Document:

Loan Agreement, dated October 5, 2004

 Exhibit 10.1 
  
 Dated October 5, 2004 
  
 LOAN AGREEMENT 

 Loan Agreement 
  
 between 
  

	(1)	Investcorp Technologies Ventures L.P., West Wind Building, P.O. Box 1111, Grand Cayman, Cayman Islands 

  
 - hereinafter referred to as “Lender” - 
  
 and 
  

	(2)	Willtek Communications GmbH, Gutenbergstraße 2 - 4, 85737 Ismaning 

  
 - hereinafter referred to as “Borrower” – 
  

	(3)	Wireless Telecom Group Inc., Parsippany, New Jersey 

  
 - - hereinafter referred to as “Parent” - 
  

	1	Loan 

  

	 	1.1	Lender shall make available to Borrower a loan in the principal amount of up to 

  

	 	1.1.1	$4,798,481 (in words: US Dollars four million seven hundred ninety eight thousand four hundred eighty one), plus 

  

	 	1.1.2	the interest accrued under the loan agreement of March 12, 2003 between the Borrower and the Lender, in the time period between September 30 and the closing of the envisaged
sale of all shares in the Borrower from the Lender and its co-shareholder to the Parent as defined in the respective Stock Purchase Agreement (hereinafter the “Closing”); [this amount is to be converted in USD at the exchange rate
applicable at the Closing] 

  

	 	1.1.3	the Euro amount pursuant to Section 1.1.2 above, shall be converted into USD at the exchange rate applicable on today’s date, close of business.

  
 (hereinafter the “Principal”).

  

	 	1.2	The full Principal amount shall be lent by Lender to Borrower on the Closing. 

  

	 	1.3	The purpose of the loan is to refinance the current EUR 3.5 million face value loan plus accrued interest referred to in section 1.1.2 above. 

  

	2	Interest 

  

	 	2.1	The amount of the Principal paid to Borrower shall bear interest in the amount of 8.0 % p.a., which shall be calculated on the basis of a 365-day year.

  

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	 	2.2	The interest shall be payable upon repayment of the Principal as provided for in Section 3 below. The interest shall, however, be accrued at the end of each calendar quarter.

  

	3	Repayment 

  

	 	3.1	The Principal shall be repayable by Borrower to Lender as follows (such repayments hereinafter “Repayments”): 

  

	 	3.1.1	USD 1,000,000 on 31 March 2006; 

  

	 	3.1.2	USD 1,000,000 on 31 December 2006; 

  

	 	3.1.3	USD 1,000,000 on 30 June 2007; and 

  

	 	3.1.4	USD 1,000,000 on 31 December 2007. 

  

	 	3.1.5	All remaining outstanding amounts, including all accrued interest, on 30 June 2008. 

  

	 	3.2	The Repayments shall be made by wire transfer into the account of Lender listed below and shall be credited to the account on the due dates reflected in the repayment
schedule. The Lender’s account details are: 

  

	
	JPMORGAN CHASE BANK
	4 Chase Metro Tech Center, 7th Floor
	Brooklyn, NY 11245 USA
	SWIFT ID (CHASUS33)
	ABA number 021-000-021
	
	For account of Investcorp Bank B.S.C.,
	account no.544-7-07207
	SWIFT ID (INVCBHBM)
	for further credit to: Investcorp Technology Ventures L.P.

  

	 	3.3	Borrower is entitled to repay the entire outstanding amount of the Principal (including all outstanding interest) at any time. 

  

	4	Termination 

  

	 	4.1	The Lender may terminate this loan in writing in case of an Event of Default as defined in Section 5 below at any time. 

  

	 	4.2	The Lender may terminate this loan in writing with a four-week notice period: 

  

	 	4.2.1	at any time after 1 July 2007, or 

  

	 	4.2.2	in case of a merger, acquisition, sale of voting control, sale of substantially all of the assets of the Parent in which the persons who at the date of this agreement are
shareholders of the Borrower (the “Shareholders”) own less than 15% of the outstanding shares of the surviving entity, or in case of a sale or exclusive license of all or substantially all of the Borrower’s or the Parent’s
intellectual property rights given that the Lender has not expressed his prior consent to such transactions, or 

  

	 	4.2.3	in case the Parent undertake a primary issuance of stock with the net proceeds in excess of $15.0 million, or 

  

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	 	4.2.4	in case the Parent or any of its subsidiaries sell any assets with a total cash proceed in excess of $4.0 million, or 

  

	 	4.2.5	in case the Parent and its consolidated subsidiaries incur or guarantee additional indebtedness not outstanding on the date of this loan agreement in excess of $4.0 million,
or 

  

	 	4.2.6	in the case the Parent and its subsidiaries record a month end cash and cash equivalent balance in excess of $15 million. 

  

	 	4.3	Upon a termination, the entire outstanding amount of the Principal (including interest) shall be due and payable by Borrower to Lender immediately without any further notice
being required. 

  

	 	4.4	Borrower shall, promptly and in any event within three business days of becoming aware of such event, give Lender written notice of any event that constitutes, or with the
giving of notice or passage of time could constitute, a termination event or Event of Default hereunder. 

  

	 	4.5	The Parent hereby guarantees vis-à-vis the Lender payment of any amount payable by Borrower to the Lender hereunder. 

  

	5	Event of Default 

  
 For purposes of the this agreement, the following shall constitute an event of default (hereinafter “Event of Default”): 
  

	 	•	if Borrower does not make the Repayments as provided for in Sections 3.1, 3.2 or 4.3 above, or 

  

	 	•	if Borrower does not pay the interest on the Principal as provided for in Section 2.2 above, or 

  

	 	•	in case of a merger, acquisition, sale of voting control, sale of new shares, sale of substantially all of the assets of the Parent in which the Shareholders have voted against such
transaction, or 

  

	 	•	in case the Borrower or its Parent (or a creditor on behalf of Borrower or its Parent) is insolvent or files for bankruptcy, insolvency, composition or similar proceedings or any
such proceeding is initiated or the application for bankruptcy/insolvency proceedings against the Borrower is rejected due to lack of assets, or 

  

	 	•	in case Borrower or its Parent is in default under its existing bank arrangements and the banks either commence legal proceedings to enforce their claims against Borrower, or its
Parent, or the banks start to realize and/or enforce the security granted by or on behalf of the Borrower or its Parent under the existing bank arrangements. 

  

	6	No set-off or withholding. 

  
 Any rights of set-off or withholding (Aufrechnungs- oder Zurückbehaltungsrechte) of the Borrower in relation to claims of the Lender under
this Loan Agreement shall be excluded. 
  

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	7	Miscellaneous 

  

	 	7.1	Borrower shall reimburse Lender for reasonable legal fees, due diligence costs and out of pocket expenses incurred in accordance with customary practice in connection with
the conclusion of this Agreement. 

  

	 	7.2	This Agreement shall be governed by German law. 

  

	 	7.3	Changes and amendments to this Agreement shall be valid only if made in writing. This shall also apply to this Section 7.3. 

  

	 	7.4	The courts of Frankfurt am Main shall have exclusive jurisdiction for all disputes out of or in connection with this Agreement. 

  

	 	7.5	Neither this Agreement nor any rights and obligations hereunder may be assigned without the prior written approval of the Lender. 

  

	 	7.6	This agreement is subject to the condition precedent that Closing has occurred. 

  

	 	7.7	For the avoidance of doubt the parties confirm that there shall be no gross-up in case any withholding taxes are applicable to the payments provided for herein.

  
 Munich/Parsippany, October 5,
2004 
  

			
	 /S/    EBRAHIM H. EBRAHIM

	 	 /S/    CYRILLE DAMANY

	 INVESTCORP TECHNOLOGY VENTURES, L.P.
	 	Willtek Communications GmbH
	 by ITV Limited, as General Partner of Investcorp
 Technology Fund Limited Partnership, its General Partner
	 	 
		
	 /S/    KARABET SIMONYAN

	 	 
	 Wireless Telecom Group Inc.
	 	 

  

 4Employment agreement

 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT 
  

THIS EMPLOYMENT AGREEMENT, dated as of this 4th day of October, 2004, by and between Virginia Financial Group, Inc., a Virginia corporation (the
“Company”), and Litz H. Van Dyke (the “Executive”). 
  
 In consideration of the mutual covenants and agreements set forth herein, the parties agree as follows: 
  
 Part I: General Employment Terms 
  
 1. Employment and Duties. The Executive shall be employed by the Company as its Executive Vice President and Chief Operating Officer. The Executive
accepts such employment and agrees to perform the managerial duties and responsibilities of Executive Vice President and Chief Operating Officer. The Executive agrees to devote his time and attention on a full-time basis to the discharge of such
duties and responsibilities of an executive nature as may be assigned him by the Company’s Chief Executive Officer or its Board of Directors. The Executive will report to Company’s Chief Executive Officer. The Executive may accept any
elective or appointed positions or offices with any duly recognized associations or organizations whose activities or purposes are closely related to the banking business or service to which would generate good will for the Company and its
subsidiaries and affiliates. 
  
 2. Term. The term of this
Agreement (the “Term”) shall commence on a mutually agreeable date but in no event later than October 4, 2004 (“the Effective Date”) and shall continue through December 31, 2006, unless terminated or extended as hereinafter
provided. This Agreement shall be extended for successive one-year periods following the original term unless either party notifies the other in writing at least 90 days prior to the end of the original term, or the end of any additional one-year
renewal term, that the Agreement shall not be extended beyond its current term. 
  
 3. Compensation. 
  
 (a)
Base Salary. For the remainder of 2004, the Company shall pay the Executive a monthly base salary not less than $16,250.00. Such base salary shall be paid to the Executive in accordance with established payroll practices of the Company. For
2005 and for each remaining year of this Agreement, including any renewal term, the Company agrees to review the Executive’s base salary and to consider implementing changes to such base salary as it may deem appropriate; however, such base
salary shall not be less than $16,250.00 per month. In addition, as a signing bonus, the Company shall pay the Executive $15,000.00, less withholding, on the date the Executive receives his first regular paycheck. 
  
 (b) Annual Bonus. 
  
 (i) Commencing with 2005, the Executive will be eligible to participate in
an annual incentive plan that will establish measurable criteria and incentive compensation levels payable to the Executive for corporate performance in relation to defined 

 threshold benchmarks. The Compensation Committee or the Board of Directors of the Company, as the case may be, will
consult with management to establish the targeted corporate performance levels for the Company on an annual basis consistent with the Company’s business plan and objectives. Achievement of the targeted corporate performance levels will normally
result in an annual cash bonus payment equal to up to 28% of the Executive’s then current annual base salary. To the extent the Company exceeds the targeted performance levels, the incentive plan will provide a means by which the annual bonus
will be increased. Similarly, the incentive plan will provide a means by which the annual bonus will be decreased if the targeted performance levels are not achieved, provided certain minimum threshold benchmarks have been satisfied. Any bonus
payments due hereunder shall be paid to the Executive no later than 75 days after the end of the year. 
  
 (ii) In addition, subject to the approval of the Compensation Committee, the Company will consider a mid-year incentive pay arrangement for the Executive
for 2005 in acknowledgement of the Executive’s forfeiture of certain stock options granted by his prior employer. Any such award, if made, will be based on achievement of financial or other targets agreed to by the Executive and the
Compensation Committee. 
  
 (c) Stock Compensation. Subject
to appropriate formalities under the Company’s Stock Incentive Plan, or any successor plan, the Executive will receive a one-time employment inducement equity compensation awards for shares of the Company’s common stock having a value
equal to 20% of the Executive’s initial annual base salary. 70% of the equity compensation award will consist of nonqualified stock options with an exercise price equal to such stock’s fair market value as of the Executive’s first day
of employment (or any higher amount required under such plan based on the date of grant) valued based on the Black-Scholes methodology and the closing stock price on the Executive’s first day of employment, with vesting at the rate of 1/5th per
year over a five year period. 30% of the equity compensation award will consist of restricted stock, with vesting at the rate of 1/3rd per year over a three year period. Other terms of such awards shall be no less favorable than provided for
similarly situated current employees of the Company. 
  
 4.
Benefits. 
  
 (a) During the term of this
Agreement, unless prior notice to the contrary is provided, the Executive shall be eligible to participate in any plans, programs or forms of compensation or benefits that the Company or its subsidiaries and affiliates provide to the class of
employees that includes the Executive, on a basis not less favorable than that provided to such class of employees, including, without limitation, group medical, disability and life insurance, vacation and sick leave, and a retirement plan; provided
however, a reasonable transition period following any change in control, merger, statutory share exchange, consolidation, acquisition or transaction involving the Company or any of its subsidiaries and affiliates shall be permitted in order to make
appropriate adjustments in compliance with this Section 4(a). Unless prior notice to the contrary is provided, the Executive will be eligible to participate in the Company’s other incentive programs, dependent on the rules and goals established
for such programs. The Company also will allow the Executive to participate in the Company’s Executive Deferred Compensation Plan. 
  

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 (b) Commencing January 1, 2005, the Executive shall be entitled to four weeks vacation annually without
loss of pay, to be accrued and used in accordance with normal Company policy, except that vacation for the first year of employment will accrue ratably over that year. Additional vacation may be available, at the sole discretion of the
Company’s Chief Executive Officer. 
  
 (c) The Company will
pay for the initiation fee and monthly dues for a full golf membership for the Executive and his family at the Glenmore County Club in Charlottesville, Virginia during the Executive’s employment by the Company . 
  
 (d) The Executive shall be provided an automobile allowance of $600.00 per
month (less withholding tax) during the term of this Agreement. The Executive shall be responsible for all costs, including without limitation acquisition costs, maintenance, gas and oil, repairs, taxes and insurance, of any vehicle the Executive
acquires for Company business use. Personal use of any such vehicle is permitted. 
  
 5. Reimbursement of Expenses. 
  
 (a) The Company shall reimburse the Executive promptly, upon presentation of adequate substantiation, including receipts, for the reasonable travel, entertainment, lodging and other business expenses incurred by the
Executive, including, without limitation, those expenses incurred by the Executive and his spouse in attending approved trade and professional association conventions, meetings and other related functions. However, the Company reserves the
right to review these expenses periodically and determine, in its sole discretion, whether future reimbursement of such expenses to the Executive will continue without prior approval by the Company’s Chief Executive Officer of the expenses.

  
 (b) As a condition of the Executive’s employment, the
Company requires the Executive to relocate to the Charlottesville, Virginia area no later than December 31, 2004 or such later date as the Company’s Chief Executive Officer may agree. The Company will pay for direct moving expenses associated
with the Executive’s relocation in accordance with the Company’s current Corporate Relocation Policy (a copy of which has been provided to the Executive). In addition, the Company agrees to purchase the Executive’s current primary
residence in accordance with the Company’s Corporate Relocation Policy (a copy of which has been provided to the Executive). The Executive acknowledges and agrees to the terms and conditions the Company’s current Corporate Relocation
Policy, including without limitation the Executive’s obligation to reimburse the Company in the event of his voluntary termination of employment with the Company. 
  
 (c) If the Executive terminates his employment with the Company voluntarily and without Good Reason, as defined below, he
shall reimburse the Company for related expenses incurred by the Company in the Executive’s recruitment, including but not limited to the signing bonus referred to in Section 3(a) above as follows: 
  
 Termination in the first 12 months: 100% of all related expenses 

 

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 Termination in second 12 months: 50% of all related expenses 
 Termination in third 12 months: 25% of all related expenses 
  
 6. Termination of Employment. 
  
 (a) Death or Incapacity. The Executive’s employment under this Agreement shall terminate automatically upon the Executive’s death.
In the event of termination due to the death of the Executive, his survivors, designees or estate shall continue to receive, in addition to all other benefits accruing upon death, full compensation hereunder for a period of three months following
the month in which his death occurred. If the Company determines that the Incapacity, as hereinafter defined, of the Executive has occurred, it may terminate the Executive’s employment and this Agreement upon 30 days’ written notice
provided that, within 30 days after receipt of such notice, the Executive shall not have returned to full-time performance of his assigned duties. “Incapacity” shall mean the failure of the Executive to perform his assigned duties with the
Company on a full-time basis as a result of mental or physical illness or injury as determined by a physician selected by the Company for the greater of 90 consecutive calendar days or the longest waiting period under any long term disability
insurance contract or program provided to him as an employee. 
  
 (b) Termination by Company With or Without Cause. The Company may terminate the Executives employment during the term of this Agreement, with or without Cause. For purposes of this Agreement, “Cause” shall mean: 

 
 (i) continual or deliberate neglect by the Executive in the performance
of his material duties and responsibilities as established from time to time by the Company’s Chief Executive Officer or it Board of Directors, or the Executive’s willful failure to follow reasonable instructions or policies of the Company
after being advised in writing of such failure and being given a reasonable opportunity and period (as determined by the Company) to remedy such failure; 
  
 (ii) conviction of, indictment for (or its procedural equivalent), entering of a guilty plea or plea of no contest with respect to a felony, a crime of
moral turpitude or any other crime with respect to which imprisonment is a possible punishment, or the commission of an act of embezzlement or fraud against the Company or any subsidiary or affiliate thereof; 
  
 (iii) any breach by the Executive of a material term of this Agreement, or
violation in any material respect of any code or standard of behavior generally applicable to officers of the Company, after being advised in writing of such breach or violation and being given a reasonable opportunity and period (as determined by
the Company) to remedy such breach or violation; 
  
 (iv)
dishonesty of the Executive with respect to the Company or any subsidiary or affiliate thereof, or breach of a fiduciary duty owed to the Company or any subsidiary or affiliate thereof; or 
  

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 (v) the willful engaging by the Executive in conduct that is reasonably likely to result, in the good
faith judgment of the Company, in material injury to the Company, monetarily or otherwise. 
  
 (c) Termination by Executive for Good Reason. The Executive may terminate his employment for Good Reason. For purposes of this Agreement, “Good Reason” shall mean: 
  
 (i) the continued assignment to the Executive of duties inconsistent with
the Executive’s position, authority, duties or responsibilities as contemplated by Section 1 hereof or, in the event of a Change in Control (as hereinafter defined), Section 10(a); 
  
 (ii) any action taken by the Company which results in a substantial reduction in the status of the Executive, including a
diminution in his position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and/or inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof
given by the Executive; 
  
 (iii) the relocation of the Executive
to any other primary place of employment which might require him to move his residence which, for this purpose, includes any reassignment to a place of employment located more than 50 miles from the Executive’s initially assigned place of
employment, without the Executive’s express written consent to such relocation; provided, however, this subsection (iii) shall not apply in connection with the relocation of the Executive if the Company decides to relocate its headquarters; or

  
 (iv) any failure by the Company, or any successor entity
following a Change in Control, to comply with the provisions of Sections 3 and 4 or Section 10(b) hereof or to honor any other term or provision of this Agreement, other than an isolated, insubstantial or inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive. 
  
 (d) Incapacity. If payments under a long term disability policy or plan shall cease due to discontinuance of the plan for failure for any reason of
the provider of such policy to continue to make payments, the Company will provide the benefits to the Executive in accordance with the terms of such policy or plan as if it were still in full force and effect. Notwithstanding the above, in no event
shall the Company’s obligation under this subparagraph be for more than two years. 
  
 7. Obligations of the Company Upon Termination. 
  
 (a) Without Cause; Good Reason. Except as set forth in Sections 7(b) and 7(c) below, if, during the term of this Agreement, the Company shall terminate the Executive’s employment without Cause or the
Executive shall terminate employment for Good Reason, the Company will pay to the Executive in a lump sum within 30 days after the termination of employment the sum of the Executive’s annual base salary through the date of termination to the
extent not theretofore paid and the balance of the Executive’s 
  

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 annual base salary for a period of 18 months from the date of termination of employment. The Company shall also maintain
in full force and effect for the Executive’s continued benefit, until 18 months from the date of termination of employment, all health and insurance plans as required by federal law, and provided that the Executive’s continued
participation is possible under the general terms and provisions of such plans and programs. If the Company reasonably determines that maintaining such health and insurance plans in full force and effect for the benefit of the Executive until 18
months from the date of termination of employment is not feasible, the Company shall pay the Executive a lump sum equal to the estimated cost of maintaining such plans for the Executive for 18 months. In addition, stock option and similar agreements
with the Executive evidencing the grant of a stock option or other award under the Company’s Stock Incentive Plan, or any successor plan, will provide that the vesting of such stock awards will accelerate and become immediately exercisable and
fully vested as of the date of termination of employment without Cause or for Good Reason. In the case of stock options, the Executive will have at least ninety (90) days after termination of employment, or such longer period as may be provided for
in the separate stock option agreement, to exercise the option. 
  
 (b) Non-Competition. Notwithstanding the foregoing, all such payments and benefits under Section 7(a) otherwise continuing for periods after the Executive’s termination of employment shall cease to be paid, and the Company shall
have no further obligation due with respect thereto, in the event the Executive engages in “Competition” or makes any “Unauthorized Disclosure of Confidential Information.” In addition, in exchange for the payments on termination
as provided herein, other provisions of this Agreement and other valuable consideration hereby acknowledged, the Executive agrees that he will not engage in competition for a period of 18 months after the Executive’s employment with the Company
ceases for any reason, including the expiration or nonrenewal of this Agreement. For purposes hereof:  
  
 (i) “Competition” means the Executive’s engaging without the written consent of the Board of Directors of the Company or a person
authorized thereby, in an activity as an officer, a director, an employee, a partner, a more than one percent shareholder or other owner, an agent, a consultant, or in any other individual or representative capacity within 50 miles of the
Company’s headquarters or any branch office of the Company or any of its subsidiaries and affiliates (unless the Executive’s duties, responsibilities and activities, including supervisory activities, for or on behalf of such activity, are
not related in any way to such competitive activity) if it involves: 
  
 (A) engaging in or entering into the business of any banking, lending or any other business activity in which the Company or any of its affiliates is actively engaged at the time the Executive’s employment ceases, or 
  
 (B) soliciting or contacting, either directly or indirectly, any of the
customers or clients of the Company or any of its affiliates for the purpose of competing with the products or services provided by the Company or any of its affiliates, or 
  
 (C) employing or soliciting for employment any employees of the Company or any of its affiliates for the purpose of
competing with the Company or any of its affiliates. 
  

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 (ii) “Unauthorized Disclosure of Confidential Information” means the use or disclosure of
information in violation of Section 8 of this Agreement. 
  
 (iii) For purposes of this Agreement, “customers” or “clients” of the Company or any of its affiliates means individuals or entities to whom the Company or any of its affiliates has provided banking, lending, or other
similar financial services at any time from the Effective Date through the date the Executive’s employment with the Company ceases. 
  
 (c) Death or Incapacity. If the Executive’s employment is terminated by reason of death or incapacity in accordance with Section 6(a) hereof,
this Agreement shall terminate without further obligation to the Executive or his legal representatives under this Agreement except as otherwise specified in Section 6(a). 
  
 (d) Cause; Other Than for Good Reason. If the Executive’s employment shall be terminated for Cause or for other
than Good Reason, this Agreement shall terminate without any further obligation of the Company to the Executive other than to pay to the Executive his annual base salary through the date of termination. The Executive will still be required to comply
with the non-competition and confidentiality covenants set forth in Section 7(b). 
  
 (e) Remedies. The Executive acknowledges that the restrictions set forth in paragraph 7(b) of this Agreement are just, reasonable, and necessary to protect the legitimate business interests of the Company. The
Executive further acknowledges that if he breaches or threatens to breach any provision of paragraph 7(b), the Company’s remedies at law will be inadequate, and the Company will be irreparably harmed. Accordingly, the Company shall be entitled
to an injunction, both preliminary and permanent, restraining the Executive from such breach or threatened breach, such injunctive relief not to preclude the Company from pursuing all available legal and equitable remedies. In addition to all other
available remedies, if the Executive violates the provisions of paragraph 7(b), the Executive shall pay all costs and fees, including attorneys’ fees, incurred by the Company in enforcing the provisions of that paragraph. If, on the other hand,
it is finally determined by a court of competent jurisdiction that a breach or threatened breach did not occur under paragraph 7(b) of this Agreement, the Company shall reimburse the Executive for reasonable legal fees incurred to defend that claim.

  
 8. Confidentiality. The Executive recognizes that as an
employee of the Company he will have access to and may participate in the origination of non-public, proprietary and confidential information and that he owes a fiduciary duty to the Company. Confidential information may include, but is not limited
to, trade secrets, customer lists and information, internal corporate planning, methods of marketing and operation, and other data or information of or concerning the Company or its customers that is not generally known to the public or in the
banking industry. The Executive agrees that he will never use or disclose to any third party any such confidential information, either directly or indirectly, except as may be authorized in writing specifically by the Company or required by law.
 
  

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 Part II: Change in Control 
  
 9. Employment After a Change in Control. If a Change in Control of the Company occurs during the term of this
Agreement, and the Executive is employed by the Company on the date the Change in Control occurs (the “Change in Control Date”), the Company will continue to employ the Executive in accordance with the terms and conditions of this
Agreement for the period beginning on the Change in Control Date and ending on the third anniversary of such date (the “Change in Control Employment Period”). If a Change in Control occurs on account of a series of transactions, the Change
in Control Date is the date of the last of such transactions. Notwithstanding any other term or provision of this Agreement, in the event of a Change in Control of the Company, Sections 9 through 15 in this Part II shall become effective and govern
the terms and conditions of the Executive’s employment. 
  
 10. Terms of Employment. 
  
 (a) Position and
Duties. During the Change in Control Employment Period, (i) the Executive’s position, authority, duties and responsibilities will be at least commensurate in all material respects with the most significant of those held, exercised and
assigned at any time during the 90-day period immediately preceding the Change in Control Date, and (ii) the Executive’s services will be performed at the location where the Executive was employed immediately preceding the Change in Control
Date or any office that is the headquarters of the Company and is less than 35 miles from such location; it being understood and agreed that this subsection (ii) shall supercede the provisions of Section 6(c)(iii) dealing with the relocation of the
Executive following a Change in Control. 
  
 (b) Compensation
and Benefits. 
  
 (i) Base Salary. During the Change
in Control Employment Period, the Executive will receive an annual base salary (the “Annual Base Salary”) at least equal to the base salary paid or payable to the Executive by the Company and its affiliated companies for the 12-month
period immediately preceding the Change in Control Date. During the Change in Control Employment Period, the Annual Base Salary will be reviewed at least annually and will be increased at any time and from time to time as will be substantially
consistent with increases in base salary generally awarded in the ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in the Annual Base Salary will not serve to limit or reduce any other
obligation to the Executive under this Agreement. The Annual Base Salary will not be reduced after any such increase, and the term Annual Base Salary as used in this Agreement will refer to the Annual Base Salary as so increased. The term
“affiliated companies” includes any company controlled by, controlling or under common control with the Company. 
  
 (ii) Annual Bonus. During the Change in Control Employment Period, the Executive will be entitled to participate in an annual incentive plan
generally applicable to other peer executives of the Company and its affiliated companies, but in no event will such incentive plan provide the Executive with a less favorable opportunity to earn an annual bonus that is similarly structured to the
annual incentive plan as in effect at any time during the six months immediately preceding the Change in Control Date. 
  

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 (iii) Incentive, Savings and Retirement Plans. During the Change in Control Employment Period,
the Executive will be entitled to participate in all incentive (including stock incentive), savings and retirement, insurance plans, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but
in no event will such plans, policies and programs provide the Executive with incentive opportunities, savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than those provided by the Company and
its affiliated companies for the Executive under such plans, policies and programs as in effect at any time during the six months immediately preceding the Change in Control Date. 
  
 (iv) Welfare Benefit Plans. During the Change in Control Employment Period, the Executive and/or the
Executive’s family, as the case may be, will be eligible for participation in and will receive all benefits under welfare benefit plans, policies and programs provided by the Company and its affiliated companies to the extent applicable
generally to other peer executives of the Company and its affiliated companies, but in no event will such plans, policies and programs provide the Executive with benefits that are less favorable, in the aggregate, than the most favorable of such
plans, policies and programs in effect at any time during the six months immediately preceding the Change in Control Date. 
  
 (v) Fringe Benefits. During the Change in Control Employment Period, the Executive will be entitled to fringe benefits in accordance with the
comparable plans, policies and programs of the Company and its affiliated companies in effect for the Executive at any time during the six months immediately preceding the Change in Control Date or, if more favorable to the Executive, as in effect
generally from time to time after the Change in Control Date with respect to other peer executives of the Company and its affiliated companies. 
  
 (vi) Vacation. During the Change in Control Employment Period, the Executive will be entitled to paid vacation in accordance with the comparable
plans, policies and programs of the Company and its affiliated companies in effect for the Executive at any time during the six months immediately preceding the Change in Control Date or, if more favorable to the Executive, as in effect generally
from time to time after the Change in Control Date with respect to other peer executives of the Company and its affiliated companies. 
  
 11. Termination of Employment Following Change in Control. 
  
 (a) Death or Incapacity. The Executive’s employment will terminate automatically upon the Executive’s death
or Incapacity during the Change in Control Employment Period. 
  
 (b) Cause. The Company may terminate the Executive’s employment during the Change in Control Employment Period for Cause (as defined in Section 6(b)). 
  

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 (c) Good Reason. The Executive’s employment may be terminated during the Change in Control
Employment Period by the Executive for Good Reason (as defined in Section 6(c). Any good faith determination of Good Reason made by the Executive during the Change in Control Employment Period shall be conclusive. 
  
 (d) Notice of Termination. Any termination during the Change in
Control Employment Period by the Company or by the Executive for Good Reason shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice
which shall indicate the specific termination provision in this Agreement relied upon. 
  
 (e) Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive’s employment is terminated by the Company other than for Cause or Incapacity, the date specified in the Notice of Termination (which shall not
be less than 30 nor more than 60 days from the date such Notice of Termination is given), and (iii) if the Executive’s employment is terminated for Incapacity, 30 days after Notice of Termination is given, provided that the Executive shall not
have returned to the full-time performance of his duties during such 30-day period. 
  
 12. Compensation Upon Termination. 
  
 (a) Termination Without Cause or for Good Reason. The Executive will be entitled to the following benefits if, during the Change in Control Employment Period, the Company terminates his employment without Cause
or the Executive terminates his employment with the Company or any affiliated company for Good Reason. 
  
 (i) Accrued Obligations. The Accrued Obligations are the sum of: (1) the Executive’s Annual Base Salary through the Date of Termination at
the rate in effect just prior to the time a Notice of Termination is given; (2) the amount, if any, of any incentive or bonus compensation theretofore earned which has not yet been paid; (3) the product of the Annual Bonus paid or payable, including
by reason of deferral, for the most recently completed year and a fraction, the numerator of which is the number of days in the current year through the Date of Termination and the denominator of which is 365; and (4) any benefits or awards
(including both the cash and stock components) which pursuant to the terms of any plans, policies or programs have been earned or become payable, but which have not yet been paid to the Executive (but not including amounts that previously had been
deferred at the Executive’s request, which amounts will be paid in accordance with the Executive’s existing directions). The Accrued Obligations will be paid to the Executive in a lump sum cash payment within ten days after the Date of
Termination; 
  
 (ii) Salary Continuance Benefit. The
Salary Continuance Benefit is an amount equal to 2.99 times the Executive’s Final Compensation. For purposes of this Agreement, “Final Compensation” means the Annual Base Salary in effect at the Date of Termination, plus the highest
Annual Bonus paid or payable for the two most recently completed years. The Salary Continuance Benefit will be paid to the Executive in a lump sum cash payment not later than the 45th day following the Date of Termination; 
  

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 (iii) Welfare Continuance Benefit. For 36 months following the Date of Termination, the Executive
and his dependents will continue to be covered under all health and dental plans, disability plans, life insurance plans and all other welfare benefit plans (as defined in Section 3(1) of ERISA) (“Welfare Plans”) in which the Executive or
his dependents were participating immediately prior to the Date of Termination (the “Welfare Continuance Benefit”). The Company will pay all or a portion of the cost of the Welfare Continuance Benefit for the Executive and his dependents
under the Welfare Plans on the same basis as applicable, from time to time, to active employees covered under the Welfare Plans and the Executive will pay any additional costs. If participation in any one or more of the Welfare Plans included in the
Welfare Continuance Benefit is not possible under the terms of the Welfare Plan or any provision of law would create an adverse tax effect for the Executive or the Company due to such participation, the Company will provide substantially identical
benefits directly or through an insurance arrangement. The Welfare Continuance Benefit as to any Welfare Plan will cease if and when the Executive has obtained coverage under one or more welfare benefit plans of a subsequent employer that provides
for equal or greater benefits to the Executive and his dependents with respect to the specific type of benefit. The Executive or his dependents will become eligible for COBRA continuation coverage as of the date the Welfare Continuance Benefit
ceases for all health and dental benefits. 
  
 (b) Death.
If the Executive dies during the Change in Control Employment Period, this Agreement will terminate without any further obligation on the part of the Company under this Agreement, other than for (i) payment of the Accrued Obligations and three
months of the Executive’s Base Salary (which shall be paid to the Executive’s beneficiary designated in writing or his estate, as applicable, in a lump sum cash payment within 30 days of the date of death); (ii) the timely payment or
provision of the Welfare Continuance Benefit to the Executive’s spouse and other dependents for 36 months following the date of death; and (iii) the timely payment of all death and retirement benefits pursuant to the terms of any plan, policy
or arrangement of the Company and its affiliated companies. 
  
 (c) Incapacity. If the Executive’s employment is terminated because of the Executive’s Incapacity during the Change in Control Employment Period, this Agreement will terminate without any further obligation on the part of
the Company under this Agreement, other than for (i) payment of the Accrued Obligations and three months of the Executive’s Base Salary (which shall be paid to the Executive in a lump sum cash payment within 30 days of the Date of Termination);
(ii) the timely payment or provision of the Welfare Continuance Benefit for 36 months following the Date of Termination; and (iii) the timely payment of all disability and retirement benefits pursuant to the terms of any plan, policy or arrangement
of the Company and its affiliated companies. 
  
 (d) Cause;
Other than for Good Reason. If the Executive’s employment is terminated for Cause during the Change in Control Employment Period, this Agreement will terminate without further obligation to the Executive other than the payment to the
Executive of the Annual Base Salary through the Date of Termination, plus the amount of any 
  

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 compensation previously deferred by the Executive. If the Executive terminates employment during the Change in Control
Employment Period, excluding a termination either for Good Reason, this Agreement will terminate without further obligation to the Executive other than for the Accrued Obligations (which will be paid in a lump sum in cash within 30 days of the Date
of Termination) and any other benefits to which the Executive may be entitled pursuant to the terms of any plan, program or arrangement of the Company and its affiliated companies. 
  
 (e) Acceleration of Vesting of Stock Awards. Except as may be otherwise agreed to by the Executive, all stock option
and similar agreements with the Executive evidencing the grant of a stock option or other award under the Company’s Stock Incentive Plan, or any successor plan, will provide that (i) the vesting of such stock awards will accelerate and become
immediately exercisable and fully vested as of the Change in Control Date, and (ii) in the case of stock options, the Executive will have at least ninety (90) days after termination of employment, or such longer period as may be provided for in the
separate stock option agreement, to exercise the stock option. 
  
 (f) Possible Reduction in Payment and Benefits. Following any Change in Control, to the extent that any amount of pay or benefits provided to the Executive under this Agreement would cause the Executive to be subject to 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 the Executive under other Company plans, programs, policies, and arrangements,
then the amount of pay and benefits provided under this Agreement shall be reduced to the extent necessary to avoid imposition of any such excise taxes. The Executive may select the payments and benefits to be limited or reduced, including an
election not to have the vesting of certain benefits, including stock options, if applicable, accelerate as a result of a Change in Control. 
  
 13. Fees and Expenses; Mitigation; Non-competition. 
  
 (a) The Company will pay or reimburse the Executive for all costs and expenses, including without limitation court costs and reasonable attorneys’
fees, incurred by the Executive (i) in contesting or disputing any termination of the Executive’s employment or (ii) in seeking to obtain or enforce any right or benefit provided by this Agreement, in each case provided the Executive’s
claim is substantially upheld by a court of competent jurisdiction. 
  
 (b) The Executive shall not be required to mitigate the amount of any payment the Company becomes obligated to make to the Executive in connection with this Agreement, by seeking other employment or otherwise. Except as specifically
provided above with respect to the Welfare Continuance Benefit, the amount of any payment provided for in Section 12 shall not be reduced, offset or subject to recovery by the Company by reason of any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or otherwise. 
  
 (c) The Executive will not be required to comply with the non-competition covenant in Section 7(b) if his employment is terminated during the Change in Control Employment Period without Cause or he terminates for Good
Reason. 
  

 12 

 14. Continuance of Welfare Benefits Upon Death. If the Executive dies while receiving a Welfare
Continuation Benefit, the Executive’s spouse and other dependents will continue to be covered under all applicable Welfare Plans during the remainder of the 18-month coverage period. The Executive’s spouse and other dependents will become
eligible for COBRA continuation coverage for health and dental benefits at the end of such 18-month period. 
  
 15. Change in Control Defined. For purposes of this Agreement, a “Change in Control” shall mean: 
  
 (a) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act’) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act), of securities of the Company representing 20% or
more of the combined voting power of the then outstanding securities; provided, however, that the following acquisitions shall not constitute a Change in Control: 
  
 (i) acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege);

  
 (ii) any acquisition by the Company; 
  
 (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the Company; or 
  
 (iv) any acquisition pursuant to a reorganization, merger or consolidation by any corporation owned or proposed to be owned, directly or indirectly, by shareholders of the Company if the shareholders’ ownership
of securities of the corporation resulting from such transaction constitutes a majority of the ownership of securities of the resulting entity and at least a majority of the members of the board of directors of the corporation resulting from such
transaction were members of the incumbent board as defined in this Agreement at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or 
  
 (b) where individuals who, as of the inception of this Agreement, constitute
the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board of Directors; provided, however, that any individual becoming a director subsequent to the effective date of
this Agreement whose election, or nomination for election by the shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than a member of the board of directors; or 
  

 13 

 (c) the shareholders of the Company approve, or the Company otherwise consummates, 
  
 (i) a merger, statutory share exchange, or consolidation of the Company with
any other corporation, except as provided in subparagraph (a)(iv) of this section, or 
  
 (ii) the sale or other disposition of all or substantially all of the assets of the Company. 
  
 Part III: Miscellaneous 
  
 16. Documents. All documents, record, tapes and other media of any kind or description relating to the business of the Company or any of its
subsidiaries and affiliates (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company. The Documents (and any copies) shall be returned to the Company upon the Executive’s
termination of employment for any reason or at such earlier time or times as the Board of Directors or its designee may specify. 
  
 17. Severability. If any provision of this Agreement, or part thereof, is determined to be unenforceable for any reason whatsoever, it shall be
severable from the remainder of this Agreement and shall not invalidate or affect the other provisions of this Agreement, which shall remain in full force and effect and shall be enforceable according to their terms. No covenant shall be dependent
upon any other covenant or provision herein, each of which stands independently. 
  
 18. Modification. The parties expressly agree that should a court find any provision of this Agreement, or part thereof, to be unenforceable or unreasonable, the court may modify the provision, or part thereof,
in a manner which renders that provision reasonable, enforceable, and in conformity with the public policy of Virginia. 
  
 19. Governing Law. This agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia. 
  
 20. Notices. All written notices required by this Agreement shall be
deemed given when delivered personally or sent by registered or certified mail, return receipt requested, to the parties at their addresses set forth on the signature page of this Agreement. Each party may, from time to time, designate a different
address to which notices should be sent. 
  
 21. Amendment.
This Agreement may not be varied, altered, modified or in any way amended except by an instrument in writing executed by the parties hereto or their legal representatives. 
  
 22. Binding Effect. This Agreement shall be binding upon the Executive and on the Company, its successors and assigns
effective on the date first above written subject to the approval by the Board of Directors of the Company. The Company will require any successor to all or substantially all of the business and/or assets of the Company to assume expressly and agree
to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 
  

 14 

 23. No Construction Against Any Party. This Agreement is the product of informed negotiations
between the Executive and the Company. If any part of this Agreement is deemed to be unclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. The Executive and the Company agree that neither party was in a superior
bargaining position regarding the substantive terms of this Agreement. 
  
 24. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the matters addressed herein and it supersedes all other prior agreements and understandings, both written and oral, express or
implied, with respect to the subject matter of this Agreement. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written herein. 
  

	
	 VIRGINIA FINANCIAL GROUP, INC.

	
	 By

	
	 Its

	
	 102 South Main Street

	 Culpeper, Virginia 22701

	
	
 Litz H. Van Dyke

  

 15

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