Document:

Exhibit 10.2

 

SECURITIES
PURCHASE AGREEMENT

Dated as of February 29, 2016

between

ALESCO PREFERRED FUNDING VI LTD

as Seller

and

HCSB FINANCIAL CORPORATION

as Purchaser

    	 

     

    

Exhibit 10.2

 

Contents

	Clause	Page
	1.   Definitions and Interpretation	1
	2.   Sale of the Purchased Securities	2
	3.   Purchase Price	2
	4.   Conditions Precedent	3
	5.   Right of Termination	3
	6.   Representations	4
	7.   Taxes	6
	8.   Limited Recourse; Non-Petition; Disclaimer
    of Warranties; Indemnification	6
	9.   Release of Purchased Securities	7
	10.   Confidentiality	7
	11.   Further Assurances	8
	12.   Miscellaneous	8

 

    	 

     

    

Exhibit 10.2

 

THIS SECURITIES PURCHASE AGREEMENT
(this Agreement), dated as of February 29, 2016, is being executed by ALESCO PREFERRED FUNDING VI LTD.
(the Seller), an exempted company incorporated under the laws of the Cayman Islands, and HCSB FINANCIAL CORPORATION
(the Purchaser), a South Carolina corporation. 

W I T N E
S S E T H:

WHEREAS, the Seller owns the
securities described on Schedule 1 to this Agreement (collectively, the Purchased Securities);

WHEREAS, the Seller has agreed
to sell, and the Purchaser has agreed to purchase all of the Seller’s right, title and interest in the Purchased Securities
on the terms and conditions set out below and in accordance with the terms of the Indenture dated as of December 21, 2004 (as such
Indenture may be amended and supplemented from time to time, the Indenture) between the Seller, Alesco Preferred
Funding VI, Inc and The Bank of New York Mellon Trust Company, National Association (as successor to JPMorgan Chase Bank),
as trustee (the Trustee).

NOW, THEREFORE, in consideration
of the premises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged the Purchaser and the Seller hereby agree as follows:

1.  Definitions
and Interpretation

		(a)	Definitions. Capitalized terms used and not otherwise defined herein have the respective
meanings given to such terms in the Indenture. In addition, as used in this Agreement:

Conditions Precedent
means the conditions precedent set forth in Section 4.

Governing Documents
has the meaning set forth in Section 10.

Governmental Authority has
the meaning set forth in Section 10.

Instrument of Transfer
means, with respect to any Purchased Security, any transfer certificate, letter or other instrument required under the terms of
such Purchased Security to be executed by the Purchaser to transfer title to such Purchased Security from the Seller to the Purchaser.

Parties means the
parties to this Agreement.

Purchase Price means
U.S. $600,000.00.

Requirements of Law
has the meaning set forth in Section 10.

Sale Date means
two (2) Business Days after the date on which each of the Conditions Precedent has been satisfied.

Tax means all present
or future taxes, duties, levies, imposts, deductions, charges, withholdings and all penalties and liabilities with respect thereto
levied by any tax authorities or other government authorities and Taxes, taxation, taxable
and comparable expressions shall be construed accordingly.

Transaction Documents
has the meaning set forth in Section 10.

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Exhibit 10.2

 

		(b)	Rules of Construction. Unless the context otherwise clearly requires: (i) the definitions
of terms herein shall apply equally to the singular and plural forms of the terms defined; (ii) whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter forms; (iii) the words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without limitation”; (iv) the word “will”
shall be construed to have the same meaning and effect as the word “shall”; (v) 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 from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein); (vi) any reference herein to any Person shall be construed to include such Person’s successors
and assigns; (vii) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof; (viii) all
references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement; (ix)
any reference in this Agreement to a statute, any provision thereof or to any statutory instrument, order or regulation made thereunder
shall be construed as a reference to such statute, provision, statutory instrument, order or regulation as the same may have been,
or may from time to time be, amended or re-enacted; and (x) headings and sub-headings are for ease of reference only and shall
not affect the interpretation of this Agreement.

 

2.  Sale
of the Purchased Securities

Subject to the occurrence
of the Sale Date, on the terms and conditions set forth herein, effective on and as of the Sale Date, the Seller hereby sells,
assigns and transfers to the Purchaser, and the Purchaser hereby acquires from the Seller, all of the right, title and interest
of the Seller in and to, and hereby assumes all of the obligations of the Seller in respect of, the Purchased Securities. Such
sale, assignment and transfer is without recourse and, except as expressly provided in this Agreement, strictly on an “as
is and where is” basis, and without any representations or warranties (whether expressed or implied) of any kind made
by the Seller (or the Trustee or any other person acting for or on behalf of the Seller or the Trustee) and without any recourse
whatsoever against the Trustee (or the Seller or any other person acting for or on behalf of the Seller or the Trustee). Neither
the Seller nor the Trustee makes any representations with respect to any information that may be available about the Purchased
Securities (whether publicly available or obtained from the Seller, the Trustee or another source), and neither the Seller nor
the Trustee assumes any responsibility whatsoever for the contents, accuracy, completeness or sufficiency of any information about
the cash assets (whether publicly available or obtained from the Seller, the Trustee or another source).

3.  Purchase
Price 

		(a)	As consideration for the sale, assignment and transfer contemplated by Section 2 hereof, the
Purchaser shall:

	 	(i) 	on the Sale Date, pay by wire transfer to the Seller an amount equal to the Purchase Price plus any additional amount required to be paid under Section 7; and 
	 	 	 
	 	(ii)	reimburse the Seller for legal fees incurred by the Seller in connection with the sale of the Purchased Securities in an amount of up to $25,000, such reimbursement to be made within five (5) Business Days of receipt by the Purchaser of written notice of such legal fees.

 

		(b)	The Seller and the Purchaser agree that (i) the Seller shall be entitled to any payments of principal,
fees and other amounts with respect to the Purchased Securities made on or prior to the Sale Date and (ii) the Purchaser shall
be entitled to any payments of principal, interest, fees and other amounts with respect to the Purchased Securities made after
the Sale Date. Each party hereto agrees that it will hold any principal, interest, fees or other amounts that it may receive to
which the other party hereto shall be entitled pursuant to the preceding sentence for the account of such other party and pay,
in like money and funds, any such amounts that it may receive to such other party promptly upon receipt.

 

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Exhibit 10.2

 

(c)  All payments under this Agreement shall
be made in immediately available funds, without setoff, deduction or counterclaim. Any payments to be made by the Purchaser to
the Seller under this Agreement shall be made in full without any set-off, deduction, counterclaim or claim to a lien whatsoever,
whether or not any such set-off, deduction, counterclaim or lien arises under this Agreement, to the following account:

 

[REDACTED]

 

4.  Conditions
Precedent

 

The obligations of the Seller hereunder
shall be subject to the accuracy in all material respects of the representations and warranties of the Purchaser contained herein
as of the date hereof and as of the Sale Date (as if made on the Sale Date) and to the satisfaction of the following additional
conditions:

	 	(i)	Purchaser shall have obtained written approval or nonobjection from the Federal Reserve Bank of Richmond to purchase the Purchased Securities (the Federal Reserve Approval); and
	 	 	 
	 	(ii)	with respect to each Purchased Security for which an Instrument of Transfer is required, the Purchaser shall have executed and delivered such Instrument of Transfer in accordance with its terms and the terms of the related Purchased Security and certified to the Seller that it has completed these actions.

 

5.  Right
of Termination

		(a)	The Seller shall have the right (but not the obligation) to terminate this Agreement upon the occurrence
of any of the following:

		(i)	the failure of the Purchaser to transfer the full amount of the Purchase Price to the Seller on
the Sale Date;

		(ii)	any other Condition Precedent is not satisfied as of 45 days after the date of this Agreement;

		(iii)	the Collateral Manager determines in its reasonable commercial judgment that the sale of the Purchased
Securities has become impracticable; or

		(iii)	the failure of the Purchaser to perform or observe any covenant or other agreement of the Purchaser
under this Agreement or if any representation, warranty or certification made by the Purchaser in this Agreement or in any document
delivered pursuant to this Agreement shall prove to have been incorrect when made.

		(b)	Upon any termination of this Agreement pursuant to Section 5(a), this Agreement shall cease
to have any effect, provided that Section 8 shall survive any termination of this Agreement.

		(c)	Upon satisfaction of all conditions precedent in this Agreement, Purchaser is irrevocably obligated
to purchase and Seller is irrevocably obligated to sell, the Purchased Securities.

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Exhibit 10.2

 

6.  Representations

		(a)	The Purchaser hereby represents and warrants to the Seller as follows:

		(i)	it has been duly organized and is validly existing under the laws of its jurisdiction of organization;

		(ii)	it has full power and authority to execute, deliver and perform this Agreement and all obligations
under this Agreement and it has taken all necessary action to authorize this Agreement on the terms and conditions hereof and the
execution, delivery and performance of this Agreement and all obligations required hereunder;

		(iii)	other than the Federal Reserve Approval, no consent of any other person, and no license, permit,
approval or authorization is required by it in connection with this Agreement or the execution, delivery, performance, validity
or enforceability of this Agreement or its obligations hereunder;

		(iv)	this Agreement has been, and each instrument and document required hereunder shall be, executed
and delivered by a duly authorized officer, and this Agreement constitutes, and each instrument and document required hereunder
when executed and delivered by it hereunder shall constitute, legally valid and binding obligations of it, enforceable against
it, in accordance with its terms, subject as to enforcement to the effect of bankruptcy, insolvency or similar laws affecting generally
the enforcement of creditors’ rights, as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar
event applicable to it;

		(v)	assuming receipt of the Federal Reserve Approval, the execution, delivery and performance of this
Agreement and the documents and instruments required hereunder do not and will not violate any provision of any existing law or
regulation binding on or applicable to it, or any order, judgment, award or decree of any court, arbitrator or governmental authority
binding on it, or any agreement, instrument or deed to which it is a party or by which it is or may be bound, which in the case
of any of the above would have an adverse effect on its ability to perform its obligations under this Agreement;

		(vi)	it has fully reviewed the terms of each Purchased Security and the transfer restrictions applicable
thereto;

		(vii)	it and any Affiliate of it that effects a purchase or transfer for it is capable of making and
does make any representations which a transferee or purchaser (howsoever described) is deemed or required to make in accordance
with the terms of each Purchased Security (or any underlying documentation relating thereto) upon the transfer to it of such Purchased
Security including, without limitation, any representations relating to the U.S. Securities Act of 1933, the U.S. Investment Company
Act of 1940, the U.S. Employee Retirement Income Securities Act of 1974 and the U.S. Internal Revenue Code of 1986 (if applicable);

		(viii)	it is not in violation of its constitutive documents or in breach or violation of or in default
under any contract or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute
or any rule, regulation or order of any court, government agency or body having jurisdiction over it or its properties or assets,
and/or is not subject to any other legal restriction, which, in either case, would have a materially adverse effect on its ability
to perform its obligations under this Agreement;

 

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Exhibit 10.2

 

		(ix)	it (A) is acting as principal and is not acting as agent or in any other capacity, fiduciary or
otherwise; (B) is acting for its own account, and it has made its own independent decisions to enter into this Agreement and as
to whether the entry into this Agreement is appropriate or proper for it based upon its own judgment and upon advice from such
advisers as it has deemed necessary; (C) is not relying on any communication (written or oral) of the other party as investment
advice or as a recommendation to enter into this Agreement; (D) is capable of assessing the merits of and understanding (on its
own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of entering
into this Agreement, and it is also capable of assuming, and assumes, the risks of entering into this Agreement; (E) understands
that the Seller is not acting as a fiduciary for or an adviser to it in respect of its entry into this Agreement; (F) has determined
that an investment in the Purchased Securities is suitable and appropriate for it; (G) understands that the Purchased Securities
have not been approved or disapproved by the United States Securities and Exchange Commission (the SEC) or any other
governmental authority or agency of any jurisdiction, nor has the SEC or any other governmental authority or agency passed upon
the accuracy or adequacy of any informational materials related to the Purchased Securities and Purchaser understands that any
representation to the contrary is a criminal offense; (H) understands that the Purchased Securities have not been and will not
be registered under the Securities Act and may not be, and will not be, resold without a valid registration under applicable federal
and state laws, including the Securities Act, or an available exemption therefrom, and in all cases in compliance with any transfer
restrictions contained in any limited liability company operating agreement or other applicable agreement; and (I) understands
that there is no market for the Purchased Securities and that it is unlikely that a trading market for the Purchased Securities
will develop; and

		(x)	the Purchaser confirms that the Purchased Securities have never been publicly rated by Standard
and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody’s Investors Service, Inc. or Fitch,
Inc. (each, with any respective successor thereto, a Rating Agency) and no private rating of the Purchased Securities
has ever been provided by a Rating Agency to the Purchaser.

The representations made
by the Purchaser in clauses 6(a)(i) to (x) above shall be made by the Purchaser on the date of this Agreement and shall
be deemed to be repeated by the Purchaser on the Sale Date, save that the representation set out in clause 6(a)(vi) shall
only be made by the Purchaser on the Sale Date.

		(b)	The Seller represents and warrants that:

		(i)	it has full power and authority, and has taken all action necessary, to execute and deliver this
Agreement and to fulfill its obligations under, and consummate the transactions contemplated by, this Agreement;

		(ii)	the making and performance by it of this Agreement does not and will not violate any law or regulation
of the jurisdiction of its organization or any other law or regulation applicable to it;

 

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Exhibit 10.2

 

		(iii)	this Agreement has been duly executed and delivered by it and constitutes the legal, valid and
binding obligation of the Seller, enforceable against it in accordance with its terms;

		(iv)	all approvals and authorizations of, all filings with and all actions by any governmental or other
administrative or judicial authority necessary for the validity or enforceability of its obligations under this Agreement have
been obtained; and

		(v)	the Seller has good title to, and is the sole legal and beneficial owner of, the Purchased Securities,
free and clear of all liens, security interests, claims, participations or other charges or encumbrances of any nature whatsoever
except for the lien in favor of the Trustee for the benefit of the Secured Parties granted under the Indenture. The Seller agrees
to cooperate with Buyer to (A) obtain removal of such lien from the Trustee and (B) with the Trustee, dissolve the trust and cancel
the related debentures.

7.  Taxes  

All payments under this Agreement will
be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If the Purchaser is
so required to deduct or withhold, then the Purchaser will (a) promptly notify the Trustee and the Seller of such requirement,
(b) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to
be deducted or withheld from any additional amount paid by the Purchaser to the Seller under this Section 7) promptly upon
the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed
against the Seller, (c) promptly forward to the Trustee and the Seller an official receipt (or a certified copy), or other documentation
reasonably acceptable to the Seller, evidencing such payment to such authorities and (d) pay to the Trustee for the account of
the Seller, in addition to the payment to which the Seller is otherwise entitled under this Agreement, such additional amount as
is necessary to ensure that the net amount actually received by the Seller (free and clear of Taxes, whether assessed against the
Purchaser or the Seller) will equal the full amount the Seller would have received had no such deduction or withholding been required.

8.  Limited
Recourse; Non-Petition; Disclaimer of Warranties; Indemnification

		(a)	The Seller does not have payment obligations under this Agreement. The obligations of the Seller
under this Agreement (i) are obligations of the Seller only and (ii) are limited-recourse obligations of the Seller. To the extent
any monetary claim shall arise against the Seller hereunder, payment if any in respect of such claim is payable solely from the
Collateral. Following realization of the Collateral and the application of the proceeds thereof in accordance with the Indenture,
any and all unpaid claims of the Purchaser arising from this Agreement, the Indenture, any agreement relating thereto or any transactions
contemplated hereby or thereby shall be extinguished. No recourse shall be had for the payment of any amount owing under this Agreement
against any officer, member, director, employee, security holder, incorporator, or agent of the Seller, Alesco Preferred Funding
VI, Inc, the Collateral Manager, or any of their respective successors, assigns, advisors or Affiliates, or any other person.

 

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Exhibit 10.2

 

		(b)	The Purchaser agrees not to institute against, or join any other Person in instituting against
the Seller or Alesco Preferred Funding VI, Inc, any bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation
or similar proceedings or other proceedings under Cayman Islands, U.S. federal or state bankruptcy or similar laws of any jurisdiction
until at least one year and one day (or, if applicable, such longer preference period as may be in effect) after the payment in
full of all Notes issued under the Indenture; provided that nothing in this Section 13 shall preclude, or be deemed to estop,
the Purchaser (A) from taking any other action prior to the expiration of such period in (i) any case or proceeding voluntarily
filed or commenced by the Seller, or (ii) any involuntary insolvency proceeding filed or commenced against the Seller, by a Person
other than the Purchaser or (B) from commencing against the Seller or any properties of the Seller any legal action which is not
a bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or similar proceeding. The provisions of this section
shall survive termination of this Agreement for any reason whatsoever.

		(c)	THE PURCHASED SECURITIES ARE TRANSFERRED TO PURCHASER “AS IS AND WHERE IS” AND WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. WITHOUT LIMITING THE GENERALITY OF
THE IMMEDIATELY PRECEDING SENTENCE, SELLER HEREBY (i) EXPRESSLY DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO (A) THE CONDITION OF THE PURCHASED SECURITIES (INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) OR (B) ANY INFRINGEMENT BY
SELLER OR ANY OF ITS AFFILIATES OF ANY PATENT OR PROPRIETARY RIGHT OF ANY THIRD PARTY; AND (ii) NEGATES ANY RIGHTS OF PURCHASER
UNDER STATUTES TO CLAIM DIMINUTION OF CONSIDERATION AND ANY CLAIMS BY PURCHASER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR
UNKNOWN, IT BEING THE INTENTION OF SELLER AND PURCHASER THAT THE PURCHASED SECURITIES ARE ACCEPTED BY PURCHASER IN THEIR PRESENT
CONDITION.

		(d)	The Purchaser agrees to indemnify and hold harmless the Seller, Alesco Preferred Funding VI,
Inc, the Collateral Manager and their officers, members, directors, employees, security holders, incorporators, and agents,
and any of their respective successors, assigns, advisors or Affiliates, from and against any and all claims, actions, demands,
losses, costs, expenses or damages (including attorneys’ fees and expenses), whether involving such parties or third parties,
resulting from the transactions contemplated by this Agreement or any inaccuracy in any of the representations, warranties or certifications
made herein, or for any breach of any of the agreements contained herein.

9.  Release
of Purchased Securities

		(a)	Upon the satisfaction of each Condition Precedent, all right, title and interest of the Trustee
in and to the Purchased Securities arising from and through the Indenture shall be terminated and released in accordance with the
terms of the Indenture, and the Purchased Securities shall no longer constitute part of the Collateral.

		(b)	The Seller hereby agrees to direct the Trustee to deliver to the Purchaser on the Sale Date any
certificates in its possession representing Purchased Securities. In addition, promptly following the Sale Date, the Seller shall,
at the expense of the Purchaser, direct the Trustee to take any further actions reasonably requested by the Purchaser, including
the filing of Uniform Commercial Code financing statement amendments.

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Exhibit 10.2

 

10.  Confidentiality

All information regarding the
terms set forth in any of the Transaction Documents, and the identities of the parties hereto, shall be kept confidential and shall
not be disclosed by either Party to any Person except (a) to the Affiliates of such Party or its or their respective directors,
officers, employees, agents, advisors, underwriters, financing sources and other representatives who are informed of the confidential
nature of such information and instructed to keep it confidential, (b) to the extent requested by any regulatory authority or required
by Requirements of Law, (c) to the extent required to be included in the financial statements or filings with the Securities and
Exchange Commission of either Party or an Affiliate thereof and (d) any insurer or other credit enhancer of, or any provider of
credit protection with respect to, any security issued by Seller (whether any of the foregoing is provided to the issuer or to
its trustee or to the applicable holder), holders of securities issued by Seller and their respective directors, officers, employees,
agents, advisors and other representatives who are informed of the confidential nature of such information and instructed to keep
it confidential. However, notwithstanding the foregoing, the tax treatment and tax structure of this Agreement and the transactions
contemplated hereunder shall not be treated as confidential.

For the Purposes of this Section
10:

(i) the term “Transaction
Documents” means, collectively, this Agreement and all additional documents, certificates, agreements or instruments, the
execution of which is required, necessary or incidental to or desirable for performing or carrying out any other Transaction Document,
which additional documents, certificates, agreements or instruments are identified by one party in writing as constituting Transaction
Documents;

(ii) the term “Requirements
of Law” means, with respect to any Person or property or assets of such Person and as of any date, all of the following applicable
thereto as of such date: all Governing Documents and existing and future laws, statutes, rules, regulations, treaties, codes, ordinances,
permits, certificates, orders and licenses of and interpretations by any Governmental Authority, judgments, decrees, injunctions,
writs, awards or orders of any court, arbitrator or other Governmental Authority;

(iii) the term “Governing
Documents” means, with respect to any Person, its articles or certificate of incorporation or formation, by-laws, partnership,
limited liability company, operating or trust agreement and/or other organizational, charter or governing documents;

(iv) the term “Governmental
Authority” means, any (a) nation or government, (b) state or local or other political subdivision thereof, (c) central bank
or similar monetary or regulatory authority, (d) Person, agency, authority, instrumentality, court, regulatory body, central bank
or other body or entity exercising executive, legislative, judicial, taxing, quasi-judicial, quasi-legislative, regulatory or administrative
functions or powers of or pertaining to government, (e) court or arbitrator having jurisdiction over such Person, its Affiliates
or its assets or properties, (f) stock exchange on which shares of stock of such Person are listed or admitted for trading, (g)
accounting board or authority that is responsible for the establishment or interpretation of national or international accounting
principles, and (h) supra-national body such as the European Union or the European Central Bank.

11.  Further
Assurances

The Seller and the Purchaser
hereby agree to execute and deliver such other instruments, and take such other actions, as either may reasonably request in connection
with the transactions contemplated by this Agreement.

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Exhibit 10.2

 

12.  Miscellaneous

		(a)	Severability. If any term, provision, covenant or condition of this Agreement, or the application
thereof to the Seller or the Purchaser or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part)
for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Agreement, modified
by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and
effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality
of the remaining terms, provisions, covenants and conditions of this Agreement so long as this Agreement as so modified continues
to express, without material change, the original intentions of the Seller and the Purchaser as to the subject matter hereof and
the deletion of such portion of this Agreement will not substantially impair the respective expectations of the Seller and the
Purchaser or the practical realization of the benefits hereof that would otherwise be conferred upon the Seller or the Purchaser.
Each Party will endeavor in good faith negotiations with the other Parties to replace the prohibited or unenforceable provision
with a valid provision, the economic effect of which comes as close as possible to that of the prohibited or unenforceable provision.

		(b)	Amendments. No provision of this Agreement may be amended, modified or waived except by
an instrument in writing signed by each of the Parties.

		(c)	Entire Agreement. This Agreement contains the entire agreement and understanding of the
Parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter
of this Agreement and no waiver of a breach of the terms of, or of any default under, this Agreement shall be deemed a waiver of
any subsequent breach or default or in any way affect the other terms of this Agreement.

		(d)	Assignment. No Party may assign any of its rights or obligations hereunder without the prior
consent of the other Parties. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns.

		(e)	Notices. Any notice, review or other communication (a notice) to be given
by the Parties pursuant to this Agreement shall be in writing and delivered by hand, mail or as follows:

If to the Seller:

Alesco Preferred Funding VI, Ltd.

c/o Cohen & Company Financial Management,
LLC

2929 Arch Street, 17th Floor

Philadelphia, PA 19104-2870

Attn: Joseph Pooler

Telephone: (215) 701-9654

Email: jpooler@ifmi.com

 

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Exhibit 10.2

 

with a copy to:

 

Institutional Financial Markets, Inc.

c/o J.V.B. Financial Group, LLC

1633 Broadway, 28th Floor

New York, NY 10019

Attn: Rachael Fink, Senior Vice President
& General Counsel

Telephone: (646) 792-5601

Email: rfink@ifmi.com

 

If to the Purchaser:

 

HCSB Financial Corporation

3640 Ralph Ellis Boulevard

Loris, South Carolina 29569

Attn: James R. Clarkson

Telephone: (843) 716-6400

Telecopy: (843) 716-6213

Email: jclarkson@horrycountystatebank.com

Any Party may change its details
for notices by prior written notice to each other Party.

Any communication to be given
to the Trustee may be addressed to the Trustee at The Bank of New York Mellon Trust Company, National Association, 601 Travis Street,
17th Floor, Houston, TX 77002, or at such other address as the Seller notifies to the Purchaser in writing.

		(f)	Governing Law. This Agreement shall be construed in accordance with, and this Agreement
and all matters arising out of or relating in any way whatsoever to this Agreement (whether in contract tort or otherwise) shall
be governed by, the law of the State of New York.

		(g)	Jurisdiction. With respect to any suit, action or proceedings relating to or arising out
of this Agreement or any of the transactions contemplated hereby (Proceedings), each Party irrevocably (i) submits
to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and of the
United States District Court for the Southern District of New York, and any appellate court therefrom; and (ii) waives any
objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes any Party from bringing Proceedings
in any other jurisdiction, nor will the bringing of Proceedings by any Party in any one or more jurisdictions preclude the bringing
of Proceedings by such Party in any other jurisdiction. Each Party hereby agrees that a final judgment in any such Proceedings
in any court specified in clause (i) above shall be conclusive and may be enforced in other jurisdictions otherwise having jurisdiction
over the other party by suit on such final judgment or in any other manner provided by law.

		(h)	WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING. Each Party hereby (a) certifies that
no representative, agent or attorney of another party other has represented, expressly or otherwise, that the other would not,
in the event of a Proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to sign,
or change its position in reliance upon the benefits of, this Agreement by, among other things, the mutual waivers and certifications
in this clause (h).

 

    	Page 10

     

    

Exhibit 10.2

 

		(i)	Counterparts. This Agreement may be executed in any number of counterparts each of which
shall be an original, and all of which taken together shall constitute one and the same instrument, and the parties agree that
receipt by fax or electronic transmission of an executed copy of this Agreement shall be deemed to be receipt of an original. Delivery
of an executed counterpart signature page by e-mail (PDF) or telecopy shall be effective as delivery of a manually executed counterpart
of this instrument.

[Signature
Page Follows]

 

    	Page 11

     

    

Exhibit 10.2

 

IN WITNESS
WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the
date first above written.

 

 

	HCSB FINANCIAL CORPORATION,

as Purchaser 
	By: /s/ James R. Clarkson               

Name: James r. Clarkson

Title: President and Chief Executive Officer

 

	
        ALESCO PREFERRED FUNDING VI LTD,

        as Seller

        BY:   Cohen & Company Financial
        Management, LLC, 

as Collateral Manager for an on behalf of 

Alesco Preferred Funding VI, Ltd.

	By: /s/ Joseph W. Pooler, Jr.                

Name: Joseph w. pooler, jr.

Title: EVP & CFO

 

Securities Purchase Agreement - Signature Page

    	 

     

    

Exhibit 10.2

 

SCHEDULE
1

 

	 	CUSIP	ISSUER	PAR/FACE AMOUNT	 
	 		 	 	 
	 	44399IIC15*	HCSB Financial Trust I	$6,000,000Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”)
dated as of February 29, 2016, is made by and among HCSB Financial Corporation, a South Carolina corporation (the “Company”),
Horry County State Bank, a South Carolina state-chartered commercial bank, which is a wholly owned subsidiary of the Company
(the “Bank” and collectively, with the Company, the “Employer”), and Janet H. Hollar, an individual
resident of South Carolina (the “Executive”).

 

WHEREAS, the Employer is engaged in the business
of commercial banking, and the Executive is knowledgeable with respect to, and experienced in, that business and the Employer desires
to employ the Executive, and the Executive is willing to serve, as Chief Executive Officer of the Company and the Bank on the terms
and conditions herein provided;

 

WHEREAS, the Company is currently contemplating
an offering of equity securities for gross proceeds of at least $30 million (the “Offering”);

 

WHEREAS, the Executive presently serves as a
consultant to the Company and the Bank pursuant to that certain independent contractor agreement dated October 19, 2015 (the “Consulting
Agreement”), and this Agreement will become effective and replace the Consulting Agreement in its entirety immediately upon
such time that both (i) the Company shall have consummated the Offering and (ii) the Company and the Bank shall have obtained all
requisite approvals or nonobjections from their respective regulatory agencies for the Executive to begin service as Chief Executive
Officer of the Company and the Bank on the terms and conditions herein provided (the “Effective Time”); and

 

WHEREAS, certain terms used in this Agreement
are defined in Section 18 hereof.

 

In consideration of the foregoing, the mutual
covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.      Employment. The Employer shall
employ the Executive, and the Executive shall serve the Employer, as Chief Executive Officer of the Company and the Bank upon the
terms and conditions set forth herein. The Executive shall have such authority and responsibilities consistent with her positions
as are set forth in the Company’s and Bank’s Bylaws or assigned by the Company’s and Bank’s Board of Directors
(the “Board”) from time to time. The Executive shall report to the Board and shall devote her full business time, attention,
skill and efforts to the performance of her duties hereunder, except during periods of illness or periods of vacation and leaves
of absence consistent with Employer policy. Further, the Executive’s service on the boards of directors (or similar body)
of other business or charitable entities is subject to the prior approval of the Board. The Employer shall have the right to require
the Executive to resign from any board or similar body on which the Executive may then serve if the Board determines that such
activity (i) interferes with the effective discharge of the Executive’s duties and responsibilities to the Employer or that
any business related to such service is then in competition with any business of the Company or the Bank, their successors or assigns
or (ii) could adversely affect the reputation of the Company or the Bank.

 

The Company shall nominate the Executive for
election as a director at such times as necessary so that the Executive will, if elected by shareholders, remain a director of
the Company throughout the term of this Agreement. The Executive hereby consents to serving as a director and to being named as
a director of the Company in documents filed with the Securities and Exchange Commission. The Board shall undertake every lawful
effort to ensure that the Executive continues throughout the term of employment to be elected or reelected as a director of the
Bank.

 

    	 	1	 

     

    
Exhibit 10.3

 

2.      Term. Unless earlier terminated
as provided herein, the Executive’s employment under this Agreement shall be for the period commencing upon the Effective
Date of this Agreement and ending on the third anniversary of the Effective Date of this Agreement. On each anniversary of the
effective date of this Agreement, the term hereof shall automatically be extended for an additional one-year period beyond the
then-effective expiration date unless a written Notice of Termination from the Employer or the Executive is received 90 days prior
to such anniversary advising the other that this Agreement shall not be further extended. If either party provides timely notice
of non-renewal of the Agreement, but the Executive continues to provide services to the Employer as an employee, such post-expiration
employment shall be deemed to be performed on an “at-will” basis and either party may thereafter terminate such employment
with or without notice and for any or no reason and without any obligations determined by reference to this Agreement.

 

3.      Compensation and Benefits.

 

(a)      As of the Effective Date, the Employer
shall pay the Executive an annual base salary rate of $225,000, which shall be paid in accordance with the Employer’s standard
payroll procedures. The Board (or an appropriate committee of the Board) shall evaluate the Executive’s performance at least
annually and make compensation adjustments as determined by the Board based on its
evaluation of the Executive’s performance.

 

(b)      The Executive shall be eligible each
year to receive a cash bonus equaling up to 20% of her annual base salary if the Employer achieves certain performance levels established
from time to time by the Board. Any bonus payment made pursuant to this Section 3(b) shall be made the earlier of (i) 70 days after
the previous year end for which the bonus was earned by the Executive and became a payable of the Employer or (ii) the first pay
period following the Employer’s press release announcing its previous year’s financial performance.

 

(c)      The Executive shall be eligible to participate
in the Company’s long-term equity incentive program and for the grant of stock options, restricted stock, and other awards
thereunder or under any similar plan adopted by the Company. The Board anticipates adopting an appropriate equity incentive plan
in which the Company’s and the Bank’s employees will be eligible to participate. The Board anticipates granting to
Employee significant to-be-determined equity award(s) under such plan. The award agreements for such equity award(s) would vest
upon achievement of certain performance and time vesting metrics and would contain other customary terms and conditions. Any options
or similar awards shall be issued to the Executive at an exercise price of not less than the stock’s current fair market
value (as determined in compliance with Treasury Regulation § 1.409A-1(b)(5)(iv)) as of the date of grant, and the number
of shares subject to such grant shall be fixed on the date of grant.

 

(d)      In
addition to the benefits specifically described in this Agreement, the Executive shall be eligible to participate in all
retirement, welfare, health or other benefits plans or programs of the Employer now or hereafter applicable generally to employees
of the Employer or to a class of employees that includes senior executives of the Employer. The parties agree that the benefits
stated in this Section 3(d) shall be subject to the terms of such plans or programs applicable generally to employees of the Employer
or to a class of employees that includes senior executives of the Employer.

 

(e)      The Employer shall reimburse the Executive
for reasonable and necessary travel, mobile cellular and data plan, and other business expenses related to the Executive’s
duties in accordance with the Employer’s business expense reimbursement policy; provided
however that the Executive shall, as a condition of any such reimbursement, submit verification of the nature and amount of such
expenses in accordance with such reimbursement policies and in sufficient detail to comply with rules and regulations promulgated
by the United States Treasury Department. In addition, the Employer shall reimburse the Executive for educational expenses related
to the Executive’s professional development and for membership in professional and civic organizations to the extent such
activities are consistent with the Employer’s strategic objectives. 

 

    	 	2	 

     

    
Exhibit 10.3

 

All expenses eligible for reimbursements described
in this Agreement must be incurred by the Executive during the Term of this Agreement to be eligible for reimbursement. All in-kind
benefits described in this Section 3 must be provided by the Employer during the Term
of this Agreement. The amount of reimbursable expenses incurred, and the amount of in-kind benefits provided, in one taxable year
shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category
of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after
the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement
nor in-kind benefits are subject to liquidation or exchanges for other benefits.

 

(f)      The Employer
shall provide Executive with a $500 monthly automobile allowance, paid in accordance with Employer’s
standard payroll procedures, but in any case, no less frequently than monthly.

 

(g)      The Employer
shall provide the Executive with four weeks’ paid vacation per year, which shall be taken in accordance with (i) any banking
rules or regulations governing vacation and (ii) the Employer’s vacation or other
paid time off policy. Any payments made by the Employer to the Executive as compensation
for paid vacation shall be paid in accordance with the Employer’s standard payroll
procedures.

 

(h)      The Bank and the Company shall apportion
any payments or benefits paid to the Executive pursuant to this Agreement among themselves as they may agree from time to time
in proportion to services actually rendered by the Executive for such entity; provided, however, that they must satisfy in full
all such obligations in a timely manner as set forth in this Agreement regardless of any agreed-upon apportionment. Executive’s
receipt of satisfaction in full of any such obligation from the Company or the Bank shall extinguish the obligations of the other
with respect to such obligation.

 

(i)       The Executive agrees to repay any compensation
previously paid or otherwise made available to the Executive under this Agreement that is subject to recovery under any applicable
law (including any rule of any exchange or service through which the securities of the Company are then traded), including, but
not limited to, the following circumstances:

 

(i)      where such compensation was
in excess of what should have been paid or made available because the determination of the amount due was based, in whole or in
part, on materially inaccurate financial information of the Company or the Bank, including but not limited to, when the Company
shall have a restatement of financial results attributable to the Executive’s actions, whether intentional or negligent;

 

(ii)      where such compensation constitutes
“excessive compensation” within the meaning of 12 C.F.R. Section 263;

 

(iii)      where the Executive has committed,
is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R.
Section 359.4(a)(4); and

 

(iv)      if, while the Executive is
also a senior executive officer of the Bank, the Bank becomes, and for so long as the Bank remains, subject to the provisions of
12 U.S.C. Section 1831o(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an
institution.

 

    	 	3	 

     

    
Exhibit 10.3

 

The Executive agrees to return promptly any
such compensation identified by the Employer by written notice provided pursuant to Section 11. If the Executive fails to return
such compensation promptly, the Executive agrees that the amount of such compensation may be deducted from any and all other compensation
owed to the Executive by the Employer. If the Executive is then employed by the Employer, the Executive acknowledges that the Employer
may take appropriate disciplinary action (up to, and including, Termination of Employment) if the Executive fails to return such
compensation. The Executive acknowledges the Employer’s rights to engage in any legal or equitable action or proceeding in
order to enforce the provisions of this Section 3(i). The provisions of this Section 3(i) shall be modified to the extent, and
remain in effect for the period, required by applicable law.

 

4.      Termination.

 

(a)      The Executive’s employment under
this Agreement may be terminated prior to the end of the term of this Agreement, if applicable, only as follows (each a “Terminating
Event”):

 

(i)      upon the death of the Executive.
If the Executive’s employment is terminated because of the Executive’s death, the Employer shall pay the Executive’s
estate any sums due her as base salary or reimbursement of expenses through the end of the month during which death occurred in
accordance with the Employer’s standard payroll procedures. The Employer shall also pay the Executive’s estate any
bonus earned through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms
as set forth in Section 3(b) of this Agreement. Any bonus that is earned in the year of death will be paid on the earlier of (i)
70 days after the year end in which the Executive died or (ii) the first pay period following the Company’s press release
announcing its financial performance for the year in which the Executive died. To the extent that the bonus is performance-based,
the amount of the bonus will be calculated by taking into account the performance of the Company for the entire year and prorated
through the date of the Executive’s death.

 

(ii)      upon the Disability of the
Executive for a period of 90 days, which includes any period of payment under the Employer’s accident and health plan. During
the period of any Disability leading up to the termination of the Executive’s employment under this provision, the Employer
shall continue to pay the Executive her full base salary at the rate then in effect and all perquisites and other benefits (other
than any bonus) in accordance with the Employer’s standard payroll procedures until the Executive becomes eligible for benefits
under any long-term disability plan or insurance program maintained by the Employer; provided, however that, the amount of any
such payments to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive for the same period
under any other disability benefit or pension plan covering the Executive. Furthermore, the Employer shall pay the Executive any
bonus earned through the date of onset of the physical or mental impairment that led to the Disability. Any bonus for previous
years which was not yet paid will be paid pursuant to the terms as set forth in Section 3(b) of this Agreement. Any bonus that
is earned in the year which includes the date of onset of the physical or mental impairment that led to the Disability will be
paid on the earlier of (i) 70 days after the year end in which the Executive became Disabled or (ii) the first pay period following
the Company’s press release announcing its financial performance for the year in which the Executive became Disabled.

 

    	 	4	 

     

    
Exhibit 10.3

 

(iii)      by the Employer for Cause
upon delivery of a Notice of Termination to the Executive. If the Executive’s employment is terminated for Cause under this
provision, the Executive shall receive only any sums due her as base salary and reimbursement of expenses through the date of such
termination, which shall be paid in accordance with the Employer’s standard payroll procedures.

 

(iv)       by the Employer without Cause
upon delivery of a Notice of Termination. If the Executive’s employment is terminated without Cause under this provision,
the Executive shall receive any sums due her as base salary or reimbursement of expenses through the date of such termination,
which shall be paid in accordance with the Employer’s standard payroll procedures.

 

(v)      by the Executive effective
upon the 30th day after delivery of a Notice of Termination. If the Executive resigns under this provision, the Executive shall
receive any sums due her as base salary or reimbursement of expenses through the date of such termination, which shall be paid
in accordance with the Employer’s standard payroll procedures.

 

(b)      With the exceptions of the provisions
of this Section 4, and the express terms of any benefit plan under which the Executive is a participant, it is agreed that, upon
termination of the Executive’s employment, the Employer shall have no obligation to the Executive for, and the Executive
waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this Section
4, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units,
or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing
such incentives. Within 60 days of termination of the Executive’s employment, and as a condition to the Employer’s
obligation to pay any severance hereunder, the Employer and the Executive shall enter into a release in the form provided by the
Employer, and Executive may not revoke such release within the revocation period stated in such release, which shall acknowledge
such remaining obligations and discharge the Employer and its officers, directors and employees with respect to their actions for
or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Executive’s employment
by the Employer, including the circumstances of such termination. In addition, if such severance payment is made by the Employer,
and if the 60 day period spans two calendar years, regardless of when such release is executed by the Executive, such severance
payment must be made in the subsequent calendar year, regardless of when the release is executed by the Executive.

 

(c)      As a condition to the Employer’s
obligation to pay any amounts hereunder, regardless of the reason for the termination of the Executive’s employment, the
Executive shall resign as a director of the Company and any of its subsidiaries, if the Executive is then serving in any such position.

 

(d)      Notwithstanding anything contained in
this Agreement to the contrary,

 

(i)       if the Executive is suspended
or temporarily prohibited from participating, in any way or to any degree, in the conduct of the Company’s or the Bank’s
affairs by (1) a notice served under Section 8(e) or (g) of Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. Section
1818 (e) or (g)) or (2) as a result of any other regulatory or legal action directed at the Executive by any regulatory or law
enforcement agency having jurisdiction over the Executive (each of the foregoing referred to herein as a “Suspension Action”),
and if this Agreement is not terminated, the Employer’s obligations under this Agreement shall be suspended as of the earlier
of the effective date of such Suspension Action or the date on which the Executive was provided notice of the Suspension Action,
unless stayed by appropriate proceedings. If the charges underlying the Suspension Action are dismissed, the Employer shall (i)
      pay on the first day of the first month following such dismissal of charges (or as provided elsewhere in this Agreement) the
Executive all of the compensation withheld while the obligations under this Agreement were suspended; and (ii) reinstate any such
obligations which were suspended.

 

    	 	5	 

     

    
Exhibit 10.3

 

(ii)      if the Executive is removed
or permanently prohibited from participating, in any way or to any degree, in the conduct of the Company’s or the Bank’s
affairs by (1) an order issued under Section 8(e)(4) or (g)(1) of the FDIA (12 U.S.C. Section 1818 (e)(4) or (g)(1)) or (2) any
other legal or law enforcement action (each of the foregoing referred to herein as a “Removal Action”), all obligations
of the Executive under this Agreement shall terminate as of the effective date of the Removal Action, but any vested rights of
the parties hereto shall not be affected.

 

(iii)      if the Company or the Bank
is in default (as defined in Section 3(x)(1) of the FDIA, 12 U.S.C. Section 1813(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but this Section (4)(f) shall not affect any vested rights of the parties hereto.

 

(iv)      if
the FDIC is appointed receiver or conservator under Section 11(c) of the FDIA (12 U.S.C. Section 1821(c)) of any depository institution
controlled by the Company, the Company shall have the right to terminate all obligations of the Company under this Agreement as
of the date of such receivership or conservatorship, other than any rights of the Executive that vested prior to such appointment.
Any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

(e)      If the FDIC
provides open bank assistance under Section 13(c) of the FDIA (12 

U.S.C. 1823(c)) to the Company
or any depository institution controlled by the Company, but excluding any such assistance provided to the industry generally,
the Company shall have the right to terminate all obligations of the Company under this Agreement as of the date of such assistance,
other than any rights of the Executive that vested prior to the FDIC action. Any vested rights of the Executive may be subject
to such modifications that are consistent with the authority of the FDIC.

 

(f)      If
the FDIC requires a transaction under Section 13(f) or 13(k) of the FDIA (12 U.S.C. 1823(f) and (k)) by the Company or any depository
institution controlled by the Company, the Company shall have the right to terminate all obligations of the Company under this
Agreement as of the date of such transaction, other than any rights of the Executive that vested prior to the transaction. Any
vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

(g)      Notwithstanding
anything contained in this Agreement to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise,
are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.
In addition, all obligations under this Agreement are further subject to such conditions,
restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws.

 

(h)      In
the event that the Company or the Bank is subject to Part 359 of the FDIC Rules and Regulations (12 C.F.R. Section 359, et
seq.), then notwithstanding the timing for the payment of any severance amounts described in this Section 4, no such payments
shall be made or commence, as applicable, that require the concurrence or consent of the appropriate federal banking agency of
the Company or the Bank pursuant to Part 359 prior to the receipt of such concurrence or consent. Any payments suspended by operation
of this Section 4(h) shall be paid as a lump sum within 30 days following receipt of the concurrence or consent of the appropriate
federal banking agency of the Company or the Bank or as otherwise directed by such federal banking agency.

 

    	 	6	 

     

    
Exhibit 10.3

 

5.      Ownership of Work Product.
The Employer shall own all Work Product arising during the course of the Executive’s employment (prior, present or future).
For purposes hereof, “Work Product” shall mean all intellectual property rights, including all Trade Secrets, U.S.
and international copyrights, patentable inventions, and other intellectual property rights in any programming, documentation,
technology or other work product that relates to the Company or any Affiliates, their business or customers and that the Executive
conceives, develops, or delivers to the Employer at any time during her employment, during or outside normal working hours, in
or away from the facilities of the Employer, and whether or not requested by the Employer. If the Work Product contains any materials,
programming or intellectual property rights that the Executive conceived or developed prior to, and independent of, the Executive’s
work for the Employer, the Executive agrees to point out the pre-existing items to the Employer and the Executive grants the Employer
a worldwide, unrestricted, royalty-free right, including the right to sublicense such items. The Executive agrees to take such
actions and execute such further acknowledgments and assignments as the Employer may reasonably request to give effect to this
provision.

 

6.      Protection of Trade Secrets. The
Executive agrees to maintain in strict confidence and, except as necessary to perform her duties for the Employer, the Executive
agrees not to use or disclose any Trade Secrets of the Company or any Affiliates during or after her employment. “Trade Secret”
means information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or
customer list, that (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable
by proper means by other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy.

 

7.      Protection of Other Confidential Information.
In addition, the Executive agrees to maintain in strict confidence and, except as necessary to perform her duties for the Employer,
not to use or disclose any Confidential Business Information of the Company or any Affiliates during her employment and for a period
of 24 months following termination of the Executive’s employment. “Confidential Business Information” shall mean
any internal, non-public information (other than Trade Secrets already addressed above) concerning the Company’s or its Affiliate’s
financial position and results of operations (including revenues, assets, net income, etc.); annual and long-range business plans,
product or service plans; marketing plans and methods; training, education and administrative manuals; customer and supplier information
and purchase histories; and employee lists. The provisions of Sections 6 and 7 shall also apply to protect Trade Secrets and Confidential
Business Information of third parties provided to the Employer under an obligation of secrecy.

 

8.      Return of Materials. The Executive
shall surrender to the Employer, promptly upon its request and in any event upon termination of the Executive’s employment,
all media, documents, notebooks, computer programs, handbooks, data files, models, samples, price lists, drawings, customer lists,
prospect data, or other material of any nature whatsoever (in tangible or electronic form) in the Executive’s possession
or control, including all copies thereof, relating to the Company or its Affiliates, their businesses or customers. Upon the request
of the Employer, the Executive shall certify in writing compliance with the foregoing requirement.

 

9.      Withholding. The
Employer may deduct from each payment of compensation hereunder all amounts required to be deducted and withheld in accordance
with applicable federal and state income, FICA and other withholding requirements.

 

10.      Successors;
Binding Agreement. The rights and obligations of this Agreement shall bind and inure to the benefit of the surviving entity
in any merger or consolidation in which the Company or the Bank is a party, or any assignee of all or substantially all of the
Company’s or the Bank’s business and properties. The Executive’s rights and obligations under this Agreement
may not be assigned by her, except that her right to receive accrued but unpaid compensation, unreimbursed expenses and other rights,
if any, provided under this Agreement, which survive termination of this Agreement shall pass after death to the personal representatives
of her estate.

 

    	 	7	 

     

    
Exhibit 10.3

 

11.      Notice. For the purposes of this
Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other; provided however that all notices to the Employer shall be directed
to the attention of the Employer with a copy to the Secretary(ies) of the Company and the Bank. All notices and communications
shall be deemed to have been received on the date of delivery thereof.

 

12.      Governing Law. This Agreement
and all rights hereunder shall be governed by the laws of the State of South Carolina, except to the extent governed by the laws
of the United States of America in which case federal laws shall govern. The parties agree
that any appropriate state court located in Horry County, South Carolina or federal court for the District of South Carolina shall
have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement shall be a proper forum
in which to adjudicate such case or controversy. The parties consent and waive any objection to the jurisdiction or venue of such
courts.

 

13.      Non-Waiver. Failure of the Employer
to enforce any of the provisions of this Agreement or any rights with respect thereto shall in no way be considered to be a waiver
of such provisions or rights, or in any way affect the validity of this Agreement.

 

14.      Saving Clause. The provisions
of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof. If any provision or clause of this Agreement, or portion thereof, shall be held
by any court or other tribunal of competent jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the remainder
of such provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the
intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be
illegal, void, or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall
reduce the duration, area, or matter of such provision, and, in its reduced form, such provision shall then be enforceable and
shall be enforced.

 

15.      Compliance
with Internal Revenue Code Section 409A. All payments that may be made and benefits that may be provided pursuant to this
Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements
thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code. Any payments made under Sections
3 and 4 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion
under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Any remaining
payments under Sections 3 and 4 are intended to qualify for the exclusion for separation pay plans under Treasury Regulation §
1.409A-1(b)(9). Each payment made under Sections 3 and 4 shall be treated as a “separate payment”, as defined in Treasury
Regulation § 1.409A-2(b)(2), for purposes of Code Section 409A. Further, notwithstanding anything to the contrary, all severance
payments payable under the provisions of Section 4 shall be paid to the Executive no later than the last day of the second calendar
year following the calendar year in which occurs the date of Executive’s termination of employment. None of the payments
under this Agreement are intended to result in the inclusion in Executive’s federal gross income on account of a failure
under Section 409A(a)(1) of the Code. The parties intend to administer and interpret this Agreement to carry out such intentions.
However, the Employer does not represent, warrant or guarantee that any payments that may be made pursuant to this Agreement will
not result in inclusion in the Executive’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any
similar state statute or regulation. Notwithstanding any other provision of this Agreement, to the extent that the right to any
payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning
of Section 409A(d)(1) of the Code, the payment shall be paid (or provided) in accordance with the following:

 

    	 	8	 

     

    
Exhibit 10.3

 

(a)      If the Executive is a “Specified
Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Executive’s termination (the
“Separation Date”), and if an exemption from the six month delay requirement of Code Section 409A(a)(2)(B)(i) is not
available, then no such payment that is payable on account of the Executive’s termination shall be made or commence during the
period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier,
on the date of the Executive’s death. The amount of any payment that would otherwise be paid to the Executive during this
period shall instead be paid to the Executive on the first day of the first calendar month following the end of the period.

 

(b)      Payments with respect to reimbursements
of expenses or benefits or provision of fringe or other in-kind benefits shall be made on or before the last day of the calendar
year following the calendar year in which the relevant expense or benefit is incurred. The amount of expenses or benefits eligible
for reimbursement, payment or provision during a calendar year shall not affect the expenses or benefits eligible for reimbursement,
payment or provision in any other calendar year.

 

16.      Compliance
with the Dodd–Frank Wall Street Reform and Consumer Protection Act. Notwithstanding anything to the contrary herein,
any incentive payments to the Executive shall be limited to the extent required under the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the “Dodd-Frank Act”), including, but not limited to, clawbacks for such incentive payments as required
by the Dodd-Frank Act and Section 10D of the Securities Exchange Act of 1934. The Executive agrees to such amendments, agreements,
or waivers that are required by the Dodd-Frank Act or requested by the Employer to comply with the terms of the Dodd-Frank Act.

17.      Compliance with Regulatory Restrictions.
Notwithstanding anything to the contrary herein, and in addition to any restrictions stated above, any compensation or other benefits
paid to the Executive shall be limited to the extent required by any federal or state regulatory agency having authority over the
Company or, if applicable, the Bank. The Executive agrees that compliance by the Company or the Bank with such regulatory restrictions,
even to the extent that compensation or other benefits paid to the Executive are limited, shall not be a breach of this Agreement
by the Company or the Bank.  The Executive agrees that such restrictions include any restrictions applicable due
to the Company’s participation in the Treasury’s Troubled Asset Relief Program - Capital Purchase Program (the “CPP”).

 

18.      Certain Definitions.

 

(a)      “Affiliate” shall
mean any business entity controlled by, controlling or under common control with the Company, including but not limited to the
Bank.

 

    	 	9	 

     

    
Exhibit 10.3

 

(b)      “Cause” shall consist
of any of (i) the commission by the Executive of a willful act (including, without limitation, a dishonest or fraudulent act) or
a grossly negligent act, or the willful or grossly negligent omission to act by the Executive, which is intended to cause, does
cause or is reasonably likely to cause material harm to the Company or any Affiliate (including harm to its business reputation);
(ii) the indictment of the Executive for the commission or perpetration by the Executive of any felony or any crime involving dishonesty,
moral turpitude or fraud; (iii) the material breach by the Executive of this Agreement that, if susceptible of cure, remains uncured
10 days following written notice to the Executive of such breach; (iv) the receipt of any formal written notice that any regulatory
agency having jurisdiction over the Company or the Bank intends to institute any form of formal regulatory action against the Executive,
the Company or the Bank (provided that the Board determines in good faith, with the Executive abstaining from participating in
the consideration of and vote on the matter, that the subject matter of such action involves acts or omissions by the Executive
and further provided that, the parties acknowledge that any regulatory action currently issued to the Company or the Bank shall
not constitute the basis for a determination of cause by the Board); (v) the exhibition by the Executive of a standard of behavior
within the scope of her employment that is materially disruptive to the orderly conduct of the Employer’s business operations
(including, without limitation, substance abuse or sexual misconduct) to a level which, in the Board’s good faith and reasonable
judgment, with the Executive abstaining from participating in the consideration of and vote on the matter, is materially detrimental
to the Employer’s best interest, that, if susceptible of cure remains uncured 10 days following written notice to the Executive
of such specific inappropriate behavior; or (vi) the failure of the Executive to devote her full business time and attention to
her employment as provided under this Agreement that, if susceptible of cure, remains uncured 30 days following written notice
to the Executive of such failure. In order for the Board of Directors to make a determination that termination shall be for Cause,
the Board must provide the Executive with notice of the grounds providing the purported basis for termination and provide the Executive
an opportunity to meet with the Board in person to address the proposed grounds.

 

(c)      “Code” shall mean
the Internal Revenue Code of 1986.

 

(d)      “Disability” or “Disabled”
shall mean as defined by Treasury Regulation § 1.409A-3(i)(4); provided however that, for purposes of this definition, the
accident and health plan covering the Executive shall only be the long term disability plan and not any other the accident and
health plan.

 

(e)      “Notice of Termination”
shall mean a written notice of termination from the Employer or the Executive which specifies an effective date of termination
(not less than 30 days from the date of the notice), indicates the specific termination provision in this Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.

 

(f)      “Standard payroll procedures”
shall mean payment no less frequently than monthly.

 

(g)      “Terminate,” “terminated,”
“termination,” or “termination of the Executive’s employment” shall mean separation
from service as defined by Treasury Regulation § 1.409A-1(h).

 

19.      Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any understandings and arrangements,
oral or written, including the Consulting Agreement, between the parties hereto with respect the subject matter hereof.

 

20.      Survival. The obligations of the
parties pursuant to Sections 3(g), 5 through 8, and 12, as applicable, shall survive the Executive’s Termination of Employment
hereunder for the period designated under each of those respective sections.

 

23.       Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

 

[signatures appear on following page]

 

    	 	10	 

     

    
Exhibit 10.3

 

IN WITNESS WHEREOF, the Company and the Bank
each have caused this Agreement to be executed and its seal to be affixed hereunto by its respective officers thereunto duly authorized
and the Executive has signed and sealed this Agreement, effective as of the date described above.

 

 

	 	HCSB FINANCIAL CORPORATION
	 	 

ATTEST:

	By: 	/s/ J. Alex Gordon	 	By:	 /s/ Michael S. Addy
	 	 	 	 	 
	Name:   	J. Alex Gordon  	 	Name:  	Michael S. Addy
	 	 	 	 	 
	 	 	 	Title: 	Chairman

 

	 	HORRY COUNTY STATE BANK
	 	 

ATTEST:

	By:	 /s/ J. Alex Gordon	 	By:	 /s/ Michael S. Addy
	 	 	 	 	 
	Name:  	J. Alex Gordon 	 	Name:  	Michael S. Addy
	 	 	 	 	 
	 	 	 	Title:	Chairman

 

 

	 	EXECUTIVE
	 	 
	 	 /s/ Janet H. Hollar
	 	Janet H. Hollar 

 

    	 	11

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