Document:

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

 

THE BANK OF HAMPTON ROADS

 

("Seller")

 

and

 

BANK OF NORTH CAROLINA

 

("Purchaser") 

 

    	 

    	 

    

 

PURCHASE AND ASSUMPTION AGREEMENT

 

	ARTICLE I TRANSFER OF ASSETS AND LIABILITIES	1
	Section 1.1. Transferred Assets	1
	Section 1.2. Purchase Price	3
	Section 1.3. Deposit Liabilities	4
	Section 1.4. Safe Deposit Business	7
	Section 1.5. Employee Matters	8
	Section 1.7. Records and Data Processing	9
	Section 1.8. Security	9
	Section 1.9. Taxes and Fees; Proration of Certain Expenses	10
	Section 1.10. Real Property	10
	 	 
	ARTICLE II CLOSING AND EFFECTIVE TIME	14
	Section 2.1. Effective Time	14
	Section 2.2. Closing	14
	Section 2.3. Post-Closing Adjustments	17
	 	 
	ARTICLE III INDEMNIFICATION	18
	Section 3.1. Seller's Indemnification of Purchaser	18
	Section 3.2. Purchaser's Indemnification of Seller	18
	Section 3.3. Claims for Indemnity	19
	Section 3.4. Limitations on Indemnification	19
	Section 3.5. Exclusive Remedy	20
	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER	20
	Section 4.1. Corporate Organization	20
	Section 4.2. No Violation	20
	Section 4.3. Corporate Authority	20
	Section 4.4. Enforceable Agreement	21
	Section 4.5. No Brokers	21
	Section 4.6. Title to and Condition of Property	21
	Section 4.7. Limitation on Representation on Condition of Property	21
	Section 4.8. Deposit Liabilities	22
	Section 4.9. Community Reinvestment Act	22
	Section 4.10. Leases	22
	Section 4.11. Litigation	22
	Section 4.12. Environmental Matters	22
	Section 4.13. Compliance with Certain Laws	23
	Section 4.14. Employee Matters	23

  

    	i

    	 

    

 

	Section 4.15. Limitation of Representations and Warranties	23
	Section 4.16. Seller’s Knowledge	23
	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER	23
	Section 5.1. Corporate Organization	23
	Section 5.2. No Violation	24
	Section 5.3. Corporate Authority	24
	Section 5.4. Enforceable Agreement	24
	Section 5.5. No Brokers	24
	Section 5.6. Consents and Approvals	24
	Section 5.7. Limitation of Representations and Warranties	24
	 	 
	ARTICLE VI OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME	25
	Section 6.1. Access to Information	25
	Section 6.2. Delivery of Magnetic Media Records	25
	Section 6.3. Application for Regulatory Approval	25
	Section 6.4. Conduct of Business; Maintenance of Properties	26
	Section 6.5. No Solicitation by Seller	27
	Section 6.6. Further Actions	27
	Section 6.7. Fees and Expenses	27
	Section 6.8. Consents of Third Parties	27
	Section 6.9. Insurance	27
	Section 6.10. Public Announcements	28
	Section 6.11. Tax Reporting	28
	Section 6.12. Regulatory Approvals and Consents	28
	 	 
	ARTICLE VII CONDITIONS TO PURCHASER'S OBLIGATIONS	28
	Section 7.1. Representations and Warranties True	28
	Section 7.2. Obligations Performed	29
	Section 7.3. No Adverse Litigation	29
	Section 7.4. Regulatory Approval	29
	Section 7.5. Plans for Chapel Hill Branch	29
	Section 7.6. Consent of Landlord	29
	 	 
	ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATIONS	29
	Section 8.1. Representations and Warranties True	29
	Section 8.2. Obligations Performed	30
	Section 8.3. No Adverse Litigation	30
	Section 8.4. Regulatory Approval	30
	Section 8.5. Release from Real Property Lease	30

  

    	ii

    	 

    

 

	ARTICLE IX TERMINATION	30
	Section 9.1. Methods of Termination	30
	Section 9.2. Procedure Upon Termination	31
	Section 9.3. Payment of Expenses	32
	 	 
	ARTICLE X MISCELLANEOUS PROVISIONS	32
	Section 10.1.  Amendment and Modification	32
	Section 10.2.  Waiver or Extension	32
	Section 10.3.  Assignment	32
	Section 10.4.  Confidentiality	32
	Section 10.5. Time of Essence	33
	Section 10.6.  Addresses for Notices	33
	Section 10.7.  Counterparts	33
	Section 10.8.  Headings	34
	Section 10.9.  Governing Law	34
	Section 10.9.  Sole Agreement	34
	Section 10.11. Severability	34
	Section 10.12. Parties In Interest	34
	Section 10.13. Survival	35

  

    	iii

    	 

    

 

PURCHASE AND ASSUMPTION AGREEMENT

 

THIS PURCHASE AND
ASSUMPTION AGREEMENT (this "Agreement") is entered into as of April 27, 2012 between The Bank of Hampton Roads, a
Virginia chartered bank having its principal offices in Norfolk, Virginia ("Seller"), and Bank of North Carolina, a North
Carolina chartered bank having its principal offices in High Point, North Carolina ("Purchaser").

 

RECITALS:

 

A. Seller wishes to
divest, upon the terms and conditions set forth herein, certain assets and certain deposit and other liabilities of the offices
at the locations set forth in Schedule 1 (collectively the "Banking Centers").

 

B. Purchaser wishes
to buy such assets and assume such liabilities upon the terms and conditions set forth herein.

 

NOW, THEREFORE,
in consideration of the premises and mutual agreements hereinafter set forth, Seller and Purchaser agree as follows:

 

ARTICLE I

TRANSFER OF ASSETS AND LIABILITIES

 

Section 1.1. Transferred Assets.

 

		(a)	As of the Effective Time (as defined in Section 2.1) and upon the terms and conditions set forth
herein, Seller will sell, assign, transfer, convey and deliver to Purchaser, and Purchaser will purchase from Seller, all of the
transferable rights, title and interests of Seller in the following assets associated with the Banking Centers and identified in
this Agreement and the Schedules and Exhibits hereto, and not otherwise excluded pursuant to the provisions of Subsection 1.1(b):

 

		(1)	fee simple title to all real estate and improvements thereon at the Banking Center described as
Preston Corners on Schedule 1.1(a)(1) (the “Improved Real Property”);

 

		(2)	fee simple title to all unimproved real estate described as Chapel Hill Land on Schedule 1.1(a)(2)
(the “Unimproved Real Property”);

 

		(3)	Seller’s rights as tenant in and to the real property lease as described on Schedule 1.1(a)(3)
(the “Real Property Lease”) for the improved land in Chapel Hill, North Carolina, as more particularly described in
such lease (the “Leased Real Property”);

 

    	1

    	 

    

		(4)	except as provided in Section 1.1(b), the furniture, fixtures, leasehold improvements, equipment
and other tangible personal property owned by Seller and located at the Banking Centers and used in conducting Seller’s business
at the Banking Centers (the "Personal Property") as listed on Schedule 1.1(a)(4), together with any manufacturer’s
warranties and maintenance or service agreements thereon that are in effect on the Closing Date and are assignable to Purchaser;

 

		(5)	all equipment leases for equipment located at the Banking Centers (the "Equipment Leases"),
and all assignable operating contracts of the Banking Centers excluding any master contracts (the "Assignable Contracts");
Equipment Leases and Assignable Contracts are listed on Schedule 1.1(a)(5);

 

		(6)	all safe deposit contracts and leases for the safe deposit boxes located at the Banking Centers
as of the Effective Time (the "Safe Deposit Contracts"); and

 

		(7)	all coins and currency located at the Banking Centers as of the Effective Time (the "Coins
and Currency").

 

The Improved
Real Property and the Unimproved Real Property are collectively referred to as the “Owned Real Property,” and the Owned
Real Property and the Leased Real Property are collectively referred to as “Real Property.” The owner or tenant of
any Real Property, as the case may be, is Seller or an affiliate of Seller as stated in the above Schedules.

 

		(b)	Excluded from the assets, properties and rights being transferred, conveyed and assigned to Purchaser
under this Agreement are the assets listed on Schedule 1.1(b) hereto, Seller's rights in and to the names “Bank of
Hampton Roads,” “The Bank of Hampton Roads,” “Gateway Bank,” “Bank of Hampton Roads Service
Corporation,” “Gateway Bank Mortgage, Inc.,” “Gateway Investment Services, Inc.,” “Gateway
Insurance Services, Inc.,” “Gateway Title Agency, Inc.,” “GBTC, Inc.,” “GBTC-VA, Inc.,”
“BHR” and any of Seller's corporate logos, trademarks, trade names, signs, paper stock, forms and other supplies containing
any such logos, trademarks or trade names, and trade names and logos of third parties with whom Seller has contracted to provide
services to its customers (the "Excluded Assets"). Seller shall coordinate with Purchaser to remove the Excluded Assets
from the Banking Centers on or prior to the Effective Time. Seller shall remove the Excluded Assets at its own cost, and, apart
from making any reasonable repairs necessitated by removing the Excluded Assets, Seller shall be under no obligation to restore
the Banking Centers' premises to their original condition, which shall be the responsibility of Purchaser.

  

    	2

    	 

    

 

Section 1.2. Purchase Price.

 

		(a)	As consideration for the purchase of the Banking Centers, Purchaser shall pay Seller a purchase
price (the "Purchase Price") equal to the sum of the following:

 

		(1)	With respect to the Owned Real Property, $5,694,000 (the "Property Value").

 

		(2)	A premium for the Deposit Liabilities (as defined in Section 1.3(a)) and franchise value related
to the Banking Centers listed on Schedule 1.2(a)(2) as follows:

 

		(i)	Five hundred and fifty thousand dollars ($550,000).

 

		(3)	The book value (net of accumulated depreciation) of the Personal Property as shown on the books
and records of Seller on the last day of the quarter immediately preceding the Closing Date, but in no event shall such value exceed
two hundred and fifty thousand dollars ($250,000); and

 

		(4)	The face amount of the Coins and Currency.

  

	 	(b)	(1)	In addition, Purchaser shall assume, as of the
Effective Time (as defined in Section 2.1), all of the duties, obligations and liabilities of Seller arising on or after the Effective
Time relating to the Real Property, the Real Property Lease, the Equipment Leases, the Assignable Contracts, the Safe Deposit
Contracts, the Deposit Liabilities (including all accrued interest relating thereto) and the ownership and operation of the Banking
Centers in the ordinary course of business, including without limitation, the payment of salary, compensation and benefits to
the New Employees (as defined in Section 1.5); provided, that any cash items paid by Seller and not cleared prior to the Effective
Time shall be the responsibility of Seller, subject to the terms of Section 1.3.

 

		(2)	All liabilities and obligations of Seller not expressly included in Section 1.2(b)(1) are excluded
from the transactions contemplated in this Agreement, including without limitation: all liabilities associated with cashier’s
checks or other official bank checks and traveler’s checks issued by Seller before the Closing Date; all liabilities and
obligations of Seller relative to Employees (as defined in Section 1.5) with respect to periods before the Closing Date; and all
liabilities and obligations of Seller relating to the Banking Centers that are not expressly included in Section 1.2(b)(1).

 

    	3

    	 

    

 

		(c)	Seller shall prepare a balance sheet (the "Pre-Closing Balance Sheet") in accordance
with generally accepted accounting principles consistently applied as of a date not earlier than 30 calendar days prior to the
Effective Time anticipated by the parties (the "Pre-Closing Balance Sheet Date") reflecting the assets to be sold and
assigned hereunder and the liabilities to be transferred and assumed hereunder. Seller agrees to pay to Purchaser at the Closing
(as defined in Section 2.1), in immediately available funds, the excess amount, if any, of the amount of Deposit Liabilities assumed
by Purchaser pursuant to Subsection (b) above, as reflected by the Pre-Closing Balance Sheet, over the Purchase Price computed
in accordance with Subsection (a) above, as reflected by the Pre-Closing Balance Sheet. The amount paid at Closing shall be subject
to subsequent adjustment based on the Post-Closing Balance Sheet (as defined in Section 2.3).

 

Section 1.3. Deposit Liabilities.

 

		(a)	"Deposit Liabilities" shall mean all of Seller's duties, obligations and liabilities
relating to the deposit accounts (except as set forth in Section 1.3(b)) located at the Banking Centers as of the Effective Time
(including accrued but unpaid or uncredited interest thereon). A projected list of the Deposit Liabilities is attached hereto as
Schedule 1.3(a), which shall be updated as soon as practicable after Closing.

 

		(b)	Subject to the limitations on indemnification set forth in Section 3.4, Purchaser shall not assume
the following:

 

		(1)	Seller's official checks, cashier checks, letters of credit, money orders, interest checks and
expense checks issued prior to closing, consignments of U.S. Government "E" and "EE" bonds and any and all
traveler's checks.

 

		(2)	Liabilities or obligations of Seller with respect to any litigation, suits, claims, demands or
governmental proceedings arising, commenced or made known to Seller prior to Closing or arising from events occurring prior to
Closing.

 

		(3)	Deposit accounts associated with lines of credit.

 

		(4)	Deposit accounts associated with qualified retirement plans where Seller is the trustee of such
plan or the sponsor of a prototype plan used by such plan.

 

		(5)	Deposit accounts associated with Seller's national or regional account relationships, if any.

 

		(6)	Self-directed individual retirement accounts, if any, it being understood that all other types
of IRA Deposit Liabilities are intended to be transferred; provided Seller has not received, on or before the Closing Date, the
account holder’s objection or failure to accept Purchaser as successor custodian.

 

    	4

    	 

    

 

		(7)	Deposits that have been reported as abandoned property under the abandoned property laws of any
jurisdiction.

 

		(8)	Brokered deposits as defined by 12 CFR §337.6(a)(2).

 

		(9)	Deposit accounts that have been overdrawn for more than 30 days as of the Closing Date.

 

		(c)	Seller does not represent or warrant that any deposit customers whose accounts are assumed by Purchaser
will become or continue to be customers of Purchaser after the Effective Time.

 

		(d)	Purchaser agrees to pay in accordance with law and customary banking practices all properly drawn
and presented checks, drafts and withdrawal orders presented to Purchaser by mail, over-the-counter or through the check clearing
system of the banking industry, by depositors of the accounts assumed, whether drawn on the checks, withdrawal or draft forms provided
by Purchaser or for a period not to exceed sixty (60) calendar days after the Closing Date, on the checks, withdrawal or draft
forms provided by Seller, and in all other respects to discharge, in the usual course of the banking business, the duties and obligations
of Seller with respect to the balances due and owing to the depositors whose accounts are assumed by Purchaser.

 

		(e)	If, after the Effective Time, any depositor, instead of accepting the obligation of Purchaser to
pay the Deposit Liabilities assumed, shall demand payment from Seller for all or any part of any such assumed Deposit Liabilities,
Seller shall not be liable or responsible for making any such payment; provided, however, that if Seller shall pay the same, Purchaser
agrees to reimburse Seller for any payments. Seller shall not be deemed to have made any representations or warranties to Purchaser
with respect to any checks, drafts or withdrawal orders processed after the Effective Time drawn on such Deposit Liabilities,
and any such representations or warranties implied by law are hereby expressly disclaimed. Seller and Purchaser shall make
arrangements to provide for the daily settlement with immediately available funds by Purchaser of checks, drafts, withdrawal orders,
returns and other items presented to and paid by Seller within 60 calendar days after the Effective Time and drawn on or chargeable
to accounts that have been assumed by Purchaser; provided, however, that Seller shall be held harmless and indemnified by Purchaser
for acting in accordance with such arrangements.

 

    	5

    	 

    

 

		(f)	Purchaser agrees, at its cost and expense, (1) to assign new account numbers to depositors of assumed
accounts, (2) to notify such depositors, on or before the Effective Time, in a form and on a date mutually acceptable to Seller
and Purchaser, of Purchaser's assumption of Deposit Liabilities, and (3) to furnish such depositors with checks on the forms of
Purchaser and with instructions to utilize Purchaser's checks and to destroy unused check, draft and withdrawal order forms of
Seller and that checks or drafts drawn more than sixty (60) calendar days after the Closing Date on Seller’s check or draft
forms will not be honored. In connection with this obligation, Seller shall provide Purchaser with a customer list on the Deposit
Liabilities together with information regarding these customers’ accounts. (If Purchaser so elects, Purchaser may offer to
buy from such depositors their unused Seller check, draft and withdrawal order forms.) In addition, Seller will notify its affected
customers by letter of the pending assignment of the Deposit Liabilities to Purchaser, which notice shall be at Seller's cost and
expense and shall be in a form and mailed at a time mutually agreeable to Seller and Purchaser.

 

		(g)	Purchaser agrees to pay promptly to Seller an amount equivalent to the amount of any checks, drafts
or withdrawal orders credited to an assumed account as of the Effective Time that are properly returned to Seller after the Effective
Time.

 

		(h)	As of the Effective Time, Purchaser will assume and discharge Seller's duties and obligations in
accordance with the terms and conditions and laws, rules and regulations that apply to the certificates, accounts and other Deposit
Liabilities assumed under this Agreement.

 

		(i)	As of and after the Effective Time, Purchaser will maintain and safeguard in accordance with applicable
law and sound banking practices all account documents, deposit contracts, signature cards, deposit slips, canceled items and other
records related to the Deposit Liabilities assumed under this Agreement, subject to Seller's right of access to such records as
provided in this Agreement.

 

		(j)	Seller will render a final statement to each depositor of an account assumed under this Agreement
as to transactions occurring through the Effective Time; provided, however, that Seller shall not be obligated to render a final
statement on any account not ordinarily receiving periodic statements in the ordinary course of Seller's business. Seller will
be entitled to impose normal fees and service charges on a per-item basis at Closing, but Seller will not impose periodic
fees or blanket charges in connection with such final statements.

 

		(k)	Seller will timely provide to Purchaser 1099 data for Purchaser to comply with all laws, rules
and regulations regarding 2012 tax reporting of transactions of such accounts through the Effective Time.

  

    	6

    	 

    

		(l)	As of the Effective Time, Purchaser, at its expense, will notify all Automated Clearing House ("ACH")
originators of the transfers and assumptions made pursuant to the Agreement; provided, however, that Seller may, at its option,
notify all such originators itself (on behalf of Purchaser), also at the expense of Purchaser. For a period of 60 calendar days
beginning on the Effective Time, Seller will honor all ACH items related to accounts assumed under this Agreement which are routed
or presented to Seller. Seller will make no charge to Purchaser for honoring such items, and will electronically transmit such
ACH data to Purchaser. If Purchaser cannot receive an electronic transmission, Seller will make available to Purchaser at Seller's
operations center receiving items from the Automated Clearing House tapes containing such ACH data. Items routed or presented after
the 60-day period shall be returned to the presenting party. Seller and Purchaser shall make arrangements to provide for the daily
settlement with immediately available funds by Purchaser of any ACH items honored by Seller, and Seller shall be held harmless
and indemnified by Purchaser for acting in accordance with this arrangement to accept ACH items.

 

		(m)	As of the Effective Time, Purchaser agrees to use commercially reasonable efforts to collect from
Purchaser's customers amounts equal to any Visa or MasterCard charge backs under the MasterCard and Visa Merchant Agreements between
Seller and its customers, or amounts equal to any deposit items returned to Seller after the Effective Time which were honored
by Seller prior to the Effective Time, and remit such amounts so collected to Seller. Purchaser agrees to immediately freeze and
remit to Seller any funds, up to the amount of the charged back or returned item that had been previously credited by Seller, if
such funds are available at the time of notification by Seller to Purchaser of the charged back or returned item and such charge
back is permitted. Notwithstanding the foregoing, Purchaser shall have no duty to remit funds for any item or charge that has been
improperly returned or charged to Seller. Solely for the purposes of this Section 1.3(m), all references to Seller shall be deemed
to include Seller and its assignees.

 

Section 1.4. Safe Deposit Business.

 

		(a)	As of the Effective Time, Purchaser will assume and discharge Seller's obligations with respect
to the safe deposit box business at the Banking Centers arising on or after the Effective Time in accordance with the terms and
conditions of contracts or rental agreements related to such business, and Purchaser will maintain all facilities necessary for
the use of such safe deposit boxes by persons entitled to use them; provided, that nothing herein shall be deemed to prohibit Purchaser,
after the Effective Time, from discontinuing the safe deposit box services or facilities at the Banking Centers (all in accordance
with applicable law and any contractual obligations regarding the same).

 

		(b)	As of the Effective Time, Seller shall transfer and assign the records related to such safe deposit
box business to Purchaser, and Purchaser shall maintain and safeguard all such records and be responsible for granting access to
and protecting the contents of safe deposit boxes at the Banking Centers.

 

    	7

    	 

    

 

		(c)	Safe deposit box rental payments (not including late payment fees) collected by either Seller or
Purchaser applying to periods both before and after the Effective Time shall be prorated as of the Effective Time.

 

Section 1.5. Employee Matters.

 

		(a)	Purchaser may offer employment to any employees employed by Seller at the Banking Centers as of
the Effective Time (the “Employees”) that are set forth in Schedule 1.5, which shall be prepared by Purchaser
within 15 days before Closing Date, in their then respective current functional positions and locations. If Purchaser offers employment
to any of the Employees (the “New Employees”), then such New Employees’ benefits will generally be equivalent
to benefits offered by Purchaser to similarly situated employees of Purchaser. New Employees and their dependents, if any, covered
under Seller’s health insurance plan before the Effective Time shall be covered under Purchaser’s health insurance
plan without being subject to any pre-existing condition limitations or exclusions. New Employees shall not be required to satisfy
the deductible and employee payments required by Purchaser's comprehensive medical and/or dental plans for the calendar year of
the Effective Time (i) to the extent of amounts previously credited during such calendar year under comparable plans maintained
by Seller, or (ii) to the extent the same are waived in their entirety by the applicable insurer, as determined by the applicable
insurer in its sole discretion. With respect to Purchaser's qualified and nonqualified pension plans, New Employees will not receive
credit for prior service with Seller (or with other entities to the extent service with any such entity is treated by Seller as
service with it). Benefits under Purchaser's pension plans for New Employees shall be determined solely with reference to service
with Purchaser.

 

		(b)	Seller makes no representations or warranties about whether any of its employees will remain at
the Banking Centers and become and remain employed by Purchaser after the Effective Time. Seller will use its commercially reasonable
efforts to maintain the employees as employees of Seller at the Banking Centers until the Effective Time. Purchaser shall have
no responsibilities or rights with respect to any employee of Seller whose employment shall be terminated for any reason prior
to the Effective Time or who shall elect not to become an employee of Purchaser. Seller agrees that, for a period of 12 months
after the Effective Time, it will not solicit for employment any New Employee who remains employed by Purchaser; provided, however,
that such prohibition shall not apply to solicitations which are directed to the general public.

  

    	8

    	 

    

		(c)	Seller shall be responsible for paying to all New Employees prior to the Effective Time the value
of any such New Employee’s accrued, but not used, sick and vacation time, if any. With respect to all who are Employees of
Seller at the Banking Centers immediately before the Effective Time and who are not offered employment with Purchaser as contemplated
under Subsection (a) above, Purchaser shall pay to Seller at Closing an amount equal to fifty percent (50%) of eight weeks’
pay for each such Employee at such Employee’s then-current rate. Seller shall match that amount and pay the total to such
Employees as severance payments. For avoidance of doubt, Purchaser shall have no obligation to contribute any amount toward severance
payments, if any, with respect to Employees who are offered employment with Purchaser but do not accept.

 

		(d)	Prior to the Closing Date, Seller shall afford the officers and authorized representatives of Purchaser
access to the Employees for interviews and training purposes, at Purchaser’s sole expense, at reasonable times without interfering
with the Banking Centers’ normal business and operations.

 

Section 1.7. Records and Data
Processing.

 

		(a)	As of the Effective Time, Purchaser shall become responsible for maintaining the files, documents
and records referred to in this Agreement. Purchaser will preserve and protect them as required by applicable law and sound banking
practice. After the Effective Time, Purchaser will permit Seller and its representatives, at reasonable times and upon reasonable
notice, to examine, inspect, copy and reproduce (at Seller's expense) any such files, documents or records as Seller deems necessary.

 

		(b)	As of the Effective Time, Seller will permit Purchaser and its representatives, at reasonable times
and upon reasonable notice, to examine, inspect, copy and reproduce (at Purchaser's expense) files, documents or records retained
by Seller regarding the assets and liabilities transferred under this Agreement as Purchaser deems necessary.

 

		(c)	It is understood that certain of Seller's records may be available only in the form of photocopies,
film copies or other non-original and non-paper media.

 

Section 1.8. Security.

 

As of the Effective
Time, Purchaser shall become solely responsible for the security of and insurance on all persons and property located in or about
the Banking Centers. 

 

    	9

    	 

    

 

Section 1.9. Taxes and Fees;
Proration of Certain Expenses.

 

Purchaser shall be
responsible for the payment of all fees and taxes related to this transaction, including all of the real estate transfer, grantor’s
and recordation taxes, fees and costs, provided that Purchaser shall not be responsible for, or have any liability with respect
to, taxes on any income to Seller arising out of the transactions herein.  Purchaser shall not be responsible for any
income tax liability of Seller arising from the business or operations of the Banking Centers before the Effective Time, and Seller
shall not be responsible for any tax liabilities of Purchaser arising from the business or operations of the Banking Centers after
the Effective Time.  Utility payments, telephone charges, real property taxes, personal property taxes, rent, salaries,
deposit insurance premiums, other ordinary operating expenses of the Banking Centers and other expenses related to the liabilities
assumed or assets purchased hereunder shall be prorated between the parties as of the Effective Time. To the extent any such item
has been prepaid by Seller for a period extending beyond the Effective Time, there shall be a proportionate monetary adjustment
in favor of Seller. To the extent Seller or its affiliate has paid security deposits to any landlord under the Real Property Lease,
Purchaser shall pay the amount of such security deposits to Seller at Closing, or such amount shall be credited to Seller on the
Closing Statement.

 

Section 1.10. Real Property.

  

		(a)	Title and Leasehold Matters.

 

(i)       Seller
agrees to deliver to Purchaser as soon as practicable after execution of this Agreement copies of all title and lease information
in possession of Seller, including but not limited to title insurance policies, attorneys’ opinions on title, surveys, covenants,
deeds, notes and mortgages, leases and easements relating to the Real Property.  Such delivery shall constitute no warranty
by Seller as to the accuracy or completeness thereof or that Purchaser is entitled to rely thereon.

 

(ii)      Purchaser
agrees to notify Seller in writing within 30 calendar days after the date of this Agreement of any mortgages, pledges, material
liens, encumbrances, reservations, tenancies, encroachments, overlaps or other title exceptions or zoning or similar land use violations
(excluding legal but nonconforming uses) related to the Real Property to which Purchaser reasonably objects (the “Title Defects”).  Purchaser
agrees that Title Defects shall not include real property taxes not yet due and payable, or easements, restrictions, tenancies,
and rights of way that do not materially interfere with the use of the Real Property as a banking center or defects that Purchaser
can obtain protection from through purchase of title insurance at regular rates (or higher rates if the excess over the regular
rate is paid by Seller).  The parties will discuss and negotiate the curing or other resolution of such Title Defects,
but Seller shall have no obligation to cure any Title Defects. If Seller is unable or unwilling to cure any such Title Defects
to Purchaser’s reasonable satisfaction, Purchaser shall have the option (upon written notice to Seller) to either (x) accept
the Title Defects and receive title in its then existing condition and proceed to Closing (without a Purchase Price adjustment
unless otherwise agreed in writing), or (y) terminate this Agreement. In no event shall Purchaser have the right to purchase the
assets relating to the Banking Center without also taking the corresponding Real Property, and vice-versa.

 

    	10

    	 

    

 

(iii)     Purchaser
shall have the right to update title matters at Closing for any changes that may have arisen between the date of Purchaser’s
original title search and the Closing Date. If such update indicates that any Title Defects have been placed of record since the
date of Purchaser’s original title search and Purchaser reasonably objects thereto, then Purchaser agrees to immediately
notify Seller in writing. The parties will discuss and negotiate the curing or other resolution of such Title Defects, but Seller
shall have no obligation to cure any Title Defects. If Seller is unable or unwilling to cure any such Title Defects to Purchaser's
reasonable satisfaction, Purchaser shall have the option (upon written notice to Seller) to either (x) accept the Title Defects
and receive title in its then existing condition and proceed to Closing (without a Purchase Price adjustment unless otherwise agreed
in writing), or (y) terminate this Agreement. In no event shall Purchaser have the right to purchase the assets relating to the
Banking Center without also taking the corresponding Real Property, and vice-versa.

 

(iv)     Purchaser
accepts the terms of the Real Property Lease as is, subject to receipt by Purchaser of an assignment of the Real Property Lease
by the landlord to the Purchaser.

 

		(b)	Environmental Matters.

 

Purchaser shall have the right
to conduct such investigation of environmental matters with respect to the Real Property as it may reasonably require and shall
report the results of any such investigation, together with its objections to any Environmental Issue, if any, to Seller no later
than the end of the Inspection Period; provided, that without the prior written consent of Seller, Purchaser shall not conduct
any invasive testing or any ground water monitoring or install any test well or undertake any other investigation which requires
a permit or license from, or the reporting of the investigation or the results thereof to, a local or state environmental regulatory
authority or the United States Environmental Protection Agency. As used herein, the term “Environmental Issue” shall
mean an issue discovered by Purchaser's investigation which constitutes a material violation of applicable environmental law which
materially impacts the Real Property or the use thereof as a banking center, or any condition in, on or under the Real Property
that would reasonably be expected to trigger any required notice, investigation, remedial obligation or material liability under
applicable environmental law. If Purchaser objects to any “Environmental Issue,” Seller and Purchaser shall address
such Environmental Issue as set forth in subsection (d) below.  As used herein, the term “Environmental Issue”
shall mean an issue discovered by Purchaser’s investigation as provided for in subsection (d) below which constitutes a
material violation of applicable environmental law that materially impacts the value of the Real Property or the use thereof as
a Banking Center, or any material condition at or under the Real Property that would reasonably be expected to give rise to a
material liability under applicable environmental law including, without limitation, clean-up and remediation obligations. 

 

    	11

    	 

    

		(c)	Facilities Inspection.

 

(i)      Purchaser shall have the
right, at Purchaser’s expense, for and during the period ending 45 calendar days following the date of execution of this
Agreement (the “Inspection Period”), to inspect the physical condition of the Owned Real Property for use as a bank,
including, without limitation, compliance of the Owned Real Property with the provisions of the Americans with Disabilities Act
(collectively, “Inspection Issues”).  These inspections shall be conducted during regular business hours
by qualified inspectors or employees of Purchaser or its affiliates following not less than three business days notice to Seller.  Prior
to entry upon the property, Purchaser will confirm to Seller the existence of general liability insurance in coverage amounts reasonably
acceptable to Seller.  Any physical disturbance to the Owned Real Property shall be subject to Seller’s prior approval,
which may be subject to such reasonable repair and restoration conditions as Seller may impose (including, without limitation,
the obligation to repair any disturbed area to its condition immediately prior to that disturbance). Purchaser promptly shall provide
Seller with copies of any and all written reports in connection with those inspections, at no cost to Seller, upon Seller’s
request.

 

(ii)    Purchaser shall return
the Owned Real Property to the condition existing prior to any tests and inspections performed by Purchaser or Purchaser’s
representatives, as determined by Seller in its reasonable discretion. Purchaser shall indemnify and hold Seller harmless from
and against any and all damages, mechanics’ liens, liabilities, losses, demands, actions, causes of action, claims, costs
and expenses (including, without limitation, reasonable attorneys’ fees and the cost of appeals) from or relating to Purchaser’s
or its employee’s, agent’s, representative’s, or contractor’s entry onto the Owned Real Property, and any
inspections or other matters performed by Purchaser with respect to the Owned Real Property, whether prior to, during, or after
the Inspection Period. The provisions of this Section 1.10(c)(ii) shall survive Closing or any termination of this Agreement.

 

		(d)	Correction of Defects.

 

If Purchaser
discovers a defect or defects in one or both of the Banking Centers with respect to Inspection Issues or Environmental Issues (a
“Defect or “Defects”) that would, in aggregate, require the expenditure of over $25,000 to correct, as determined
by Purchaser in its reasonable discretion, Purchaser shall promptly give written notice thereof to Seller describing the Defect
or Defects in detail. The parties will discuss and negotiate the curing or other resolution of such Defects, but Seller shall have
no obligation to cure any Defects. If Seller is unable or unwilling to cure any Defects to Purchaser’s reasonable satisfaction,
Purchaser shall have the option (upon written notice to Seller) to either (x) accept the Defect and receive the Owned Real Property
in its then existing condition and proceed to Closing (without a Purchase Price adjustment unless otherwise agreed in writing),
or (y) terminate this Agreement.

 

    	12

    	 

    

 

		(e)	Casualty and Condemnation.

 

		(i)	Except as stated in this Agreement, Seller shall bear all risk of loss or damage to the Owned Real
Property from all causes until the Closing; provided, however, Seller shall have no obligation to repair such loss or damage.

 

		(ii)	If before Closing: (a) any material portion of any Owned Real Property is destroyed by fire, the
elements or by any other casualty (a “Casualty”), or (b) any material portion of any Owned Real Property is taken by
eminent domain or made the subject of condemnation proceedings (a “Taking”), Seller shall give Purchaser prompt written
notice thereof and Purchaser may elect, by written notice to Seller within five (5) business days after Purchaser has received
written notice of such event from Seller (and the Closing shall be extended for two (2) business days after the expiration of such
termination election period, if applicable), to terminate this Agreement without further liability, except for obligations set
forth in this Agreement that expressly survive termination. In no event shall Purchaser have the right to purchase the assets relating
to a Banking Center without also taking the corresponding Owned Real Property, and vice-versa. If before Closing a portion of any
Owned Real Property is destroyed by a Casualty (as to less than a “material portion”) or a Taking occurs (which does
not affect a “material portion” of any Owned Real Property), Purchaser shall proceed to Closing subject to the provisions
of Section 1.10(e)(iii). For the purposes of this Section 1.10, a “material portion” of any Owned Real
Property shall mean (i) any portion of the Owned Real Property where the cost to restore same (as reasonably determined by Seller)
exceeds $200,000 and (ii) with respect to a Taking only, any portion which materially affects access to or parking upon the Owned
Real Property solely to the extent such remaining parking is not in compliance with applicable ordinances.

 

		(iii)	If this Agreement is not terminated pursuant to Section 1.10(e)(ii), then at the Closing
the following shall occur:

  

		(A)	Seller shall credit on account of the Purchase Price the amount, as applicable, of all condemnation
awards actually received by Seller or any sums of money collected by Seller (whether retained by Seller or paid directly to a holder
of any lien on the Owned Real Property) under its policies of insurance or renewals thereof insuring against the loss in question
to the extent same have not been expended for the purpose of restoration or repair of the Owned Real Property.

 

		(B)	In the case of a Taking, Seller shall assign, transfer and set over to Purchaser all of Seller's
right, title and interest in and to (a) such further sums payable thereunder, and (b) any awards that may be made with respect
to any pending or future condemnation proceeding.

  

    	13

    	 

    

		(C)	In the case of a Casualty, Seller shall assign, transfer and set over to Purchaser all of Seller's
right, title, and interest in and to the proceeds of any casualty insurance policies payable to Seller.

 

		(D)	In the case of a Casualty, Seller shall credit against the Purchase Price the amount of any deductible
under its insurance policy, but not to exceed the amount required to repair or replace the portion of the Owned Real Property damaged
or destroyed.

 

		(E)	All provisions of this Section 1.10(e) shall also be applicable to the Leased Real Property,
subject to the rights of the landlord under the Real Property Lease.

 

		(f)	Development Bonds.

 

If Seller has outstanding bonds,
letters of credit, or other security issued in favor of a municipality or agency related to the development of any Unimproved Real
Property (the “Seller Bonds”) Purchaser shall cause to be issued to such municipality or agency, effective at Closing,
any replacement bonds or letters of credit that are necessary to obtain the release of the Seller Bonds.

 

ARTICLE II

CLOSING AND EFFECTIVE TIME

 

Section 2.1. Effective Time.

 

The purchase of assets
and assumption of liabilities provided for in this Agreement shall occur at a closing (the "Closing") to be held at a
mutually agreeable time and location within 15 calendar days following the date of all approvals by regulatory agencies and after
all statutory waiting periods have expired, or at such other place, time or date on which the parties shall mutually agree. The
effective time (the "Effective Time") shall be 5:00 p.m. local time, on the day on which the Closing occurs (the "Closing
Date").

 

Section 2.2. Closing.

 

		(a)	All actions taken and documents delivered at the Closing shall be deemed to have been taken and
executed simultaneously, and no action shall be deemed taken nor any document delivered until all have been taken and delivered.

 

		(b)	At the Closing, subject to all the terms and conditions of this Agreement, Seller shall execute
(where appropriate), deliver or make reasonably available to Purchaser:

 

    	14

    	 

    

 

		(1)	Special warranty deeds transferring title to the Owned Real Property to Purchaser;

 

		(2)	A Bill of Sale, in substantially the form attached hereto as Exhibit 2.2(b)(2) (the "Bill
of Sale"), transferring to Purchaser all of Seller's interest in the Personal Property and other transferred assets;

 

		(3)	An Assignment and Assumption Agreement, in substantially the form attached hereto as Exhibit
2.2(b)(3) (the "Assignment and Assumption Agreement"), assigning Seller's interest in the Equipment Leases, the Assignable
Contracts, the Real Property Lease, the Safe Deposit Contracts, and the Deposit Liabilities;

 

		(4)	Consents from third persons that are required to effect the assignments set forth in the Assignment
and Assumption Agreement, including, but not limited to, the lessors under the Equipment Leases and the Real Property Lease to
the extent required. With respect to any Equipment Lease for which the required consent is not obtained from the lessor prior to
the Closing, in lieu of such consent Seller may provide either (at Seller’s sole option), a special indemnity in form and
content reasonably satisfactory to Purchaser against any loss to Purchaser resulting from the failure to obtain such consent, or
the substitution by Seller and delivery hereunder to Purchaser of equipment comparable to the equipment subject to such Equipment
Lease;

 

		(5)	Seller's keys to the safe deposit boxes and Seller's records related to the safe deposit box business
at the Banking Centers;

 

		(6)	Seller's records related to the Deposit Liabilities assumed by Purchaser;

 

		(7)	Immediately available funds in the net amount shown as owing to Purchaser by Seller on the Closing
Statement, if any;

 

		(8)	The Coins and Currency;

 

		(9)	Such of the other assets to be purchased as shall be capable of physical delivery;

 

		(10)	A certificate of a proper officer of Seller, dated as of the Closing Date, certifying the fulfillment
of all conditions that are the obligation of Seller hereunder, and that all the representations and warranties of seller set forth
in this agreement remain true and correct in all material respects as of the Effective Time;

 

    	15

    	 

    

 

		(11)	A certified copy of a resolution of the Board of Directors of Seller, or its Executive Committee,
approving the sale of the Banking Centers contemplated hereby;

 

		(12)	Such certificates and other documents as Purchaser and its counsel may reasonably require to evidence
the receipt by Seller of all necessary corporate and regulatory authorizations and approvals for the consummation of the transactions
provided for in this Agreement;

 

		(13)	A Closing Statement, substantially in the form attached hereto as Exhibit 2.2(b)(13) (the
"Closing Statement");

 

		(14)	An affidavit of Seller certifying that Seller is not a "foreign person" as defined in
the federal Foreign Investment in Real Property Tax Act of 1980;

 

		(15)	The Power of Attorney substantially in the form attached hereto as Exhibit 1.4(k);

 

		(16)	An assignment and assumption of the Real Property Lease (“Assignment of Real Property Lease”)
executed by the landlord of the Leased Real Property; and

 

		(17)	Such executed customary affidavits and documents as Purchaser’s title insurer may require
as a condition to issuing owner’s title insurance policies to Purchaser with respect to the Real Property.

 

It is understood that the items
listed in Subsections (b)(5) and (9) shall be transferred after the Banking Centers have closed for business on the Closing Date
and that the records listed in Subsection (b)(7) will be transferred as soon as practicable after the Closing, but in no event
more than five (5) business days after the Closing. For purposes of this Agreement, the term "business day" shall mean
any day that Seller is open for business and that is not a Saturday, Sunday or federal holiday.

 

		(c)	At the Closing, subject to all the terms and conditions of this Agreement, Purchaser shall execute
(where appropriate), deliver or make reasonably available to Seller:

 

		(1)	The Assignment and Assumption Agreement;

 

		(2)	A certificate and receipt acknowledging the delivery and receipt of possession of the property
and records referred to in this Agreement;

 

    	16

    	 

    

 

		(3)	A certificate of a proper officer of Purchaser, dated as of the Closing Date, certifying to the
fulfillment of all conditions that are the obligation of Purchaser hereunder, and that all the representations and warranties of
purchaser set forth in this agreement remain true and correct in all material respects as of the Effective Time;

 

		(4)	A certified copy of a resolution of the Board of Directors, or its Executive Committee, of Purchaser
approving the purchase of the Banking Centers contemplated hereby;

 

		(5)	Such certificates and other documents as Seller and its counsel may reasonably require to evidence
the receipt by Purchaser of all necessary corporate and regulatory authorizations and approvals for the consummation of the transactions
provided for in this Agreement;

 

		(6)	The Assignment of Real Property Lease; and

 

		(7)	The Closing Statement.

 

		(d)	All instruments, agreements and certificates described in this Section 2.2 shall be in form and
substance reasonably satisfactory to the parties' respective legal counsel.

 

Section 2.3. Post-Closing Adjustments.

 

		(a)	Not later than 30 business days after the Effective Time, Seller shall deliver to Purchaser a balance
sheet dated as of the Effective Time and prepared in accordance with generally accepted accounting principles consistently applied
reflecting the assets sold and assigned and the liabilities transferred and assumed hereunder (the "Post-Closing Balance Sheet").
Seller shall afford Purchaser and its accountants and attorneys the opportunity to review all work papers and documentation used
by Seller in preparing the Post-Closing Balance Sheet. On or before the 15th business day following delivery of the
Post-Closing Balance Sheet (the "Adjustment Payment Date"), Seller and Purchaser shall effect the transfer of any funds
as may be necessary to reflect changes in such assets and liabilities between the Pre-Closing Balance Sheet and the Post-Closing
Balance Sheet together with interest thereon computed from the Effective Time to the Adjustment Payment Date at the applicable
Federal Funds Rate (as hereinafter defined).

 

 

    	17

    	 

    

		(b)	In the event that a dispute arises as to the appropriate amounts to be paid to either party on
the Adjustment Payment Date, each party shall pay to the other on such Adjustment Payment Date all amounts other than those as
to which a dispute exists. Any disputed amounts retained by a party which are later found to be due to the other party shall be
paid to such other party promptly upon resolution with interest thereon from the Adjustment Payment Date to the date paid at the
applicable Federal Funds Rate. In the event of an unresolved dispute, either party may submit the matter to a firm of certified
public accountants mutually agreeable to Seller and Purchaser (the “Mediator”), which shall determine such dispute
in accordance with the terms and conditions of this Agreement within 30 calendar days after the submission. The parties shall each
pay one-half of the fees and expenses of the Mediator, except that the Mediator may assess the full amount of its fees and expenses
against either party if it determines that party negotiated the Post-Closing Balance Sheet in bad faith. The Post-Closing Balance
Sheet, as agreed upon by the parties and determined under this Subsection, shall be final and binding upon the parties.

 

		(c)	The Federal Funds Rate shall mean the rate quoted for Federal Funds in the Money Rates Column of
the Wall Street Journal, adjusted daily, for the period beginning with the first calendar day following the Effective Time and
ending with the Adjustment Payment Date.

 

ARTICLE III

INDEMNIFICATION

 

Section 3.1. Seller's Indemnification
of Purchaser.

 

Subject to limitations in this Article
III, Seller shall indemnify, hold harmless and defend Purchaser from and against any costs, expenses, liabilities, losses or damages,
including without limitation reasonable attorneys' fees and expenses, but excluding punitive, exemplary, special or incidental
damages (a "Loss") incurred by Purchaser and caused by any breach by Seller of any representation or warranty contained
herein, and any Loss arising out of any claims, actions, suits or proceedings commenced prior to the Effective Time or arising
out of events occurring prior to the Effective Time relating to operations at the Banking Center, except to the extent of liabilities
assumed or payable hereunder by Purchaser. Claims for indemnity must be made within the time frame set forth in Section 3.3(a).

 

Section 3.2. Purchaser's Indemnification
of Seller.

 

Subject to the limitations set forth in
this Article III, Purchaser shall indemnify, hold harmless and defend Seller and its affiliates from and against any Loss incurred
by Seller caused by: (a) any breach by Purchaser of any representation or warranty contained herein; and (b) any Loss arising out
of any claims, actions, suits or proceedings arising out of events occurring following the Effective Time relating to operations
at the Banking Centers or administration of any of the Deposit Liabilities by Purchaser. Claims for indemnity must be made within
the time frame set forth in Section 3.3(a).

 

    	18

    	 

    
 

Section 3.3. Claims for Indemnity.

 

		(a)	A claim for indemnity under Sections 3.1 or 3.2 of this Agreement shall be made by the claiming
party prior to the expiration of twelve (12) months after the Effective Time by the giving of notice thereof to the other party.
Such notice shall set forth in reasonable detail the basis upon which such claim for indemnity is made. In the event that any such
claim is made within such prescribed twelve (12) month period, the indemnity relating to such claim shall survive until such claim
is resolved. Claims not made within such twelve (12) month period shall cease and no indemnity shall be made therefor.

 

		(b)	In the event that any person or entity not a party to this Agreement shall make any demand or claim
or file or threaten to file any lawsuit, which demand, claim or lawsuit may result in any liability, damage or loss to one party
hereto of the kind for which such party is entitled to indemnification pursuant to Section 3.1 or 3.2, then, after notice is provided
by the indemnified party to the indemnifying party of such demand, claim or lawsuit, the indemnifying party shall have the option,
at its cost and expense, to retain counsel for the indemnified party to defend any such demand, claim or lawsuit. In the event
that the indemnifying party shall fail to respond within ten (10) business days after receipt of such notice of any such demand,
claim or lawsuit, then the indemnified party shall retain counsel and conduct the defense of such demand, claim or lawsuit as it
may in its discretion deem proper, at the cost and expense of the indemnifying party. In effecting any settlement of any such demand,
claim or lawsuit, an indemnified party shall act in good faith, shall consult with the indemnifying party and shall enter into
only such settlement as the indemnifying party shall approve (the indemnifying party's approval will be implied if it does not
respond within ten (10) business days of its receipt of the notice of such settlement offer).

 

Section 3.4. Limitations on Indemnification.

 

(a)         Except as provided in
Section 3.4(b), no indemnification shall be required to be made by either party under Sections 3.1 or 3.2 until the aggregate amount
of all claims for indemnity by the other party exceeds $50,000. Once such aggregate amount exceeds the $50,000 threshold, such
party shall thereupon be entitled to indemnification for all claims in excess of such threshold.

 

(b)         Notwithstanding anything
to the contrary in this Agreement, including Sections 3.1, 3.2 and 3.4(a), the limitations set forth in Section 3.4(a) shall not
apply to any Loss relating to, arising out of or resulting from fraudulent misrepresentation or warranty or fraudulent inducement
to enter into this Agreement.

 

    	19

    	 

    

 

(c)          Notwithstanding
anything to the contrary in this Agreement, the parties shall have no obligations under this Article III for (i) any consequential
liability, damage or loss that the indemnified party may suffer or (ii) any punitive, exemplary, special or incidental damages,
damage or loss the indemnified party may suffer, except to the extent that such punitive, exemplary, special or incidental damages
are incurred by the indemnified party as a result of a third party claim and such damages arise out of or result from acts of the
indemnifying party under this Article III.

 

Section 3.5. Exclusive Remedy

 

The procedures provided
in this Article III shall constitute the sole and exclusive remedy of the parties after the Closing for any Loss sustained by a
party as a result of any breach of this Agreement (regardless of whether any claims or causes of action asserted with respect to
such matters are brought in contract, tort or any other legal theory whatsoever), other than losses or liabilities based upon fraud
or fraudulent misrepresentation or as set forth in Section 3.4(b).

  

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller makes no representations
or warranties to Purchaser except as specifically set forth in this Article IV. Seller hereby represents and warrants to Purchaser
as follows:

 

Section 4.1. Corporate Organization.

 

Seller is a Virginia
chartered bank duly organized, validly existing and in good standing under the laws of Virginia. Seller has the corporate power
and authority to own its properties, to carry on its business as currently conducted and to effect the transactions contemplated
herein.

 

Section 4.2. No Violation.

 

The Banking Centers
have been operated in all material respects in accordance with applicable laws, rules and regulations. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions contemplated herein, will violate or conflict with or constitute
a default under (a) Seller's Articles of Incorporation or Bylaws; (b) any provision of any material agreement or any other material
restriction of any kind to which Seller is a party or by which Seller is bound; (c) any injunction, order or decree or, to Seller’s
knowledge, any statute, law or regulation, the violation of which would have a material adverse effect on the results of operation
or financial condition of the Banking Centers; or (d) any provision which will result in a default under, or which will cause the
acceleration of the maturity of, any material obligation or loan to which Seller is a party.

 

Section 4.3. Corporate Authority.

 

The execution and delivery
of this Agreement, and the consummation of the transactions contemplated herein, have been duly authorized by Seller, and no further
corporate authorization is necessary for Seller to consummate the transactions contemplated hereunder.

 

    	20

    	 

    
 

Section 4.4. Enforceable Agreement.

 

This Agreement has
been duly authorized, executed and delivered by Seller and is the legal, valid and binding agreement of Seller, enforceable in
accordance with its terms, except as enforceability may be limited under any applicable law pertaining to bankruptcy, receivership,
reorganization, fraudulent transfer or insolvency or similar laws affecting creditor’s rights generally and to general principles
of equity.

 

Section 4.5. No Brokers.

 

No broker, finder,
or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Seller, other than Sandler O’Neill & Partners, L.P.

 

Section 4.6. Title to and Condition
of Property.

 

		(a)	Seller has not entered into any agreement regarding the Real Property other than (i) those specifically
set forth herein or disclosed to Purchaser prior to the execution of this Agreement, (ii) those listed on Schedule 4.6(a),
(iii) those that are recorded in the chain of title to the Real Property, and (iv) the Real Property Lease, the Equipment Leases,
and the Assignable Contracts.

 

		(b)	To Seller’s knowledge, the Real Property is not subject to any condemnation proceeding, other
proceeding or litigation of any kind, pending, proposed, or threatened, which would be binding upon Purchaser and would materially
affect or limit Purchaser's use and enjoyment of the Real Property.

 

		(c)	Seller owns and will convey to Purchaser at the Effective Time, all of the Seller’s rights,
title and interest to all the Personal Property free and clear of any claims, mortgages, liens, security interests, pledges or
encumbrances of any kind except as may be set forth in this Agreement. To Seller’s knowledge, the Personal Property is in
good operating condition and repair, giving consideration to its age and use and subject to ordinary wear and tear, Seller has
good and marketable title to the assets to be transferred under this Agreement, and the Banking Centers are in conformity in all
material respects with all zoning ordinances, building or fire codes or other laws, statutes, ordinances, codes or regulations
applicable to them, and all certificates, licenses and permits required for the lawful use and occupancy of such property have
been obtained and are in full force and effect.

 

Section 4.7. Limitation on Representation
on Condition of Property.

 

Except as may be otherwise
specifically set forth in Article IV of this Agreement, (i) the assets to be purchased by Purchaser hereunder are sold AS IS, WHERE
IS, with no warranties or representations whatsoever, except as may be expressly represented or warranted in this Agreement.

 

    	21

    	 

    

 

Section 4.8. Deposit Liabilities.

 

The Deposit Liabilities
(a) are insured by the Federal Deposit Insurance Corporation to the fullest extent permitted by federal law, and no action is pending
or, to Seller’s knowledge, has been threatened by the Federal Deposit Insurance Corporation against Seller with respect to
the termination of such insurance, and all premiums and assessments required to be paid in connection therewith have been paid
when due by Seller, and (b) were opened, extended or made, and have been maintained, in all material respects, in accordance with
all applicable federal and state laws, regulations, rules and orders.

 

Section 4.9. Community Reinvestment
Act.

 

Seller is in compliance
with the Community Reinvestment Act and its implementing regulations, and there are no threatened or pending actions, proceedings,
or allegations by any person or regulatory agency which may cause any regulatory authority to deny any application required to
be filed pursuant to this Agreement. In addition, Seller has not been advised of any supervisory concerns regarding its compliance
with the Community Reinvestment Act.

 

Section 4.10. Leases.

 

The Real Property Lease
and the Equipment Leases are in full force and effect and are fully transferable and assignable to Purchaser, except to the extent
that consent of the lessor or another party is required by the terms of the respective lease documents. Purchaser's sole remedy
for failure to obtain any such required consent with respect to the Equipment Leases shall be as provided in Section 2.2(b)(4).

 

Section 4.11. Litigation.

 

There is no action,
suit or proceeding pending or, to the knowledge of Seller, threatened against Seller before any court or arbitrator or any governmental
body, agency or official that relates to the Banking Centers (including the assets and the assumed liabilities under this Agreement)
or that could materially affect the ability of Seller to perform its obligations under this Agreement.

 

Section 4.12. Environmental Matters.

 

To Seller’s knowledge,
and except as disclosed on any environmental assessment report delivered by Seller to Purchaser, Seller’s operation of the
Real Property and the Banking Centers are and have been in compliance in all material respects with any applicable environmental
laws. There (a) are no causes of action, claims, charges or investigations pending or, to Seller’s knowledge, threatened
against Seller or any other person with respect to the Real Property or the Banking Centers which in any way relate to any environmental
law or to any presence of or exposure to any Hazardous Substances; (b) to Seller’s knowledge, has been no Hazardous Substance
handled, stored, disposed of, or released in, on or under the Real Property or Banking Centers in a manner or in an amount or concentration
that would trigger any required notice, investigation, remedial action or material liability under any applicable environmental
laws; and (c) to Seller’s knowledge are no and have been no underground storage tanks located on or under the Real Property
or the Banking Centers. As used herein, “Hazardous Substance” shall mean any hazardous substances, pollutants or other
regulated materials or wastes defined as such under applicable environmental laws.

 

    	22

    	 

    

 

Section 4.13. Compliance with
Certain Laws.

 

To Seller’s knowledge,
the Deposit Liabilities were opened, extended, or made and have been maintained in accordance with all applicable federal and state
laws, rules and regulations.

 

Section 4.14. Employee Matters.

 

There are no written
contracts of employment between Seller and any of the Employees. Seller is not a party to any contract or arrangement with any
union relating to the business conducted at the Banking Centers, and Seller is not aware of any pending organizational efforts
at the Banking Centers.

 

Section 4.15. Limitation of Representations
and Warranties.

 

Except as may be expressly
represented or warranted in this Agreement by Seller or in any other document or instrument executed by Seller and delivered to
Purchaser in connection with this Agreement, Seller makes no representations or warranties whatsoever, express or implied.

 

Section 4.16. Seller’s
Knowledge.

 

For the purposes of
this Agreement, Seller’s knowledge is limited to the actual and current knowledge of President and Chief Executive Officer
Douglas J. Glenn, Senior Vice President and Retail Banking Executive Donna Richards, and the Financial Center Manager relating
to the Banking Center at Preston Corners, Chastity Caltagirone.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents
and warrants to Seller as follows:

 

Section 5.1. Corporate Organization.

 

Purchaser is a North
Carolina chartered bank duly organized, validly existing and in good standing under the laws of North Carolina. Purchaser has the
corporate power and authority to own the properties being acquired, to assume the liabilities being transferred and to effect the
transactions contemplated herein.

 

    	23

    	 

    

 

Section 5.2. No Violation.

 

Neither the execution
and delivery of this Agreement, nor the consummation of the transactions contemplated herein, will violate or conflict with or
constitute a default under: (a) the Articles of Incorporation or Bylaws of Purchaser; (b) any provision of any material agreement
or any other material restriction of any kind to which Purchaser is a party or by which Purchaser is bound; (c) any injunction,
order or decree or, to Purchaser’s knowledge, statute, law or regulation; or (d) any provision which will result in a default
under, or cause the acceleration of the maturity of, any material obligation or loan to which Purchaser is a party. Purchaser has
no knowledge of any breach of warranty or misrepresentation made by Seller under this Agreement.

 

Section 5.3. Corporate Authority.

 

The execution and delivery
of this Agreement, and the consummation of the transactions contemplated herein, prior to the Effective Time will have been duly
authorized by Purchaser, and no further corporate authorization on the part of Purchaser is necessary to consummate the transactions
contemplated hereunder.

 

Section 5.4. Enforceable Agreement.

 

This Agreement has
been duly authorized, executed and delivered by Purchaser and is the legal, valid and binding agreement of Purchaser enforceable
in accordance with its terms, except as enforceability may be limited under any applicable law pertaining to bankruptcy, receivership,
reorganization, fraudulent transfer or insolvency or similar laws affecting creditor’s rights generally and to general principles
of equity.

 

Section 5.5. No Brokers.

 

No broker, finder,
or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Purchaser.

 

Section 5.6. Consents and Approvals

 

Purchaser has received
no notice and has no reason to believe that any federal, state or other governmental agency would oppose or not grant or issue
its consent or approval, if required, with respect to the transactions contemplated hereby.

 

Section 5.7. Limitation of Representations
and Warranties.

 

Except as may be expressly
represented or warranted in this Agreement by Purchaser or in any other document or instrument executed by Purchaser and delivered
to Seller in connection with this Agreement, Purchaser makes no representations or warranties whatsoever, express or implied.

 

    	24

    	 

    

 

ARTICLE VI

OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME

 

Section 6.1. Access to Information.

 

Seller shall afford
to the officers and authorized representatives of Purchaser, upon prior notice and subject to Seller's normal security requirements,
access to the properties, contracts, books and records pertaining to the Banking Centers and the Deposit Liabilities in order to
facilitate the consummation of the transactions herein contemplated, provided, that such access shall be at reasonable times and
shall not interfere with the normal business and operations of the Banking Centers or the affairs of Seller relating to the Banking
Centers. Nothing in this Section 6.1 shall require Seller to breach any obligation of confidentiality or to reveal any proprietary
information, trade secrets or marketing or strategic plans. It is understood that certain of Seller's records may be available
only in the form of photocopies, film copies or other non-original and non-paper media.

 

Section 6.2. Delivery of Magnetic
Media Records.

 

Seller shall prepare
or cause to be prepared at its expense and make available to Purchaser at Seller's data processing center magnetic media records
in Seller's field format not later than 60 calendar days after the execution of this Agreement, and further shall make available
to Purchaser such records updated as of the Closing Date, which records shall contain information related to the Deposit Liabilities.
Such updated records shall be made available at such time after Closing as agreed to by the parties. Seller may, with the consent
of Purchaser, provide such reports in paper format instead of magnetic media format.

 

Section 6.3. Application for
Regulatory Approval.

 

Within 30 calendar
days following the execution of this Agreement, Purchaser shall prepare and file applications required by law with the appropriate
regulatory authorities for approval to purchase and assume the aforesaid assets and liabilities, to establish branches at the locations
of the Banking Centers (or relocations to the extent contemplated herein), and to effect in all other respects the transactions
contemplated herein. Purchaser agrees to process such applications in a diligent manner and on a priority basis and to provide
Seller promptly with a copy of such applications as filed (except for any confidential portions thereof) and all material notices,
orders, opinions, correspondence and other documents with respect thereto, and to use its commercially reasonable efforts to obtain
all necessary regulatory approvals. Purchaser knows of no reason why such applications should not receive all such approvals. Purchaser
shall promptly notify Seller upon receipt by Purchaser of notification that any application provided for hereunder has been denied.
Seller shall provide such assistance and information to Purchaser as shall be reasonably necessary for Purchaser to comply with
the requirements of the applicable regulatory authorities.

 

    	25

    	 

    

 

Section 6.4. Conduct of Business;
Maintenance of Properties.

 

		(a)	From the date hereof until the Effective Time, Seller
covenants that it will:

 

		(i)	Carry on, or cause to be carried on, the business of the Banking Centers substantially in the same
manner as on the date hereof, use all reasonable efforts to preserve intact its current business organization, including its relationship
with the personnel at the Banking Centers, and preserve its business relationships with depositors, customers and others having
business relationships with it and whose accounts will be retained at the Banking Centers; provided, that Seller need not, in its
sole discretion, advertise or promote new or substantially new customer services in the principal market areas of the Banking Centers;

  

		(ii)	Cooperate with and assist Purchaser in assuring the orderly transition of the business of the Banking
Centers to Purchaser from Seller; and

 

		(iii)	Maintain the Real Property, the Personal Property and each Banking Center in its current condition,
ordinary wear and tear, casualty and condemnation excepted.

 

		(b)	Between the date hereof and the Effective Time, Seller shall not, without the prior consent of
Purchaser:

 

		(i)	Increase or agree to increase the salary, remuneration or compensation or other employment benefits
of the Employees other than in accordance with Seller’s customary policies or bank-wide changes consistent with past practices,
or pay or agree to pay any uncommitted bonus to any such Employees other than regular bonuses granted based on historical practice;

 

		(ii)	Materially increase the staffing levels at any Banking Center or effect changes in branch personnel
employed as of the Effective Time other than in the ordinary course of business consistent with past practices;

 

		(iii)	Change any pricing on deposit accounts at the Banking Centers on other than a regional basis, except
as may be required in the ordinary course of business consistent with past practices; or

 

		(iv)	transfer, assign, encumber or otherwise dispose of any or all of the Assets or Deposit Liabilities
except in the ordinary course of business or pursuant to this Agreement.

 

    	26

    	 

    

 

Section 6.5. No Solicitation
by Seller.

 

In consideration of
the purchase of the transferred assets and assumption of the assumed liabilities by Purchaser, neither Seller nor its Affiliates
(including their respective directors, officers, employees or principal shareholders), successors or assigns will, for a period
of twelve (12) months after the Closing Date, solicit, on behalf of itself or others, deposits from customers whose Deposits are
assumed by Purchaser hereunder; provided, however, that nothing contained in this Section 6.5 shall be deemed to prohibit general
solicitations in (i) newspapers, (ii) television (iii) radio, or mass mailings not specifically directed or targeted to customers
of the Banking Center. In addition, these restrictions shall not apply to (1) the solicitation of (A) commercial accounts normally
established and maintained in offices other than the Banking Center or (B) any credit or debit card customer which has an agreement
with Seller for merchant services which is not transferred to Purchaser, (2) the installation and operation by Seller of automated
teller machines at any location beyond a two mile radius measured from the current location of either Banking Center, or (3) for
avoidance of doubt, any deposit, safe deposit or other business or transaction between Seller and any customer or customers whose
Deposits are assumed by Purchaser hereunder, provided that such deposit, safe deposit or other business or transaction was not
solicited in violation of the provisions of the first sentence of this Section 6.5.

 

Section 6.6. Further Actions.

 

Each party hereto shall
execute and deliver such instruments and take such other actions as the other party may reasonably require in order to carry out
the intent of this Agreement.

 

Section 6.7. Fees and Expenses.

 

Except as otherwise
provided herein, each party shall be responsible for its own attorneys' and accountants' fees and expenses and other expenses arising
in connection with this Agreement and the transactions contemplated hereby.

 

Section 6.8. Consents of
Third Parties.

 

If the assignment of
any material claim, contract, license, lease, commitment, sales order or purchase order (or any material claim or right or any
benefit arising thereunder) without the consent of a third party would constitute a breach thereof or materially affect the rights
of Purchaser or Seller thereunder, then such assignment is hereby made subject to such consent or approval being obtained.

 

Section 6.9. Insurance.

 

As of the Effective
Time, Seller will discontinue its insurance coverage maintained in connection with the Banking Centers and the activities conducted
thereon, except for coverage relating to periods preceding the Effective Time. Purchaser shall be responsible for all insurance
protection for the Banking Centers' premises and the activities conducted thereon immediately following the Effective Time.

 

    	27

    	 

    

 

Section 6.10. Public Announcements.

 

Seller and Purchaser
agree that, from the date hereof, neither shall make any public announcement or public comment, regarding this Agreement or the
transactions contemplated herein without first consulting with the other party hereto and reaching an agreement upon the substance
and timing of such announcement or comment. Further, Seller and Purchaser acknowledge the sensitivity of this transaction to the
Employees, and no announcements or communications with the public or these Employees shall be made without the prior approval of
Seller.

 

Section 6.11. Tax Reporting.

 

Seller shall provide
Purchaser all 1099 data for Purchaser to comply with all 2012 tax reporting obligations in connection with transferred assets and
liabilities on or before the Effective Time, and Purchaser shall comply with all tax reporting obligations with respect to the
transferred assets and liabilities after the Effective Time.

 

Section 6.12. Regulatory Approvals
and Consents.

 

Seller and Purchaser
shall cooperate with each other in connection with any application for regulatory approval of the transactions contemplated by
this Agreement. Seller will use its commercially reasonable efforts to obtain all consents, approvals or authorizations of all
governmental authorities or agencies or third parties required for the execution, delivery and performance by Seller of this Agreement
and the consummation by it of all transactions contemplated hereby or for the assumption by Purchaser of the Real Property Lease,
the Equipment Leases, the Assignable Contracts and the Safe Deposit Contracts.

 

ARTICLE VII

CONDITIONS TO PURCHASER'S OBLIGATIONS

 

The obligations of
Purchaser to complete the transactions contemplated in this Agreement are conditioned upon fulfillment, on or before the Closing,
of each of the following conditions:

 

Section 7.1. Representations
and Warranties True.

 

The representations
and warranties made by Seller in this Agreement shall be true in all material respects on and as of the Effective Time as though
such representations and warranties were made at and as of such time, except to the extent otherwise provided herein or consented
to by Purchaser.

 

    	28

    	 

    

 

Section 7.2. Obligations Performed.

 

Seller shall (a) deliver
or make available to Purchaser those items required by Section 2.2, and (b) perform and comply in all material respects with all
obligations and agreements required by this Agreement to be performed or complied with by it prior to or on the Effective Time.

 

Section 7.3. No Adverse Litigation.

 

As of the Effective
Time, no action, suit or proceeding shall be pending or threatened against Seller which is reasonably likely to (a) materially
and adversely affect the business, properties and assets of the Banking Centers, or (b) materially and adversely affect the transactions
contemplated herein.

 

Section 7.4. Regulatory Approval.

 

		(a)	Purchaser shall have received all necessary regulatory approvals of the transactions provided in
this Agreement, all notice and waiting periods required by law to pass shall have passed, no proceeding to enjoin, restrain, prohibit
or invalidate such transactions shall have been instituted or threatened, and any conditions of any regulatory approval shall have
been met.

 

		(b)	Such approvals shall not have imposed any condition which is materially disadvantageous or burdensome
to Purchaser in its sole discretion.

 

Section 7.5.
Plans for Chapel Hill Branch

 

Purchaser shall have
received clarification from appropriate authorities of the City of Chapel Hill with respect to plans approved by the City for a
proposed branch to be located on the Unimproved Real Property.

 

Section 7.6.
Consent of Landlord

 

Seller shall deliver
on or before the Effective Time written consent of the landlord to the assignment of the Real Property Lease from Seller to Purchaser.

 

ARTICLE VIII

CONDITIONS TO SELLER'S OBLIGATIONS

 

The obligations of
Seller to complete the transactions contemplated in this Agreement are conditioned upon fulfillment, on or before the Closing,
of each of the following conditions:

 

Section 8.1. Representations
and Warranties True.

 

The representations
and warranties made by Purchaser in this Agreement shall be true in all material respects at and as of the Effective Time as though
such representations and warranties were made at and as of such time, except to the extent otherwise provided herein or consented
to by Seller.

 

    	29

    	 

    

 

Section 8.2. Obligations Performed.

 

Purchaser shall (a)
deliver to Seller those items required by Section 2.2, and (b) perform and comply in all material respects with all obligations
and agreements required by this Agreement to be performed or complied with by it prior to or on the Effective Time.

 

Section 8.3. No Adverse Litigation.

 

As of the Effective
Time, no action, suit or proceeding shall be pending or threatened against Purchaser which might materially and adversely affect
the transactions contemplated hereunder.

 

Section 8.4. Regulatory Approval.

 

Purchaser shall have
received from the appropriate regulatory authorities approval of the transactions contemplated herein, waiting periods required
by law to pass shall have passed, no proceeding to enjoin, restrain, prohibit or invalidate such transactions shall have been instituted
or threatened, and any conditions of any regulatory approval shall have been met.

 

Section 8.5.
Release from the Real Property Lease.

 

Seller shall have been
released by the landlord from all liability under the Real Property Lease for all obligations that accrue under such Real Property
Lease after the Effective Time.

 

ARTICLE IX

TERMINATION

 

Section 9.1. Methods of Termination.

 

This Agreement may
be terminated in any of the following ways:

 

		(a)	by either Purchaser or Seller, in writing five (5) calendar days in advance of such termination,
if the Closing has not occurred by September 30, 2012, unless such date is extended in writing by mutual agreement of the parties;

 

		(b)	at any time on or prior to the Effective Time by the mutual consent in writing of Purchaser and
Seller;

 

		(c)	by Purchaser in writing if the conditions set forth in Article VII (with the exception of delivery
of items required to be delivered at Closing) of this Agreement shall not have been met by Seller or waived in writing by Purchaser
within 30 calendar days following the date of all approvals by regulatory agencies and after all statutory waiting periods have
expired;

 

    	30

    	 

    
 

		(d)	by Seller in writing if the conditions set forth in Article VIII of this Agreement shall not have
been met by Purchaser or waived in writing by Seller within 30 calendar days following the date of all approvals by regulatory
agencies and after all statutory waiting periods have expired;

 

		(e)	any time prior to the Effective Time, by Purchaser or Seller in writing if the other shall have
been in breach of any representation and warranty in any material respect (as if such representation and warranty had been made
on and as of the date hereof and on the date of the notice of breach referred to below), or in breach of any covenant, undertaking
or obligation contained herein, and such breach has not been cured by the earlier of 30 calendar days after the giving of notice
to the breaching party of such breach or the Effective Time; provided, however, that there shall be no cure period in connection
with any breach of Section 6.3, so long as such breach by Purchaser was not caused by any action or inaction of Seller, and Seller
may terminate this Agreement immediately if regulatory applications are not filed within 30 calendar days after the date of this
Agreement as provided in that Section; or

 

		(f)	by Purchaser or Seller in writing at any time after any applicable regulatory authority has denied
approval of any application of Purchaser or Seller for approval of the transactions contemplated herein.

 

Section 9.2. Procedure Upon Termination.

 

In the event of termination
pursuant to Section 9.1, and except as otherwise stated therein, written notice thereof shall be given to the other party, and
this Agreement shall terminate immediately upon receipt of such notice unless an extension is consented to by the party having
the right to terminate. If this Agreement is terminated as provided herein,

 

		(a)	each party will return all documents, work papers and other materials of the other party, including
photocopies or other duplications thereof, relating to this transaction, whether obtained before or after the execution hereof,
to the party furnishing the same; and

 

		(b)	all information received by either party hereto with respect to the business of the other party
(other than information which is a matter of public knowledge or which has heretofore been published in any publication for public
distribution or filed as public information with any governmental authority) shall not at any time be used for any business purpose
by such party or disclosed by such party to third persons.

 

    	31

    	 

    
 

Section 9.3. Payment of Expenses.

 

If the transactions
contemplated herein are not consummated because of a party's breach of this Agreement, in addition to such damages as may be recoverable
in law or equity, the other party shall be entitled to recover from the breaching party, upon demand, itemization and documentation,
its reasonable outside legal, accounting, consulting and other out-of-pocket expenses.

 

ARTICLE X

MISCELLANEOUS PROVISIONS

 

Section 10.1. Amendment and Modification.

 

This Agreement may
be amended, modified, or supplemented only by written agreement of the parties.

 

Section 10.2. Waiver or Extension.

 

Except with respect
to required approvals of the applicable governmental authorities, either party, by written instrument signed by a duly authorized
officer, may extend the time for the performance of any of the obligations or other acts of the other party and may waive (a) any
inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (b) compliance
with any of the undertakings, obligations, covenants or other acts contained herein. The waiver of any breach of any provision
under this Agreement by any party herein shall not be deemed to be a waiver of any preceding or subsequent breach under this Agreement.

 

Section 10.3. Assignment.

 

This Agreement and
all of the provisions hereof shall be binding upon, and shall inure to the benefit of, the parties hereto and their permitted assigns,
but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other.

 

Section 10.4. Confidentiality

 

Seller and Purchaser
agree that the Confidentiality Agreement dated May 6, 2011 between Seller and Purchaser (the "Confidentiality Agreement")
shall survive the execution hereof and the consummation of the transactions contemplated herein.

 

    	32

    	 

    

 

Section 10.5. Time of Essence.

 

TIME IS OF THE ESSENCE
WITH RESPECT TO THE OBLIGATIONS TO BE PERFORMED UNDER THIS AGREEMENT.

 

Section 10.6. Addresses for Notices

 

All notices, requests,
demands, consents and other communications provided for hereunder and under the related documents shall be in writing and transmitted
by nationally recognized air courier (charges prepaid), telecopied or personally delivered (with receipt thereof acknowledged),
effective upon receipt, to the applicable party at the address indicated below:

 

	If to Seller:	The Bank of Hampton Roads
	 	999 Waterside Dr., Suite 200
	 	Norfolk, Virginia  23510
	 	Attn:   Douglas J. Glenn, President and CEO
	 	Telephone:  (757) 217-3634
	 	Fax:  (757) 217-3656
	 	 
	With a copy to:	Williams Mullen
	 	999 Waterside Dr., Suite 1700
	 	Norfolk, Virginia 23510
	 	Attn: William A. Old, Jr.
	 	Telephone: (757) 629-0613
	 	Fax: (757) 629-0660
	 	 
	If to Purchaser:	Bank of North Carolina
	 	1226 Eastchester Drive
	 	High Point, North Carolina 27265
	 	Attn:  ____________
	 	Telephone:  (336) 476-9200
	 	Fax: 
	 	 
	With a copy to:	 
	 	 
	 	Attn: 
	 	Telephone: 
	 	Fax: 

 

or, as to each party, at such other address
as shall be designated by such party by notice to the other party complying with the terms of this Section.

 

Section 10.7. Counterparts

 

This Agreement may
be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement and any subsequent amendment hereto may be delivered either by a party or
its counsel by facsimile machine or by PDF document via email to the other party or its counsel and the signatures so transmitted
constitute original signatures and are binding on the party so signing. After any such transmission, the parties shall further
deliver to each other original or hard copies, with original signatures, of this Agreement or any amendments, but such further
delivery, or failure thereof, shall not affect the validity or timing of this Agreement or any such amendment.

 

    	33

    	 

    

 

Section 10.8. Headings.

 

The headings of the
Sections and Articles of this Agreement are inserted for convenience only and shall not constitute a part thereof.

 

Section 10.9. Governing Law.

 

This Agreement shall
be governed by, and construed in accordance with, the laws of the State of North Carolina.

 

Section 10.10. Sole Agreement.

 

Except for the Confidentiality
Agreement, this Agreement and the exhibits and attachments hereto represent the sole agreement between the parties respecting the
transactions contemplated hereby, and all prior or contemporaneous written or oral proposals, agreements in principle, representations,
warranties and understandings between the parties with respect to such matters are superseded hereby and merged herein.

 

Section 10.11. Severability.

 

If any provision, paragraph,
sentence, change or phrase of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.

 

Section 10.12. Parties In Interest.

 

Nothing in this Agreement,
express or implied, including, without limitation the provisions of Section 1.5(a) and (c), is intended or shall be construed to
confer upon or give to any person (other than the parties hereto, their successors and permitted assigns) any rights or remedies
under or by reason of this Agreement, or any term, provision, condition, undertaking, warranty, representation, indemnity, covenant
or agreement contained herein.

 

    	34

    	 

    

 

Section 10.13. Survival.

 

All representations,
warranties and covenants contained in or made pursuant to this Agreement shall survive the execution and delivery of the Agreement
and shall continue in full force and effect for a period of six (6) months after the Closing Date and thereafter shall terminate,
except as to any claim with respect to a representation and warranty for which written notice shall have been given prior to the
end of such six (6) month period; and provided, further, that all covenants or agreements that by their terms are to be performed
after the Closing Date shall survive until fully discharged.

 

[Signature Page Follows.]

 

    	35

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Purchase and Assumption Agreement to be duly executed by their duly authorized officers as
of the date first written above.

 

	SELLER:	 
	 	 
	THE BANK OF HAMPTON ROADS	 
	 	 	 
	By:	 	 
	 	 	 
	Name: 	 	 
	 	 	 
	Title:	 	 
	 	 	 
	 	 	 
	PURCHASER:	 
	 	 
	BANK OF NORTH CAROLINA	 
	 	 	 
	By:	 	 
	 	 	 
	Name: 	 	 
	 	 	 
	Title:	 	 

 

    	36

    	 

    
 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

SCHEDULE AND EXHIBIT LIST

 

	Schedule No.	 	Description
	 	 	 
	1	 	Banking Centers
	1.1(a)(1)	 	Improved Real Property
	1.1(a)(2)	 	Unimproved Real Property
	1.1(a)(3)	 	Leased Real Property
	1.1(a)(4)	 	Personal Property
	1.1(a)(5)	 	Equipment Leases and Assignable Contracts
	1.1(b)	 	Excluded Assets
	1.2(a)(2)	 	Banking Centers Where Deposit Liabilities Are Being Sold
	1.3(a)	 	Deposit Liabilities
	1.5	 	Employees Who Will Be Considered for Employment
	4.6(a)	 	Agreements Regarding the Real Property
	 	 	 
	Exhibit No.	 	Description
	1.4(k)	 	Power of Attorney
	2.2(b)(2)	 	Form of Bill of Sale
	2.2(b)(3)	 	Form of Assignment and Assumption Agreement
	2.2(b)(13)	 	Form of Closing Statement

 

    	37

    	 

    

 

SCHEDULE 1 

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Banking Centers

   

	Preston Corners:	4725 SW Cary Pkwy Cary, NC
	Chapel Hill:	504 Meadowmont Village Circle Chapel Hill,
    NC

 

    	1

    	 

    

 

SCHEDULE 1.1(a)(1)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Improved Real Property

 

Preston Corners:          4725 SW Cary Pkwy Cary, NC

 

    	2

    	 

    

 

SCHEDULE 1.1(a)(2)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Unimproved Real Property

 

Chapel Hill Land:          5002 Barbee Chapel Road, Chapel Hill, NC

 

    	3

    	 

    

 

SCHEDULE 1.1(a)(3)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Leased Real Property

 

Chapel Hill:          504
Meadowmont Village Circle, Chapel Hill, NC

 

    	4

    	 

    

 

SCHEDULE 1.1(a)(4)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Personal Property

 

See report.

 

    	5

    	 

    

 

SCHEDULE 1.1(a)(5)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Equipment Leases and Assignable
Contracts

 

None.

 

    	6

    	 

    

 

SCHEDULE 1.1(b)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Excluded Assets

 

Loans.

 

    	7

    	 

    

 

SCHEDULE 1.2(a)(2)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Banking Centers Where Deposit Liabilities
Are Being Sold

 

Preston Corners:           4725
SW Cary Pkwy, Cary, NC

 

Chapel Hill:                  504
Meadowmont Village Circle, Chapel Hill, NC

 

    	8

    	 

    

 

SCHEDULE 1.3(a)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Deposit Liabilities

 

Listing made available
to Purchaser as a part of Purchaser's due diligence investigation, which will be updated following the Closing.

 

    	9

    	 

    

 

SCHEDULE 1.5

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Employees That Will Be Considered for Employment

 

Bank of Hampton Roads/Gateway Employees
who will be Potential Rehire Candidates with Bank of North Carolina

 

Preston Corners 

 

All branch staff to be considered

 

Chapel Hill

 

All branch staff to be considered

 

    	10

    	 

    

 

SCHEDULE 4.6(a)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

Agreements Regarding the Real Property

 

Chapel Hill:             504
Meadowmont Village Circle, Chapel Hill, NC 

Lease between DDRM Meadowmont Village Center
LLC and Gateway Bank & Trust Company, dated November 14, 2007. (consent required for assignment)

 

    	11

    	 

    

 

EXHIBIT 1.4(k)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

POWER OF ATTORNEY

 

THIS POWER OF ATTORNEY
is dated this                   
day of                    2012,
by The Bank of Hampton Roads, a Virginia chartered bank ("Seller"), to be effective as of 5:00 p.m. on                   
,            2012.

 

WITNESSETH:

 

WHEREAS, Seller and
Bank of North Carolina ("Purchaser") have entered into a Purchase and Assumption Agreement dated as of _______________,
2012 (the "Agreement"), which provides for the sale by Seller to Purchaser of certain personal property; and

 

WHEREAS, in a Bill
of Sale to Purchaser dated ___________, 2012 (the "Bill of Sale"), Seller has agreed, from time to time, at the request
of Purchaser to execute, acknowledge and deliver to Purchaser any and all instruments, documents, endorsements, assignments, information,
materials and other papers that may be reasonably required to (i) transfer to Purchaser certain Assets (as defined in the Bill
of Sale) being acquired by Purchaser pursuant to the Agreement and (ii) give full force and effect to the intent and purpose of
the Bill of Sale.

 

NOW, THEREFORE, for
good and valuable consideration, receipt of which is hereby acknowledged, Seller hereby irrevocably appoints and authorizes the
President or any Vice President, or the Secretary or any Assistant Secretary, of Purchaser as its attorney-in-fact solely for the
purpose of endorsing and recording, pursuant to the Bill of Sale, certificates of title for vehicles, amendments to financing statements,
continuation statements, financing statements, and similar documents related to the other Assets transferred pursuant to the Bill
of Sale, provided, such power of attorney is not intended to and does not convey to Purchaser any right to endorse or record
any documents relating to collateral other than collateral transferred pursuant to the Bill of Sale as described in the preceding
paragraph.

 

[Signature Page Follows.]

 

    	12

    	 

    

 

IN WITNESS WHEREOF,
Seller has caused this Power of Attorney to be duly executed by its duly authorized officer as of the day and year first above
written.

 

	WITNESSES:	 	 	The Bank of Hampton Roads
	 	 	 	 
	 	 	By:	 
	 	 	 	 
	 	 	Its:	 

 

STATE OF _____________________

COUNTY OF ___________________

 

Before me, the undersigned
Notary Public, in and for the State and County aforesaid, duly commissioned, qualified and acting, personally appeared                         ,
with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged
him/herself to be                                
of The Bank of Hampton Roads, a Virginia chartered bank, and s/he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the association by him/herself as such officer

 

WITNESS my hand and
official seal of office at                              ,
                   County, __________,
this the ____ day of                         ,
2012.

 

	 	 
	 	Notary Public

 

My commission expires:
              
                 

 

    	13

    	 

    

 

EXHIBIT 2.2(b)(2)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

BILL OF SALE

 

THIS BILL OF SALE is dated
this ____ day of ______________, 2012, by The Bank of Hampton Roads, a Virginia chartered bank ("Seller").

 

WHEREAS, Seller and
Bank of North Carolina, a North Carolina chartered bank ("Purchaser"), have entered into a Purchase and Assumption Agreement
dated as of _____________, 2012 (the "Agreement"), which provides for the sale by Seller to Purchaser of certain personal
property and loans related to Seller's offices located in the State of North Carolina as set forth in Schedule 1 hereto (the
"Banking Centers"), all as set forth in the Agreement;

 

NOW, THEREFORE, Seller,
for good and valuable consideration, receipt of which is hereby acknowledged, does hereby grant, bargain, sell, assign, set over,
convey and transfer to Purchaser all of its right, title and interest in and to the following assets (the "Assets"):
The Personal Property, the Coins and Currency (as such terms are defined in the Agreement), and all of Seller's files and records
related to the Loans, the Equipment Leases and Deposit Liabilities (as such terms are defined or described in the Agreement).

 

Seller, for itself
and its successors and assigns, does hereby covenant to Purchaser and its successors and assigns that it (i) makes the representations
and warranties with respect to the Assets contained in the Agreement and (ii) shall, from time to time, at the request of Purchaser,
execute, acknowledge and deliver to Purchaser any and all further instruments, documents, endorsements, assignments, information,
materials and other papers that may be reasonably required to transfer the Assets to Purchaser, to enable Purchaser to bill, collect,
service and administer the Loans and to give full force and effect to the full intent and purposes of this Bill of Sale.

 

This Bill of Sale shall
be binding upon, and shall inure to the benefit of Seller and each of its successors and assigns and shall be subject to the terms
and conditions of the Agreement. In the event of a conflict between any of the terms and provisions hereof and the Agreement, the
Agreement shall be deemed to control. The Seller makes the representations and warranties with respect to the Assets contained
in the Agreement.

 

    	14

    	 

    

 

This Bill of Sale,
and the rights and obligations of the parties hereunder, shall be governed by, and construed in accordance with, the laws of the
State of North Carolina.

 

This instrument shall
be effective as of the Effective Time, as defined in the Agreement.

 

[Signature Page Follows.]

 

    	15

    	 

    

 

IN WITNESS WHEREOF,
Seller has caused this Bill of Sale to be duly executed by its duly authorized officers and its corporate seal to be affixed hereto,
effective as of the Effective Time, as defined in the Agreement.

 

	 	THE BANK OF HAMPTON ROADS
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

    	16

    	 

    

 

EXHIBIT 2.2(b)(3)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND
ASSUMPTION AGREEMENT is entered into this ____ day of _______________, 2012, by and between The Bank of Hampton Roads, a Virginia
chartered bank (“Seller"), and Bank of North Carolina, a North Carolina chartered bank ("Purchaser").

 

WITNESSETH:

 

WHEREAS, Seller and
Purchaser have entered into a Purchase and Assumption Agreement dated as of _____________, 2012 (the "Agreement"), which
provides for the assignment by Seller of all of its rights and interests in and to certain leases, contracts, deposit accounts
and other liabilities related to Seller's offices located at the Banking Centers as defined in the Agreement, and the assumption
by Purchaser of Seller's liabilities and obligations thereunder, all as set forth in the Agreement;

 

NOW, THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration, receipt of which is hereby acknowledged by Seller
and Purchaser, Seller hereby assigns, transfers and sets over to Purchaser all of Seller's rights and interest to, and Purchaser
does hereby assume all of Seller's liabilities and obligations in connection with, the following assets (the "Assets");

 

		(a)	The Real Property Lease, Equipment Leases and Assignable Contracts as defined in the Agreement;

 

		(b)	All deposit accounts located at the Banking Centers, except for those deposit accounts and liabilities
described in Section 1.3(b) of the Agreement, and all merchant services accounts associated therewith; and

 

		(c)	All Safe Deposit Contracts as defined in the Agreement.

 

    	17

    	 

    

 

This Assignment and
Assumption Agreement shall be binding upon, and shall inure to the benefit of, Seller, Purchaser, and each of their successors
and assigns and shall be subject to the terms and conditions of the Agreement. In the event of a conflict between any of the terms
and provisions hereof and the Agreement, the Agreement shall be deemed to control. The Seller makes the representations and warranties
with respect to the Assets contained in the Agreement.

 

This Assignment and
Assumption Agreement, and the rights and obligations of the parties hereunder, shall be governed by, and construed in accordance
with, the laws of the State of North Carolina.

 

This instrument shall
be effective as of the Effective Time, as defined in the Agreement.

 

[Signature Page Follows.]

 

    	18

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Assignment and Assumption Agreement to be executed by their duly authorized officers and their
corporate seals to be affixed hereto, all as of the day and year first above written.

 

	 	THE BANK OF HAMPTON ROADS 
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 
	 	 	 
	 	BANK OF NORTH CAROLINA
	 	 	 
	 	By: 	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

    	19

    	 

    

 

EXHIBIT 2.2(b)(13)

 

PURCHASE AND ASSUMPTION AGREEMENT

 

Between

The Bank of Hampton Roads

and 

Bank of North Carolina

 

CLOSING STATEMENT

 

(Pre-Closing Balance Sheet as of ______________)

 

	Cash due Purchaser for:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Deposit liability (including accrued interest)	 	$	 	 	 			 
	 	 	 	 	 	 	 	 	 
	Pro rata safe deposit box rental	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Pro rata property taxes*	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Deed stamps*	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total Cash due Purchaser	 	 	  	 	 	$	 	 
	 	 	 	 	 	 	 	 	 
	Cash due Seller for:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Real and Personal Property	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Coins and Currency	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Premium for  Deposit Liabilities	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Deed Stamps*	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Pro rata property taxes*	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Prepayments	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Total Cash due Seller	 	 	  	 	 	$	 	 
	 	 	 	 	 	 	 	 	 
	Net cash due Purchaser	 	 	  	 	 	$	 	 

 

*Only for
party that has paid or is required to pay the obligation.

 

    	20

    	 

    

 

Seller hereby approves
the Closing Statement. Purchaser hereby approves the Closing Statement and acknowledges receipt of the Total Cash Due Purchaser.
Seller and Purchaser agree to make subsequent adjustments to the extent necessary in accordance with Section 2.3 of the Purchase
and Assumption Agreement between Seller and Purchaser dated as of ___________, 2012.

 

This the ____ day of
_______________, 2012.

 

	 	THE BANK OF HAMPTON ROADS
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 
	 	 	 
	 	BANK OF NORTH CAROLINA
	 	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

    	21EXHIBIT 10.1

 

TRADEMARK AND DOMAIN NAME LICENSE AGREEMENT

 

This Trademark and
Domain Name License Agreement (this “Agreement”) is entered into by and between Riviera Operating Corporation,
a Nevada corporation (“Licensor”), on the one hand, and Riviera Black Hawk, Inc., a Colorado corporation (“Licensee”),
on the other hand. Licensor and Licensee (each, a “Party,” and, collectively, the “Parties”)
agree to the terms herein as of April 26, 2012 (the “Effective Date”).

 

RECITALS

 

		A.	Monarch Growth Inc., a Nevada corporation (“Buyer”), and Licensor have entered
into a Stock Purchase Agreement along with Riviera Holdings Corporation, a Nevada corporation, and Monarch Casino & Resort,
Inc., a Nevada corporation, dated as of September 29, 2011 (the "Purchase Agreement"), pursuant to which Buyer
agreed to purchase all of the issued and outstanding stock of Licensee and Licensee and Licensor agreed to enter into this Agreement.

 

		B.	Concurrently with the execution of this Agreement, Buyer is purchasing all of the issued and outstanding
stock of Licensee and will concurrently assume the operation of the Riviera Casino in Black Hawk, Colorado (hereinafter referred
to as the “Black Hawk Casino”).

 

		C.	Licensor is the owner of trademark rights in the trademarks listed on Exhibit A attached
hereto (collectively, the “Riviera Marks”) and is the owner and registrant of the domain names rivierablackhawk.com
and rivwinners.com (the “Domain Names”).

 

		D.	Licensor is willing to license to Licensee the Riviera Marks and the Domain Names for use at and
in connection with the Black Hawk Casino for a transition period.

 

In consideration of
the mutual covenants of the Parties and other valuable consideration, the sufficiency and receipt of which is hereby acknowledged,
the Parties agree as follows:

 

TERMS

 

		1.	GRANT OF LICENSE. Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee permission to use the Domain Names for a website (and the domain name rivwinners.com in connection with
email marketing) and an exclusive (within the town of Black Hawk, Colorado), royalty-free, fully paid license to use the Riviera
Marks, in connection with the operation, promotion and marketing of the Black Hawk Casino and in connection with goods and services
specifically related to the Black Hawk Casino, for the Term (defined below). Licensee agrees to operate the Black Hawk Casino pursuant
to this license for the Term in compliance with the terms of this Agreement, including, without limitation, the Quality Standard
(as defined below). Licensee shall not use the Riviera Marks or the Domain Names in connection with any other casino, hotel, hotel/casino,
business or activities anywhere in the world at any time, except as expressly permitted in this Agreement. Licensee acknowledges
and agrees that all duties, covenants and obligations of Licensee under this Agreement are material to Licensor as a condition
of granting this license to Licensee. Licensor specifically reserves all rights not herein granted. Nothing in the foregoing shall
limit Licensor’s right to market goods and services under the trademark RIVIERA throughout the world; provided however, that
for three years after the Effective Date, Licensor (or its affiliates or licensees other than Licensee) shall not operate a casino
in the state of Colorado using the trademark RIVIERA.

 

 

    	-1-

    	 

    
 

 

		2.	TERM. The term of this Agreement shall be for a period of twelve months, commencing
on the Effective Date, (the “Initial Term”) which Initial Term may be extended for up to an additional six (6)
months upon Licensee’s written request to Licensor, specifying the additional time desired, no later than sixty (60) days
prior to the expiration of the Initial Term (the Initial Term and any extension, the “Term”). Notwithstanding
the foregoing, Licensor shall, for up to thirty (30) months after the Effective Date of this Agreement, cause the Domain Names
to redirect to the Black Hawk Casino website designated by Licensee and redirect email sent to the rivwinners.com domain to the
email domain designated by Licensee. Licensor may terminate such redirection on the same basis and in the same manner as Licensor
may terminate this Agreement.

 

		3.	ASSIGNMENT; NO SUBLICENSING. This Agreement and the licenses granted in this Agreement
may not be assigned by Licensee without the express prior written consent of Licensor, which consent may be withheld in Licensor’s
sole and absolute discretion. Licensee may not grant any sub-licenses with respect to the licenses granted in this Agreement to
any third parties without the prior express written permission of Licensor, which permission may be withheld in Licensor’s
sole and absolute discretion.

 

		4.	QUALITY CONTROL.
Licensee acknowledges that providing substandard services and goods would have an adverse effect upon the reputation of
Licensor and the value of the goodwill represented by the Riviera Marks. Accordingly, Licensor agrees that it will take no action
that dilutes or damages the Riviera Marks, or any goodwill associated therewith. Further, Licensee shall take no action that impairs,
contests or tends to impair or contest the validity of, or Licensor’s respective rights, title and interest in and to, the
Domain Names or the Riviera Marks, or the goodwill associated therewith. Licensee agrees to operate, promote and market the Black
Hawk Casino and provide goods and services specifically related thereto at a level of quality that at least meets the quality of
services and goods provided during the one-year period prior to the Effective Date at the Black Hawk Casino, and in a manner that
fully complies with all local, state, and federal laws, and regulations (the “Quality Standard”). The offering
of goods or services that are consistent with the Quality Standard does not require prior approval by Licensor except in the case
of a Rebrand Mark (defined below) as discussed in Section 5 hereof.

 

		5.	MARKETING MATERIALS. The quality, contents and workmanship of all promotional, packaging
and advertising material containing or bearing the Riviera Marks (the “Ancillary Materials”) shall at all times
be of a high standard, feature proper usage of the Riviera Marks, and be of such style, appearance and quality as to be adequate
and suited to their exploitation to the best advantage and to the protection and enhancement of Licensor, the Riviera Marks and
the goodwill pertaining thereto; and no less than the best quality of Ancillary Material used at the Black Hawk Casino by Licensee’s
predecessor in interest during the one-year period prior to the Effective Date (the “Ancillary Materials Standard”).
The use of Ancillary Materials that are consistent with the Ancillary Materials Standard does not require prior approval by Licensor.
Notwithstanding the foregoing, any use of or reference to the Riviera Marks in conjunction with any other trademark for the purposes
of introducing or furthering the rebranding of the Black Hawk Casino under such other trademark (“Rebrand Mark”) must
be approved by Licensor in advance, such approval not to be unreasonably withheld. Licensee may submit to Licensor templates for
Licensor’s prior written approval of proposed reference to or usage of the Riviera Marks in conjunction with a Rebrand Mark
and, if Licensor approves such a template, Licensee may use or reference the Riviera Marks in conjunction with a Rebrand Mark in
accordance with that approved template, the Quality Standard, and the Ancillary Materials Standard, without obtaining Licensor’s
further approval.

 

 

    	-2-

    	 

    
 

 

		6.	SAMPLES AND INSPECTION. Licensee will supply Licensor, at Licensor’s request,
with samples of the Ancillary Materials and any goods bearing the Riviera Marks. Licensee agrees to permit Licensor or its representative
to conduct periodic inspections of the Black Hawk Casino in order to determine compliance with this Agreement. Notwithstanding
the foregoing, Licensor’s receipt of sample Ancillary Materials and goods (or observation during an inspection of the Black
Hawk Casino, goods, services or Ancillary Materials) that do not meet the Quality Standard or the Ancillary Materials Standard,
as applicable, will: (i) not serve as notice to Licensor by Licensee that any goods or services fail to meet the Quality Standard
or that any Ancillary Materials fail to meet the Ancillary Materials Standard and (ii) not act as a waiver if Licensor fails to
notify Licensee concerning a failure to meet the Quality Standard or the Ancillary Materials Standard. If the quality of a particular
good or service falls below the Quality Standard or if the quality of a particular Ancillary Material falls below the Ancillary
Material Standard, Licensee shall use commercially reasonable efforts to restore such quality. In the event that Licensee has not
taken appropriate steps to restore such quality within thirty (30) days after the earlier of: (i) written notification by Licensor
or (ii) such time as Licensee otherwise becomes aware of such quality issue, Licensor shall have the right to remove such good,
service or Ancillary Material from the scope of the license granted in this Agreement, and Licensee shall no longer be permitted
to manufacture, perform, offer, market, distribute or use such good, service or Ancillary Material under the Riviera Marks. Nothing
in the foregoing is intended to require prior approval of goods, services or Ancillary Materials under the Quality Standard or
the Ancillary Materials Standard except as set forth in Section 5.

 

		7.	INTELLECTUAL PROPERTY NOTICES. Licensee agrees to affix to goods and services bearing
the Riviera Marks, and to any Ancillary Materials, such legal notices as required by Licensor. In addition, wherever appropriate
and required by Licensor, Licensee shall affix the appropriate symbol ® or TM to any such material, as well as such other
reasonable notice or notices of trademark as requested by Licensor.

 

		8.	REGISTRATION. The Parties acknowledge and agree that Licensor has the right, but
not the obligation, to apply for any and all registrations in the United States and elsewhere for the Riviera Marks under its own
name. Licensee agrees to provide reasonable assistance to Licensor with respect to filing such applications and obtaining and maintaining
the resulting registrations for the Riviera Marks.

 

		9.	GOODWILL INURES TO BENEFIT OF LICENSOR. Licensee acknowledges that Licensor is the
owner of the Riviera Marks, including all goodwill associated therewith. Licensee further acknowledges that its use of the Riviera
Marks inures to the benefit of Licensor and that Licensee shall not acquire any rights therein. Licensor will retain all right,
title and interest in and to the Riviera Marks, including any goodwill associated therewith, subject to the limited license granted
to Licensee hereunder.

 

    	-3-

    	 

    
 

 

		10.	WARRANTEES, REPRESENTATIONS, ADDITIONAL COVENANTS AND INDEMNIFICATION.

 

a.           
Licensor represents and warrants that it has full right, power and authority to enter into this Agreement and that it owns
all necessary rights in and to the Riviera Marks and the Domain Names to grant the license under this Agreement to Licensee. Licensor
agrees to defend, indemnify, save and hold harmless Licensee, its Affiliates and their respective Representatives, equityholders,
successors and assigns from and against any and all costs, losses, liabilities, damages, claims, demands, expenses, including interest,
penalties, actual and reasonable professional fees (including, but not limited to, attorneys’ fees) and all amounts paid
in investigation, defense or settlement of any of the foregoing (collectively, “Damages”), paid or incurred,
in connection with, arising out of or resulting from any breach of the warranties or the inaccuracy of any of the representations
set forth in the foregoing sentence. "Affiliate" means, with respect to any Person, any other Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first-mentioned
Person. "Person" means an individual, corporation, limited liability company, partnership (of any kind), association,
trust, unincorporated organization, other entity or "group" (as defined in Rule 13d-5(b)(1) promulgated under the Securities
Exchange Act of 1934, as amended), or Governmental Entity. "Governmental Entity" means any (i) nation, state,
commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature, or any political subdivision
thereof, (ii) federal, state, local, municipal, foreign or other government, or (iii) governmental or quasi-governmental authority
of any nature (including any governmental division, department, bureau, agency, commission, instrumentality, official, organization,
body or entity and any court, arbitrator or other tribunal). "Representatives" means, with respect to any Person,
the Gaming Representatives, employees, financial advisors, legal advisors, agents or other representatives of such Person. "Gaming
Representative" means, with respect to any Person, the directors, officers, key employees, shareholders, members or managers
of such Person, or Persons otherwise holding any ownership interest in such Person.

 

b.           
Licensee represents and warrants that it has full right, power and authority to enter into this Agreement. Licensee agrees
that: (i) it shall comply with all applicable laws and regulations in connection with the use, manufacture, production, performance,
sale, distribution, advertising and promotion of goods and services relating to, and the use of the Domain Names in connection
with, the Black Hawk Casino; (ii) it shall be solely responsible for the manufacture, production, performance, sale, distribution,
advertising and promotion of goods and services relating to, and the use of the Domain Names in connection with, the Black Hawk
Casino, and will bear all related costs associated therewith; (iii) it will conduct itself in a business-like and professional
manner so as not to bring disrepute to the Riviera Marks; (iv) any actions taken by Licensee in connection with the Riviera Marks
and the use of the Domain Names shall not infringe upon any intellectual property right or misappropriate any third party trade
secret(s) or confidential information; and (v) it has not taken, and will not take during the Term, any action in conflict with
this Agreement. Licensee agrees to defend, indemnify, save and hold harmless Licensor, its Affiliates and their respective Representatives,
equityholders, successors and assigns from and against any and all Damages paid or incurred, in connection with, arising out of
or resulting from (x) any breach of the warranties or the inaccuracy of any of the representations set forth in this Section 10(b),
(y) Licensee’s use of the Riviera Marks or the Domain Names, or (z) any breach or of failure to perform any covenant or agreement
made, or to be performed, by Licensee in this Agreement.

 

 

    	-4-

    	 

    
 

 

		11.	IMMEDIATE TERMINATION. Licensor shall have the right to immediately terminate this
Agreement by giving written notice to Licensee in the event that Licensee does any of the following:

 

a.           
files a petition in bankruptcy or is adjudicated a bankrupt or insolvent, or makes an assignment for the benefit of creditors,
or an arrangement pursuant to any bankruptcy law, or if Licensee is unable to meet its financial obligations when they become due
or discontinues its business or a receiver is appointed for Licensee or for Licensee’s business and such receiver is not
discharged within thirty (30) days; or

 

b.           
breaches any of the provisions of this Agreement relating to the unauthorized assignment or sublicensing of the Agreement
or the licenses granted in this Agreement; or

 

c.           
after receipt of written notice from Licensor, fails to immediately discontinue the distribution or sale of goods or services
or the use of any Ancillary Materials pursuant to Section 6 hereof; or

 

d.           
undergoes a change of control of more than 50% of its outstanding shares, or merges, consolidates with or into any other
corporation or other entity, or directly or indirectly sells or otherwise transfers, sells or disposes of all or a substantial
portion of its business or assets.

 

Notwithstanding the foregoing,
if Licensor elects, in its sole discretion, to provide Licensee with notice and an opportunity to cure any breach described in
this Section 11, such action will not constitute a waiver of or bar to Licensor’s right to strictly enforce immediate termination
in the future, without any right to cure, in the event of the same or any other breach.

 

Licensee may terminate this Agreement
immediately (or upon the passage of such time as Licensee otherwise designates) upon written notice to Licensee.

 

		12.	TERMINATION AFTER NOTICE. In addition to the termination rights set forth in Section
11, this Agreement may be terminated by either Party upon thirty (30) days' written notice to the other Party in the event of a
material breach of a provision of this Agreement by the other Party, provided that, during the thirty (30)-day period, the breaching
Party fails to cure such breach.

 

		13.	EFFECT OF TERMINATION. Upon the expiration or termination of this Agreement, all
of the rights of Licensee under this Agreement shall forthwith terminate and immediately revert to Licensor (except, in the event
of expiration, for redirection of the Domain Names solely as expressly set forth in this Agreement), and Licensee shall immediately
discontinue all use of the Domain Names and the Riviera Marks, including discontinuing the use of any trade name incorporating
the Riviera Marks and changing any entity name incorporating the Riviera Marks and destruction of all Ancillary Materials at no
cost whatsoever to Licensor. Licensee recognizes and agrees that the use of any trademark, trade name, trade dress or other industrial
or intellectual property similar to the Riviera Marks has the potential to cause significant consumer confusion after termination
or expiration of this Agreement. Therefore, after expiration or termination of this Agreement, Licensee will not use or adopt the
use of any trademark, trade name, entity name, trade dress or other industrial or intellectual property that is not just confusingly
similar, but similar in any way to the Riviera Marks.

 

    	-5-

    	 

    
 

 

		14.	REMEDIES UPON BREACH. In the event that a Party breaches this Agreement, each Party
reserves the right to immediately assert any and all claims against the breaching Party that it deems appropriate, including, without
limitation, taking action to enforce the Agreement, and/or taking action to obtain or enforce a judgment against the breaching
Party.

 

		15.	ENFORCEMENT. Licensor shall have the sole right and responsibility to enforce the
Riviera Marks and shall retain 100% of any recovery it obtains in any such enforcement activity. Licensee, however, will promptly
notify Licensor of any infringement of the Riviera Marks of which it becomes aware and shall reasonably cooperate with Licensor,
at Licensor’s cost, in any such enforcement activity.

 

		16.	CONFIDENTIALITY. The Parties agree to keep the terms of
this Agreement confidential. This confidentiality provision does not restrict either Party in any way from making any internal
reports or reports to its affiliates or advisors concerning the terms of this Agreement consistent with its standard operating
procedures and a report to its Board of Directors in a public meeting or making such disclosure as may be required by law, regulation
or the rules of a stock exchange or trading market.

 

		17.	GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY.

 

a.           
This Agreement shall be governed by and construed in accordance with the internal substantive Laws (other than conflicts-of-law
principles) of the State of Nevada. Each Party irrevocably consents to the personal jurisdiction of the state and federal courts
located in the State of Nevada in connection with any controversy related to this Agreement, waives any argument that venue in
any such forum is not convenient and agrees that any litigation initiated by any of them in connection with this Agreement shall
be venued in a state or federal court located in Clark County, Nevada.

 

b.           
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND, THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE EITHER OF THE WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 17.

 

 

    	-6-

    	 

    

 

 

 

		18.	NOTICES. All notices and other communications under this Agreement shall be in writing
and shall be deemed given (a) on the date of delivery, if delivered by hand or sent by fax (which is confirmed) or e-mail
(which is confirmed), (b) on the first Business Day following the date of dispatch by a nationally recognized private overnight
courier service, or (c) on the fifth Business Day following the date on which it was deposited in the U.S. mail, postage prepaid,
if mailed by registered or certified mail (return receipt requested), to the Parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):

 

if to Licensee,
to:

 

Monarch Casino
& Resort, Inc.

Executive Offices

3800 South
Virginia Street

Reno, Nevada
89502

Attention:
John Farahi

Fax: (775)
332-9171

Jfarahi@atlantiscasino.com

 

with a copy to
(which shall not constitute notice):

 

Greenberg Traurig, LLP

3773 Howard Hughes Parkway, Suite 400N

Las Vegas, Nevada 89169

Attention: Michael J. Bonner

Fax: (702) 549-2728

Bonnerm@gtlaw.com

 

if to Licensor,
to:

 

Riviera Operating Corporation

2901 Las Vegas Boulevard South

Las Vegas, Nevada 89109

Attention: Tullio J. Marchionne

Fax: (702) 794-9560

tmarchionne@theriviera.com

 

with a copy to
(which shall not constitute notice):

 

Brownstein Hyatt Farber Schreck, LLP

410 Seventeenth Street, Suite 2200

Denver, CO 80202

Attention: Kevin A. Cudney

Fax: (303) 223-1111

kcudney@bhfs.com

 

		19.	INTERPRETATION. When a reference is made in this Agreement to Sections or exhibits,
such reference shall be to a Section or exhibit of this Agreement unless otherwise indicated. All exhibits to this Agreement are
incorporated herein by reference. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement. The phrase "made available" in this Agreement shall
mean that the information referred to has been made available if requested by the Party to whom such information is to be made
available.

 

 

    	-7-

    	 

    
 

 

		20.	HEADINGS. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

 

		21.	ENTIRE AGREEMENT. This Agreement and all documents and instruments referred to in
this Agreement constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, between
the Parties with respect to the subject matter of this Agreement. The Parties make no representations or warranties to each other,
except as contained in this Agreement, and any and all prior representations and warranties made by any Party or its representatives,
whether verbally or in writing, are deemed to have been merged into this Agreement, it being intended that no such prior representations
or warranties shall survive the execution and delivery of this Agreement.

 

		22.	SEVERABILITY. If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this
Agreement is not affected in any manner materially adverse to any Party or provision shall be ineffective to the extent, but only
to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such invalid, illegal or
unenforceable provision or provisions or any other provisions of this Agreement, unless such a construction would be unreasonable.

 

		23.	BINDING EFFECT; PARTIES OF INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each Party and their respective successors and assigns, and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of
this Agreement except as expressly provided in this Agreement, including in Section 10 (which, from and after the Effective Date,
shall be for the benefit of each indemnified Person set forth in Section 10).

 

		24.	MUTUAL DRAFTING. Each Party has had full opportunity to review and consider the contents
of this Agreement. All of the terms contained in this Agreement, including the Recitals concerning the intentions of the Parties
and the purpose of this Agreement, are material terms. Each Party has participated in the drafting of this Agreement, which each
Party acknowledges is the result of good faith negotiations among the Parties. In the event any ambiguity or question of intent
arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

 

		25.	AMENDMENT. This Agreement may be amended by Licensor and Licensee; provided, however,
that such amendment is effected by an instrument in writing signed on behalf of each of Licensor and Licensee.

 

 

    	-8-

    	 

    
 

 

		26.	EXTENSION; WAIVER. Any term or provision of this Agreement may be waived, or the
time for its performance may be extended, by the Party or Parties entitled to the benefit thereof. Any agreement on the part of
a Party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such Party.
The failure of any Party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision,
nor in any way to affect the validity of this Agreement or any Party or the right of any Party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

 

		27.	FACSIMILE SIGNATURES; COUNTERPARTS. This Agreement may be executed by facsimile and
in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed
to be an original but all of which taken together shall constitute one and the same agreement.

 

		28.	FEES AND EXPENSES. The Parties shall bear their own legal fees and costs incurred
in the negotiation of this Agreement and prior to the execution of this Agreement. However, in the event that legal action ensues
to compel performance of this Agreement, the prevailing party shall be entitled to an award of the reasonable costs and attorney’s
fees incurred in such action.

 

		29.	ACKNOWLEDGEMENT. Each Party acknowledges that it has read this Agreement, understands
it and agrees to be bound by its terms, that it has had the advice of counsel with respect to this Agreement, that it has the capacity
and right to enter into this Agreement, and that it accepts the duties, obligations, privileges and rights granted hereunder.

 

 

    	-9-

    	 

    
 

 

IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be signed by their respective duly authorized officers as of the Effective Date.

 

	Licensor:	Licensee
	 	 
	Riviera Operating Corporation	Riviera Black Hawk, Inc.
	 	 
	By:/s/ Andy Choy	By:/s/ Ronald Rowan
	Name: Andy Choy	Name: Ronald Rowan
	Its:President and Chief Executive Officer	Its:Treasurer

 

 

    	

    	 

    
 

EXHIBIT A

 

Riviera Marks

 

1. RIVIERA (US Trademark Registration No.
2090347

 

2.    (US Trademark Registration No. 3388841)

 

3.  (US Trademark Registration No. 2389433)

 

4. The word mark RIVIERA and the two stylized
RIVIERA marks referenced above each in conjunction with the phrase BLACK HAWK

 

5. THE RIV

 

6. LIVE AT THE RIV

 

7. WIN AT THE RIV

 

8. WIN AT THE RIV (Stylized)

 

9. RIVIERA PLAYER'S CLUB

 

10. R Logo -- Stylized "R" (without
a circle)

 

11. R Circle Logo -- Stylized "R"
inside a circle

 

12. R PLAYER'S CLUB -- featuring the R Circle
Logo

 

13. RIVWINNERS

 

14. RIV WINNERS

 

    	11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]