Document:

Unassociated Document

    Exhibit
10.3

    

    Execution
Copy

     

    SECURITY
AGREEMENT

    

    This
SECURITY AGREEMENT (this “Agreement”) is
entered into as of June 29, 2009, by and between ORAGENICS, INC., a Florida
corporation located at 13700 Progress Boulevard, Alachua, Florida 32615 (“Borrower”), and KOSKI
FAMILY LIMITED PARTNERSHIP, a Texas limited partnership having a mailing address
of 3525 Turtle Creek Boulevard, Unit 19-B, Dallas, Texas 75219 (“Lender”)

    

    Background

    

    
      	
              A.

            	
              On
      the date of this Agreement, Lender loaned Borrower One Million and No/100
      Dollars ($1,000,000.00) (the “Loan”),
      pursuant to the terms of a Secured Promissory Note of even date herewith
      executed by Borrower in favor of Lender in the principal amount of One
      Million and No/100 Dollars ($1,000,000.00) (the “Promissory
      Note”).

            

    

    

    
      	
              B.

            	
              As
      a material inducement for Lender to make the Loan to Borrower pursuant to
      the terms of the Promissory Note, Borrower has agreed to provide
      collateral security for the performance of its obligations and liabilities
      under the Promissory Note, pursuant to the terms and conditions of this
      Agreement.

            

    

    

    Terms and
Conditions

    

    For the
reasons described above, in consideration of the mutual promises and covenants
set forth in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged by the parties, Borrower
and Lender hereby agree as follows:

    
      	
               
      

            	 

    

    
      	
              1.

            	
              Definitions.  The
      following capitalized terms used in this Agreement shall have the meanings
      assigned to them in this Section 1, and
      shall include the plural as well as the singular
  number:

            

    

    

    
      	
               
      

            	
              1.1

            	
              “Collateral”
      means all of the following assets of Borrower, whether now owned or
      hereafter acquired by Borrower, and all products thereof, and all
      replacements, replenishments, additions, accessions, and substitutions
      thereof and the proceeds thereof (including, without limitation, insurance
      proceeds, cash, bank accounts, and
deposits):

            

    

    

    
      	
               
      

            	
              (a)

            	
              all
      patents, patent disclosures, trademarks, service marks, trade dress,
      logos, trade names, copyrights, art and mask works, manuals and
      information, and all registrations, applications, reissues, continuations,
      continuations in part or extensions thereof, and all associated goodwill
      for each of the foregoing, and all computer software, computer programs,
      computer data bases and related documentation and materials, data,
      documentation, trade secrets, confidential business information (including
      ideas, formulas, compositions, inventions, know how, business processes
      and techniques, research and development information, drawings, designs,
      plans, proposals and technical data, financial, marketing and business
      data, customer and supplier data, pricing and cost information) and other
      intellectual property rights (in whatever form or medium), whether owned
      or licensed by the Borrower, including, without limitation, the
      Intellectual Property (as defined in Section 5.1(a)
      below) described on Exhibit
      A.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              all
      inventory from any source or
supplier;

            

    

    

    
      	
               
      

            	
              (c)

            	
              all
      contract rights (including all property, casualty, and life insurance
      contracts owned by Borrower) and other rights and privileges of Borrower
      under any and all leases and other contracts between Borrower and any
      third party;

            

    

    

    
      	
               
      

            	
              (d)

            	
              all
      equipment, including, but not limited to, machinery, motor vehicles,
      furniture and furnishings, and office
equipment;

            

    

    

    
      	
               
      

            	
              (e)

            	
              all
      cash on hand and in bank accounts, marketable securities, certificates of
      deposit and similar items; and

            

    

    

    
      	
               
      

            	
              (f)

            	
              without
      limiting the generality of the foregoing, to the extent related to all or
      any part of the other Collateral, all books, correspondence, credit files,
      records, invoices, tapes, cards, computer runs and other papers and
      documents in the possession or under the control of Borrower or any
      computer bureau or service company from time to time acting for
      Borrower.

            

    

    

    
      	
               
      

            	
              1.2

            	
              “Event of
      Default”  means the occurrence of any one or more of the
      following events:

            

    

    

    
      	
               
      

            	
              (a)

            	
              any
      event of default under the Promissory
Note;

            

    

    

    
      	
               
      

            	
              (b)

            	
              any
      default by Borrower under this Agreement and if such default is capable of
      being remedied, such default remains unremedied for thirty (30) days,
      including the breach or material inaccuracy of any representation,
      warranty or covenant of Borrower under this
  Agreement;

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      inability of Borrower, or the admission by Borrower of its inability, to
      pay its debts as they mature, or the insolvency of
    Borrower;

            

    

    

    
      	
               
      

            	
              (d)

            	
              the
      filing against Borrower of an involuntary petition or other pleading
      seeking the entry of a decree or order for relief under the United States
      Bankruptcy Code or any similar federal or state insolvency or other
      similar law ordering: (i) the liquidation of Borrower, (ii) a
      reorganization of Borrower or the business and affairs of Borrower, or
      (iii) the appointment of a receiver, liquidator, assignee, custodian,
      trustee or similar official for Borrower or the property of Borrower, and
      the failure to have such petition or other pleading denied or dismissed
      within thirty (30) days from the date of
filing;

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (e)

            	
              (i)
      the commencement by Borrower of a voluntary case under the United States
      Bankruptcy Code or any similar federal or state insolvency or other
      similar law, (ii) the consent by Borrower to the appointment or taking
      possession by a receiver, liquidator, assignee, trustee, custodian or
      similar official for Borrower or any of the property of Borrower, (iii)
      the making by Borrower of an assignment for the benefit of creditors, or
      (iv) the failure by Borrower generally to pay its debts as they become
      due; or

            

    

    

    
      	
               
      

            	
              (f)

            	
              the
      making of any levy, seizure or attachment of or on the Collateral by any
      third party.

            

    

    

    
      	
               
      

            	
              1.3

            	
              “Liability” or
      “Liabilities”
      means all monetary obligations and liabilities of Borrower to Lender under
      the Promissory Note, whether now existing or hereafter incurred, matured
      or unmatured, direct or indirect, absolute or contingent, now due or
      hereafter to become due, as well as all costs and reasonable expenses of
      collection, including reasonable attorneys’ fees, paralegals’ fees and
      expenses for any primary, appellate, bankruptcy and post-judgment
      proceedings, incurred by Lender in connection with the enforcement of the
      Promissory Note or this Agreement.

            

    

    

    
      	
              2.

            	
              Grant of Security
      Interest.  To secure the full and punctual payment of all
      Liabilities, Borrower hereby grants to Lender a continuing security
      interest in the Collateral, free and clear of any and all prior liens,
      encumbrances or charges whatsoever.

            

    

    

    
      	
              3.

            	
              Perfection of Security
      Interest.  To perfect the security interest granted
      above, Borrower authorizes Lender to file financing statements in forms
      that are satisfactory to Lender (including amendments thereto and
      continuation statements thereof and filings with the United States Patent
      and Trademark Office), describing the Collateral and containing such
      legends as Lender deems necessary or appropriate to protect Lender’s
      interest in the Collateral. Borrower agrees to pay all taxes, fees and
      costs (including reasonable attorneys’ fees) paid or incurred by Lender in
      connection with the preparation, filing or recordation of such documents
      and instruments.  Borrower shall not file any amendments,
      correction statement or termination statements concerning the Collateral
      without the prior written consent of Lender.  Borrower shall,
      from time to time, at the request of Lender, execute such other documents
      and perform such other acts reasonably necessary or appropriate to
      establish and maintain a valid and perfected security interest in the
      Collateral, free of all other liens and claims
      whatsoever.  Borrower hereby appoints Lender as its
      attorney-in-fact (without requiring it to act as such) to perform all acts
      that Lender deems necessary or appropriate to perfect and continue its
      security interest in the Collateral.  Borrower hereby
      acknowledges that this power of attorney is coupled with an interest and
      is irrevocable until all Liabilities have been fully
  paid.

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

       

    

    
    

    
      	
              4.

            	
              Patents, Trademarks, etc.  Borrower
      shall notify Lender immediately upon the occurrence of each of the
      following (i) Borrower’s acquisition after the date of this Agreement of
      any material Intellectual Property and (ii) a Responsible Officer of
      Borrower obtaining knowledge, or reason to know, that any application or
      registration relating to any Intellectual Property owned by or licensed to
      Borrower is reasonably likely to become abandoned or dedicated, or of any
      material adverse determination or development (including, without
      limitation, the institution of, or any such determination or development
      in, any proceeding in the United States Copyright Office, the United
      States Patent and Trademark Office or any court) regarding Borrower’s
      ownership of any material Intellectual Property, its right to register the
      same, or to keep and maintain the same.  Borrower will,
      contemporaneously herewith, execute and deliver to Lender the Patent
      Security Agreement, Trademark Security Agreement and Copyright Security
      Agreement in the forms of Exhibit B, Exhibit C and Exhibit D hereto, as
      necessary, and shall execute and deliver to Lender any other document
      required to acknowledge or register or perfect Lender’s interest in any
      part of the Intellectual Property. Notwithstanding anything to the
      contrary contained in this Agreement, Lender shall only require perfection
      of its security interests in, or other registration with respect to, any
      patent, trademark or copyright registered, or eligible to be registered,
      with a country other than the United States or any political subdivision
      thereof, to the extent that Lender determines, in its sole discretion,
      that such patent, trademark or copyright, and the registration thereof in
      such other country or political subdivision thereof, is material to
      Borrower’s business.

            

    

    

    
      	
              5.

            	
              Representations and
      Warranties.  Borrower represents and warrants to Lender
      as follows:

            

    

    

    
      	
               
      

            	
              5.1

            	
              Representations and
      Warranties Regarding Intellectual
  Property.

            

    

    
      	
               
      

            	 

    

    
      	
               
      

            	
              (a)

            	
              Exhibit A
      attached to this Agreement contains a true, correct and complete list of
      all patents, trademarks, service marks, trade names and copyrights owned
      by Borrower, including any applications therefor (collectively, the “Intellectual
      Property”) and including, where applicable, the patent, trademark,
      service mark or copyright number (or application number), issue date and
      title.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Borrower
      is the sole and exclusive owner of all right, title and interest in and to
      the Intellectual Property and has not granted, nor does there exist by
      implication or operation of law, any license or other right in respect
      thereof which does or which will, subsequent to the date of this
      Agreement, permit or enable anyone other than Borrower to use any of the
      Intellectual Property.

            

    

    

    
      	
               
      

            	
              (c)

            	
              No
      individual or entity has any rights to utilize any Intellectual Property
      or sell any products or services which utilize or incorporate, or which
      were developed utilizing or incorporating, any Intellectual
      Property.

            

    

    

    
      	
               
      

            	
              (d)

            	
              There
      is no notice or pending or threatened claim against Borrower (and there
      has not been any such notice or claim) asserting (i) that any of the
      Intellectual Property infringes or violates the rights of third parties;
      (ii) that any of the Intellectual Property is invalid; (iii) that the
      present or past conduct of Borrower’s business infringes or violates any
      rights of others with respect to any of the Intellectual Property; (iv)
      that any individual or entity has any rights to utilize any of the
      Intellectual Property or sell any products or devices which utilize or
      incorporate, or which were developed utilizing or incorporating, any
      Intellectual Property; or (v) which could, if adversely determined against
      Borrower, adversely affect Borrower’s ability to utilize any of the
      Intellectual Property, and no basis for any such claim
    exists.

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (e)

            	
              Borrower
      has not given any notice to any third parties asserting infringement by
      such third parties upon any of the Intellectual
  Property.

            

    

    

    
      	
               
      

            	
              5.2

            	
              General
      Representations and
Warranties.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Borrower
      is a corporation duly organized, legally existing and in good standing
      under the laws of the State of
Florida.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Borrower
      is the owner of the Collateral free from any security interest,
      encumbrance, or lien, and will defend the Collateral against all claims
      and demands of all persons at any time claiming the
  same.

            

    

    

    
      	
               
      

            	
              (c)

            	
              No
      financing statement covering any Collateral or any proceeds thereof is on
      file in any public office, except for that which may be on file to perfect
      the security interest of Lender.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Borrower
      is not in default with respect to any of its existing indebtedness, and
      the making and performance of this Agreement will not violate any laws or
      result in a default under any contract, agreement, or instrument to which
      Borrower is a party or by which its property is bound, or result in the
      creation or imposition of any security interest in, or lien or encumbrance
      upon, any of its assets, except in favor of
  Lender.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Borrower
      has the power and authority to enter into and perform this Agreement and
      to incur the obligations herein provided for, and has taken all action
      necessary to authorize the execution, delivery, and performance of this
      Agreement.

            

    

    

    
      	
               
      

            	
              (f)

            	
              This
      Agreement, when delivered, will be valid, binding and enforceable against
      Borrower in accordance with its
terms.

            

    

    

    
      	
               
      

            	
              (g)

            	
              No
      representation, warranty or statement of Borrower hereunder omits to state
      any material fact necessary to make each representation or warranty or
      statement in this Agreement by Borrower accurate and not misleading in any
      material respect.

            

    

    

    
      	
              6.

            	
              Affirmative
      Covenants.  Borrower covenants that, until such time as
      all of the Liabilities have been fully satisfied paid, it
      shall

            

    

    

    
      	
               
      

            	
              6.1

            	
              take
      all actions necessary to prosecute any pending applications with respect
      to the Intellectual Property;

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.2

            	
              take
      all actions necessary to protect its rights with respect to the
      Intellectual Property, including bringing appropriate actions to prevent
      infringement of such rights;

            

    

    

    
      	
               
      

            	
              6.3

            	
              promptly
      notify Lender of any actual or threatened infringement of Borrower’s
      rights with respect to the Intellectual
  Property;

            

    

    

    
      	
               
      

            	
              6.4

            	
              promptly
      notify Lender of the occurrence of any Event of Default or any event or
      condition which, with the giving of notice and/or the lapse of time, could
      constitute an Event of Default;

            

    

    

    
      	
               
      

            	
              6.5

            	
              pay
      or cause to be paid when due, all taxes, assessments, and charges or
      levies imposed upon the Collateral;

            

    

    

    
      	
               
      

            	
              6.6

            	
              notify
      Lender thirty (30) days in advance of any change in the location of its
      business, or of the establishment of any new, or the discontinuance of any
      existing, place of business;

            

    

    

    
      	
               
      

            	
              6.7

            	
              continuously
      maintain, preserve, and keep in full force and effect, its corporate
      existence, good standing, and its right and privilege to conduct business
      in Florida;

            

    

    

    
      	
               
      

            	
              6.8

            	
              permit
      Lender or its representatives at any time to inspect as frequently as
      reasonably requested the Collateral, wherever located, and it shall fully
      and timely assist Lender in regard to such inspections to the extent
      requested by Lender; and

            

    

    

    
      	
               
      

            	
              6.9

            	
              maintain
      insurance, at full replacement cost, on the
  Collateral.

            

    

    

    
      	
              7.

            	
              Negative
      Covenants.  Borrower covenants that, until such time as
      all of the Liabilities have fully paid satisfied, it shall
    not

            

    

    

    
      	
               
      

            	
              7.1

            	
              pay
      any dividends to its shareholders, without the prior consent of Lender,
      which consent shall not be unreasonably
  withheld;

            

    

    

    
      	
               
      

            	
              7.2

            	
              sell,
      transfer or otherwise dispose of all or any part of the Collateral, except
      for collection of accounts receivable and sales of inventory in the
      ordinary course of business;

            

    

    

    
      	
               
      

            	
              7.3

            	
              disclose
      any confidential information regarding the Intellectual
      Property;

            

    

    

    
      	
               
      

            	
              7.4

            	
              grant
      any license with respect to the Intellectual Property without the prior
      consent of the Lender; or

            

    

    

    
      	
               
      

            	
              7.5

            	
              mortgage,
      pledge, grant, or permit to exist a security interest in or lien upon any
      of the Collateral.

            

    

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              Remedies Upon
      Default. Upon the occurrence of an Event of Default, Lender may
      declare all Liabilities to be immediately due and payable and may, at its
      option and without notice or demand on Borrower and in addition to all the
      rights and remedies that accrue to a secured party under the Uniform
      Commercial Code as in effect in under applicable law or that are otherwise
      available to Lender under applicable law, do any one or more of the
      following: (a) foreclose
      or otherwise endorse Lender’s interest in the Collateral in any manner
      permitted by law, or provided for in this Agreement; or (b) sell,
      lease, license or otherwise dispose of any Collateral at one or more
      public or private sales, whether or not such collateral is present at the
      place of sale, for cash or credit or future delivery, on such terms and in
      such manner as Lender may determine.  Borrower expressly waives
      any constitutional or other right to a judicial hearing prior to the time
      Lender takes possession or disposes of the Collateral upon default as
      provided in this Section
      8.

            

    

    

    
      	
              9.

            	
              General
      Provisions.

            

    

    

    
      	
               
      

            	
              9.1

            	
              Choice of Law;
      Venue.  The laws of the State of Florida, excluding its
      choice of law provisions if such laws would result in the application of
      laws other than the laws of the State of Florida, shall govern any
      disputes with respect to this Agreement, the validity of this Agreement,
      the construction of its terms, and the interpretation of the rights and
      duties of Borrower and Lender hereunder.  The forum selected for
      any proceeding or suit related to a dispute between Borrower and Lender
      related to this Agreement shall be in a federal or state court of
      competent jurisdiction located in Hillsborough County,
      Florida.  Borrower and Lender each consent to said courts’
      personal jurisdiction over it and waive any defense, whether asserted by
      motion or pleading, that Hillsborough County, Florida is an improper or
      inconvenient venue.

            

    

    
      	
               
      

            	 

    

    
      	
               
      

            	
              9.2

            	
              Notice.  Any
      notice, demand or other communication to a party that is permitted or
      required hereunder shall be given in writing, and shall be deemed to have
      been duly delivered (i) when
      delivered by personal delivery, (ii) three (3)
      days after being deposited with the United States Postal Service for
      mailing by first class mail, postage prepaid, certified mail, with return
      receipt requested (regardless of whether the return receipt is
      subsequently received), or (iii) one
      business day after being deposited with a nationally recognized courier
      service for overnight delivery; and in each case addressed by the sender
      to the recipient at the address first listed above, or to such other
      address as party may notify the other party in writing in conformity with
      the provisions of this Section.

            

    

    

    
      	
               
      

            	
              9.3

            	
              Further
      Action.  Each party agrees to take all further action,
      and to execute, acknowledge, and deliver any other documents, which may be
      reasonably necessary, appropriate, or desirable to carry out the
      provisions of this Agreement.

            

    

    

    
      	
               
      

            	
              9.4

            	
              No
      Agency.  Nothing contained in this Agreement shall be
      deemed to create any association, partnership or joint venture between the
      parties.

            

    

    

    
      	
               
      

            	
              9.5

            	
              Amendment.  The
      Agreement may be amended only by a written instrument signed by both
      parties.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              9.6

            	
              Assignment.  Lender
      may assign its rights under this Agreement in connection with the
      assignment of the Promissory Note.

            

    

    

    
      	
               
      

            	
              9.7

            	
              No
      Waiver.  No waiver of any provision of this Agreement,
      and no consent to any departure by a party from the terms and conditions
      of this Agreement, shall be effective unless such waiver or consent is
      given in writing by the party against whom the waiver is being sought (in
      which the case the waiver or consent shall be effective only in the
      specific instance, and only for the specific purpose, for which it was
      given).  No failure or delay by a party in exercising any right
      or remedy, or requiring the satisfaction of any condition under this
      Agreement, and no course of dealing between the parties, shall operate as
      a waiver or estoppel of any right or remedy of such party hereunder, or
      limit or prevent the subsequent enforcement of any provision of this
      Agreement by such party.

            

    

    

    
      	
               
      

            	
              9.8

            	
              Integration.  This
      Agreement, together with the Promissory Note (collectively, the “Loan
      Documents”), constitutes the final agreement among the
      parties.  They are the complete and exclusive expression of the
      parties’ agreement on the matters contained in the Loan
      Documents.  All prior and contemporaneous negotiations and
      agreements between the parties on the matters contained in the Loan
      Documents are expressly merged into and superseded by the Loan
      Documents.  The provisions of the Loan Documents may not be
      explained, supplemented, or qualified through evidence of trade usage or a
      prior course of dealings.  In entering into the Loan Documents,
      no party has relied upon any statement, representation, warranty or
      agreement of the other party except for those expressly contained in the
      Loan Documents.  There are no conditions precedent to the
      effectiveness of the Loan Documents other than those expressly stated in
      the Loan Documents.

            

    

    

    
      	
               
      

            	
              9.9

            	
              Severability.  If
      any provision of this Agreement is determined to be invalid, illegal or
      unenforceable, the remaining provisions of this Agreement shall remain in
      full force, if the essential terms and conditions and conditions of this
      Agreement for each party remain valid, binding and
      enforceable.

            

    

    

    
      	
               
      

            	
              9.10

            	
              Successors and
      Assigns.  This Agreement shall be binding upon, and shall
      inure to the benefit of, the parties and their respective successors and
      permitted assignees.

            

    

    

    
      	
               
      

            	
              9.11

            	
              Counterparts.  The
      parties may execute this Agreement in multiple counterparts, each of which
      constitutes an original, and all of which, collectively, constitute only
      one agreement.  The signatures of the parties need not appear on
      the same counterpart, and delivery of an executed counterpart signature
      page by facsimile or other form of electronic transmission shall be as
      effective as executing and delivering this Agreement in the presence of
      the other parties to this Agreement.  This Agreement shall be
      binding when each party to this Agreement has delivered an executed
      counterpart signature page to each other
party.

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              9.12

            	
              Number and
      Gender.  Except where the context requires otherwise, any
      reference in this Agreement to the singular includes the plural, and any
      reference in this Agreement to the masculine gender includes the feminine
      and neuter gender.

            

    

    

    
      	
               
      

            	
              9.13

            	
              Descriptive
      Headings.  The titles and captions preceding the text of
      the sections of this Agreement are inserted solely for convenient
      reference and neither constitute a part of this Agreement nor affect its
      meaning, interpretation, or effect.

            

    

    

    
      	
               
      

            	
              9.14

            	
              Authority. Each
      individual executing this Agreement on behalf of an entity represents and
      warrants that he or she is duly authorized to execute and deliver this
      Agreement on behalf of the entity and that this Agreement is binding upon
      the entity.

            

    

    

    [Continued
on next page.]

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              9.15

            	
              Computation of
      Time.  Whenever the last day for the exercise of any
      privilege or the discharge of any duty under this Agreement shall fall
      upon Saturday, Sunday or any public or legal holiday, whether federal or
      of the State of Florida, the party having such privilege or duty shall
      have until 5:00 p.m. on the next succeeding regular business day to
      exercise such privilege or to discharge such
  duty.

            

    

    

    IN
WITNESS WHEREOF, the parties have executed this SECURITY AGREEMENT on the date
first indicated above.

     

    
      	 	
              Borrower:

               

              ORAGENICS,
      INC.

               

               

            
	 	
              By:

            	
              /s/David
      B. Hirsch

            
	 	
              Name:

            	
              David
      B. Hirsch

            
	 	
              Title:

            	
              President

            
	 	
               

               

              Lender:

               

              KOSKI
      FAMILY LIMITED PARTNERSHIP

               

               

            
	 	
              By:

            	
              /s/Christine
      L. Koski

            
	 	
              Name:

            	
              Christine
      L. Koski

            
	 	
              Title:

            	
              Managing
      General Partner

            

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

    TO
SECURITY AGREEMENT

    

    [Attach
list and description of Intellectual Property]

     

     

     

    
      
         

      

      
        11Unassociated Document

     

    Exhibit
10.1

    

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

    

    

    THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT made and entered into as of the 16th day of
December, 2008 by and between ROBERT L. BUZZO, hereinafter
referred to as “Employee,” and FIRST COMMUNITY BANCSHARES,
INC., hereinafter referred to as “the Corporation.”

    

    W
I T N E S S E T H

    

    WHEREAS, Employee currently
serves as the Corporation’s Vice-President, pursuant to an agreement entered
into between Employee and the Corporation dated effective October 7, 2002;
and

    

    WHEREAS, in order to ensure
that the Agreement complies with Section 409A of the Internal Revenue Code of
1986, as amended, and to make certain other modifications, Employee and the
Corporation wish to amend and restate the Agreement in the manner herein
provided.

    

    NOW, THEREFORE, in
consideration of the mutual covenants herein set forth, Employee and the
Corporation do agree to amended terms of employment as follows:

    

    1.    Employment
and Term.  The Corporation
hereby hires Employee, and Employee hereby agrees to continue his employment
with the Corporation in such position(s) as Executive Management of the Company
shall from time to time assign to Employee, with such duties as normally
associated with these positions.  Employee shall also serve in such
additional offices for the subsidiaries and affiliates of the Corporation as its
Board of Directors may specify.  The term of this Agreement shall be
for a period of three (3) years effective January 1, 2009.

    

    
      2.     Compensation and
Benefits.

    

    

    (a)           Base Salary.
Employee’s base salary shall not be less than $217,800.00, subject to adjustment
on each anniversary date of this Agreement. The base salary shall be paid
biweekly during the term hereof, and if applicable, during the severance pay
period, less all customary withholding.

    

    (b)           Incentive
Compensation. Employees shall be awarded incentive compensation, if
any, in an amount determined appropriate by the Corporation; provided, however,
such incentive compensation shall not encourage the Employee to take unnecessary
and excessive risks that threaten the value of the Corporation.  In
addition, as provided in the Emergency Economic Stabilization Act §111(b)(2)(B),
incentive compensation paid to Employee shall be subject to recovery or
“clawback” by the Corporation if the payments were based on materially
inaccurate financial statements or any other materially inaccurate performance
metric criteria.

    

    (c)           Vacation.  Employee
shall be entitled to vacation of four (4) weeks per year during the term of this
Agreement.  In the event Employee does not use all four (4) weeks each
year, the same rules that apply to all other employees should be
followed.

    

    (d)           Benefits.  Employee
shall be entitled to participate, on the same basis as other members of senior
management, in all employee welfare, retirement and/or pension benefit plans
that the Corporation establishes and makes available.  In addition,
the Corporation shall provide Employee with the use of an appropriate vehicle or
automobile allowance consistent with his position as President and CEO, as
agreed and determined by the Compensation Committee from time to
time.

    

    3.    Termination
for Cause.  The Corporation
may terminate the employment of Employee prior to the expiration of the term or
any renewals, upon Employee’s death, upon the Corporation’s determination that
he suffers from a permanent disability, or for “Cause” as set forth in this
Section.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (a)          Death.  Employee’s
employment shall terminate automatically upon his death.  Upon his
death, the Corporation shall pay Employee’s estate his base salary through the
end of the month in which his death occurs.  Employee’s estate and
heirs will be entitled to apply for and receive whatever plan benefits might be
in place at the time of his death.  Further, Employee’s eligible
dependents shall have the right to continue their health insurance coverage as
permitted by COBRA.

    

    (b)          Permanent
Disability.  If, as a result of Employee’s incapacity due to an
accident or physical or mental illness, Employee is substantially unable to
perform his duties for six (6) consecutive months, or for an aggregate of 200
days during any period of twelve (12) consecutive months, and remains incapable
of performing such duties at the end of such six (6) or twelve (12) month
period, then the Corporation shall have the right to terminate Employee’s
employment for “permanent disability” before the end of the applicable
term.  Employee’s right to continued compensation and benefits shall
end on the date set for termination, subject to Employee’s right to apply for
and receive, if deemed qualified, those benefits that may be provided to
participants in any disability plans and policies sponsored by the
Corporation.  Further, Employee (and his eligible dependents) shall be
entitled to continue to participate in the Corporation’s health insurance plans
as permitted by COBRA or as permitted by applicable Corporation plan provisions,
at Employee’s expense.

    

    (c)          “Termination for
Cause” shall mean the termination of Employee’s employment prior to the
expiration of the term or any renewal term by the Corporation as a result of a
finding by the Board of any of the following: (i) Employee has knowingly and
intentionally engaged in an act or omission, or series of actions, deemed by the
Corporation to be fraudulent or unlawful; (ii) any knowing and material breach
of this Agreement by Employee; (iii) any knowing and material violation by
Employee of corporate policies and procedures that result in damage to the
business or reputation of the Corporation or its subsidiaries’ business,
including without limitation policies prohibiting discrimination, harassment
and/or retaliation; (iv) Employee engaging in a criminal act involving the
property or persons associated with the Corporation (other than a minor traffic
offense) or involving behavior determined by the Board to be substantially
detrimental to the Corporation’s best interests; (v) excessive absenteeism by
Employee without proper authorization; (vi) Employee’s intentional failure to
follow the directions of the Employee’s supervisor or a continued failure to
perform assigned duties, which is not cured within twenty-one (21) days after
written notice thereof is given to Employee; or (viii) Employee is grossly
neglectful of duties resulting in a substantial injury to the Corporation which
is not cured within twenty-one (21) days after written notice thereof is given
to Employee.  In the event the Corporation terminates Employee’s
employment for “Cause,” then Employee’s right to receive any further
compensation or benefits from the Corporation shall cease immediately as of the
date of termination.

    

    4.    Termination
Without Cause.  In the event the
Corporation terminates Employee’s employment for any reason other than set forth
in Section 3, or if the Corporation gives notice of non-renewal under Section
12, then the Corporation shall pay Employee severance in the form of continuing
to pay his base salary and to provide benefits of like kind such that he will
receive an amount equal to his total base compensation at the time of his
termination for the greater of thirty (30) months or the balance of the existing
term of this Agreement, as it may be renewed from time to time pursuant to
Section 12.  Nonetheless, if the Corporation terminates the employment
of Employee under this Section within two years after a Change of Control
(defined below), then the Employee shall receive the benefits provided by
Section 6 in lieu of this Section.

    

    5.    Voluntary
Termination by Employee.  Except in the case of a voluntary
termination by Employee after a “Change of Control” as defined in Section 6
below, in the event that Employee terminates his employment of his own volition
prior to the expiration of the term of this Agreement and any renewals thereof,
then Employee shall be limited to the same rights and benefits as provided in
connection with a Termination for Cause under Section 3(c) above.

    

    6.    Change of
Control.  If within two (2)
years after a Change of Control Employee’s employment ends either because (i)
the Corporation terminates Employee’s employment without Cause under Section 4,
or (ii) Employee chooses to terminate his employment with the Corporation,
regardless of the circumstances (other than as a result of his death), then the
Corporation shall (subject to the provisions of Section 6 hereof) immediately
pay Employee severance in the form of a lump sum payment in the amount of 2.99
times Employee’s base salary as in effect on the date of
termination.  “Change of Control”
shall mean a change in the ownership of the Corporation, a change in the
effective control of the Corporation, or a change in the ownership of a
substantial portion of the assets of the Corporation, consistent with and
interpreted in accordance with Internal Revenue Code Section 409A and the
regulations issued thereunder.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    7.           Tax
Issues.  To the extent that any amount of pay or benefits
provided to Employee under this Agreement would cause Employee to be subject to
an excise tax under Sections 280G and 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), and after taking into consideration all other amounts
payable to Employee under other plans, programs, policies, and arrangements,
then the amount of pay and benefits provided under this Agreement and all other
plans, programs, policies and arrangements shall be reduced to the extent
necessary to avoid imposition of any such excise tax.  Payments and
benefits under this Agreement shall be reduced first.  Payments and
benefits shall be reduced in the following order of priority (i) first from cash
compensation, (ii) next from equity compensation, then (iii) pro-rated among all
remaining payments.

    

    8.           Loyalty
Obligations.  Employee agrees
that the following obligations (“Loyalty Obligations”) shall apply in
consideration of Employee’s employment by or continued employment with the
Corporation:

    

    (a)           Confidential
Information.

    

    (i)           Corporation
Information.  At all times during the term of Employee’s
employment and thereafter, Employee shall hold in strictest confidence, and not
use (except for the benefit of the Corporation and to fulfill Employee’s
employment obligations) or disclose to any person, business or other entity,
without authorization of the Board of Directors of the Corporation, any
Confidential Information of the Corporation or its subsidiary and affiliated
entities (jointly and severally, “Related Entities”).  “Confidential
Information” means any proprietary information, technical or financial
data, trade secrets or know-how regarding the Corporation and/or Related
Entities or their internal operations and plans that is treated as confidential
by the Corporation and/or Related Entities that is not generally known by
persons not employed by the Corporation, and that is not otherwise available to
the public by lawful and proper means.  Confidential Information
includes, but is not limited to, strategic plans and forecasts; product or
service plans or research; products, services and customer lists; marketing
research, plans and/or forecasts; compilations and databases of business or
marketing information that are developed by or for the Corporation; budget
and/or financial information; customer contact, account and mailing information;
pricing, costs or profitability analysis; sales and marketing techniques and
programs; incentive compensation plans; account information (including loan
terms, expiration or renewal dates, fee schedules and commissions); software,
access codes, passwords, databases and source codes; inventions; processes,
formulas, designs, drawings or engineering information; hardware configuration,
and all other financial or other business information or systems of the
Corporation and the Related Entities, as well as information regarding the
employees of the Corporation and the Related Entities.

    

    (ii)           Third Party
Information.  Employee recognizes that the Corporation and
Related Entities have received and in the future will receive information from
third parties that the third party considers to be confidential or proprietary
information and which is, or may be, subject to a duty on the part of the
Corporation (or Related Entities) not to disclose to others and to restrict its
use only for certain limited purposes.  Employee agrees to hold all
such confidential or proprietary information from third parties in the strictest
confidence and not to disclose it to any person, firm or corporation or to use
it except as necessary in carrying out Employee’s work for the Corporation
consistent with the obligations of the Corporation or Related Entities to such
third party.

    

    (iii)           Legal
Requirements.  Nothing in this Section 8 shall be construed to
interfere with, restrict or allow any retaliation against Employee’s obligation
or right to make disclosures, reports or complaints as authorized, permitted or
required by federal or state law, including without limitation pursuant to the
provisions of the Sarbanes-Oxley Act.

    

    (b)           Conflicting
Employment.  During the term of Employee’s employment with the
Corporation, Employee shall not engage in any other employment, occupation,
consulting or other business activity directly related to the business in which
the Corporation or Related Entities are now involved or become involved during
the term of Employee’s employment.  Further, Employee shall not engage
in any other activities that conflict with the business of the Corporation or
Related Entities or that materially interferes with his ability to devote the
time necessary to fulfill Employee’s obligations to the
Corporation.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (c)           Returning
Property.  At the time his employment with the Corporation
ends, Employee shall return to the Corporation (and will not keep copies in
Employee’s possession, recreate or deliver to anyone else) any and all devices,
records, data, computer files, records or disks, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints, sketches,
materials, equipment, other documents or property, or reproductions of any
aforementioned items developed by Employee or others pursuant to or during
Employee’s employment with the Corporation or otherwise belonging to the
Corporation or Related Entities and their respective successors or
assigns.

    

    (d)           Notification of New
Employer.  In the event that Employee leaves the employ of the
Corporation and begins employment elsewhere, Employee agrees the Corporation may
send notice to Employee’s new employer (whether Employee is employed as an
employee, consultant, independent contractor, director, partner, officer,
advisor, Employee or manager) informing the new employer about Employee’s
obligations under this Agreement.

    

    (e)           Non-Solicitation
Restriction.  The intent of this restriction is to prevent
Employee during employment and for the thirty-six (36) months immediately after
the employment with the Corporation ends (“Restricted Period”)
from unfairly competing with the Corporation (which for purposes of this Section
shall include all Related Entities) by trading on or disrupting business
relationships that the Corporation has with individuals and business entities
that have accounts with the Corporation or use or are actively considering using
the Corporation’s products or services.

     

    (i)           Employee
shall refrain during the Restricted Period from engaging in any of the following
activities, whether he does them by or for himself alone, or as an officer,
director, stockholder, partner, member, investor, employee, consultant or agent
for or on behalf of any other person or legal entity:

     

    (1)           Disrupt
the Corporation’s business relationship with a Customer (defined below) by
directly or indirectly requesting, suggesting, encouraging or advising a
Customer to withdraw, curtail, limit, cancel, terminate or not renew all or any
portion of the Customer’s business with the Corporation.

     

    (2)           Solicit
the business of a Customer by communicating directly with any Customer
(regardless of who initiates the communication and in what form it occurs) when
as part of the communication Employee discusses or offers a Competitive Service
or Product (as defined below).

     

    (3)           Solicit
the business of a Prospect (defined below) by communicating directly with a
Prospect (regardless of who initiates the communication and in what form it
occurs) when as part of the communication Employee discusses or offers a
Competitive Service or Product with the intent to divert the Prospect's business
away from the Corporation.

     

    (ii)           As
used in this Section, the following terms shall have these
meanings:

     

    (1)           “Competitive Service or
Product” means those services or products offered by a financial services
company or a banking or lending entity which is unaffiliated with the
Corporation that are the same as or the functional equivalent of those services
or products which are offered by the Corporation when Employee’s employment ends
or which have been approved by the Corporation to be offered within ninety (90)
days of Employee’s last day of employment with the Corporation.

     

    (2)           “Customer” means a
business entity or individual that has an account with, loan from, an investment
with or a deposit with the Corporation (defined above) or that has received or
used other financial or investment products or services from the Corporation at
any time within the twelve (12) months immediately prior to the termination of
Employee’s employment with the Corporation, provided Employee
either had contact with the business entity or individual during employment with
the Corporation or had supervisory responsibility for those employees of the
Corporation who had direct responsibility for servicing the
Customer.

     

    (3)           “Prospect” means a
business entity or individual who has not previously done business with the
Corporation, but who had one or more communications with Employee within the six
(6) months immediately before the end of employment with the Corporation where
the business entity or individual applied for a loan, inquired about
establishing an account or making an investment, or otherwise had discussions
with Employee about utilizing or obtaining service(s) and/or product(s) offered
by the Corporation.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    9.           Non-Compete
Restriction.

     

    (a)           Competitive Employment
Restriction.  At all times during employment with the
Corporation and for the thirty-six (36) month period immediately after
Employee’s employment with the Corporation ends, Employee shall not accept
employment with, work for or provide services on behalf of any Competing
Financial Services Organization (defined below) if (i) the position to be held
or the services to be performed by Employee is the same or the functional
equivalent to the position held and/or the services performed by Employee on
behalf of the Corporation during Employee’s last twelve (12) months of
employment with the Corporation, or (ii) Employee is providing consulting
services related to the design, development, or marketing of services or
products that are intended to be directly competitive with offerings by the
Corporation (or its subsidiaries), and Employee is reporting to or working with
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or
the Board of Directors (or one of the Committees of the Board) of the Competing
Financial Services Organization.

     

    (b)           Anti-Piracy
Restriction.  At all times during employment with the
Corporation and for twelve (12) months immediately after Employee’s employment
ends, Employee shall refrain from taking any action to induce, solicit or
encourage a Key Employee of the Corporation to quit employment with the
Corporation with the intent, hope or purpose of having the Key Employee join a
Competing Financial Services Organization (defined below) in a similar capacity,
if that competitive organization has customer service facilities located within
a twenty-five (25) mile radius of any of the Corporation’s
facilities.  As used in this Section, “Key Employee” means
anyone who holds a position of Vice President or higher with the Corporation or
any of its subsidiaries.

     

    (c)           Definition.  As
used in Section, “Competing Financial Services
Organization” means an entity engaged in the commercial, retail or
mortgage banking or lending business that provides services and products that
are the same as or competitive with the services and products offered by the
Corporation (or one of its subsidiaries) immediately prior to the date
Employee’s employment ends or were approved to be offered within ninety (90)
days of Employee’s last day of employment with the Corporation.  This
restrictive covenant applies only if the Competing
Financial Services Organization operates, or is seeking to open one or more
branch facilities within a fifty (50) mile radius of the Corporation’s
headquarters or within a twenty-five (25) mile radius of any other facility
operated by the Corporation (or one of its subsidiaries) where commercial,
retail or mortgage banking or lending services and products are offered to the
public.

     

    10.           Enforcement.  Employee
acknowledges that the restrictive covenants set forth above in Sections 8 and 9
are reasonable and necessary in order to protect the legitimate business
interests of the Corporation and that a violation of one or more of those
covenants would result in irreparable injury to the Corporation.  In
the event of a breach or a threatened breach of this Agreement, in addition to
all other remedies (legal or equitable), the Corporation shall be entitled to
specific performance of these provisions and the issuance of a restraining order
and/or injunction prohibiting Employee from violating one or more of these
Loyalty Obligations.  If litigation is filed which relates to or
arises under this Section, then the Corporation shall be entitled to recover its
attorneys’ fees, costs and expenses incurred in connection with the litigation
(including all appeals), as well as the Corporation’s pre-litigation efforts to
prevent a breach, to enforce the Agreement, or to seek redress for a
breach.  Nothing contained herein shall be construed as limiting or
prohibiting the Corporation from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of money
damages.  Should an injunction be issued, Employee waives the right to
require that the court require a bond to be posted in excess of
$1,000.00.

     

    11.           Compliance
with Code Section 409A.

    

    (a)           General.  It
is intended that this Agreement comply with the provisions of Section 409A of
the Code and the regulations and guidance of general applicability issued
thereunder (referred to herein as “Section 409A”) so as to not subject Employee
to the payment of additional interest and taxes under Section
409A.  In furtherance of this intent, this Agreement shall be
interpreted, operated and administered in a manner consistent with these
intentions, and to the extent Section 409A would result in Employee being
subject to the payment of additional income taxes or interest under Section
409A, the parties agree to amend the Agreement to avoid the application of such
taxes and interest.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (b)           Delayed
Payments.  Notwithstanding any provision in this Agreement to
the contrary, as needed to comply with Section 409A, if Employee is a “specified
employee” (within the meaning of Section 409A), payments due under Section 4 or
Section 6 above shall be subject to a six (6) month delay such that amounts
otherwise payable during the six (6) month period following Employee’s
separation from service (as defined in Treasury Reg. §1.409A-1(h)) shall be
accumulated and paid in a lump-sum catch-up payment as of the first day of the
seventh month following Employee’s separation from service (or, if earlier, the
date of Employee’s death). To the extent that Employee is required to pay for
the cost of any benefits to keep them in full force and effect during the 6
month delay period, Employee shall also be reimbursed for such out-of-pocket
expenses as of the same date provided above.

    

    (c)           Treatment as Separation
Pay.  This Section shall not apply to the extent such payments
can be considered to be separation pay that is not part of a deferred
compensation arrangement under Section 409A. If permitted by Section 409A, cash
payments to Employee pursuant to Section 4 or Section 6 shall be considered
first to come from separation pay.

    

    (d)           Cooperation.  Corporation
and Employee shall promptly deliver to each other copies of any written
communications and summaries of any verbal communications with any taxing
authority regarding the Excise Tax.  In the event of any controversy
with the IRS (or other taxing authority) with regard to the Excise Tax, Employee
shall permit the Corporation to control issues related to the Excise Tax (at its
sole expense) provided that such issues do not potentially materially adversely
affect Employee.  In the event issues are inter-related, Employee and
the Corporation shall in good faith cooperate so as not to jeopardize the
resolution of either issue.  In the event of any conference with any
taxing authority relating to the Excise Tax or other associated income taxes,
Employee shall permit a representative of the Corporation to accompany Employee,
and Employee and his representative shall cooperate with the Corporation and its
representative.  To the extent that there are any accounting charges
incurred, the Corporation shall pay all such expenses incurred by
Employee.

    

    12.           Renewals.  This Agreement
shall be automatically renewed for successive additional three-year periods on
January 1 in each year hereafter beginning in 2009, in the absence of notice of
non-renewal by either party given in writing to the other party no later than
September 15 of the preceding year.

    

    13.           Amendment
and Waiver.  The provisions of this Agreement may be amended or
waived only with the prior written consent of the Corporation and Employee, and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.

    

    14.           Withholding.  Anything
to the contrary notwithstanding, all payments required to be made by the
Corporation hereunder to Employee shall be subject to the withholding of such
amounts relating to taxes as the Corporation may reasonably determine it should
withhold pursuant to any applicable law or regulation.

    

    15.           Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision or
subsection of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law, then such invalidity, illegality or
unenforceability cannot be reformed by the court to cause it to be enforceable,
then the offending provision shall be stricken from this Agreement, the
remainder of this Agreement shall be construed and enforced as if the invalid,
illegal or unenforceable provision had never been contained herein.

    

    16.           Forum
Selection.  The parties agree that the exclusive jurisdiction
for any lawsuit related to or arising under this Agreement shall be in the
Circuit Court for Tazewell County, Virginia or the United States District Court
for the Western District of Virginia.  Employee waives any objection
to jurisdiction and venue which Employee otherwise may have to this venue for
any such lawsuit.

    

    17.           Applicable
Law.  This Agreement
shall be construed and applied in accordance with the laws of the Commonwealth
of Virginia, with the exception of its conflict of law provisions.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    18.           Survival.  Subject
to any limits on applicability contained therein, the provisions contained in
Sections 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 and 20 hereof
shall survive and continue in full force in accordance with their terms
notwithstanding any termination of this Agreement.  Likewise, in the
event that the Corporation is obligated to make payments to the Employee under
either Section 4 or 6, and the Employee dies before all such payments are made,
then the Corporation shall make the balance of those payments to the Employee’s
estate.

    

    19.           Successors
and Assigns.

    

    (a)           This
Agreement shall bind and inure to the benefit of and be enforceable by the
Corporation and its successors or assigns.  In the event that a
transaction is contemplated that will, upon consummation, result in a Change of
Control (defined above), then in connection the closing of such transaction, the
Corporation shall require as a condition of approval of the transaction that the
surviving or successor entity execute an agreement, in a form and substance
acceptable to Employee, to expressly assume and agree to honor and perform this
Agreement as if the Corporation were still bound.

    

    (b)           This
Agreement shall inure to the benefit and be enforceable by Employee, his
personal and legal representatives, his executors, administrators, heirs,
successors and assigns.  Notwithstanding the foregoing, Employee may
not assign any rights or delegate any obligations hereunder without the prior
written consent of the Board.

    

    20.           Notices.  Any
notice provided for in this Agreement shall be in writing and shall be either
personally delivered, sent by reputable overnight carrier or mailed by first
class mail, return receipt requested, to the recipient at the address below
indicated:

    

    
      	
               
      

            	
              (a)

            	
              Notices to
      Employee:

            

    

    
      	
               
      

            	
              Robert
      L. Buzzo

            

    

    
      	
               
      

            	
              608
      Ashley Way

            

    

    
      	
               
      

            	
              Bluefield,
      VA  24605

            

    

    

    
      	
               
      

            	
              (b)

            	
              Notice to
      Corporation:

            

    

    
      	
               
      

            	
              First
      Community Bancshares, Inc.

              
                Attn:  John
      M. Mendez

                President
      and Chief Executive Officer

              

            

    

    
      	
               
      

            	
              One
      Community Place

            

    

    
      	
               
      

            	
              Bluefield,
      VA  24605

            

    

    

    or such
other address or to the attention of such other person as the recipient party
shall have specified by prior written notice to the sending
party.  Any notice under this Agreement will be deemed to have been
given when so delivered, sent or mailed.

    

    21.           Entire
Agreement.  This Agreement contains all of the understandings
and representations between the parties hereto pertaining to the matters
referred to herein, and supersedes any and all undertakings and agreements,
whether oral or in writing, previously entered into by them with respect
thereto, including any previous employment, severance and/or non-competition
agreements.  To the extent that a separate agreement currently exists
which grants Employee stock options or other incentive or deferred compensation,
those agreements remain in full force and effect, except to the extent that
those agreements contain restrictive covenants in which case the provisions of
Sections 9-11 shall be deemed applicable and replace all such similar
provisions.

    

    22.           Document
Review.  Corporation and
Employee hereby acknowledge and agree that each (i) has read this Agreement in
its entirety prior to executing it, (ii) understands the provisions and effects
of this Agreement, (iii) has consulted with such attorneys, accountants and
financial and other advisors as it or he has deemed appropriate in connection
with their respective execution of this Agreement, and (iv) has executed this
Agreement voluntarily and knowingly.  EMPLOYEE HEREBY UNDERSTANDS,
ACKNOWLEDGES AND AGREES THAT THIS AMENDED AGREEMENT HAS BEEN PREPARED BY LEGAL
COUNSEL TO COMPANY AND THAT HE OR SHE HAS NOT RECEIVED ANY ADVICE, COUNSEL OR
RECOMMENDATION WITH RESPECT TO THIS AGREEMENT FROM SUCH COUNSEL.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    WITNESS
the following signatures:

    
      
         

        
          
            
              	 	FIRST
      COMMUNITY BANCSHARES, INC.	 
	 	 	 	 
	
                       

                    	
                      By: 

                    	/s/ John M. Mendez	 
	 	 	      
                      John
      M. Mendez, CEO

                    	 
	 	 	 	 
	 	 	 	 

            

          

        

         

      

    

    /s/ Robert L.
Buzzo

    Robert
L. Buzzo

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