AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

         THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered into as of April 6, 2005, by and between Coastal Banking Company, Inc. ("Coastal"), a corporation organized and existing under the laws of the State of South Carolina, with its principal office located in Beaufort, South Carolina, and First Capital Bank Holding Corporation ("First Capital"), a corporation organized and existing under the laws of the State of Florida, with its principal office located in Fernandina Beach, Florida.

Preamble

        The Boards of Directors of First Capital and Coastal are of the opinion that the transaction described herein is in the best interest of the parties and their respective shareholders. This Agreement provides for the merger of First Capital with and into Coastal (the "Merger"). At the effective time of the Merger, the outstanding shares of the capital stock of First Capital shall be converted into the right to receive shares of the common stock of Coastal (except as provided herein). As a result, shareholders of First Capital shall become shareholders of Coastal. The transaction described in this Agreement is subject to the approvals of the shareholders of First Capital, the shareholders of Coastal, the Board of Governors of the Federal Reserve System, and the satisfaction of certain other conditions described in this Agreement. It is the intention of the parties to this Agreement that the Merger for federal income tax purposes shall qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986.

        Immediately following the Closing of the Merger, Lowcountry National Bank, a national banking association and wholly owned subsidiary of Coastal ("Lowcountry") will remain in existence under its Articles of Incorporation and Bylaws as in effect immediately prior to the Effective Time as a wholly owned subsidiary of Coastal. First National Bank of Nassau County, a national banking association and wholly owned subsidiary of First Capital ("First National"), will remain in existence under its Articles of Incorporation and Bylaws as in effect immediately prior to the Effective Time as a wholly owned subsidiary of Coastal.

        Certain terms used in this Agreement are defined in Section 11.1 of this Agreement.

         NOW, THEREFORE , in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein, the parties, intending to be legally bound, agree as follows:

ARTICLE I
TRANSACTION AND TERMS OF MERGER

        1.1     Merger.     Subject to the terms and conditions of this Agreement, at the Effective Time, First Capital shall be merged with and into Coastal in accordance with the provisions of Section 33-11-101 of the South Carolina Business Corporation Act of 1988 and Section 607.1101 of the Florida Business Corporation Act. Coastal shall be the Surviving Corporation resulting from the Merger and the separate existence of First Capital shall cease. The Merger shall be consummated pursuant to the terms of this Agreement, which has been approved and adopted by the respective Boards of Directors of First Capital and Coastal.

        1.2     Time and Place of Closing.     The Closing will take place at 9:30 a.m. on the date that the Effective Time occurs (or the immediately preceding day if the Effective Time is earlier than 9:30 a.m.), or at such other time as the Parties, acting through their chief executive officers, may mutually agree. The place of Closing shall be at the offices of Nelson Mullins Riley & Scarborough LLP, Atlanta, Georgia, or such other place as may be mutually agreed upon by the Parties.

        1.3     Effective Time.     The Merger contemplated by this Agreement shall become effective on the date (the "Effective Date") and at the time that the Articles of Merger are filed with the Department

of State of Florida and the Secretary of State of South Carolina. Subject to the terms and conditions hereof, unless otherwise mutually agreed upon in writing by the chief executive officers of each Party, the Parties shall use their reasonable efforts to cause the Effective Time to occur on the last business day of the month in which occurs the last to occur of (i) the effective date (including expiration of any applicable waiting period) of the last required Consent of any Regulatory Authority having authority over and approving or exempting the Merger, (ii) the date on which the shareholders of each Party, voting separately, approve this Agreement, or (iii) such later date as may be mutually agreed upon in writing by the chief executive officers of each Party.

        1.4     Execution of Support Agreements.     Immediately prior to the execution of this Agreement and as a condition hereto, each of the executive officers and directors of each Party shall have executed and delivered to the other Party a Support Agreement in substantially the form attached hereto as Exhibit A (for the executive officers and directors of First Capital) or Exhibit A-1 (for the executive officers and directors of Coastal).

ARTICLE 2
TERMS OF MERGER

        2.1     Articles of Incorporation.     The Articles of Incorporation of Coastal in effect immediately prior to the Effective Time shall be the Articles of Incorporation of the Surviving Corporation until otherwise amended or repealed.

        2.2     Bylaws.     The Bylaws of Coastal in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until otherwise amended or repealed.

        2.3     Directors of Coastal.     Upon the Effective Time, Coastal shall have 12 directors determined as follows:

•         (a)   Immediately prior to the Effective Time, all but six directors of Coastal will resign as directors of Coastal. The remaining directors shall be Randolph C. Kohn, Ladson F. Howell, Dennis O. Green, James W. Holden, James C. Key, and Robert B. Pinkerton. Such remaining directors shall be apportioned evenly among Class I, Class II, and Class III directors. It is the intent of the Parties as evidenced in the forms of Support Agreements attached hereto as Exhibit A and Exhibit A-1 that if any of the directors set forth this subsection cease to be a director of Coastal prior to date of the 2007 Coastal annual meeting of shareholders, a majority of the remaining directors set forth in this subsection shall have the right to nominate the replacement director or replacement directors and, so long as the replacements are reasonably acceptable to the remaining board members, the full board will vote to fill the vacancy with such nominees; and

          (b)   Six of the resulting vacancies on the board of directors of Coastal will be filled by those six nominees designated by the board of directors of First Capital such that two nominees will fill Class I vacancies, two nominees will fill Class II vacancies, and two nominees will fill Class III vacancies. The nominees shall be Ron Anderson, Christina H. Bryan, Suellen Rodeffer Garner, Robert L. Peters, Michael G. Sanchez, and Edward E. Wilson. It is the intent of the Parties as evidenced in the forms of Support Agreements attached hereto as Exhibit A and Exhibit A-1 that if any of the directors set forth in this subsection cease to be a director prior to the date of the 2007 Coastal annual meeting of shareholders, a majority of the remaining directors set forth in this subsection shall have the right to nominate the replacement director or replacement directors and, so long as the replacements are reasonably acceptable to the remaining board members, the full board will vote to fill the vacancy with such nominees.

          (c)   It is the intent of the Parties as evidenced in the forms of Support Agreements attached hereto as Exhibit A and Exhibit A-1 that a majority of the directors set forth in Section 2.3(a) of this Agreement shall have the right to nominate two directors for the 2006 Coastal annual meeting

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  of shareholders and a majority of the directors set forth in Section 2.3(b) of this Agreement shall have the right to nominate two directors for the 2006 Coastal annual meeting of shareholders, so long as the nominations are reasonably acceptable to the nominating committee;

          (d)   It is the intent of the Parties as evidenced in the forms of Support Agreements attached hereto as Exhibit A and Exhibit A-1 that following the Merger and at least through the day immediately preceding the 2007 Coastal annual meeting of shareholders, the Chairman of the Board of Coastal shall be elected by a vote of a majority of the directors of Coastal then in office, provided that in the case of a tie vote, the Chairman of the Board of Costal should be nominated by the directors set forth in Section 2.3(b) of this Agreement and, so long as the nominee is reasonably acceptable to the remaining board members, the full board will vote in favor of such nominee to serve as Chairman.

        2.4     Directors of Lowcountry and First National.     From and after the Effective Time, the current boards of directors of Lowcountry and First National shall remain intact except that each bank will increase its number of members by one and Michael G. Sanchez will be appointed to serve as a director of Lowcountry and Randolph C. Kohn will be appointed to serve as a director of First National.

        2.5     Officers.     From and after the Effective Time, the officers of Coastal, First Capital, Lowcountry, and First National shall be as follows:

• • (a)

    Randolph C. Kohn, chief executive officer of Coastal and president and chief executive officer of Lowcountry;
    
    

    (b)

    Michael G. Sanchez, president of Coastal and president and chief executive officer of First National;
    
    

    (c)

    James L. Pate, III, chief financial officer of Coastal, Lowcountry, and First National; and
    
    

    (d)

    Timothy S. Ayers, chief operating officer of Coastal, Lowcountry, and First National.

ARTICLE 3
MANNER OF CONVERTING SHARES

        3.1     Conversion of Shares.     Subject to the provisions of this Article 3, at the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, the shares of the constituent corporations shall be converted as follows:

•         (a)   Each share of Coastal Common Stock issued and outstanding immediately prior to the Effective Time excluding shares held by Coastal shareholders who perfect their dissenters' rights of appraisal as provided in Section 3.4 of the Agreement shall remain issued and outstanding from and after the Effective Time; and

          (b)   Subject to adjustment as outlined below and the conditions set forth herein, each share of First Capital Common Stock issued and outstanding at the Effective Time (excluding shares held by Coastal or any of its Subsidiaries or by First Capital, in each case other than in a fiduciary capacity or as a result of debts previously contracted, and excluding shares held by First Capital shareholders who perfect their dissenters' rights of appraisal as provided in Section 3.4 of this Agreement) shall be exchanged for 1.054 shares of Coastal Common Stock. The aggregate number of shares of Coastal Common Stock issuable pursuant to the immediately preceding sentence is sometimes hereinafter referred to as the "Merger Consideration."

          (c)   As of the Effective Time, each share of First Capital Common Stock as set forth in Section 3.1(b) of this Agreement shall cease to be outstanding and each holder of a certificate representing any such shares of First Capital Common Stock shall cease to have any rights with

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  respect thereto, except the right to receive such holders' pro rata portion of the Merger Consideration and any cash in lieu of fractional shares of Coastal Common Stock to be issued or paid in consideration therefor upon surrender of such certificate in accordance with Section 4.1 of this Agreement, without interest.

        3.2     Anti-Dilution Provisions.     In the event First Capital or Coastal changes the number of shares of First Capital Common Stock or Coastal Common Stock, respectively, issued and outstanding prior to the Effective Time as a result of a stock split, stock dividend, or similar recapitalization with respect to such stock and the record date therefor (in the case of a stock dividend) or the effective date therefor (in the case of a stock split or similar recapitalization) shall be prior to the Effective Time, the Merger Consideration shall be proportionately adjusted.

        3.3     Shares Held by First Capital or Coastal.     Each of the shares of First Capital Common Stock held by First Capital or by any Coastal Companies, in each case other than in a fiduciary capacity or as a result of debts previously contracted, shall be canceled and retired at the Effective Time, and no consideration shall be issued in exchange therefor.

        3.4     Dissenting Shareholders.     Each holder of shares of First Capital Common Stock or Coastal Common Stock, as the case may be, shall be entitled to exercise dissenters' rights of appraisal in accordance with and as contemplated by Sections 607.1301 et seq . of the Florida Business Corporation Act and Sections 33-13-101 et seq . of the South Carolina Business Corporation Act of 1988. Any holder of shares of First Capital Common Stock or Coastal Common Stock, as the case may be, who perfects his dissenter's right of appraisal shall be entitled to receive the value of such shares in cash as determined pursuant to such provision of Law; provided, however , that no such payment shall be made to any dissenting shareholder unless and until such dissenting shareholder has complied with the applicable provisions set forth above and surrendered to the appropriate Party the certificate or certificates representing the shares for which payment is being made. In the event that after the Effective Time a dissenting shareholder of First Capital fails to perfect, or effectively withdraws or loses, his right to appraisal and of payment for his shares, Coastal shall issue and deliver the consideration, to which such holder of shares of the common stock of First Capital is entitled under this Article 3 (without interest) upon surrender by such holder of the certificate or certificates representing the shares of First Coastal held by him. In the event that after the Effective Time a dissenting shareholder of Coastal fails to perfect, or effectively withdraws or loses, his right to appraisal and of payment for his shares, Coastal shall not be obligated to take any action with respect to such holder.

        3.5     Fractional Shares.     Notwithstanding any other provision of this Agreement, each holder of shares of First Capital Common Stock exchanged pursuant to the Merger, who would otherwise have been entitled to receive a fraction of a share of Coastal Common Stock (after taking into account all certificates delivered by such holder), shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of Coastal Common Stock multiplied by the market value of one share of Coastal Common Stock at the Effective Time. The market value of one share of Coastal Common Stock at the Effective Time shall be calculated based on the 10-day average closing price of Coastal Common Stock on the OTCBB immediately preceding the Effective Time. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional shares.

        3.6     Conversion of Stock Options and Stock Appreciation Rights.     

•         (a)   At the Effective Time, all rights with respect to First Capital Common Stock pursuant to stock options (the "First Capital Options") granted by First Capital under the First Capital Bank Holding Corporation 1999 Stock Incentive Plan (the "First Capital Option Plan"), which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become rights with respect to Coastal Common Stock, and Coastal shall assume each First Capital Option

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• in accordance with the terms of the First Capital Option Plan and the stock option agreement by which it is evidenced. From and after the Effective Time, (i) each First Capital Option assumed by Coastal may be exercised solely for shares of Coastal Common Stock, (ii) the number of shares of Coastal Common Stock subject to each First Capital Option shall be equal to the product of the number of shares of First Capital Common Stock subject to such First Capital Option immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iii) the per share exercise price under each such First Capital Option shall be adjusted by dividing the per share exercise price under each such First Capital Option by the Exchange Ratio and rounding down to the nearest cent. First Capital agrees to take all necessary steps to effectuate the foregoing provisions of this Section 3.6.

          (b)   At the Effective Time, all interests with respect to stock appreciation rights (the "First Capital SARs") granted by First Capital under the First Capital Phantom Stock Appreciation Rights Plan (the "First Capital SAR Plan"), which are outstanding at the Effective Time, whether or not exercisable, shall be converted into and become interests with respect to Coastal Common Stock, and Coastal shall assume each First Capital SAR in accordance with the terms of the First Capital SAR Plan and phantom stock appreciation rights agreement by which it is evidenced. From and after the Effective Time, (i) the number of shares of Coastal Common Stock subject to each First Capital SAR shall be equal to the product of the number of shares of First Capital Common Stock subject to such First Capital SAR immediately prior to the Effective Time multiplied by the Exchange Ratio, and (iii) the per share fair market value under each such First Capital SAR (as defined in phantom stock appreciation rights agreement by which it is evidenced) shall be adjusted by dividing the per share fair market value under each such First Capital SAR by the Exchange Ratio and rounding down to the nearest cent. First Capital agrees to take all necessary steps to effectuate the foregoing provisions of this Section 3.6.

          (c)   All restrictions or limitations on transfer with respect to First Capital Common Stock awarded under the First Capital Option Plan or any other plan, program, or arrangement of any First Capital Company, to the extent that such restrictions or limitations shall not have already lapsed, and except as otherwise expressly provided in such plan, program, or arrangement, shall remain in full force and effect with respect to shares of Coastal Common Stock into which such restricted stock is converted pursuant to Section 3.1 of this Agreement.

          (d)   Shares of Coastal Common Stock to be issued upon exercise of First Capital Options shall be the subject of a timely filed and effective Form S-8 registration statement covering such shares.

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ARTICLE 4
EXCHANGE OF SHARES

        4.1     Exchange Procedures.     As soon as reasonably practicable after the Effective Time, Coastal's exchange agent shall mail to the former shareholders of First Capital appropriate transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the certificates theretofore representing shares of First Capital Common Stock shall pass, only upon proper delivery of such certificates to the exchange agent). After the Effective Time, each holder of shares of First Capital Common Stock (other than shares to be canceled pursuant to Section 3.3 of this Agreement or as to which dissenters' rights of appraisal have been perfected as provided in Section 3.4 of this Agreement) issued and outstanding at the Effective Time shall surrender the certificate or certificates representing such shares to the exchange agent and shall as soon as reasonably practicable after surrender thereof receive in exchange therefor the consideration provided in Section 3.1 of this Agreement, together with all undelivered dividends or distributions in respect of such shares (without interest thereon) pursuant to Section 4.2 of this Agreement. To the extent required by Section 3.5 of this Agreement, each holder of shares of First Capital Common Stock issued and outstanding at the Effective Time also shall receive, upon surrender of the certificate or certificates representing such shares, cash in lieu of any fractional share of Coastal Common Stock to which such holder may be otherwise entitled (without interest). Coastal shall not be obligated to deliver the consideration to which any former holder of First Capital Common Stock is entitled as a result of the Merger until such holder surrenders his certificate or certificates representing the shares of First Capital Common Stock for exchange as provided in this Section 4.1. The certificate or certificates of First Capital Common Stock so surrendered shall be duly endorsed as Coastal may require. Any other provision of this Agreement notwithstanding, Coastal shall not be liable to a holder of First Capital Common Stock for any amounts paid or property delivered in good faith to a public official pursuant to any applicable abandoned property Law.

        4.2     Rights of Former Shareholders.     At the Effective Time, the stock transfer books of First Capital shall be closed as to holders of First Capital Common Stock immediately prior to the Effective Time, and no transfer of First Capital Common Stock by any such holder shall thereafter be made or recognized. Until surrendered for exchange in accordance with the provisions of Section 4.1 of this Agreement, each certificate theretofore representing shares of First Capital Common Stock (other than shares to be canceled pursuant to Sections 3.3 and 3.4 of this Agreement) shall from and after the Effective Time represent for all purposes only the right to receive the consideration provided in Sections 3.1 and 3.5 of this Agreement in exchange therefor. To the extent permitted by Law, former shareholders of record of First Capital shall be entitled to vote after the Effective Time at any meeting of Coastal shareholders the number of whole shares of Coastal Common Stock into which their respective shares of First Capital Common Stock are converted, regardless of whether such holders have exchanged their certificates representing First Capital Common Stock for certificates representing Coastal Common Stock in accordance with the provisions of this Agreement. Whenever a dividend or other distribution is declared by Coastal on the Coastal Common Stock, the record date for which is at or after the Effective Time, the declaration shall include dividends or other distributions on all shares issuable pursuant to this Agreement, but no dividend or other distribution payable to the holders of record of Coastal Common Stock as of any time subsequent to the Effective Time shall be delivered to the holder of any certificate representing shares of First Capital Common Stock issued and outstanding at the Effective Time until such holder surrenders such certificate for exchange as provided in Section 4.1 of this Agreement. However, upon surrender of such First Capital Common Stock certificate, both the Coastal Common Stock certificate (together with all such undelivered dividends or other distributions without interest) and any undelivered cash payments to be paid for fractional share interests (without interest) shall be delivered and paid with respect to each share represented by such certificate.

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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FIRST CAPITAL

        First Capital represents and warrants to Coastal, except as set forth in the First Capital Disclosure Letter, as follows:

        5.1     Organization, Standing, and Power.     First Capital is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Florida and is a bank holding company within the meaning of the BHC Act. First National is a national banking association, duly organized, validly existing, and in good standing under the laws of the United States of America. Each of First Capital and First National has the corporate power and authority to carry on its business as now conducted and to own, lease, and operate its Assets. Each of First Capital and First National is duly qualified or licensed to transact business as a foreign corporation in good standing in the states of the United States and foreign jurisdictions where the character of its Assets or the nature or conduct of its business requires it to be so qualified or licensed. First National is an "insured institution" as defined in the Federal Deposit Insurance Act and applicable regulations thereunder, and the deposits held by First National are insured by the FDIC's Bank Insurance Fund to the maximum extent provided by law.

        5.2     Authority of First Capital; No Breach By Agreement.     

        (a)   First Capital has the corporate power and authority necessary to execute, deliver, and, other than with respect to the Merger, perform this Agreement, and with respect to the Merger, upon the approval of the Merger by First Capital's shareholders in accordance with this Agreement and the Florida Business Corporation Act, to perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of First Capital, subject to the approval of this Agreement by the affirmative vote of the holders of a majority of the outstanding shares of First Capital Common Stock. Subject to the Consents of Regulatory Authorities and shareholder approval, this Agreement represents a legal, valid, and binding obligation of First Capital, enforceable against First Capital in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).

        (b)   Neither the execution and delivery of this Agreement by First Capital, nor the consummation by First Capital and First National of the transactions contemplated hereby, nor compliance by First Capital and First National with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of First Capital's Articles of Incorporation or Bylaws, or (ii) constitute or result in a Default under, or require any Consent pursuant to, or result in the creation of any Lien on any Asset of any First Capital Company under, any Contract or Permit of any First Capital Company or, (iii) subject to receipt of the requisite Consents violate any Law or Order applicable to any First Capital Company or any of their respective Assets.

        (c)   No notice to, filing with, or Consent of any public body or authority is necessary for the consummation by First Capital of the Merger and the transaction contemplated in this Agreement other than (i) in connection or compliance with the provisions of the Securities Laws, applicable state corporate and securities Laws, and rules of the NASD, (ii) Consents required from Regulatory Authorities, (iii) notices to or filings with the IRS or the Pension Benefit Guaranty Corporation with respect to any employee benefit plans, (iv) under the HSR Act, and (v) Consents, filings, or notifications which, if not obtained or made, are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on First Capital.

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        5.3     Capital Stock.     

        (a)   The authorized capital stock of First Capital consists only of 10,000,000 shares of First Capital Common Stock, of which 1,182,700 shares are issued and outstanding as of the date of this Agreement, 1,000,000 shares of preferred stock, none of which are issued and outstanding as of the date of this Agreement. As of the date of this Agreement, 86,400 shares of First Capital Common Stock were reserved for issuance upon the exercise of issued and outstanding stock options under the First Capital Option Plan. All of the issued and outstanding shares of capital stock of First Capital are duly and validly issued and outstanding and are fully paid and nonassessable. None of the outstanding shares of capital stock of First Capital has been issued in violation of any preemptive rights of the current or past shareholders of First Capital.

        (b)   Except as specifically set forth in this Section, there are no shares of capital stock or other equity securities of First Capital outstanding and there are no outstanding options, warrants, scrip, stock appreciation rights, rights to subscribe to, calls, or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of the capital stock of First Capital or contracts, commitments, understandings, or arrangements by which First Capital is or may be bound to issue additional shares of its capital stock or options, warrants, or rights to purchase or acquire any additional shares of its capital stock.

        5.4     First Capital's Subsidiaries.     

        (a)   The First Capital Disclosure Letter sets forth with respect to each First Capital Company its name, its jurisdiction of incorporation, First Capital's percentage ownership, the number of shares of stock owned or controlled by First Capital, and the name and number of shares held by any other person who owns any stock of the First Capital Company. First Capital owns of record and beneficially all the capital stock of each First Capital Company free and clear of any Liens. There are no contracts, commitments, agreements, or understandings relating to First Capital's right to vote or dispose of any equity securities of the First Capital Companies. First Capital's ownership interest in each First Capital Company is in compliance with all applicable laws, rules, and regulations relating to equity investments by bank holding companies or national banking associations.

        (b)   Each First Capital Company is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease, and operate its properties, and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary.

        (c)   The outstanding shares of capital stock of each First Capital Company have been validly authorized and are validly issued, fully paid, and nonassessable. No shares of capital stock of any First Capital Company are or may be required to be issued by virtue of any options, warrants or other rights, no securities exist that are convertible into or exchangeable for shares of such capital stock, or any other debt or equity security of any First Capital Company, and there are no contracts, commitments, agreements, or understandings of any kind for the issuance of additional shares of capital stock or other debt or equity security of any First Capital Company or options, warrants, or other rights with respect to such securities.

        5.5     Exchange Act Filings; Financial Statements.     

        (a)   First Capital has timely filed and made available to Coastal all SEC Documents required to be filed by First Capital since December 31, 2000. The First Capital SEC Documents (i) at the time filed, complied in all material respects with the applicable requirements of the Securities Laws and other applicable Laws and (ii) did not, at the time they were filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing or, in the case of registration

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statements, at the effective date thereof) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such First Capital SEC Documents or necessary in order to make the statements in such First Capital SEC Documents not misleading. First Capital has made available to Coastal all comment letters received by First Capital from the staffs of the SEC and the OCC and all responses to such comment letters by or on behalf of First Capital with respect to all filings under the Securities Laws. First Capital's principal executive officer and principal financial officer (and First Capital's former principal executive officers and principal financial officers, as applicable) have made the certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act and the rules and regulations of the Exchange Act thereunder with respect to the First Capital SEC Documents. For purposes of the preceding sentence, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act. Such certifications contain no qualifications or exceptions to the matters certified therein and have not been modified or withdrawn; and neither First Capital nor any of its officers has received notice from any Regulatory Authority questioning or challenging the accuracy, completeness, content, form, or manner of filing or submission of such certifications. No First Capital Company is required to file any reports under the Exchange Act.

        (b)   Each of the First Capital Financial Statements (including, in each case, any related notes) contained in the First Capital SEC Documents, including any First Capital SEC Documents filed after the date of this Agreement until the Effective Time, complied as to form in all material respects with the Exchange Act, was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited interim statements, as permitted by Form 10-QSB of the Exchange Act), and fairly presented the financial position of First Capital and each First Capital Company as at the respective dates and the results of operations and cash flows for the periods indicated, including the fair values of the assets and liabilities shown therein except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments which were not or are not expected to be material in amount or effect and were certified to the extent required by the Sarbanes-Oxley Act.

        (c)   First Capital's independent public accountants, which have expressed their opinion with respect to the First Capital Financial Statements included in the First Capital SEC Documents (including the related notes), are and have been throughout the periods covered by such First Capital Financial Statements (x) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act) (to the extent applicable during such period), (y) "independent" with respect to First Capital within the meaning of Regulation S-X and (z) with respect to First Capital, in compliance with subsections (g) through (l) of Section 10A of the Exchange Act and related Securities Laws. Section 5.5 of the First Capital Disclosure Letter lists all non-audit services preformed by First Capital's independent public accountants for First Capital and each First Capital Company.

        (d)   First Capital maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act; such controls and procedures are effective to ensure that all material information concerning First Capital and each First Capital Company is made known on a timely basis to the individuals responsible for the preparation of the First Capital SEC Documents.

        5.6     Absence of Undisclosed Liabilities.     No First Capital Company has any Liabilities that are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on any First Capital Company, except Liabilities which are accrued or reserved against in the consolidated balance sheets of First Capital as of December 31, 2004 included in the First Capital Financial Statements or reflected in the notes thereto. No First Capital Company has incurred or paid any Liability since December 31, 2004, except for such Liabilities incurred or paid in the ordinary course of business consistent with past business practice and which are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on First Capital.

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        5.7     Absence of Certain Changes or Events.     Since December 31, 2004, except as disclosed in the First Capital Financial Statements or as disclosed in the First Capital Disclosure Letter, (i) there have been no events, changes, or occurrences which have had, or are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on First Capital, (ii) no First Capital Company has taken any action, or failed to take any action, prior to the date of this Agreement, which action or failure, if taken after the date of this Agreement, would represent or result in a material breach or violation of any of the covenants and agreements of First Capital, and (iii) each First Capital Company has conducted its respective businesses in the ordinary and usual course (excluding the incurrence of expenses in connection with this Agreement and the transactions contemplated hereby).

        5.8     Tax Matters.     

        (a)   All Tax Returns required to be filed by or on behalf of any First Capital Company have been timely filed or requests for extensions have been timely filed, granted and have not expired for periods ended on or before December 31, 2004, and all returns filed are complete and accurate in all Material respects. All Taxes shown on filed returns have been paid as of the date of this Agreement, and there is no audit, examination, deficiency, or refund Litigation with respect to any Taxes that is reasonably likely to result in a determination that would have, individually or in the aggregate, a Material Adverse Effect on First Capital, except as reserved against in the First Capital Financial Statements delivered prior to the date of this Agreement. All Taxes and other Liabilities due with respect to completed and settled examinations or concluded Litigation have been paid.

        (b)   No First Capital Company has executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax due that is currently in effect, and no unpaid tax deficiency has been asserted in writing against or with respect to any First Capital Company.

        (c)   Adequate provision for any Taxes due or to become due by any First Capital Company for the period or periods through and including the date of the respective First Capital Financial Statements has been made and is reflected on such First Capital Financial Statements.

        (d)   Each First Capital Company is in compliance with, and their respective records contain all information and documents (including, without limitation, properly completed IRS Forms W-9) necessary to comply with, all applicable information reporting and Tax withholding requirements under federal, state, and local Tax Laws, and such records identify with specificity all accounts subject to backup withholding under Section 3406 of the Internal Revenue Code, except for such instances of noncompliance and such omissions as are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on First Capital.

        (e)   No First Capital Company has made any payments, is obligated to make any payments, or is a party to any contract, agreement, or other arrangement that could obligate it to make any payments that would be disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue Code.

        (f)    There are no Material Liens with respect to Taxes upon any of the Assets of any First Capital Company.

        (g)   There has not been an ownership change, as defined in Internal Revenue Code Section 382(g), of any First Capital Company that occurred during or after any Taxable Period in which any First Capital Company incurred a net operating loss that carries over to any Taxable Period ending after December 31, 2004.

        (h)   No First Capital Company has filed any consent under Section 341(f) of the Internal Revenue Code concerning collapsible corporations.

        (i)    No First Capital Company has or has had a permanent establishment in any foreign country, as defined in any applicable tax treaty or convention between the United States and such foreign country.

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        5.9     Allowance for Possible Loan Losses; Loan and Investment Portfolio, etc.     The Allowance shown on the consolidated balance sheets of First Capital included in the most recent First Capital Financial Statements dated prior to the date of this Agreement was, and the Allowance shown on the consolidated balance sheets of First Capital included in the First Capital Financial Statements as of dates subsequent to the execution of this Agreement will be, as of the dates thereof, adequate (within the meaning of GAAP and applicable regulatory requirements or guidelines) to provide for losses relating to or inherent in the loan and lease portfolios (including accrued interest receivables) of First National and other extensions of credit by First National as of the dates thereof, except where the failure of such Allowance to be so adequate is not reasonably likely to have a Material Adverse Effect on First Capital.

        5.10     Assets.     

        (a)   Except as disclosed or reserved against in the First Capital Financial Statements delivered prior to the date of this Agreement, each First Capital Company has good and marketable fee title, free and clear of all Liens, to all of their respective Assets in the name of such First Capital Company. All tangible properties used in the businesses of each First Capital Company are in good condition, reasonable wear and tear excepted, and are usable in the ordinary course of business consistent with each First Capital Company's past practices.

        (b)   All Assets which are material to First Capital's business, held under leases or subleases by any of the First Capital Companies, are held under valid Contracts enforceable in accordance with their respective terms, and each such Contract is in full force and effect.

        (c)   Each First Capital Company currently maintains insurance, including bankers' blanket bonds, with insurers of recognized financial responsibility, similar in amounts, scope, and coverage to that maintained by other peer organizations. None of the First Capital Companies has received notice from any insurance carrier that (i) any policy of insurance will be canceled or that coverage thereunder will be reduced or eliminated, or (ii) premium costs with respect to such policies of insurance will be substantially increased, or (iii) that similar coverage will be denied or limited or not extended or renewed with respect to any First Capital Company, any act or occurrence, or that any Asset, officer, director, employee, or agent of any First Capital will not be covered by such insurance or bond. There are presently no claims for amounts exceeding $25,000 individually or in the aggregate pending under such policies of insurance or bonds, and no notices of claims in excess of such amounts have been given by any First Capital Company under such policies. First Capital has made no claims, and no claims are contemplated to be made, under its directors' and officers' errors and omissions or other insurance or bankers' blanket bond.

        (d)   The Assets of the First Capital Companies include all Assets required to operate the business of the First Capital Companies as presently conducted.

        5.11     Intellectual Property.     Each First Capital Company owns or has a license to use all of the Intellectual Property used by such First Capital Company in the course of its business, including sufficient rights in each copy possessed by each First Capital Company. Each First Capital Company is the owner of or has a license, with the right to sublicense, to any Intellectual Property sold or licensed to a third party by such First Capital Company in connection with such First Capital Company's business operations, and such First Capital Company has the right to convey by sale or license any Intellectual Property so conveyed. No First Capital Company is in Default under any of its Intellectual Property licenses. No proceedings have been instituted, or are pending or overtly threatened, which challenge the rights of any First Capital Company with respect to Intellectual Property used, sold or licensed by such First Capital Company in the course of its business, nor has any person claimed or alleged any rights to such Intellectual Property. The conduct of the business of the First Capital Companies does not infringe any Intellectual Property of any other person. No First Capital Company is obligated to pay any recurring royalties to any Person with respect to any such Intellectual Property.

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No officer, director or employee of any First Capital Company is party to any confidentiality, nonsolicitation, noncompetition, or other Contract which restricts or prohibits such officer, director or employee from engaging in activities competitive with any Person, including any First Capital Company.

        5.12     Environmental Matters.     

        (a)   The First Capital Companies and their respective Participation Facilities and Loan Properties are, and have been, in compliance with all Environmental Laws, except for violations which are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the First Capital Companies.

        (b)   There is no Litigation pending or overtly threatened before any court, governmental agency, board, authority, or other forum in which the First Capital Companies or any of their respective Participation Facilities and Loan Properties has been or, with respect to threatened Litigation, may be named as a defendant or potentially responsible party (i) for alleged noncompliance (including by any predecessor) with any Environmental Law or (ii) relating to the Release of any Hazardous Material, whether or not occurring at, on, under or involving a site owned, leased, or operated by the First Capital Companies or any of their respective Participation Facilities and Loan Properties, except for such Litigation pending or threatened which is not likely to have, individually or in the aggregate, a Material Adverse Effect on the First Capital Companies.

        (c)   There is no reasonable basis for any Litigation of a type described in subsection (b), except such as is not likely to have, individually or in the aggregate, a Material Adverse Effect on the First Capital Companies.

        (d)   During the period of (i) the First Capital Companies' ownership or operation of any of their respective current properties, (ii) the First Capital Companies' participation in the management of any Participation Facility or (iii) the First Capital Companies' holding of a security interest in a Loan Property, there have been no Releases of Hazardous Material in, on, under, or affecting any Participation Facility or Loan Property.

        5.13     Compliance with Laws.     

        (a)   First Capital is a bank holding company duly registered and in good standing as such with the Federal Reserve and the Florida Department of Financial Services. First National is a member in good standing of the Federal Reserve System and the FDIC.

        (b)   Compliance with Permits, Laws and Orders.

•           (i)  Each First Capital Company has in effect all Permits and has made all filings, applications, and registrations with Regulatory Authorities that are material and required for it to own, lease, or operate its material assets and to carry on its business as now conducted, and there has occurred no Default under any such Permit applicable to their respective businesses or employees conducting their respective businesses.

           (ii)  No First Capital Company is in Default under any Laws or Orders applicable to its business or employees conducting its business.

          (iii)  No First Capital Company has received any notification or communication from any Regulatory Authority, (A) asserting any First Capital Company is in Default under any of the Permits, Laws or Orders which such Regulatory Authority enforces, (B) threatening to revoke any Permits, or (C) requiring any First Capital Company (x) to enter into or consent to the issuance of a cease and desist order, formal agreement, directive, commitment, or memorandum of understanding, or (y) to adopt any resolution of its board of directors or similar undertaking, which restricts materially the conduct of its business, or in any material manner relates to its management.

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• 
  

          (iv)  There (A) is no unresolved violation, criticism, or exception by any Regulatory Authority with respect to any report or statement relating to any examinations or inspections of any First Capital Company, (B) and no notices or correspondence received by any First Capital Company with respect to formal or informal inquiries by, or disagreements or disputes with, any Governmental Authority with respect to any First Capital Company's business, operations, policies, or procedures since December 31, 2004, and (C) is not any pending or, to its Knowledge, threatened, nor has any Regulatory Authority indicated an intention to conduct any, investigation or review of it or any of the First Capital Companies.

           (v)  No First Capital Company nor any of its directors, officers, employees, or representatives acting on its behalf has offered, paid, or agreed to pay any Person, including any Regulatory Authority, directly or indirectly, any thing of value for the purpose of, or with the intent of obtaining or retaining any business in violation of applicable Laws, including (1) using any corporate funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity, (2) making any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (3) violating any provision of the Foreign Corrupt Practices Act of 1977, or (4) making any bribe, rebate, payoff, influence payment, kickback, or other unlawful payment.

          (vi)  Each First Capital Company has complied in all material respects with all requirements of Law under the Bank Secrecy Act and the USA Patriot Act, and each First Capital Company has timely filed all reports of suspicious activity, including those required under 12 C.F.R. § 21.11.

        5.14     Labor Relations.     No First Capital Company is the subject of any Litigation asserting that any of them has committed an unfair labor practice (within the meaning of the National Labor Relations Act or comparable state law) or seeking to compel any First Capital Company to bargain with any labor organization as to wages or conditions of employment, nor is any First Capital Company a party to or bound by any collective bargaining agreement, Contract or other agreement or understanding with a labor union or labor organization, nor is there any strike or other labor dispute involving either of them, pending or to their respective Knowledge threatened, nor to their respective Knowledge, is there any activity involving any First Capital Companies' employees seeking to certify a collective bargaining unit or engaging in any other organization activity.

        5.15     Employee Benefit Plans.     

        (a)   The First Capital Companies have Previously Disclosed, and delivered or made available to Coastal prior to the execution of this Agreement, correct and complete copies in each case of all pension, retirement, profit-sharing, deferred compensation, stock option, employee stock ownership, severance pay, vacation, bonus, or other incentive plans, all other written employee programs, arrangements, or agreements, all medical, vision, dental, or other health plans, all life insurance plans and all other employee benefit plans or fringe benefit plans, including, without limitation, "employee benefit plans" as that term is defined in Section 3(3) of ERISA currently adopted, maintained by, sponsored in whole or in part by, or contributed to by any First Capital Companies or any Affiliate thereof for the benefit of employees, retirees, dependents, spouses, directors, independent contractors, or other beneficiaries and under which such persons are eligible to participate (collectively, the "First Capital Benefit Plans" and each, a "First Capital Benefit Plan"). Any of the First Capital Benefit Plans which is an "employee welfare benefit plan," as that term is defined in Section 3(l) of ERISA, or an "employee pension benefit plan," as that term is defined in Section 3(2) of ERISA, is referred to herein as a "First Capital ERISA Plan." No First Capital Benefit Plan is or has been a "multi-employer plan" (within the meaning of Section 3(37) of ERISA). The First Capital Companies do not participate in or have any liability arising in relation to a multi-employer plan (within the meaning of Section 3(37) of ERISA), a multiple employer plan, or a plan which is subject to Code Section 412 or Title IV of ERISA.

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        (b)   The First Capital Companies have delivered or made available to Coastal prior to the execution of this Agreement correct and complete copies of the following documents: (i) all trust agreements or other funding arrangements for such First Capital Benefit Plans (including insurance contracts), and all amendments thereto, (ii) with respect to any such First Capital Benefit Plans or amendments, all determination letters, Material rulings, Material opinion letters, Material information letters or Material advisory opinions issued by the IRS, the United States Department of Labor or the Pension Benefit Guaranty Corporation after December 31, 2002, (iii) annual reports or returns, audited or unaudited financial statements, actuarial valuations and reports and summary annual reports prepared for any First Capital Benefit Plan with respect to the most recent plan year, and (iv) the most recent summary plan descriptions and any Material modifications thereto.

        (c)   All First Capital Benefit Plans are in compliance with the applicable terms of ERISA, the Internal Revenue Code, and any other applicable Laws, the breach or violation of which are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on First Capital. Each First Capital ERISA Plan which is intended to be qualified under Section 401(a) of the Internal Revenue Code is the subject of a favorable determination letter or opinion letter from the IRS, and no First Capital Company is aware of any circumstances likely to reasonably result in revocation of any such letter or failure of a First Capital ERISA Plan intended to satisfy Internal Revenue Code Section 401 to satisfy the Tax qualification provisions of the Internal Revenue Code applicable thereto. No First Capital Company has engaged in a transaction with respect to any First Capital Benefit Plan that, assuming the Taxable Period of such transaction expired as of the date hereof, would subject any First Capital Company to a Material Tax or penalty imposed by either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on any First Capital Company.

        (d)   Except as required under Title I, Part 6 of ERISA and Internal Revenue Code Section 4980 B, no First Capital Company has any obligations to provide health or life benefits under any of the First Capital Benefit Plans to former employees, and there are no restrictions on the rights of First Capital to amend or terminate any such plan without incurring any Liability thereunder, which Liability is reasonably likely to have a Material Adverse Effect on the First Capital Companies.

        (e)   Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby solely as a result of such actions, will (i) result in any payment (including, without limitation, severance, unemployment compensation, golden parachute, or otherwise) becoming due to any officer, director, or any employee of the First Capital Companies from the First Capital Companies under any First Capital Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under any First Capital Benefit Plan, or (iii) result in any acceleration of the time of payment or vesting of any such benefit, where such payment, increase or acceleration is reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the First Capital Companies.

        (f)    The actuarial present values of all accrued deferred compensation entitlements (including, without limitation, entitlements under any executive compensation, supplemental retirement, or employment agreement) of directors and employees and former directors and employees of the First Capital Companies and its respective beneficiaries, have been fully reflected on the First Capital Financial Statements to the extent required by and in accordance with GAAP.

        5.16     Material Contracts.     Except as reflected in the First Capital Financial Statements, no First Capital Company nor any of their respective Assets, businesses, or operations, is a party to, or is bound or affected by, or receives benefits under, (i) any employment, severance, termination, consulting, or retirement Contract providing for aggregate payments to any Person in any calendar year in excess of $50,000, (ii) any Contract relating to the borrowing of money by any First Capital Company or the guarantee by any First Capital Company of any such obligation (other than Contracts evidencing

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deposit liabilities, purchases of federal funds, fully-secured repurchase agreements, trade payables, letters of credit, and Contracts relating to borrowings or guarantees made in the ordinary course of business), and (iii) any other Contract or amendment thereto would be required to be filed as an exhibit to a First Capital Regulatory Report filed by First Capital with any Regulatory Authority as of the date of this Agreement that has not been filed by First Capital with any Regulatory Authority as an exhibit to any First Capital Regulatory Report for the fiscal year ended December 31, 2004 (together with all Contracts referred to in Sections 5.10 and 5.15(a) of this Agreement, the "First Capital Contracts"). With respect to each First Capital Contract, (i) the Contract is in full force and effect, (ii) no First Capital Company is in Default thereunder, other than Defaults which are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the First Capital Companies, (iii) no First Capital Company has repudiated or waived any material provision of any such Contract, and (iv) no other party to any such Contract is, to the knowledge of the First Capital Companies, in Default in any respect, or has repudiated or waived any Material provision thereunder. All of the indebtedness of the First Capital Companies for money borrowed is prepayable at any time by the First Capital Companies without penalty or premium.

        5.17     Privacy of Customer Information.     

        (a)   Each First Capital Company is the sole owner of all individually identifiable personal information relating to identifiable or identified natural person ("IIPI") relating to customers, former customers, and prospective customers that will be transferred to Coastal and the Coastal Companies pursuant to this Agreement.

        (b)   Each First Capital Company's collection and use of such IIPI, the transfer of such IIPI to Coastal and the Coastal Companies, and the use of such IIPI by the Coastal Companies as contemplated by this Agreement complies with First Capital's privacy policy, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, and all other applicable privacy Laws, and any Contract and industry standard relating to privacy.

        5.18     Legal Proceedings.     There is no Litigation instituted or pending or overtly threatened against any First Capital Company, or against any Asset, interest or right of any of them, nor are there any Orders of any Regulatory Authorities, other governmental authorities or arbitrators outstanding against the First Capital Companies.

        5.19     Loans to Executive Officers and Directors.     First Capital has not, since December 31, 2004, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer (or equivalent thereof) of First Capital, except as permitted by Section 13(k) of the Exchange Act and Federal Reserve Regulation O. First Capital has Previously Disclosed any loan or extension of credit maintained by First Capital to which the second sentence of Section 13(k)(1) of the Exchange Act applies.

        5.20     Regulatory Matters.     No First Capital Company or any Affiliate thereof has taken any action or has any Knowledge of any fact or circumstance that is reasonably likely to (i) prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially impede or delay receipt of any Consents of Regulatory Authorities referred to in Section 9.1(b) of this Agreement or result in the imposition of a condition or restriction of the type referred to in the second sentence of such Section.

        5.21     State Takeover Laws.     The First Capital Companies have taken all necessary action to exempt the transactions contemplated by this Agreement from any applicable "moratorium," "control share," "fair price," "business combination," or other state takeover Law.

        5.22     Brokers and Finders; Opinion of Financial Advisor.     Except for First Capital Financial Advisor and the Transaction Financial Advisor, neither First Capital nor its subsidiaries, or any of their respective officers, directors, employees, or representatives, has employed any broker, finder, or

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investment banker or incurred any Liability for any financial advisory fees, investment bankers fees, brokerage fees, commissions, or finder's or other fees in connection with this Agreement or the transactions contemplated hereby. First Capital has received from the First Capital Financial Advisor an opinion that, as of the date hereof, the Exchange Ratio is fair to the shareholders of First Capital from a financial point of view.

        5.23     Statements True and Correct.     No statement, certificate, instrument, or other writing furnished or to be furnished by the First Capital Companies or any Affiliate thereof to Coastal pursuant to this Agreement or any other document, agreement, or instrument referred to herein contains or will contain any untrue statement of Material fact or will omit to state a Material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. None of the information supplied or to be supplied by the First Capital Companies or any Affiliate thereof for inclusion in the Registration Statement to be filed by Coastal with the SEC will, when the Registration Statement becomes effective, be false or misleading with respect to any Material fact, or omit to state any Material fact necessary to make the statements therein not misleading. None of the information supplied or to be supplied by the First Capital Companies or any Affiliate thereof for inclusion in the Joint Proxy Statement to be mailed to the First Capital Companies' shareholders and Coastal shareholders in connection with the First Capital Meeting and the Coastal Meeting, respectively, and any other documents to be filed by any First Capital Company or any Affiliate thereof with the SEC or any other Regulatory Authority in connection with the transactions contemplated hereby, will, at the respective time such documents are filed, and with respect to the Joint Proxy Statement, when first mailed to the shareholders of the First Capital Companies and Coastal be false or misleading with respect to any Material fact, or omit to state any Material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or, in the case of the Joint Proxy Statement or any amendment thereof or supplement thereto, at the time of the First Capital Meeting and the Coastal Meeting be false or misleading with respect to any Material fact, or omit to state any Material fact necessary to correct any statement in any earlier communication with respect to the solicitation of any proxy for either of such shareholders' meetings. All documents any First Capital Company or any Affiliate thereof is responsible for filing with any Regulatory Authority in connection with the transactions contemplated hereby will comply as to form in all Material respects with the provisions of applicable Law.

        5.24     Articles of Incorporation Provisions.     The First Capital Companies have taken all actions so that the entering into of this Agreement and the consummation of the Merger contemplated hereby do not and will not result in the grant of any rights to any Person under the Articles of Incorporation, Bylaws, or other governing instruments of the First Capital Companies (other than voting, dissenters' rights of appraisal, or other similar rights) or restrict or impair the ability of Coastal or any of its Subsidiaries to vote, or otherwise to exercise the rights of a shareholder with respect to, shares of the First Capital Common Stock that may be acquired or controlled by it.

        5.25     Delivery of First Capital Disclosure Letter.     First Capital has delivered to Coastal a complete First Capital Disclosure Letter.

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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF COASTAL

        Coastal represents and warrants to First Capital, except as set forth in the Coastal Disclosure Letter, as follows:

        6.1     Organization, Standing, and Power.     Coastal is a corporation duly organized, validly existing, and in good standing under the Laws of the State of South Carolina and is a bank holding company within the meaning of the BHC Act. Lowcountry is a national banking association, duly organized, validly existing, and in good standing under the laws of the United States of America. Each of Coastal and Lowcountry has the corporate power and authority to carry on its business as now conducted and to own, lease, and operate its Assets. Each of Coastal and Lowcountry is duly qualified or licensed to transact business as a foreign corporation in good standing in the states of the United States and foreign jurisdictions where the character of its Assets or the nature or conduct of its business requires it to be so qualified or licensed. Lowcountry is an "insured institution" as defined in the Federal Deposit Insurance Act and applicable regulations thereunder, and the deposits held by Lowcountry are insured by the FDIC's Bank Insurance Fund to the maximum extent provided by law.

        6.2     Authority of Coastal; No Breach By Agreement.     

        (a)   Coastal has the corporate power and authority necessary to execute, deliver, and, other than with respect to the Merger, perform this Agreement, and with respect to the Merger, upon the approval of the Merger by Coastal's shareholders in accordance with this Agreement and the South Carolina Business Corporation Act of 1988, to perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of Coastal, subject to the approval of this Agreement by the affirmative vote of the holders of two-thirds of the outstanding shares of Coastal Common Stock. Subject to the Consents of Regulatory Authorities and shareholder approval, this Agreement represents a legal, valid, and binding obligation of Coastal, enforceable against Coastal in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought).

        (b)   Neither the execution and delivery of this Agreement by Coastal, nor the consummation by Coastal and Lowcountry of the transactions contemplated hereby, nor compliance by Coastal and Lowcountry with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of Coastal's Articles of Incorporation or Bylaws, or (ii) constitute or result in a Default under, or require any Consent pursuant to, or result in the creation of any Lien on any Asset of any Coastal Company under, any Contract or Permit of any Coastal Company or, (iii) subject to receipt of the requisite Consents violate any Law or Order applicable to any Coastal Company or any of their respective Assets.

        (c)   No notice to, filing with, or Consent of any public body or authority is necessary for the consummation by Coastal of the Merger and the transaction contemplated in this Agreement other than (i) in connection or compliance with the provisions of the Securities Laws, applicable state corporate and securities Laws, and rules of the NASD, (ii) Consents required from Regulatory Authorities, (iii) notices to or filings with the IRS or the Pension Benefit Guaranty Corporation with respect to any employee benefit plans, (iv) under the HSR Act, and (v) Consents, filings, or notifications which, if not obtained or made, are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Coastal.

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        6.3     Capital Stock.     

        (a)   The authorized capital stock of Coastal consists only of 10,000,000 shares of Coastal Common Stock, of which 1,010,379 shares are issued and outstanding as of the date of this Agreement, 10,000,000 shares of preferred stock, none of which are issued and outstanding as of the date of this Agreement. As of the date of this Agreement, 117,571 shares of Coastal Common Stock were reserved for issuance upon the exercise of issued and outstanding stock options under the Coastal Option Plan. As of the date of this Agreement, warrants to purchase 190,050 shares of Coastal Common Stock were issued and outstanding. All of the issued and outstanding shares of capital stock of Coastal are duly and validly issued and outstanding and are fully paid and nonassessable. None of the outstanding shares of capital stock of Coastal has been issued in violation of any preemptive rights of the current or past shareholders of Coastal.

        (b)   Except as specifically set forth in this Section, there are no shares of capital stock or other equity securities of Coastal outstanding and there are no outstanding options, warrants, scrip, rights to subscribe to, calls, or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of the capital stock of Coastal or contracts, commitments, understandings, or arrangements by which Coastal is or may be bound to issue additional shares of its capital stock or options, warrants, or rights to purchase or acquire any additional shares of its capital stock.

        6.4     Coastal's Subsidiaries.     

        (a)   The Coastal Disclosure Letter sets forth with respect to each Coastal Company its name, its jurisdiction of incorporation, Coastal's percentage ownership, the number of shares of stock owned or controlled by Coastal, and the name and number of shares held by any other person who owns any stock of the Coastal Company. Coastal owns of record and beneficially all the capital stock of each Coastal Company free and clear of any Liens. There are no contracts, commitments, agreements, or understandings relating to Coastal's right to vote or dispose of any equity securities of the Coastal Companies. Coastal's ownership interest in each Coastal Company is in compliance with all applicable laws, rules, and regulations relating to equity investments by bank holding companies or national banking associations.

        (b)   Each Coastal Company is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease, and operate its properties, and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary.

        (c)   The outstanding shares of capital stock of each Coastal Company have been validly authorized and are validly issued, fully paid, and nonassessable. No shares of capital stock of any Coastal Company are or may be required to be issued by virtue of any options, warrants or other rights, no securities exist that are convertible into or exchangeable for shares of such capital stock, or any other debt or equity security of any Coastal Company, and there are no contracts, commitments, agreements, or understandings of any kind for the issuance of additional shares of capital stock or other debt or equity security of any Coastal Company or options, warrants, or other rights with respect to such securities.

        6.5     Exchange Act Filings; Financial Statements.     

        (a)   Coastal has timely filed and made available to Coastal all SEC Documents required to be filed by Coastal since December 31, 2000. The Coastal SEC Documents (i) at the time filed, complied in all material respects with the applicable requirements of the Securities Laws and other applicable Laws and (ii) did not, at the time they were filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing or, in the case of registration statements, at the

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effective date thereof) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such Coastal SEC Documents or necessary in order to make the statements in such Coastal SEC Documents not misleading. Coastal has made available to First Capital all comment letters received by Coastal from the staffs of the SEC and the OCC and all responses to such comment letters by or on behalf of Coastal with respect to all filings under the Securities Laws. Coastal's principal executive officer and principal financial officer (and Coastal's former principal executive officers and principal financial officers, as applicable) have made the certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act and the rules and regulations of the Exchange Act thereunder with respect to the Coastal SEC Documents. For purposes of the preceding sentence, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act. Such certifications contain no qualifications or exceptions to the matters certified therein and have not been modified or withdrawn; and neither Coastal nor any of its officers has received notice from any Regulatory Authority questioning or challenging the accuracy, completeness, content, form, or manner of filing or submission of such certifications. No Coastal Company is required to file any reports under the Exchange Act.

        (b)   Each of the Coastal Financial Statements (including, in each case, any related notes) contained in the Coastal SEC Documents, including any Coastal SEC Documents filed after the date of this Agreement until the Effective Time, complied as to form in all material respects with the Exchange Act, was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements or, in the case of unaudited interim statements, as permitted by Form 10-QSB of the Exchange Act),