Exhibit 10.4


 


UP TO 2,500,000 SHARES


OF


COMMON STOCK


OF


CONGAREE BANCSHARES, INC.


 






 


AGENCY AGREEMENT


 






 


           ,
2006


 


SAMCO
Capital Markets,


  a Division of Penson Financial Services, Inc.


1700
Pacific Avenue, Suite 2000


Dallas,
Texas 75201


 


Ladies
and Gentlemen:


 


                Congaree Bancshares, Inc., a
South Carolina corporation (the “Company”), and Congaree State Bank, a South
Carolina banking association in organization (the “Bank”), proposes, subject to
the terms and conditions stated herein, to engage SAMCO Capital Markets, a Division
of Penson Financial Services, Inc. (the “Agent” or “you”) to assist the Company
in structuring an offering of the Company’s common stock (the “Common Stock”)
and, as agent of the Company, to assist in the sale on a “best efforts” basis
of a minimum of 1,400,000 and up to a maximum of 2,500,000 shares of the Common
Stock, par value $0.01 per share (the “Shares”).


 


1.             The
Offering.  The Company is offering the
Shares, in connection with the Company’s initial public offering (the “Offering”)
and capitalization of the Bank, a de novo,
Federal Deposit Insurance Corporation (“FDIC”) insured South Carolina banking
association.


                The Company has
prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “1933
Act”), with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form SB-2 (File No. 333-131931) under the 1933
Act, including a prospectus, relating to the Shares.  Except where the context otherwise requires, “Registration
Statement,” as used herein, means the registration statement, as amended at the
time of such registration statement’s effectiveness for purposes of
Section 11 of the 1933 Act (the “Effective Time”), including (i) all
documents filed as a part thereof, (ii) any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the 1933 Act and deemed, pursuant to Rule 430A or Rule 430C under the 1933 Act,
to be part of the registration statement at the Effective Time, and
(iii) any registration statement filed to register the offer and sale of
the Shares pursuant to Rule 462(b) under the 1933 Act.


 


 


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                Except where the
context otherwise requires, a “Preliminary Prospectus,” as used herein, means any
preliminary prospectus included in the Registration Statement or filed with the
Commission pursuant to Rule 424(a) under the 1933 Act.


 


                Except where the context otherwise requires, “Prospectus,” as used herein, means the prospectus in the form included in the Registration Statement at the Effective Time or, if Rule 430A under the 1933 Act is relied on, the term “Prospectus” shall also include the final prospectus filed with the Commission pursuant to Rule 424(b) under the 1933 Act.


 


     “Blue Sky Application,” as used herein,
means any instrument or document executed by the Company or the Bank or based
upon written information supplied by the Company or the Bank filed in any state
or jurisdiction to register or qualify any or all of the Shares or to claim an
exemption therefrom or provided to any state or jurisdiction to exempt the
Company as a broker-dealer or officers, directors or employees as broker-dealers
or agents under the securities laws thereof.


 


Any
reference herein to the Registration Statement, any Preliminary Prospectus, or the
Prospectus shall be deemed to refer to and include the documents, if any,
incorporated by reference, or deemed to be incorporated by reference, therein
(the “Incorporated Documents”), including, without limitation, unless the
context otherwise requires, the documents, if any, filed as exhibits to such
Incorporated Documents.  Any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, any Preliminary Prospectus, or the Prospectus shall be
deemed to refer to and include the filing of any document under the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
“Exchange Act”) on or after the Effective Time, or the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and deemed to be incorporated
therein by reference.


 


                The Bank has filed
with the Office of the South Carolina Board of Financial Institutions (“BFI”)
for approval to form a de novo South
Carolina banking association, and with the FDIC for insurance of accounts, and
has filed amendments (as so amended, the “Applications”) thereto as required by
the BFI and the FDIC (the BFI and the FDIC are collectively referred to herein
as the “Regulatory Agencies”).


 


2.             Retention
of Agent; Compensation; Sale and Delivery of the Shares.  Subject to the terms and conditions herein
set forth, the Company and the Bank hereby appoint the Agent as their exclusive
placement agent (i) to utilize its “best efforts” to solicit subscriptions for
Shares and to assist the Company and the Bank with respect to the Company’s
sale of the Shares in the Offering, and (ii) to manage the sale of Shares
through a group of selected broker dealers, if necessary.


                On the basis of
the representations and warranties and subject to the terms and conditions of
this Agreement, the Agent accepts such appointment and agrees to consult with
and assist the Company and the Bank as to matters set forth in the letter
agreement dated January 5, 2006, between the Company and Agent (“Letter
Agreement”), a copy of which is attached hereto as Exhibit A. It is
acknowledged by the Company and the Bank that the Agent shall not be obligated
to purchase any Shares and shall not be obligated to take any action which Agent
deems to be inconsistent with any applicable law, regulation, decision or
order. Subscriptions


 


 


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will be offered as described in the Prospectus.  Except as otherwise provided in this
Agreement, the appointment of the Agent will terminate upon completion of the
Offering.


 


                In the event the
Company is unable to sell a minimum of 1,320,000 Shares within the period
herein provided, this Agreement shall terminate and the Company shall cause the
Escrow Agent (as defined below) to refund to any persons who have subscribed
for any of the Shares the full amount it received from them, plus interest, as
set forth in the Prospectus; and none of the parties to this Agreement shall
have any obligation to the other parties hereunder, except as set forth in this
Section 2 and in Sections 6, and 8 hereof.


 


                In the event the
Offering is terminated and the Closing (as defined below) does not occur, then
in no event shall the Agent receive the fees set forth in subparagraphs (a) and
(b) below. Provided, however, regardless of whether
or not the Closing occurs, the Agent shall be entitled to reimbursement of its reasonable
and accountable out-of-pocket expenses, as set forth in subparagraph (c) below.


 


                If all conditions
precedent to the consummation of the Offering are satisfied, the Company agrees
to issue, or have issued, the Shares sold in the Offering and to release for
delivery certificates for such Shares on the Closing Date (as defined below)
against payment to the Company by any means authorized pursuant hereto; provided, however, that no funds shall be released to the
Company until the conditions specified in Section 7 hereof shall have been
complied with to the reasonable satisfaction of the Agent and its counsel. The
release of Shares against payment therefor shall be made on a date and at a
place mutually acceptable to the Company and the Agent (the “Closing”). Certificates
for Shares shall be delivered directly to the purchasers in accordance with
their directions. The date upon which the Company shall release or deliver the
Shares sold in the Offering, in accordance with the terms herein, is called the
“Closing Date.”  The Agent shall receive
the following compensation for its services hereunder:


 


(a)           The
Company will pay Agent a cash fee equal to $40,000 due upon commencement of the
Offering, which for purpose of this Section 2(a) shall be the date of the
Prospectus (the “Commencement Date”).  On
the 28th day after the Commencement Date and for each four week
period thereafter, the Company will pay Agent a fee equal to $20,000 (due at
the start of each new four week period) for the term of this Agreement; provided that Agent shall have been advised by the NASD that
the NASD has “no objection” to Agent’s compensation under this Agreement.


(b)           A
commission equal to four percent (4%) of the aggregate dollar amount of Shares
sold; provided, however, for purposes of
calculating the commission due to the Agent pursuant to this Section 2(b) shares
sold to current or proposed directors, officers or organizers shall be
excluded; and provided further, that commission
due to the Agent pursuant to this Section 2(b) shall be reduced by the
aggregate amount of fees paid to the Agent pursuant to Section 2(a) above.


(c)           Agent
shall be reimbursed for reasonable expenses as contemplated by Section 6 hereof,
regardless of whether the Offering is successfully completed.  Any management fee, out-of-pocket expenses or
commissions payable hereunder, shall be paid in next day funds on the


 


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earlier of the Closing Date or a determination by the Company to
terminate or abandon the Offering.  


(d)           If
the Company elects to engage Agent as a Sponsoring Dealer, the Company shall
pay Agent an additional fee of $2,500 for the first state in which Agent serves
as Sponsoring Dealer and a fee of $1,000 for each additional state requiring a
Sponsoring Dealer.


(e)           The
Company and the Bank acknowledge and agree that in connection with the Offering,
sale of the Shares or any other services Agent may be deemed to be providing
hereunder, notwithstanding any preexisting relationship, advisory or otherwise,
between the parties or any oral representations or assurances previously or
subsequently made by Agent: (i) no fiduciary or agency relationship exists between
the Company, the Bank or any other person, on the one hand, and Agent, on the
other hand; (ii) Agent is not acting as advisor, expert or otherwise, to the
Company, including, without limitation, with respect to the determination of
the Offering price of the Shares, and such relationship between the Company or
the Bank, on the one hand, and Agent, on the other hand, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations
that Agent may have to the Company or the Bank shall be limited to those duties
and obligations specifically stated herein; and (iv) Agent and its respective
affiliates may have interests that differ from those of the Company or the Bank.
Each of the Company and the Bank hereby waives any claims that the Company and
the Bank may have against Agent with respect to any breach of fiduciary duty in
connection with the Offering.


3.                                       Representations
and Warranties of the Company.


                The Company represents and
warrants to, and agrees with, the Agent that:


 


(a)           The
Company has all such power, authority, authorizations, approvals and orders as
may be required to enter into this Agreement, to carry out the provisions and
conditions hereof and to issue and sell the Shares as provided herein and as
described in the Registration Statement, any Preliminary Prospectuses, and the Prospectus.  The consummation of the Offering, the
execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated have been duly and validly authorized by
all necessary corporate action on the part of the Company and this Agreement
has been validly executed and delivered by the Company and is the valid, legal
and binding agreement of the Company enforceable in accordance with its terms,
except to the extent, if any, that the provisions of Section 8 hereof may be
unenforceable as against public policy, and except to the extent that such
enforceability may be limited by bankruptcy laws, insolvency laws, or other
laws affecting the enforcement of creditors’ rights generally, or the rights of
creditors of financial institutions insured by the FDIC (including the laws
relating to the rights of the contracting parties to equitable remedies).


(b)           The
Registration Statement has heretofore become effective under the 1933 Act; no
stop order of the Commission preventing or suspending the use of any
Preliminary Prospectus or the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been instituted or, to
the knowledge of the Company after due inquiry, are contemplated by the
Commission; the Registration Statement complied when it became effective,
complies as of the date hereof and, as amended or supplemented, at each time a


 


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subscription agreement or funds are submitted by prospective investors
to the Company during the Offering period (each such time referred to as a “time
of delivery”), at the Closing Date and at all times during which a prospectus
is required by the 1933 Act to be delivered (whether physically or through
compliance with Rule 172 under the 1933 Act or any similar rule) in connection
with any sale of Shares, will comply, in all material respects, with the
requirements of the 1933 Act; each Preliminary Prospectus complied, at the time
it was filed with the Commission, and complies as of the date hereof, in all
material respects, with the requirements of the 1933 Act; at no time during the
period that begins on the earlier of the date of such Preliminary Prospectus
and the date such Preliminary Prospectus was filed with the Commission and ends
at the Closing Time (as defined herein) did or will any Preliminary Prospectus,
as then amended or supplemented, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading;
the Prospectus will comply, as of its date, the date that it is filed with the
Commission, each time of delivery, the Closing Date and at all times during
which a prospectus is required by the Act to be delivered (whether physically
or through compliance with Rule 172 under the 1933 Act or any similar rule) in
connection with any sale of Shares, in all material respects, with the
requirements of the 1933 Act (including, without limitation, Section 10(a)
of the 1933 Act); at no time during the period that begins on the earlier of
the date of the Prospectus and the date the Prospectus is filed with the
Commission and ends at the later of the Closing Time and the end of the period
during which a prospectus is required by the 1933 Act to be delivered (whether
physically or through compliance with Rule 172 under the 1933 Act or any
similar rule) in connection with any sale of Shares did or will the Prospectus,
as then amended or supplemented, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that neither the
Company nor the Bank make any representation or warranty with respect to any
statement contained in the Registration Statement, any Preliminary Prospectus, or
the Prospectus in reliance upon and in conformity with information concerning the
Agent and furnished in writing by or on behalf of the Agent to the Company expressly
for use in the Registration Statement, such Preliminary Prospectus, or the
Prospectus, as applicable.


(c)           Prior
to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the
meaning of the 1933 Act) or used any “prospectus” (within the meaning of the 1933
Act) in connection with the offer or sale of the Shares; each of the
Preliminary Prospectuses is a prospectus that, other than by reason of Rule 431
under the 1933 Act, satisfies the requirements of Section 10 of the 1933 Act,
including a price range where required by rule; the Company has not prepared or
used a “free writing prospectus” (as defined in Rule 405 under the 1933 Act) in
connection with the offering and sale of the Shares; the Company is not an “ineligible
issuer” (as defined in Rule 405 under the 1933 Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the 1933 Act with
respect to the offering of the Shares contemplated by the Registration
Statement.


(d)           No
Blue Sky Application includes an untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided, however, that neither the Company nor the Bank
make any representation or warranty with respect to any statement


 


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contained in a Blue Sky Application in reliance upon and in conformity
with information concerning the Agent and furnished in writing by or on behalf
of the Agent to the Company expressly for use in the Blue Sky Application.


(e)           The
Applications were approved on a preliminary basis by the BFI and the FDIC on                     
and                 ,
2006, respectively. At the time of the approval of the Applications by the Regulatory
Agencies and at all times subsequent thereto until the Closing Date, the
Applications will comply as to form in all material respects with all
applicable rules and regulations of the Regulatory Agencies (except as modified
or waived in writing by the applicable Regulatory Agencies).  The information in the Applications is true,
correct and complete in all material respects.


(f)            No
order has been issued by the Commission or any of the Regulatory Agencies (and
hereinafter reference to the FDIC shall include the Bank Insurance Fund (“BIF”)),
or any state regulatory authority, preventing or suspending the use of any
Preliminary Prospectus or the Prospectus and no action by or before any such
government entity to revoke any approval, authorization or order of
effectiveness related to the Offering or any of the Applications is, to the
knowledge of the Company, pending or threatened.


(g)           The
Offering has been duly authorized and approved by the Board of Directors of the
Company, and, following the Closing Date, the Company and the Bank will have
completed all conditions precedent to the Offering specified in the Applications
and approvals from the Regulatory Agencies, and the offer and sale of the
Shares will have been conducted in all material respects in compliance with all
applicable laws, regulations, decisions and orders, including all terms,
conditions, requirements and provisions precedent to the Offering imposed upon
the Company or the Bank by the Regulatory Agencies, the Commission or any
regulatory authority, and in the manner described in the Registration
Statement, the Preliminary Prospectuses, and the Prospectus. At the Closing
Date, to the best knowledge of the Company and the Bank, no person will have
sought to obtain review of the preliminary action of the Regulatory Agencies in
approving the Applications pursuant to any applicable state or federal statute
or regulation.


(h)           The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of State of South Carolina, and has corporate
power and authority to own, lease or operate its properties and to conduct its
business as described in the Registration Statement, the Preliminary
Prospectuses, and the Prospectus, and to enter into and perform its obligations
under this Agreement; subject to receipt of final approvals from the Regulatory
Agencies, the Bank is duly organized and validly existing under South Carolina
law and regulations promulgated by the BFI, with power and authority to own or
lease its properties and conduct its business as described in the Registration
Statement, the Preliminary Prospectuses, and the Prospectus; the Company and
the Bank do not conduct business in any jurisdiction other than the State of South
Carolina.


(i)            Except
for the Bank, the Company does not own equity interests of any other business
entities.


 


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(j)            The
financial statements included in the Registration Statement, any Preliminary
Prospectuses, or the Prospectus, together with the related schedules and notes,
present fairly, in all material respects, the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement of
operations, shareholder’s equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; such financial statements
have been prepared in conformity with generally accepted accounting principles
(“GAAP”) applied on a consistent basis throughout the periods involved.  The supporting schedules, if any, included in
the Registration Statement, any Preliminary Prospectuses, or the Prospectus present
fairly in accordance with GAAP the information required to be stated therein.


(k)           Since
the respective dates as of which information is given in the Registration
Statement, the Preliminary Prospectuses, and the Prospectus, except as
otherwise stated therein, (i) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Bank considered as one enterprise,
whether or not arising in the ordinary course of business (a “Material Adverse
Effect”), (ii) there have been no transactions entered into by the Company
or the Bank, other than those in the ordinary course of business, which are
material with respect to the Company and the Bank considered as one enterprise,
and (iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.


(l)            Each
of the Company and the Bank has good and marketable title to all real property
and good title to all other properties owned by it, in each case free and clear
of all mortgages, pledges, liens, security interests, restrictions, defects or encumbrances
of any kind except such as (i) are described in the Registration Statement, any
Preliminary Prospectus, or the Prospectus, or (ii) do not singly or in the
aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by either the
Company or the Bank; and any real property and buildings held under lease by
either the Company or the Bank are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and propose to be made of such property and
buildings by either the Company or the Bank.


(m)          The
Company has an authorized capitalization as set forth in the Registration
Statement, the Preliminary Prospectuses, and the Prospectus; all of the issued
shares of capital stock of the Company have been duly and validly authorized
and issued, are fully paid and nonassessable and conform to the description of
the capital stock of the Company contained in the Registration Statement, the
Preliminary Prospectuses, and the Prospectus; no holder of securities of the
Company will be subject to personal liability by reason of being such a holder;
there are no preemptive or other similar rights to subscribe for or to purchase
any securities of the Company; except as described in the Registration
Statement, there are no warrants, options or other rights to purchase any securities
of the Company; neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement give rise to
any rights for or relating to the registration of any securities of the Company
with respect to such filing, offering or sale.


(n)           The
Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued
and fully paid and


 


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nonassessable and will conform to the description of the Shares
contained in the Registration Statement, the Preliminary Prospectuses, and the
Prospectus;


(o)           The
issuance and sale of the Shares being issued at the Closing Date by the Company
and the performance of this Agreement and the consummation by the Company of
the other transactions herein contemplated will not conflict with or result in
a breach or violation of any terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or the Bank is a party or by which
any of the property or assets of the Company or the Bank is bound or to which
any of the property or assets of the Company or the Bank is subject, nor will
such action result in any violation of the provisions of the Articles of
Incorporation or Association, as amended, or Bylaws, as amended, of the Company
or the Bank or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or the Bank or
any of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issuance and sale of the Shares or the consummation
by the Company of the transactions contemplated by this Agreement, except such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Act and under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Agent.


(p)           There
is no action, suit, proceeding, inquiry or investigation before or brought by
any court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company or the Bank, threatened, against or affecting
the Company or the Bank, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in this Agreement or the
performance by the Company or the Bank of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the Company
or the Bank is a party or of which any of their respective property or assets
is the subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, is not in the
reasonable judgment of the Company expected to result in a Material Adverse
Effect.


(q)           The
Company and the Bank own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect the
interest of the Company or the Bank therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.


(r)            Elliott
Davis, LLC, which has certified certain financial statements and supporting
schedules of the Company included in the Registration Statement, the
Preliminary Prospectus,


 


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and the Prospectus containing an audit report, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.


(s)           All
employee benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)) established, maintained or
contributed to by the Company or the Bank (except any such plan for which the
principal sponsor or plan administrator is an affiliate other than the Company
or the Bank) comply in all material respects with the requirements of ERISA and
no employee pension benefit plan (as defined in Section 3(2) of ERISA) has
incurred or assumed an “accumulated funding deficiency” within the meaning of
Section 302 of ERISA or has incurred or assumed any material liability (other
than for the payment of premiums) to the Pension Benefit Guaranty Corporation.


(t)            The
Company and the Bank have timely filed all necessary federal, state and foreign
income, franchise and excise tax returns and have paid all taxes shown thereon
as due, and there is no tax deficiency that has been or, to the best knowledge
of the Company, might be asserted against the Company that might have a
material adverse effect on the business, properties, business prospects,
condition (financial or otherwise), earnings or results of operations of the
Company, and all tax liabilities are adequately provided for on the books of
the Company and the Bank.


(u)           The
Company is not in violation of any federal or state law, regulation, or treaty
relating to the storage, handling, transportation, treatment or disposal of
hazardous substances (as defined in 42 U.S.C. Section 9601) or hazardous
materials (as defined by any federal or state law or regulation) or other waste
products, which violation may have a material adverse effect on the financial
condition or business operations or properties of the Company; the Company has
received all permits, licenses or other approvals as may be required of it
under applicable federal and state environmental laws and regulations to
conduct its business as described in the Registration Statement, the
Preliminary Prospectuses, and the Prospectus, and the Company is in compliance
in all material respects with the terms and conditions of any such permit,
license or approval; the Company has not received any notices or claims that it
is a responsible party or a potentially responsible party in connection with
any claim or notice asserted pursuant to 42 U.S.C. Section 9601 et seq. or any
state superfund law; and the disposal of all of the Company’s hazardous
substances, hazardous materials and other waste products has been lawful.


(v)           No
material relationship, direct or indirect, exists between or among the Company
or the Bank, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or the Bank on the other hand, that is
required by the Act, or by the rules and regulations under such Act to be
described in the Registration Statement, the Preliminary Prospectuses, or the
Prospectus, that is not so described.


(w)          Neither
the Company nor the Bank has taken and neither of such entities will take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.


(x)            The
Company holds and is operating in compliance, in all material respects, with
all franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and


 


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orders of any governmental or self-regulatory body required for the
conduct of its business as presently being conducted (“licenses”) and all
licenses are valid and in full force and effect; and the Company is in compliance,
in all material respects, with all laws, regulations, orders and decrees
applicable to it.


(y)           Each
of the Company and the Bank maintains insurance of the types and in the amounts
that are reasonable or required for the business operated by it, all of which
insurance is in full force and effect.


(z)            The
Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.


(aa)         There
is no document or contract of a character required to be described in the Registration
Statement, the Preliminary Prospectuses, or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as required.
All such contracts to which the Company or the Bank is a party constitute valid
and binding agreements of the Company or the Bank and are enforceable against
the Company or the Bank in accordance with the terms thereof, except as may be
limited by bankruptcy, insolvency, fraudulent transfer or other similar laws
affecting the rights and remedies of creditors generally and subject to general
principles of equity, and except to the extent that any such contract contains
provisions for indemnification for liabilities under the Act.


(bb)         The
Company has not distributed, nor will it distribute, prior to the Closing Time,
any prospectus (as defined under the 1933 Act) in connection with the Offering
and sale of the Shares other than the Registration Statement, any Preliminary
Prospectuses, the Prospectus, or other materials, if any, permitted by the 1933
Act, including Rule 134 promulgated thereunder.


4.                                       Delivery and
Payment.


                An
escrow procedure shall be established which shall comply with Commission Rule 15c2-4,
promulgated under the Exchange Act, with The Bankers Bank as escrow agent (the “Escrow
Agent”).


 


                The Company and the Agent shall
transmit all funds received from subscribers to the Escrow Agent by noon of the
next business day following receipt thereof. The Company and the Agent shall jointly
direct the Escrow Agent to make payment for Shares sold hereunder by wire
transfer or certified or bank cashier’s check drawn to the order of the Company
in next day funds.  Such payment is to be
made at the offices of The Bankers Bank, 2410 Paces Ferry Road, 600 Paces
Summit, Atlanta, Georgia  30339-4098, at 10:00
a.m. local time, on the Closing Date. 
The time of such payment, as adjusted by the agreement of the parties,
is referred to herein as the “Closing Time”.  The Company shall direct the Escrow Agent to
deliver payment of the fees due


 


 


10

















 


to
the Agent pursuant to Section 2 hereof (less any portion thereof previously
paid to the Agent) to the Agent by wire transfer or certified or bank cashier’s
check drawn to the order of the Agent in next day funds, to the Agent on the Closing
Date.


 


5.             Covenants of the
Company.  The Company hereby covenants,
and agrees to cause the Bank to covenant upon formation, to the Agent as
follows:


(a)           The
Company has filed the Registration Statement with the Commission.  The Company will not, at any time before or
after the date the Registration Statement is declared effective, file any
amendment or supplement to the Registration Statement without providing the
Agent and its counsel an opportunity to review such amendment or file any
amendment or supplement to which amendment the Agent or its counsel shall
reasonably object.


(b)           The
Company will not prepare or use a “free writing prospectuses” (as defined in
Rule 405 under the 1933 Act) in connection with the offering and sale of the
Shares.


(c)           The
Bank has filed the Applications with the Regulatory Agencies.  The Company has filed, or will file, an
application (the “Holding Company Application”) with the Board of Governors of
the Federal Reserve System (the “Federal Reserve”) to acquire the stock of the
Bank in accordance with the Bank Holding Company Act of 1956, as amended, and
the rules and regulations promulgated thereunder (the “BHCA”).


(d)           The
Company will use its best efforts to cause any post-effective amendment to the
Registration Statement to be declared effective by the Commission and any
amendment to an Application to be approved by the Regulatory Agencies, and will
immediately upon receipt of any information concerning the events listed below
notify the Agent (i) when the Registration Statement, as amended, has become
effective; (ii) when an Application or the Holding Company Application, as
amended, has been approved by a Regulatory Agency or the Federal Reserve; (iii)
of the receipt of any written comments from the Commission or any written
non-confidential communications from the Regulatory Agencies, the Federal
Reserve or any other governmental agency with respect to the Offering or the
transactions contemplated by this Agreement; (iv) of any request by the
Commission, a Regulatory Agency, the Federal Reserve or any other governmental
entity for any amendment or supplement to the Registration Statement; (v) of
the issuance by the Commission, a Regulatory Agency, the Federal Reserve or any
other governmental entity of any order or other action suspending the Offering
or the use of the Registration Statement, the Preliminary Prospectuses, or the
Prospectus, or any other filing of the Company and the Bank under applicable
regulations or other applicable law, or the threat of any such action; (vi) of
the issuance by the Commission, any Regulatory Agency, the Federal Reserve or
any state authority of any stop order suspending the effectiveness of the
Registration Statement or of the initiation or threat of initiation or threat
of any proceedings for that purpose; or (vii) of the occurrence of any event
mentioned in paragraph (g) below.  The
Company will make every reasonable effort to prevent the issuance by the Commission,
any Regulatory Agency, the Federal Reserve or any state authority of any such
order and, if any such order shall at any time be issued, to obtain the lifting
thereof at the earliest possible time.


(e)           The
Company will deliver to the Agent and to its counsel conformed copies of each
of the following documents, with all exhibits: 
(i) the Applications and the Holding


 


11

















 


Company Application, as originally filed and of each amendment or
supplement thereto, and (ii) the Registration Statement, as originally filed
and each amendment thereto.  Further, the
Company will deliver such additional copies of the foregoing documents to
counsel to the Agent as may be required for any NASD filings.  The Company will also deliver to the Agent
such number of copies of the Prospectus, as amended or supplemented, as the
Agent may reasonably request.


(f)            The
Company and the Bank will comply in all material respects with any and all
terms, conditions, requirements and provisions with respect to the Offering and
the transactions contemplated thereby imposed by the Commission, by applicable
state law and regulations, and by the 1933 Act, the Exchange Act and the rules
and regulations of the Commission promulgated under such statutes, to be
complied with prior to or subsequent to the Closing Date; and when the
Prospectus is required to be delivered, the Company and the Bank will comply in
all material respects, at their own expense, with all material requirements
imposed upon them by the Regulatory Agencies, the Federal Reserve, the
Commission, by applicable state law and regulations and by the 1933 Act, the
Exchange Act and the rules and regulations of the Commission promulgated under
such statutes, in each case as from time to time in force, so far as necessary
to permit the continuance of sales or dealing in the Shares during such period
in accordance with the provisions hereof and the Prospectus.


(g)           If
any event relating to or affecting the Company or the Bank shall occur, as a
result of which it is necessary, in the reasonable opinion of counsel for the
Company for the Agent, to amend or supplement the Registration Statement, any
Preliminary Prospectus, or the Prospectus in order to make them not misleading
in light of the circumstances existing at the time of its use, the Company
will, at its expense, forthwith prepare, file with the Commission and the
Regulatory Agencies, and furnish to the Agent, a reasonable number of copies of
an amendment or amendments of, or a supplement or supplements to, the
Registration Statement, any Preliminary Prospectus, or the Prospectus (in form
and substance satisfactory to counsel for the Agent after a reasonable time for
review) which will amend or supplement the Registration Statement, Preliminary
Prospectus, or the Prospectus so that as amended or supplemented it will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time, not misleading.  For the purpose of this subsection, the
Company will furnish such information with respect to itself and the Bank as
the Agent may from time to time reasonably request.


(h)           The
Company will endeavor in good faith, in cooperation with the Agent, to register
or to qualify the Shares for offering and sale under the applicable securities
laws of the jurisdictions in which the Offering will be conducted; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify to do business
in any jurisdiction in which it is not so qualified.


(i)            For
the period of three years from the date of this Agreement, the Company will
furnish to the Agent upon request a copy of (i) each report of the Company mailed
to holders of Shares if such report is not immediately available on the
Commission’s EDGAR website and (ii) from time to time, such other publicly
available information concerning the Company and the Bank as the Agent may
reasonably request.


 


12

















 


(j)            The
Company and the Bank will use the net proceeds from the sale of the Shares in
the manner set forth in the Prospectus under the caption “Use of Proceeds,” and
to file such reports with the Commission with respect to the sale of the Shares
and the application of the proceeds therefrom as may be required by Rule 463
under the 1933 Act.


(k)           Prior
to the Closing Date, the Company will inform the Agent of any event or
circumstances of which it is aware as a result of which (A) the Registration
Statement, any Preliminary Prospectus, or the Prospectus as then supplemented
or amended, would include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading, or (B) the information in the Applications would no longer be true,
correct and complete in all material respects.


(l)            The
Company will distribute the Prospectus or other offering materials in
connection with the offering and sale of the Shares only as set forth in the
Prospectus, and only in accordance with the 1933 Act and the Exchange Act and
the rules and regulations promulgated under such statutes, and the laws of any
state in which the Shares are qualified for sale.


(m)          The
Company will furnish to its shareholders such reports as may be required under
Section 15(d) of the Exchange Act.


(n)           The
Company will timely file such reports pursuant to the Exchange Act as are
necessary in order to make generally available to its security holders as soon
as practicable an earning statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.


(o)           The
Company will maintain appropriate arrangements with the Escrow Agent for
depositing all funds received from persons mailing subscriptions for or orders
to purchase Shares in the Offering as described in the Prospectus until the
Closing Date and satisfaction of all conditions precedent to the release of the
Company’s obligation to refund payments received from persons subscribing for
or ordering Shares in the Offering as described in the Prospectus.


(p)           The
Company and the Bank will conduct their businesses in compliance in all
material respects with all applicable federal and state laws, rules,
regulations, decisions, directives and orders including, all decisions,
directives and orders of the Commission, the BFI, the Federal Reserve and the
FDIC.


(q)           The
Company will not amend the terms of the Offering without notifying the Agent
prior thereto.


(r)            The
Company will not deliver the Shares until the Company and the Bank have
satisfied or caused to be satisfied each condition set forth in Section 7
hereof, unless such condition is waived in writing by the Agent.


6.             Payment of
Expenses.  The Company covenants and
agrees, and agrees to cause the Bank to covenant and agree upon formation with
the Agent that it will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of counsel to the Company and the Bank and
accountants in connection with the registration of the Shares under the Act and
all other expenses


 


13

















 


in connection with the preparation, printing and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and any
amendments or supplements thereto, and the mailing and delivering of copies
thereof to the Agent and dealers; (ii) the cost of printing or reproducing this
agreement, the Blue Sky Survey, any dealer agreements and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(h)
hereof, including the reasonable fees and disbursements of counsel for the
Agent in connection with such qualification and in connection with the Blue Sky
Survey; (iv) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of
the Shares; (v) the cost of preparing stock certificates; (vi) all expenses
related to road shows; (vii) the costs or expenses of any transfer agent or
registrar; (vii) all reasonable out-of-pocket fees and expenses of the Agent, including
the reasonable fees and expenses of counsel for the Agent related to the Offering
and not otherwise specifically provided for in this Section; (viii) the
expenses associated with the use of on-site consultants, which will not exceed
$5,000 per month for the use of one consultant and $8,000 per month for the use
of two consultants; and (ix) all other costs and expenses incident to the
performance of the Agent’s obligations hereunder which are not otherwise
specifically provided for in this Section.


7.             Conditions to
Obligations of the Agent. The obligations of the Agent hereunder and the
occurrence of the Closing of the Offering are subject, in its discretion, to
the condition that all representations and warranties and other statements of
the Company are, at and as of the commencement of the Offering and at and as of
the Closing Date, true and correct in all material respects and the condition
that the Company shall have performed in all material respects all of its obligations
hereunder theretofore to be performed, and the following additional conditions:


(a)           No
Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which the Agent shall have objected in
writing.


(b)           The
Registration Statement and any registration statement required to be filed,
prior to the sale of the Shares, under the Act pursuant to Rule 424(b) shall
have been filed and shall have become effective under the 1933 Act.


(c)           (i) No
stop order with respect to the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings initiated under
Section 8(d) or 8(e) of the 1933 Act; (ii) the Registration Statement
and all amendments thereto shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) none of
the Preliminary Prospectuses or the Prospectus, and no amendment or supplement
thereto, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading.


(d)           Jenkens
& Gilchrist, P.C., counsel for the Agent, shall have furnished to the Agent
such opinion or opinions, dated the Closing Date, with respect to the
incorporation of the Company, the validity of the Shares being issued on the
Closing Date, the Registration Statement, the Prospectus, and other related
matters as the Agent may reasonably request, and


 


14

















 


such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;


(e)           Nelson
Mullins Riley & Scarborough LLP, counsel for the Company, shall have furnished
to the Agent their written opinion, dated as of the Closing Date, in form and substance
satisfactory to the Agent, substantially to the effect set forth in Exhibit B
hereto; in rendering the opinions required by this section, such counsel, with
the consent of Agent’s counsel, may rely, as to matters of fact, upon
certificates and representations of officers of the Company and on certificates
of public officials.


(f)            At
the time of the execution of this Agreement, the Agent shall have received from
Elliott Davis, LLC a letter dated such date, in form and substance satisfactory
to the Agent to the effect that:


(i)            Elliot Davis, LLC are independent certified public
accountants with respect to the Company within the meaning of the 1933 Act and
the applicable published rules and regulations adopted by the Commission and
the PCAOB;


(ii)           In the opinion of Elliot Davis, LLC, the financial
statements audited by Elliot Davis, LLC and included in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the related rules and regulations
adopted by the Commission;


(iii)          For the purposes of providing such letter, Elliot Davis,
LLC has read the fiscal 2005 minutes of meetings of shareholders, the Board of
Directors and any committees of the Board of Directors of the Company, as set
forth in the minute books as of a date within five days of the Effective Time,
officials of the Company advising Elliot Davis, LLC that the minutes of all
such meetings through that date were set forth therein; and


(iv)          Such additional statements relating to the unaudited
quarterly financial statements of the Company subsequent to December 31, 2005
as the Agent may reasonably request.


(g)           The
Company shall have furnished or caused to be furnished to the Agent on the
Closing Date a certificate of officers of the Company, satisfactory to the
Agent as to the accuracy of the representations and warranties of the Company
herein at and as of the Closing Date, as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to the Closing
Date, as to the matters set forth in subsections (a) and (l) of this Section
and as to such other matters as the Agent shall reasonably request.


(h)           The
Company or the Bank shall not have sustained since the date of the latest
audited financial statements included in the Registration Statement and
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth in the Registration Statement and the Prospectus,
and since the respective dates as of which information are given in the
Registration Statement and the


 


15

















 


Prospectus, there shall not have been any material change in the
long-term debt of the Company or the Bank or any material change, or any
development, involving a prospective material change in or affecting the
general affairs of the management, financial position, shareholder’s equity or
results of operations of the Company or the Bank, otherwise than as set forth
or contemplated in the Registration Statement and the Prospectus, the effect of
which, in any such case described above, is in the Agent’s reasonable judgment
sufficiently material and adverse as to make it impracticable or inadvisable to
proceed with the Offering or the delivery of the Shares on the terms and in the
manner contemplated in the Prospectus.


(i)            Prior
to and at the Closing Date:  (i) in the
reasonable opinion of the Agent, there shall have been no material adverse
change in the management, financial condition or in the earnings, capital,
properties or business affairs of the Company or the Bank independently, or of
the Company and the Bank, considered as one enterprise, from that as of the
latest dates as of which such condition is set forth in the Prospectus, except
as referred to therein; (ii) there shall have been no material transaction
entered into by the Company and the Bank, considered as one enterprise, from
the latest date as of which the financial condition of the Company or the Bank
is set forth in the Prospectus other than transactions referred to or
contemplated therein; (iii) the Company or the Bank shall not have received
from the BFI, the Federal Reserve or the FDIC any direction (oral or written)
to make any material change in the method of conducting their business with
which it has not complied in all material respects (which direction, if any,
shall have been disclosed to the Agent) and which would reasonably be expected
to have a material and adverse effect on the management, condition (financial
or otherwise) or on the earnings, capital, properties or business affairs of
the Company or the Bank considered as one enterprise; (iv) neither the Company
nor the Bank shall have been in default (nor shall an event have occurred
which, with notice or lapse of time or both, would constitute a default) under
any provision of any agreement or instrument relating to any material
outstanding indebtedness; (v) no action, suit or proceedings, at law or in
equity or before or by any federal or state commission, board or other
administrative agency, shall be pending or, to the knowledge of the Company or
the Bank, threatened against the Company or the Bank or affecting any of their
properties wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a material and adverse effect on the management, financial
condition or on the earnings, capital, properties or business affairs of the
Company or the Bank, considered as one enterprise; and (vi) the Shares have been
qualified or registered for offering and sale under the securities or blue sky
laws of the jurisdictions as to which the Company and the Agent shall have
agreed.


(j)            At
or prior to the Closing Date, the Agent shall receive (i) a copy of the letters
from the Office of the South Carolina Board of Financial Institutions and the FDIC
granting preliminary approval of the Applications, (ii) a copy of the order
from the Commission declaring the Registration Statement effective, (iii) a
certificate of good standing from the State of South Carolina evidencing the
good standing of the Company and (iv) a copy of the letter from the Federal
Reserve granting preliminary approval of the Holding Company Application.


(k)           Subsequent
to the date hereof, there shall not have occurred any of the following:  (i) a suspension or limitation in trading in
securities generally on the New York Stock Exchange or American Stock Exchange
or in the over-the-counter market, or quotations halted generally on the Nasdaq
Stock Market, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required by either of such
exchanges or the


 


16

















 


NASD or by order of the Commission or any other governmental authority;
(ii) a general moratorium on the operations of commercial banks or other
federally-insured financial institutions or general moratorium on the
withdrawal of deposits from commercial banks or other federally-insured
financial institutions declared by either federal or state authorities; (iii)
the engagement by the United States in hostilities which have resulted in the
declaration, on or after the date hereof, of a national emergency or war; or
(iv) a material decline in the price of equity or debt securities if the effect
of any of (i) through (iv) herein, in the Agent’s reasonable judgment, makes it
impracticable or inadvisable to proceed with the Offering or the delivery of
the Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus.


(l)            The
NASD has confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the terms of this Agreement and Agent’s
compensation hereunder.


8.                                       Indemnification
and Contribution.


(a)           The
Company agrees to indemnify and hold harmless the Agent and its affiliates and
their respective members, partners, directors, officers, employees, agents and
controlling persons (Agent and each such person being an “Indemnified Party”)
from and against any and all loss, claim, damage, judgment, assessment, cost
and other liability (each a “Claim”), joint or several, to which such
Indemnified Party may become subject under any applicable federal or state law,
or otherwise, and related to or arising out of any transaction contemplated by
this letter or the engagement of Agent pursuant to, and the performance by Agent
of the services contemplated by this letter and will reimburse any Indemnified
Party for all reasonable fees and expenses (including reasonable counsel fees
and expenses) as they are incurred in connection with the investigation of,
preparation for, or defense of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such Indemnified Party is a party
and whether or not such claim, action or proceeding is initiated or brought by
or on behalf of the Company.  The Company
will not be liable under the foregoing indemnification and reimbursement
provisions to the extent that any loss, claim, damage, judgment, assessment,
cost or any other liability, or related expense, is found in a final judgment
by a court of competent jurisdiction to have resulted from an Indemnified Party’s
willful misconduct, bad faith or gross negligence or the breach of this
Agreement.  The Company agrees that no
Indemnified Party will have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company or its security holders or
creditors related to or arising out of the engagement of Agent pursuant to, or
the performance by Agent of the services contemplated by, this Agreement except
to the extent that any loss, claim, damage, judgment, assessment, cost or any
other liability, or related expenses, is found in a final judgment by a court
of competent jurisdiction to have resulted from an Indemnified Party’s willful
misconduct, bad faith or gross negligence or the breach of this Agreement.


(b)           If
the indemnification of an Indemnified Party provided for in this Agreement is
for any reason held unenforceable (other than for a reason provided in the
prior paragraph), the Company agrees to contribute to the losses, claims,
damages, judgments, assessments, costs and other liabilities, and related
expenses, for which such indemnification is held unenforceable (i) in such
proportion as is appropriate to reflect the relative benefits to the Company and
its security holders, on the one hand, and Agent, on the other hand, of the
transaction as contemplated (whether or not the transaction is consummated) or
(ii) if (but only if) the allocation provided for


 


17

















 


in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Company on the one
hand, and Agent, on the other hand, as well as any other relevant equitable
considerations; provided, however, that, to the extent permitted by applicable
law, in no event will the Indemnified Parties be required to contribute an
aggregate amount in excess of the aggregate fees actually paid to Agent under
this Agreement.


(c)           The
Company agrees that, without Agent’s prior written consent, which consent will
not be unreasonably withheld, it will not settle, compromise or consent to the
entry of any judgment in any pending or threatened claim, action, or proceeding
in respect of which indemnification could be sought under the indemnification
provisions of this Agreement, whether or not Agent or any other Indemnified Party
is an actual or threatened party to such claim, action, or proceeding, unless
such settlement, compromise or consent includes an unconditional release of
each Indemnified Party from all liability arising out of such claim, action or
proceeding.  The Company shall not be
liable for any settlement of any litigation or proceeding effected without its
consent.


(d)           Upon
receipt by an Indemnified Party of actual notice of a Claim as to which
indemnification may be sought hereunder, such Indemnified Party shall promptly
notify the Company of the nature and basis of the Claim.  In addition, an Indemnified Party shall
promptly notify the Company after any action is commenced against the
Indemnified Party (by way of service with a summons or other legal process) and
shall transmit a copy to the business address of the Company.  The Company may, and shall, if requested by
any Indemnified Party, assume the defense of any Claim against such Indemnified
Party in respect of which indemnity may be sought hereunder, including, without
limitation, the employment of counsel reasonably satisfactory to such
Indemnified Party and the payment of the fees and expenses of such counsel and
necessary experts, in which event the Company shall not be liable for the fees
and expenses of any other counsel retained by such Indemnified Party in
connection with such litigation or proceeding.


(e)           The
reimbursement, indemnity and contribution obligations of the Company under the
preceding paragraphs shall be in addition to any liability that the Company may
otherwise have, and shall be binding upon and inure to the benefit of the
successors, assigns, heirs and personal representatives of any Indemnified
Party.


(f)            In
the event that an Indemnified Party is requested or required to appear as a
witness in any action brought by or on behalf of or against the Company or any
affiliate of the Company in a transaction contemplated by this Agreement in
which such Indemnified Party is not named as a defendant, the Company agrees to
reimburse Agent for all reasonable expenses incurred by it in connection with
such Indemnified Party’s appearing and preparing to appear as such a witness,
including, without limitation, the reasonable fees and disbursements of its
legal counsel.


9.             Representations
and Indemnities to Survive.  All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Bank submitted pursuant hereto,
shall remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation (or any statement as to the results
thereof)


 


18

















 


made by or on behalf of the Agent, or any controlling person of the
Agent, or the Company, or the Bank or any officer or director or controlling
person of the Company or the Bank, and shall survive delivery of and payment
for the Shares.


10.           Termination
and Payment of Expenses.  This Agreement shall become
effective on the date hereof and shall terminate on [•], 2006. This Agreement
may be extended upon the mutual agreement of the Agent and the Company.
However, (i) this Agreement may be terminated at any time, whether at the end
of its term or otherwise, at the option of the Agent or the Company upon ten
(10) days written notice to the other.  If
for any reason any Shares are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Agent for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred by
the Agent in making preparations for the purchase, sale and delivery of the
Shares not so delivered, and shall pay the Fee as defined in Section 2 of this
Agreement, but the Company shall then be under no further liability to the
Agent except as provided in Section 6 and Section 8 hereof.


11.           Notices.  All statements, requests, notices and
agreements hereunder shall be in writing and shall be sufficient in all
respects if delivered or sent by reliable courier, first class mail, or
facsimile transmission to:


	
  Agent:

  	
   

  	
  SAMCO
  Capital Markets, a Division of Penson Financial Services, Inc.

  
	
   

  	
   

  	
  1700
  Pacific Avenue, Suite 2000

  
	
   

  	
   

  	
  Dallas,
  Texas 75201

  
	
   

  	
   

  	
  Attention:
  Corporate Finance Department

  
	
   

  	
   

  	
  Facsimile:
  214-765-1499

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Jenkens
  & Gilchrist

  
	
   

  	
   

  	
  1445
  Ross Avenue, Suite 3700

  
	
   

  	
   

  	
  Dallas,
  Texas 75202

  
	
   

  	
   

  	
  Attention:
  Michael G. Keeley

  
	
   

  	
   

  	
  Facsimile:
  214-855-4300

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
  Congaree
  Bancshares, Inc.

  
	
   

  	
   

  	
  3618
  Sunset Boulevard

  
	
   

  	
   

  	
  West
  Columbia, South Carolina 29169

  
	
   

  	
   

  	
  Attention:
  F. Harvin Ray, Jr., President

  
	
   

  	
   

  	
  Facsimile:
      -    -     

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Nelson
  Mullins Riley & Scarborough LLP

  
	
   

  	
   

  	
  999
  Peachtree Street, N.E., Suite 1400

  
	
   

  	
   

  	
  Atlanta,
  GA 30309

  
	
   

  	
   

  	
  Attention:
  J. Brennan Ryan

  
	
   

  	
   

  	
  Facsimile
  (404) 817-6047

  



 


Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.


 


19

















 


12.           Successors.  This Agreement shall be binding upon, and
inure solely to the benefit of, the Placement Agent and the Company and, to the
extent provided in Sections 8 and 9 hereof; the officers and directors of the
Company and each person who controls the Company, or the Placement Agent, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
agreement. No purchaser of any of the shares from the Placement Agent shall be
deemed a successor or assign by reason merely of such purchase.


13.           Time
of the Essence.  Time shall be of the
essence in this Agreement.


14.           Business
Day.  As used herein, the term “business
day” shall mean any day when the Commission’s office in Washington, D.C. is
open for business.


15.           Applicable
Law.  This Agreement shall be
construed in accordance with the laws of the State of Texas.


16.           Captions.  The captions included in this Agreement are
included solely for convenience of reference and shall not be deemed to be a
part of this Agreement.


17.           Counterparts.  This Agreement may be executed by any one or
more of the parties in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.


18.           Pronouns.
All pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter gender as the context requires.


 


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If
the foregoing is in accordance with your understanding, please sign and return
to us two counterparts hereof, and upon the acceptance hereof by you, this
letter and such acceptance hereof shall constitute a binding agreement between
us.


 


Very
truly yours,


 


Congaree
Bancshares, Inc.


 


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:F.
  Harvin Ray, Jr.

  
	
  Title:
  Chief Executive Officer

  



 


Accepted
as of the date hereof at Dallas, Texas:


 


SAMCO
Capital Markets, a Division of Penson Financial Services, Inc.


 


	
  By:

  	
   

  	
   

  	
   

  
	
  Name:
  Joseph R. Mannes

  
	
  Title:
  Managing Director

  



 


 


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