Exhibit 10.2





Exhibit 10.2

 

STOCK PLEDGE AGREEMENT


             This Stock Pledge Agreement (this "Agreement"), dated
as of this 28th day of December, 2007, is by and between SOUTHERN
FIRST BANCSHARES, INC., a South Carolina corporation and a bank holding
company (the "Borrower"), and THE BANKERS BANK, NATIONAL
ASSOCIATION (the "Lender").

 

 


W I T N E S S E T H:


 

 


WHEREAS, the Borrower and the
Lender have entered into that certain Loan Agreement, dated of even date
herewith, which is incorporated herein by reference thereto, pursuant to which
the Borrower and the Lender agreed that the Lender shall extend credit to the
Borrower in an amount as set forth in the Loan Agreement (as amended modified
or supplemented from time to time, the "Loan Agreement") (Capitalized terms used in this Agreement that are
defined in the Loan Agreement shall have the meanings assigned to them therein
unless otherwise defined in this Agreement);
and




WHEREAS, the obligations of the
Lender under the Loan Agreement are subject to the further condition, among
others, that the Borrower grants to and creates in favor of the Lender a first
priority security interest in the Pledged Shares (as hereinafter defined)
pursuant to the terms and conditions as hereinafter provided except as
otherwise specifically set forth herein.




NOW, THEREFORE, in consideration
of the Debt (as defined in the Loan Agreement), and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Borrower, and in order to induce the Lender to enter into the Loan Agreement
and make the Loans (as defined in the Loan Agreement), the Borrower, intending
to be legally bound hereby, covenants and agrees as follows:


            


Section 1.                  
Pledge.  As security for the full and timely payment of the Debt in
accordance with the terms of this Agreement, the Loan Agreement and the other
Loan Documents and the full and timely payment and performance of the
obligations of the Borrower under this Agreement, the Loan Agreement and the
other Loan Documents, the Borrower hereby grants a security interest in and
pledges to the Lender all of the Borrower's right, title and interest in and to
all of the issued and outstanding capital stock of Southern First Bank, National
Association, a wholly-owned subsidiary of the Borrower, together with all
additions, substitutions, replacements and proceeds thereof and all income,
interest, dividends and other distributions thereon (collectively, the "Pledged
Shares").  The Borrower has herewith delivered to the Lender the stock
certificates evidencing the Pledged Shares, accompanied by duly executed blank
stock powers or assignments as applicable.  The Borrower hereby authorizes
the transfer of possession of all certificates, instruments, documents and other
evidence of the Pledged Shares to the Lender.




Section 2.                  
Covenants, Representations and
Warranties.  The Borrower represents
and warrants to the Lender as follows:




    (a)               
There are no restrictions on the pledge
or transfer of any of the Pledged Shares, other than restrictions referenced on
the face of any certificates evidencing the Pledged Shares.


    (b)               
The Borrower is the legal owner of the
Pledged Shares, which is registered in the name of the Borrower.















     (c)               
The Pledged Shares are free and clear of
any security interests, pledges, liens, encumbrances, charges, agreements,
claims or other arrangements or restrictions of any kind, except as referenced
in Section 2(a) above; and the Borrower will not incur, create, assume or
permit to exist any pledge, security interest, lien, charge or other
encumbrance of any nature whatsoever on any of the Pledged Shares or assign,
pledge or otherwise encumber any right to receive income from the Pledged
Shares, other than in favor of the Lender.


    (d)               
The Borrower has the right to transfer
the Pledged Shares free of any encumbrances and the Borrower will defend the
Borrower's title to the Pledged Shares against the claims of all persons, and
any registration with, or consent or approval of, or other action by, any
federal, state or other governmental authority or regulatory body which was or
is necessary for the validity of the pledge of and grant of the security
interest in the Pledged Shares has been obtained.


    (e)               
The pledge of and grant of the security
interest in the Pledged Shares is effective to vest in the Lender a valid and
perfected first priority security interest, superior to the rights of any other
person, in and to the Pledged Shares as set forth herein.




Section 3.                  
Voting Rights and Transfer.  




    (a)               
So long as no Event of Default (as
hereinafter defined) shall have occurred and is continuing and Lender has not
delivered the notice specified in subsection (b) below, the Borrower shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Shares or any part thereof for any purpose not inconsistent with
the terms of this Agreement or any document or agreement executed in connection
herewith.  


    (b)               
Upon the occurrence and during the
continuance of an Event of Default, at the option of the Lender exercised in a
writing sent to the Borrower, all rights of the Borrower to exercise the voting
and other consensual rights which it would otherwise be entitled to exercise
pursuant to subsection (a) above shall cease, and the Lender shall thereupon
have the sole right to exercise such voting and other consensual rights.


    (c)               
At any time after the occurrence of an
Event of Default, the Lender may transfer any or all of the Pledged Shares into
its name or that of its nominee and may exercise all voting rights with respect
to the Pledged Shares, but no such transfer shall constitute a taking of such
Pledged Shares in satisfaction of any or all of the Debt unless the Lender
expressly so indicates by written notice to the Borrower.




Section 4.                  
Default.




	
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        (a)               
If any of the following occur (each an
"Event of Default"):  (i) any Event of Default under the Loan Agreement, (ii)
the failure by the Borrower to perform any of its obligations hereunder, (iii)
the failure of the Lender to have a perfected first priority security interest
in the Pledged Shares or (iii) any restriction is imposed on the pledge or
transfer of any of the Pledged Shares after the date of this Agreement without
the Lender's prior written consent, then the Lender is authorized in its
discretion to declare any or all of the Debt to be immediately due and payable
without demand or notice, which are expressly waived, and may exercise any one
or more of the rights and remedies granted pursuant to this Agreement or given
to a secured party under the UCC of the applicable state, as it may be amended
from time to time, or otherwise at law or in equity, including without limitation
the right to sell or otherwise dispose of any or all of the Pledged Shares at
public or private sale, with or without advertisement thereof, upon such terms
and conditions as it may deem advisable and at such prices as it may deem best.


        (b)               
At any bona fide public sale, and to the
extent permitted by law, at any private sale, the Lender shall be free to
purchase all or any part of the Pledged Shares, free of any right or equity of
redemption in the Borrower, which right or equity is hereby waived and released. 
Any such sale may be on cash or credit.  The Lender shall be authorized at any
such sale (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing the Pledged Shares for their own account in compliance with
Regulation D of the Securities Act of 1933 (the "Act") or any other applicable
exemption available under such Act.  The Lender will not be obligated to make
any sale if it determines not to do so, regardless of the fact that notice of
the sale may have been given.  The Lender may adjourn any sale and sell at the
time and place to which the sale is adjourned.  If the Pledged Shares are
customarily sold on a recognized market or threatens to decline speedily in
value, the Lender may sell such Pledged Shares at any time without giving prior
notice to the Borrower.  Whenever notice is otherwise required by law to be
sent by the Lender to the Borrower of any sale or other disposition of the
Pledged Shares, ten (10) days written notice sent to the Borrower at its
address specified above will be reasonable.

 The Borrower recognizes that the Lender
may be unable to effect or cause to be effected a public sale of the Pledged
Shares by reason of certain prohibitions contained in the Act, so that the
Lender may be compelled to resort to one or more private sales to a restricted
group of purchasers who will be obligated to agree, among other things, to
acquire the Pledged Shares for their own account, for investment and without a
view to the distribution or resale thereof.  The Borrower understands that
private sales so made may be at prices and on other terms less favorable to the
seller than if the Pledged Shares were sold at public sales, and agrees that
the Lender has no obligation to delay or agree to delay the sale of any of the
Pledged Shares for the period of time necessary to permit the issuer of the
securities which are part of the Pledged Shares (even if the issuer would
agree), to register such securities for sale under the Act.  The Borrower
agrees that private sales made under the foregoing circumstances shall be
deemed to have been made in a commercially reasonable manner.


         (c)               
The Lender shall apply the net proceeds
of any sale or liquidation of the Pledged Shares, first to the payment of the
reasonable costs and expenses incurred by the Lender in connection with such
sale or collection including, without limitation, reasonable attorneys' fees
and legal expenses, second to the payment of the Debt, whether on account of
principal or interest or otherwise as the Lender in its sole discretion may
elect, and then to pay the balance, if any, to the Borrower or as otherwise
required by Law.  If such Proceeds are insufficient to pay the amounts required
by Law, the Borrower shall be liable for any deficiency; provided, however,
that nothing contained herein will obligate the Lender to proceed against the
Borrower or any other party obligated under the Debt or against any other
collateral for the Debt prior to proceeding against the Pledged Shares.




	
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    (d)               
If any demand is made at any time upon
the Lender for the repayment or recovery of any amount received by it in
payment or on account of any of the Debt and if the Lender repays all or any
part of such amount by reason of any judgment, decree or order of any court or
administrative body or by reason of any settlement or compromise of any such
demand, the Borrower will be and remain liable for the amounts so repaid or
recovered to the same extent as if such amount had never been originally
received by the Lender.  The provisions of this section will be and remain
effective notwithstanding the release of any of the Pledged Shares by the
Lender in reliance upon such payment (in which case the Borrower's liability
will be limited to an amount equal to the fair market value of the Pledged
Shares determined as of the date such Pledged Shares was released) and any such
release will be without prejudice to the Lender's rights hereunder and will be
deemed to have been conditioned upon such payment having become final and
irrevocable.  This Section shall survive the termination of this Agreement.




 Section 5.                  
Dividends, Interest and
Premiums.  The Borrower will have the
right to receive all cash dividends, interest and premiums declared and paid on
the Pledged Shares prior to the occurrence of any Event of Default.  In the
event any additional shares are issued to the Borrower as a stock dividend or
in lieu of interest on any of the Pledged Shares, as a result of any split of
any of the Pledged Shares, by reclassification or otherwise, any certificates
evidencing any such additional shares will be immediately delivered to the
Lender and such shares will be subject to this Agreement and a part of the
Pledged Shares to the same extent as the original Pledged Shares.  At any time
after the occurrence of an Event of Default, the Lender shall be entitled to
receive all cash or stock dividends, interest and premiums declared or paid on
the Pledged Shares, all of which shall be subject to the Lender's rights under
Section 5 above.




Section 6.                  
Further Assurances.  The Borrower hereby irrevocably authorizes
the Lender, at any time and from time to time, to execute (on behalf of the
Borrower), file and record against the Borrower any notice, financing
statement, continuation statement, amendment statement, instrument, document or
agreement under the UCC that the Lender may consider necessary or desirable to
create, preserve, continue, perfect or validate any security interest granted
hereunder or to enable the Lender to exercise or enforce its rights hereunder
with respect to such security interest.  Without limiting the generality of the
foregoing, the Borrower hereby irrevocably appoints the Lender as the
Borrower's attorney-in-fact to do all acts and things in the Borrower's name
that the Lender may deem necessary or desirable.  This power of attorney is
coupled with an interest with full power of substitution and is irrevocable. 
The Borrower hereby ratifies all that said attorney shall lawfully do or cause
to be done by virtue hereof.






	
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Section
7.                  
Continuing Validity of
Obligations.  The agreements and
obligations of the Borrower hereunder are continuing agreements and
obligations, and are absolute and unconditional irrespective of the
genuineness, validity or enforceability of the Loan Agreement, the Note or any
other instrument or instruments now or hereafter evidencing the Debt or any
part thereof or of the Loan Documents or any other agreement or agreements now
or hereafter entered into by the Lender and the Borrower pursuant to which the
Debt or any part thereof is issued or of any other circumstance which might
otherwise constitute a legal or equitable discharge of such agreements and
obligations.  Without limitation upon the foregoing, such agreements and
obligations shall continue in full force and effect as long as the Debt or any
part thereof remains outstanding and unpaid and shall remain in full force and
effect without regard to and shall not be released, discharged or in any way
affected by (i) any renewal, refinancing or refunding of the Debt in whole or
in part, (ii) any extension of the time of payment of the Note or other
instrument or instruments now or hereafter evidencing the Debt, or any part
thereof, (iii) any compromise or settlement with respect to the Debt or any part
thereof, or any forbearance or indulgence extended to the Borrower, (iv) any
amendment to or modification of the terms of the Note or other instrument or
instruments now or hereafter evidencing the Debt or any part thereof or any
other agreement or agreements now or hereafter entered into by the Lender and
the Borrower pursuant to which the Debt or any part thereof is issued or
secured, (v) any substitution, exchange, or release of a portion of, or failure
to preserve, perfect or protect, or other dealing in respect of, the Pledged
Shares or any other property or any security for the payment of the Debt or any
part thereof, (vi) any bankruptcy, insolvency, arrangement, composition,
assignment for the benefit of creditors or similar proceeding commenced by or
against the Borrower, (vii) any dissolution, liquidation or termination of the
Borrower for any reason whatsoever or (viii) any other matter or thing
whatsoever whereby the agreements and obligations of the Borrower hereunder,
would or might otherwise be released or discharged.  The Borrower hereby waives
notice of the acceptance of this Agreement by the Lender.




Section 8.                  
Defeasance.  Notwithstanding anything to the contrary contained
in this Agreement, upon payment in full of the Debt and performance of all obligations
of under the Loan Agreement, this Agreement shall terminate and be of no
further force and effect and at the request of the Borrower, the Lender shall
thereupon terminate its security interest in the Pledged Shares.  Until such
time, however, this Agreement shall be binding upon and inure to the benefit of
the parties, their successors and assigns, provided that the Borrower may not
assign this Agreement or any of its rights under this Agreement or delegate any
of its duties or obligations under this Agreement and any such attempted
assignment or delegation shall be null and void.  This Agreement is not
intended and shall not be construed to obligate the Lender to take any action
whatsoever with respect to the Pledged Shares or to incur expenses or perform
or discharge any obligation, duty or disability of the Borrower.




 Section
9.                  
Miscellaneous.


    (a)               
The provisions of this Agreement are
intended to be severable.  If any provision of this Agreement shall for any
reason be held invalid or unenforceable, in whole or in part, in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any manner
affecting the validity or unenforceability of such provision in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.


     (b)               
No failure or delay on the part of the Lender
in exercising any right, remedy, power or privilege under this Agreement, the
Loan Agreement or any of the other Loan Documents shall operate as a waiver
thereof or of any other right, remedy, power or privilege of the Lender under this
Agreement, the Loan Agreement, the Note or any of the other Loan Documents; nor
shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other right, remedy, power or privilege or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges of the Lender under this
Agreement, the Loan Agreement, the Note and the other Loan Documents are
cumulative and not exclusive of any rights or remedies which it may otherwise
have.


     (c)               
All notices, statements, requests and
demands given to or made upon any party in accordance with the provisions of this
Agreement shall be deemed to have been given or made when given or made as
provided in the Loan Agreement.


    (d)               
The section headings contained in this
Agreement are for reference purposes only and shall not control or affect its
construction or interpretation in any respect.


     (e)               
The UCC shall govern the settlement,
perfection and the effect of attachment and perfection of the Lender's security
interest in the Pledged Shares and the rights, duties and obligations of the Lender
and the Borrower with respect to the Pledged Shares (whether or not the UCC
applies to the Pledged Shares).  This Agreement shall be deemed to be a
contract under the Laws of the State of North Carolina and the execution and
delivery of this Agreement and, to the extent not inconsistent with the
preceding sentence, the terms and provisions of this Agreement shall be
governed by and construed in accordance with the Laws of that State of North
Carolina without regard to the principles of the conflicts of laws thereof.




	
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     (f)                
The Borrower consents to the exclusive
jurisdiction and venue of the federal and state Courts located in Mecklenburg County, North Carolina in any action on, relating to or mentioning this
Agreement.




[INTENTIONALLY LEFT
BLANK]






	
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IN WITNESS WHEREOF, and
intending to be legally bound, the undersigned has executed and delivered this
Agreement as of the day and year written above.

 

 


Witness:                                                                        Southern
First Bancshares, Inc.






By:                                                                               By:                                                       (SEAL)


Name:                                                                          Name:                                                              


Title:                                                                             Title:                                                                 




 

The Bankers Bank,
National Association


 

By:                                                                   


C.J. Pruitt


Vice President