Exhibit 10.1

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

 

BY AND AMONG

 

SOUTHERN FIRST BANCSHARES, INC.

 

AND

 

THE OTHER SIGNATORIES THERETO

 

January 27, 2014

 

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SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of January 27,
2014, by and among Southern First Bancshares, Inc., a South Carolina corporation
(the “Company”), and each purchaser identified on the signature pages hereto
(each, including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).

 

RECITALS

 

A. The Company and each Purchaser are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(2) of the Securities Act of 1933 (the “Securities Act”), and Rule 506 of
Regulation D (“Regulation D”) as promulgated by the United States Securities and
Exchange Commission (the “Commission”) under the Securities Act.

 

B. Each Purchaser, severally and not jointly, wishes to purchase, and the
Company wishes to sell, upon the terms and conditions stated in this Agreement,
that aggregate number of shares of the Company’s common stock, par value $0.01
per share (the “Common Stock”), set forth below such Purchaser’s name on the
signature page of this Agreement (which aggregate amount for all Purchasers
together shall be 475,000 shares of Common Stock and shall be collectively
referred to herein as the “Common Shares”).  The Board of Governors of the
Federal Reserve System (the “FRB”) has not objected to any Purchaser’s entry
into this Agreement or the consummation of the transactions contemplated
thereby, notwithstanding any conditions applicable to Purchaser set forth in any
passivity and anti-association letter provided to the FRB. 

 

C. The Company has engaged Sandler O’Neill + Partners, L.P. as its exclusive
financial advisor (the “Financial Advisor”) for the offering of the Common
Shares and the TARP Preferred Redemption (as defined below). 

 

D. Contemporaneously with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the “Registration Rights
Agreement”), pursuant to which, among other things, the Company will agree to
provide certain registration rights with respect to the Common Shares under the
Securities Act and the rules and regulations promulgated thereunder and
applicable state securities laws.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
agree as follows:

 

 

ARTICLE 1: 

 

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DEFINITIONS

 

1.1         Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, Controls, is controlled by or
is under common control with such Person, as such terms are used in and
construed under Rule 405 under the Securities Act.

 

“Articles of Incorporation” means the Articles of Incorporation of the Company
and all amendments thereto, as the same may be amended from time to time.

 

“Bank” means Southern First Bank, the Company’s Subsidiary insured depository
institution.

 

“Bylaws” means the Bylaws of the Company and all amendments thereto, as the same
may be amended from time to time.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
South Carolina are open for the general transaction of business.

 

“Closing” means the closing of the purchase and sale of the Common Shares
pursuant to this Agreement.

 

“Closing Date” means the date of this Agreement or such other date as the
parties may agree. 

 

“Code” means the Internal Revenue Code of 1986, including the regulations and
published interpretations thereunder.

 

“Common Stock” has the meaning set forth in the Recitals, and also includes any
securities into which the Common Stock may hereafter be reclassified or changed.

 

“Company Counsel” means Nelson Mullins Riley & Scarborough LLP.

 

“Company’s Knowledge” means with respect to any statement made to the knowledge
of the Company, that the statement is based upon the actual knowledge of the
executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement after reasonable investigation.

 

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

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“DTC” means The Depository Trust Company.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, including the
regulations and published interpretations thereunder.

 

“ERISA Affiliate”, as applied to the Company, means any Person under common
control with the Company, who together with the Company, is treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“Exchange Act” means the Securities Exchange Act of 1934 or any successor
statute, and the rules and regulations promulgated thereunder.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“GAAP” means U.S. generally accepted accounting principles, as applied by the
Company.

 

“Lien” means any lien, charge, claim, encumbrance, security interest, right of
first refusal, preemptive right or other restrictions of any kind.

 

“Material Adverse Effect” means any result, occurrence, fact, change, event or
effect that has, or could reasonably be expected to have, (i) a material and
adverse effect on the legality, validity or enforceability of this Agreement or
the Registration Rights Agreement, (ii) a material and adverse effect on the
results of operations, assets, properties, business, condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) any
adverse impairment to the Company’s ability to perform in any material respect
on a timely basis its obligations under this Agreement or the Registration
Rights Agreement; provided, that in determining whether a Material Adverse
Effect has occurred, there shall be excluded any effect to the extent resulting
from the following: (A) changes, after the date hereof, in U.S. GAAP or
regulatory accounting principles generally applicable to banks, savings
associations or their holding companies, (B) changes, after the date hereof, in
applicable laws, rules and regulations or interpretations thereof by any court,
administrative agency or other governmental authority, whether federal, state,
local or foreign, or any applicable industry self-regulatory organization, (C)
actions or omissions of the Company expressly required by the terms of this
Agreement or taken with the prior written consent of an affected Purchaser, (D)
changes, after the date hereof, in general economic, monetary or financial
conditions, (E) changes in global or national political conditions, including
the outbreak or escalation of war or acts of terrorism and (F) the public
disclosure of this Agreement or the transactions contemplated hereby; except,
with respect to clauses (A), (B), (D) and (E), to the extent that the effects of
such changes have a disproportionate effect on the Company and the Subsidiaries,
taken as a whole, relative to other similarly situated banks, savings
associations or their holding companies generally.

 

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“Material Contract” means any contract of the Company that was filed, or should
have been filed, as an exhibit to the SEC Reports pursuant to Item 601 of
Regulation S-K. 

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate is making, or is
accruing an obligation to make, contributions or has made, or been obligated to
make, contributions within the preceding six years. 

 

“OCC” means the Office of the Comptroller of the Currency.

 

“Pension Plan” means any employee pension benefit plan within the meaning of
Section 3(2) of ERISA, other than a Multiemployer Plan, which is subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA and which (i) is maintained for employees of the Company or any of its
ERISA Affiliates or (ii) has at any time during the last six years been
maintained for the employees of the Company or any current or former ERISA
Affiliate.

 

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization or governmental authority.

 

“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, is the NASDAQ Global Market.

 

“Proceeding” means an action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

 

“Purchase Price” means $13.00 per Common Share.

 

“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Registrable Securities (as defined in the Registration Rights
Agreement).

 

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“Required Approvals” means, collectively: (i) the filing with the Commission of
one or more Registration Statements in accordance with the requirements of the
Registration Rights Agreement, (ii) filings required by applicable state
securities laws, (iii) the filing of a Notice of Exempt Offering of Securities
on Form D with the Commission under Regulation D of the Securities Act, (iv) the
filing of any requisite notices and/or application(s) to the Principal Trading
Market for the listing of the Common Shares for trading or quotation, as the
case may be, thereon in the time and manner required thereby, (v) the filings
required in accordance with Section 4.6 of this Agreement and (vi) those that
have been made or obtained prior to the date of this Agreement.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“SEC Reports” means all reports, schedules, forms, statements and other
documents (including the exhibits thereto and documents incorporated by
reference therein) required to be filed by the Company under the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2011.

 

“Series T Preferred Stock” means the Company’s Fixed Rate Cumulative Perpetual
Preferred Stock, Series T, having a liquidation preference of $1,000 per share.

 

“South Carolina Courts” means the courts of the State of South Carolina and the
United States District Court located in the city of Greenville, South Carolina.

 

“State Board” means the South Carolina State Board of Financial Institutions.

 

“Subscription Amount” means with respect to each Purchaser, the aggregate amount
to be paid for the Common Shares purchased hereunder as indicated on such
Purchaser’s signature page to this Agreement next to the heading “Aggregate
Purchase Price (Subscription Amount)”.

 

“Subsidiary” means any entity in which the Company, directly or indirectly, owns
sufficient capital stock or holds a sufficient equity or similar interest such
that it is consolidated with the Company in the financial statements of the
Company. 

 

“TARP Preferred Redemption” means the redemption by the Company of 4,057 shares
of the Series T Preferred Stock held by EJF Debt Opportunities Master Fund, L.P.
at a redemption price of $1,000 per share.

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other than the OTC
Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by OTC Markets Group, Inc. (or any similar organization or agency succeeding to
its functions of reporting prices); provided , that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

 

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“Trading Market” means whichever of the NASDAQ Global Select Market, the NASDAQ
Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on which the
Common Stock is listed or quoted for trading on the date in question.

 

“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto, the Registration Rights Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

 

            “Transfer Agent” means Registrar and Transfer Company, or any
successor transfer agent for the Company. 

 

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ARTICLE 2: 

PURCHASE AND SALE

 

2.1         Purchase of Common Shares; Closing. 

 

                          (a)                Subject to the terms and conditions
set forth in this Agreement, at the Closing the Company shall issue and sell to
each Purchaser, and each Purchaser shall, severally and not jointly, purchase
from the Company, the number of Common Shares set forth below such Purchaser’s
name on the signature page of this Agreement at a per Common Share price equal
to the Purchase Price. Concurrent with the Company’s receipt of the Subscription
Amount from each Purchaser, the Company shall instruct the Transfer Agent to
issue, in book-entry form, the number of Common Shares specified on such
Purchaser’s signature page hereto (or, if the Company and such Purchaser shall
have agreed, as indicated on such Purchaser’s signature page hereto, that such
Purchaser will receive Common Shares in certificated form, then the Company
shall instead instruct the Transfer Agent to issue such specified Common Shares
in certificated form (the “Stock Certificates”)) registered in the name of such
Purchaser, or as otherwise set forth on the Stock Certificate Questionnaire
included as Exhibit B-2 hereto.

 

                          (b)                The Closing of the purchase and
sale of the Common Shares shall take place on the Closing Date at the
Greenville, South Carolina office of Nelson Mullins Riley & Scarborough LLP or
remotely by facsimile transmission or other electronic means or at such location
as the parties may mutually agree. 

2.2         Closing Deliveries.

 

                          (a)                On or prior to the Closing, the
Company shall issue, deliver or cause to be delivered to each Purchaser the
following (the “Company Deliverables”):

 

(i)            this Agreement, duly executed by the Company;

 

(ii)          the Company shall cause the Transfer Agent to issue, in book-entry
form the number of Common Shares specified on such Purchaser’s signature page
hereto (or, if the Company and such Purchaser shall have agreed, as indicated on
such Purchaser’s signature pages hereto, that such Purchaser will receive Stock
Certificates for their Common Shares, then the Company shall instead instruct
the Transfer Agent to issue such specified Stock Certificates registered in the
name of such Purchaser or as otherwise set forth on the Stock Certificate
Questionnaire);

 

(iii)         a legal opinion of Company Counsel, dated as of the Closing Date
and in the form attached hereto as Exhibit C, executed by such counsel and
addressed to the Purchasers;

 

(iv)         the Registration Rights Agreement, duly executed by the Company
(which shall be delivered on the date hereof); and

 

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(v)          a certificate of the Secretary of the Company, in the form attached
hereto as Exhibit D (the “Secretary’s Certificate”), dated as of the Closing
Date, (a) certifying the resolutions adopted by the Board of Directors of the
Company or a duly authorized committee thereof approving the transactions
contemplated by this Agreement and the other Transaction Documents and the
issuance of the Common Shares, (b) certifying the current versions of the
Articles of Incorporation and Bylaws, and (c) certifying as to the signatures
and authority of persons signing the Transaction Documents and related documents
on behalf of the Company.

 

                          (b)                Each Purchaser shall deliver or
cause to be delivered to the Company, on or prior to the Closing Date, the
following (the “Purchaser Deliverables”):

 

(i)            this Agreement, duly executed by such Purchaser;

 

(ii)          the Registration Rights Agreement, duly executed by such
Purchaser;

 

(iii)         a fully completed and duly executed Accredited Investor
Questionnaire, reasonably satisfactory to the Company, and the Stock Certificate
Questionnaire in the forms attached hereto as Exhibits B-1 and B-2,
respectively; and

 

(iv)         its Subscription Amount, in United States dollars and in
immediately available funds, in the amount indicated below such Purchaser’s name
on the applicable signature page hereto under the heading “Aggregate Purchase
Price (Subscription Amount)” by wire transfer to the Company in accordance with
the Company’s written instructions.

 

ARTICLE 3: 

REPRESENTATIONS AND WARRANTIES

 

3.1         Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Purchasers that:

 

                          (a)                Subsidiaries. The Company has no
direct or indirect Subsidiaries other than as set forth in Exhibit E. The
Company owns, directly or indirectly, all of the capital stock (except for any
preferred securities issued by Subsidiaries that are trusts) or comparable
equity interests of each Subsidiary free and clear of any and all Liens, and all
the issued and outstanding shares of capital stock or comparable equity interest
of each Subsidiary are validly issued and are fully paid, non-assessable (to the
extent such concept is applicable to an equity interest of a Subsidiary) and
free of preemptive and similar rights to subscribe for or purchase securities.

 

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                          (b)                Organization and Qualification. The
Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own or lease and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Significant
Subsidiary is in violation of any of the provisions of its respective articles
or certificate of incorporation, bylaws or other organizational or charter
documents. The Company and each of its Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not in the
reasonable judgment of the Company be expected to have a Material Adverse
Effect. The Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956 (the “BHCA”). The Company’s depository institution
Subsidiary’s deposit accounts are insured up to applicable limits by the FDIC.
The Company has conducted its business in compliance with all applicable
federal, state and foreign laws, orders, judgments, decrees, rules, regulations
and applicable stock exchange requirements, including all laws and regulations
restricting activities of bank holding companies and banking organizations,
except for any noncompliance that, individually or in the aggregate, has not had
and would not be reasonably expected to have a Material Adverse Effect. 

 

                          (c)                Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder, including, without limitation, to issue the Common
Shares in accordance with the terms hereof. The Company’s execution and delivery
of each of the Transaction Documents to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby (including, but not
limited to, the sale and delivery of the Common Shares) have been duly
authorized by all necessary corporate action on the part of the Company, and no
further corporate action is required by the Company, its Board of Directors or
its shareholders in connection therewith other than in connection with the
Required Approvals. Each of the Transaction Documents to which it is a party has
been (or upon delivery will have been) duly executed by the Company and is, or
when delivered in accordance with the terms hereof, will constitute the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
There are no shareholder agreements, voting agreements, or other similar
arrangements with respect to the Company’s Common Stock to which the Company is
a party or, to the Company’s Knowledge, between or among any of the Company’s
shareholders.

 

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                          (d)                No Conflicts. The execution,
delivery and performance by the Company of the Transaction Documents to which it
is a party and the consummation by the Company of the transactions contemplated
hereby or thereby (including, without limitation, the issuance of the Common
Shares) do not and will not (i) conflict with or violate any provisions of the
Company’s or any Subsidiary’s articles or certificate of incorporation, bylaws
or otherwise result in a violation of the organizational documents of the
Company or any Subsidiary, (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would result in a default)
under, result in the creation of any Lien upon any of the properties or assets
of the Company or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any Material Contract, or (iii) subject to the Required Approvals, conflict with
or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including federal and state securities laws and
regulations and the rules and regulations thereunder, assuming, without
investigation, the correctness of the representations and warranties made by the
Purchasers herein, of any self-regulatory organization to which the Company or
its securities are subject, including all applicable Trading Markets), or by
which any property or asset of the Company is bound or affected, except in the
case of clauses (ii) and (iii) such as would not have or reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

 

                          (e)                Filings, Consents and Approvals.
Neither the Company nor any of its Subsidiaries is required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including,
without limitation, the issuance of the Common Shares), other than the Required
Approvals.

 

                           (f)                Issuance of the Common Shares. The
issuance of the Common Shares has been duly authorized and the Common Shares,
when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, fully paid and non-assessable and
free and clear of all Liens, other than restrictions on transfer provided for in
the Transaction Documents or imposed by applicable securities laws, and shall
not be subject to preemptive or similar rights. Assuming, without investigation,
the accuracy of the representations and warranties of the Purchasers in this
Agreement, the Common Shares will be issued in compliance with all applicable
federal and state securities laws and, in that regard, no registration under the
Securities Act is required for the offer and sale of the Common Shares by the
Company to the Purchasers pursuant to this Agreement.

 

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                          (g)                Capitalization. As of the date
hereof, the authorized capital stock of the Company consists of 10,000,000
shares of Common Stock, par value $0.01 per share, and 10,000,000 shares of
preferred stock, $0.01 par value per share (the “Preferred Stock”).  As of the
date of this Agreement, there are 4,319,750 shares of Common Stock issued and
outstanding and 15,299 shares of Preferred Stock issued and outstanding.  Other
than awards outstanding under or pursuant to equity or incentive plans or
arrangements described in the SEC Reports, in respect of which an aggregate of
776,255 shares of Common Stock have been reserved for issuance pursuant to such
awards, no shares of Common Stock are reserved for issuance.  No bonds,
debentures, notes or other indebtedness having the right to vote on any matters
on which the shareholders of the Company may vote are issued or outstanding. 
Except as described above, there are no shares of Common Stock subject to
restricted stock awards covering shares of Common Stock or other rights (or
units) covering shares of Common Stock.   All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and
non-assessable, have been issued in compliance in all material respects with all
applicable federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to
subscribe for or purchase any capital stock of the Company. Except as specified
in this Section 3.1(g): (i) no shares of the Company’s outstanding capital stock
are subject to preemptive rights or any other similar rights; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company; (iii) there are no material outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or by which the
Company is bound that are not described in the SEC Reports; (iv) except for the
Registration Rights Agreement, there are no agreements or arrangements under
which the Company is obligated to register the sale of any of its securities
under the Securities Act; (v) there are no outstanding securities or instruments
of the Company that contain any redemption or similar provisions, and there are
no contracts, commitments, understandings or arrangements by which the Company
is or may become bound to redeem a security of the Company that are not
described in the SEC Reports; (vi) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement that are not described in the SEC Reports; and (vii) the Company
has no liabilities or obligations required to be disclosed in the SEC Reports
but not so disclosed in the SEC Reports, which, individually, or in the
aggregate, will have or would reasonably be expected to have a Material Adverse
Effect. There are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the Common Shares.

 

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                          (h)                SEC Reports. The Company has filed
all SEC Reports on a timely basis or has received a valid extension of such time
of filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective filing dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

                            (i)                Financial Statements. The
financial statements of the Company and its Subsidiaries included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved,
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
balance sheet of the Company and its consolidated Subsidiaries taken as a whole
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments, which would not be material, either individually or
in the aggregate.

 

                            (j)                Tax Matters. The Company and each
of its Subsidiaries has (i) filed all material foreign, U.S. federal, state and
local tax returns, information returns and similar reports that are required to
be filed, and all such tax returns are true, correct and complete in all
material respects, and (ii) paid all material taxes required to be paid by it
and any other material assessment, fine or penalty levied against it other than
taxes (x) currently payable without penalty or interest, or (y) being contested
in good faith by appropriate proceedings.

 

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                          (k)                Material Changes. Since the date of
the latest audited financial statements included within the SEC Reports, except
as disclosed in subsequent SEC Reports filed prior to the date hereof, (i) there
have been no events, occurrences or developments that have had or would
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, (ii) the Company has not incurred any material
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not altered
materially its method of accounting or the manner in which it keeps its
accounting books and records, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its shareholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its Common Stock, (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except Common Stock issued pursuant to existing
Company option plans or equity based plans disclosed in the SEC Reports, and
(vi) there has not been any material change or amendment to, or any waiver of
any material right by the Company under, any Material Contract under which the
Company or any of its Subsidiaries is bound or subject. Except for the
transactions contemplated by this Agreement (including, for the avoidance of
doubt, the consummation of the TARP Preferred Redemption and any of the
transactions contemplated thereunder), no event, liability or development has
occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the
time this representation is made that has not been publicly disclosed at least
one Trading Day prior to the date that this representation is made.

 

                            (l)                Regulatory Permits. The Company
and each of its Subsidiaries possess or have applied for all certificates,
authorizations, consents and permits issued by the appropriate federal, state,
local or foreign regulatory authorities necessary to conduct their respective
businesses as currently conducted and as described in the SEC Reports, except
where the failure to possess such permits, individually or in the aggregate, has
not and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect (“Material Permits”), and (i) neither the
Company nor any of its Subsidiaries has received any notice in writing of
proceedings relating to the revocation or material adverse modification of any
such Material Permits and (ii) the Company is unaware of any facts or
circumstances that would give rise to the revocation or material adverse
modification of any Material Permits.

 

                         (m)                Insurance. The Company and the Bank
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as the Company believes to be prudent and
customary in the businesses and locations in which the Company and the Bank are
engaged. Neither the Company nor the Bank has received any notice of
cancellation of any such insurance, nor, to the Company’s Knowledge, will it or
the Bank be unable to renew their respective existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.

 

                          (n)                Transactions With Affiliates and
Employees. Except as set forth in the SEC Reports and other than the grant of
stock options or other equity awards pursuant to equity or incentive plans or
arrangements described in the SEC Reports, none of the officers or directors of
the Company and, to the Company’s Knowledge, none of the employees of the
Company, is presently a party to any transaction with the Company or to a
presently contemplated transaction (other than for services as employees,
officers and directors) that would be required to be disclosed pursuant to Item
404 of Regulation S-K promulgated under the Securities Act.

 

                          (o)                Sarbanes-Oxley; Disclosure
Controls. The Company is in compliance in all material respects with all of the
provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such disclosure
controls and procedures are effective.

 

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                          (p)                Certain Fees. No person will have,
as a result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company or a Purchaser for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than the
Financial Advisor’s fees which are being paid by the Company and the legal fees
of Purchasers which are being reimbursed by the Company pursuant to Section 5.1
of this Agreement. The Company shall indemnify, pay, and hold each Purchaser
harmless against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
right, interest or claim.

 

                          (q)                Principal Trading Market. The
issuance and sale of the Common Shares hereunder does not contravene the rules
and regulations of the Principal Trading Market.

 

                           (r)                Listing and Maintenance
Requirements. The Company’s Common Stock is registered pursuant to Section 12(b)
of the Exchange Act, and the Company has taken no action designed to terminate
the registration of the Common Stock under the Exchange Act nor has the Company
received any written notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received written notice from any Trading Market on which the
Common Stock is listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance in all material respects with the listing
and maintenance requirements for continued trading of the Common Stock on the
Principal Trading Market.

 

                          (s)                Unlawful Payments. Neither the
Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any
directors, officers, employees, agents or other Persons acting at the direction
of or on behalf of the Company or any of its Subsidiaries has, in the course of
its actions for, or on behalf of, the Company: (a) directly or indirectly, used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to foreign or domestic political activity; (b) made
any direct or indirect unlawful payments to any foreign or domestic governmental
officials or employees or to any foreign or domestic political parties or
campaigns from corporate funds; (c) violated any provision of the Foreign
Corrupt Practices Act of 1977, or (d) made any other unlawful bribe, rebate,
payoff, influence payment, kickback or other material unlawful payment to any
foreign or domestic government official or employee.

 

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                            (t)                Application of Takeover
Protections; Rights Agreements. The Company has not adopted any shareholder
rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company. The Company and
its Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Articles of Incorporation or other
organizational documents or the laws of South Carolina or otherwise which is or
could become applicable to any Purchaser solely as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Common Shares and any Purchaser’s ownership of the Common
Shares.

 

                          (u)                Disclosure. The Company confirms
that neither it nor, to the Company’s Knowledge, any of its officers or
directors nor any other Person acting on its or their behalf, including the
Financial Advisor, has provided any Purchaser or its respective agents or
counsel with any information that it believes constitutes or could reasonably be
expected to constitute material, non-public information except insofar as the
existence, provisions and terms of the Transaction Documents and the
transactions contemplated hereunder may constitute such information, all of
which will be disclosed by the Company in the Press Release as contemplated by
Section 4.6 hereof. The Company understands and confirms that each of the
Purchasers will rely on the representations in this Section 3.1(dd) in effecting
transactions in securities of the Company. No event or circumstance has occurred
or information exists with respect to the Company or any of its Subsidiaries or
its or their business, properties, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed, except for the announcement of this Agreement and related
transactions and/or as may otherwise be disclosed on the Press Release issued
pursuant to Section 4.6.

 

                          (v)                Acknowledgment Regarding
Purchasers’ Purchase of Common Shares. The Company acknowledges and agrees that
each of the Purchasers is acting solely in the capacity of an arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any of the Purchasers
or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Common Shares.

 

                         (w)                Money Laundering Laws. The
operations of each of the Company and any Subsidiary are in compliance in all
material respects with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “Money Laundering Laws”) and
to the Company’s Knowledge, no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Company and/or any Subsidiary with respect to the Money Laundering Laws is
pending or threatened.

 

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                          (x)                Reports, Registrations and
Statements. Since December 31, 2010, the Company and each Subsidiary have filed
all material reports, registrations and statements, together with any required
amendments thereto, that it was required to file with the FRB, the OCC, the
FDIC, the State Board and any other applicable federal or state securities or
banking authorities, except where the failure to file any such report,
registration or statement would not have or reasonably be expected to have a
Material Adverse Effect. All such reports and statements filed with any such
regulatory body or authority are collectively referred to herein as the “Company
Reports.” As of their respective dates, the Company Reports complied as to form
in all material respects with all the rules and regulations promulgated by the
FRB, the OCC, the FDIC, the State Board and any other applicable foreign,
federal or state securities or banking authorities, as the case may be.

 

                          (y)                Agreements with Regulatory
Agencies; Compliance with Certain Banking Regulations. Neither the Company nor
any Subsidiary is subject to any cease-and-desist or other similar public order
or enforcement action issued by, or is a party to any public written agreement,
consent agreement or memorandum of understanding with, or is a party to any
public commitment letter or similar undertaking to, or has adopted any board
resolutions at the request of, or is subject to any public capital directive by
any governmental entity that currently restricts in any material respect the
conduct of its business or that in any material manner relates to its capital
adequacy, its liquidity and funding policies and practices, its ability to pay
dividends, its credit, risk management or compliance policies, its internal
controls, its management or its operations or business (each item in this
sentence, a “Regulatory Agreement”), nor has the Company or any Subsidiary been
advised in writing by any governmental entity that it intends to issue,
initiate, order, or request any such Regulatory Agreement.   For the avoidance
of doubt, nothing in this paragraph shall be interpreted to require the Company
or the Company Subsidiaries to disclose any confidential supervisory
information.

 

To the Company’s Knowledge, there are no facts or circumstances that would cause
its Subsidiary banking institutions: (i) to be deemed not to be in satisfactory
compliance with the Community Reinvestment Act (the “CRA”) and the regulations
promulgated thereunder or to be assigned a CRA rating by federal or state
banking regulators of lower than “satisfactory”; (ii) to be operating in
violation, in any material respect, of the Bank Secrecy Act, the Patriot Act,
any order issued with respect to anti-money laundering by OFAC, or any other
anti-money laundering statute, rule or regulation; or (iii) not to be in
satisfactory compliance, in any material respect, with all applicable privacy of
customer information requirements contained in any applicable federal and state
privacy laws and regulations as well as the provisions of all information
security programs adopted by the Subsidiary.

 

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                          (z)                No General Solicitation or General
Advertising. Neither the Company nor, to the Company’s Knowledge, any Person
acting on its behalf has engaged or will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with any offer or sale of the Common Shares.

 

                       (aa)                ERISA. The Company and each ERISA
Affiliate is in compliance in all material respects with all presently
applicable provisions of ERISA. Neither Company nor any of its Subsidiaries
sponsor a Pension Plan.

 

                       (bb)                No Additional Agreements; No
Additional Sales. The Company has no other agreements or understandings
(including, without limitation, side letters) with any Purchaser to purchase
Common Shares on terms that are different from those set forth herein. The
Company has no agreements or understandings with any Person (other than the
Purchasers) to purchase shares of Common Stock (other than agreements or
understandings with employees, directors, and officers with respect to stock
options and restricted stock agreements pursuant to equity or incentive plans or
arrangements described in the SEC Reports).

 

3.2         Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants to the
Company as follows:

 

                          (a)                Organization; Authority. Such
Purchaser is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization with the requisite corporate,
partnership or limited liability company power and authority to enter into and
to consummate the transactions contemplated by the applicable Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or, if such Purchaser is not a corporation, such partnership, limited
liability company or other applicable like action, on the part of such
Purchaser. Each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 

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                          (b)                No Conflicts. The execution,
delivery and performance by such Purchaser of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Purchaser (if such Purchaser is an
entity), (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Purchaser is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Purchaser,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.

 

                          (c)                Investment Intent. Such Purchaser
understands that the Common Shares are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and
is acquiring the Common Shares as principal for its own account and not with a
view to, or for, distributing or reselling such Common Shares or any part
thereof in violation of the Securities Act or any applicable state securities
laws, provided, that by making the representations herein, other than as set
forth herein, such Purchaser does not agree to hold any of the Common Shares for
any minimum period of time and reserves the right at all times to sell or
otherwise dispose of all or any part of such Common Shares pursuant to an
effective registration statement under the Securities Act or under an exemption
from such registration and in compliance with applicable federal and state
securities laws. Such Purchaser is acquiring the Common Shares hereunder in the
ordinary course of its business. Such Purchaser does not presently have any
agreement, plan or understanding, directly or indirectly, with any Person to
distribute or effect any distribution of any of the Common Shares (or any
securities which are derivatives thereof) to or through any Person or entity.

 

                          (d)                Purchaser Status. At the time such
Purchaser was offered the Common Shares, it was, and at the date hereof it is,
an “accredited investor” as defined in Rule 501(a) under the Securities Act.
Such Purchaser has provided the information in the Accredited Investor
Questionnaire attached hereto as Exhibit B-1.

 

                          (e)                Reliance. The Company and the
Financial Advisor (on behalf of its client) will be entitled to rely upon this
Agreement and is irrevocably authorized to produce this Agreement or a copy
hereof to (A) any regulatory authority having jurisdiction over the Company and
its affiliates and (B) any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby, in
each case, to the extent required by any court or governmental authority to
which the Company is subject, provided that the Company provides the Purchaser
with prior written notice of such disclosure to the extent practicable and
allowed by applicable law.

 

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                           (f)                General Solicitation. Purchaser:
(i) became aware of the offering of the Common Shares, and the Common Shares
were offered to Purchaser, solely by direct contact between Purchaser and the
Company or the Financial Advisor, and not by any other means, including any form
of “general solicitation” or “general advertising” (as such terms are used in
Regulation D promulgated under the Securities Act and interpreted by the
Commission); (ii) reached its decision to invest in the Company independently
from any other Purchaser; (iii) has entered into no agreements with shareholders
of the Company or other subscribers for the purpose of controlling the Company
or any of its subsidiaries; and (iv) has entered into no agreements with
shareholders of the Company or other subscribers regarding voting or
transferring Purchaser’s interest in the Company.

 

                          (g)                Direct Purchase. Purchaser is
purchasing Common Shares directly from the Company. The Financial Advisor has
not made any representations, declarations or warranties to Purchaser, express
or implied, regarding the Common Shares, the Company or the Company’s offering
of the Common Shares, and the Financial Advisor has not offered to sell, or
solicited an offer to buy, any of the Common Shares that Purchaser proposes to
acquire from the Company hereunder. 

 

                          (h)                Experience and Financial Capability
of Such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Common Shares, and has so evaluated the merits
and risks of such investment. Such Purchaser has available funds necessary to
consummate the Closing on the terms and conditions contemplated by this
Agreement and is able to bear the economic risk of an investment in the Common
Shares and, at the present time, is able to afford a complete loss of such
investment.

 

                            (i)                Access to Information. Such
Purchaser acknowledges that it has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Common Shares and the merits and risks of investing in the
Common Shares and any such questions have been answered to such Purchaser’s
reasonable satisfaction; (ii) access to information about the Company and the
Subsidiaries and their respective financial condition, results of operations,
business, properties and management sufficient to enable it to evaluate its
investment; (iii) the opportunity to obtain such additional information that the
Company possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the
investment; and (iv) the opportunity to ask questions of management and any such
questions have been answered to such Purchaser’s reasonable satisfaction.
Neither such inquiries nor any other investigation conducted by or on behalf of
such Purchaser or its representatives or counsel shall modify, amend or affect
such Purchaser’s right to rely on the truth, accuracy and completeness of the
Company’s representations and warranties contained in the Transaction Documents.
Such Purchaser has sought such accounting, legal and tax advice as it has
considered necessary to make an informed decision with respect to its
acquisition of the Common Shares. Purchaser acknowledges that neither the
Company nor the Financial Advisor has made any representation, express or
implied, with respect to the accuracy, completeness or adequacy of any available
information except, with respect to the Company, as expressly set forth in the
SEC Reports or to the extent such information is covered by the representations
and warranties of the Company contained in Section 3.1.

 

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                            (j)                Brokers and Finders. Other than
the Financial Advisor, no Person will have, as a result of the transactions
contemplated by the Transaction Documents, any right, interest or claim against
or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Purchaser.

 

                          (k)                Independent Investment Decision.
Such Purchaser has independently evaluated the merits of its decision to
purchase Common Shares pursuant to the Transaction Documents, and such Purchaser
confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Such Purchaser understands that
nothing in this Agreement or any other materials presented by or on behalf of
the Company to the Purchaser in connection with the purchase of the Common
Shares constitutes legal, regulatory, tax or investment advice. Such Purchaser
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Common Shares. Such Purchaser understands that the Financial Advisor has
acted solely as the agent of the Company in this offering of the Common Shares
and such Purchaser has not relied on any statement, representation or warranty
including any business or legal advice of the Financial Advisor or any of either
of its agents, counselor Affiliates in making its investment decision hereunder,
and confirms that none of such Persons has made any representations or
warranties to such Purchaser in connection with the transactions contemplated by
the Transaction Documents.

 

                            (l)                ERISA. (i) If Purchaser is, or is
acting on behalf of, an ERISA Entity (as defined below), Purchaser represents
and warrants that on the date hereof;

 

(A)       The decision to invest assets of the ERISA Entity in the Common Shares
was made by fiduciaries independent of the Company or its affiliates, which
fiduciaries are duly authorized to make such investment decisions and who have
not relied on any advice or recommendations of the Company or its affiliates;

 

(B)       Neither the Company nor any of its agents, representatives or
affiliates have exercised any discretionary authority or control with respect to
the ERISA Entity’s investment in the Common Shares;

 

(C)       The purchase and holding of the Common Shares will not constitute a
nonexempt prohibited transaction under ERISA or Section 4975 of the Code or a
similar violation under any applicable similar laws; and

 

(D)       The terms of the Transaction Documents comply with the instruments and
applicable laws governing such ERISA Entity.

 

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(ii)        For the purpose of this paragraph, the term “ERISA Entity” will mean
(A) an “employee benefit plan” within the meaning of Section 3(3) of ERISA
subject to Title I of ERISA, (B) a “plan” within the meaning of Section
4975(e)(1) of the Code and (C) any person whose assets are deemed to be “plan
assets” within the meaning of ERISA Section 3(42) and 29 C.F.R. § 2510.3-101 or
otherwise under ERISA.

 

                         (m)                Reliance on Exemptions. Such
Purchaser understands that the Common Shares being offered and sold to it in
reliance on specific exemptions from the registration requirements of U.S.
federal and state securities laws and that the Company is relying upon, among
other things, the truth and accuracy of, and such Purchaser’s compliance with,
the representations, warranties, agreements, acknowledgements and understandings
of such Purchaser set forth herein in order to determine the availability of
such exemptions and the eligibility of such Purchaser to acquire the Common
Shares.

 

                          (n)                No Governmental Review. Such
Purchaser understands that no U.S. federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Common Shares or the fairness or suitability of the
investment in the Common Shares nor have such authorities passed upon or
endorsed the merits of the offering of the Common Shares. Purchaser understands
that the Common Shares are not savings accounts, deposits or other obligations
of any bank and are not insured by the FDIC, including the FDIC’s Deposit
Insurance Fund, or any other governmental agency.

 

                          (o)                Consents. Assuming the accuracy of
the representations and warranties of the Company and the other parties to the
Transaction Documents, and except for the consent of the FRB (which consent has
been obtained), no approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any governmental entity or authority or any
other person or entity in respect of any law or regulation is necessary or
required, and no lapse of a waiting period under law applicable to such
Purchaser is necessary or required, in each case in connection with the
execution, delivery or performance by such Purchaser of this Agreement or the
purchase of the Common Shares contemplated hereby.

 

                          (p)                Residency.  Such Purchaser’s office
in which its investment decision with respect to the Common Shares was made is
located in the jurisdiction immediately below such Purchaser’s name on its
signature page hereto.

 

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                          (q)                Regulatory Matters. Purchaser
understands and acknowledges that: (i) the Company is a registered bank holding
company under the BHCA, and is subject to regulation by the FRB; (ii)
acquisitions of interests in bank holding companies are subject to the BHCA and
the Change in Bank Control Act (the “CIBCA”) and may be reviewed by the FRB to
determine the circumstances under which such acquisitions of interests will
result in Purchaser becoming subject to the BHCA or, except for the consent of
the FRB (which consent has been obtained),  subject to the prior notice
requirements of the CIBCA. Assuming the accuracy of the representations and
warranties of the Company contained herein, Purchaser represents that: (A)
neither it nor its Affiliates will, as a result of the transactions contemplated
herein, be deemed to (i) own or control 10% or more of any class of voting
securities of the Company or (ii) otherwise control the Company for purposes of
the BHCA or CIBCA, and (B) to its knowledge, the purchase of such Common Shares
shall not (i) cause such Purchaser or any of its Affiliates to violate any bank
regulation or (ii) require such Purchaser or any of its Affiliates to file a
prior notice with the Federal Reserve or its delegee under the CIBCA or the BHCA
or obtain the prior approval of any bank regulator. Purchaser is not
participating and has not participated with any other investor in the offering
of the Common Shares in any joint activity or parallel action towards a common
goal between or among such investors of acquiring control of the Company. The
Purchaser currently owns the number of shares of Common Stock set forth below
such Purchaser's name on the signature page of this Agreement.

 

                           (r)                No Discussions. Purchaser has not
discussed the Offering with any other party or potential investors (other than
the Company, the Financial Advisor, any other Purchaser, and Purchaser’s
authorized representatives), except as expressly permitted under the terms of
this Agreement.

 

                          (s)                Knowledge as to Conditions.
Purchaser does not know of any reason why any regulatory approvals and, to the
extent necessary, any other approvals, authorizations, filings, registrations,
and notices required or otherwise a condition to the consummation by it of the
transactions contemplated by this Agreement will not be obtained.

 

The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article 3 and the Transaction Documents.

 

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ARTICLE 4: 

OTHER AGREEMENTS OF THE PARTIES

 

4.1         Transfer Restrictions.

 

                          (a)                Compliance with Laws.
Notwithstanding any other provision of this Article 4, each Purchaser covenants
that the Common Shares may be disposed of only pursuant to an effective
registration statement under, and in compliance with the requirements of, the
Securities Act, or pursuant to an available exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act, and in
compliance with any applicable state, federal or foreign securities laws. In
connection with any transfer of the Common Shares other than (i) pursuant to an
effective registration statement, (ii) to the Company or (iii) pursuant to Rule
144 (provided that the transferor provides the Company with reasonable
assurances (in the form of a seller representation letter and, if applicable, a
broker representation letter) that such securities may be sold pursuant to such
rule), the Company may require the transferor thereof to provide to the Company
and the Transfer Agent, at the transferor’s expense, an opinion of counsel
selected by the transferor, which counsel must be reasonably acceptable to the
Company and the Transfer Agent, and the form and substance of which opinion
shall be reasonably satisfactory to the Company and the Transfer Agent, to the
effect that such transfer does not require registration of such transferred
Common Shares under the Securities Act. As a condition of transfer (other than
pursuant to clauses (i), (ii) or (iii) of the preceding sentence), any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights of a Purchaser under this Agreement and the Registration
Rights Agreement with respect to such transferred Common Shares.

 

                          (b)                Legends. Certificates evidencing
the Common Shares shall bear any legend as required by the “blue sky” laws of
any state and a restrictive legend in substantially the following form (and,
with respect to Common Shares held in book-entry form, the Transfer Agent will
record such a legend on the share register), until such time as they are not
required under Section 4.1(c) or applicable law:

 

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THE ISSUANCE OF THE SECURITIES HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL WHICH COUNSEL AND OPINION MUST BE REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT
TO RULE 144 UNDER SUCH ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE COMPANY
WITH REASONABLE ASSURANCES (IN THE FORM OF A SELLER REPRESENTATION LETTER AND,
IF APPLICABLE, A BROKER REPRESENTATION LETTER) THAT THE SECURITIES MAY BE SOLD
PURSUANT TO SUCH RULE). NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

 

                          (c)                Removal of Legends. The restrictive
legend set forth in Section 4.1(b) above shall be removed and the Company shall
issue a certificate without such restrictive legend or any other restrictive
legend to the holder of the applicable Common Shares upon which it is stamped or
issue to such holder by electronic delivery at the applicable balance account at
DTC, if (i) such Common Shares are registered for resale under the Securities
Act, (ii) such Common Shares are sold or transferred pursuant to Rule 144 (if
the transferor is not an Affiliate of the Company), or (iii) such Common Shares
are eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule
144(c)(1) (or Rule 144(i)(2), if applicable) as to such securities and without
volume or manner-of-sale restrictions. Following the earlier of (i) the
Effective Date (as defined in the Registration Rights Agreement) or (ii) Rule
144 becoming available for the resale of Common Shares (if the holder of the
Common Shares is not an Affiliate of the Company), without the requirement for
the Company to be in compliance with the current public information required
under 144(c)(1) (or Rule 144(i)(2), if applicable) as to the Common Shares and
without volume or manner-of-sale restrictions, the Company shall instruct the
Transfer Agent to remove the legend from the Common Shares and shall cause its
counsel to issue any legend removal opinion required by the Transfer Agent. Any
fees (with respect to the Transfer Agent, Company Counsel or otherwise)
associated with the issuance of such opinion or the removal of such legend shall
be borne by the Company. If a legend is no longer required pursuant to the
foregoing, the Company will no later than three Trading Days following the
delivery by a Purchaser to the Company or the Transfer Agent (with notice to the
Company) of a legended certificate or instrument representing such Common Shares
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect the reissuance and/or transfer) and a representation
letter to the extent required by Section 4.1(a), deliver or cause to be
delivered to such Purchaser a certificate or instrument (as the case may be)
representing such Common Shares that is free from all restrictive legends. The
Company may not make any notation on its records or give instructions to the
Transfer Agent that enlarge the restrictions on transfer set forth in this
Section 4.1(c). Certificates for Common Shares free from all restrictive legends
may be transmitted by the Transfer Agent to the Purchasers by crediting the
account of the Purchaser’s prime broker with DTC as directed by such Purchaser.

 

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                          (d)                Acknowledgement. Each Purchaser
hereunder acknowledges its primary responsibilities under the Securities Act and
accordingly will not sell or otherwise transfer the Common Shares or any
interest therein without complying with the requirements of the Securities Act
and the rules and regulations promulgated thereunder and the requirements set
forth in this Agreement. Except as otherwise provided below, while the
Registration Statement remains effective, each Purchaser hereunder may sell the
Common Shares in accordance with the plan of distribution contained in the
Registration Statement and if it does so it will comply therewith and with the
related prospectus delivery requirements unless an exemption therefrom is
available or unless the Common Shares are sold pursuant to Rule 144. Each
Purchaser, severally and not jointly with the other Purchasers, agrees that if
it is notified by the Company in writing at any time that the Registration
Statement registering the resale of the Common Shares is not effective or that
the prospectus included in such Registration Statement no longer complies with
the requirements of Section 10 of the Securities Act, such Purchaser will
refrain from selling such Common Shares until such time as such Purchaser is
notified by the Company that such Registration Statement is effective or such
prospectus is compliant with Section 10 of the Exchange Act, unless such
Purchaser is able to, and does, sell such Common Shares pursuant to an available
exemption from the registration requirements of Section 5 of the Securities Act.

 

4.2         Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Common Shares may result in dilution of the outstanding shares
of Common Stock. The Company further acknowledges that its obligations under the
Transaction Documents, including without limitation its obligation to issue the
Common Shares pursuant to the Transaction Documents, are unconditional and
absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the
Company may have against any Purchaser and regardless of the dilutive effect
that such issuance may have on the ownership of the other shareholders of the
Company.

 

4.3         Furnishing of Information. In order to enable the Purchasers to sell
the Common Shares under Rule 144 of the Securities Act, for a period of one year
following the Closing Date, the Company shall maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. During such one year period, if the Company is not
required to file reports pursuant to such laws, it will prepare and furnish to
the Purchasers and make publicly available the information described in Rule
144(c)(2), if the provision of such information will allow resales of the Common
Shares pursuant to Rule 144.

 

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4.4         Form D and Blue Sky. The Company agrees to timely file a Form D with
respect to the Common Shares as required under Regulation D. The Company, on or
before the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Common Shares for sale to the Purchasers at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification). The Company
shall make all filings and reports relating to the offer and sale of the Common
Shares required under applicable securities or Blue Sky laws of the states of
the United States following the Closing Date.

 

4.5         No Integration. The Company shall not, and shall use its
commercially reasonable efforts to ensure that no Affiliate of the Company
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act) that
will be integrated with the offer or sale of the Common Shares in a manner that
would require the registration under the Securities Act of the sale of the
Common Shares to the Purchasers.

 

4.6         Securities Laws Disclosure; Publicity. On or before 9:00 a.m., New
York City time, on the second Trading Day immediately following the date of this
Agreement, the Company shall issue one or more press releases (collectively, the
“Press Release”) disclosing the material terms of the transactions contemplated
hereby, including, without limitation, the issuance of the Common Shares, the
material terms of the TARP Preferred Redemption, and any other material,
nonpublic information that the Company may have provided to any Purchaser at any
time prior to the filing of the Press Release. On or before 5:30 p.m., New York
City time, on the fourth Trading Day immediately following the date of this
Agreement, the Company will file a Current Report on Form 8-K with the
Commission describing the terms of the Transaction Documents. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser
or any Affiliate or investment adviser of any Purchaser, or include the name of
any Purchaser or any Affiliate or investment adviser of any Purchaser in any
press release or filing with the Commission (other than the Registration
Statement) or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by federal securities law in connection with
(A) any registration statement contemplated by the Registration Rights Agreement
and (B) the filing of final Transaction Documents with the Commission and (ii)
to the extent such disclosure is required by law, at the request of the Staff of
the Commission or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior written notice of such disclosure permitted
under this subclause (ii) to the extent practicable and allowed by applicable
law. From and after the issuance of the Press Release, no Purchaser shall be in
possession of any material, non-public information received from the Company,
any Subsidiary or any of their respective officers, directors or employees or
the Financial Advisor that is not disclosed in the Press Release. Each
Purchaser, severally and not jointly with other Purchasers, covenants that until
such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 4.6, such Purchaser will
maintain the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction). 

 

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4.7         Non-Public Information. Except with the express written consent of
such Purchaser and unless prior thereto such Purchaser shall have executed a
written agreement regarding the confidentiality and use of such information, the
Company shall use its best efforts not to, and shall use its best efforts to
cause each Subsidiary and each of their respective officers, directors,
employees and agents, not to, and each Purchaser shall not directly solicit the
Company, any of its Subsidiaries or any of their respective officers, directors,
employees or agents to provide any Purchaser with any material, non-public
information regarding the Company or any of its Subsidiaries from and after the
filing of the Press Release.

 

4.8         Indemnification.

 

                          (a)                Indemnification of Purchasers. In
addition to the indemnity provided in the Registration Rights Agreement, the
Company will indemnify and hold each Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, an
“Indemnified Person”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Indemnified Person may suffer or
incur as a result of (i) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (ii) any action instituted against a Indemnified Person
in any capacity, or any of them or their respective affiliates, by any
shareholder of the Company who is not an affiliate of such Indemnified Person,
with respect to any of the transactions contemplated by this Agreement. The
Company will not be liable to any Indemnified Person under this Agreement to the
extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Indemnified Person’s breach of any of the representations,
warranties, covenants or agreements made by such Indemnified Person in this
Agreement or in the other Transaction Documents or attributable to the gross
negligence or willful misconduct on the part of such Indemnified Person.

 

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                          (b)                Conduct of Indemnification
Proceedings. Promptly after receipt by any Indemnified Person of notice of any
demand, claim or circumstances which would or might give rise to a claim or the
commencement of any action, proceeding or investigation in respect of which
indemnity may be sought pursuant to Section 4.8(a), such Indemnified Person
shall promptly notify the Company in writing and the Company shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Person, and shall assume the payment of all fees and expenses;
provided, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is actually and materially and adversely prejudiced by such
failure to notify (as determined by a court of competent jurisdiction, which
determination is not subject to appeal or further review). In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; (ii) the Company shall
have failed promptly to assume the defense of such proceeding and to employ
counsel reasonably satisfactory to such Indemnified Person in such proceeding;
or (iii) in the reasonable judgment of counsel to such Indemnified Person,
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them; provided, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified Parties. The
Company shall not be liable for any settlement of any proceeding affected
without its written consent, which consent shall not be unreasonably withheld,
delayed or conditioned. Without the prior written consent of the Indemnified
Person, which consent shall not be unreasonably withheld, delayed or
conditioned, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding.

 

4.9         Listing of Common Stock. The Company will use its reasonable best
efforts to list the Common Shares on the NASDAQ Global Market and maintain the
listing of the Common Stock on the NASDAQ Global Market.

 

4.10      Use of Proceeds. The Company intends to use the net proceeds from the
sale of the Common Shares hereunder for the purpose of redeeming 4,057 shares of
the Series T Preferred Stock in the TARP Preferred Redemption and related
transaction fees and expenses and for general corporate purposes.

 

4.11      Limitation on Beneficial Ownership. No Purchaser (and its Affiliates
or any other Persons with which it is acting in concert) will be entitled to
purchase a number of Common Shares that would result in such Purchaser becoming,
directly or indirectly, the beneficial owner (as determined under Rule 13d-3
under the Exchange Act) of more than 9.9% of the number of shares of Common
Stock issued and outstanding.

 

 

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ARTICLE 5: 

MISCELLANEOUS

 

 

 

5.1         Fees and Expenses. Except as set forth in this Section 5.1, the
parties hereto shall be responsible for the payment of all expenses incurred by
them in connection with the preparation and negotiation of the Transaction
Documents and the consummation of the transactions contemplated hereby. The
Company shall reimburse the Purchasers for their reasonable legal fees and
expenses in an amount not to exceed $25,000 associated with the negotiation of
the Transaction Documents (including, without limitation, this Agreement and the
Registration Rights Agreement) and the consummation of the transactions
contemplated hereby (including, without limitation, the sale and issuance of the
Common Shares to the Purchasers pursuant to the terms of this Agreement and the
filing with the Commission of one or more Registration Statements in accordance
with the requirements of the Registration Rights Agreement). The Company shall
pay all amounts owed to the Financial Advisor relating to or arising out of the
transactions contemplated hereby.  The Company shall pay all Transfer Agent
fees, stamp taxes and other taxes and duties levied in connection with the sale
and issuance of the Common Shares to the Purchasers.  

 

5.2         Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.

 

5.3         Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile or e-mail (provided the
sender receives a machine-generated confirmation of successful facsimile
transmission or e-mail notification or confirmation of receipt of an e-mail
transmission) at the facsimile number or e-mail address specified in this
Section prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Trading Day or later than 5:00 p.m., New York time, on any
Trading Day, (c) if sent by U.S. nationally recognized overnight courier service
with next day delivery specified (receipt requested) the Trading Day following
delivery to such courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as follows:

 

If to the Company:                 Southern First Bancshares, Inc.

                                                100 Verdae Boulevard, Suite 100

Greenville, South Carolina 29606

Attention: Mr. Michael D. Dowling

Fax: (864) 679-9403

mdowling@southernfirst.com

 

With a copy to:                      Nelson Mullins Riley & Scarborough LLP

Poinsett Plaza, Suite 900

104 South Main Street

Greenville, SC 29601

Attn: Mr. Benjamin A. Barnhill, Esq.

Fax: (864) 250-2373

                                                Ben.Barnhill@nelsonmullins.com

 

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If to a Purchaser:                  To the address set forth under such
Purchaser’s name on the signature page hereof; or such other address as may be
designated in writing hereafter, in the same manner, by such Person.

 

5.4         Amendments; Waivers; No Additional Consideration. No amendment or
waiver of any provision of this Agreement will be effective with respect to any
party unless made in writing and signed by an officer or a duly authorized
representative of such party. No consideration shall be offered or paid to any
Purchaser to amend or consent to a waiver or modification of any provision of
any Transaction Document unless the same consideration is also offered to all
Purchasers who then hold Common Shares.

 

5.5         Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.

 

5.6         Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of and be binding upon the parties and their successors and
permitted assigns. This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of the
Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to
any Person to whom such Purchaser assigns or transfers any Common Shares in
compliance with the Transaction Documents and applicable law, provided such
transferee shall agree in writing to be bound, with respect to the transferred
Common Shares, by the terms and conditions of this Agreement that apply to the
“Purchasers”.

 

5.7         No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, other than, solely with respect to the provisions of
Section 4.8, the Indemnified Persons.

 

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5.8         Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of South Carolina applicable to contracts
made and to be performed entirely within such State. Each party agrees that all
Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees
or agents) may be commenced on a non-exclusive basis in the South Carolina
Courts. Each party hereto hereby irrevocably submits to the non-exclusive
jurisdiction of the South Carolina Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such South Carolina Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

5.9         Survival. Subject to applicable statutes of limitations, the
representations and warranties and agreements and covenants contained herein
shall survive the Closing and the delivery of the Common Shares; provided, that
the representations and warranties of the Company and each Purchaser shall
survive the Closing and the delivery of Common Shares for a period of one year.

 

5.10      Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that the parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile
transmission, or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.

 

5.11      Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

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5.12      Replacement of Common Shares. If any certificate or instrument
evidencing any Common Shares is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company and the Transfer Agent of such loss, theft or
destruction and the execution by the holder thereof of a customary lost
certificate affidavit of that fact and an agreement to indemnify and hold
harmless the Company and the Transfer Agent for any losses in connection
therewith or, if required by the Transfer Agent, a bond in such form and amount
as is required by the Transfer Agent. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Common Shares. If a
replacement certificate or instrument evidencing any Common Shares is requested
due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

 

5.13      Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company may be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at
law would be adequate.

 

5.14      Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

 

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5.15      Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. The decision of each Purchaser to
purchase Common Shares pursuant to the Transaction Documents has been made by
such Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations or condition
(financial or otherwise) of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statement or opinions. Nothing contained
herein or in any Transaction Document, and no action taken by any Purchaser
pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Common Shares or enforcing its
rights under the Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. It is expressly understood
and agreed that each provision contained in this Agreement is between the
Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.

 

 

 

[REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

                                        SOUTHERN FIRST BANCSHARES, INC.

 

                                        By:                                                                             

                                        Name: R. Arthur Seaver, Jr.

                                        Title: Chief Executive Officer

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGES FOR PURCHASERS FOLLOW]

Company Signature Page

 

--------------------------------------------------------------------------------

 

 

 

                                                    PURCHASER:
                                                                   

 

                                                    By:
                                                                                        

                                                    Name:           
                                                                       

                                                    Title: 
                                                                                     

 

                                                    Aggregate Purchase Price
(Subscription Amount): $              

 

                                                    Number of Common Shares to
be Acquired:                 

 

                                                    Number of shares of Common
Stock currently

                                                    owned by
Purchaser:______________________

 

                                                    Tax ID No.:   
                                                                       

 

                                                    Address for Notice:

                                                                                                                                                    

                                                                    
                                                                                

                                                                                                                                   
                 

 

                                                    Telephone No.:
                                                                  

                                                    Facsimile No.: 
                                                                   

                                                    E-mail
Address:                                                                   

                                                    Attention: 
                                                                            

 

 

                                                                                                                Delivery
Instructions:

                                                                                                                (if
different than above)

                                                                                                                c/o
                                                                              
        

                                                                                                                Street:
                                                                                 

                                                                                                                City/State/Zip:
                                                                     

                                                                                                                Attention:
                                                                             

                                                                                                                Telephone
No.:                                                                    

 

 

Purchaser Signature Page

 

 

 

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EXHIBIT INDEX

 

 

A:        Form of Registration Rights Agreement 

B-1:     Accredited Investor Questionnaire 

B-2:     Stock Certificate Questionnaire 

C:        Form of Opinion of Company Counsel 

D:        Form of Secretary’s Certificate 

E:        Subsidiaries of the Company 

 

 

 

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Exhibit E

 

Subsidiaries

 

•         Southern First Bank

•         Greenville Statutory Trust I

•         Greenville Statutory Trust II

 

 

 

 

 

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