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Exhibit 4.2

                                WARRANT AGREEMENT

         THIS AGREEMENT, dated as of this 7th day of September, 2001, by and
between Gateway Bank & Trust Co., a North Carolina state chartered bank (the
"Bank") and SunTrust Banks, Inc., (the "Transfer Agent").

         WHEREAS, the Bank in connection with its offering (the "Offering") of
approximately one million one hundred and eleven thousand (1,111,000) shares of
its par value $5.00 common stock (the "Common Stock") is issuing an aggregate of
approximately one million one hundred and eleven thousand (1,111,000) warrants
(the "Warrants") to purchase the Bank's Common Stock, such that one Warrant
shall be issued for each share of the Bank's Common Stock sold in the Offering.

         WHEREAS, the Bank desires to appoint the Transfer Agent to act on its
behalf in connection with the (i) issuance, transfer and exchange of the
certificates representing the Warrants (the "Warrant Certificates"), (ii) the
exercise of the Warrants by the holders thereof (together with any registered
successors or assigns, the "Holders") and (iii) the adjustment of the Warrants
in certain events as contained herein;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         1. APPOINTMENT OF TRANSFER AGENT. The Bank hereby appoints the Transfer
Agent as its agent to issue the Warrant Certificates, as set forth herein at the
usual and customary rates under the current agreement between the Bank and the
Transfer Agent, subject to resignation or replacement as provided herein. The
Transfer Agent agrees to accept such appointment, subject to the terms and
conditions as set forth herein and to issue, transfer and exchange the Warrant
Certificates pursuant to the terms as provided for herein to issue the
certificates representing the appropriate number of shares of Common Stock (or
other consideration) upon exercise of the Warrants. The Bank agrees to issue and
honor the Warrants on the terms and conditions as herein set forth and to issue
its Common Stock (or other securities) upon notice from the Transfer Agent of
the proper exercise of any Warrant. The Transfer Agent is hereby empowered to
enforce any rights of the Holders for the benefit of any Holders, subject to the
terms and conditions contained herein.

         2. ISSUANCE OF WARRANT CERTIFICATES.

                  2.1. Form of Warrant Certificate. All Warrants shall be issued
substantially in the form of the Warrant Certificate annexed hereto as Exhibit
A. The terms of any such Certificate are incorporated herein by reference.

                  2.2. Execution of Warrants. No Warrants shall have been duly
and validly issued until a Holder has received a Warrant Certificate executed by
the chairman or president of the Bank and the secretary or treasurer of the Bank
and such Certificate is countersigned by an authorized officer of the Transfer
Agent. Any Warrant Certificates may be executed by the officers of the Bank by
means of a facsimile signature. The Transfer Agent shall maintain the register
of all Holders.

                  2.3. Maximum Number of Warrants. The Bank hereby authorizes
the Transfer Agent to issue an aggregate of approximately one million one
hundred and eleven thousand (1,111,000) Warrants pursuant to the terms hereof
subject to adjustment as hereafter provided in Section 4 hereof.

                  2.4. Initial Holders. The Bank shall deliver to the Transfer
Agent a list of the names of the persons who shall be the initial Holders of the
Warrants and the number of Warrants to which each such person is entitled. The
Transfer Agent is hereby authorized by the Bank to promptly issue Warrant
Certificates for approximately one million one hundred and eleven thousand
(1,111,000) Warrants upon receipt of the written request of the Bank, which
shall include the list referred to in the preceding sentence. The Bank shall
deliver to the Transfer Agent, along with this Warrant Agreement, a sufficient
number of duly executed Warrant Certificates. The Warrant Certificates shall be
completed and countersigned by the Transfer Agent and promptly mailed or
delivered to the Holders pursuant to the terms hereof. When requested by the
Transfer Agent, from time to time hereafter, the Bank will execute additional
Warrant Certificates in blank for the Transfer Agent to issue hereunder.



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         3. RIGHTS OF A HOLDER. Subject to adjustment as provided herein, each
Warrant shall evidence the right to purchase one share of the Bank's Common
Stock at the Warrant Price of $11.10. Following the Expiration Date, as defined
in Section 4.1 below, the Warrant shall be null and void.

         4. EXERCISE OR TRANSFER OF WARRANT.

                  4.1. Exercise Period. The Warrants may be exercised at any
time commencing after June 27, 2001 (the "Initial Exercise Date") but not later
than 5:00 P.M., Eastern time, on June 30, 2004 (the "Expiration Date"). If the
Expiration Date is not a Business Day, it shall automatically be extended to
5:00 P.M. on the next day which is a Business Day. Business Day means any day
other than a Saturday, Sunday, or holiday on which banks in North Carolina are
authorized by law to close.

                  4.2. Means of Exercise. In order to exercise a Warrant, the
Holder must present and surrender the Warrant Certificate to the Transfer Agent
at its office, with the election to exercise section duly executed and it must
be accompanied by payment in full, in the form of cash, by certified or official
bank check payable to the order of the Bank or its successor, of the aggregate
Warrant Price for the number of shares of Common Stock specified in such
Election to Exercise Form.

                  4.3. Issuance of Common Stock. Upon the request of the
Transfer Agent, the Bank shall promptly deliver or cause to be delivered a
certificate or certificates evidencing the shares of Common Stock purchased when
any Warrant is validly exercised. Upon receipt of any Warrant Certificate by the
Transfer Agent, at its office, in proper form for exercise and accompanied by
payments as herein provided, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Bank shall then be closed
or that certificates representing such shares of Common Stock shall not then be
actually delivered to the Holder.

                  4.4. Warrants Not Transferrable Separate From Common Stock for
up to 45 Days. These Warrants shall be originally issued with an equal number of
shares of Common Stock in Units. During the 45 days following the date of
original issuance, the Warrants may only be transferred together with such
Common Stock as a unit. At any time after the original date of issuance, the
Bank may declare this restriction no longer applicable by written notice to the
Transfer Agent. The Bank shall also issue a press release but neither the Bank
nor the Transfer Agent shall be obligated to notify the Warrant holders.

                  4.5 Transfer. Upon surrender of this Warrant Certificate and
similar Warrant Certificates at the principal office of the Transfer Agent, by
the Holder hereof in person or by an attorney duly authorized in writing, with
the election to transfer section properly completed and duly executed, such
Warrant Certificates may be transferred or exchanged in the manner provided in
this Warrant Certificate and without payment of any service charge, for another
Warrant Certificate or Warrant Certificates of like tenor, evidencing in the
aggregate the number of Warrants evidenced by the Warrant Certificates so
surrendered and registered in the name or names as requested by the then
registered owner thereof or by an attorney duly authorized in writing. Warrants
transferred pursuant to such Section shall be accompanied by a proper payment of
any applicable transfer taxes.

         5. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES PURCHASABLE AND
OTHER TERMS IN CERTAIN EVENTS.

         5.1. The Purchase Price and the resulting number of shares of Common
Stock issuable under each Warrant shall be subject to adjustment as follows:

         (a) If the Bank after the date of this Warrant Certificate but before
         its exercise:

                  (1) pays a dividend or any other distribution payable in
                  shares of its Common Stock otherwise than out of earnings or
                  earned surplus;

                  (2) subdivides its outstanding shares of Common Stocks into a
                  greater number of shares;

                  (3) combines its outstanding shares of Common Stock into a
                  smaller number of shares;

                  (4) issues by reclassification of its shares of Common Stock
                  any shares of capital stock of the Bank (other than a change
                  in par value or from par value to no par value or from no par
                  value to par value); or



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                  (5) issues rights, options or warrants entitling holders of
                  shares of Common Stock to subscribe for shares of Common Stock
                  at less than the current market price, if any;

the Purchase Price in effect immediately prior to such action shall be adjusted
so that the holder of each Warrant may receive the number of shares of Common
Stock of the Bank to which it would have been entitled upon such action if such
holder had so exercised the Warrant immediately prior thereto. An adjustment
made pursuant to this Section 5 shall become effective immediately after the
record date for the determination of owners of Common Stock entitled thereto in
the case of a dividend or distribution, and shall become effective immediately
after the effective date in the case of a subdivision, combination,
reclassification, or issuance of rights, options or warrants retroactive to the
record date, if any, for such event.

         (b) No payment or adjustment shall be made by or on behalf of the Bank
on account of any cash dividends on the Common Stock issued upon any exercise of
a Warrant which was declared for payment to the holders of Common Stock of
record as of a date prior to the date on which such Warrant is exercised.

         (c) Upon each adjustment of the Purchase Price made pursuant to this
Section 5, each Warrant shall thereafter (until another such adjustment)
evidence the right to purchase that number of shares of Common Stock (calculated
to the nearest hundredth) obtained by dividing the Initial Purchase Price by the
Purchase Price in effect after such adjustment.

         (d) The Bank's failure to give the notice required by this Section 5.1
or any defect therein shall not affect the validity of such action listed under
this Section 5.1.

         (e) For the purpose of this Section 5.1, the term "shares of Common
Stock" shall mean (x) the class of stock designated as the Common Stock at the
date of this Warrant, or (y) any other class of stock resulting from successive
changes or reclassifications of such shares consisting solely of changes in par
value, from no par value to par value or from par value to no par value. In the
event that at any time, as a result of an adjustment made pursuant to this
Section 5, the Holder shall become entitled to purchase any shares of the Bank
other than shares of Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Warrant Price of such shares
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Common Stock contained in this Section 5.1

         5.2. Liquidation, Dissolution or Winding Up. Notwithstanding any other
provisions hereof, in the event of the liquidation, dissolution, or winding up
of the affairs of the Bank (other than in connection with a merger or sale or
conveyance of all or substantially all of its assets outside of the ordinary
course of business), the right to exercise each Warrant shall terminate and
expire at the close of business on the last full business day before the
earliest date fixed for the payment of any distributable amount on the Common
Stock. The Bank shall cause a notice to be mailed to each Holder at least 20
days prior to the applicable record date for such payment stating the date on
which such liquidation, dissolution or winding up is expected to become
effective, and the date on which it is expected that holders of shares of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property or assets (including cash) deliverable upon such
liquidation, dissolution or winding up, and that each Holder may exercise
outstanding Warrants during such 20 day period and, thereby, receive
consideration in the liquidation on the same basis as other previously
outstanding shares of the same class as the shares acquired upon exercise. The
Bank's failure to give notice required by this Section 5.2 or any defect therein
shall not affect the validity of such liquidation, dissolution or winding up.

         5.3. Merger, Consolidation, etc.

                  (a) In case of any merger of the Bank into any other entity or
sale or conveyance of all or substantially all of its assets outside of the
ordinary course of business (such merger, sale or conveyance, a "Change") then,
as a condition of such Change, lawful and adequate provisions shall be made
whereby the Holders shall thereafter have the right to receive upon payment of
the Warrant Price in effect immediately prior to such Change, upon the basis and
upon the terms and conditions specified in this Agreement (including but not
limited to all provisions contained in this Section 5), and in lieu of the
shares of the Bank's Common Stock purchasable upon the exercise of the Warrants,
such shares of stock, securities, cash or assets which such Holder would have
been entitled to receive after the happening of such Change had such Warrant
been exercised immediately prior to such Change. The provisions of this Section
5.3 shall similarly apply to successive Changes. The Bank shall cause a notice
to be mailed to each Holder at least 20 days prior to the applicable record date
for the Change covered by this Section 5.3(a) and shall provide notice of the
Change and shall set forth the first and last date on which the Holder may


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exercise outstanding Warrants. The Bank's failure to give the notice required by
this Section 5.3(a) or any defect therein shall not affect the validity of the
Change covered by this Section 5.3(a).

                  (b) Notwithstanding the foregoing, if as a result of such
Change, holders of the Bank Common Stock shall receive consideration other than
solely in shares of stock or other securities in exchange for their Bank Common
Stock, the Bank may, at its option, fulfill its obligation hereunder by causing
the Notice required by Section 5.3(a) hereof to include notice to Holders of the
opportunity to exercise their Warrants before the applicable record date for the
Change, and thereby receive consideration in the Change, on the same basis as
other previously outstanding shares of the same class as the shares acquired
upon exercise. If the notice specified in the preceding sentence is provided to
Holders, Warrants not exercised in accordance with this Section 5.3(b) before
consummation of the Change shall be cancelled and become null and void on the
effective date of the Change. The notice provided by the Transfer Agent pursuant
to this Section 5.3(b) shall include a description of the terms of this
Agreement providing for cancellation of the Warrants in the event that Warrants
are not exercised by the prescribed date. The Bank's failure to give any notice
required by this Section 5.3(b) or any defect therein shall not affect the
validity of any such Change.

         5.4. Duty to Make Fair Adjustments in Certain Cases. If any event
occurs as to which in the opinion of the Board of Directors of the Bank the
other provisions of this Section 5 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holders in
accordance with the essential intent and principles of this Agreement, then the
Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, as to
protect the purchase rights of the Holders. Notwithstanding the foregoing, the
issuance of Common Stock or any securities convertible into Common Stock by the
Bank either for cash or in a merger, consolidation, exchange or acquisition
shall not, by itself, constitute a basis for requiring any adjustment in the
Warrants unless specifically enumerated herein.

         5.5. Good Faith Determination. Any determination as to whether an
adjustment or limitation of exercise is required pursuant to this Section 5 (and
the amount of any adjustment), shall be binding upon the Holders and the Bank if
made in good faith by the Board of Directors of the Bank.

         5.6. Notice of Adjustment. Whenever the number of shares of Common
Stock purchasable upon the exercise of the Warrants or the Warrant Price is
adjusted, the Bank shall promptly file in the custody of its Secretary or an
Assistant Secretary at its principal office and with the Transfer Agent, an
officer's certificate setting forth the number of shares of Common Stock
purchasable upon the exercise of the Warrants, the Warrant Price after such
adjustment, a statement, in reasonable detail, of the facts requiring such
adjustment and the computation by which such adjustment was made. Each such
officer's certificate shall be made available at all reasonable times for
inspection by the Warrant Holders, and the Transfer Agent shall, forthwith after
each such adjustment, promptly mail a copy of such certificate to such Holders
by first class mail, postage prepaid.

         5.7. No Change of Warrant Necessary. Irrespective of any adjustment in
the Warrant Price or in the number or kind of shares issuable upon exercise of
the Warrants, the Warrant Certificates may continue to express the same price
and number and kind of shares as are stated in the Warrant Certificates as
initially issued.

         6. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Bank covenants
and agrees for the benefit of the Holders:

                  6.1. That all shares of Common Stock which may be issued upon
the exercise of the rights represented by the Warrant Certificates will, upon
issue and payment of the aggregate Warrant Price therefor, be duly authorized,
validly issued, fully paid and non-assessable (other than as provided under
North Carolina law) and free and clear of all liens and encumbrances, with no
personal liability attaching to the ownership thereof.

                  6.2. That during the period within which the rights
represented by the Warrant Certificates may be exercised, the Bank will at all
times have authorized and reserved for the purpose of issue upon exercise of the
rights evidenced by the Warrant Certificates, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by the
Warrant Certificates.

                  6.3. That the Bank will take all such action as may be
necessary to ensure that the shares of Common Stock issuable upon the exercise
of the Warrants may be so issued without violation of any applicable federal or
state law or regulation.


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                  6.4. That the Bank qualifies for an exemption from the
registration requirements of the Securities Act of 1933 and has made all
appropriate filings with and received approvals from, state and federal banking
regulatory authorities with respect to Warrants and the Common Stock issuable
thereunder.

                  6.5 Notwithstanding anything in this agreement to the
contrary, in connection with the formation of a financial holding company
pursuant to the Agreement and Plan of Reorganization and Share Exchange (the
"Plan of Reorganization") dated January 16, 2001, between the Bank and Gateway
Financial Corporation ("Holding Company"), the following shall apply:

         (i) No notice need be given in advance to the Warrant Holders by the
         Bank or the Warrant Agent; and

         (ii) The Holding Company shall assume the liabilities and obligations
         of the Bank hereunder by written instrument executed among the Bank,
         the Holding Company and the Transfer Agent; and

         (iii) The Holding Company shall register under the Securities Act of
         1933 the Holding Company common stock issuable upon exercise of the
         Warrants, immediately upon consummation of the Plan of Reorganization,
         and shall register or qualify such common stock in every state where
         such registration or qualification shall be required under the
         applicable state securities or Blue Sky laws; and

         (iv) The Holding Company shall use its best efforts to list the
         Warrants for trading on the Nasdaq SmallCap Market, as soon as the
         Warrants may be transferred separately from the Holding Company common
         stock.

         7. LOSS OF WARRANT CERTIFICATE. Upon receipt by the Transfer Agent of
evidence satisfactory to it of the loss, theft, destruction or mutilation of a
Warrant Certificate, and (i) in the case of such loss, theft or destruction, of
reasonably satisfactory indemnification and bonding, or (ii) if mutilated, upon
surrender and cancellation of such Warrant Certificate, the Transfer Agent shall
execute and deliver a new Warrant Certificate of like tenor. Any such new
Warrant Certificate executed and delivered shall constitute an additional
contractual obligation on the part of the Bank, whether or not the Warrant
Certificate so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.

         8. NO ISSUANCE OF FRACTIONAL INTERESTS IN COMMON STOCK. The Bank shall
not be required to issue fractional shares of Common Stock on the exercise of
the Warrants. If any fraction of a share of Common Stock would be issuable upon
the exercise of the Warrants (or any specified portion thereof), the Bank shall
pay an amount in cash equal to the product of (a) such fraction and (b) the fair
market value of the Common Stock, as determined in good faith by the Board of
Directors of the Bank, on the Business Day prior to the date the warrant is
exercised.

         9. NO RIGHTS AS STOCKHOLDERS; CERTAIN NOTICES AND REPORTS TO HOLDERS.
Except as specifically provided in this Agreement, nothing contained in this
Agreement or in the Warrant Certificates shall be construed as conferring upon
the Holders or any transferees the right to vote or to receive dividends or to
receive notice as stockholders in respect of any meeting of stockholders for the
election of directors of the Bank or any other matter, or any rights whatsoever
as stockholders of the Bank. If, however, between the date hereof and the
Expiration Date (or if earlier the occurrence of any event specified in Section
5.2 or 5.3(b) terminating the Warrants), any of the following events shall
occur:

                           (a) the Bank shall declare any cash dividend upon its
         shares of Common Stock payable at a rate more than 50% in excess of the
         rate of the last cash dividend theretofore paid; or

                           (b) the Bank shall declare any dividend payable in
         any securities upon its shares of Common Stock, other than a dividend
         payable in Common Stock or make any distribution (other than a regular
         cash dividend out of undistributed net income) to the holders of its
         shares of Common Stock; or

                           (c) the Bank shall distribute any rights, options or
         warrants to the holders of shares of Common Stock; or

                           (d) a capital reorganization or reclassification of
         the Bank's capital stock shall be proposed;

then in any one or more of said events, the Bank shall give to the Holders at
least twenty days prior written notice of



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the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to receive such dividend or
distribution. Any such notice shall also specify, in the case of any such
dividend or distribution, the date on which holders of shares of Common Stock
are entitled thereto. Failure to mail such notice or any defect therein or in
the mailing thereof shall not affect the validity of any action taken in
connection with such dividend or distribution.

         The Bank shall transmit by mail to all registered Holders, all reports
and other documents that the Bank transmits to holders of shares of Common Stock
generally, at the same time and in the same manner as such reports and other
documents are transmitted to holders of shares of Common Stock.

         10. AGREEMENT OF WARRANT HOLDERS. Every Holder of a Warrant, by his
acceptance thereof, consents and agrees with the Bank, the Transfer Agent and
every other Holder of a Warrant that:

                           (a) Warrants are not transferable except as provided
         herein; and

                           (b) The Bank and the Transfer Agent may deem and
         treat the person in whose name the Warrant Certificate is registered as
         the Holder and as the absolute, true and lawful owner of the Warrants
         represented thereby for all purposes, and neither the Bank nor the
         Transfer Agent shall be affected by any notice or knowledge to the
         contrary.

         11. DUTIES OF TRANSFER AGENT. The Transfer Agent acts hereunder as
agent and in a ministerial capacity for the Bank, and its duties shall be
determined solely by the provisions hereof. The Transfer Agent shall not, by
issuing and delivering Warrant Certificates or by any other act hereunder be
deemed to make any representations as to the validity, value or authorization of
the Warrant Certificates or the Warrants represented thereby or of any
securities or other property delivered upon exercise of any Warrant or whether
any stock issued upon exercise of any Warrant is fully paid and nonassessable.

                  The Transfer Agent shall not at any time be under any duty or
responsibility to any Holder of Warrant Certificates to make or cause to be made
any adjustment of the Warrant Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustments, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be liable for any
recital or statement of facts contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
the part of the Bank to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement except for its own
gross negligence or willful misconduct.

                  The Transfer Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Bank) and shall incur no
liability or responsibility for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.

                  Any notice, statement, instruction, request, direction, order
or demand of the Bank shall be sufficiently evidenced by an instrument signed by
the President, any Vice President, its Secretary, or Assistant Secretary,
(unless other evidence in respect thereof is herein specifically prescribed).
The Transfer Agent shall not be liable for any action taken, suffered or omitted
by it in accordance with such notice, statement, instruction, request,
direction, order or demand believed by it to be genuine.

                  The Bank agrees to pay the Transfer Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder and further agrees to indemnify the Transfer Agent and save
it harmless against any and all losses, expenses and liabilities, including
judgments, reasonable costs and counsel fees, for anything done or omitted by
the Transfer Agent in the execution of its duties and powers hereunder except
losses, expenses and liabilities arising as a result of the Transfer Agent's
gross negligence or willful misconduct.

                  The Transfer Agent may resign its duties and be discharged
from all further duties and liabilities hereunder (except liabilities arising as
a result of the Transfer Agent's own gross negligence or willful misconduct),
after giving 30 days' prior written notice to the Bank. At least 15 days prior
to the date such resignation is to become effective, the Transfer Agent shall
cause a copy of such notice of resignation to be mailed to the Holder of each


<PAGE>   7


Warrant Certificate at the Bank's expense. Upon such resignation, or any
inability of the Transfer Agent to act as such hereunder, the Bank shall appoint
a new Transfer Agent in writing. The Bank shall have complete discretion in the
naming of a new Transfer Agent, who may be an affiliate, subsidiary or
department of the Bank, or any person used by the Bank as transfer agent for the
Common Stock. If the Bank shall fail to make such appointment within a period of
15 days after it has been notified in writing of such resignation by the
resigning Transfer Agent, then the Holder of any Warrant Certificate may apply
to any court of competent jurisdiction for the appointment of a new Transfer
Agent.

                  The Bank may, upon notice to the Holders, remove and replace
the Transfer Agent for the Bank Common Stock for any reason.

                  After acceptance in writing of an appointment by a new
transfer agent is received by the Bank, such new transfer agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Transfer Agent, without any further assurance,
conveyance, act or deed. Any former Transfer Agent hereby agrees to cooperate
with and deliver all records and Warrant Certificates to the new transfer agent
at the direction of the new agent and the Bank.

                  Not later than the effective date of an appointment of a new
transfer agent by the Bank, the Bank shall file notice with the resigning or
terminated Transfer Agent and shall forthwith cause a copy of such notice to be
mailed to each Holder.

                  Any corporation into which the Transfer Agent or any new
transfer agent may be converted or merged or any corporation resulting from any
consolidation to which the Transfer Agent or any new transfer agent shall be a
party or any corporation succeeding to the trust business of the Transfer Agent
shall be a successor transfer agent under this Agreement without any further
act. Any such successor transfer agent shall promptly cause notice of its
succession as transfer agent to be mailed to the Bank and to each Holder.

                  Nothing herein shall preclude the Transfer Agent from acting
in any other capacity for the Bank.

         12. MODIFICATION OF AGREEMENT. The Transfer Agent and the Bank may by
supplemental agreement make any changes or corrections in this Agreement: (i)
that they shall deem appropriate to cure any ambiguity or to correct any
defective or inconsistent provision or manifest mistake or error herein
contained; or (ii) that they may deem necessary or desirable and which shall not
adversely affect the purchase or other material rights of the Holders of Warrant
Certificates. This Agreement shall not otherwise be modified, supplemented or
amended in any respect except with the consent in writing of the Holders of
Warrant Certificates representing not less than 50% of the Warrants then
outstanding, but no such amendment, modification or supplement which changes the
number or nature of the securities purchasable upon the exercise of any Warrant,
the Warrant Price or accelerates the Expiration Date, shall be made without the
consent in writing of each and every Holder (but no consent shall be required
for such changes as are specifically prescribed by this Agreement as originally
executed).

         13. MISCELLANEOUS.

                           13.1. Entire Agreement. This Agreement and the form
         of Warrant Certificate annexed hereto as Exhibit A contains the entire
         Agreement between the parties hereto with respect to the transactions
         contemplated by this Agreement and supersedes all prior negotiations,
         arrangements or understandings with respect thereto.

                           13.2. Counterparts. This Agreement may be executed in
         one or more counterparts, all of which shall be considered one and the
         same agreement and each of which shall be deemed an original.

                           13.3. Governing Law. This Agreement shall be governed
         by the laws of the State of North Carolina, without giving effect to
         the principles of conflicts of laws thereof.

                           13.4. Descriptive Headings. The descriptive headings
         of this Agreement are for convenience only and shall not control or
         affect the meaning or construction of any provision of this Agreement.

                           13.5. Notices. Any notice or other communications
         required hereunder to be given to a Holder shall be in writing and
         shall be sufficiently given, if mailed (first class, postage prepaid),
         or personally delivered, addressed in the name and at the address of
         such Holder appearing from time to time on the records of the Transfer
         Agent. Notices or other communications to the Bank shall be deemed to


<PAGE>   8


         have been sufficiently given if delivered by hand or mailed to the Bank
         at its then principal office, Attention: President, or at such other
         address as the Bank shall have designated by written notice to the
         Transfer Agent. Notices or other communications to the Transfer Agent
         shall be deemed to have been sufficiently given if delivered by hand or
         mailed (first class, postage prepaid) to its then principal office.
         Notice by mail shall be deemed given when deposited in the mail,
         postage prepaid.

                           13.6 Successors and Assigns. The terms and conditions
         of this Agreement shall inure to the benefit of and be binding upon the
         respective successors and assigns of the Bank and the Transfer Agent.

                  IN WITNESS WHEREOF, the Bank and the Transfer Agent have
         executed this Agreement by their duly authorized officers as of the
         date first set forth above.



                                         Gateway Bank & Trust Co.

[Corporate Seal]
                                         By: /s/ Daniel B. Berry
                                             --------------------

                                         Daniel B. Berry
                                         President and Chief Executive Officer

                                         SunTrust Banks, Inc.

[Corporate Seal]
                                         By:  /s/ Sue Hampton
                                           -------------------

                                         Sue Hampton
                                         Vice President