LOAN AGREEMENT dated as of June 6, 2014 between Southern First Bancshares, Inc. as Borrower and The Brand Banking Company as Lender

                        (b)        Neither the Borrower nor any Subsidiary is under investigation by, or is operating under any restrictions (excluding any restrictions on the payment of dividends referenced in subsection (a) above) imposed by or agreed to with, any Governmental Authority, other than routine examinations by such Governmental Authorities.

            Section 4.14.     Capital Measures.  On the Closing Date, both the Borrower and each Financial Institution Subsidiary have been, or are deemed to have been, notified by the appropriate Governmental Authority having regulatory authority over each of them that each of them is “well capitalized”,  as determined in accordance with any regulations established by such Governmental Authority.

            Section 4.15.     FDIC Insurance. The deposits of each Financial Institution Subsidiary that is an “insured depository institution” (within the meaning of § 12 U. S. C. 1831(c)) are insured by the FDIC and no act has occurred that would adversely affect the status of such Financial Institution Subsidiary as an FDIC insured bank.

                        Section 4.16.     OFAC. Neither the Borrower nor any of its Subsidiaries (a) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (b) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2 or (c) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

                        Section 4.17.     Patriot Act. Each of the Borrower and its Subsidiaries is in compliance, in all material respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (b) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of the Obligations will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

17

ARTICLE V

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that so long as the Lender has a Revolving Commitment hereunder or the principal of and interest on any Revolving Loan or any fee remains unpaid:

            Section 5.1.       Financial Statements and Other Information. The Borrower will deliver to the Lender:

                        (a)        as soon as available and in any event within 120 days after the end of each fiscal year of Borrower, a copy of the annual audited report for such fiscal year for the Borrower and its Subsidiaries, containing (i) a consolidated balance sheet and the related consolidated statements of income, of changes in shareholders' equity and of cash flows (together with all footnotes thereto) and (ii)  a condensed balance sheet of the Borrower only and the related condensed statements of income and of cash flows, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and reported on by independent public accountants acceptable to Lender (without a “going concern” or like qualification, exception or explanation  and without any qualification or exception as to scope of such audit) to the effect that  such financial statements present fairly in all material respects the financial condition and the results of operations and cash flows on a consolidated basis of the Borrower for such fiscal year in accordance with GAAP and that the examination by such accountants in connection with such  financial statements has been made in accordance with generally accepted auditing standards;

                        (b)        as soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, an unaudited balance sheet of the Borrower and its Subsidiaries on a consolidated basis and of the Borrower on a stand alone basis as of the end of such fiscal quarter and the related unaudited statements of income and cash flows of the Borrower and its Subsidiaries on a consolidated basis and of the Borrower on a stand alone basis, each for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of Borrower's previous fiscal year, all certified by the chief financial officer or president of the Borrower as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis and of the Borrower on a stand alone basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes;

                        (c)        concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, a certificate of a Responsible Officer, (i) certifying as to whether there exists a Default or Event of Default on the date of such certificate, and if a Default or an Event of Default then exists, specifying the details thereof and the action which the Borrower has taken or proposes to take with respect thereto, (ii) setting out calculations of unencumbered Liquid Assets, Net Non-core Funding Dependence Ratio and Rate Sensitive Assets to Rate Sensitive Liabilities Ratio for any Financial Institution Subsidiary and (iii) setting forth in reasonable detail calculations demonstrating compliance with Article VI;

                        (d)        concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, duly executed copies of the Borrower’s then current FR Report Y-9C and FR Report Y-9LP and a duly executed copy of the then current Call Report for each Financial Institution Subsidiary;

18

                        (e)        promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be;

                        (f)        promptly following any request therefor, such other information regarding the results of operations, business affairs and  financial condition of the Borrower or any Subsidiary as the Lender may reasonably request; and

                        (g)        Any documents required to be delivered pursuant to this Section 5.1 shall be deemed to have been delivered by the Borrower on the date on which the Borrower files such documents with the Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval System.

                        Section 5.2.       Notices of Material Events.  The Borrower will furnish to the Lender prompt written notice of the following:

(a)        the occurrence of any Default or Event of Default;

                        (b)        the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of the Borrower, affecting the Borrower or any Subsidiary which, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

                        (c)        the occurrence of any ERISA Event that alone, or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $500,000;

(d)        any investigation of the Borrower or any Subsidiary by any Governmental Agency having regulatory authority over the Borrower or any such Subsidiary (other than routine examinations of the Borrower and/or any such Subsidiary);

                        (e)        the issuance of any cease and desist order, written agreement, cancellation of insurance or other public or enforcement action by the FDIC or other Governmental Authority having regulatory authority over the Borrower or any Subsidiary;  

(f)         the issuance of any memorandum of understanding or proposed disciplinary action by or from any Governmental Authority having regulatory authority over the Borrower or any Subsidiary, to the extent that the Borrower or any such Subsidiary is permitted to disclose such information (provided that the Borrower shall take all reasonable efforts to obtain any necessary regulatory consents); and

                        (g)        any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. 

19

                        Each notice delivered under this Section 5.2 shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

            Section 5.3.       Existence; Conduct of Business; Management.  The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business and will continue to engage in the same business as presently conducted or such other businesses that are reasonably related thereto; provided, that nothing in this Section 5.3 shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3. The Borrower will, and will cause each of its Subsidiaries to, retain a chief executive officer, chief financial officer and other senior management team of professionals with such skills and experience as shall be sufficient to manage the respective affairs of the Borrower and its Subsidiaries.

            Section 5.4.       Compliance with Laws, Etc. The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental Authority (including without limitation all federal and state banking statutes and regulations) applicable to its assets, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

            Section 5.5.       Books and Records. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to prepare the consolidated financial statements of Borrower in conformity with GAAP.

            Section 5.6.       Visitation, Inspection, Etc. The Borrower will, and will cause each of its Subsidiaries to, permit any representative of the Lender to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, all at such reasonable times and as often as the Lender may reasonably request after reasonable prior notice to the Borrower.

            Section 5.7.       Maintenance of Properties; Insurance.

            (a)        The Borrower will, and will cause each of its Subsidiaries to, (i) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear except where the failure to do so, either individually or it the aggregate, could not reasonably be expected to result in a Material Adverse Effect and (ii) maintain with financially sound and reputable insurance companies, insurance with respect to its properties and business, and the properties and business of its Subsidiaries, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations.

            (b)        The deposits of each Financial Institution Subsidiary will at all times be insured by the Federal Deposit Insurance Corporation (“FDIC”).

20

            Section 5.8.       Use of Proceeds.  The Borrower may use the proceeds of all Revolving  Loans for the following purposes, including but not limited to, redeeming shares of its Series A preferred stock originally issued under the Troubled Asset Relief Program of the United States Treasury and financing working capital needs (including without limitation acquisitions) and for other general corporate purposes of the Borrower and its Subsidiaries. No part of the proceeds of any Revolving Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulation T, U or X.

            Section 5.9.       Payment of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, pay and discharge at or before maturity, all of its obligations and liabilities (including without limitation all tax liabilities and claims that could result in a statutory Lien) before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

            Section 5.10      Deposit Account. Borrower or its Financial Institution Subsidiary shall maintain a deposit account with Lender of no less than $250,000.00.

ARTICLE VI

FINANCIAL COVENANTS

The Borrower covenants and agrees that so long as the Lender has its Revolving Commitment hereunder or the principal of or interest on or any Revolving Loan remains unpaid or any fee remains unpaid:

            Section 6.1.       Minimum Net Income.  The Borrower on a consolidated basis will have at the end of each fiscal year end Net Income of at least $3,500,000, determined in accordance with GAAP and as disclosed in Borrower’s consolidated financial statements.

            Section 6.2.       Ratio of Minimum Classified Assets to Tier I Capital. The Borrower on a consolidated basis will not permit at the end of each Fiscal Quarter the ratio of Classified Assets to Tier I Capital plus ALLL to exceed 50%.

                        Section 6.3.       Capital Measures.

                        (a)        The Borrower will be  “well-capitalized” for all applicable state and federal regulatory purposes at all times,  and the Borrower (i) will have a Total Risk-based Capital Ratio of 10.0% or greater, a Tier 1 Risk-based Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.00% or greater (each as defined by applicable  federal and state regulations or orders), and will not be subject to any written agreement, order, capital directive or prompt corrective action directive by any Governmental Authority having regulatory authority over the Borrower or (ii) if required by any Governmental Authority having regulatory authority over the Borrower in order to remain “well capitalized” and in compliance with all applicable regulatory requirements, will have such higher amounts of Total Risk-based Capital and Tier 1 Risk-based Capital and/or such greater Leverage Ratio as specified by such Governmental Authority.

21

                        (b)        Each Financial Institution Subsidiary of the Borrower will be “well capitalized” for all applicable state and federal regulatory purposes at all times, and such Financial Institution Subsidiary  (i) will have a Total Risk-based Capital Ratio of 10.0% or greater,  a Tier 1 Risk-based Capital Ratio of 6.0% or greater, and a Leverage Ratio of 5.0% or greater (each as defined by applicable federal and state regulations or orders) and not be subject to any written agreement, order, capital directive or prompt corrective action directive by any Governmental Authority having regulatory authority over such Financial Institution Subsidiary or (ii) if required by any Governmental Authority having regulatory authority over such Financial Institution Subsidiary  in order to remain “well capitalized” and in compliance with all applicable regulatory requirements, will have such higher amounts of Total Risk-based Capital and Tier 1 Risk-based Capital and/or such greater Leverage Ratio as specified by such Governmental Authority.

                        (c)       Notwithstanding the foregoing, if at any time any such Governmental Authority changes the definition of “well capitalized” either by amending such ratios or otherwise, such amended definition, and any such amended or new ratios, shall automatically be incorporated by reference into this Agreement as the minimum standard for the Borrower or any Financial Institution Subsidiary, as the case may be, on and as of the date that any such amendment becomes effective by applicable statute, regulation, order or otherwise.

                        Section 6.4.       Allowance for Loan and Lease Losses to Classified Assets. The Borrower shall cause the Financial Institution Subsidiary on a consolidated basis to maintain at all times an Allowance for Loan and Lease Losses equal to or greater than 125% of Classified Assets if Classified Assets are greater than or equal to 25% of Tier I Capital plus ALLL. If Classified Assets are less than 25% of Tier I Capital plus ALLL then the Financial Institution Subsidiary on a consolidated basis will maintain at all times an ALLL equal to or greater than 115% of Nonperforming Loans. Notwithstanding the foregoing, if at any time any a Governmental Authority changes the requirements for ALLL either by amending such definitions or otherwise, the ratios set out herein shall be adjusted as appropriate to take into account such amended definition.

            Section 6.5.       Minimum Liquidity.  The Borrower shall maintain at all times Liquid Assets having an aggregate market value equal or greater than  the sum of (a) scheduled debt service for the Financial Institution Subsidiary for the succeeding four Fiscal Quarters  and (b)  operating expenses of the Financial Institution Subsidiary for the succeeding two Fiscal Quarters.

ARTICLE  VII

NEGATIVE COVENANTS

The Borrower covenants and agrees that so long as the Lender has its Revolving Commitment hereunder or the principal of or interest on any Revolving Loan remains unpaid or any fee remains unpaid:

            Section 7.1.       Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:

                        (a)        Indebtedness created pursuant to the Loan Documents;

                        (b)        Indebtedness existing on the date hereof and set forth on Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof;

22

            (c)        Indebtedness of any Financial Institution Subsidiary (i) to the Federal Reserve Board or to the Federal Home Loan Bank Board or (ii) constituting federal funds purchased and securities sold under agreements to repurchase incurred in the ordinary course of business or (iii) otherwise incurred in the ordinary course of its banking business;

            (d)        Indebtedness constituting obligations of the Borrower and any Financial Institution Subsidiary under debentures, indentures, trust agreements and guarantees in connection with the issuance by such Persons of trust preferred securities;

(e)        Indebtedness owed by (i) the Borrower or any “affiliate” of the Borrower (as defined in Regulation W of the Board of Governors of the Federal Reserve System and sections 23A and 23B of the Federal Reserve Act) to any Financial Institution Subsidiary not in violation of Regulation W of the Board of Governors of the Federal Reserve System (as amended, supplemented or otherwise modified), or (ii) any Subsidiary to the Borrower or (iii) the Borrower or any Subsidiary to a Subsidiary other than a Financial Institution Subsidiary;

                        (f)        any other Indebtedness that is subordinated to the Indebtedness under this Agreement on the following terms: (i) no part of the principal of such Indebtedness is stated to be payable or is required to be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to the Commitment Termination Date and the payment of principal of which and any other obligations of the Borrower with respect thereof (other than interest subject to clause (f)(ii)) are subordinated to the prior payment in full of principal and interest (including post-petition interest)  and all other obligations and amounts of the Borrower to the Lender hereunder on terms and conditions first approved in writing by the Lender, (ii) no part of the interest accruing on such Indebtedness is payable, without the prior written consent of the Lender, after a Default or Event of Default has occurred and is continuing, and (iii) such Indebtedness otherwise contains terms, covenants and conditions in form and substance reasonably satisfactory to the Lender as evidenced by its prior written approval thereof; and

                        (g)        Indebtedness consisting of Hedging Agreements entered into by (i) the Borrower in the ordinary course of business to hedge or mitigate risks in connection with interest rate fluctuations on its Indebtedness and (ii) any Financial Institution Subsidiary in the ordinary course of its business.

            Section 7.2.       Negative Pledge.  The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired (including without limitation in the case of the Borrower, the capital stock of any Financial Institution Subsidiary), except:

                        (a)        Liens (if any) created in favor of the Lender pursuant to the Loan Documents;

(b)        Permitted Encumbrances;

(c)        Liens granted to secure any Indebtedness incurred pursuant to Section 7.1(c) ( as long as in the case of Section 7.1(c)(ii), such Lien shall only extend to those securities sold) and Section 7.1(e); and

                        (d)        extensions, renewals, or replacements of any Lien referred to in paragraphs (a), (b) and (c) of this Section 7.2.

23

                        Section 7.3.       Fundamental Changes.

                         (a)       The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (other than in the ordinary course of business) or all or substantially all of the stock of any of its Subsidiaries or liquidate or dissolve; provided, that if at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing (as shown by evidence of pro forma covenant compliance provided by Borrower and approved by Lender), (i) the Borrower or any Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the Borrower is not a party to such merger) is the surviving Person, and (ii) any Subsidiary may sell, lease, transfer or dispose of its assets to the Borrower, provided, that any Financial Institution Subsidiary may sell loans, investments or other assets in the ordinary course of its business.

            (b)        The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related thereto and any types of businesses that are expressly permitted by any Governmental Authority having jurisdiction over the Borrower and/or any Financial Institutions Subsidiary.

                        Section 7.4.       Restricted Payments. Upon the occurrence and during the continuation of any Default or Event of Default, and so long as such action would not cause a Default or Event of Default, the Borrower will not, and will not permit its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any dividend on any class of its stock, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any shares of common stock or Indebtedness subordinated to the Obligations of the Borrower or any options, warrants, or other rights to purchase such common stock or such Indebtedness, whether now or hereafter outstanding; provided, that any Subsidiary may pay dividends to the Borrower at any time.

                        Section 7.5.       Restrictive Agreements.  The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its common stock, to make or repay loans or advances to the Borrower or any other Subsidiary, to guarantee Indebtedness of the Borrower or any other Subsidiary or to transfer any of its property or assets to the Borrower or any Subsidiary of the Borrower; provided, that (i) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or any other Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, and (iii) clause (a) shall not apply to customary provisions in leases restricting the assignment thereof. 

24

            Section 7.6.       Investments, Etc.  The Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Subsidiary prior to such merger), any common stock, Indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person (all of the foregoing being collectively called “Investments”), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, except:

                        (a)        Investments existing on the date hereof (including Investments in Subsidiaries) that have been disclosed to the Lender and/or that are set forth on the most current financial statements that have been delivered to the Lender;

(b)        Investments purchased in the ordinary course of business by any Financial Institution Subsidiary;

                        (c)        Investments made by the Borrower in or to any Subsidiary and by any Subsidiary in or to the Borrower or in or to another Subsidiary;

                        (d)        Investments made for the purpose of making or consummating an Acquisition. provided, that (i)  after giving effect to such Acquisition, no Default or Event of Default shall have occurred and be continuing, (ii) such Acquisitions are undertaken in accordance with all applicable laws, and (iii) the prior written consent or approval of such Acquisition of the board of directors or equivalent governing body  of the Person being acquired. Upon the Borrower or any Subsidiary’s Investment of fifty percent or more of the voting stock any Person that is a regulated financial institution, such Person shall become a Financial Institution Subsidiary for purposes of this Agreement; and

(e)        Other Investments permitted by applicable laws and regulations.

Section 7.7.       Sale and Leaseback Transactions.  The Borrower will not, and will not permit any of the Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.

ARTICLE VIII

EVENTS OF DEFAULT

Section 8.1.       Events of Default.  If any of the following events (each an “Event of Default”) shall occur:

                        (a)        the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment or otherwise; or

                        (b)        the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount payable under clause (a) of this Section 8.1) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) days; or

25

            (c)        any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document (including the Schedules attached thereto) and any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to the Lender by the Borrower  or any representative of the Borrower  pursuant to or in connection with this Agreement shall prove to be incorrect in any material respect when made or deemed made or submitted; or

            (d)        the Borrower shall fail to observe or perform any covenant or agreement contained in Section 5.2, Section 5.3 (with respect to the Borrower’s existence), Section 5.10 or Articles VI or VII; or

            (e)        the Borrower shall fail to observe or perform any covenant or agreement contained (i) in this Agreement (other than those referred to in clauses (a), (b) and (d) above), and such failure shall remain unremedied for ninety (90) days after the earlier of (x) any officer of the Borrower becomes aware of such failure, or (y)  notice thereof shall have been given to the Borrower by the Lender or any Lender or (ii) in any other Loan Document (after taking into consideration any applicable grace periods); or

            (f)        the Borrower or any Subsidiary (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of or premium or interest on any Indebtedness owed to the Bank (including without limitation any Hedging Agreement or any letter of credit) in any amount or any other Indebtedness owed to any other Person greater than $500,000 that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness (without regard to whether such holders or other Person shall have exercised or waived their right to do so); or any such Indebtedness shall be declared to be due and payable; or required to be prepaid or redeemed (other  than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or

            (g)        the Borrower or any Subsidiary shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect  or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of , or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of this Section 8.1(g), (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any such Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting  any of the foregoing; or

26

                        (h)        an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any  Subsidiary or its debts, or any substantial part of its assets,  under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect  or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and in any such case, such  proceeding or petition shall remain undismissed for a period of 60 days or an order or decree approving or ordering any of the foregoing shall be entered; or

                        (i)         the Borrower or any Subsidiary shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or

                        (j)         an ERISA Event shall have occurred that, in the opinion of the Lender, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to the Borrower and the Subsidiaries in an aggregate amount exceeding $1,000,000; or

                        (k)        any uninsured judgment or order for the payment of money in excess of $1,000,000 in the aggregate shall be rendered against the Borrower or any Subsidiary, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

                        (l)         any non-monetary judgment or order shall be rendered against the Borrower or any Subsidiary that could reasonably be expected to have a Material Adverse Effect, and there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

                        (m)        a Change in Control shall occur or exist; or

(n)         any Governmental Authority having regulatory authority over the Borrower or any Subsidiary shall impose any restriction upon the payment of dividends from any such Subsidiary to the Borrower or in any other way impose any restriction that limits or restricts Borrower or any of its Subsidiaries from engaging in normal business activities; or

(o)          any Financial Institution Subsidiary shall cease for any reason to be an insured bank under the Federal Deposit Insurance Act, as amended; or

(p)          the FDIC or any other federal or state regulatory authority shall issue a cease and desist order or take other action of a disciplinary or remedial nature against the Borrower or any Financial Institution Subsidiary and such order or other action could reasonably be expected to have a Material Adverse Effect or there shall occur with respect to any Financial Institution Subsidiary any event that is grounds for the required submission of a capital restoration plan under 12 U.S.C. §1831o (e)(2) and the regulations thereunder;

27

then, and in every such event (other than an event with respect to the Borrower or any Subsidiary described in clause (g) or (h) of this Section 8.1) and at any time thereafter during the continuance of such event, the Lender may, by notice to the Borrower, take any or all of the following actions, at the same or different times:  (i) terminate its Revolving Commitment; (ii) declare the principal of and any accrued interest on the Revolving Loans, and all other Obligations owing hereunder, to be, whereupon the same shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and (iii) exercise all remedies contained in any other Loan Document; and  that, if an Event of Default specified in either clause (g) or (h)  shall occur, the Revolving Commitment  shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon, and  all fees, and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE IX

MISCELLANEOUS

            Section 9.1.       Notices.

            (a)        Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service (with confirmation), mailed by certified or registered mail (return receipt requested) or sent by telecopy or email (with confirmation), as follows:

To the Borrower:                        Southern First Bancshares, Inc.

                                                ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇

                                                ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

                                                Attn: ▇▇▇▇ ▇▇▇▇▇▇▇

                                                Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇

                                                Telecopy Number:  (▇▇▇) ▇▇▇-▇▇▇▇

                                                Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

                        To the Lender:                           The Brand Banking Company

                                                                        ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇

                                                                        ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

                                                                        Attn: ▇▇▇▇▇ ▇▇▇▇▇▇

                                                                        Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇

                                                                        Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇

                                                                        Email: ▇▇▇▇▇ ▇▇▇▇▇▇ <▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇>

                  Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All such notices and other communications shall, when transmitted by overnight delivery, or faxed, be effective when delivered for overnight (next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed, upon the third Business Day after the date deposited into the mails or if delivered, upon delivery; provided, that notices delivered to the Lender shall not be effective until actually received by the Lender at its address specified in this Section 9.1.

                        (b)        Any agreement of the Lender herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Borrower.  The Lender shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Lender shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Lender in reliance upon such telephonic or facsimile notice.  The obligation of the Borrower to repay the Revolving Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Lender to receive written confirmation of any telephonic or facsimile notice or the receipt by the Lender of a confirmation which is at variance with the terms understood by the Lender to be contained in any such telephonic or facsimile notice.

28

                        Section 9.2.       Waiver; Amendments.

                        (a)        No failure or delay by the Lender in exercising any right or power hereunder or any other Loan Document, and no course of dealing between the Borrower and the Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power or any abandonment or  discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder.  The rights and remedies of the Lender hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 9.2, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Revolving Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Lender may have had notice or knowledge of such Default or Event of Default at the time.

                        (b)        No amendment or waiver of any provision of this Agreement or the other Loan Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Borrower and the Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

            Section 9.3.       Expenses; Indemnification.

                        (a)        The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of the Lender (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) in connection with the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated) provided however that Lender will use its best efforts to limit such fees and expenses relating to preparation and administration of the Loan Documents to no more than $10,000, and (ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) incurred by the Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section 9.3, or in connection with the Revolving Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Revolving Loans.

29

                         (b)       The Borrower shall indemnify the Lender and each Affiliate of the Lender, and each officer, director, employee, agents and advisors of the Lender and each Affiliate of the Lender (each, an “Indemnitee”) against, and hold each of them harmless from, any and all costs, losses, liabilities, claims, damages and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, which may be incurred by any Indemnitee,  or asserted against any Indemnitee by the Borrower or any third Person, arising out of, in connection with or as a result of (i) the execution or delivery of any this Agreement or any other agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation  of any of the transactions contemplated hereby, (ii) any Revolving Loan or any actual or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned by the Borrower  or any Subsidiary or any Environmental Liability  related in any way to the Borrower or any Subsidiary or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether brought by the Borrower or any third Person and whether based on contract, tort, or any other theory  of law and regardless of whether any Indemnitee is a party thereto; provided,  that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined  by a court of competent jurisdiction in a final and nonappealable ▇▇▇▇▇▇▇▇.▇▇ have resulted from the  gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

                         (c)       The Borrower shall pay, and hold the Lender harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and save the Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.

                        (d)        To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or the use of proceeds thereof.

                        (e)        All amounts due under this Section 9.3 shall be payable promptly after written demand therefor.

            Section 9.4.       Successors and Assigns.

(a)        The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).

(b)        The Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents (including all or a portion of its Revolving Commitment and the Revolving Loans at the time owing to it); provided, that the Borrower must give its prior written consent (which consent shall not be unreasonably withheld or delayed) to any assignment, except an assignment to an Affiliate of the Lender or during the occurrence and continuation of a Default or an Event of Default. Upon the execution and delivery of an assignment agreement by the Lender and such assignee and payment by such assignee of an amount equal to the purchase price agreed between the Lender and such assignee, such assignee shall become a party to this Agreement and the other Loan Documents and shall have the rights and obligations of a Lender under this Agreement, and the Lender shall be released from its obligations hereunder to a corresponding extent.  Upon the consummation of any such assignment hereunder, the Lender, the assignee and the Borrower shall make appropriate arrangements to have new Revolving Credit Notes issued to reflect such assignment. 

30

(c)        The Lender may at any time, without the consent of the Borrower, sell participations to one or more banks or other entities (each, a “Participant”) in all or a portion of the Lender's rights and obligations under this Agreement; provided, that (i) the Lender's obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the performance of its obligations hereunder, and (iii) the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender's rights and obligations under this Agreement and the other Loan Documents. Any agreement between the Lender and the Participant with respect to such participation shall provide that the Lender shall retain the sole right and responsibility to enforce this Agreement and the other Loan Documents and the right to approve any amendment, modification or waiver of this Agreement and the other Loan Documents.

 (d)       The Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement and the Note to secure its obligations to a Federal Reserve Bank without complying with this Section 9.4; provided, that no such pledge or assignment shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

            Section 9.5.       Governing Law; Jurisdiction; Consent to Service of Process.

                        (a)        This Agreement and the other Loan Documents shall be construed in accordance with and be governed by the law (without giving effect to the conflict of law principles thereof) of the State of Georgia.

                        (b)        The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of any Federal and/or state court (including without limitation the Business Case Division of the ▇▇▇▇▇▇ County Superior Court, if applicable)  located in the State of Georgia and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Georgia state court or, to the extent permitted by applicable law, such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

                        (c)        The Borrower irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of  this Section 9.5 and brought in any court referred to in paragraph (b) of this Section 9.5. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

                        (d)        Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 9.1.  Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.

31

                        Section 9.6.       Right of Setoff.  In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, the Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of the Borrower at any time held or other obligations at any time owing by the Lender to or for the credit or the account of the Borrower against any and all Obligations held by the Lender, irrespective of whether the Lender shall have made demand hereunder and although such Obligations may be unmatured.  The Lender agrees promptly to notify the Borrower after any such set-off and any application made by the Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application.

            Section 9.7.       Counterparts; Integration. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement, the other Loan Documents, and any separate letter agreement(s) relating to any fees payable to the Lender constitute the entire agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters.

            Section 9.8.       Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making  of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Loan Commitment has not expired or terminated.  The provisions of Section 2.10 and Section 9.3 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Loan Commitment or the termination of this Agreement or any provision hereof.  All representations and warranties made herein, in the certificates, reports, notices, and other documents delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the other Loan Documents, and the making of the Loans.

            Section 9.9.       Severability.  Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

32

                        Section 9.10.     Patriot Act.   The Lender hereby notifies the Borrower  that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender  to identify the Borrower in accordance with the Patriot Act.  The Borrower shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the Patriot Act.

                        Section 9.11.     WAIVER OF JURY TRIAL.

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

[Remainder of Page Intentionally Blank]

33

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed under seal in the case of the Borrower by their respective authorized officers as of the day and year first above written.

                                                                                                                            SOUTHERN FIRST BANCSHARES, INC.

                                                                                                                            By___________________________

                                                                     Name:

                                                                     Title:

                                                                    [SEAL]

                                                                                                                            THE BRAND BANKING COMPANY

                                                                                                                             By___________________________________

                                                                                                                                    Name:

                                                                                                                                    Title:  

34