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                                  Exhibit 10.12

                                    AGREEMENT
                                    ---------

The following are the terms and conditions for Southeast Financial Holdings,
Inc. providing consulting services to the management and directors of Smith
River Bankshares, Inc.

I.  SERVICES AND DUTIES
    -------------------

     (A)  Timetables
          ----------

          I will advise the management and Board of Directors of Smith River
          Bankshares, Inc. on the establishment of a comprehensive plan for the
          development and execution of the company's stock offering. I will
          assist the bank's management in establishing a computer database that
          will enable the bank's management and directors to gage the process of
          the capital raising campaign on a daily basis.

     (B)  Coordination of Media Campaigns
          -------------------------------

          Public Relations (Free Advertising)
          -----------------------------------

          I will prepare written news releases regarding your bank, as well as
          your officers and directors. These releases, which are subject to
          approval, are intended to enhance interest in your bank.

          Media Announcements (Paid Advertising)
          --------------------------------------

          I will prepare all layout and design work for your bank's "tombstone"
          announcements with coupons, and will advise on placement and related
          marketing factors, such as location in newspaper, style of
          announcement, and announcement identification techniques.

     (C) Marketing Overview
         ------------------

          I will advise management (Monday through Friday, weekends if
          necessary) how best to coordinate all aspects of the company's
          marketing campaign, including advice as to proven marketing techniques
          which have been successful in other Denovo bank stock offerings.

          I will make sure your management and directors are committed to your
          marketing campaign, as this is an essential point to a timely
          completion of your stock sale. Recommendations will be made on how to
          allocate each director's fund raising responsibilities. Advice will be
          offered to all officers and directors as to proven marketing
          techniques that will enable them to maximize their efforts. Included
          will be suggested form letters and notices. Investor meetings,
          including open houses, breakfast meetings, luncheon meetings, and
          cocktail receptions are the best settings for introducing the bank to
          potential investors.

     (D)  IRA KEOGH, Pension and Profit Sharing Suitability
          -------------------------------------------------

          I will work with the officers and management of the bank in processing
          all retirement account purchases shares through the various types of
          retirement accounts that potential investors may have already
          established. If potential investors wish to use retirement funds to
          invest in the bank's stock, but do not have a retirement account
          established or have a custodian that will not process this type of
          transaction, then I will seek out those retirement custodians who will
          allow such a transaction. I will oversee all retirement account
          transactions to ensure they are properly initiated and completed.
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     (E)  FEE ARRANGEMENT
          ---------------

          a. I will be paid the sum of $7,500.00 upon the acceptance of this
          Agreement, thereafter I will receive the sum of $15,000.00 per month
          (paid upon the 21st of each month) unless terminated by Smith River
          Bankshares, Inc., for the term of this Agreement or until the
          Agreement is terminated as provided herein. This Agreement may be
          terminated by giving 30 days written notice of said termination.

          b. Smith River Bankshares, Inc. agrees to reimburse reasonable
          expenses in connection with this assignment. These expenses will be
          presented to the bank on a monthly basis. Attachment A, a part of this
          Agreement, defines the reimbursement policy to be followed. Total
          expenses will not exceed $4,000 per month.

     (F)  TERM OF AGREEMENT
          -----------------

     This Agreement shall begin 2/22/00, and shall end 3/22/00, unless sooner
     terminated as provided herein.

     (G)  INDEMNIFICATION
          ---------------

     Smith River Bankshares, Inc., its successors and assignees, agrees to
     indemnify and hold harmless Southeast Financial Holdings, Inc. against any
     losses, claims, damages, or liabilities (or actions in respect thereof)
     that arise out of or are based upon as untrue statement or alleged untrue
     statement of any material fact contained in any written information
     supplied to me upon which this placement is based, or any related document,
     or arise out of or are based upon the omission or alleged omission to state
     therein any material fact necessary to make any such written information
     not misleading, and will reimburse Southeast Financial Holdings, Inc. for
     any reasonable legal fees and expenses of counsel or other reasonable
     expense incurred by Southeast Financial Holdings, Inc. in connection with
     investigating or defending any such loss, claim, damage, liability, or
     action. Such indemnity shall not apply to any loss, claim, damage,
     liability, or action based solely upon the misfeasance, gross negligence,
     or misconduct of Southeast Financial Holdings., Inc. as finally determined
     by a court of competent jurisdiction.

The undersigned agree to the terms and conditions as outlined in this Agreement.


                                -----------------------------------------------
                                Lee Bradley, Southeast Financial Holdings, Inc.


                                -----------------------------------------------
                                Andy McCullar, President/CEO
                                Smith River Bankshares, Inc.


                                -----------------------------------------------
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                                  ATTACHMENT A



MEALS

Up to $25 per day per person with receipts attached to expense reports. Meals
with Company representatives or potential investors approved in advance by the
Company's chief executive officer client are reimbursable in addition to the
base amount.

MILEAGE

$.32 per mile on direct business related travel with personal cars. All mileage
is to be logged on a daily basis on expense reports. Local travel to and from
the Company's office is not reimbursable.

LODGING

The lowest cost alternative to the Company will be used commensurate with safety
and cleanliness for our staff.