, successors, predecessors, subsidiaries,
assigns and attorneys (the “Released Parties”) from any and all charges, claims, damages, injury and actions, in law
or equity, which you or your heirs, successors, executors, or other representatives ever had, now have, or may in the future have
by reason of any act, omission, matter, cause or thing through the date of your execution of this Release. You understand that
this Release is a general release of all claims you may have against the Released Parties based on any act, omission, matter, case
or thing through the date of your execution of this Release.

 

2.            WAIVER.

 

You realize there are
many laws and regulations governing the employment relationship. These include, but are not limited to, Title VII of the Civil
Rights Acts of 1964 and 1991; the Age Discrimination in Employment Act of 1967; the Americans with Disabilities Act; the National
Labor Relations Act; 42 U.S.C. § 1981; the Family and Medical Leave Act; the Employee Retirement Income Security Act of 1974
(other than any accrued benefit(s) to which you have a non-forfeitable right under any pension benefit plan); the Older Workers
Benefit Protection Act; the Equal Pay Act; the Family and Medical Leave Act; the Maryland Civil Rights Act; the Maryland Wage Payment
and Collection Law; Maryland Occupational Safety and Health Act; the Maryland Collective Bargaining Law; and any other state, local
and federal employment and related laws; and any amendments to any of the foregoing. You also understand there may be other statutes
and laws of contract and tort that also relate to your employment with the Companies. By signing this Release, you waive and release
any rights you may have against the Released Parties under these and any other laws, except those as to which a waiver and release
is not permitted as a matter of law, based on any act, omission, matter, cause or thing through the date of your execution of this
Release; provided however, that this Release does not release or discharge the Released Parties from any Company’s obligations
to you under or pursuant to (a) Section 7.7 and Section 9.3 of the Employment Agreement, (b) Section 3.1 of the Non-Compete Agreement,
(c) vested benefits under the Company’s employee welfare benefit plans and employee pension benefit plans (excluding any
severance benefits), subject to the terms and conditions of those plans, (d) any securities of the Company that you own or (e)
claims for indemnification under the Company’s by-laws or policies of insurance.

 

    	 	 	 

     

    

 

You
also agree not to initiate, join, or voluntarily participate in any action or suit in any court or to accept any damages or other
relief from any such proceeding brought by anyone else based on any act, omission, matter, cause or thing through the date of your
execution of this Release, provided that nothing in this Release shall be construed to prohibit you from filing a charge with or
participating in any investigation or proceeding conducted by the EEOC, NLRB, SEC or any comparable state or local agency (“Government
Agencies”). Notwithstanding the foregoing, you hereby waive your right to recover individual relief with respect to any charge,
complaint, or lawsuit filed by you or anyone on your behalf, and you agree that you will not accept any benefit that you may be
entitled to receive in connection with any action taken by any other person or agency against the Bank; provided
however, that nothing in this Release limits your right to receive an award for information provided to any Government Agencies.
Additionally, you represent that you have no pending complaints or charges filed against the Bank.

 

By execution of this
Release and in consideration of the benefits provided herein, you understand that you are specifically waiving any rights or claims
that you may have under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621, et sec. You
state that your waiver of these ADEA claims is knowing and voluntary, and you understand that you are forever releasing the Bank
(and its affiliates and related persons who are Released Parties) with respect to all such claims. This waiver does not apply to
any rights or claims that relate to events which may occur after the date this Release becomes effective, or to any rights or claims
to test the knowing and voluntary nature of this Release, solely to the extent required under the ADEA and Older Workers Benefit
Protection Act (“OWBPA”).

 

3.            NOTICE PERIOD.

 

This document is important.
We advise you to review it carefully and consult an attorney before signing it, as well as any other professional whose advice
you value, such as an accountant or financial advisor. If you agree to the terms of this Release, sign in the space indicated below
for your signature. You will have twenty-one (21) [45 days if deemed to be a group layoff under OWBPA] calendar days from
the date you receive this document to consider whether to sign this Release. If you choose to sign the Release before the end of
that twenty-one day period, you certify that you did so voluntarily for your own benefit and not because of any coercion.

 

4.            RETURN OF PROPERTY.

 

You certify that you
have fully complied with Section 8.3 of your Employment Agreement.

 

    -19-

     

    

 

5.            REVOCATION.

 

You should also understand
that even after you have signed this Release, you still have seven (7) days to revoke it. To revoke your acceptance of this Release,
the Board of Directors of Bancorp must receive written notice before the end of the seven (7)-day period. In the event you revoke
or do not accept this Release, you will not be entitled to any of the payments or benefits that you would have been entitled to
under the [Employment Agreement] [Non-Compete Agreement] by virtue of executing this Release. If you do not revoke this Release
within seven (7) days after you sign it, it will be final, binding, and irrevocable.

 

IN WITNESS WHEREOF, you
have knowingly and voluntarily executed this Release, as of the day and year first set forth below.

 

	 	 	 	 
	 	Charles Levingston	 	Date 

 

    -20-

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