Document:

EXHIBIT 10.6

 Exhibit 10.6 
 LEASE AGREEMENT 
 THIS LEASE AGREEMENT (referred to herein as “Lease”) is made as of the 1st day
of August, 2006, by and between JAMES PAUL POULOS and RITA ANN POULOS, TRUSTEES, under that certain Trust Agreement with James Paul Poulos dated March 8, 2001, (referred to herein as “Lessor”) and HOMETOWN BANK, a Virginia banking
corporation (referred to herein as “Lessee”). 
 NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties hereto agree as follows: 
 1. Leased Premises. Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor, upon the terms and conditions hereinafter set forth, that certain building and land situated at 3521 Franklin Road, S.W., Roanoke, Virginia, 24014, more particularly shown on Schedule A attached hereto and incorporated herein by
reference (the “Leased Premises”). Lessor shall also grant to Lessee a non-exclusive easement over the premises situated at 3515 Franklin Road for lanes around the building at 3521 Franklin Road for use in connection with Lessee’s
drive-through facility. Each parcel, 3521 and 3515 Franklin Road shall have an easement for ingress and egress over the other parcel. 
 2.
Initial Term and Renewal Terms. The initial term of this Lease shall commence on the date this Lease is fully executed by the parties (the “Execution Date”) and shall terminate on July 31, 2016 (the “Expiration
Date”). Lessee may extend the initial term of this Lease for two (2) additional five (5) year periods, provided that notice of Lessee’s election to renew this Lease must be received by Lessor at least ninety (90) days prior
to the expiration of the then existing term (but not earlier than one (1) year prior to the expiration of the then existing term) and further provided that an Event of Default, as set forth in Section 16, shall not exist at the time the
notice to renew is received by Lessor. 
 3. Possession, Rent, Rent Adjustment and Late Fee. Possession of the Leased Premises shall
be given to Lessee on the Execution Date. Lessee shall be entitled to occupy the Leased Premises rent free for the period beginning on the Execution Date and ending on September 1, 2006. Beginning September 1, 2006 (the “Rent
Commencement Date”), Lessee covenants and agrees to pay Lessor annual rent in the amount of $57,000 per annum in monthly installments of $4,750.00 per month until a final Certificate of Occupancy is received, unless the failure to obtain the
Certificate of Occupancy is the result of Lessee’s failure to meet its obligations hereunder. After all alterations and repairs described in Sections 8 and 9 hereof are completed and a Certificate of Occupancy is received, Lessee’s rent
will increase to $96,000 per annum in monthly installments of $8,000.00 per month based upon the expenditures made by Lessor as set forth in Section 8, not exceeding $390,000. Should Lessor’s said expenditures exceed $390,000, which
increased expenditures having been approved by Lessee, the monthly rent shall be adjusted in an amount to return to Lessor a ten percent annual return on such increased expenditures. The rent provided for herein shall be increased by the change in
the All Urban Consumer Price Index (or such replacement index) during the 2007 calendar year, provided the increase shall be capped at three percent (3%). Beginning August 1, 2008 and for each lease year thereafter, the annual rent shall be
increased by the change in the All Urban Consumer Price Index (or such replacement index) 

 
during the preceding lease year, provided that the yearly increase in rent shall be capped at three percent (3%) and in no event shall the annual rent
for any lease year be less than the annual rent paid during the preceding calendar year. 
 All monthly payments of rent shall be payable
without deduction, offset, notice or demand in advance on the first day of each calendar month beginning on the Rent Commencement Date and continuing to be paid on the first of each month thereafter until the Expiration Date (as the same may be
extended) or earlier termination of this Lease as provided herein. Payments shall be made by cash or check payable to Lessor and delivered to Lessor’s address as stated in Section 24 of this Lease or the address then in effect for receipt
of notices hereunder. Lessee shall be charged a five percent (5%) late fee for any monthly payment of rent not received by Lessor by the tenth (10th) day of the month in which it is due. 
 4. Use of Leased Premises. Lessee shall use and occupy the Leased Premises, subject to the terms and conditions hereof, for the operation of a
bank or general office use. Any change in the use of the Leased Premises may not be made without the prior written consent of Lessor, which consent shall not be unreasonably withheld. 
 5. Personal Property Taxes, Licenses, Permits and Real Estate Taxes. Lessee shall pay promptly all business and personal property taxes, licenses
and permits arising from or in connection with its use and operation of the Leased Premises. Beginning on the Execution Date, Lessee shall be responsible for the cost of the real estate taxes and assessments applicable to the Leased Premises and
shall reimburse Lessor the cost thereof within thirty (30) days following Lessee’s receipt of evidence that the same have been paid. Lessee shall pay a late fee equal to five percent (5%) of the amount owed in the event Lessor has not
been reimbursed within said thirty (30) day period. 
 6. Payment of Utilities. Beginning on the Execution Date, Lessee shall be
responsible for payment of all utilities serving the Leased Premises. Lessee shall contract for the utilities serving the Leased Premises to be put in Lessee’s name and billed directly. Lessee shall promptly pay any and all utility bills.

 7. Time to Complete Alterations and Repairs of the Essence. The parties acknowledge that it is in their mutual best interests to
complete the repairs and alterations each of the parties is obligated to make as expeditiously as possible. Lessor and Lessee agree to use their best efforts to complete the alterations and repairs provided for in Sections 8 and 9 no later than
March 1, 2007, with reasonable extensions to be granted for good cause shown. 
 8. Lessor’s Improvements to the Lease Premises
and the Buildings. Lessor agrees, at Lessor’s sole cost and expense, to install: (i) a new false roof and guttering except that Lessee will pay for that portion of the roof which covers the drive-though facility; (ii) brick and
masonry exterior walls on the four sides of the building with Lessee to pay one-half the cost thereof, said payment to be paid by Lessee when the brick work has been approved pursuant to Section 10 hereof; (iii) exterior windows and doors;
(iv) exterior painting; (v) to grade where appropriate, resurface and stripe the parking lot; and (vi) architecture and engineering fees and expenses to Bill Hume and his associates for exterior work, not to exceed $15,514. All of the
above to be consistent 

  

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with the sketch attached hereto as Schedule B. Lessor agrees at Lessor’s sole expense to provide an HVAC system satisfactory to Lessee’s architect
and to Lessor’s HVAC contractor, Kesterson Heating and Air, such system to be warranted for one year from the date the final Certificate of Occupancy is issued; after that one year period, Lessee will be responsible for a service contract and
for maintenance of the system. It is the intention of the parties that Lessor will make and pay for the exterior alterations and repairs, except as hereinabove set out in this Section 8. 
 9. Lessee’s Improvements; Maintenance and Repair of Leased Premises. 
 (a) Lessee agrees at Lessee’s sole cost and expense, to: (i) construct interior walls and ceilings and provide interior doors
and trim; (ii) install interior plumbing and electrical service; (iii) provide interior painting and/or wall covering; (iv) install floor covering; and (v) install tellers counter, drive-through window and equipment related to
the drive-though, including the roof and supports for the roof. It is the intention of the parties that Lessee will make and pay for the interior alterations and repairs except Lessee will also pay for the roof over the drive-though and one-half of
the exterior brick work. Lessee will pay for its portion of the roof and brick work at such time as the work is approved under Section 10. 
 (b) In the event any lien shall at any time be filed against the Leased Premises, the buildings or the land which the Leased Premises are a party, by reason of work, labor or services performed or materials furnished
to Lessee or to anyone holding the Leased Premises though or under Lessee, Lessee shall promptly cause the same to be discharged of record or bonded to satisfaction of Lessor. If Lessee shall fail to cause such lien or liens to be so discharged or
bonded within ten (10) days after being notified of the filing thereof, then Lessor, in addition to any other right or remedy set forth herein, shall have the right to cause the lien to be discharged or to declare all rent for the balance of
the then existing term immediately due and payable and shall have the right also to order and cause any further work and the supply of materials in and about the Leased Premises to be stopped. 
 (c) All improvements made to the Leased Premises which are so installed or attached that they cannot be removed without damage to the
Leased Premises or the buildings shall become the property of Lessor upon installation and may not be removed without the prior written consent of Lessor, except banking trade fixtures such as drive-though window, tellers counter, equipment and
vault, which will remain the property of Lessee and may be removed, with the premises repaired or restored after such removal. 
 (d) Lessor shall cause to be maintained, repaired and replaced the roof and all structural portions of the building, including the parking lot, water and sewer lines, and electrical service outside the building. 
 (e) Lessee shall be responsible, at its sole cost and expense, for maintenance and repair of the HVAC system(s) and the components thereof
serving the Leased Premises after the one-year warranty period, provided that Lessee shall be entitled to the benefit of any warranty covering any repair or replacement required to be made. Lessee shall cause to be provided normal preventive
maintenance services to the HVAC system(s) serving the Leased Premises. 
  

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 (f) Lessee shall also maintain the Leased Premises in a clean, safe condition and good
state of repair, subject to ordinary wear and tear. All damage to the Leased Premises and to its fixtures, appurtenances and equipment caused by Lessee’s moving property in or out of the Leased Premises, by the installation or removal of
furniture, fixtures or other property, or by any other action or omission of Lessee, its employees, agents or invitees shall be repaired, restored or replaced promptly by Lessee at its sole cost and expense, which repairs, restorations and
replacements shall be in quality and class equal to the original work or installations. If Lessee fails to make the repairs, restorations or replacements, then the same may be made by Lessor at the expense of Lessee and Lessee agrees to pay the
amount of such repairs, restorations or replacements within thirty (30) days as additional rent and to pay as a late fee an amount equal to five percent (5%) of each invoice not paid within thirty (30) days. Notwithstanding any of the
foregoing to the contrary, all replacements and improvements made by Lessor shall be deemed the property of Lessor. 
 (g)
Lessee shall promptly notify Lessor (or any other person designated by Lessor), of any repair or replacement needed to the Leased Premises for which Lessor is responsible (eg., roof and guttering, exterior walls, windows and doors, replacement of
air conditioning units, and repair or resurfacing and striping of parking lot). Any person or company selected by Lessor to make any repairs or replacements shall be properly licensed and insured. Lessor shall have no obligation to make any repair
or replacement until such time as Lessee notifies Lessor of such necessary repair or replacement. 
 10. Design and Construction
Administration. Lessee’s architect, Bill Hume, will design the alterations and improvements to the Leased Premises consistent with the sketch attached as Schedule B. Both Lessor and Lessee may select the contractors, workmen and suppliers
to perform the alterations and repairs for which each is responsible. However, it is understood and agreed that all work must comply with the plans and specifications provided by Lessee’s architect and must be approved when completed by said
architect, which said approval may not be unreasonably withheld. 
 11. Condemnation. 
 (a) Total. If the Leased Premises are wholly condemned by any public authority under the power of eminent domain, or a voluntary
transfer by Lessor to any condemning authority under threat of condemnation, Lessee’s leasehold interest in the Leased Premises shall be deemed to terminate as of the date on which title to the Leased Premises vests in the condemning authority.
Lessee shall at that time pay to Lessor all unpaid rent, additional rent or other amounts owed hereunder, prorated though such date of termination. 
 (b) Partial. If any portion of the Leased Premises shall be partially condemned by public authorities under the power of eminent domain, or voluntary transfer to any condemning authority under threat of
condemnation, and if such partial taking materially interferes, in the reasonable opinion of Lessee, with the business then being conducted on the Leased Premises by Lessee, then (i) Lessee shall be entitled to a reduction in the rent
thereafter to reflect any resulting decrease in the fair market rental value of the Leased Premises, as mutually determined by Lessor and Lessee, or (ii) Lessee may, at its option, terminate this Lease and Lessee’s rights and duties
hereunder effective sixty (60) days following receipt by Lessor of written notice of termination from Lessee. In the event Lessee elects to terminate the Lease as provided in the preceding sentence, it shall notify Lessor in writing within
thirty (30) days of the title to the portion of the Leased Premises vests in the condemning authority. 
  

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 (c) Compensation. The compensation awarded or paid upon such total or partial
taking of the Leased Premises shall belong to Lessor, however, Lessee shall be entitled to participate in the condemnation proceedings and shall be entitled to compensation for the taking or impairing of the unamortized portion of any leasehold
improvements made by Lessee to the Leased Premises and its moving and relocation expenses. 
 12. Hazard Insurance and Damage to Leased
Premises. Lessor shall cause the Leased Premises to be insured against loss or damage by fire or other casualty, provided that Lessee shall reimburse Lessor for the premiums paid by Lessor to insure the building beginning on the Execution Date
and continuing until the termination of this Lease. Lessee shall reimburse Lessor the cost of said insurance premiums within thirty (30) days following Lessee’s receipt of written evidence that the same have been paid by Lessor and Lessee
shall pay a late fee of five percent (5%) of the amount of the premiums in the event Lessee fails to reimburse Lessor within the thirty (30) day period. Lessee shall insure at its own expense its personal property, improvements, inventory
and other contents located, used or stored in the Leased Premises (collectively, “Lessee’s Personal Property”) against loss or damage by fire or other casualty and Lessor shall not be liable for any damages arising for any reason
whatsoever to Lessee’s Personal Property. In the event of fire or other casualty to the Leased Premises, Lessor may elect to either (i) rebuild and restore the Leased Premises or (ii) terminate this Lease with no obligation to rebuild
and restore the Leased Premises. In the event Lessor elects to rebuild and restore the Leased Premises, this Lease shall not terminate provided that the rent, additional rent and other amounts owed hereunder shall abate until such time as the Leased
Premises are restored and possession is given to Lessee. Should Lessor elect to terminate the Lease following a fire or other casualty, neither party shall have any further liability hereunder, provided that Lessee shall pay all rent, additional
rent and other amounts owed to Lessor hereunder through the date of such casualty. 
 13. Indemnity to Lessor and Liability Insurance.
Lessee shall indemnify and save harmless Lessor from and against any and all loss, liability, damage and expense of any kind or nature whatsoever incurred to or expended by Lessor caused by, relating to or arising out of Lessee’s or its
employees’, invitees’ or agents’ use of, or activities in, upon or around, the Leased Premises. 
 For so long as this Lease
remains in effect or Lessee maintains possession of the Leased Premises, Lessee shall keep in force, at its sole cost and expense, comprehensive general liability insurance with an insurer reasonably satisfactory to Lessor in the amount of
$1,000,000.00 for injury (fatal or nonfatal) to or death of any one person and $2,000,000.00 for injury to or death of more than one person in any one occurrence and $500,000.00 for damage to or destruction of property in or upon the Leased
Premises. Lessor shall be named as an additional insured under the policy or policies evidencing the foregoing insurance coverage, and each such policy shall require at least thirty (30) days prior written notice to Lessor before lapse or
discontinuance of coverage (whether due to nonpayment, nonrenewal or passage of time) for any reason or before any modification or other change in the terms of coverage. Lessee shall promptly provide Lessor with the original or true copies of each
such policy as well as a certificate of insurance evidencing such coverage. 
  

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 14. Assignment and Subletting. Lessee may not assign or sublet this Lease, in whole or in part,
without Lessor’s prior written consent, which consent shall not be unreasonably withheld. As a condition to Lessor consenting to any assignment or sublet, Lessee shall first provide Lessor with a signed acknowledgment by any proposed assignee
or sublessee agreeing to be bound by the terms of this Lease. In no event shall any permitted assignment or sublease relieve Lessee of its obligations hereunder and notwithstanding such permitted assignment or sublease Lessee shall remain primarily
liable for all obligations owed to Lessor hereunder. However, Lessor may convey the Leased Premises to an entity or to individuals as long as they are related parties to the Poulos’. 
 15. Environmental Matters - Lessee’s Obligations. During the term of this Lease, Lessee shall, at Lessee’s sole cost and expense, comply
with and observe all state and federal environmental laws, and any and all rules and regulations relating thereto (“Environmental Laws”) pertaining to the Leased Premises or Lessee’s use and occupancy of the Leased Premises. Lessee
shall promptly deliver to Lessor copies of all notices which Lessee receives from any governmental authority or agency alleging any violation of Environmental Laws or requesting compliance with any Environmental Laws. Lessee shall indemnify, defend
and hold Lessor harmless from and against any and all claims, losses, damages, liabilities, costs and expenses, including attorney’s fees, arising from Lessee’s failure to comply with all Environmental Laws of any kind or nature whatsoever
incurred or expended by Lessor caused by, relating to or arising out of Lessee’s activities in, upon or around, the Leased Premises. This provision shall survive termination of the Lease. 
 16. Event of Default by Lessee. Each of the following shall constitute an “Event of Default” under this Lease: 
 (a) Lessee’s failure to pay rent, additional rent or any other amount owed hereunder within five (5) days after written notice
from Lessor that the same is past due; provided that no such notice shall be required if a notice has been given at any time during the immediately preceding twelve (12) month period; 
 (b) Lessee fails to observe or perform any other term, condition or covenant herein binding upon Lessee within thirty (30) days after
notice from Lessor; provided that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee shall commence such cure promptly
and shall thereafter diligently proceed to completion; 
 (c) Lessee abandons or vacates the Leased Premises for fourteen
(14) consecutive days, or Lessee fails to surrender the Leased Premises to Lessor on the Expiration Date (as the same may be extended) or earlier termination of this Lease; 
 (d) Lessee makes or consents to a general assignment for the benefit of creditors or a receiver is appointed for all or substantially all
of Lessee’s assets; or 
  

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 (e) Lessee files a voluntary petition in any bankruptcy or insolvency proceeding or an
involuntary petition in any bankruptcy or insolvency proceeding is filed against Lessee and is not discharged by Lessee within sixty (60) days. 
 17. Lessor’s Remedies in Event of Lessee’s Default. Upon the occurrence of an Event of Default, Lessor, at its option and without any obligation to do so, and without further notice or demand to
Lessee, may exercise any one or more of the following remedies in addition to all other rights and remedies provided in this Lease or available at law or in equity: 
 (a) Lessor may terminate this Lease, in which case Lessee shall immediately surrender possession of the Leased Premises to Lessor and,
except as specifically set forth herein, neither party shall have any further rights or obligations under this Lease, except that Lessee shall remain liable for payment of rent, additional rent and all other amounts due for the remainder of the
initial term (or the then existing term if the Lease has been renewed), and the performance of all other terms and conditions of this Lease required to have been performed before the date of termination. If Lessor terminates this Lease, Lessor may
accelerate the rent and additional rent due for the remainder of the initial term (or then existing term if the Lease has been renewed) and Lessee shall pay to Lessor upon written demand all rent and additional rent that would have been due from the
date of termination until the Expiration Date. 
 (b) Lessor may terminate Lessee’s right of possession of the Leased
Premises without terminating this Lease, in which case Lessee shall immediately surrender possession of the Leased Premises to Lessor. If Lessee fails to surrender possession, Lessor may expel or remove Lessee and any other person who may be
occupying the Leased Premises or any portion thereof, by summary proceeding, ejectment or other legal action or by force if necessary, and may change the locks on the doors to the Leased Premises, without being liable for prosecution or any claim
for damages therefor. In such case, Lessor may, at its option, remove Lessee’s Personal Property and other evidence of tenancy and store them at Lessee’s risk and expense or dispose of them as Lessor sees fit. Regardless of whether Lessor
reenters or retakes possession of the Leased Premises, Lessee shall not be released, in whole or in part, from the obligation to pay the rent, additional rent and other amounts owed hereunder for the remainder of the initial term or from any other
obligation under this Lease. If Lessor terminates Lessee’s right of possession, Lessor may relet the Leased Premises, or any part thereof, for the account of Lessee, for such rent and term and upon such other conditions as are acceptable to
Lessor in its sole discretion. For purposes of such reletting, Lessor is authorized to repair, refurbish or otherwise restore the Leased Premises to a condition reasonably consistent with normal usage, wear and tear occasioned by Lessee’s use
of the Leased Premises over the course of Lessee’s occupancy, as deemed necessary by Lessor. Lessee shall be liable for the reasonable costs incurred by Lessor in connection with any such restoration. Nothing herein shall be construed to
obligate Lessee to revitalize or otherwise upgrade the Leased Premises beyond the condition it was in when Lessee took possession. Lessee shall be responsible for any deficiency between the rent and additional rent due hereunder and the rent
collected from such reletting. However, Lessee shall not be responsible for rent deficiencies caused by Lessor subletting the Leased Premises at a discount rate to new tenants, without good cause to do so. 
  

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 (c) Lessor may make such payment or take whatever action Lessor may determine to be
necessary or appropriate to comply with the terms and conditions of this Lease that Lessee failed to observe, to perform the covenant in this Lease breached by Lessee or to correct, avoid or reduce any damages caused or anticipated to be caused by
the Event of Default. Such payment or action by Lessor shall not be deemed to have cured the Event of Default for purposes of this Section and shall not limit Lessor’s right to pursue the other remedies available to Lessor on account of such
Event of Default. 
 (d) Lessor may recover from Lessee all payments of rent, additional rent and other amounts owed hereunder
as they become due and enforce Lessee’s compliance with all of the other terms and conditions of this Lease, regardless of whether Lessee has surrendered possession of the Leased Premises and without any obligation on Lessor’s part to
relet the Leased Premises to other tenants. 
 18. Payment of Lessor’s Costs. Lessee shall pay or reimburse Lessor and its agents
for all costs incurred or paid in exercising any one or more of the remedies provided in this Lease or at law or in equity after the occurrence of an Event of Default, including, without limitation, all reasonable attorneys’ fees, together with
interest on all costs incurred at a rate of ten percent (10%) until paid. Lessee shall pay such costs and interest thereon immediately upon demand by Lessor. 
 19. Default by Lessor. If Lessor shall default in the performance of any of its covenants and obligations contained in this Lease, Lessee shall give written notice to Lessor specifying the nature of the default
and shall provide Lessor with a reasonable opportunity to cure the default. In the event Lessor fails to cure the default with thirty (30) days following Lessor’s receipt of notice from Lessee, or fails to commence to cure the default in
the event the same cannot reasonably be cured within thirty (30) days and diligently proceeds to cure the same, Lessee shall have the right to cure any such default on behalf of Lessor and require the cost thereof to be paid by Lessor
immediately upon demand therefore. In no event shall Lessee have the right to terminate this Lease due to Lessor’s default. 
 20.
Covenant and Agreement of Lessor. Lessor covenants and agrees that Lessee, upon paying the rent, additional rent and other amounts owed hereunder and upon the performance of the covenants, conditions and agreements herein provided to be
observed and performed by Lessee, shall peaceably and quietly hold and enjoy the Leased Premises for and during the initial term and any renewal hereof. 
 21. Lessor’s Right to Access to Leased Premises. Lessor shall coordinate with Lessee in order to gain access to the Leased Premises, provided that Lessee shall cooperate in good faith to allow Lessor and
its agents access to the Leased Premises within a reasonable time frame. Lessor will not have keys to the Leased Premises and, in the event of an emergency, Lessor agrees to contact the individuals designated by Lessee for access to the Leased
Premises. 
 22. Covenants of Lessee. Lessee covenants that (a) it will comply with all Federal, State and/or municipal laws,
ordinances and regulations relating to its business conducted in the Leased Premises and to its use of the Leased Premises, (b) it will not use, or permit to be used, the Leased Premises for any illegal purpose, and (c) it will conduct its
business in such manner as will be in keeping with the character and reputation of the Leased Premises. 
  

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 23. Signs. Lessee shall be entitled to affix exterior signs to the building at the intersection of
Franklin Road and Duke of Gloucester Street, the Bank’s sign to be the dominant sign at said location, size and design to first be approved by Lessor in writing, which approval shall not be unreasonably withheld. A smaller sign will be affixed
to the current signpost for DJ’s. Such change shall be at Lessee’s expense and approved by Lessor in writing, which approval shall not be unreasonably withheld. It is agreed by the parties that should the property where DJ’s is
located be sold or leased for a restaurant, Lessee will permit the continuation of a directional sign to the restaurant consistent with the one which will be installed for DJ’s. Lessee shall also be permitted to place a temporary “Coming
Soon” sign on the property during the construction period. Any permitted sign to be installed by Lessee shall comply with all local rules, regulations and ordinances promulgated by the local governing body where the Leased Premises are located.
Lessee shall pay, at its sole costs and expense, for the installation of any permitted sign and for any damage to the buildings caused by the installation, removal or modification of any sign. 
 24. Notices. All notices to the parties hereto shall be sent via hand delivery, certified mail return receipt requested, overnight delivery or via
facsimile, and shall be deemed effective upon confirmation of receipt thereof, to the following addresses (until such address is changed by written notice to the other party): 
 Lessor: 
 James Paul Poulos 

Rita Ann Poulos, Trustees 
 6757 Parkway
Drive 
 Roanoke,VA 24018 
 with a
copy to: 
 Edward A. Natt 
 Osterhoudt, Prillaman, Natt, Helscher, 
 Yost, Maxwell & Ferguson, PLC 
 P. O. Box 20487 
 Roanoke,VA 24018-0049 

 Facsimile No.: (540)772-0126 
 Lessee: 
 HomeTown Bank 
 c/o William S. Clark, President & CEO 
 P.O. Box 271 
 Roanoke, VA 24002 
 Facsimile No.:
(540) 342-5626 
  

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 with a copy to: 
 William R. Rakes 
 Gentry Locke Rakes & Moore 
 10 Franklin Road, SE, Suite 800 
 Roanoke, VA
24011 
 Facsimile No.: (540) 983-9468 
 25. Entire Agreement. This Lease, including the Schedule(s) attached hereto, contains the entire agreement of the parties, and shall supersede the terms and conditions of all prior written and oral agreements,
if any, concerning the matters covered herein. The parties acknowledge there are no oral agreements, understandings, representations, or warranties which supplement or explain the terms and conditions contained in this Lease. This Lease may not be
modified except by a writing signed by Lessor and Lessee. 
 26. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of any right or power hereunder at any one time or more times be deemed a waiver or relinquishment of
such right or power at any other time or times. 
 27. Arbitration. Any dispute arising out of or related to this Lease shall be
resolved exclusively by arbitration in Roanoke, Virginia, provided however that neither Lessor nor Lessee shall commence an arbitration proceeding unless and until such party shall first give a written notice (a “Dispute Notice”) to the
other party setting forth the nature of the dispute. The parties shall first attempt in good faith to resolve the dispute without resorting to arbitration. If the dispute has not been resolved by the parties within thirty (30) days after
delivery of a Dispute Notice, then either party may proceed with the filing of a demand for arbitration. The arbitration shall be initiated and administered according to the Commercial Arbitration Rules of the American Arbitration Association
(“AAA”) in effect on the date of the Dispute Notice, however, the parties agree that they will not use AAA or its arbitrators to administer or conduct the proceeding. Instead, the parties agree that a single arbitrator, mutually selected
by the parties, will preside over the proceeding. The arbitration will be initiated by the certified mailing of a Demand for Arbitration by one party to the other. If the parties cannot agree upon an arbitrator within thirty (30) days after a
Demand for Arbitration has been made, the parties shall seek appointment of an arbitrator by the Circuit Court for the City of Roanoke. The arbitrator shall base the award on applicable law and judicial precedent and, unless both parties agree
otherwise, shall include in such award the findings of fact and conclusions of law upon which the award is based. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The losing party shall pay
the costs of the arbitration, the legal fees and all other reasonable costs incurred by the winning party. 
 28. Subordination and
Attornment. Lessee covenants and agrees that this Lease shall be subordinate to any mortgage, deed of trust or other security instrument now or hereafter placed upon the Leased Premises or the buildings of which the Leased Premises are a part by
any bank, trust company, insurance company or other lender. Lessee shall, upon Lessor’s request, execute and deliver any instrument necessary to effectuate such subordination, and if Lessee, within ten (10) days after submission of such
instrument, fails to execute the same, Lessor is 

  

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hereby authorized to execute the same as attorney-in-fact for Lessee. Notwithstanding the foregoing, upon written request by Lessee, Lessor shall obtain from
any holder of a mortgage, deed of trust or other security instrument a non-disturbance agreement from such third parties acknowledging and agreeing that Lessee’s interest in the Leased Premises will not be disturbed so long as Lessee performs
its obligations hereunder. 
 29. Estoppel Certificates. Lessee shall, from time to time, upon Lessor’s written request, execute,
acknowledge and deliver to Lessor a written statement certifying that this Lease is unmodified and in full force and effect (or that the same is in full force and effect as modified, listing the instruments of modification), the dates to which rent
and other charges have been paid, and whether or not to the best of Lessee’s knowledge Lessor is in default hereunder (and if so, specifying the nature of the default); it being intended that any such statement delivered pursuant to this
Section may be relied upon by a prospective purchaser of Lessor’s interest or mortgagee of Lessor’s interest or assignee of Lessor’s interest in the Leased Premises. 
 30. Force Majure. Neither party, nor any successor in interest thereto, shall be considered in breach of or default in any of its obligations
under this Lease in the event of delay in the performance of such obligations due to causes beyond its control, including but not restricted to, strikes, lockouts, other actions of labor unions, riots, storms, floods, explosions, acts of God or of
the public enemy, acts of government, insurrection, mob violence, civil commotion, sabotage, malicious mischief, vandalism, inability (notwithstanding good faith and diligent efforts) to procure, or general shortage of, labor, equipment, faculties,
materials, or supplies in the open market, defaults of independent contractors or subcontractors (provided that remedies are being diligently pursued against the same), failures of transportation, fires, other casualties, epidemics, quarantine
restrictions, freight embargoes, severe weather, inability (notwithstanding good faith and diligent efforts) to obtain governmental permits or approvals, or delays of subcontractors due to such causes. 
 31. Termination of Lease Due to Lessee’s Inability to Gain Approvals. This Lease shall automatically terminate in the event Lessee does not
obtain the requisite approvals from the Bureau of Financial Institutions of the Virginia State Corporation Commission, for the operation of a branch on the Leased Premises by December 1, 2006. In the event of the automatic termination of this
Lease as set forth in this Section 31, Lessee nevertheless shall remain responsible for the payment of all amounts owed hereunder through the date of termination and any and all improvements made to the Leased Premises by Lessee shall not be
removed and remain the property of Lessor. 
 32. Miscellaneous. 
 (a) This Lease may be executed by the parties in any number of counterparts (each of which shall be deemed to be an original, and all of
which shall be deemed to represent one and the same agreement), and merges all prior or contemporaneous understandings and agreements between the parties hereto with respect to the Leased Premises. Facsimile signatures shall be treated and deemed
originals. 
  

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 (b) This Lease and the covenants and conditions herein contained shall bind and inure to
the benefit of Lessor and Lessee and their respective heirs, successors and their permitted assigns. 
 (c) This Lease shall
be construed in accordance with, and the respective rights, obligations and remedies of the parties shall be governed in all respects by, the laws of the Commonwealth of Virginia. 
 (d) The headings and subheadings of the provisions herein are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Lease. 
 (e) Smoking is not permitted in the Leased Premises. Lessee agrees
that it shall make its employees, agents and invitees aware of the no smoking policy mandated by Lessor. 
 (f) Except for any
obligations of Lessor expressly set forth herein, this Lease is a “net lease” and Lessor shall receive the rent as net income from the Leased Premises, not diminished by any expenses except as otherwise expressly provided herein.

 WITNESS the following signatures and seals: 
  

											
		 		 	LESSOR:	 	
				
		 		 	 James Paul Poulos, Trustee
 Rita Ann Poulos,
Trustee
	 	
					
	August 7, 2006	 		 	By:	 	/s/ James P. Poulos	 	(SEAL)
	Date	 		 		 	James Paul Poulos, Trustee	 	
					
		 		 	By:	 	/s/ Rita Ann Poulos	 	(SEAL)
		 		 		 	Rita Ann Poulos, Trustee	 	

  

											
		 		 	LESSEE:	 	
				
		 		 	HomeTown Bank	 	
					
	August 7, 2006	 		 	By:	 	/s/ William S. Clark	 	(SEAL)
	Date	 		 	Its:	 	President / CEO	 	

  

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 Schedule A 
 The Leased Premises is Lot B described hereinbelow: 
 Lots A and B, containing .342 acres and .536 acres, respectively, as shown on
Plat of Survey showing the division of the property of James Paul Poulos and Helen C. Poulos being a portion of Tract 5 of Acsal Co., Inc. Map divided into Lots A, B, and C, Roanoke County, Virginia, made by C. B. Malcolm & Son, dated
February 22, 1968, and of record in the Clerk’s Office of the Circuit Court of the City of Roanoke, Virginia, in Deed Book 1433, at page 628, to which reference is specifically made; 
 BEING the same property conveyed unto James P. Poulos and Helen C. Poulos, husband and wife, as
tenants by the entirety with the right of survivorship as at common law, by Deed dated January 2, 1962, from Pearl C. Clay and Virginia G. Clay, his wife, of record in the Clerk’s Office of the Circuit Court for the County of Roanoke,
Virginia, in Deed Book 680, page 577. The said Helen C. Poulos having departed this life on the 20th day of April, 1997, and title thereby vesting
in her husband, the said James P. Poulos; and 
 BEING the same property conveyed by James P. Poulos, widower, to James Paul Poulos and Rita
Ann Poulos, Trustees, under that certain Trust Agreement with James Paul Poulos dated March 8, 2001, of record in the Clerk’s Office of the Circuit Court of the City of Roanoke, Virginia, in Deed Book 6815 at page 10. 

 

 
 SCHEDULE BEXHIBIT 10.7

 Exhibit 10.7 
 BRANCH LEASE AGREEMENT 
 Prepared by: Kendall O. Clay, Attorney at Law, P.C., PO Box 852, Radford, VA 24143 
 Return to:
                                         
                                         
                                       
 Tax Map Reference No.:
                                         
                    
 THIS LEASE AGREEMENT, made this 30th
day of April, 2008, by and between HASH GROUP, LLC, Grantor, herein referred to as “Landlord”, whose address is 2257 Roanoke Street, Christiansburg, Virginia 24073, and HOMETOWN BANK, D/B/A NEWRIVER BANK, Grantee, herein referred to as
“Tenant”, whose address is 202 S. Jefferson Street, Roanoke, Virginia. 
 WITNESSETH: 
 WHEREAS, Landlord is the sole owner of the following premises located at 1540 Roanoke Street, Christiansburg, Virginia, described on Exhibit I attached
hereto; and 
 WHEREAS, Tenant desires to lease the premises for the purpose of conducting a branch bank and banking operations. 

NOW, THEREFORE, in consideration of the mutual covenants contained herein the parties hereby agree as follows: 
 DESCRIPTION OF THE PREMISES 
 Landlord agrees
to lease and Tenant agrees to rent that certain space designated as 1540 Roanoke Street, Christiansburg, Virginia, together with adequate parking space and roadways for ingress and egress to the leased premises, which space is hereinafter referred
to as the “premises.” 
 TERM OF LEASE 
 Tenant agrees to lease the above described premises for a period of sixty (60) months commencing on the first day of May, 2008. At the end of such 60-month period the Lease shall be renewed for an additional
60-month period upon the same terms and conditions (except for an increase adjustment in rent as provided herein), unless ninety (90) days prior to the end of such 

 
initial 60-month period the Tenant notifies the Landlord that it does not intend to renew the Lease. Upon the expiration of the initial term and any renewal
term, as provided herein, the Lease shall continue for successive periods of 60 months unless either party notifies the other party by delivery of a certified letter notifying the other party of its intent not to renew the Lease. 
 COMMENCEMENT DATE AND IMPROVEMENTS 
 The
premises will be available to the Tenant by May 1, 2008. The Tenant may, at any time during this Lease, with the prior written consent of the Landlord and upon such terms and conditions as the Landlord shall set forth in writing, make such
alterations and additions to the premises at its own expense. 
 RENT 
 Tenant agrees to pay to Landlord at its office, the sum of One Thousand and 00/100 Dollars ($1,000.00) per month for the lease of the premises, to be due
and payable on the first day of each month beginning on the first day of May, 2009. No rent will be payable during the period May 1, 2008 through April 30, 2009. 
 For the renewal period and any subsequent renewal periods rent for the renewal period and subsequent renewal periods shall increase by 10% over the
rental in effect for the previous period for each subsequent rental period. 
 REAL ESTATE TAXES 
 During the term of this Lease, Landlord shall pay all real estate taxes and real estate assessments imposed on the demised premises by the state, county,
or other lawful governmental authority. Tenant shall reimburse Landlord for said real estate taxes imposed directly on the leased premises or on a pro-rata basis based on the entire rental area of the property. Tenant shall pay all personal property
and business taxes imposed by the state, county, or other lawful governmental authority on Tenant’s property or business operations. 
  

 2 

 USE OF PREMISES 
 The parties expressly agree that this Lease is executed in order that Tenant may conduct the business of a branch banking operation. 
 SERVICES 
 During the term of this Lease, the parties shall provide the following: 
 At Tenant’s Expense: 
  

	 	•	 	 Heating, cooling and electricity which are separately metered and will be put in Tenant’s name 

  

	 	•	 	 Maintenance, including parking lot maintenance and the cost of snow removal and paving shall be pro-rated based upon the area occupied by the Tenant as a proportion
of the total occupied space in the center 

  

	 	•	 	 Custodial services 

  

	 	•	 	 Real estate taxes (pro-rata) 

  

	 	•	 	 Exterior maintenance 

 At
Landlord’s Expense: 
  

	 	•	 	 Hazard insurance protecting the Landlord’s interest 

 ASSIGNMENT AND SUBLEASE 
 This Lease may not be assigned or transferred, except to a successor entity, and
the premises may not be sublet, either in whole or in part, by Tenant without Landlord’s prior written consent. 
 REPAIRS 
 Landlord hereby agrees that during the term of this Lease, it shall, in the matter of keeping the building and demised premises in good repair, maintain
the parking area and be responsible for snow removal and that these services shall be a part of the expense of “SERVICES” and billed as provided above. 
  

 3 

 RIGHT OF ENTRY TO REPAIR 
 Landlord reserves the right for itself, its agents and employees to enter upon the premises at any reasonable time to make repairs, alterations or improvements; provided, however, that such repairs, alterations, or
improvements shall not unreasonably interfere with Tenant’s business operations. Such right to enter shall also include the right to enter upon the premises for the purposes of inspection. 
 INSURANCE 
 Landlord shall maintain all
public or common areas in a condition free from all physical and fire hazards. Landlord shall adequately insure the building and all public or common areas for fire, casualty, hazard, and liability. Tenant shall maintain the demised premises in a
hazard-free condition. Tenant shall be responsible for insuring its personal property and it shall be responsible for all liability within the demised premises. 
 BANKRUPTCY OR INSOLVENCY 
 It is expressly agreed that if at any time during the term of this lease, Tenant
shall be adjudged bankrupt or insolvent by any Federal or State Court of competent jurisdiction, Landlord may, at its option, declare this Lease to be terminated and canceled, and may take possession of the demised premises. In the event of the
backruptcy or insolvency of the Landlord, or in the event the premises are sold, Tenant may elect to terminate this Lease, but it will not be required to do so. 
 DAMAGE OR DESTRUCTION BY FIRE OR NATURAL CAUSES 
 If, during the term of this Lease, the building on the
demised premises is destroyed by fire, natural causes, or other casualty, or so damaged thereby that it cannot be repaired with reasonable diligence within sixty (60) days, this Lease shall terminate as of the date of such damage or
destruction. However, if said buildings can with reasonable diligence be repaired within 60 days, 

  

 4 

 
said buildings shall be, by Landlord, repaired as quickly as is reasonably possible, and this lease shall remain in full force and effect; provided, however,
rent shall be abated for any part of said building which is rendered unfit for occupancy for the period that such unfitness continues. 
 DEFAULT ON PAYMENT OF RENT 
 If any monthly installment of rent as herein called for remains overdue and unpaid for ten
(10) days, Landlord shall impose a penalty of five (5) percent of the monthly rental amount for each month overdue. If any monthly installment of rent and interest as herein called for remain overdue and unpaid for thirty (30) days,
Landlord may, at its option, at any time during such default, declare this Lease terminated and take possession of the demised premises. 
 DISPUTE RESOLUTION/ARBITRATION 
 The parties agree to use every reasonable effort to settle any dispute or disagreement between
them relative to this agreement by amicable means and not to resort to legal action unless and until the parties have in good faith attempted to settle such dispute or disagreement. If this method of resolution should have proved to be
impracticable, any controversy or claim arising out of or relating to this agreement shall be submitted to and be finally resolved by arbitration. Unless the parties interested mutually agree on a different method of arbitration, then any interested
party may submit the matter to arbitration with one arbitrator selected by each party and the two arbitrators thus selected shall select a neutral arbitrator who shall preside over the arbitration which will be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, the Virginia Arbitration Act, or such other rules and procedures agreed upon by a majority of the arbitrators. The arbitrators may employ such experts as they deem necessary and
hear evidence from any party in the discretion of the arbitrators. The determination by a majority of the arbitrators shall be binding on all parties for all purposes and a judgment on the award may be entered 

  

 5 

 
by any court of competent jurisdiction. Costs of each designated arbitrator shall be paid by the designating party and all other costs for a neutral
arbitrator, experts and expenses incurred shall be divided equally between the parties in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall take place in a neutral location, and, except
as otherwise provided herein, the provisions of the Virginia Uniform Arbitration Act shall apply. The arbitrators may employ the services of such accountants and agents as they may deem necessary. Interested parties may present to the arbitrators
such evidence as they may deem appropriate. The determination of a majority of the arbitrators shall be final and binding upon all persons for all purposes. Each party shall bear the expenses of its or his attorney and the expenses of its or his
proof, if any. Judgment upon the award rendered by the arbitrators may be entered in any court of competent jurisdiction. 
 SIGNS 

Tenant may display signs and shingles advertising his place of business with the prior written consent of the Landlord, which consent shall not be
unreasonably withheld. 
 The parties, having read and understood the provisions of this lease agree for themselves, their heirs,
administrators, personal representatives, executors, successors and assigns to be bound thereby. 
 In Witness Whereof, the parties have
executed this lease on the 30th day of April, 2008. 
  

			
	HASH GROUP, LLC
		
	By:	 	/s/ David Hagan
	Its:	 	 
	
	HOMETOWN BANK, D/B/A NEWRIVER BANK
		
	By:	 	/s/ Charles W. Maness
	Its:	 	CFO

  

 6

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