Exhibit 10.1

 

  

 

 

                                                                             

LOAN AGREEMENT

 

 

dated as of June  6, 2014

 

 

between

 

 

Southern First Bancshares, Inc.

as Borrower

 

 

 

and

 

 

The Brand Banking Company

as Lender

 

 

 

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LOAN AGREEMENT

 

 

THIS LOAN AGREEMENT (this “Agreement”) is made and entered into as of June 6,
2014, by and between Southern First Bancshares, Inc., a South Carolina
corporation (the “Borrower”) and The Brand Banking Company, a Georgia banking
corporation (the “Lender”).

 

 

ARTICLE I

 

DEFINITIONS; CONSTRUCTION

 

Section 1.1.  Definitions.  In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):

 

“Acquisition” shall mean any transaction or a series of related transactions for
the purpose of, or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of any Person, (b) the acquisition of greater than 50% of the capital
stock, partnership interest, membership interest or other equity of any Person,
or otherwise causing a Person to become a Subsidiary, or (c) a merger or
consolidation of, or any other combination with, another Person (other than a
Person that is a Subsidiary), provided that the Borrower or any Subsidiary is
the surviving entity.

 

 “Affiliate” shall mean, as 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.

 

                        “Allowance for Loan and Lease Losses” shall mean the
amount set forth under the line item “allowance for loan and lease losses” on
the Borrower’s consolidated balance sheet delivered under either Section 5.1(a)
or 5.1(b) as determined in accordance with GAAP.

           

“Availability Period” shall mean the period from the Closing Date to the
Commitment Termination Date.

 

                       “Base Rate” shall mean the per annum rate equal to the
Wall Street Journal Prime Rate plus .25 percentage point(s). The Wall Street
Journal Prime Rate for any day is a fluctuating rate of interest equal to the
highest rate published from time to time in the “Money Rates” section of The
Wall Street Journal as the Prime Rate for such day (or, if such source is not
available, such alternate source as determined by the Lender). The Wall Street
Journal Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate charged to customers.  The Lender may make commercial loans
or other loans at rates of interest at, above or below the Wall Street Journal
Prime Rate.  Each change in the Wall Street Journal Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

                        “Base Rate Loan” means a Loan hereunder that bears
interest at the Base Rate.

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in Atlanta, Georgia are authorized or required by law to
close.

 

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“Call Report” shall mean, with respect to a Financial Institution Subsidiary,
the “Consolidated Reports of Condition and Income” (FFIEC  Form 031 or 041 or
any successor form of the Federal Financial Institutions Examination Council).

 

“Change in Control” shall mean (a) with respect to the Borrower,  the occurrence
of one or more of the following events: (i) any sale, lease, exchange or other
transfer (in a single transaction or a series of related transactions) of all or
substantially all of the assets of the Borrower to any Person or “group” (within
the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder in effect on the date hereof), 
(ii) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or “group” (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder
as in effect on the date hereof) of 331/3% or more of the outstanding shares of
the voting stock of the Borrower or (iii) occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Borrower by Persons
who were neither (A) nominated by the current board of directors or (B)
appointed by directors so nominated, or (b) the Borrower shall own, directly or
indirectly, less than 100% of the voting stock of any Financial Institution
Subsidiary.

 

“Change in Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any Governmental Authority after the date of this Agreement, or
(iii) compliance by the Lender (or for purposes of Section 2.10(b), by the
Lender’s holding company, if applicable) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.

 

                        “Classified Assets” shall mean the sum of (a) all assets
adversely classified as Substandard, Doubtful or Loss, and (b) Other Real Estate
Owned (determined in accordance with, and as set forth on, Borrower’s FR Report
Y-9C).

 

                                    “Closing Date” shall mean the date on which
the conditions precedent set forth in Section 3.1 and Section 3.2 have been
satisfied or waived in accordance with Section 9.2, and unless otherwise
indicated, shall be the date of this Agreement.

 

                        “Code” shall mean the Internal Revenue Code of 1986, as
amended an in effect from time to time.

 

“Commitment Termination Date” shall mean June 5, 2017, or earlier if the
Revolving Commitment is terminated pursuant to Section 2.3 or Section 8.1.

                       

“Control” shall mean the power, directly or indirectly, either to (i) vote 5% or
more of securities having ordinary voting power for the election of directors
(or persons performing similar functions) of a Person or (ii) direct or cause
the direction of the management and policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. The terms
“Controlling”, “Controlled by”, and “under common Control with” have meanings
correlative thereto.

 

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

 

“Default Interest” shall have the meaning set forth in Section 2.6(b).

 

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“Dollar(s)” and the sign “$” shall mean lawful money of the United States of
America.

 

                        “Environmental Laws” shall mean all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices
or binding agreements issued, promulgated or entered into by or with any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material or to health and safety matters.

 

                        “Environmental Liability” shall mean any liability,
contingent or otherwise (including any liability for damages, costs of
environmental investigation and remediation, costs of administrative oversight,
fines, natural resource damages, penalties or indemnities), of the Borrower or
any Subsidiary directly or indirectly resulting from or based upon (a) any
actual or alleged violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d)
the Release or threatened Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

 

                        “ERISA Affiliate” shall mean any trade or business
(whether or not incorporated), which, together with the Borrower, is treated as
a single employer under Section 414(b) or (c) of the Code or, solely for the
purposes of Section 302 of ERISA and Section  412 of the Code, is treated as a
single employer under Section 414 of the Code.

 

                        “ERISA Event” shall mean (a) any “reportable event”, as
defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than an event for which the 30 day notice period is
waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator appointed by the PBGC of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Event of Default” shall have the meaning provided in Article VIII.

 

                        “Financial Institution Subsidiary” shall mean each of
(a) First Southern Bank, Greenville, South Carolina, and (b) each other
Subsidiary hereafter formed or acquired that is a regulated financial
institution.

 

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                        “Fiscal Quarter” shall mean each fiscal quarter
(including the fiscal quarter at the fiscal yearend) of the Borrower and its
Subsidiaries.

 

“FR Report Y-9C” shall mean the “Consolidated Financial Statements for Bank
Holding Companies FR Y-9C” submitted by the Borrower as required by Section 5(c)
of the Bank Holding Company Act (12 U.S.C. 1844) and Section 225.5(b) of
Regulation Y [12 CFR 225.5(b)], or any successor or similar replacement report.

                        “FR Report Y-9LP” shall mean the “Parent Company Only
Financial Statements for Large Bank Holding CompaniesFR Y-9LP” submitted by the
Borrower as required by Section 5(c) of the Bank Holding Company Act (12 U.S.C.
1844) and Section 225.5(b) of Regulation Y [12 CFR 225.5(b)], or any successor
or similar replacement report.

 

 “GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.2.

 

                        “Governmental Authority” shall mean the government of
the United States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

                        “Hazardous Materials” means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

 

                        “Hedging Agreements” shall mean interest rate swap, cap
or collar agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts, foreign exchange contracts
(forward and/or spot), commodity agreements and other similar agreements or
arrangements designed to protect against fluctuations in interest rates,
currency values or commodity values.

 

                        “Indebtedness” of any Person shall mean, without
duplication (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), (iv) all obligations of such
Person under any conditional sale or other title retention agreement(s) relating
to property acquired by such Person, (v) all obligations of such Person under
capital leases and all monetary obligations of such Person under Synthetic
Leases, (vi) all obligations, contingent or otherwise, of such Person in respect
of letters of credit, acceptances or similar extensions of credit, (vii) all
guarantees by such Person of Indebtedness of others, (viii) all Indebtedness of
a third party secured by any Lien on property owned by such Person, whether or
not such Indebtedness has been assumed by such Person, (ix) all obligations of
such Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any common stock of such Person, and (x) all net obligations
incurred by such Person under Hedging Agreements.

 

                        “Interest Period” shall mean, with respect to any Libor
Rate Loan, a period of one month, provided that (i) the initial Interest Period
may have an actual duration of less than one month, depending on the initial
funding date and (ii) no Interest Period may extend beyond the Commitment
Termination Date. 

 

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                        “Interest Rate Determination Date” shall mean the date
that the initial Revolving Loan is funded and the first Business Day of each
calendar month thereafter.

 

                        “Investments” shall have the meaning set forth in
Section 7.6 hereof.

 

                        “Leverage Ratio” shall be calculated by dividing Tier 1
Capital of the Borrower or the Financial Institutions Subsidiary, as applicable
(the numerator of the ratio) by its average total consolidated assets (the
denominator of the ratio).

 

                        “Lien” shall mean any mortgage, pledge, security
interest, lien (statutory or otherwise), charge, encumbrance, hypothecation,
assignment, deposit arrangement, or other arrangement having the practical
effect of the foregoing or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).

 

                        “LIBOR” shall mean a fluctuating rate of interest which
can change on each banking day.  The rate will be adjusted on each banking day
to equal the London Interbank Offered Rate (or a comparable or successor rate
which is approved by the Lender for U.S. Dollar deposits for delivery on the
date in question for a one month term beginning on that date.  The Lender will
use the London Interbank Offered Rate as published by Bloomberg (or other
commercially available source providing quotations of such rate as selected by
the Lender from time to time) as determined at approximately 11:00 a.m. London
time two (2) London Banking Days prior to the date in question, as adjusted from
time to time by Lender for reserve requirements, deposit insurance assessment
rates and other regulatory costs.    A “London Banking Day” is a day on which
banks in London are open for business and dealing in offshore dollars.

 

                        “LIBOR Rate Loan” means a Loan hereunder that bears
interest at LIBOR.

            “Liquid Assets” shall mean the sum of all cash, time deposits,
marketable securities and the difference between the investment in debt and
equity securities and the aggregate amount of any amounts borrowed to directly
fund such investment in debt and equity securities.

                        “Loan” shall mean the Term Loan or the Revolving Loan,
as the case may be, made by Lender to Borrower pursuant to Section 2 in an
amount not to exceed the Term Loan Commitment and the Revolving Loan Commitment.
Collectively the Term Loan and the Revolving Line of Credit Loan are referred to
as the “Loans.”

 

                        “Loan Commitment” shall mean collectively the Revolving
Loan Commitment and the Term Loan Commitment.

 

                        “Loan Documents” shall mean, collectively, this
Agreement, the Revolving Credit Note, the Pledge Agreement, and any and all
other instruments, agreements, documents and writings executed in connection
with any of the foregoing.

 

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                        “Material Adverse Effect” shall mean, with respect to
any event, act, condition or occurrence of whatever nature (including any
adverse determination in any litigation, arbitration, or governmental
investigation or proceeding), whether singly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or occurrences
whether or not related, a material adverse change in, or a material adverse
effect on, (a) the business, results of operations, financial condition, assets,
liabilities or prospects of the Borrower and of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of
its obligations under the Loan Documents, (c) the rights and remedies of the
Lender under any of the Loan Documents or (d) the legality, validity or
enforceability of any of the Loan Documents.

 

                        “Maturity Date” shall mean either the Commitment
Termination Date or the Term Loan Maturity Date if the Loan is extended pursuant
to Section 2.5, as applicable.

 

“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of
ERISA.

 

“Net Noncore Funding Dependence Ratio” shall mean  noncore liabilities, less
short term investments divided by long term assets.  

 

                        “Nonperforming Loans” shall mean (a) the sum of (i)
nonaccrual loans and lease financing receivables, (ii) loans and lease financing
receivables that are contractually past due 90 days or more as to interest or
principal and are still accruing interest, and (iii) loans for which the terms
have been modified due to a deterioration in the financial position of the
borrower that are nonaccrual (determined in accordance with, and as set forth
on, Borrower’s FR Report Y-9C); minus (b) non-performing loans guaranteed by the
United States Small Business Administration.

 

                        “Notice of Borrowing” shall have the meaning as set
forth in Section 2.2.

 

“Obligations” shall mean all amounts owing by the Borrower to the Lender
pursuant to or in connection with this Agreement or any other Loan Document,
including without limitation, all principal, interest (including any interest
accruing after the filing of any petition in bankruptcy or the commencement of
any insolvency, reorganization or like proceeding relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), all reimbursement obligations, all net obligations under
Hedging Agreements entered into between Borrower and Lender or its Affiliates,
fees, expenses, indemnification and reimbursement payments, costs and expenses
(including all fees and expenses of counsel to the Lender incurred pursuant to
this Agreement or any other Loan Document), whether direct or indirect, absolute
or contingent, liquidated or unliquidated, now existing or hereafter arising
hereunder or thereunder, together with all renewals, extensions, modifications
or refinancings thereof.

 

                        “Other Real Estate Owned” shall mean the sum of (a) real
estate acquired in satisfaction of debts previously contracted and (b) other
real estate owned, as set forth on Schedule HC-M of Borrower’s FR Report Y-9C.

                        “Note” shall mean a promissory note of the Borrower
payable to the order of the Lender in the principal amount of the Revolving
Commitment, in substantially the form of Exhibit A.

 

“Participant” shall have the meaning set forth in Section 9.4(c).

 

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                         “Payment Office” shall mean the office of the Lender
located at 3328 Peachtree Road, NE Atlanta, Georgia 30326, or such other
location as to which the Lender shall have given written notice to the Borrower.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.

 

                         “Permitted Encumbrances” shall mean:

 

                        (i)         Liens imposed by law for taxes not yet due
or which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance with GAAP;

 

                        (ii)        statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;

 

                        (iii)       pledges and deposits made in the ordinary
course of business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;

 

                        (iv)       deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;

 

                        (v)        judgment and attachment liens not giving rise
to an Event of Default or Liens created by or existing from any litigation or
legal proceeding that are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained in
accordance with GAAP; and

 

                        (vi)       easements, zoning restrictions, rights-of-way
and similar encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Borrower and its
Subsidiaries taken as a whole;

 

provided, that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

 “Person” shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.

 

                        “Plan” means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section
3(5) of ERISA.

 

                        “Pledge Agreement” shall mean that certain Pledge
Agreement dated as of June 6, 2014 by the Borrower in favor of the Lender.

 

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                        “Rate Sensitive Assets/Rate Sensitive Liabilities Ratio”
shall mean the ratio of the bank assets that mature or reprice within a year to
the bank liabilities that mature or reprice within a year. 

 

 “Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

                        “Release” means any release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.

 

“Responsible Officer” shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of the Borrower
as may be designated in writing by any one of the foregoing with the consent of
the Lender; and, with respect to the financial covenants only, the chief
financial officer or the treasurer of the Borrower.

 

“Revolving Commitment” shall mean the obligation of the Lender to make Revolving
Loans to the Borrower in an aggregate principal amount not exceeding
$10,000,000.

 

                        “Revolving Loan” shall mean a loan made by the Lender to
the Borrower under its Revolving Commitment.

 

                        “Subsidiary” shall mean, with respect to any Person (the
“Parent”), any corporation, partnership, joint venture, limited liability
company, association or other entity the accounts of which would be consolidated
with those of the Parent in the Parent's consolidated financial statements if
such financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which securities  or other ownership
interests representing more than 30% of the equity  or more than 30% of  the
ordinary voting power, or in the case of a partnership, more than 30% of the
general partnership interests are, as of such date, owned, Controlled or held,
or (ii) that is, as of such date, otherwise Controlled, by the Parent or one or
more subsidiaries of the Parent or by the Parent and one or more subsidiaries of
the Parent. Unless otherwise indicated, all references to “Subsidiary” hereunder
shall mean a Subsidiary of the Borrower.

 

                        “Synthetic Lease” of any Person shall mean (a) a lease
designed to have the characteristics of a loan for federal income tax purposes
while obtaining operating lease treatment for financial accounting purposes, or
(b) an agreement for the use or possession of property creating obligations that
are not required to appear on the balance sheet of such Person but which, upon
the insolvency or bankruptcy of such Person would be characterized by a court of
competent jurisdiction as indebtedness of such Person.

 

                        “Term Loan” shall mean the Revolving Loan that is
converted into a Term Loan on the Commitment Termination Date.

 

                        “Term Loan Commitment” shall mean the amount of the
Revolving Loan that is converted to a Term Loan.

 

                        “Term Loan Maturity Date” shall mean June 5, 2024.

 

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                        “Total Risk-based Capital” means Total Risk-based
Capital as defined by the capital maintenance regulations of the primary federal
bank regulatory agency for the Borrower and the Financial Institution
Subsidiary.

 

                        “Tier 1 Capital” means Tier 1 capital as defined by the
capital maintenance regulations of the primary federal bank regulatory agency
for the Borrower and the Financial Institution Subsidiary.

 

                        “Withdrawal Liability” shall mean liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title
IV of ERISA.

 

            Section 1.2.       Accounting Terms and Determination.  Unless
otherwise defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for such changes approved by the Borrower's independent
public accountants) with the most recent audited consolidated financial
statement of the Borrower delivered pursuant to Section 5.1(a); provided, that
if the Borrower notifies the Lender that the Borrower wishes to amend any
covenant in Article VI to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Lender notifies  the Borrower that it
wishes to amend Article VI for such purpose), then the Borrower's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Lender.

 

            Section 1.3.       Terms Generally.  The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.  The
words “include”, “includes” and “including” shall be deemed to be followed by
the phase “without limitation”.  In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including” and the word “to” means “to but excluding”. Unless the context
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and permitted assigns, (c) the words “hereof”, “herein”
and “hereunder” and words of similar import shall be construed to refer to this
Agreement as a whole and not to any particular provision hereof, (d) all
references to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles, Sections, Exhibits and Schedules to this Agreement and (e)
all references to a specific time shall be construed to refer to the time in the
city and state of the Lender's principal office, unless otherwise indicated.

 

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ARTICLE II

 

AMOUNT AND TERMS OF THE REVOLVING AND TERM COMMITMENT

 

            Section 2.1.       Revolving Loans.

 

            (a)         Subject to the terms and conditions set forth herein,
the Lender agrees to make Revolving Loans to the Borrower, from time to time
during the Availability Period, in an aggregate principal amount outstanding at
any time not to exceed the Revolving Commitment. During the Availability Period,
the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in
accordance with the terms and conditions of this Agreement; provided, that the
Borrower may not borrow or reborrow should there exist a Default or Event of
Default.

 

            (b)        The Borrower's obligation to pay the principal of, and
interest on, Revolving Loans shall be evidenced by the records of the Lender. 
Except in the case of manifest error by the Lender, the entries made in such
records shall be conclusive evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, that the failure or
delay of the Lender in maintaining or making entries into any such record or any
error therein shall not in any manner affect the obligation of the Borrower to
repay the Revolving Loans (both principal and unpaid accrued interest) in
accordance with the terms of this Agreement.

 

                        Section 2.2.       Procedure for Revolving Loans.  The
Borrower shall give the Lender written notice (or telephonic notice promptly
confirmed in writing) of each Revolving Loan substantially in the form of
Exhibit 2.2 (a “Notice of Borrowing”) prior to 11:00 a.m. two (2)  Business Days
prior to which a Revolving Loan is being requested. Each Notice of Borrowing
shall be irrevocable and shall specify: (a) the principal amount of the
Revolving Loan, and (b) the proposed date of the Revolving Loan (which shall be
a Business Day).  Upon the satisfaction of the applicable conditions set forth
in Article III hereof, the Lender will make the proceeds of each Revolving Loan
available to the Borrower at the Payment Office on the date specified in the
applicable Notice of Borrowing by crediting an account maintained by the
Borrower with the Lender or at the Borrower’s option, by effecting a wire
transfer of such amount to an account designated by the Borrower to the Lender.

 

                        Section 2.3.       Termination of Revolving Commitment.

 

            The Revolving Commitment is available between the date of this
Agreement and the Commitment Termination Date or such earlier date as the
availability may terminate as provided for in this Agreement.

 

 

                        Section 2.4.       Repayment and Prepayments of
Revolving Loans.

 

                        (a)        The outstanding principal amount of all
Revolving Loans shall be due and payable (together with accrued and unpaid
interest thereon) on the Commitment Termination Date.

 

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                        (b)        The Borrower shall have the right at any time
and from time to time to prepay any Revolving Loan, in whole or in part, without
premium or penalty, on any Business Day.

 

                        (c)        Interest on the principal amount of all
Revolving Loans shall accrue from and including the date such Revolving Loans
are made to but excluding the date of any repayment thereof. Interest on
Revolving Loans shall be payable on the last day of each March, June, September
and December and on the Commitment Termination Date. All Default Interest shall
be payable on demand.

 

                        Section 2.5.       Conversion to Term Loan. 

 

            On the Commitment Termination Date, no additional advances may be
made against the Loan.  Provided that there exists no Event of Default hereunder
the Borrower shall have the option to pay the principal amount over a period of
seven (7) years.  The Borrower shall notify the Lender no later than ninety days
prior to the Commitment Termination Date that it seeks to exercise this option.
Repayment of the Term Loan shall commence on the last day of the first fiscal
quarter following the Commitment Termination Date and on the same day of each
quarter thereafter, and ending on the “Term Loan Maturity Date.  The Borrower
will pay principal and interest in twenty-eight (28) equal combined
installments.  Each installment shall be in an amount sufficient to fully
amortize the principal amount over an amortization period of seven (7) years. 
In any event, on the Term Loan Maturity Date, the Borrower will repay the
remaining principal balance plus any interest and fees then due.  Each
installment, when paid, will be applied first to the payment of interest
accrued.  The Borrower shall have the right at any time and from time to time to
prepay the Term Loan, in whole or in part, without premium or penalty, on any
Business Day. The prepayment will be applied to the most remote payment of
principal due under this Agreement. 

 

                        Section 2.6        Interest on Revolving and Term Loans.

 

                        (a)        The Borrower shall pay interest on each Loan
at LIBOR, plus 2.90% per annum, provided, however, that the interest rate shall
never fall below 3.25% or rise above 5.15% per annum. The interest rate will be
adjusted on the first day of each month (the “Adjustment Date”) and remain fixed
until the next Adjustment Date.  If the Adjustment Date in any particular month
would otherwise fall on a day that is not a banking day the Adjustment Date for
that particular month will be the first banking day immediately following
thereafter. If a Base Rate Loan shall be outstanding under the circumstances set
forth in Section 2.9 or Section 2.10, then the Borrower shall pay interest on
each Base Rate Loan at the Base Rate in effect from time to time subject to the
interest rate floor and ceiling set forth above.

 

(b)        While an Event of Default exists or after acceleration, at the option
of the Lender, the Borrower shall pay interest (“Default Interest”) at the rate
otherwise applicable for the thencurrent Interest Period plus an additional
3.00% per annum.

 

                        (c)        The Lender shall determine each interest rate
applicable to the Loans hereunder and shall promptly notify the Borrower of such
rate in writing (or by telephone, promptly confirmed in writing).  Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.

 

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            Section 2.7.       Fees. The Borrower agrees to pay to the Lender an
upfront fee, equal to 0.50% of the Revolving Commitment Amount, due at Closing.
In the event the Borrower exercises its option to convert the Revolving Loan
into a Term Loan it will pay an additional fee equal to equal to 0.50% of the
Term Loan Commitment, due on the Commitment Termination Date.

 

                        Section 2.8.       Computation of Interest and Fees. All
computations of interest and fees hereunder shall be made on the basis of a year
of 360 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest or fees are
payable (to the extent computed on the basis of days elapsed). Each
determination by the Lender of an interest amount or fee hereunder shall be made
in good faith and, except for manifest error, shall be final, conclusive and
binding for all purposes.

 

                        Section 2.9.       Inability to Determine Interest
Rates.  If Lender determines that no adequate basis exists for determining
LIBOR, or that LIBOR will not adequately and fairly reflect the cost to Lender
of funding the Loan, or that any applicable law or regulation or compliance
therewith by Lender prohibits or restricts or makes impossible the charging of
interest based on LIBOR and Lender so notifies Borrower, then until Lender
notifies Borrower that the circumstances giving rise to such suspension no
longer exist, (x) the obligation of the Lender to make Libor Rate Loans or to
continue outstanding Loans as Libor Rate Loans shall be suspended and (y) all
such affected Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period unless the Borrower elects to prepay such Loans
in accordance with this Agreement and all unpaid principal shall continue to
bear interest at the Base Rate until the Maturity Date of the Note (whether by
acceleration, declaration, extension or otherwise).   

 

                         Section 2.10.    Illegality.  If any Change in Law
shall make it unlawful or impossible for the Lender to make, maintain or fund
any LIBOR Rate Loan, the Lender shall promptly give notice thereof to the
Borrower, whereupon until the Lender notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
the Lender to make LIBOR Rate Loans, or to continue any outstanding Revolving
Loans as LIBOR Rate Loans, shall be suspended. Any new Revolving Loan shall be
made as a Base Rate Loan and all then outstanding Libor Rate Loans shall be
converted to a Base Rate Loan either (x) on the last day of the then current
Interest Period if the Lender may lawfully continue to maintain such Libor Rate
Loans to such date or (y) immediately if the Lender shall determine that it may
not lawfully continue to maintain such Libor Rate Loans to such date. 

 

                        Section 2.11.     Increased Costs.

 

(a)        If any Change in Law shall:

 

                        (i)         impose, modify or deem applicable any
reserve, special deposit or similar requirement that is not otherwise included
in the determination of LIBOR hereunder against assets of, deposits with or for
the account of, or credit extended by, the Lender (except any such reserve
requirement reflected in the calculation of LIBOR); or

 

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            (ii)        impose on the Lender or the London Interbank Offering
Rate market any other condition affecting this Agreement or any LIBOR Rate Loans
made by the Lender; and the result of the foregoing is to increase the cost to
the Lender of making, continuing or maintaining a LIBOR Rate Loan or to reduce
the amount received or receivable by the Lender hereunder (whether of principal,
interest or any other amount), then the Borrower shall promptly pay, upon
written notice from and demand by the Lender, within fifteen (15) Business Days
after the date of such notice and demand, additional amount or amounts
sufficient to compensate the Lender for such additional costs incurred or
reduction suffered.

 

            (b)        If the Lender shall have determined that on or after the
date of this Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on the Lender's capital (or
on the capital of the Lender's Parent corporation) as a consequence of its
obligations hereunder to a level below that which the Lender or the Lender's
Parent corporation could have achieved but for such Change in Law (taking into
consideration the Lender's policies or the policies of the Lender's Parent
corporation with respect to capital adequacy) then, from time to time, within
fifteen (15) Business Days after receipt by the Borrower of written demand by
the Lender, the Borrower shall pay to the Lender such additional amounts as will
compensate the Lender or the Lender's Parent corporation for any such reduction
suffered. 

 

            (c)        A certificate of the Lender setting forth the amount or
amounts necessary to compensate the Lender or its Parent corporation, as the
case may be, specified in paragraph (a) or (b) of this Section 2.11 shall be
delivered to the Borrower and shall be conclusive, absent manifest error.  The
Borrower shall pay the Lender such amount or amounts within fifteen (15) days
after receipt thereof.

 

                         (d)       Failure or delay on the part of the Lender to
demand compensation pursuant to this Section 2.11 shall not constitute a waiver
of the Lender's right to demand such compensation.

 

            Section 2.12.     Payments Generally. The Borrower shall make each
payment required to be made by it hereunder (whether of principal, interest,
fees, or of amounts payable under Section 2.10 or otherwise) prior to 12:00
noon, on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Lender, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made to the Lender at its Payment Office.  If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be made payable for the period of such
extension.  All payments hereunder shall be made in Dollars.

 

 

ARTICLE III

 

CONDITIONS PRECEDENT TO REVOLVING LOANS

           

                        Section 3.1.       Conditions Precedent To Initial
Revolving Loan.  The obligation of the Lender to make the initial Revolving Loan
hereunder is subject to the receipt by the Lender of the following documents in
form and substance reasonably satisfactory to the Lender:

 

                        (a)        this Agreement duly executed and delivered by
the Borrower;

 

                        (b)        a duly executed Revolving Credit Note;

 

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                        (c)        a certificate of the Secretary or Assistant
Secretary of the Borrower, attaching and certifying copies of its bylaws and of
the resolutions of its boards of directors, authorizing the execution, delivery
and performance of the Loan Documents and certifying the name, title and true
signature of each officer of the Borrower authorized to execute the Loan
Documents;

 

                        (d)        certified copies of the articles of
incorporation of the Borrower, together with good standing certificates (or the
equivalent) as may be available from the Secretary of State of the jurisdiction
of incorporation of the Borrower and each Subsidiary and each other jurisdiction
where the Borrower or such Subsidiary is required to be qualified to do business
as a foreign corporation;

 

                        (e)        a favorable written opinion of  Nelson
Mullins Riley & Scarborough, LLP, counsel to the Borrower, addressed to the
Lender, and covering such matters relating to the Borrower, the Loan Documents
and the transactions contemplated therein as the Lender shall reasonably
request.

 

            Section 3.2.       Each Revolving Loan.   The obligation of the
Lender to make each Revolving Loan is subject to the satisfaction of the
following conditions:

 

                        (a)        at the time of and immediately after giving
effect to such Revolving Loan, no Default or Event of Default shall exist;

 

                        (b)        all representations and warranties of the
Borrower  herein shall be true and correct in all material respects on and as of
the date of such Revolving Loan both before and after giving effect thereto;

                       

                        (c)        since December 31, 2013, there shall have
been no change which has had or could reasonably be expected to have a Material
Adverse Effect;

 

                        (d)        the Lender shall have received a duly
executed Notice of Borrowing in accordance with Section 2.2 hereof; and

 

                        (e)        the Lender shall have received such other
documents,  certificates or information as it may reasonably request, all in
form and substance reasonably satisfactory to the Lender.

 

                        The making of each Revolving Loan shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a), (b) and (c) of this Section 3.2.

 

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lender as follows:

                        Section 4.1.       Existence; Power. Each of the
Borrower and each of its Subsidiaries (i) is duly organized, validly existing
and in good standing as a corporation under the laws of the jurisdiction of its
organization, (ii) has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business, and is in
good standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.

 

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            Section 4.2.       Organizational Power; Authorization.  The
execution, delivery and performance by the Borrower of each of the Loan
Documents are within the Borrower’s corporate powers and have been duly
authorized by all necessary corporate, and if required, stockholder, action.
This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document when executed and delivered by the
Borrower will constitute, valid and binding obligations of the Borrower,
enforceable against it in accordance with their respective terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.

 

                        Section 4.3.       Governmental Approvals; No Conflicts.
The execution, delivery and performance by the Borrower of this Agreement and
the other Loan Documents  (a) do not require any consent or approval of,
registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the articles of
incorporation or by-laws of the Borrower or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument binding on the Borrower or any
of its Subsidiaries or any of its assets or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries, except Liens (if any) created under the
Loan Documents.

 

            Section 4.4.       Financial Statements.  The Borrower has furnished
to the Lender (a) the audited consolidated balance sheet of the Borrower and its
Subsidiaries as of December 31, 2013 and the related consolidated statements of
income, shareholders' equity and cash flows for the fiscal year then ended
prepared by Elliott Davis, LLC and (b) the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of March 31, 2014, and the
related unaudited consolidated statements of income and cash flows for the
fiscal quarter and year-to-date period then ending, certified by a Responsible
Officer.  Such financial statements fairly present, in all material respects,
the consolidated financial position of the Borrower and its Subsidiaries as of
such dates and the consolidated results of operations and cash flows for such
periods in conformity with GAAP consistently applied, subject to year end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (b) of this Section 4.4.  Since December 31, 2013, there have been
no changes with respect to the Borrower and its Subsidiaries which have had or
could reasonably be expected to have, singly or in the aggregate, a Material
Adverse Effect.

 

            Section 4.5.       Litigation Matters.  No litigation, investigation
or proceeding of or before any arbitrators or Governmental Authorities is
pending against, or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination that could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect or (ii) which in any manner draws into question the validity or
enforceability of this Agreement or any other Loan Document.

 

            Section 4.6.       Compliance with Laws and Agreements.  The
Borrower and each Subsidiary is in compliance with (a) all applicable laws
(including without limitation all Environmental Laws and all federal and state
banking statutes) and all rules, regulations (including without limitation all
federal and state banking regulations) and orders of any Governmental Authority,
and (b) all indentures, agreements or other instruments binding upon it or its
properties, except where non-compliance, either singly or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

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            Section 4.7.       Investment Company Act, Etc.  Neither the
Borrower nor any of its Subsidiaries is (a) an “investment company”, as defined
in, or subject to regulation under, the Investment Company Act of 1940, as
amended, or (b) a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended.

 

            Section 4.8.       Taxes.  The Borrower and its Subsidiaries have
timely filed or caused to be filed all Federal income tax returns and all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except (i) to the
extent the failure to do so would not have a Material Adverse Effect or (ii)
where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as the case may be,
has set aside on its books adequate reserves.

 

            Section 4.9.       Margin Regulations.  None of the proceeds of any
of the Revolving Loans will be used for “purchasing” or “carrying” any “margin
stock” with the respective meanings of each of such terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect or for any purpose that violates the provisions of
Regulation U.

 

                        Section 4.10.     ERISA.  No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect.  The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of all such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of all such
underfunded Plans.

 

                        Section 4.11.     Disclosure. The Borrower has disclosed
to the Lender all agreements, instruments, and corporate or other restrictions
to which the Borrower or any of its Subsidiaries is subject, and all other
matters known to any of them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  None of the
reports (including without limitation all reports that the Borrower is required
to file with the Securities and Exchange Commission), financial statements,
certificates or other information furnished by or on behalf of the Borrower to
the Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, taken as a whole, in light of the circumstances under which they were
made, not misleading.

 

                        Section 4.12.     Subsidiaries. Schedule 4.12 sets forth
the name of, the ownership interest of the Borrower in, and the jurisdiction of
incorporation of, each Financial Institution Subsidiary and each other
Subsidiary, in each case as of the Closing Date.

 

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                       SECTION 4.13.     DIVIDEND RESTRICTIONS; OTHER
RESTRICTIONS.

 

                        (a)     No Financial Institution Subsidiary has violated
any applicable regulatory restrictions on dividends, and no Governmental
Authority has taken any action to restrict the payment of dividends by any
Financial Institution Subsidiary.

 

                        (b)        Neither the Borrower nor any Subsidiary is
under investigation by, or is operating under any restrictions (excluding any
restrictions on the payment of dividends referenced in subsection (a) above)
imposed by or agreed to with, any Governmental Authority, other than routine
examinations by such Governmental Authorities.

 

            Section 4.14.     Capital Measures.  On the Closing Date, both the
Borrower and each Financial Institution Subsidiary have been, or are deemed to
have been, notified by the appropriate Governmental Authority having regulatory
authority over each of them that each of them is “well capitalized”,  as
determined in accordance with any regulations established by such Governmental
Authority.

 

            Section 4.15.     FDIC Insurance. The deposits of each Financial
Institution Subsidiary that is an “insured depository institution” (within the
meaning of § 12 U. S. C. 1831(c)) are insured by the FDIC and no act has
occurred that would adversely affect the status of such Financial Institution
Subsidiary as an FDIC insured bank.

 

                        Section 4.16.     OFAC. Neither the Borrower nor any of
its Subsidiaries (a) is a person whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (b) engages in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such person in any
manner violative of Section 2 or (c) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

 

                        Section 4.17.     Patriot Act. Each of the Borrower and
its Subsidiaries is in compliance, in all material respects, with (a) the
Trading with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto and (b) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001).  No part of the proceeds of the Obligations will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.

 

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ARTICLE V

 

AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees that so long as the Lender has a Revolving
Commitment hereunder or the principal of and interest on any Revolving Loan or
any fee remains unpaid:

 

            Section 5.1.       Financial Statements and Other Information. The
Borrower will deliver to the Lender:

 

                        (a)        as soon as available and in any event within
120 days after the end of each fiscal year of Borrower, a copy of the annual
audited report for such fiscal year for the Borrower and its Subsidiaries,
containing (i) a consolidated balance sheet and the related consolidated
statements of income, of changes in shareholders' equity and of cash flows
(together with all footnotes thereto) and (ii)  a condensed balance sheet of the
Borrower only and the related condensed statements of income and of cash flows,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and reported on by independent public
accountants acceptable to Lender (without a “going concern” or like
qualification, exception or explanation  and without any qualification or
exception as to scope of such audit) to the effect that  such financial
statements present fairly in all material respects the financial condition and
the results of operations and cash flows on a consolidated basis of the Borrower
for such fiscal year in accordance with GAAP and that the examination by such
accountants in connection with such  financial statements has been made in
accordance with generally accepted auditing standards;

 

                        (b)        as soon as available and in any event within
45 days after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, an unaudited balance sheet of the Borrower and its
Subsidiaries on a consolidated basis and of the Borrower on a stand alone basis
as of the end of such fiscal quarter and the related unaudited statements of
income and cash flows of the Borrower and its Subsidiaries on a consolidated
basis and of the Borrower on a stand alone basis, each for such fiscal quarter
and the then elapsed portion of such fiscal year, setting forth in each case in
comparative form the figures for the corresponding quarter and the corresponding
portion of Borrower's previous fiscal year, all certified by the chief financial
officer or president of the Borrower as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its Subsidiaries on a consolidated basis and of the Borrower on a stand alone
basis in accordance with GAAP, subject to normal year-end audit adjustments and
the absence of footnotes;

 

                        (c)        concurrently with the delivery of the
financial statements referred to in clauses (a) and (b) above, a certificate of
a Responsible Officer, (i) certifying as to whether there exists a Default or
Event of Default on the date of such certificate, and if a Default or an Event
of Default then exists, specifying the details thereof and the action which the
Borrower has taken or proposes to take with respect thereto, (ii) setting out
calculations of unencumbered Liquid Assets, Net Non-core Funding Dependence
Ratio and Rate Sensitive Assets to Rate Sensitive Liabilities Ratio for any
Financial Institution Subsidiary and (iii) setting forth in reasonable detail
calculations demonstrating compliance with Article VI;

 

                        (d)        concurrently with the delivery of the
financial statements referred to in clauses (a) and (b) above, duly executed
copies of the Borrower’s then current FR Report Y-9C and FR Report Y-9LP and a
duly executed copy of the then current Call Report for each Financial
Institution Subsidiary;

 

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                        (e)        promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all functions of said Commission, or with any
national securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;

 

                        (f)        promptly following any request therefor, such
other information regarding the results of operations, business affairs and 
financial condition of the Borrower or any Subsidiary as the Lender may
reasonably request; and

 

                        (g)        Any documents required to be delivered
pursuant to this Section 5.1 shall be deemed to have been delivered by the
Borrower on the date on which the Borrower files such documents with the
Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and
Retrieval System.

 

 

                        Section 5.2.       Notices of Material Events.  The
Borrower will furnish to the Lender prompt written notice of the following:

 

(a)        the occurrence of any Default or Event of Default;

 

                        (b)        the filing or commencement of any action,
suit or proceeding by or before any arbitrator or Governmental Authority against
or, to the knowledge of the Borrower, affecting the Borrower or any Subsidiary
which, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect;

 

                        (c)        the occurrence of any ERISA Event that alone,
or together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding $500,000;

 

(d)        any investigation of the Borrower or any Subsidiary by any
Governmental Agency having regulatory authority over the Borrower or any such
Subsidiary (other than routine examinations of the Borrower and/or any such
Subsidiary);

 

                        (e)        the issuance of any cease and desist order,
written agreement, cancellation of insurance or other public or enforcement
action by the FDIC or other Governmental Authority having regulatory authority
over the Borrower or any Subsidiary;  

 

(f)         the issuance of any memorandum of understanding or proposed
disciplinary action by or from any Governmental Authority having regulatory
authority over the Borrower or any Subsidiary, to the extent that the Borrower
or any such Subsidiary is permitted to disclose such information (provided that
the Borrower shall take all reasonable efforts to obtain any necessary
regulatory consents); and

                                                           

                        (g)        any other development that results in, or
could reasonably be expected to result in, a Material Adverse Effect. 

 

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                        Each notice delivered under this Section 5.2 shall be
accompanied by a written statement of a Responsible Officer setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

            Section 5.3.       Existence; Conduct of Business; Management.  The
Borrower will, and will cause each of its Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and maintain in full force and
effect its legal existence and its respective rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material
to the conduct of its business and will continue to engage in the same business
as presently conducted or such other businesses that are reasonably related
thereto; provided, that nothing in this Section 5.3 shall prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.3. The
Borrower will, and will cause each of its Subsidiaries to, retain a chief
executive officer, chief financial officer and other senior management team of
professionals with such skills and experience as shall be sufficient to manage
the respective affairs of the Borrower and its Subsidiaries.

 

            Section 5.4.       Compliance with Laws, Etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all laws, rules, regulations
and requirements of any Governmental Authority (including without limitation all
federal and state banking statutes and regulations) applicable to its assets,
except where the failure to do so, either individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

            Section 5.5.       Books and Records. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities to the extent necessary
to prepare the consolidated financial statements of Borrower in conformity with
GAAP.

 

            Section 5.6.       Visitation, Inspection, Etc. The Borrower will,
and will cause each of its Subsidiaries to, permit any representative of the
Lender to visit and inspect its properties, to examine its books and records and
to make copies and take extracts therefrom, and to discuss its affairs, finances
and accounts with any of its officers and with its independent certified public
accountants, all at such reasonable times and as often as the Lender may
reasonably request after reasonable prior notice to the Borrower.

 

            Section 5.7.       Maintenance of Properties; Insurance.

 

            (a)        The Borrower will, and will cause each of its
Subsidiaries to, (i) keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear except
where the failure to do so, either individually or it the aggregate, could not
reasonably be expected to result in a Material Adverse Effect and (ii) maintain
with financially sound and reputable insurance companies, insurance with respect
to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by
companies in the same or similar businesses operating in the same or similar
locations.

 

            (b)        The deposits of each Financial Institution Subsidiary
will at all times be insured by the Federal Deposit Insurance Corporation
(“FDIC”).

 

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            Section 5.8.       Use of Proceeds.  The Borrower may use the
proceeds of all Revolving  Loans for the following purposes, including but not
limited to, redeeming shares of its Series A preferred stock originally issued
under the Troubled Asset Relief Program of the United States Treasury and
financing working capital needs (including without limitation acquisitions) and
for other general corporate purposes of the Borrower and its Subsidiaries. No
part of the proceeds of any Revolving Loan will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulation T, U or
X.

 

            Section 5.9.       Payment of Obligations.  The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge at or before maturity,
all of its obligations and liabilities (including without limitation all tax
liabilities and claims that could result in a statutory Lien) before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

 

            Section 5.10      Deposit Account. Borrower or its Financial
Institution Subsidiary shall maintain a deposit account with Lender of no less
than $250,000.00.

 

 

ARTICLE VI

 

FINANCIAL COVENANTS

 

The Borrower covenants and agrees that so long as the Lender has its Revolving
Commitment hereunder or the principal of or interest on or any Revolving Loan
remains unpaid or any fee remains unpaid:

 

            Section 6.1.       Minimum Net Income.  The Borrower on a
consolidated basis will have at the end of each fiscal year end Net Income of at
least $3,500,000, determined in accordance with GAAP and as disclosed in
Borrower’s consolidated financial statements.

 

            Section 6.2.       Ratio of Minimum Classified Assets to Tier I
Capital. The Borrower on a consolidated basis will not permit at the end of each
Fiscal Quarter the ratio of Classified Assets to Tier I Capital plus ALLL to
exceed 50%.

 

                        Section 6.3.       Capital Measures.

 

                        (a)        The Borrower will be  “well-capitalized” for
all applicable state and federal regulatory purposes at all times,  and the
Borrower (i) will have a Total Risk-based Capital Ratio of 10.0% or greater, a
Tier 1 Risk-based Capital Ratio of 6.0% or greater, and a Leverage Ratio of
5.00% or greater (each as defined by applicable  federal and state regulations
or orders), and will not be subject to any written agreement, order, capital
directive or prompt corrective action directive by any Governmental Authority
having regulatory authority over the Borrower or (ii) if required by any
Governmental Authority having regulatory authority over the Borrower in order to
remain “well capitalized” and in compliance with all applicable regulatory
requirements, will have such higher amounts of Total Risk-based Capital and Tier
1 Risk-based Capital and/or such greater Leverage Ratio as specified by such
Governmental Authority.

 

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                        (b)        Each Financial Institution Subsidiary of the
Borrower will be “well capitalized” for all applicable state and federal
regulatory purposes at all times, and such Financial Institution Subsidiary  (i)
will have a Total Risk-based Capital Ratio of 10.0% or greater,  a Tier 1
Risk-based Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0% or
greater (each as defined by applicable federal and state regulations or orders)
and not be subject to any written agreement, order, capital directive or prompt
corrective action directive by any Governmental Authority having regulatory
authority over such Financial Institution Subsidiary or (ii) if required by any
Governmental Authority having regulatory authority over such Financial
Institution Subsidiary  in order to remain “well capitalized” and in compliance
with all applicable regulatory requirements, will have such higher amounts of
Total Risk-based Capital and Tier 1 Risk-based Capital and/or such greater
Leverage Ratio as specified by such Governmental Authority.

 

                        (c)       Notwithstanding the foregoing, if at any time
any such Governmental Authority changes the definition of “well capitalized”
either by amending such ratios or otherwise, such amended definition, and any
such amended or new ratios, shall automatically be incorporated by reference
into this Agreement as the minimum standard for the Borrower or any Financial
Institution Subsidiary, as the case may be, on and as of the date that any such
amendment becomes effective by applicable statute, regulation, order or
otherwise.

 

                        Section 6.4.       Allowance for Loan and Lease Losses
to Classified Assets. The Borrower shall cause the Financial Institution
Subsidiary on a consolidated basis to maintain at all times an Allowance for
Loan and Lease Losses equal to or greater than 125% of Classified Assets if
Classified Assets are greater than or equal to 25% of Tier I Capital plus ALLL.
If Classified Assets are less than 25% of Tier I Capital plus ALLL then the
Financial Institution Subsidiary on a consolidated basis will maintain at all
times an ALLL equal to or greater than 115% of Nonperforming Loans.
Notwithstanding the foregoing, if at any time any a Governmental Authority
changes the requirements for ALLL either by amending such definitions or
otherwise, the ratios set out herein shall be adjusted as appropriate to take
into account such amended definition.

 

            Section 6.5.       Minimum Liquidity.  The Borrower shall maintain
at all times Liquid Assets having an aggregate market value equal or greater
than  the sum of (a) scheduled debt service for the Financial Institution
Subsidiary for the succeeding four Fiscal Quarters  and (b)  operating expenses
of the Financial Institution Subsidiary for the succeeding two Fiscal Quarters.

 

 

ARTICLE  VII

 

NEGATIVE COVENANTS

 

The Borrower covenants and agrees that so long as the Lender has its Revolving
Commitment hereunder or the principal of or interest on any Revolving Loan
remains unpaid or any fee remains unpaid:

 

            Section 7.1.       Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:

 

                        (a)        Indebtedness created pursuant to the Loan
Documents;

 

                        (b)        Indebtedness existing on the date hereof and
set forth on Schedule 7.1 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(immediately prior to giving effect to such extension, renewal or replacement)
or shorten the maturity or the weighted average life thereof;

 

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            (c)        Indebtedness of any Financial Institution Subsidiary (i)
to the Federal Reserve Board or to the Federal Home Loan Bank Board or (ii)
constituting federal funds purchased and securities sold under agreements to
repurchase incurred in the ordinary course of business or (iii) otherwise
incurred in the ordinary course of its banking business;

 

            (d)        Indebtedness constituting obligations of the Borrower and
any Financial Institution Subsidiary under debentures, indentures, trust
agreements and guarantees in connection with the issuance by such Persons of
trust preferred securities;

 

(e)        Indebtedness owed by (i) the Borrower or any “affiliate” of the
Borrower (as defined in Regulation W of the Board of Governors of the Federal
Reserve System and sections 23A and 23B of the Federal Reserve Act) to any
Financial Institution Subsidiary not in violation of Regulation W of the Board
of Governors of the Federal Reserve System (as amended, supplemented or
otherwise modified), or (ii) any Subsidiary to the Borrower or (iii) the
Borrower or any Subsidiary to a Subsidiary other than a Financial Institution
Subsidiary;

 

                        (f)        any other Indebtedness that is subordinated
to the Indebtedness under this Agreement on the following terms: (i) no part of
the principal of such Indebtedness is stated to be payable or is required to be
paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to the Commitment Termination Date and the
payment of principal of which and any other obligations of the Borrower with
respect thereof (other than interest subject to clause (f)(ii)) are subordinated
to the prior payment in full of principal and interest (including post-petition
interest)  and all other obligations and amounts of the Borrower to the Lender
hereunder on terms and conditions first approved in writing by the Lender, (ii)
no part of the interest accruing on such Indebtedness is payable, without the
prior written consent of the Lender, after a Default or Event of Default has
occurred and is continuing, and (iii) such Indebtedness otherwise contains
terms, covenants and conditions in form and substance reasonably satisfactory to
the Lender as evidenced by its prior written approval thereof; and

 

                        (g)        Indebtedness consisting of Hedging Agreements
entered into by (i) the Borrower in the ordinary course of business to hedge or
mitigate risks in connection with interest rate fluctuations on its Indebtedness
and (ii) any Financial Institution Subsidiary in the ordinary course of its
business.

 

            Section 7.2.       Negative Pledge.  The Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien on any of its assets or property now owned or hereafter acquired
(including without limitation in the case of the Borrower, the capital stock of
any Financial Institution Subsidiary), except:

 

                        (a)        Liens (if any) created in favor of the Lender
pursuant to the Loan Documents;

 

(b)        Permitted Encumbrances;

 

(c)        Liens granted to secure any Indebtedness incurred pursuant to Section
7.1(c) ( as long as in the case of Section 7.1(c)(ii), such Lien shall only
extend to those securities sold) and Section 7.1(e); and

 

                        (d)        extensions, renewals, or replacements of any
Lien referred to in paragraphs (a), (b) and (c) of this Section 7.2.

 

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                        Section 7.3.       Fundamental Changes.

 

                         (a)       The Borrower will not, and will not permit
any Subsidiary to, merge into or consolidate into any other Person, or permit
any other Person to merge into or consolidate with it, or sell, lease, transfer
or otherwise dispose of (in a single transaction or a series of transactions)
all or substantially all of its assets (other than in the ordinary course of
business) or all or substantially all of the stock of any of its Subsidiaries or
liquidate or dissolve; provided, that if at the time thereof and immediately
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing (as shown by evidence of pro forma covenant compliance
provided by Borrower and approved by Lender), (i) the Borrower or any Subsidiary
may merge with a Person if the Borrower (or such Subsidiary if the Borrower is
not a party to such merger) is the surviving Person, and (ii) any Subsidiary may
sell, lease, transfer or dispose of its assets to the Borrower, provided, that
any Financial Institution Subsidiary may sell loans, investments or other assets
in the ordinary course of its business.

 

            (b)        The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date hereof and businesses reasonably related thereto and any types of
businesses that are expressly permitted by any Governmental Authority having
jurisdiction over the Borrower and/or any Financial Institutions Subsidiary.

 

                        Section 7.4.       Restricted Payments. Upon the
occurrence and during the continuation of any Default or Event of Default, and
so long as such action would not cause a Default or Event of Default, the
Borrower will not, and will not permit its Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any dividend on any class of its
stock, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, retirement, defeasance or
other acquisition of, any shares of common stock or Indebtedness subordinated to
the Obligations of the Borrower or any options, warrants, or other rights to
purchase such common stock or such Indebtedness, whether now or hereafter
outstanding; provided, that any Subsidiary may pay dividends to the Borrower at
any time.

 

                        Section 7.5.       Restrictive Agreements.  The Borrower
will not, and will not permit any Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit any Lien upon any of its assets or properties, whether
now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to its common stock, to make or
repay loans or advances to the Borrower or any other Subsidiary, to guarantee
Indebtedness of the Borrower or any other Subsidiary or to transfer any of its
property or assets to the Borrower or any Subsidiary of the Borrower; provided,
that (i) the foregoing shall not apply to restrictions or conditions imposed by
law or by this Agreement or any other Loan Document, (ii) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is sold and such
sale is permitted hereunder, and (iii) clause (a) shall not apply to customary
provisions in leases restricting the assignment thereof. 

           

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            Section 7.6.       Investments, Etc.  The Borrower will not, and
will not permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly-owned Subsidiary
prior to such merger), any common stock, Indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person (all of the foregoing being collectively called “Investments”), or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person that constitute a business unit, except:

 

                        (a)        Investments existing on the date hereof
(including Investments in Subsidiaries) that have been disclosed to the Lender
and/or that are set forth on the most current financial statements that have
been delivered to the Lender;

 

(b)        Investments purchased in the ordinary course of business by any
Financial Institution Subsidiary;

 

                        (c)        Investments made by the Borrower in or to any
Subsidiary and by any Subsidiary in or to the Borrower or in or to another
Subsidiary;

           

                        (d)        Investments made for the purpose of making or
consummating an Acquisition. provided, that (i)  after giving effect to such
Acquisition, no Default or Event of Default shall have occurred and be
continuing, (ii) such Acquisitions are undertaken in accordance with all
applicable laws, and (iii) the prior written consent or approval of such
Acquisition of the board of directors or equivalent governing body  of the
Person being acquired. Upon the Borrower or any Subsidiary’s Investment of fifty
percent or more of the voting stock any Person that is a regulated financial
institution, such Person shall become a Financial Institution Subsidiary for
purposes of this Agreement; and

 

(e)        Other Investments permitted by applicable laws and regulations.

 

Section 7.7.       Sale and Leaseback Transactions.  The Borrower will not, and
will not permit any of the Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

 

 

ARTICLE VIII

 

EVENTS OF DEFAULT

 

Section 8.1.       Events of Default.  If any of the following events (each an
“Event of Default”) shall occur:

 

                        (a)        the Borrower shall fail to pay any principal
of any Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment or otherwise; or

 

                        (b)        the Borrower shall fail to pay any interest
on any Loan or any fee or any other amount (other than an amount payable under
clause (a) of this Section 8.1) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of five (5) days; or

 

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            (c)        any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with this
Agreement or any other Loan Document (including the Schedules attached thereto)
and any amendments or modifications hereof or waivers hereunder, or in any
certificate, report, financial statement or other document submitted to the
Lender by the Borrower  or any representative of the Borrower  pursuant to or in
connection with this Agreement shall prove to be incorrect in any material
respect when made or deemed made or submitted; or

 

            (d)        the Borrower shall fail to observe or perform any
covenant or agreement contained in Section 5.2, Section 5.3 (with respect to the
Borrower’s existence), Section 5.10 or Articles VI or VII; or

 

            (e)        the Borrower shall fail to observe or perform any
covenant or agreement contained (i) in this Agreement (other than those referred
to in clauses (a), (b) and (d) above), and such failure shall remain unremedied
for ninety (90) days after the earlier of (x) any officer of the Borrower
becomes aware of such failure, or (y)  notice thereof shall have been given to
the Borrower by the Lender or any Lender or (ii) in any other Loan Document
(after taking into consideration any applicable grace periods); or

 

            (f)        the Borrower or any Subsidiary (whether as primary
obligor or as guarantor or other surety) shall fail to pay any principal of or
premium or interest on any Indebtedness owed to the Bank (including without
limitation any Hedging Agreement or any letter of credit) in any amount or any
other Indebtedness owed to any other Person greater than $500,000 that is
outstanding, when and as the same shall become due and payable (whether at
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument evidencing such Indebtedness; or any other event
shall occur or condition shall exist under any agreement or instrument relating
to such Indebtedness and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of such
Indebtedness (without regard to whether such holders or other Person shall have
exercised or waived their right to do so); or any such Indebtedness shall be
declared to be due and payable; or required to be prepaid or redeemed (other 
than by a regularly scheduled required prepayment or redemption), purchased or
defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness
shall be required to be made, in each case prior to the stated maturity thereof;
or

 

            (g)        the Borrower or any Subsidiary shall (i) commence a
voluntary case or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect  or seeking the
appointment of a custodian, trustee, receiver, liquidator or other similar
official of it or any substantial part of its property, (ii) consent to the
institution of , or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (i) of this Section 8.1(g), (iii)
apply for or consent to the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the Borrower or any such Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting  any of the foregoing; or

 

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                        (h)        an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any  Subsidiary or
its debts, or any substantial part of its assets,  under any federal, state or
foreign bankruptcy, insolvency or other similar law now or hereafter in effect 
or (ii) the appointment of a custodian, trustee, receiver, liquidator or other
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, and in any such case, such  proceeding or petition shall remain
undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or

 

                        (i)         the Borrower or any Subsidiary shall become
unable to pay, shall admit in writing its inability to pay, or shall fail to
pay, its debts as they become due; or

 

                        (j)         an ERISA Event shall have occurred that, in
the opinion of the Lender, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to the Borrower
and the Subsidiaries in an aggregate amount exceeding $1,000,000; or

 

                        (k)        any uninsured judgment or order for the
payment of money in excess of $1,000,000 in the aggregate shall be rendered
against the Borrower or any Subsidiary, and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be a period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

 

                        (l)         any non-monetary judgment or order shall be
rendered against the Borrower or any Subsidiary that could reasonably be
expected to have a Material Adverse Effect, and there shall be a period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

                        (m)        a Change in Control shall occur or exist; or

 

(n)         any Governmental Authority having regulatory authority over the
Borrower or any Subsidiary shall impose any restriction upon the payment of
dividends from any such Subsidiary to the Borrower or in any other way impose
any restriction that limits or restricts Borrower or any of its Subsidiaries
from engaging in normal business activities; or

 

(o)          any Financial Institution Subsidiary shall cease for any reason to
be an insured bank under the Federal Deposit Insurance Act, as amended; or

 

(p)          the FDIC or any other federal or state regulatory authority shall
issue a cease and desist order or take other action of a disciplinary or
remedial nature against the Borrower or any Financial Institution Subsidiary and
such order or other action could reasonably be expected to have a Material
Adverse Effect or there shall occur with respect to any Financial Institution
Subsidiary any event that is grounds for the required submission of a capital
restoration plan under 12 U.S.C. §1831o (e)(2) and the regulations thereunder;

 

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then, and in every such event (other than an event with respect to the Borrower
or any Subsidiary described in clause (g) or (h) of this Section 8.1) and at any
time thereafter during the continuance of such event, the Lender may, by notice
to the Borrower, take any or all of the following actions, at the same or
different times:  (i) terminate its Revolving Commitment; (ii) declare the
principal of and any accrued interest on the Revolving Loans, and all other
Obligations owing hereunder, to be, whereupon the same shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower and (iii) exercise all
remedies contained in any other Loan Document; and  that, if an Event of Default
specified in either clause (g) or (h)  shall occur, the Revolving Commitment 
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon, and  all fees, and all other Obligations
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.

 

 

ARTICLE IX

 

MISCELLANEOUS

 

            Section 9.1.       Notices.

 

            (a)        Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications to any party herein to be effective shall be in writing and shall
be delivered by hand or overnight courier service (with confirmation), mailed by
certified or registered mail (return receipt requested) or sent by telecopy or
email (with confirmation), as follows:

 

To the Borrower:                        Southern First Bancshares, Inc.

                                                100 Verdae Boulevard, Suite 100

                                                Greenville, SC 29606

                                                Attn: Mike Dowling

                                                Telephone Number: (864) 679-9070

                                                Telecopy Number:  (864) 679-9403

                                                Email:
mdowling@southernfirst.com

 

                        To the Lender:                           The Brand
Banking Company

                                                                        3328
Peachtree Road, NE

                                                                        Atlanta,
Georgia 30326

                                                                        Attn:
Chris Gruehn

                                                                       
Telephone Number: (770) 339-2086

                                                                        Telecopy
Number: (678) 407-8948

                                                                        Email:
Chris Gruehn <cgruehn@thebrandbank.com>

 

                  Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.  All such notices and other communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the mails or if delivered, upon delivery; provided, that notices delivered
to the Lender shall not be effective until actually received by the Lender at
its address specified in this Section 9.1.

 

                        (b)        Any agreement of the Lender herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower.  The Lender shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Borrower to
give such notice and the Lender shall not have any liability to the Borrower or
other Person on account of any action taken or not taken by the Lender in
reliance upon such telephonic or facsimile notice.  The obligation of the
Borrower to repay the Revolving Loans and all other Obligations hereunder shall
not be affected in any way or to any extent by any failure of the Lender to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Lender of a confirmation which is at variance with the terms
understood by the Lender to be contained in any such telephonic or facsimile
notice.

 

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                        Section 9.2.       Waiver; Amendments.

 

                        (a)        No failure or delay by the Lender in
exercising any right or power hereunder or any other Loan Document, and no
course of dealing between the Borrower and the Lender, shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power or
any abandonment or  discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power hereunder or thereunder.  The rights and remedies of the Lender
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies provided by law. No waiver of any provision
of this Agreement or any other Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 9.2, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a
Revolving Loan shall not be construed as a waiver of any Default or Event of
Default, regardless of whether the Lender may have had notice or knowledge of
such Default or Event of Default at the time.

 

                        (b)        No amendment or waiver of any provision of
this Agreement or the other Loan Documents, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Borrower and the Lender and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

            Section 9.3.       Expenses; Indemnification.

 

                        (a)        The Borrower shall pay (i) all reasonable,
out-of-pocket costs and expenses of the Lender (including, without limitation,
the reasonable fees, charges and disbursements of outside counsel and the
allocated cost of inside counsel) in connection with the preparation and
administration of the Loan Documents and any amendments, modifications or
waivers thereof (whether or not the transactions contemplated in this Agreement
or any other Loan Document shall be consummated) provided however that Lender
will use its best efforts to limit such fees and expenses relating to
preparation and administration of the Loan Documents to no more than $10,000,
and (ii) all out-of-pocket costs and expenses (including, without limitation,
the reasonable fees, charges and disbursements of outside counsel and the
allocated cost of inside counsel) incurred by the Lender in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section 9.3, or in connection with the Revolving
Loans made hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Revolving Loans.

 

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                         (b)       The Borrower shall indemnify the Lender and
each Affiliate of the Lender, and each officer, director, employee, agents and
advisors of the Lender and each Affiliate of the Lender (each, an “Indemnitee”)
against, and hold each of them harmless from, any and all costs, losses,
liabilities, claims, damages and related expenses, including the fees, charges
and disbursements of any counsel for any Indemnitee, which may be incurred by
any Indemnitee,  or asserted against any Indemnitee by the Borrower or any third
Person, arising out of, in connection with or as a result of (i) the execution
or delivery of any this Agreement or any other agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation  of any of the transactions
contemplated hereby, (ii) any Revolving Loan or any actual or proposed use of
the proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned by the Borrower  or any
Subsidiary or any Environmental Liability  related in any way to the Borrower or
any Subsidiary or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether brought by
the Borrower or any third Person and whether based on contract, tort, or any
other theory  of law and regardless of whether any Indemnitee is a party
thereto; provided,  that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined  by a court of competent jurisdiction in a
final and nonappealable judgment.to have resulted from the  gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.

 

                         (c)       The Borrower shall pay, and hold the Lender
harmless from and against, any and all present and future stamp, documentary,
and other similar taxes with respect to this Agreement and any other Loan
Documents, any collateral described therein, or any payments due thereunder, and
save the Lender harmless from and against any and all liabilities with respect
to or resulting from any delay or omission to pay such taxes.

 

                        (d)        To the extent permitted by applicable law,
the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to actual or direct damages) arising out of, in
connection with or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the transactions contemplated therein, any Loan or the use
of proceeds thereof.

 

                        (e)        All amounts due under this Section 9.3 shall
be payable promptly after written demand therefor.

 

            Section 9.4.       Successors and Assigns.

 

(a)        The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights hereunder
without the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void).

 

(b)        The Lender may at any time assign to one or more assignees all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including all or a portion of its Revolving Commitment and the
Revolving Loans at the time owing to it); provided, that the Borrower must give
its prior written consent (which consent shall not be unreasonably withheld or
delayed) to any assignment, except an assignment to an Affiliate of the Lender
or during the occurrence and continuation of a Default or an Event of Default.
Upon the execution and delivery of an assignment agreement by the Lender and
such assignee and payment by such assignee of an amount equal to the purchase
price agreed between the Lender and such assignee, such assignee shall become a
party to this Agreement and the other Loan Documents and shall have the rights
and obligations of a Lender under this Agreement, and the Lender shall be
released from its obligations hereunder to a corresponding extent.  Upon the
consummation of any such assignment hereunder, the Lender, the assignee and the
Borrower shall make appropriate arrangements to have new Revolving Credit Notes
issued to reflect such assignment. 

 

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(c)        The Lender may at any time, without the consent of the Borrower, sell
participations to one or more banks or other entities (each, a “Participant”) in
all or a portion of the Lender's rights and obligations under this Agreement;
provided, that (i) the Lender's obligations under this Agreement shall remain
unchanged, (ii) the Lender shall remain solely responsible to the other parties
hereto for the performance of its obligations hereunder, and (iii) the Borrower
shall continue to deal solely and directly with the Lender in connection with
the Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement between the Lender and the Participant with respect to
such participation shall provide that the Lender shall retain the sole right and
responsibility to enforce this Agreement and the other Loan Documents and the
right to approve any amendment, modification or waiver of this Agreement and the
other Loan Documents.

 

 (d)       The Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement and the Note to secure its
obligations to a Federal Reserve Bank without complying with this Section 9.4;
provided, that no such pledge or assignment shall release the Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

            Section 9.5.       Governing Law; Jurisdiction; Consent to Service
of Process.

 

                        (a)        This Agreement and the other Loan Documents
shall be construed in accordance with and be governed by the law (without giving
effect to the conflict of law principles thereof) of the State of Georgia.

 

                        (b)        The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the non-exclusive
jurisdiction of any Federal and/or state court (including without limitation the
Business Case Division of the Fulton County Superior Court, if applicable) 
located in the State of Georgia and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any other
Loan Document or the transactions contemplated hereby or thereby, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Georgia state
court or, to the extent permitted by applicable law, such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against the Borrower or its properties in the courts of any
jurisdiction.

 

                        (c)        The Borrower irrevocably and unconditionally
waives any objection which it may now or hereafter have to the laying of venue
of any such suit, action or proceeding described in paragraph (b) of  this
Section 9.5 and brought in any court referred to in paragraph (b) of this
Section 9.5. Each of the parties hereto irrevocably waives, to the fullest
extent permitted by applicable law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

                        (d)        Each party to this Agreement irrevocably
consents to the service of process in the manner provided for notices in Section
9.1.  Nothing in this Agreement or in any other Loan Document will affect the
right of any party hereto to serve process in any other manner permitted by law.

 

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                        Section 9.6.       Right of Setoff.  In addition to any
rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, the Lender shall have the right, at any time or
from time to time upon the occurrence and during the continuance of an Event of
Default, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, to set off and
apply against all deposits (general or special, time or demand, provisional or
final) of the Borrower at any time held or other obligations at any time owing
by the Lender to or for the credit or the account of the Borrower against any
and all Obligations held by the Lender, irrespective of whether the Lender shall
have made demand hereunder and although such Obligations may be unmatured.  The
Lender agrees promptly to notify the Borrower after any such set-off and any
application made by the Lender; provided, that the failure to give such notice
shall not affect the validity of such set-off and application.

 

            Section 9.7.       Counterparts; Integration. This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Lender constitute the entire agreement among
the parties hereto and thereto regarding the subject matters hereof and thereof
and supersede all prior agreements and understandings, oral or written,
regarding such subject matters.

 

            Section 9.8.       Survival. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making  of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Lender may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Loan Commitment has not expired or terminated.  The provisions of Section
2.10 and Section 9.3 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Loan Commitment or
the termination of this Agreement or any provision hereof.  All representations
and warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and the making of the
Loans.

 

            Section 9.9.       Severability.  Any provision of this Agreement or
any other Loan Document held to be illegal, invalid or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof; and
the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

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                        Section 9.10.     Patriot Act.   The Lender hereby
notifies the Borrower  that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow the Lender  to identify the Borrower in
accordance with the Patriot Act.  The Borrower shall, and shall cause each of
its Subsidiaries to, provide to the extent commercially reasonable, such
information and take such other actions as are reasonably requested by the
Lender in order to assist the Lender in maintaining compliance with the Patriot
Act.

 

                        Section 9.11.     WAIVER OF JURY TRIAL.

 

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE
TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

           

                       

 

[Remainder of Page Intentionally Blank]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal in the case of the Borrower by their respective authorized
officers as of the day and year first above written.

 

                                                           
                                                                SOUTHERN FIRST
BANCSHARES, INC.

 

                                                                                                                           
By___________________________

                                                                     Name:

                                                                     Title:

 

 

                                                                    [SEAL]

 

                                   
                                                                                       
THE BRAND BANKING COMPANY

                                                           

 

                                                                                                                            
By___________________________________

                                                                                                                                   
Name:

                                                                                                                                   
Title:  

 

 

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SCHEDULE  4.12

 

 

FINANCIAL INSTITUTION SUBSIDIARIES

 

 

                                                                   
                                                                       
OWNERSHIP % BY                                                      
JURISDICTION OF

Name
                                                                                                                                 
Borrower                                                                 
Incorporation

Southern First
Bank                                                                                                             
100%                                                                       South
Carolina

                                                                                                                                

 

 

 

 

OTHER SUBSIDIARIES

 

 

 

Greenville Statutory Trust I

Greenville Statutory Trust II

 

 

 

 

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SCHEDULE 7.1

 

 

OUTSTANDING INDEBTEDNESS

 

 

 

 

 

 

[SOUTHERN FIRST BANCSHARES TO PROVIDE]

 

 

 

 

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EXHIBIT A

 

NOTE

 

$10,000,000.00                                                                                     
        
                                                                                                                                      
Atlanta, Georgia

                                                                                                                                                                                                                                                           
June 6, 2014

 

            FOR VALUE RECEIVED, the undersigned, Southern First Bancshares,
Inc., a South Carolina corporation (the “Borrower”), hereby promises to pay to
The Brand Banking Company (the “Lender”) or its registered assigns at its
principal office or any other office that the Lender designates, on the Maturity
Date (as defined in the Loan Agreement dated as of June 6, 2014, by and between
the Borrower and the Lender) (as the same may be amended, supplemented or
otherwise modified from time to time, the “Loan Agreement”), the lesser of the
principal sum of Ten Million and no/100 Dollars ($10,000,000) and the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant
to the Loan Agreement, in lawful money of the United States of America in
immediately available funds, and to pay interest from the date hereof on the
principal amount thereof from time to time outstanding, in like funds, at said
office, at the rate or rates per annum and payable on such dates as provided in
the Loan Agreement.  In addition, should legal action or an attorney-at-law be
utilized to collect any amount due hereunder, the Borrower further promises to
pay all costs of collection, including the reasonable attorneys’ fees of the
Lender.

 

            The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from its due
dates at a rate or rates provided in the Loan Agreement.

 

            All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and the date thereof shall be recorded by
the holder hereof in its internal records; provided, that the failure of the
holder hereof to make such a notation or any error in such notation shall not
affect the obligations of the Borrower to make the payments of principal and
interest in accordance with the terms of this Note and the Loan Agreement.

 

            This Note is issued in connection with, and is entitled to the
benefits of, the Loan Agreement which, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain
events, for prepayment of the principal hereof prior to the maturity hereof and
for the amendment or waiver of certain provisions of the Loan Agreement, all
upon the terms and conditions therein specified.  THIS NOTE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF GEORGIA  AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

 

                                                                                                               
SOUTHERN FIRST BANCSHARES, INC.

 

                                                                                                               
By:                                                      

                                                                                                                    
Name:

                                                                                                                    
Title:

                                                                                                                    
[SEAL]

 

 

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EXHIBIT 2.2

 

 

 

 

 

The Brand Banking Company

3328 Peachtree Road, NE

Atlanta, Georgia 30326

 

Attention:

 

Dear Sirs:

 

            Reference is made to the Loan Agreement dated as of June 6, 2014 
(as amended and in effect on the date hereof, the “Loan Agreement”), between the
undersigned, as Borrower, and The Brand Banking Company, as Lender.  Terms
defined in the Loan Agreement are used herein with the same meanings.  This
notice constitutes a Notice of Borrowing, and the Borrower hereby requests a
Revolving Loan under the Loan Agreement, and in that connection the Borrower
specifies the following information with respect to the Loan requested hereby:

 

            (A)       Principal amount of Revolving
Loan:                                          

 

            (B)       Date of Revolving Loan (which is a Business Day):
                                  

 

            (C)       Location and number of Borrower’s account to which
proceeds of Loans are

to be disbursed:                                     

 

            The Borrower hereby represents and warrants that the conditions
specified in paragraphs (a), (b) and (c) of Section 3.2 of the Loan Agreement
are satisfied.

 

                                                                                                                                                                       
Very truly yours,

 

                                                                                                                                                                       
SOUTHERN FIRST BANCSHARES, INC.

 

                                                                                                                                                                       
By:                                                                  

                                                                                   
                                                                                         
Name:

                                                                                   
                                                                                         
Title:

 

 

 

 

 

 

 

 

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