Indemnity Agreement
This Indemnity Agreement is made and entered into as of March 23,
2005, by and between MainStreet BankShares, Inc., a Virginia bank
holding company ("MainStreet") and Smith River Community Bank,
National Association, a national banking association ("Bank").
Whereas, Bank was formerly a wholly owned subsidiary of MainStreet
and MainStreet has sold all of its hares in the Bank to Argentum
Capital Management, LLC and/or its assignees ("Argentum");
Whereas, as a condition to such sale Argentum required MainStreet,
and MainStreet was willing, to enter into this Indemnity
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, the
mutual covenants of the parties contained herein and one dollar and
other valuable consideration in hand paid, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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The parties have identified the loans more specifically set forth
on Exhibit
A hereto as indemnifiable loans provided that Bank has not made
or
permitted to be made on or after the Closing Date (as defined in
Section 4
hereof) any modification in any term or condition of such loan
without the
prior express written consent of MainStreet (each a "Loan").
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MainStreet agrees that, in the event the Bank determines in
accordance
with its own general credit and accounting policies and industry
standards
to charge off a Loan (each a "Charge Off Loan"), MainStreet will
acquire
all of Bank's right, title and interest in the Charge Off Loan
within
a
reasonable period of time not exceeding 45 days after notice
thereof from
Bank and subject to the terms and conditions hereof.
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A Charge Off Loan shall be eligible for purchase her
