Document:

Exhibit 10.1

 

COMMERCIAL
LEASE AGREEMENT

TRIPLE
NET

 

THIS
COMMERCIAL LEASE AGREEMENT (“Lease”) is made effective February 5,
2008 by and between PARADIGM HOLDINGS, LLC whose
address is P.O. Box 2045, Bluffton SC 29910 (“Landlord”) and ATLANTIC COMMUNITY BANK whose address is 1
Sherington Drive, Suite J, Bluffton , SC 29910 (“Tenant”).

 

WHEREAS,
Landlord is the owner of a parcel of real property with certain improvements
known as Lot 11-A of Sheridan Park, Bluffton, SC (“Premises”/ “Building”); and

 

WHEREAS,
Tenant wishes to lease a portion of Landlord’s improved real property under
certain terms and conditions.

 

NOW,
THEREFORE, in consideration of the sum of the rent to be paid
by Tenant to Landlord, the covenants and agreements herein, and for other good
and valuable consideration, the receipt and legal sufficiency of which both
parties acknowledge, the Landlord and Tenant agree as follows:

 

1.                                       LEASED PREMISES. 
In consideration of the rent described below and of the covenants
hereinafter contained, Landlord does hereby lease to Tenant, and Tenant does
hereby lease from Landlord, that certain office space comprising initially of
5,105square feet, and shall be expanded to 5,905 + upon the conclusion
of the Tenant’s build out which shall include the addition of an automated
drive-through as described herein (“Leased Premises”).  Said leased area shown on the floor plan
attached hereto as Exhibit “A”.

 

2.                                       TERM

 

a.                                       Term.  The term of
this Lease (“Initial Term”) shall commence on January 1, 2008 (“Commencement
Date”) and shall terminate at 12:00 o’clock midnight, local time, on the last
day of the calender month which completed fifteen (15) full years’ tenancy
hereunder (the “Termination Date”).  The
normal lease year shall run from January 1 to December 31  (“Lease Year”).

 

b.                                      Option To Extend Term. 
At the conclusion of the Initial Term, so long as the Lease is not in
default, Tenant shall have the option to renew this Lease for a period of five (5) years
(“First Option Period”).  Subsequently,
at the conclusion of the First Option Period, Tenant shall have the option of
renewing this Lease for an additional five (5) years (“Second Option
Period”), provided that the Lease is not in default. To exercise its renewal
option, Tenant shall notify the Landlord in writing of its intent to exercise
not less than one hundred twenty days (120) days before the expiration of the
Initial Term, and if applicable, the first renewal term. All agreements,
covenants, and provisions provided in this Lease shall control and apply to any
renewal term.

 

3.                                       RENT

 

Rent.  Tenant hereby covenants and agrees to pay to
Landlord as rent for the Leased Premises (all of which is collectively referred
to as “Rent”) all of the following:

a.                                       Annual basic rent (“Basic Rent”) in the sum of One Hundred
Fourteen Thousand Eight Hundred Sixty Two and 50/100 Dollars ($114,862.50),
payable in twelve  (12) equal monthly
installments of Nine Thousand Five Hundred Seventy One and 88/100 Dollars  ($9,571.88) in advance on the first day of
Tenant’s possession on or around February 8, 2008 through December,
2008.  First month’s rent shall be
pro-rated based upon date of possession; and

 

b.                                                                                From January 1, 2009 through August 31,
2023, Basic Rent shall be increased each year as described on the Schedule of
Rents attached hereto as Exhibit “B”; and

 

c.                                                                                 If Tenant exercises its options to renew
this Lease under terms described herein, Basic Rent Shall continue to increase
as described on new Schedule of Rents to be released prior to the last year of
the Tenant’s then current term, but in no event shall the renewal rent be
increased by more than 3% per year; and

 

d.                                                                                In each instance under Subsections 3 (a) through
(b), the Basic Rent shall be payable in

 

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equal monthly installments,
each in advance, on the first day of each month of the applicable Lease Year.

 

e.                                                                                 Additional rent (“Additional Rent”) Tenant shall, for
each Lease Year after January, 2008 for so much of the Lease Year as Tenant has
occupied the Leased Premises, during the Lease Term, and any renewals hereof,
pay as additional rent the Landlord’s operating/common costs payable with
respect to the land and/or Building of which the Leased Premises are a
part.  Landlord’s operating/common costs
shall be defined to include the cost and expense of operating and maintaining
the common facilities which are provided by the Landlord in a manner deemed by
Landlord to be reasonable and appropriate for the best interest of the Tenant
including, without limitation:

(i)            All costs and expenses of operating
repairing, heating, cooling, lighting, cleaning,  policing trash removal and security;

(ii)           insurance, including liability insurance
for personal injury, death and property damage, insurance against fire,
extended coverage, theft, or other casualties, insurance against liability for
defamation and claims of false arrests occurring in or about the common
facilities areas, plate glass insurance for glass exclusively serving the
common facilities and areas;

(iii)          regulation
of traffic and any fees payable for security for the Building of which the
Leased Premises is a part;

(iv)          all water and sewer user fees payable to
the BJWSA, or its successors;

(v)           all taxes assessed or imposed at any time
by an municipal, county or state government upon or against the Building and or
the land of which the Leases Premises form a part;

(vi)          costs and expense of pest control service
for all common areas and all leased premises in the Building or which the
Leased Premises is a part;

 

g.                                                                                      Notice
of Additional Rent.  Landlord will
give a statement of estimated charges based upon Tenant’s square footage and
payable by Tenant under this Section for the Lease Year in question, which
estimated charges payable shall be payable in equal monthly installments in
advance, subject to adjustment in accordance with the terms of this
Section.  Whenever the correct amount of
an item shown on any such statement shall be known, appropriate adjustment
shall be made by Landlord’s increasing or decreasing Tenant’s subsequent
payments, by giving Tenant a credit against subsequent rent, or a refund; if
during any Lease Year or part thereof Landlord shall not have delivered to
Tenant the statement mentioned herein, Tenant shall continue to pay the
Landlord the sum as payable for the immediate preceding Lease Year until the
statement of the then current Lease Year shall have been delivered at which
time the monthly payments by Tenant shall be adjusted retroactively.  Landlord will maintain, or cause to be
maintained, complete and accurate records of accounts in such manner and detail
so as to provide a proper basis for analysis of the statements to be furnished
by Landlord.  Tenant or its authorized
representatives shall have the right to examine said accounts and records
during regular business hours for the purpose of verifying the information set
forth and any such statement provided that written request for such inspection
is made by Tenant withing ten (10) days after receipt of such statement.

 

h.                                                                                      Method
of Payment.  Basic Rent and all
Additional Rent as provided for under this Lease shall be paid promptly when
due, in cash or by check, in lawful money of the United States of America,
without notice or demand and without deduction, diminution, abatement,
counterclaim or set off of any amount or for any reason whatsoever, payable to
Paradigm Holdings, LLC, and delivered to Landlord at its offices at the address
as stated in Section 27 or to such other person and place as may be
designated by notice in writing from Landlord to Tenant from time to time.  If Tenant shall present to Landlord more than
twice during the Lease Term checks or drafts not honored by the institution
upon which they are issued, then Landlord may require that future payments of
Rent and other sums thereafter payable be made by certified or cashier’s check.

 

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i.                                                                                          Charge
for Late Payment.  Other remedies for
non-payment of rent notwithstanding, any installment of Rent which is not paid
within fifteen (15) days after the due date shall be subject, at Landlord’s
option each month, to a late charge equal to five percent (5%) of the amount
due, which shall be payable as Additional Rent. 
Any installment of Basic Rent or Additional Rent not paid within five (5) days
from the date due shall accrue interest at the rate of eighteen (18%) until
paid in full, which interest shall be deemed Additional Rent.

 

j.                                                                                          Partial
Payments.  No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly installments of Rent
herein stipulated shall be deemed to be other than on account of the earliest
stipulated Rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check for payment without prejudice
to Landlord’s right to recover the balance of such Rent or to pursue any other
remedy provided in this Lease.

 

k.                                                                                       Security
Deposit.  Landlord has received the
sum of Fifteen Thousand and No/100 Dollars($15,000.00) as a security deposit (“Security
Deposit”).  The Security Deposit shall
bear interest to Tenant at a rate of one and a half percent (1.5%) per year,
and shall be considered as security for the payment and performance of the
obligations, covenants, conditions and agreements contained herein.  The Security Deposit shall not constitute an
advance payment of any amounts owed by Tenant under this Lease, or a measure of
damages to which Landlord shall be entitled upon a breach of this Lease by
Tenant or upon termination of this Lease. 
Landlord may, without prejudice to any other remedy, use the Security
Deposit to the extent necessary to remedy any default in the payment of Basic
Rent or Additional Rent or to satisfy any other obligation of Tenant hereunder
and Tenant shall promptly, on demand, restore the Security Deposit to its
original amount.  If Landlord transfers
its interest in the Leased Premises during the Term, Landlord may assign the
Security Deposit to the transferee who shall become obligated to Tenant for its
return pursuant to the terms of this Lease, and thereafter Landlord shall have
no further liability for its return.

 

4.                                       USE OF LEASED PREMISES

 

a.                                      Permitted Uses. 
Tenant covenants to use the Leased Premises currently for a bank and
depository institution with all corollary and additional business activities
that are customary in the banking industry. 
Landlord’s prior written consent, which shall not be unreasonably
withheld, must be acquired in the event Tenant shall desire to assign this
Lease or sublet the premises for any other lawful reasonable use.  Tenant, at its own expense, shall comply with
and promptly carry out and be responsible for all orders, impact fees,
requirements or conditions imposed by the ordinances, laws and regulations of
all of the governmental authorities having jurisdiction over the Leased
Premises, which are occasioned by or required in the current conduct of Tenant’s
business, and any lawful reasonable business uses within the Leased Premises
and to obtain all licenses, permits, equipment and the like required to permit
Tenant and/or conditional subtenants to occupy the Leased Premises.

 

b.             Prohibited
Uses.  Tenant shall not permit the
Leased Premises, or any part thereof, to be used for any disorderly, unlawful
or hazardous purpose, nor as a source of annoyance or embarrassment to Landlord
or other tenants.

 

5.                                       OPERATING EXPENSES

 

a.                                                                                       Operating
Expenses as Additional Rent.  Tenant
shall pay to Landlord, as Additional Rent, Tenant’s pro rata share of the amount
of the Operating Expenses for

 

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the Premises.

 

b.                                                                                      Operating
Expenses Defined.  The term “Operating
Expenses” shall mean any and all expenses incurred by Landlord in connection
with the utilities, taxes, flood, wind and hail, and liability insurance, and
landscaping..

 

c.                                                                                       No
Reduction in Rent.  Nothing contained
in this Section 5 shall be construed at any time to reduce the Rent
payable hereunder below the amount stipulated in Sections 3 and 4 of this Lease.

 

d.                                                                                      Proration
of Adjustments for Partial Year.  If
the Termination Date or sooner termination of this lease shall not coincide
with the end of a calendar year, then in computing the amount payable under
this Section 5 for the period between the commencement of the applicable
calendar year in question and the Termination Date or sooner termination of
this Lease, the amount that would have been due from the Tenant for the full
year, if Tenant had been a tenant for the entire calendar year, shall be prorated
over the portion of the calendar year that Tenant is a tenant in the Premises.

 

6.           REAL ESTATE TAXES

 

a.                                       Real Estate Taxes as Additional Rent. 
Tenant shall pay to Landlord, as Additional Rent, Tenant’s pro rata
share of the amount by which Real Estate Taxes for the Premises for or
attributable to the then current Real Estate Tax Year.  Tenant shall pay each month, in advance, as
Additional Rent, one-twelfth of Landlord’s estimate of Tenant’s annual
obligation under this Section 6. 
Such payments shall in no way limit Tenant’s annual obligation.  If the total of such monthly installments
paid is less than Tenant’s total obligation, Tenant shall promptly pay the
difference upon receipt of Landlord’s statement.  Any overpayment shall be credited to Tenant’s
obligation for the next succeeding period.

 

b.                                      Real Estate Taxes Defined. 
The term “Real Estate Taxes” means all taxes, rates and assessments,
general or special, levied or imposed with respect to the land, and
improvements constructed thereon (including all taxes, rates and assessments,
general or special, levied or imposed for school, public betterment and/or
general or local improvements.  The term “Base
Real Estate Taxes” means the assessed value of said land, and improvements,
multiplied by the then current rate, for the tax year during which this Lease
commences.  The term “Real Estate Tax
Year” means each successive twelve (12) month period following and
corresponding to the period in respect of which the Base Real Estate Taxes are
established, irrespective of the period or periods which may from time to time
in the future be established by competent authority for the purposes of levying
or imposing Real Estate Taxes.

 

c.                                       No Reduction in Rent. 
Nothing contained in this Section 6 shall be construed at any time
to reduce the Rent payable hereunder below the amount stipulated in Sections 3
and 5 of this Lease.

 

d.                                      Certain Increase Not Included. 
It is understood and agreed that Tenant shall not be liable for any
increase in the Real Estate Taxes which is occasioned solely by reason of
Landlord’s failure to pay Real Estate Taxes when due.

 

e.                                       Cost of Pursuing Tax Reduction Part of
Tax Escalation.  Reasonable expenses incurred by Landlord in
obtaining or attempting to obtain a reduction of any Real Estate Property Taxes
shall be added to and included in the amount of any such Real Estate Property
Taxes.  Real Estate Property Taxes which
are being contested by Landlord shall nevertheless be included for the purposes
of the computation of the liability of Tenant under this Section 6 hereof,
provided, however, that in the event that Tenant shall have paid any amount of
Additional Rent pursuant to this Section 6 and Landlord shall thereafter
receive a refund of any portion of any Real Estate Taxes on which such payment
shall have been based, Landlord shall pay to Tenant the appropriate portion of
such refund.  Landlord shall have no
obligation to contest, object, or litigate the levying

 

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or imposition of
any Real Estate or Personal Property Taxes and may settle, compromise, consent
to, waive or otherwise determine in its discretion any Real Estate Taxes
without consent or approval of Tenant. 
If, however, Landlord does not contest such Real Estate Taxes, Tenant
may do so at Tenant’s expense and Landlord will cooperate with Tenant in such
effort.

 

f.                                         Proration of Adjustment for Partial Year. 
If the Termination Date or sooner termination of this Lease shall not
coincide with the end of a Real Estate Tax Year, then in computing the amount
payable under this Section 6 for the period between the commencement of
the applicable Real Estate Tax Year in question and the Termination Date or
sooner termination of this Lease, the amount that would have been due from the
Tenant for the full year, if Tenant had been a tenant for the entire Real
Estate Tax Year, shall be prorated over the portion of the Real Estate Tax Year
that Tenant is a tenant in the Premises. 
Tenant’s obligation to pay increased Real Estate Taxes under this Section 7
for the final period of the Lease (as well as for any earlier period not paid
as of the expiration or sooner termination of the Lease) shall survive the
expiration or sooner termination of this Lease.

 

7.           REPAIRS AND MAINTENANCE

 

f.                                                                                         Landlord’s Responsibility to Maintain and
Repair.  Subject to the provisions hereinafter
contained with regard to damage by fire or other casualty and this Section 7,
Landlord agrees to maintain the structural portions, and the roof, of the Leased
Premises in good order and repair during the Lease Term, unless damage thereto
shall have been caused by the act or neglect of Tenant, its agents, employees,
contractors or invitees, in which case, the same shall be repaired by and at
the expense of Tenant.  In the event of
Tenant’s negligence, as defined herein, and Tenant fails to make such repairs
promptly, Landlord, at its option, may make such repairs and Tenant shall pay
Landlord on demand Landlord’s actual costs in making such repairs plus a fee of
ten percent (10%) to cover Landlord’s overhead.

 

g.                                                                                      Tenant’s Responsibility to Maintain and
Repair.  Tenant shall maintain the non-structural
portions of the interior of the Leased Premises including but not limited to,
all ceilings, floors, walls and attached fixtures.  Tenant shall also be responsible for the HVAC
systems, including serving, as well as all electrical, plumbing and other
utility infrastructure within the Leased Premises in good repair and condition.

 

8.                                       LANDLORD’S UTILITY ACCESS - Landlord’s
Right to Access Service Lines. 
Landlord reserves the right to erect, use, connect to, maintain and
repair pipes, ducts, conduits, cables, plumbing, vents and wires in, to and
through the Leased Premises as and to the extent that Landlord deems necessary
or appropriate for the proper operation and maintenance of the Building and the
right at all times to transmit water, hear, air-conditioning and electric
current through such pipes, ducts, conduits, cables, plumbing, vents and wires.

 

9.                                       TENANT’S AGREEMENT

 

f.                                         Covenants of Tenant. 
Tenant covenants and agrees:

 

(i)            not to place a load on any floor exceeding the floor
load which such floor was designed to carry in accordance with the plans and
specifications of the Premises, and not to install, operate or maintain in the
Leased Premises any safe or heavy item of equipment except in such manner and
in such location as Landlord shall prescribe so as to achieve the proper
distribution of weight;

(ii)           upon the successful completion of Tenant improvements
, not to strip, overload, damage or deface the Leased Premises, hallways,
stairways, elevators, parking facilities or other public areas of the Premises,
or the fixtures therein or used therewith, nor to permit any hole to be made in
any of the same;

(iii)          not to suffer or permit any trade or occupation to be
carried on or use made of the Leased Premises which shall be unlawful, noisy,
offensive, or injurious to any person or property, or

 

5

 

such as to increase the danger of fire or affect or make void or
voidable any insurance on the Premises, or which may render any increased or
extra premium payable for such insurance, or which shall be contrary to any law
or ordinance, rule or regulation from time to time established by any
public authority;

(iv)                              to park vehicles only located on Lot
11-A.

(v)                                 to conform to all rules and
regulations from time to time established by the appropriate insurance rating
organization and to all reasonable rules and regulations from time to time
established by the Landlord, including those attached as Exhibit “B”
hereto;

(vi)                              to be responsible for the cost of removal
of Tenant’s bulk trash at time of move-in, during occupancy and move-out;

(vii)                           not to conduct nor permit in the Leased
Premises either the generation, treatment, storage or disposal of any hazardous
substances and materials or toxic substances of any kind as described in any
federal, state or local laws, ordinances or regulations regarding environmental
or hazardous wastes, and Tenant shall prohibit its assignees, sublessees,
employees, agents and contractors (collectively: “Permitees”) from doing so;
and Tenant shall indemnify, defend and hold Landlord and its agents harmless
from all loss; costs, foreseeable and unforeseeable, direct or consequential;
damages; liability; fines; prosecutions; judgments; litigation; and expenses,
including but not limited to, clean-up cost, court costs and reasonable
attorneys’ fees arising out of any violation of the provisions of this Section by
Tenant or its Permitees.

 

10.                                 ALTERATIONS

 

a.                                       Tenant
Build Out. Tenant shall be responsible for the renovations and construction
to the Premises which shall include, but not be limited to, the addition of
drive through teller lanes, addition of square footage, and the overall
conversion to be in compliance for a depository institution under local, state,
and federal regulations.  Said build out
improvements are further described on Exhibit “A” attached hereto.

 

b.                                      Signs.  Tenant shall
have the right to place a sign on a monument or the Building, whichever the
Tenant prefers, so long as the Tenant obtains a permit for the sign from the
Town of Bluffton.

 

c.                                       Once Tenant’s build out has been approved
by Landlord and completed,  Tenant shall
not paint the Leased Premises or make any alterations, additions, or other
improvement in or to the Leased Premises or install any equipment of any kind
that shall require any alterations or additions or affect the use of the
Building’s water system, heating system, plumbing system, air-conditioning
system, electrical system or other mechanical system, or install any telephone
antennae on the roof, in the windows, or upon the exterior of the Building
without the prior written consent of Landlord. 
If any such alterations or additions are made by Tenant without Landlord’s
consent, Landlord may correct or remove them and Tenant shall be liable for any
and all costs and expenses incurred by Landlord in the connection or removal of
such work.  All plans and specifications
for any such work shall be prepared by Tenant at Tenant’s expense and shall
thereafter be submitted to Landlord for its review.  As a further condition of Landlord’s consent
to the use of Tenant’s contractor, Tenant or Tenant’s contractor must evidence
insurance coverage to include (a) Worker’s Compensation Coverage and (b) Comprehensive
General Liability and Property Damage insurance in the amount of not less than
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) in the aggregate.  All work with respect to such alterations and
additions shall be done in a good and workmanlike manner and diligently
prosecuted to completion to the end that Leased Premises shall at all times be
a complete unit except during the period necessarily required for such work.  Tenant shall not permit a mechanic’s lien(s) to
be placed upon the Leased Premises, or the Building as a result of any
alterations or improvements made by it and agrees, if any such lien be filed on
account of the act of Tenant, promptly to pay the same.  If Tenant fails to discharge such lien within
thirty (30) days of its filing, then, in addition to any other right or remedy
of Landlord, Landlord may, at its election, discharge the lien.  Tenant shall pay on demand any amount paid by
Landlord for the discharge or satisfaction of any such lien, and all attorneys’

 

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fees and other
costs and expenses of Landlord incurred in defending any such action or in
obtaining the discharge of such action or in obtaining the discharge of such
lien, together with all necessary disbursements in connection therewith.  Tenant hereby expressly recognizes that in no
event shall it be deemed the agent of Landlord and no contractor of Tenant
shall by virtue of its contract be entitled to assert any lien against the
Leased Premises or Building.  All
alterations or additions shall become a part of the realty and surrendered to
Landlord upon the expiration or termination of this Lease, unless Landlord shall
at the time of its approval of such work require removal or restoration on the
part of Tenant as a condition of such approval.

 

11.                                 HOLD HARMLESS

 

a.                                                                                       Limitations of Landlord’s Liability. 
Unless caused by an act or omission, or the negligence of the Landlord,
Landlord shall not be liable for any damage to, or loss of, property in the
Leased Premises belonging to Tenant, its employees, agents, visitors, licensees
or other persons in or about the Leased Premises, or for damage or loss
suffered by the business of Tenant, from any cause whatsoever, including,
without limiting the generality thereof, such damage or loss resulting from
fire, steam, smoke, electricity, gas, water, rain, ice or snow, which may leak
or flow from or into any part of the Leased Premises, or from the breakage,
leakage, obstruction or other defects of the pipes, wires, appliances,
plumbing, air-conditioning or lighting fixtures of the same, whether the said
damage or injury results from conditions arising upon the Leased Premises or
upon other portions of the Building of which the Leased Premises are a part, or
from other sources.  Landlord shall not
be liable in any manner to Tenant, its agents, employees, invitees or visitors
for any injury or damage to Tenant, Tenant’s agents, employees, invitees or
visitors, or their property, caused by the criminal or intentional misconduct,
or by any act or neglect of third parties or of Tenant, Tenant’s agents,
employees, invitees or visitors, or of any other tenant of the Premises.  In no event shall Landlord be liable to
Tenant for any consequential damages sustained by Tenant arising out of the
loss or damage to any property of Tenant other than the gross negligence of
Landlord.

 

b.                                                                                      Tenant’s Indemnification of Landlord. 
Tenant covenants and agrees to save Landlord and Landlord’s agents
harmless and indemnified, and to defend Landlord and Landlord’s agents from all
loss, damage, liability or expense of any kind, including without limitation
attorneys’ fees and court costs incurred, suffered or claimed by any person
whomsoever, or for any damage or injury to any persons or property from any
cause whatsoever, by reason of the use or occupancy by Tenant, its agents,
employees, invitees or visitors of the Leased Premises, or of the Building
unless caused by an act or omission or the negligence of Landlord.

 

c.                                                                                       The provisions of this Section 11
shall survive the expiration or sooner termination of the Lease Term.

 

12.                 LIEN ON TENANT’S PROPERTY.  To protect Landlord in the event Tenant
defaults hereunder, Tenant hereby grants to Landlord a continuing security
interest for all Rent and other sums of money becoming due hereunder from
Tenant, and upon all goods, wares, chattels, fixtures, furniture and other
personal property of Tenant which are or may be located on the Leased Premises
without Landlord’s consent so long as any Rent or other such sum from time to
time owned to Landlord hereunder remains unpaid.  Tenant shall, on its receipt of a written
request therefor from Landlord, execute such financing statements, continuation
statements and other instruments and other instruments as are necessary or
desirable, in Landlord’s judgment, to perfect such security interest.

 

13.                                 INSURANCE

 

a.                                                                                       Public Liability Insurance. 
Tenant shall, at its cost and expense, obtain and maintain at all times
during the Lease Term, for the protection of Landlord and Tenant, Public
Liability Insurance (Comprehensive General Liability or Commercial General
Liability) including Contractual Liability Insurance, with a personal injury
limit of not less than One Million Dollars ($1,000,000.00) for injury or death
to any one person and not less than Two Million Dollars

 

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($2,000,000.00) for injury and/or death to any number
of persons for each occurrence and not less than Five Hundred Thousand Dollars
($500,000.00) property damage coverage, insuring against all liability of
Tenant and its representative arising out of and in connection with Tenant’s
use or occupancy of the Leased Premises. 
Landlord and Landlord’s agent shall be name as additional insurers.

 

b.                                                                                      Fire and Extended Coverage Insurance. 
Tenant shall, at its cost and expense, obtain and maintain at all times
during the Lease Term, fire and extended coverage insurance on the Leased
Premises and its contents, including any leasehold improvements made by Tenant,
with a company selected by Landlord and in an amount sufficient so that no
co-insurance penalty shall be invoked in case of loss.

 

c.                                                                                       Periodic Increases of Coverage Limits. 
Tenant shall increase its insurance coverage, as required, but not more
frequently than each calendar year if, in the opinion of Landlord or any
mortgagee of Landlord, the amount of public liability and/or property damage
insurance coverage at that time is not adequate.

 

d.                                                                                      Insurance Company Standards and Prior
Notice of Change in Coverage.  All insurance
required under this Lease shall be issued by insurance companies licensed to do
business in the jurisdiction where the Building is located.  Such companies shall have a policy holder
rating of at least “A-” and be assigned a financial size category of at least “Class X”
as rated in the most recent edition of “Best’s Key Rating Guide” for insurance
companies.  Each policy shall contain an
endorsement requiring thirty  (30) days
written notice from the insurance company to Landlord before cancellation or
any change in the coverage, scope or amount of any policy.  Each policy, or a certificate showing it is
in effect, together with evidence of payment of premiums, shall be deposited
with Landlord on or before the Commencement Date, and renewal certificates or
copies of renewal policies shall be delivered to Landlord at least thirty (30)
days prior to the expiration of any policy.

 

14.                                 ASSIGNMENT & SUBLETTING.  Tenant shall not assign, transfer, mortgage
or encumber this Lease or sublet the Leased Premises without obtaining the
prior written consent of Landlord, nor shall any assignment or transfer of this
Lease be effectuated by operation of law without the prior written consent of
Landlord, which consents described herein shall not be unreasonably
withheld.  Exception: Without prior written consent, Landlord will agree to permit
the Tenant to assign its rights and obligations under this Lease to an entity
purchasing Tenant, or to a succeeding Tenant via a merger, provided the Tenant
satisfy the following conditions: (1) No Default shall exist; (2) The
Tenant is selling to an unrelated third party in a bona fide arm’s length
transaction; (3)  Successor tenant shall have net assets greater than
(>) $50,000,000.00; (4) Tenant shall have paid all costs and expenses
in connection with any such assignment, including Landlord’s reasonable
attorney’s fees and expenses. 
In the event that Tenant desires to assign this Lease, sublet the Leased
Premises, or permit occupancy or use of the Leased Premises or any part thereof
by another party or parties, Tenant shall provide Landlord with thirty  (30) days advance written notice of Tenant’s
bona fide proposed assignment or subletting of all or any part of the Leased
Premises.  Landlord shall have the right,
at its option during said thirty  (30)
day period, to (a) release Tenant from this Lease, (b) sublet all or
any part of the Leased Premises from Tenant at the same rental Tenant is paying
Landlord, with the right to further sublease or, (c) refuse to consent to
Tenant’s assignment or subletting and to continue this Lease in full force and
effect as to the entire Leased Premises. 
The consent by Landlord to any assignment, transfer, or subletting shall
not be construed as a waiver or release of Tenant from any covenant or
obligation under this Lease, nor shall the collection or acceptance of Rent
from any such assignee, transferee, subtenant or occupant constitute a waiver
or release of Tenant from any covenant or obligation contained in this Lease,
nor shall such assignment or subletting be construed to relieve Tenant from
giving Landlord said thirty (30) days notice, nor from obtaining the consent in
writing of Landlord to any further assignment or subletting (which consent may
be withheld in the sole and absolute discretion of Landlord).  In the event that Tenant defaults hereunder,
Tenant hereby assigns to Landlord any and all rent due from any subtenant of
Tenant and hereby authorizes each such subtenant to pay said rent directly to
Landlord.  Without limiting the generality
of the foregoing, if Landlord

 

8

 

consents to an
assignment or sublease pursuant to this Section 15, Landlord may condition
its consent upon the entry by such transferee into an agreement (in form and
substances satisfactory to Landlord) with Landlord, by which such transferee
assumes all of Tenant’s obligations hereunder.

 

15.                                 LANDLORD’S RIGHT OF ACCESS

 

a.                                                                                       Landlord’s General Right of Access. 
Landlord may, at any time during Tenant’s occupancy, during reasonable
business hours, enter either to view the Leased Premises or to show the same to
others, or to facilitate repairs to the Building, or to introduce, replace,
repair, alter or make new or change existing connections from any fixtures,
pipes, wires, ducts, conduits or other construction therein, or remove, without
being held responsible therefor, placards, signs, lettering, window or door
coverings and the like not expressly consented to by Landlord.

 

b.                                                                                      Landlord’s Right to Show Leased Premises. 
Landlord may, during the last ninety 
(90) days of the Lease Term, enter the Leased Premises free form
hindrance or control of Tenant to show the Leased Premises to prospective
tenants at times which shall not unreasonably interfere with Tenant’s
business.  If Tenant shall vacate the
Leased Premises during the last month of the Lease Term, Landlord shall have
the unrestricted right to enter the same after Tenant’s moving to commence
preparation for the succeeding tenant or for any other purpose whatsoever,
without affecting Tenant’s obligation to pay Rent for the full Lease Term.

 

16.                                 FIRE CLAUSE

 

a.                                                                                       General Rights and Obligations in Case of
Fire.  In the event the Leased Premises or any part
thereof, the hallways, stairways or other approaches thereto, becomes damaged
or destroyed by fire or other casualty from any cause so as to render said
Leased Premises and/or approaches unfit for use and occupancy, a just and
proportionate part of the Rent according to the nature and extent of the damage
or injury to said Leased Premises and/or approaches, shall be suspended or
abated until said Leased Premises and/or approaches have been put in as good
condition for use and occupancy as at the time immediately prior to such damage
or destruction.  Landlord shall proceed,
at its expense and as expeditiously as may be practicable, to repair the
damage, unless, because of the substantial extent of the damage or destruction,
Landlord should decide not to repair or restore the Leased Premises or the
Building, in which event and at Landlord’s sole option, Landlord may terminate
this Lease forthwith by giving Tenant a written notice of its intention to
terminate within ninety (90) days after the date of the fire or other casualty.  Landlord shall not be obligated to repair,
restore or replace any fixture, improvement, alteration, furniture or other
property owned, installed or made by Tenant, all of which shall be repaired,
restored or replaced by Tenant.

 

b.                                                                                      Notice of Damage to Leased Premises. 
Tenant shall immediately notify Landlord of any damage to the Leased
Premises caused by fire or any other casualty.

 

c.                                                                                       Landlord Not Liable for Business
Interruption.  No damages, compensation, or claim shall be
payable by Landlord for inconvenience, loss of business, or annoyance arising
from any repair or restoration of any portion of the Leased Premises or any
portion thereof.  Subject to the
provisions of Section 7, Landlord shall diligently proceed to have such
repairs made promptly.

 

17.                                 CONDEMNATION

 

a.                                                                                       Lease Terminated by Substantial
Condemnation.  This Lease shall be
terminated and the Rent shall be abated to the date of such termination in
either of the following events: (a) condemnation of the Leased Premises,
the Building or any part thereof by any competent authority under right of
eminent domain for any public or quasi-public use or purpose; or (b) condemnation
by competent authority under right of eminent domain for any public or
quasi-public use or purpose; (c) condemnation by competent authority under
right of eminent domain for any public or quasi-public use or purpose of the
entire Premises.  In case of any taking
or condemnation, whether or not the

 

9

 

Lease Term shall cease and terminate, the entire award
shall be apportioned between the Landlord and Tenant as is equitable based upon
the improvements completed by the Tenant, subject to depreciation under
generally accepted accounting principles.

 

b.                                                                                      Temporary or Partial Condemnation.  In the event of a temporary taking or
condemnation of all or any part of the Leased Premises for any public or
quasi-public use or purpose, this Lease shall be unaffected and Tenant shall
continue to pay a proportionately abated Basic Rent and all Additional Rent
payable in for any such period.  In the
event of any such temporary taking, notwithstanding the provisions of Section 17(a),
Tenant shall be entitled to claim, prove and receive the portion of the award
for such taking that represents compensation for use or occupancy of the Leased
Premises during the Lease Term, and Landlord shall be entitled to appear,
claim, prove and receive the portions of the award that represent the cost of
restoration of the Leased Premises and the use or occupancy of the Leased
Premises after the end of the Lease Term.

 

18.                                 DEFAULTS AND REMEDIES

 

h.                                      Events of Tenant Default. It is hereby mutually agreed that:  (a) if Tenant shall fail (i) to pay
Rent or other sums which Tenant is obligated to pay by any provision of this
Lease, when and as it is due and payable hereunder and without demand therefor,
or (ii) to keep and perform each and every covenant, condition and
agreement herein contained on the part of Tenant to be kept and performed; or (b) if
Tenant shall abandon or evidence any intention to abandon all or any portion of
the Leased Premises; or (c) if the estate hereby created shall be taken by
execution or other process of law; or (d) if Tenant shall (i) generally
to pay Tenant’s debts as such debts become due, (ii) become insolvent, (iii) make
an assignment for the benefit of creditors, (iv) file, be the entity
subject to, or acquiesce in a petition in any court (whether or not filed by or
against Tenant pursuant to any statute of the United States or any state and
whether or not for a trustee, custodian, receiver, agent, or other officer for
Tenant or for all or any portion of Tenant’s property) in any proceeding
whether bankruptcy, reorganization, composition, extension, arrangement,
insolvency proceedings, or otherwise; then, upon the occurrence of an Event of
Default by Tenant as herein defined, Landlord shall have the right following
written notice of default by Landlord to Tenant and a right to cure within
thirty (30) days after receipt of the notice, and in each and every case, from
thenceforth and at all times thereafter, at the sole option of Landlord,
Landlord may :

 

(i)                     Terminate this Lease, in which event Tenant shall
immediately surrender the Leased Premises to Landlord.  If Tenant fails to do so, Landlord may
without notice and without prejudice to any other remedy Landlord may have,
enter upon and take possession of the Leased Premises and expel or remove
Tenant and its effects without being liable to prosecution or any claim for
damages therefor; and Tenant shall indemnify Landlord for all loss and damage
which Landlord may suffer by reason of such termination whether through the
inability to relet the Leased Premises or otherwise including any loss of Rent
for the remainder of the Lease Term.

(ii)                  Terminate this Lease, in which event Tenant’s default
should be considered a total breach of Tenant’s obligation under this Lease and
Tenant immediately shall become liable for such damages for such breach, in an
amount equal to the total of (1) costs of recovering the Leased Premises; (2) the
unpaid Rent earned as of the date of termination, plus interest thereon at a
rate per annum from the due date equal to twelve percent (12%) per year,
provided, however, that such interest shall never exceed the highest lawful
rate; and (3) all other sums of money and damage owing by Tenant to
Landlord.  Tenant’s right of possession
shall cease and terminate and Landlord shall be entitled to the possession of
the Leased Premises and shall remove all persons and property therefrom and
reenter the same without further demand of Rent or demand of possession of the
Leased Premises, either with or without process of law and

 

10

 

without becoming
liable to prosecution therefor, any notice to quit or intention to reenter
being hereby expressly waived by Tenant.

(iii)
Pursue any other
remedy available to Landlord on account of such default under applicable law or
in equity.

 

b.                                      Liability
of Tenant.  In the event of any
reentry or retaking of the Leased Premises by Landlord and/or any termination
of this Lease by Landlord, Tenant shall nevertheless remain in all events
liable and answerable for the Rent to the date for such retaking, reentry or
termination and Tenant shall also be and remain answerable in damages for the
deficiency or loss of Rent as well as all related expenses which Landlord may
thereby sustain in respect to the balance of the Lease Term, and, in such case,
Landlord reserves full power, which is hereby acceded to by Tenant, to let said
Leased Premises for the benefit of Tenant, in liquidation and discharge, in
whole or in part, as the case may be, of the liability of Tenant under the
terms and provisions of this Lease, and such damages and related expenses, at the
option of Landlord, may be recovered by it at the time of the retaking and
reentry, or in separate actions, from time to time, as Tenant’s obligation to
pay Rent would have accrued if the Lease Term had continued, or from time to
time as said damage and related expenses shall have been made more easily
ascertainable by reletting of the Leased Premises.

 

c.                                       Interpretation
of Agreement Under Bankruptcy Laws. 
The provisions of this Section 18 are subject to the Bankruptcy
Laws of the United States of America and the State of South Carolina which may,
in certain cases, limit the rights of Landlord to enforce some of the
provisions of this Section in proceedings thereunder.  To the extent that limitations exist by
virtue thereof, the remaining provisions hereof shall not be affected thereby
but shall remain in full force and effect. 
The provisions of this Section 19 shall be interpreted in a manner
which results in a termination of this Lease in each and every instance, and to
the fullest extent and at the earliest moment that such termination is
permitted under the federal and state bankruptcy laws, it being of prime
importance to Landlord to deal only with tenants who have, and continue to
have, a strong degree of financial strength and financial stability.

 

d.                                      Application
of Rents After Reletting.  All rents
received by Landlord in any reletting after Tenant’s default shall be applied,
first to the payment of such expenses as Landlord may have incurred in
recovering possession of the Leased Premises and in reletting the same
(including brokerage fees), second to the payment of any costs and expenses
incurred by Landlord, either for making the necessary repairs (including
fitting up the space for such reletting) to the Leased Premises or in curing
any default on the part of Tenant of any covenant or condition herein, made
binding upon Tenant.  Any remaining rent
shall then be applied toward the payment of Rent due from Tenant, together with
interest and penalties as defined in Section 3.4, and Tenant expressly
agrees to pay any deficiency then remaining. 
Landlord shall in no event be liable in any way whatsoever (nor shall
Tenant be entitled to any set off) for Landlord’s failure to relet the Leased
Premises, and Landlord, at its option, may refrain from terminating Tenant’s
right of possession, and in such case may enforce against Tenant the provisions
of this Lease for the full Lease Term.

 

e.                                       Enforcement
Costs.  In the event Tenant defaults
in the performance of any of the terms, covenants, agreements or conditions
contained in this Lease and Landlord places in the hands of an attorney or
collection agency the enforcement of all or any part of this Lease, the
collection of any Rent due or to become due or including reasonable attorneys’
fees, whether suit is actually filed or not.

 

19.                 TENANT’S REMEDIES UPON AN EVENT OF DEFAULT.  Upon the occurrence of an Event of
Default by Landlord, Tenant shall have the right to (a) terminate this
Lease following written notice of default by Tenant to Landlord and a right to
cure within thirty (30) days after receipt of the notice.  If the Event of Default cannot be cured
within thirty (30) days, but is pursued in good faith within a reasonable time,
this Lease shall not be terminated due to the Event of Default.  Upon termination of this Lease following an
Event of Default by Landlord, Tenant shall be entitled to pursue all remedies
under South

 

11

 

Carolina Law,
specifically including but not limited to all incidental and consequential
damages resulting from Landlord’s default.

 

20.         LEASE SUBORDINATE TO MORTGAGES.  This Lease shall be subject and subordinate
at all times to the lien of any mortgage or other encumbrances(s) which
may now or which may at any time hereafter be made upon the Premises of which
the Leased Premises is a part or any portion thereof, or upon Landlord’s
interest therein.  This clause shall be
self operative, and no further instrument of subordination shall be required to
effect the subordination of this Lease. 
Nonetheless, in confirmation of such subordination, Tenant shall execute
and deliver such further instrument(s) subordinating this Lease to the
lien of any such mortgage thereby, within thirty (30) days of receipt of such
request.  If the interests of Landlord
under this Lease shall be transferred by reason of foreclosure or other
proceedings for enforcement of any mortgage on the Leased Premises or Building,
Tenant shall be bound to the transferee, under the terms, covenants and
conditions of this Lease for the remaining Term, including any extensions or
renewals, with the same force and effect as if the transferee were Landlord
under this Lease, and, if requested by such transferee, Tenant agrees to attorn
to the transferee as its landlord.  The
holder of any mortgage encumbering the Premises shall have the right,
unilaterally, at any time to subordinate fully or partially its mortgage or
other security instrument to this Lease on such terms and subject to such
conditions as such holder may consider appropriate in its discretion.  Upon request Tenant shall execute and deliver
an instrument confirming any such full or partial subordination.

 

21.         SURRENDER OF POSSESSION. Upon the
expiration or earlier termination of the Lease Term, Tenant shall surrender the
Leased Premises and all keys, gate cards, parking passes, security cards, and
locks connected therewith to Landlord in good order and repair (ordinary wear
and tear excepted).  Subject to the
provisions of Section 10, any and all improvements, repairs, alterations
and all other property attached to, used in connection with or otherwise
installed upon the Leased Premises (i), shall, immediately upon the completion
of the installation thereof, be an become Landlord’s property without payment
therefor by Landlord, and (ii) shall be surrendered to Landlord upon the
expiration or earlier termination of the Lease Term, except that any machinery,
equipment or fixtures installed by Tenant and used in the conduct of the Tenant’s
trade or business (rather than to service the Leased Premises or any of the
remainder of the Building or Premises generally) and all other personalty of
Tenant shall remain Tenant’s property and shall be removed by Tenant upon the
expiration or earlier termination of the Lease Term, and Tenant shall promptly
thereafter fully restore any part of the Leased Premises or the Building
damaged by such installation or removal thereof.

 

22.         TENANT HOLDING OVER.  If Tenant or any person claiming through
Tenant shall not immediately surrender possession of the Leased Premises at the
expiration or earlier termination of the Lease Term, the tenancy shall become
month to month and the Landlord shall be entitled to recover compensation for
such use and occupancy at twenty five percent (25%) of the Basic Rent and
Additional Rent payable hereunder just prior to the expiration or earlier
termination of the Lease Term.  Landlord
shall also continue to be entitled to retake or recover possession of the
Leased Premises as herein before provided in case of default on the part of
Tenant, and Tenant shall be liable to Landlord for any loss or damage it may
sustain by reason of Tenant’s failure to surrender possession of the Leased
Premises immediately upon the expiration or earlier termination of the Lease
Term.  Tenant hereby agrees that all the
obligation of Tenant and all rights of Landlord applicable during the Lease
Term shall be equally applicable during such period of subsequent occupancy.

 

23.                                 ESTOPPEL CERTIFICATES. Tenant
shall, without charge therefor, at any time and from time to time, within
fifteen  (15) business days after request
by Landlord, execute, acknowledge and deliver to Landlord a written estoppel
certificate certifying to Landlord, any mortgagee, assignee of a mortgagee, or
any purchaser of the Premises, or any other person designated by Landlord, as
of the date of such estoppel certificate: 
(a) that Tenant is in possession of the Leased Premises: (b) that
this Lease is unmodified and in full force and effect (or if there have been
modifications, that this Lease is in full force and effect as modified and
setting forth such modification); (c) whether or not there are then
existing any setoffs or defenses against the enforcement of any right or remedy
of Landlord, or any duty or obligation of Tenant hereunder (and, if so,
specifying the same in detail); (d) the amount of the Basic Rent and the
dates through

 

12

 

which Basic Rent
and Additional Rent have been paid; (e) that Tenant has no knowledge of
any then uncured defaults on the part of Landlord under this Lease (or if
Tenant has knowledge of any such uncured defaults, specifying the same in
detail); (f) that Tenant has no knowledge of any even having occurred that
authorizes the termination of this Lease by Tenant (or if Tenant has such
knowledge, specifying the same in detail); (g) the amount of any Security
Deposit held by Landlord; and (h) such reasonable other information
requested by Landlord, such mortgagee, assignee of such mortgagee, such
purchaser or such other person.  Failure
to deliver the certificate upon request by Landlord shall be conclusive upon
Tenant for the benefit of Landlord and any successor to Landlord that this
Lease is in full force and effect and has not been modified except as may be
represented by the party requesting the certificate.

 

24.                                 MISCELLANEOUS

 

c.                                       Interpretation of “Tenant”. 
The term “Tenant” shall include legal representatives, successors and
permitted assigns.  All covenants herein
made binding upon Tenant shall be construed to be equally applicable to and
binding upon its agents, employees and others claiming the right to be in or on
the Leased Premises or in the Building through or under Tenant.

 

d.                                      Interpretation Generally. 
If more than one individual, firm, or corporation shall join as Tenant,
singular context shall be construed to be plural wherever necessary and the
covenants of Tenant shall be the joint and several obligations of each party
signing as Tenant and when the parties signing as Tenant are partners, shall be
the obligation of the firm and of the individual members thereof.

 

e.                                       Gender and Number. 
Feminine or neuter pronouns shall be substituted for those of the
masculine form and the plural shall be substituted for the singular, wherever the
context shall require.  It is also agreed
that no specific words, phrases or clauses herein used shall be taken or
construed to control, limit or cut down the scope or meaning of any general
word, phrases or clauses used in connection therewith.

 

f.                                         No Waiver.  No waiver or
breach of any covenant, condition or agreement herein contained shall operate
as a waiver of the covenant, condition or agreement itself, or of any
subsequent breach thereof.

 

g.                                      Nonrecourse Against Landlord. 
Notwithstanding anything to the contrary contained in this Lease, Tenant
shall look only to Landlord’s ownership in the Premises for satisfaction of
Tenant’s remedies for the collection of a judgment (or other judicial process)
requiring the payment of money by Landlord in the event of any default by
Landlord hereunder, and no other property or assets of the partners or
principals of Landlord, disclosed or undisclosed, shall be subject to levy,
execution or the enforcement procedure for the satisfaction of Tenant’s
remedies under or with respect to this Lease, the relationship of Landlord and
Tenant hereunder or Tenant’s use or occupancy of the Leased Premises.  No personal liability or personal
responsibility is assumed by, nor shall at any time be asserted or enforceable
against Landlord, its partners or its principals, or their respective heirs,
legal representatives, successors and assigns on account of this Lease or any
covenant, undertaking, or agreement of Landlord contained herein.  If any provision of this Lease either expressed
or implied obligates Landlord not to unreasonably withhold its consent or
approval, an action for declaratory judgment or specific performance shall be
Tenant’s sole right and remedy in any dispute as to whether Landlord has
breached such obligation.

 

h.                                      No Warranties Implied. 
TENANT AND LANDLORD EXPRESSLY AGREE THAT THERE ARE AND SHALL BE NO
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND
BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.

 

i.                                          Binding Effect. 
This Lease shall be binding upon and shall inure to the benefit of the
parties

 

13

 

hereto and their
respective heirs, personal representatives, successors and assigns.  This provision shall not be deemed to grant
Tenant any right to assign this Lease or sublet the Leased Premises or any part
thereof other than as provided in Section 14 hereof.

 

j.                                          Entire Agreement; Amendment. 
It is understood and agreed by and between the parties hereto that this
Lease contains the final and entire agreement between said parties, and that
they shall not be bound by any terms, statements, condition or representations,
oral or written, express or implied, not herein contained.  This Lease may not be modified orally or in
any manner other than by written agreement signed by the parties hereto.

 

k.                                       Partial Invalidity. 
Every agreement contained in this Lease is, and shall be construed as a
separate and independent agreement.  If
any term of this Lease of the application thereof to any person or
circumstances shall be invalid and unenforceable, the remaining provisions of
this Lease, the application of such term to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected.

 

l.                                          Force Majeure. 
Whenever a period of time is herein prescribed for action to be taken by
the parties hereto, either party shall not be liable or responsible for, and
there shall be excluded from the computation for any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials,
war, governmental laws, regulations, or restrictions, or any other cause of any
kind whatsoever which is beyond the reasonable control of the parties.

 

m.                                    Agreement Not Effective Until Executed by
Landlord.  The submission of this Lease to Tenant shall
not be construed as an offer nor shall Tenant have any rights with respect
thereto unless Landlord executes a copy of this Lease and delivers same to
Tenant.

 

n.                                      Tenant to Cooperate with Lenders, et al.  If, in connection with obtaining financing for
the Premises  (including syndications or
sale/leasebacks), any lender or ground lessor shall request modifications to
this Lease as a condition for such financing, Tenant will not unreasonably
withhold, delay, or defer its consent thereto, provided that such modifications
do not increase the obligations of Tenant hereunder or adversely affect either
the leasehold interest hereby created or Tenant’s use and enjoyment of the
Leased Premises.

 

o.                                      Enforcement Expense. 
Tenant and Landlord agree that all costs, including reasonable attorney’s
fees, of any legal action or suit in law or equity arising out of the mutual
covenants, promises and agreements of this Lease, shall be paid by the
unsuccessful party to such legal action, both prior to and on appeal.

 

p.                                      Counterparts. 
This Agreement may be signed in counterparts, and when each required signatory hereunder shall have signed an original
copy of this Agreement and delivered same to the other party, all such
signatures shall be taken collectively as though each party hereto had executed
in full a single document, and same shall be binding and of full force and
effect.

 

q.                                      Titles and Paragraph Headings.  The titles and paragraph headings
used herein are for purposes of convenience only and are not to be considered
substantive in matters of construction.

 

r.                                         Business Days.  If the final day of any period or any date of
performance under this Lease falls on a Saturday, Sunday or legal holiday, then
the final day of the period or the date of performance shall be extended to the
next day which is not a Saturday, Sunday or legal holiday.

 

25.           BROKERS Tenant represents and warrants
that it has not entered into any agreement with, or otherwise had any dealings
with, any broker or agent in connection with the negotiation or execution of
this Lease which could form the basis of any claim by any such broker or agent
for a brokerage fee or commission, finder’s fee, or any other compensation of
any kind or nature in connection herewith, and Tenant shall indemnify, defend
and hold Landlord harmless from and against any costs (including, but not
limited to,

 

14

 

court costs and
attorneys’ fees), expenses, or liability for commissions or other compensation
claimed by any broker or agent other than those listed above in this Section with
respect to this Lease which arises out of any agreement or dealings, or alleged
agreement or dealings, between Tenant and any such agent or broker.

 

26.                                 NOTICES AND DEMANDS.  All notices required or permitted hereunder
shall be deemed to have been given if mailed in any United States Post Office
by certified or registered mail, postage prepaid, return receipt requested, or
by express commercial courier, addressed to Landlord or Tenant respectively at
the following addresses or to such other addresses as the parties hereto may
designate to the other in writing from time to time:

 

	
  LANDLORD

  	
   

  	
  TENANT

  	
   

  
	
  PARADIGM
  HOLDINGS, LLC

  	
   

  	
  ATLANTIC
  COMMUNITY BANK

  	
   

  
	
  Attn: Brian
  Rose, Jr.

  	
   

  	
  Attn:  Robert
  P. Trask

  	
   

  
	
  P.O. Box 2045

  	
   

  	
  P.O. Box 3077

  	
   

  
	
  Bluffton, SC 29910

  	
   

  	
  Bluffton, SC 29910

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  With Copy to:

  	
   

  	
  With Copy to:

  	
   

  
	
  Charles H.
  Wiseman, Esq.

  	
   

  	
  Mark S. Simpson, Esq.

  	
   

  
	
  P.O. Drawer 6868

  	
   

  	
  P.O. Drawer 7049

  	
   

  
	
  Hilton Head Island, SC
  29938

  	
   

  	
  Hilton Head Island, SC
  29938

  	
   

  

 

27.                                 QUIET ENJOYMENT.  Quiet Enjoyment of Leased Premises.  Landlord covenants and agrees that upon
Tenant paying the Rent and any other charges due and payable and observing and
performing all the terms, covenants and conditions, on Tenant’s part to be
observed and performed, Tenant may peaceably and quietly enjoy the Leased
Premises hereby demised, subject, nevertheless, to the terms and conditions of
this Lease and to any mortgages hereinbefore mentioned.

 

28.                                 WAIVER OF TRIAL BY JURY.  LANDLORD AND TENANT EACH AGREE TO AND THEY
HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE LEASED PREMISES AND/OR
ANY CLAIM OR INJURY OR DAMAGE, AND ANY STATUTORY REMEDY.

 

29.                                 GOVERNING LAW This Lease shall be
construed and governed by the laws of the State of South Carolina.  Should any provision of this Lease and/or its
conditions be illegal or not enforceable under the laws of said state, it or
they shall be considered severable, and the Lease and its conditions shall
remain in force and be binding upon the parties hereto as though the said
provision had never been included.

 

15

 

IN
WITNESS WHEREOF, Landlord has hereunto set its hand and seal,
or has caused its name to be hereunto subscribed and Tenant has hereunto set
its hand and seal, or has caused its corporate name to be hereunto subscribed
and its corporate seal to be hereunto affixed and attested by its duly
authorized officers, as the case may be, as of the day and year first above
written.

 

	
  WITNESS:

  	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
  PARADIGM
  HOLDINGS, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   /s/ X

  	
   

  	
  /s/ Brian
  Rose, Jr.

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  Brian Rose, Jr.

  	
   

  
	
   

  	
   

  	
  Its:
  Manager

  	
   

  
	
   /s/ X

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
  ATLANTIC
  COMMUNITY BANK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   /s/ X

  	
   

  	
  /s/ Robert P. Trask

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  Robert P. Trask

  	
   

  
	
   

  	
   

  	
  Its:  President
  and Chief Executive Officer

  	
   

  
	
  /s/ X

  	
   

  	
   

  	
   

  

 

16

 

Exhibit “A”

Floor Plan of Leased Premise/Tenant Build Out
Improvements

 

17

 

Exhibit “B”

Schedule of Rents

 

18Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (Agreement) dated as February 8,
2008, is made by and between Atlantic Bancshares, Inc., (Company) a South
Carolina corporation which is the holding company for Atlantic Community Bank
(Bank), a South Carolina state bank, (collectively referred to as Employer) and
Robert P. Trask (Executive).

 

In consideration of the mutual covenants herein
contained, the parties agree as follows:

 

Section 1
– Duties

 

Employer shall employ Executive and the Executive
shall serve the Employer as President and Chief Executive Officer of the Bank
and as President of the Company upon the terms can conditions set forth herein.
Executive shall have such authority and responsibilities consistent with his
position as set forth in the Company’s or Bank’s bylaws or as assigned by the
Company’s and the Bank’s Boards of Directors (collectively referred to as Board
of Directors). Executive shall devote his full business time, attention, skill
and efforts to the performance of his duties hereunder. Executive may devote
reasonable period to service as a director or advisor to other organizations,
to charitable and community activities, provided that, in the Board’s sole
opinion, such activities do not materially interfere with and are not in
conflictive with or adverse to, the interests of the Company or the Bank.
Executive shall be subject to all Bank policies and benefits as are other
employees, except as may otherwise be stated herein.

 

The Executive is currently serving as a director of
each of the Company and 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 of Directors 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 Company and of
the Bank.

 

Section 2 – Term

 

A.                                   Unless earlier
terminated as provided herein, Executive’s employment under this Agreement
shall commence on February 8, 2008, and be for a term of three years. Executive
agrees to remain in the exclusive employ of Employer until February 8,
2011, and neither to accept other employment nor to become employed by any
other employer until such termination date, unless the termination date is
affected as hereinafter provided.

 

1

 

B.                                     In the event
written notice is not given by either party to this Agreement 60 days prior to
the termination date, this Agreement shall be extended on the same terms and
conditions as herein provided, all for an additional period of three (3) years.
Agreement shall continue thereafter for three-year periods unless either party
hereto gives 60 days written notice to the other party that the party does not
wish to extend this Agreement.

 

C.                                     Nothing in this
Agreement shall prevent, limit or otherwise interfere with the right of Company
and Bank to terminate the services of Executive at any time, subject only to
the provisions set forth in Section 4 of this Agreement.

 

D.                                    Nothing in this
Agreement shall prevent, limit or otherwise interfere with the right of the
Executive to resign at any time from his position with Employer, subject only
to the provision set forth in Section 4 of this Agreement.

 

Section 3 – Compensation & Benefits

 

A.                                   Starting February 8,
2008, Employer shall pay Executive an annual base salary of $135,000.00  (One Hundred
Thirty-Five Thousand and no/100 Dollars) in accordance with the
Employer’s normal payroll practices, which shall mean no less frequently than
monthly. The Board of Directors (or an appropriate committee of the Board)
shall review Executive’s performance and salary periodically and may increase
Executive’s base salary if it determines in its sole discretion that an
increase is appropriate.

 

B.                                     Executive shall
participate in Employer’s long-term equity incentive program and be eligible to
purchase stock options in accordance with the stock incentive plan approved by
the Company’s shareholders. Any options or similar awards shall be issued to
Executive at an exercise price of not less than the stock’s current fair market
value as of the date of grant.

 

C.                                     Executive shall
participate in all retirement, health, welfare, and other benefit plans or
programs of Employer now or as may be adopted for all employees or adopted
for a class of employees that includes Executive.

 

Employer shall pay the Executive’s coverage for medical and dental
benefits excluding the minimal required co-pay payment.

 

D.                                    Employer shall
provide Executive with a term life insurance policy providing for death
benefits totaling $500,000 payable to Executive’s spouse and heirs and
$1,000,000 payable to Employer. Executive agrees to cooperate in the securing
and maintenance of such policy. If Executive is taxed by state or federal
authorities with respect to Employer’s payment of such life insurance policy,
Employer agrees that Executive’s compensation shall be increased, on a tax
gross-up basis, so that Executive shall be, after payment of all taxes, in the
same financial position as if no taxes had 

 

2

 

been imposed upon him. Employer shall require and pay the cost of an
annual physical for the Executive.

 

E.                                      Employer shall
provide Executive with an automobile either owned or leased by the Employer.
Insurance, gasoline, taxes, and other related expenses shall also be paid by
the Employer.

 

F.                                      Employer may pay
for membership dues for Executive’s membership in various civic organizations. In
addition, Employer shall pay membership fees and annual dues, not to exceed $1,000.00, to an area country club
in which Executive is designated as authorized user of such membership so long
as Executive remains President or CEO of Employer and this Agreement remains in
force.

 

G.                                     Employer shall
reimburse Executive for reasonable travel and other expenses, including cell
phone, related to Executive’s duties which are incurred and accounted for in
accordance with Bank policies. Executive shall be issued a corporate credit card
to be used for business related expenses in accordance with Bank policies. The
Employer shall reimburse the Executive for such expenses within 60 days of
Executive’s notice to Employer of such expense.

 

H.                                    Employer shall
provide Executive with four weeks paid vacation per year which shall be taken
in accordance with Bank policies and in accordance with any banking rules or
regulations governing vacation leave. Paid time off days may not be
carried forward into following calendar years, and any payments made by the
Employer to the Executive as compensation for paid time off days shall be paid
in accordance with the Employer’s normal payroll practices, which shall mean no
less frequently than monthly.

 

I.                                         The Executive
shall be eligible to receive cash bonuses based on the Executive’s achievement
of specified goals and criteria. These goals and criteria may include both
annual and long-term goals, may provide for vesting over a specified time
period, and shall be established annually by the Compensation Committee of the
Board of Directors.

 

For purposes of this Agreement, a bonus shall not be deemed to be
earned prior to the date it is actually paid to the Executive except to the
extent that the Employer specifically provides otherwise in a writing delivered
to the Executive. Any bonus payment made pursuant to this Section 3(I) 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.

 

Section 4 – Termination

 

A.                                   Executive’s
employment under the Agreement may be terminated prior to the end of the
term only as provided in this Section 4.

 

3

 

B.            Death. The Agreement
will terminate upon the death of Executive.  In this event, the Employer shall pay
Executive’s estate any sums due him as base salary and/or reimbursement of
expenses through the end of the month during which death occurred in accordance
with the Employer’s normal payroll practices, which shall mean no less
frequently than monthly. The Employer shall also pay the Executive’s estate any
bonus earned or accrued through the date of death including any amounts awarded
for previous years but which were not yet vested. Any bonus for previous years
which was not yet paid will be paid pursuant to the terms as set forth in Section 3(I).
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 Employer’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 Executive’s death.

 

C.            Disability. Employer may terminate
this Agreement upon the Disability of Executive for a period of ninety (90)
days. In this event, the Employer shall pay Executive any sums due him as base
salary and/or reimbursement of expenses through the date of termination in
accordance with the Employer’s normal payroll practices, which shall mean no
less frequently than monthly.

 

D.            For Cause. Employer may terminate
this Agreement for cause upon delivery of a Notice of Termination to Executive.
If Executive is terminated for cause under this provision Executive shall
receive only any sums due him as base salary and reimbursement of expenses
through the date of termination in accordance with the Employer’s normal
payroll practices, which shall mean no less frequently than monthly. For
purposes of this paragraph, cause is defined as:

 

(i) The commission or omission by Executive of any act, which in
Employer’s sole opinion, is intended to cause, causes, or is reasonably likely
to cause harm to Employer, including harm to its business reputation;

 

(ii) The indictment of Executive for the commission or
perpetration by Executive of any crime involving dishonesty, moral turpitude,
or fraud;

 

(iii) The material breach by Executive of this Agreement;

 

(iv) Violation of Employer policies by Executive;

 

(v) Receipt of any form of notice, written or otherwise, that
any regulatory agency having jurisdiction over Employer intends to institute
any formal or informal regulatory action against Executive or Employer;

 

(vi) Exhibition by Executive of a standard of behavior that is
disruptive to the orderly conduct of the Employer’s Business to a level which,
in the 

 

4

 

Board of Director’s sole opinion, is detrimental to Employer’s best
interest; or

 

(vii) Failure of Executive to devote his full business time and
attention to his employment.

 

E.                                      Without Cause. Employer may terminate
this Agreement without cause upon delivery of a Notice of Termination to
Executive. If Executive is terminated without cause under this provision,
Employer shall pay to Executive severance compensation a lump sum amount equal
to his then current monthly base salary for Twenty-Four (24) months, plus any
bonus earned or accrued through the date of termination, including any amounts
awarded for previous years but which were not yet vested.

 

If when Executive’s employment terminates he is a specified employee
within the meaning of Section 409A of the Internal Revenue Code, and if
the benefits under this Section 4(E) would be considered deferred
compensation under Section 409A, and finally if an exemption from the
six-month delay requirement of Section 409A(a)(2)(B)(i) is not
available, the lump sum amount due under this Section 4(E) shall be
paid to the Executive on the date that is six months and one day following date
of Executive’s termination.

 

F.                                      Resignation. Executive may terminate
this Agreement at any time by delivery of a Notice of Resignation to Employer
with a minimum of 30 days notice. If Executive resigns under this provision,
Employer shall pay Executive any sums due him as base salary and reimbursement
of expenses through the effective date of resignation, and any other amounts
due to Executive pursuant to the Employer’s policies; provided however, that if
Executive fails to give at least 30 days notice, Executive may forfeit
right to payment of accrued and unpaid vacation time. Any such amounts payable
under this Section 4(F) will be paid in accordance with the Employer’s
normal payroll practices, which shall mean no less frequently than monthly.

 

G.            Change of Control. Upon the
occurrence of a Change in Control, and regardless of whether the Executive
remains employed by the Employer or its successor following a Change in
Control, the Executive shall be entitled to the following:

 

(i) within fifteen (15) days, Employer shall pay Executive in cash
in an amount equal to his then current monthly base salary multiplied by 36
plus any bonus earned or accrued through the date of Change in Control (including
any amounts awarded for previous years but which were not yet vested);

 

(ii) For a period of 36 months, payment of premiums for medical
and dental insurance, disability insurance, and life insurance being provided
to Executive prior to the change in control or to other 

 

5

 

similarly situated executives who continue in the employ of Employer.

 

Employer’s obligation hereunder with respect to the benefits stated in
this Section 4G(ii) shall be limited to the extent that Executive’s
employment terminates and he becomes eligible for any such benefits pursuant to
a subsequent employer’s benefit plans, in which case Employer may reduce
the coverage of any benefits it is required to provide Executive so long as the
aggregate coverage and benefits of the combined benefit plans is no less
favorable to Executive than the coverages and benefits required to be provided
hereunder; and

 

(iii) The restrictions on any outstanding incentive awards
(including restricted stock) granted to Executive under Company’s or Bank’s
long-term equity incentive program or other incentive plan or arrangement shall
lapse and such awards shall become 100% vested, all stock options and stock
appreciation rights granted to Executive shall become immediately exercisable
and shall become 100% vested, all performance units granted to Executive shall
become 100% vested.

 

For the purpose of this Section 4(G), all amounts paid to
Executive will be grossed up so as to account for any additional federal and
state income taxes that may be owed as a result of this lump sum payment
rather than periodic payments over 36 months.

 

H.                                    With the
exceptions of the provisions of this Section 4 and the express terms of
any benefit plan under which Executive is a participant, it is agreed that,
upon termination of Executive’s employment for any reason, Employer shall have
no obligation to Executive for, and Executive waives and relinquishes any
further compensation or benefits, except for COBRA benefits. Unless otherwise
stated in this Section 4, the effect of termination on any outstanding
incentive awards, stock options, stock appreciations rights, performance units
or other incentives shall be governed by the terms of the applicable plan. At
the time of Termination of 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 substantially in the form attached hereto as Exhibit A
acknowledging such remaining obligations and discharging both parties, as well
as the Employer’s 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.

 

I.                                         In the event
that Executive’s employment is terminated for any reason, Executive shall
tender his resignation as a director of the Company and the Bank, effective as
of the date of termination.

 

6

 

J.                                        The parties intend
that the severance payments and other compensation provided for herein are
reasonable compensation for Executive’s service to Employer and shall not
constitute “excess parachute payments” within the meaning of Section 280G
of the Internal Revenue Code and any regulations thereunder.

 

In the event that Employer’s independent accountants acting as auditors
for Employer on the date of a Change in Control determine that the payments
provided for herein constitute “excess parachute payments,” then the compensation
payable hereunder shall be increased, on a tax gross-up basis, so as to
reimburse Executive for the tax payable by Executive, pursuant to Section 4999
of the Internal Revenue Code, on such “excess parachute payments,” taking into
account all taxes payable by Executive with respect to such tax gross-up
payments hereunder, so that Executive shall be, after payment of all taxes, in
the same financial position as if no taxes under Section 4999 of the
Internal Revenue Code had been imposed upon him.

 

Section 5 - Ownership of Work Product

 

Employer shall own all work product arising during the course of
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 Employer, its Business or its customers and
that the Executive conceives, develops or delivers to Employer at any time
during his employment, during or outside normal working hours, in or away from
the facilities of Employer, and whether or not requested by 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 Employer, Executive agrees to point out the
pre-existing items to Employer and Executive grants Employer a worldwide,
unrestricted, royalty-free right, including the right to sublicense such items.

 

Section 6 - Protection of Trade Secrets

 

Executive agrees to maintain in strict confidence, and except as
necessary to perform his duties for Employer, the Executive agrees not to
use or disclose any trade secrets of Employer during or after his 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

 

Section 7 – Protection of Other Confidential
Information

 

Executive agrees to maintain in strict confidence and, except as
necessary to perform his duties for Employer, not to use or disclose any
confidential business information of Employer during his employment and for a
period of 24 months following termination of Executive’s employment. “Confidential
business information” shall mean any internal, non-public information
concerning Employer’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, educational
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 Employer under an obligation of confidentiality or secrecy.

 

Section 8 – Return of Materials

 

Executive shall surrender to Employer, promptly upon its request or
upon termination of 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 Executive’s possession or
control, including all copies thereof, relating to Employer, its Business or
its customers. Upon the request of Employer, Executive shall certify in writing
compliance with the foregoing requirement.

 

Section 9 – Restrictive Covenants

 

A.                                   No Solicitation
of Customers. During Executive’s employment with Employer and
for a period of 12 months thereafter, Executive shall not (except of behalf of
or with the prior written consent of Employer) either directly or indirectly,
on Executive’s own behalf or in the service or on behalf of others (i) solicit,
divert, or appropriate to or for a Competing Business, or (ii) attempt to
solicit, divert, or appropriate to or for a Competing Business, any person or
entity that is or was a customer of Employer or any of its affiliates at any
time during the 12 months prior to the date of termination and with whom the
Executive has had material contact. The parties agree that solicitation of such
a customer to acquire stock in a Competing Business during this time period
would be a violation of this Section 9(A). This restriction does not apply
following a Change in Control.

 

B.                                     No Recruitment
of Personnel. During Executive’s employment with Employer and
for a period of 12 months thereafter, Executive shall not, either directly or
indirectly, on Executive’s own behalf or in the service or on behalf of others (i) solicit,
divert or hire away or (ii) attempt to solicit, divert or hire away, to
any Competing Business located in the territory, any employee of or consultant
to Employer or any of its affiliates, regardless of whether Executive or
consultant is full-time or temporary, the employment or engagement is pursuant
to written agreement, or the employment is for 

 

8

 

a determined period or is at-will. For purposes of this Agreement, “territory”
means within a radius of 15 miles from the main office of the Employer or any
branch office of Employer. This restriction does not apply following a Change
in Control.

 

C.                                     Non-Competition
Agreement. During Executive’s employment with Employer and
for a period of 12 months thereafter, Executive shall not (except of behalf of
or with the prior written consent of Employer) compete with Employer or any of
its affiliates by directly or indirectly forming, serving as organizer,
employee, director or officer of, or consultant to, or acquiring or maintaining
more than a 1% passive investment in a depository financial institution or
holding company therefore if such depository institution or holding company has
one or more offices or branches located in the territory. This restriction does
not apply following a Change in Control.

 

D.                                    Independent
Provisions. The provisions in each of the above Sections 9(A),
9(B), and 9(C) are independent, and the unenforceability of any one
provision shall not affect the enforceability of any other provision.

 

Section 10 – Successors: Binding Agreement

 

The rights and obligations of this Agreement shall bind and inure to
the benefit of the surviving corporation in any merger or consolidation in
which Employer is a party, or to any assignee of all or substantially all of
Employer’s Business and properties. Executive’s rights and obligations under
this Agreement may not be assigned by him, except under his 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 representative of his estate.

 

Section 11 – Notice

 

For the purposes of this Agreement, notices and all other
communications provided for in the 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 Employer shall be directed to the attention of the Chief Executive
Officer with a copy to the Secretary of Employer. All notices and
communications shall be deemed to have been received on the date of delivery
thereof.

 

Section 12 – Governing Law

 

This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of South Carolina without giving effect
to the conflict of laws principles thereof. Any action brought by any party to
this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of South Carolina.

 

9

 

Section 13 – Non Waiver

 

Failure of 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.

 

Section 14 – Enforcement

 

Executive aggress that in the event of any breach or threatened breach
by Executive of any covenant contained in Section 9(A), 9(B), or 9(C) hereof,
the resulting injuries to Employer would be difficult or impossible to estimate
accurately, even though irreparable injury or damages would certainly result.
Accordingly, an award of legal damages, if without other relief, would be
inadequate to protect Employer. Executive, therefore, agrees that in the event
of any such breach, Employer shall be entitled to obtain from a court of
competent jurisdiction an injunction to restrain the breach or anticipated
breach of any such covenant, and to obtain any other available legal,
equitable, statutory or contractual relief. Should Employer have cause to seek
such relief, no bond shall be required from Employer and Executive shall pay
all attorney’s fees and court costs which Employer may incur to the extent
Employer prevails in its enforcement action.

 

Section 15 – 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 thereof. 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 or such
provision, and, in its reduced form, such provision shall then be enforceable
and shall be enforced. Executive and Employer hereby agree that this Agreement may be
amended from time to time to modify the terms of Section 9(A), 9(B), or 9(C) the
definition of the term “territory” and the definition of the term “business” to
reflect changes in Employer’s Business and affairs so that the scope of the
limitations placed on Executive’s activities by Section 9 accomplishes the
parties’ intent in relation to the current facts and circumstances.

 

Section 16 – Certain Definitions

 

A.                                   “Affiliate”
shall mean any business entity controlled by, controlling or under common
control with Employer.

 

10

 

B.                                     “Business”
shall mean the operation of a depository financial institution, including,
without limitation, the solicitation and acceptance of deposits of money and
commercial paper, the solicitation and funding of loans and the provision of
other banking services, and any other related business engaged in by Employer
or any of its Affiliates as of the date of termination.

 

C.                                     “Change in
Control” shall mean as defined by Treasury Regulation § 1.409A-3(i)(5).

 

D.                                    “Competing
Business” shall mean any business that, in whole or in part, is the same or
substantially the same as the Business.

 

E.                                      “Disability”
shall mean as defined by Treasury Regulation § 1.409A-3(i)(4).

 

F.                                      “Notice of
Termination” shall mean a written notice of termination from Employer or
Executive which specifies an effective date of termination, indicates the
specific termination provision(s) in this Agreement relied upon, and, in
the case of a termination for Good Reason or for Cause, sets forth in
reasonable detail the facts and circumstances claimed to provide the basis for
termination of Executive’s employment under the provision so indicated.

 

G.                                     “Terminate,” “terminated,”
“termination,” or “Termination” of Employment” shall mean separation from
service as defined by Regulation 1.409A-1(h).

 

Section 17 – Entire Agreement

 

This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, if any, understanding and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.

 

IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
by its Chairman of the Board of Directors and Executive has signed this
Agreement, effective of the date first above written.

 

 

	
  ATTEST:

  	
  ATLANTIC BANCSHARES, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   /s/ Brian J. Smith

  	
   

  
	
   

  	
  Name: Brian J. Smith

  
	
  Name:

  	
   

  	
   

  	
  Title: Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   /s/ Robert P. Trask

  	
   

  
	
   

  	
  Robert P. Trask

  
							

 

11

 

Exhibit A

 

Form of Release of Claims

 

SEVERANCE AGREEMENT AND
RELEASE

 

This Severance Agreement and Release (the “Agreement”)
is made between Robert P. Trask, an individual resident of South
Carolina (“Employee”), and Atlantic Community Bank (the “Bank”).

 

As used in this Agreement, the term “Employee” shall
include the employee’s heirs, executors, administrators, and assigns, and the
term “Bank” shall include the Bank, its holding company, any other related or
affiliated entities, and the current and former officers, directors,
shareholders, employees, and agents of them.

 

On February 8, the Bank and Employee entered
into an Employment Agreement governing the relationship between the parties.
Section 4(H) of the Employment Agreement also provides that Employee
shall be entitled to severance pay if the Employment Agreement is terminated,
on the condition that Employee enter into this release or a substantially
similar release.

 

Employee desires to receive severance pay and the
Bank is willing to provide severance pay on the condition the Employee enter
into this Agreement.

 

Now, in consideration for the mutual promises and
covenants set forth herein, and in full and complete settlement of all matters
between Employee and the Bank, the parties agree as follows:

 

1.                                      Termination
Date:  The Employee
agrees that his employment with the Bank terminates as of                                 
(the “Termination Date”).

 

2.                                      Severance
Payments:  Subsequent to
his Termination Date, the Bank shall pay Employee severance pay as noted in
Paragraph 4 of the Employment Agreement, dated                 ,
(the “Severance Payment”), less applicable deductions and withholdings.

 

3.                                      Legal
Obligations

 

The parties acknowledge that pursuant to Section 4(H) of
the Employment Agreement, they agreed that at the time of termination and as a
condition of payment of severance, they would enter into this release
acknowledging any remaining obligations and discharging each other from any
other claims or obligations arising out of or in connection with Employee’s
employment by the Bank, including the circumstances of such termination. Employee
acknowledges that the Bank has no prior legal obligations to make the payments
described in Section 2 above which are exchanged for the promises of
Employee set forth in this Agreement. It is specifically agreed that the
payments described in Section 2 are valuable and sufficient consideration
for each of the promises of Employee set forth in this Agreement and are
payments in addition to anything of value to which Employee is otherwise
entitled.

 

12

 

4.                                      Waiver
and Release:

 

a)                                      Employee
unconditionally releases and discharges the Bank from any and all causes of
action, suits, damages, claims, proceedings, and demands that the Employee has
ever had, or may now have, against the Bank, whether asserted or unasserted,
whether known or unknown, concerning any matter occurring up to and including
the date of the signing of this Agreement.

 

b)                                     Employee
acknowledges that he is waiving and releasing, to the full extent permitted by
law, all claims against the Bank, including (but not limited to) all claims
arising out of, or related in any way to, his employment with the Bank or the
termination of that employment, including (but not limited to) any and all
breach of contract claims, tort claims, claims of wrongful discharge, claims
for breach of an express or implied employment contract, defamation claims,
claims under Title VII of the Civil Rights Act of 1964 as amended, which
prohibits discrimination in employment based on race, color, national origin,
religion or sex, the Family and Medical Leave Act, which provides for unpaid
leave for family or medical reasons, the Equal Pay Act, which prohibits paying
men and women unequal pay for equal work, the Age Discrimination in Employment
Act of 1967, which prohibits age discrimination in employment, the Americans
with Disabilities Act, which prohibits discrimination based on disability, the
Rehabilitation Act of 1973, the South Carolina Human Affairs Law, any and all
other applicable local, state and federal non-discrimination statutes, the
Employee Retirement Income Security Act, the Fair Labor Standards Act, the
South Carolina Payment of Wages Law and all other statutes relating to
employment, the common law of the State of South Carolina, or any other state,
and any and all claims for attorneys’ fees.

 

c)                                      This Waiver and
Release provision ((a) through (c) of this paragraph) shall be
construed to release all claims to the full extent allowed by law. If any term
of this paragraph shall be declared unenforceable by a court or other tribunal
of competent jurisdiction, it shall not adversely affect the enforceability of
the remainder of this paragraph.

 

d)                                     The Bank
unconditionally releases and discharges Employee from any and all causes of
action, suits, damages, claims, proceedings, and demands that the Bank has ever
had, or may now have, against Employee, whether asserted or unasserted,
whether known or unknown, concerning any matter occurring up to and including
the date of the signing of this Agreement with the exception of any claims for
breach of trust, or any act which constitutes a felony or crime involving
dishonesty, theft, or fraud.

 

5.                                      Restrictive
Covenants and Other Obligations

 

The
parties agree that Section 5 – “Ownership of Work Product,” Section 6
– “Protection of Trade Secret,” Section 7 – “Protection of Confidential
Information,” Section 8 – “Return of Materials,” Section 9 – “Restrictive
Covenants,” Section 14 – “Enforcement,” and Section 15 – “Saving
Clause,” of the Employment Agreement shall remain in full force and effect and
that Employee will perform his obligations under those sections and those
sections of the Employment Agreement are incorporated by reference as if set
forth fully herein. In the event Employee breaches any obligation under this Section 5,
the Bank’s obligation to make severance payments to Employee shall terminate
immediately and the Bank shall have no further obligations to Employee.

 

13

 

6.                                      Duty
of Loyalty/Nondisparagement

 

The parties shall not (except as required by law)
communicate to anyone, whether by word or deed, whether directly or through any
intermediary, and whether expressly or by suggestion or innuendo, any
statement, whether characterized as one of fact or of opinion, that is intended
to cause or that reasonably would be expected to cause any person to whom it is
communicated to have a lowered opinion of the other party.

 

7.                                      Confidentiality
Of The Terms Of This Agreement

 

Employee agrees not to publicize or disclose the contents
of this Agreement, including the amount of the monetary payments, except (i) to
his immediate family; (ii) to his attorney(s), accountant(s), and/or tax
preparer(s); (iii) as may be required by law; or (iv) as
necessary to enforce the terms of this Agreement. Employee further agrees that
he will inform anyone to whom the terms of this Agreement are disclosed of
the confidentiality requirements contained herein. Notwithstanding the
foregoing, the parties agree that where business needs dictate, Employee may disclose
to a third party that he has entered into an agreement with the Bank, which
agreement contains restrictive covenants including noncompetition and
nondisclosure provisions, one or more of which prohibit him from performing the
requested service.

 

Employee recognizes that the disclosure of any
information regarding this Agreement by him, his family, his attorneys, his
accountants or financial advisors, could cause the Bank irreparable injury and
damage, the amount of which would be difficult to determine. In the event the
Bank establishes a violation of this paragraph of the Agreement by Employee,
his attorneys, immediate family, accountants, or financial advisors, or others
to whom Employee disclosed information in violation of the terms of this
Agreement. The Bank shall be entitled to injunctive relief without the need for
posting a bond and shall also be entitled to recover from Employee the amount
of attorneys’ fees and costs incurred by the Bank in enforcing the provisions
of this paragraph.

 

8.                                      Continued
Cooperation

 

Employee agrees that he will cooperate fully with
the Bank in the future regarding any matters in which he was involved during
the course of his employment, and in the defense or prosecution of any claims
or actions now in existence or which may be brought or threatened in the
future against or on behalf of the Bank. Employee’s cooperation in connection
with such matters, actions and claims shall include, without limitation, being
available to meet with the Bank’s officials regarding personnel or commercial
matters in which he was involved; to prepare for any proceeding (including,
without limitation, depositions, consultation, discovery or trial); to provide
affidavits; to assist with any audit, inspection, proceeding or other inquiry;
and to act as a witness in connection with any litigation or other legal
proceeding affecting the Bank. Employee further agrees that should he be
contacted (directly or indirectly) by any person or entity adverse to the Bank,
he shall within 48 hours notify the then-current Chairman of the Board of the
Bank. Employee shall be reimbursed for any reasonable costs and expenses
incurred in connection with providing such cooperation.

 

9.                                      Entire
Agreement; Modification of Agreement

 

Except as otherwise expressly noted herein, this
Agreement constitutes the entire understanding of the parties and supersedes
all prior discussions, understandings, and agreements of every nature between
them relating to the matters addressed herein. Accordingly, no representation,
promise, or inducement not included or incorporated by reference in this
Agreement shall be binding upon the parties. Employee affirms that the only 

 

14

 

consideration
for the signing of this Agreement are the terms set forth above and that no
other promises or assurances of any kind have been made to him by the Bank or
any other entity or person as an inducement for him to sign this Agreement. This
Agreement may not be changed orally, but only by an agreement in writing
signed by the parties or their respective heirs, legal representatives,
successors, and assigns.

 

10.                               Partial
Invalidity

 

The parties agree that the provisions of this
Agreement and any paragraphs, subsections, sentences, or provisions thereof
shall be deemed severable and that the invalidity or unenforceability of any
paragraph, subsection, sentence, or provision shall not affect the validity or
enforceability of the remainder of the Agreement.

 

11.                               Waiver

 

The waiver of the breach of any term or provision of
this Agreement shall not operate as or be construed to be a waiver of any other
subsequent breach of this Agreement.

 

12.                               Successors
and Assigns

 

This Agreement shall inure to and be binding upon
the Bank and Employee, their respective heirs, legal representatives,
successors, and assigns.

 

13.                               Governing
Law

 

This Agreement shall be construed in accordance with
the laws of the state of South Carolina and any applicable federal laws.

 

14.                               Headings

 

The headings or titles of sections and subsections
of this Agreement are for convenience and reference only and do not constitute
a part of this Agreement.

 

15.                               Notice

 

Any notice or communication required or permitted
under this Agreement shall be made in writing and sent by certified mail,
return receipt requested, addressed as follows:

 

If to Employee:

PO Box 2156, Bluffton, SC 29910

 

If to the Bank:

PO Box 3077, Bluffton, SC 29910

 

16.                               Representations:  Employee acknowledges that:

 

a)                                      He has read
this Agreement and understands its meaning and effect.

 

b)                                     He has
knowingly and voluntarily entered into this Agreement of his own free will.

 

c)                                      By signing this
Agreement, Employee has waived, to the full extent permitted by law, all claims
against the Bank based on any actions taken by the Bank up to the date of the 

 

15

 

signing of this Agreement, and the Bank may plead
this Agreement as a complete defense to any claim the Employee may assert.

 

d)                                     He would not
otherwise be entitled to the consideration described in this Agreement, and
that the Bank is providing such consideration in return for Employee’s
agreement to be bound by the terms of this Agreement.

 

e)                                      He has been
advised to consult with an attorney before signing this Agreement.

 

f)                                        He has been
given up to 21 days to consider the terms of this Agreement.

 

g)                                     He has seven
days, after Employee has signed the Agreement and it has been received by the
Bank, to revoke it by notifying the Chairman of the Board of his intent to
revoke acceptance.

 

For such revocation to be effective, the notice of
revocation must be received no later than 5:00 p.m. on the seventh day
after the signed Agreement is received by the Bank. This Agreement shall not
become effective or enforceable until the revocation period has expired.

 

h)                                     He is not
waiving or releasing any rights or claims that may arise after the date
the Employee signs this Agreement.

 

 

As
to Employee:

 

	
   

  	
   

  	
   

  
	
  Date

  	
  Robert P. Trask

  
	
   

  	
   

  
	
   

  	
   

  
	
  As to the Bank:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
  Brian J. Smith, Chairman of the Board

  

 

16

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