Unassociated Document


    April 21,
2009

    Jerry L.
Calvert

    President
& CEO

    First
National Bancshares, Inc.

    215 N.
Pine Street

    P.O. Box
3508

    Spartanburg,
SC  29304

    


    Dear Mr.
Calvert:

    


    As of
December 31, 2008, First National Bancshares, Inc. is not in compliance with
Section 4., Negative Covenants c, e, f and g of the Loan Agreement dated
December 28, 2007.  As a result, an event of default has occurred
under Section 8 (ii) of the same Loan Agreement.  As such, Nexity Bank
has the right to seek remedies granted in the loan documents including the right
to “sell, assign and deliver or collect the whole or any part of the Collateral”
(Pledge Agreement – 5. Default and 11. Power of Sale).  The collateral
includes 1,100,000 shares of common stock of First National Bank of the South;
stock certificate number 001 together with any and all stock rights, rights paid
in stock, new securities or other properties to which the Pledgor is or may
hereafter become entitled to receive on account of shares.

    


    Nexity
Bank is requesting the borrower to provide any information and access to
information (to be determined) sufficient to allow Nexity Bank and/or its
designated parties to complete an immediate and thorough due
diligence.  While Section 4 (a) of the Loan Agreement requires that
the borrower provide this information, Nexity Bank would require that this
information be provided when requested and not within the minimum time frames
stipulated in this covenant.  If the borrower would agree to provide
this information under these terms, Nexity Bank would agree to waive only its
ability to seize the collateral under the Pledge Agreement; Section 11. until
June 30, 2009.  All other terms and conditions of the loan documents
including other rights, powers, provisions and remedies granted to the lender
shall continue to exist and may be exercised by Nexity Bank at any time. Please
sign the attached signature page acknowledging your acceptance of these
terms.

    


    
      	
              Sincerely,

            
	 
      
	 
      
	
              Greg
      Lee

            
	
              Chairman

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Signature
Page First National Bancshares Loan

    


    
      	
              Nexity
      Bank

            	
              First
      National Bancshares, Inc

            


    

    


    
      
        
          
            	
                         
      /s/ Greg Lee

                  	 
      	
                        /s/ Jerry L.
      Calvert

                  
	
                    By:

                  	 
      	
                    Greg
      Lee

                  	 
      	
                    Accepted by:  

                  	
                    Jerry
      L. Calvert

                  
	 
      	 
      	
                    Chairman
      and CEO

                  	 
      	 
      	
                    President and
      CEO

                  
	 
      	 
      	 
      	 
      	 
      	 
      
	
                          April 21,
      2009

                  	 
      	
                           April 30,
      2009

                  
	
                    Date

                  	 
      	
                    Date