Exhibit 10.3

 

THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO THE SOUTH CAROLINA UNIFORM
ARBITRATION ACT: SC CODE ANN.  §15-48-10 ET SEQ. AND THE FEDERAL ARBITRATION
ACT: 9 U.S.C. 1 ET SEQ.

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR THE COMPANY, UPON ITS REQUEST, RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THIS INSTRUMENT ACCEPTABLE TO THE COMPANY STATING THAT SUCH
SALE, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND APPLICABLE STATE LAWS.  THIS
INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT BY AND AMONG
THE ISSUER OF THESE SECURITIES AND THE INVESTORS REFERRED TO THEREIN, A COPY OF
WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SUCH
AGREEMENT.  ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SUCH AGREEMENT
WILL BE VOID.

 

WARRANT

to purchase

 

[                   ](1)

 

Shares of Common Stock of

 

First Community Corporation

 

Issue Date: December 16, 2011

 

1.             Definitions. Unless the context otherwise requires, when used
herein the following terms shall have the meanings indicated.

 

“AAA” has the meaning set forth in Section 15.

 

“Arbitration Rules” has the meaning set forth in Section 15.

 

“Board of Directors” means the board of directors of the Company, including any
duly authorized committee thereof.

 

“Business Combination” means a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Company’s stockholders.

 

“business day” means any day except Saturday, Sunday and any day on which
banking institutions in the State of New York generally are authorized or
required by law or other governmental

 

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(1)  The Company will fill in this number, which will be equal to 43 shares of
Common Stock for each $1,000 of principal amount of the Notes purchased by the
subscriber.

 

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actions to close.

 

“Charter” means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational document.

 

“Common Stock” means the common stock of the Company.

 

“Company” means First Community Corporation, a South Carolina corporation.

 

“Dispute” has the meaning set forth in Section 15.

 

“Dispute Notice” has the meaning set forth in Section 15.

 

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

 

“Exercise Price” means $5.90.

 

“Expiration Time” has the meaning set forth in Section 3.

 

“Issue Date” means December 16, 2011.

 

“Market Price” means, with respect to a particular security, on any given day,
the last reported sale price regular way or, in case no such reported sale takes
place on such day, the average of the last closing bid and ask prices regular
way, in either case on the principal national securities exchange on which the
applicable securities are listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and ask prices as furnished by two members of the Financial Industry
Regulatory Authority, Inc. selected from time to time by the Company for that
purpose.  “Market Price” shall be determined without reference to after hours or
extended hours trading. If such security is not listed and traded in a manner
that the quotations referred to above are available for the period required
hereunder, the Market Price per share of Common Stock shall be deemed to be the
fair market value per share of such security as determined in good faith by the
Board of Directors.  For the purposes of determining the Market Price of the
Common Stock on the “trading day” preceding, on or following the occurrence of
an event, (i) that trading day shall be deemed to commence immediately after the
regular scheduled closing time of trading on the New York Stock Exchange or, if
trading is closed at an earlier time, such earlier time and (ii) that trading
day shall end at the next regular scheduled closing time, or if trading is
closed at an earlier time, such earlier time (for the avoidance of doubt, and as
an example, if the Market Price is to be determined as of the last trading day
preceding a specified event and the closing time of trading on a particular day
is 4:00 p.m. and the specified event occurs at 5:00 p.m. on that day, the Market
Price would be determined by reference to such 4:00 p.m. closing price).

 

“Notes” means the Company’s 8.75% Subordinated Notes due in 2019, $1,000
principal amount, issued pursuant to the Subordinated Note and Warrant Purchase
Agreement.

 

“Party” has the meaning set forth in Section 15.

 

“Parties” has the meaning set forth in Section 15.

 

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“Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and
as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

 

“Regulatory Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant for
shares of Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the receipt of any
necessary approvals and authorizations of, filings and registrations with,
notifications to, or expiration or termination of any applicable waiting period
under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder, the Securities Act, and applicable state
securities laws.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

 

“Shares” has the meaning set forth in Section 2.

 

“Subordinated Note and Warrant Purchase Agreement” means the Subordinated Note
and Warrant Purchase Agreement by and among the Company and the investors
referred to therein, a copy of which is on file with the Company.

 

“trading day” means (A) if the shares of Common Stock are not traded on any
national or regional securities exchange or association or over-the-counter
market, a business day or (B) if the shares of Common Stock are traded on any
national or regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation system is
scheduled to be open for business and on which the shares of Common Stock (i)
are not suspended from trading on any national or regional securities exchange
or association or over-the-counter market for any period or periods aggregating
one half hour or longer; and (ii) have traded at least once on the national or
regional securities exchange or association or over-the-counter market that is
the primary market for the trading of the shares of Common Stock.

 

“Warrantholder” has the meaning set forth in Section 2.

 

“Warrant” means this Warrant.

 

2.             Number of Shares; Exercise Price. This certifies that, for value
received,  the undersigned warrantholder whose name appears on the signature
page hereto or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate number of                         (2)
fully paid and nonassessable shares of Common Stock, at a purchase price per
share of Common Stock equal to the Exercise Price.  The number of shares of
Common Stock (the “Shares”) and the Exercise Price are subject to adjustment as
provided herein, and all references to “Common Stock,” “Shares” and “Exercise
Price” herein shall be deemed to include any such adjustment or series of
adjustments.

 

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(2)  The Company will fill in this number, which will be equal to 43 shares of
Common Stock for each $1,000 of principal amount of the Notes purchased by the
subscriber.

 

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3.             Exercise of Warrant; Term. Subject to the restrictions on
exercise contained in this Warrant, to the extent permitted by applicable laws
and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time
to time after the execution and delivery of this Warrant by the Company on the
date hereof, but in no event later than 5:00 p.m., New York City time on the
eighth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at 5455 Sunset Boulevard, Lexington, South Carolina 29072
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:

 

(i)            (Conversion) by having the Company withhold, from the shares of
Common Stock that would otherwise be delivered to the Warrantholder upon such
exercise, shares of Common stock issuable upon exercise of the Warrant equal in
value to the aggregate Exercise Price as to which this Warrant is so exercised
based on the Market Price of the Common Stock on the trading day on which this
Warrant is exercised and the Notice of Exercise is delivered to the Company
pursuant to this Section 3, or

 

(ii)           (Cash Payment) with the consent of both the Company and the
Warrantholder, by tendering in cash, by certified or cashier’s check payable to
the order of the Company, or by wire transfer of immediately available funds to
an account designated by the Company.

 

If the Warrantholder does not exercise this Warrant in its entirety, the
Warrantholder will be entitled to receive from the Company within a reasonable
time a new warrant in substantially identical form for the purchase of that
number of Shares equal to the difference between the number of Shares subject to
this Warrant and the number of Shares as to which this Warrant is so exercised. 
Notwithstanding anything in this Warrant to the contrary, the Warrantholder
hereby acknowledges and agrees that its exercise of this Warrant for Shares is
subject to the conditions that (x) the Warrantholder will have first received
any applicable Regulatory Approvals and (y) the exercise is subject to a valid
exemption from registration under federal and applicable state securities laws.

 

4.             Issuance of Shares; Authorization; Listing.  Certificates for
Shares issued upon exercise of this Warrant will be issued in such name or names
as the Warrantholder may designate, subject to transfer restrictions set forth
in Section 6.8 of the Subordinated Note and Warrant Purchase Agreement, and will
be delivered to such named Person or Persons within a reasonable time after the
rights represented by this Warrant shall have been so exercised.  The Company
hereby represents and warrants that any Shares issued upon the exercise of this
Warrant in accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges (other than liens or charges created by the Warrantholder,
income and franchise taxes incurred in connection with the exercise of the
Warrant or taxes in respect of any transfer occurring contemporaneously
therewith). The Company agrees that the Shares so issued will be deemed to have
been issued to the Warrantholder as of the close of business on the date on
which this Warrant and payment of the Exercise Price are delivered to the
Company in accordance with the terms of this Warrant, notwithstanding that the
stock transfer books of the Company may then be closed or certificates
representing such Shares may not be actually delivered on such date.  The
Company will at all times reserve and keep available, out of its authorized but
unissued Common Stock, solely for the purpose of providing for the exercise of
this Warrant, the aggregate number of shares of Common Stock then issuable upon
exercise of this Warrant at any time.  If the Common Stock is listed on a
national securities exchange at the time of exercise of this Warrant, then the
Company will use good faith efforts to cause the Shares issuable upon exercise
of this Warrant to be listed on such national securities exchange.

 

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5.             Legends.  The Warrantholder agrees to the imprinting of a legend
on the Shares issued upon the exercise of this Warrant pursuant to this
Agreement in substantially the following form:

 

THE ISSUANCE OF THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE LAWS,
AND THESE SHARES OF COMMON STOCK MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND/OR SUCH LAWS COVERING THIS CERTIFICATE
OR THE COMPANY, UPON ITS REQUEST, RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER
OF THIS CERTIFICATE ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT, OFFER, PLEDGE OR OTHER DISTRIBUTION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND APPLICABLE STATE LAWS.

 

Certificates evidencing the Shares issued upon the exercise of this Warrant may
be issued without such a legend if the Company determines that such legend is
not required under applicable requirements of the Securities Act (including
judicial interpretations and pronouncements issued by the staff of the SEC) and
applicable state laws.

 

6.             Fractional Shares or Scrip. The Company may issue fractional
Shares or scrip representing fractional Shares upon any exercise of this
Warrant.  In lieu of any fractional Share or scrip to which the Warrantholder
would otherwise be entitled, the Company may pay to the Warrantholder a cash
payment equal to the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price for such
fractional share.

 

7.             No Rights as Stockholders; Transfer Books. This Warrant does not
entitle the Warrantholder to any voting rights or other rights as a stockholder
of the Company prior to the date of exercise hereof.

 

8.             Charges, Taxes and Expenses. Issuance of certificates for Shares
to the Warrantholder upon the exercise of this Warrant shall be made without
charge to the Warrantholder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificates.

 

9.             Transfer/Assignment.

 

(A)          Subject to compliance with clause (B) of this Section 9, this
Warrant and all rights hereunder are transferable, in whole or in part, upon the
books of the Company by the registered holder hereof in person or by duly
authorized attorney, and a new warrant shall be made and delivered by the
Company, of the same tenor and date as this Warrant but registered in the name
of one or more transferees, upon surrender of this Warrant, duly endorsed, to
the office or agency of the Company described in Section 3.  All expenses (other
than stock transfer taxes) and other charges payable in connection with the
preparation, execution and delivery of the new warrants pursuant to this Section
8 shall be paid by the Company.

 

(B)           The transfer of the Warrant and the Shares issued upon exercise of
the Warrant are subject to the restrictions set forth in Section 6.8 of the
Subordinated Note and Warrant Purchase Agreement.  If and for so long as
required by the Subordinated Note and Warrant Purchase Agreement, this Warrant
shall contain the legends as set forth in Section 6.7 of the Subordinated Note
and Warrant Purchase Agreement.

 

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(C)           Until any transfer of this Warrant is made in the warrant
registry, the Company may treat the Warrantholder as the absolute owner hereof
for all purposes; provided, however, that if and when this Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer hereof as the absolute owner hereof for all purposes, notwithstanding any
notice to the contrary.

 

10.           Exchange and Registry of Warrant. This Warrant is exchangeable,
upon the surrender hereof by the Warrantholder to the Company, for a new warrant
or warrants of like tenor and representing the right to purchase the same
aggregate number of Shares.  The Company shall maintain a registry showing the
name and address of the Warrantholder as the registered holder of this Warrant.
This Warrant may be surrendered for exchange or exercise in accordance with its
terms, at the office of the Company, and the Company shall be entitled to rely
in all respects, prior to written notice to the contrary, upon such registry.

 

11.           Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.

 

12.           Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall not be a business day, then such action may be taken or such right
may be exercised on the next succeeding day that is a business day.

 

13.           Adjustments and Other Rights. The Exercise Price and the number of
Shares issuable upon exercise of this Warrant shall be subject to adjustment
from time to time as follows; provided, that if more than one subsection of this
Section 13 is applicable to a single event, the subsection shall be applied that
produces the largest adjustment and no single event shall cause an adjustment
under more than one subsection of this Section 13 so as to result in
duplication:

 

(A)          Stock Splits, Subdivisions, Reclassifications or Combinations. If
the Company shall (i) declare and pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding shares of Common Stock into a smaller
number of shares, the number of Shares issuable upon exercise of this Warrant at
the time of the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be
proportionately adjusted so that the Warrantholder after such date shall be
entitled to purchase the number of shares of Common Stock which such holder
would have owned or been entitled to receive in respect of the shares of Common
Stock subject to this Warrant after such date had this Warrant been exercised
immediately prior to such date.  In such event, the Exercise Price in effect at
the time of the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be adjusted to
the number obtained by dividing (x) the product of (1) the number of Shares
issuable upon the exercise of this Warrant before such adjustment and (2) the
Exercise Price in effect immediately prior to the record or effective date, as
the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of Shares
issuable upon exercise of the Warrant determined pursuant to the immediately
preceding sentence.

 

(B)           Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 13(A)), the Warrantholder’s right to receive Shares upon
exercise of this Warrant shall be converted into the right to

 

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exercise this Warrant to acquire the number of shares of stock or other
securities or property (including cash) which the Common Stock issuable (at the
time of such Business Combination or reclassification) upon exercise of this
Warrant immediately prior to such Business Combination or reclassification would
have been entitled to receive upon consummation of such Business Combination or
reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Warrantholder
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to the Warrantholder’s right to exercise this Warrant in exchange
for any shares of stock or other securities or property pursuant to this
paragraph.  Unless otherwise determined by the Board of Directors in connection
with a Business Combination, in determining the kind and amount of stock,
securities or the property receivable upon exercise of this Warrant following
the consummation of such Business Combination, if the holders of Common Stock
have the right to elect the kind or amount of consideration receivable upon
consummation of such Business Combination, then the consideration that the
Warrantholder shall be entitled to receive upon exercise shall be deemed to be
the types and amounts of consideration received by the majority of all holders
of the shares of common stock that affirmatively make an election (or of all
such holders if none make an election).

 

(C)           Rounding of Calculations; Minimum Adjustments. All calculations
under this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent
or to the nearest one-hundredth (1/100th) of a share, as the case may be.  Any
provision of this Section 13 to the contrary notwithstanding, no adjustment in
the Exercise Price or the number of Shares into which this Warrant is
exercisable shall be made if the amount of such adjustment would be less than
$0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount
shall be carried forward and an adjustment with respect thereto shall be made at
the time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall aggregate
$0.01 or 1/10th of a share of Common Stock, or more.

 

(D)          Timing of Issuance of Additional Common Stock Upon Certain
Adjustments. In any case in which the provisions of this Section 13 shall
require that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event (i)
issuing to the Warrantholder of this Warrant exercised after such record date
and before the occurrence of such event the additional shares of Common Stock
issuable upon such exercise by reason of the adjustment required by such event
over and above the shares of Common Stock issuable upon such exercise before
giving effect to such adjustment and (ii) paying to such Warrantholder any
amount of cash in lieu of a fractional share of Common Stock; provided, however,
that the Company upon request shall deliver to such Warrantholder a due bill or
other appropriate instrument evidencing such Warrantholder’s right to receive
such additional shares, and such cash, upon the occurrence of the event
requiring such adjustment.

 

(E)           Other Events.  The Exercise Price or the number of Shares into
which this Warrant is exercisable shall not be adjusted solely as a result of a
change in the par value of the Common Stock or a change in the jurisdiction of
incorporation of the Company.

 

(F)           Statement Regarding Adjustments. Whenever the Exercise Price or
the number of Shares into which this Warrant is exercisable shall be adjusted as
provided in Section 13, the Company shall forthwith file at the principal office
of the Company a statement showing in reasonable detail the facts requiring such
adjustment and the Exercise Price that shall be in effect and the number of
Shares into which this Warrant shall be exercisable after such adjustment.

 

(G)           Notice of Adjustment Event. In the event that the Company shall
propose to take any action of the type described in this Section 13 (but only if
the action of the type described in this Section 13 would result in an
adjustment in the Exercise Price or the number of Shares into which this Warrant
is

 

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exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Company shall give notice to the
Warrantholder, in the manner set forth in Section 13(F), which notice shall
specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place.  Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to
indicate the effect on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of this Warrant.  Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.

 

(H)          Adjustment Rules. Any adjustments pursuant to this Section 13 shall
be made successively whenever an event referred to herein shall occur.  If an
adjustment in Exercise Price made hereunder would reduce the Exercise Price to
an amount below par value of the Common Stock, then such adjustment in Exercise
Price made hereunder shall reduce the Exercise Price to the par value of the
Common Stock.

 

14.           Governing Law. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by and construed under the laws of the
State of South Carolina without giving effect to conflicts of laws principles.

 

15.           Dispute Resolution.

 

(A)          General.  Any claim of, or dispute or controversy involving, the
Company or the Warrantholder (each a “Party” and, collectively the “Parties”)
arising out of, connected with, or relating to this Warrant, the subject matter
of this Warrant, its formation or execution, or any right or obligation created
by this Warrant, irrespective of the legal theory or claims underlying such
claim, dispute, or controversy (including tort or statutory claims) (“Dispute”),
shall be resolved in accordance with this Section 15.

 

(B)           Dispute Notice.  The Party asserting the Dispute will give prompt
notice to the other Party describing the Dispute in reasonable detail (“Dispute
Notice”).

 

(C)           Informal Proceedings.  Prior to the initiation of formal dispute
resolution procedures, the Parties shall first attempt to resolve their dispute
informally.  Towards that end, promptly after receipt of the Dispute Notice, the
Parties, personally or through party representatives, will negotiate in good
faith to resolve the Dispute.  The specific format for the discussions shall be
left to the discretion of the designated representatives.

 

(D)          Formal Proceedings.  Formal proceedings for the resolution of a
dispute pursuant to this Section 16 may not be commenced until the earlier of:

 

(i)            the Parties or designated Party representatives concluding in
good faith that amicable resolution through continued negotiation of the matter
does not appear likely; or

 

(ii)           30 business days from the date of the Dispute Notice.  (This
period shall be deemed to run notwithstanding any claim that the process
described in this Section was not followed or completed).

 

(E)           Mandatory Arbitration.

 

(i)            Upon demand of any Party (whether made before or after
institution of any judicial proceeding), any dispute shall be referred to
arbitration, and the final decision rendered shall be binding upon the Parties
to this Agreement.  Disputes include, without limitation, tort

 

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claims, counterclaims, securities law claims, contract claims, disputes as to
whether a matter is subject to binding arbitration, claims brought as class
actions, or claims arising out of or connected with the transaction reflected by
any Warrant.

 

(ii)           To the extent not specified or modified hereafter, arbitration
shall be conducted under and governed by the Commercial Arbitration Rules (the
“Arbitration Rules”) promulgated by the American Arbitration Association
(“AAA”), the Securities Arbitration Supplementary Procedures promulgated by the
AAA, and Chapter 48 of Title 15 of the Code of Laws of South Carolina, as
amended (the South Carolina Uniform Arbitration Act).  All arbitration hearings
shall be conducted in Lexington County, South Carolina.  The Expedited
Procedures set forth in the Arbitration Rules shall be applicable to claims of
less than $100,000.  All applicable statutes of limitation shall apply to a
dispute.  A judgment upon the award may be entered in any court having
jurisdiction over the Party.

 

(iii)          Where the claim amounts to or exceeds $100,000, the arbitration
shall be conducted before three arbitrators, who shall be licensed attorneys in
the State of South Carolina.  All plaintiffs/claimants in the action shall be
permitted the selection of one arbitrator and all defendants/respondents shall
be permitted the selection of the second arbitrator.  (For purposes of selection
of the arbitrators, third-party, counter, or cross claimants shall not be
recognized).  The two selected arbitrators shall then select the third
arbitrator.

 

(iv)          Where the claim is less than $100,000, the arbitration shall be
conducted before a single arbitrator, who shall be a licensed attorney in the
State of South Carolina.  This arbitrator shall be selected by mutual agreement
of the Parties.

 

(F)           Litigation.  In the event that the provisions hereof requiring
binding arbitration shall for any reason be deemed unenforceable (or if no Party
demands that a Dispute be submitted to binding arbitration), the Parties agree
as follows:

 

(i)            Consent to Jurisdiction.  Each Party consents to the jurisdiction
of the state courts of Lexington County, South Carolina, and the Federal Courts
of the District of South Carolina, Richland Division.  Each Party expressly and
irrevocably consents to the jurisdiction of the aforesaid courts and waives any
defenses of lack of personal jurisdiction, improper venue, or forum non
conveniens.

 

(ii)           Exclusive Selection of Forum.  Any Dispute shall be brought
exclusively in the Court of Common Pleas for Lexington County, South Carolina,
or in the Federal Courts of the District of South Carolina, Richland Division.

 

(iii)          Waiver of Right to Jury Trial.  Each Party waives their
respective right to a trial by jury with respect to any Dispute.  Each Party
acknowledges and understands that this waiver is a material inducement to enter
into a business relationship, that each has relied on this waiver in entering
into this Warrant, and that each will continue to rely on the waiver in their
related future dealings.  Each Party represents and warrants that each has had
the opportunity of reviewing this jury waiver with legal counsel, and that each
knowingly and voluntarily waives its jury trial rights.

 

(G)           Expiration.  The foregoing obligations, contained in this Section
15, shall indefinitely survive the expiration or earlier termination of this
Warrant.

 

16.           Binding Effect. This Warrant shall be binding upon any successors
or assigns of the

 

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Company and the successors and permitted assigns of the Warrantholder.

 

17.           Amendments. This Warrant may be amended and the observance of any
term of this Warrant may be waived only with the written consent of the Company
and the Warrantholder.

 

18.           Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the other will be in writing and will be deemed
to have been duly given (a) on the date of delivery if delivered personally, or
by facsimile, upon confirmation of receipt, or (b) on the second business day
following the date of dispatch if delivered by a recognized next day courier
service. All notices hereunder shall be delivered to the addresses set forth
below, or pursuant to such other instructions as may be designated in writing by
the party to receive such notice:

 

If to the Company:

 

First Community Corporation

5455 Sunset Boulevard

Lexington, South Carolina 29072

Attention: Chief Financial Officer

(803) 951-0508

 

With a copy (which shall not constitute notice) to:

 

Nelson Mullins Riley & Scarborough, LLP

104 South Main Street, Suite 900

Greenville, South Carolina 29601

Attention: John M. Jennings, Esq.

Telecopy: (864) 250-2207

 

If to the Warrantholder:

 

To the address set forth in the Warrantholder’s subscription agreement with
respect to the Notes and the Warrants or to such other address as shall be
designated in a written notice to the Company.

 

19.           Acceptance.          Receipt of this Warrant by the Warrantholder
shall constitute acceptance of and agreement to all of the terms and conditions
contained herein.

 

20.           Entire Agreement. This Warrant and the forms attached hereto and
the Subordinated Note and Warrant Purchase Agreement and the forms attached
thereto (and with respect to the original Warrantholder, the subscription
agreement with respect to the Notes and the Warrants and the forms attached
thereto, and the confidentiality agreement between the original Warrantholder
and the Company) contain the entire agreement between the Parties with respect
to the subject matter hereof and supersede all prior and contemporaneous
arrangements or undertakings with respect thereto.

 

[Remainder of page intentionally left blank]

 

10

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[Form of Notice of Exercise]

 

 

Date:

 

 

 

 

TO:         First Community Corporation

 

RE:          Election to Purchase Common Stock

 

The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant.  The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price
for such shares of Common Stock in the manner set forth below. A new warrant
evidencing the remaining shares of Common Stock covered by such Warrant, but not
yet subscribed for and purchased, if any, should be issued in the name set forth
below.

 

Number of Shares of Common Stock

 

 

 

Method of Payment of Exercise Price (note if cashless exercise (conversion)
pursuant to Section 3(B)(i) of the Warrant or cash

exercise pursuant to Section 3(B)(ii) of the Warrant, with consent of the
Company and the Warrantholder)

 

 

Aggregate Exercise Price:

 

 

 

 

Holder:

 

 

By:

 

 

Name:

 

 

Title:

 

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a
duly authorized officer.

 

Dated:

 

 

 

 

 

 

 

COMPANY: FIRST COMMUNITY CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

Michael C. Crapps

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

Attest:

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

Joseph G. Sawyer

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

AGREED AND ACKNOWLEDGED BY

 

 

WARRANTHOLDER:

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

[Signature Page to Warrant]

 

12

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