Sales Agency Agreement

BANC STOCK FINANCIAL SERVICES, INC. LETTERHEAD]
A Subsidiary of the Bank Stock Group


August 28, 1998


Mr. J. Aubrey Crosland President and Chief Executive Officer First Capital Bancshares, Inc. (Proposed) 830 Highway 38 South Bennettsville, South Carolina 29512


Re: Letter of Intent


Dear Mr. Crosland:


The following is to set forth the proposal of BSFS Financial Services, Inc. the proposed offering of common stock ("The Offering") ("BSFS" or "Sales Agent") to serve as the broker-dealer for First Capital Bancshares, Inc. (Proposed) ("Company"). This letter agreement ("Agreement") hereby confirms the interest of BSFS, a subsidiary of The Banc Stock Group, Inc., to serve as the Company's exclusive underwriter/stock marketing agent in connection with the Offering, which is contemplated to be a minimum offering of $5,000,000 million and a maximum of $7,200,000 with a per share price of $10.00 per share. It is understood that directors and executive officers of the Company contemplate purchasing shares of the Company's common stock and that they may purchase all or a portion of these shares prior to commencement of the Offering (at $10.00 per share), and that the amount of the Offering will be reduced by this amount. For purposes of this Agreement, it is understood that employees of BSFS will be actively involved in the Offering and that references to the Sales Agent shall include employees and agents of BSFS. This Agreement sets forth selected terms of our engagement.


1. OFFERING SERVICES. BSFS will act as lead manager in the Offering to be conducted on a best efforts basis. BSFS may form a syndicate of selected broker-dealers to assist in the sale of the common stock. The decision to utilize selected broker-dealers will be made by BSFS upon consultation with the Company.


As the Company's sales/stock marketing agent, BSFS will provide the Company with a comprehensive program of services designed to promote an orderly, efficient and cost-effective distribution. BSFS will provide financial and logistical advice to the Company concerning the Offering and related issues.


2. PREPARATION OF OFFERING DOCUMENTS. The Company and its counsel will draft the Registration Statement and other materials to be used in connection with the Offering. BSFS and its counsel will review these documents and assist your counsel with their preparation. The 2


First Capital Bancshares, Inc. (Proposed) December 21, 1998 Page 2


Registration Statement will be in a form reasonably satisfactory to each of us and our respective counsel.


3. DUE DILIGENCE REVIEW. Prior to the filing of the Form SB-2 Registration Statement ("Registration Statement") or any other documents naming BSFS as the Company's underwriter/stock marketing agent, BSFS and its representatives will undertake substantial investigations to learn about the Company's proposed business and operations ("due diligence review") in order to confirm information provided to us and to evaluate information to be contained in the Company's Registration Statement. The Company agrees that it will make available to BSFS all relevant information, whether or not publicly available, which the BSFS reasonably requests. The Company acknowledges that BSFS will rely upon the accuracy and completeness of all information received from the Company or its officers, directors, employees, agents and representatives, accountants and counsel.


BSFS shall furnish, as soon as practicable, to the Company such information regarding BSFS as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance with state and federal securities laws.


4. REGULATORY FILINGS. Upon satisfactory completion of BSFS's due diligence review, the Company will cause a Registration Statement with respect to the Offering to be filed with the Securities and Exchange Commission ("SEC") and such state securities commissioners as may be determined by BSFS and reasonably acceptable to the Company. No filings naming BSFS will be made without the prior consent of BSFS.


5. AGENCY OR UNDERWRITING AGREEMENT. The specific terms of the Offering and any broker-assisted sales services contemplated in this Agreement shall be set forth in a Sales Agency Agreement ("Agency Agreement") between BSFS and the Company to be executed prior to commencement of the Offering. Sales of common stock in the Offering will be contingent upon, among other things, the absence of material adverse developments prior to completion of the Offering. The Agency Agreement and any Selected Dealer Agreement shall be prepared by counsel for BSFS, and such counsel shall make all required filings with the National Association of Securities Dealers, Inc. The Company and its offers and directors will agree not to offer, sell, contract to sell or grant any option to purchase or otherwise dispose of any common stock for at least 180 days after the Offering without first obtaining the Sales Agent's written consent except that the Company may adopt a stock option plan and issue options.


6. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Agency Agreement will provide for customary representations, warranties and covenants by the Company, including, without limitation, with respect to indemnification and contribution by the Company. This will be consistent 3


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with the indemnification set forth in paragraph 9 herein.


7. FEES. For the services hereunder, the Company shall pay the following fees to BSFS at closing, unless stated otherwise:


(a) 2.5% of the purchase price of the stock sold to
proposed officers, directors and employees of the
Company in the offering and 0% of the price of
shares sold prior to the offering;


(b) 6.5% of the purchase price of the stock sold to
certain individuals and entities designated by the
board of directors, not to exceed $2,000,000/200,000
shares; and


(c) 7% of the purchase price of the securities sold to
persons other than those persons qualifying as
purchasers in Section 7(a) and 7(b) above. In the
event that a syndicate of selected broker-dealers is
used to assist in the Offering, BSFS will pass onto
such selected broker-dealers who assist in the
Offering an amount competitive with gross
underwriting discounts charged at such time for
comparable stock sold at a comparable price per
share in a similar market environment. Fees with
respect to purchases effected through selected
broker-dealers other than BSFS shall be transmitted
by BSFS to such selected broker-dealer. The decision
to utilize selected broker-dealers will be made by
BSFS upon consultation with the Company.


8. EXPENS ...