Document:

EXHIBIT 10.4

STATE OF NORTH CAROLINA

COUNTY OF BUNCOMBE
                                                            EMPLOYMENT AGREEMENT

         THIS AGREEMENT entered into as of ___________________, 2000 by and
between THE BANK OF ASHEVILLE (hereinafter referred to as the "Bank") and G.
GORDON GREENWOOD (hereinafter referred to as "Greenwood").

                              W I T N E S S E T H:

         WHEREAS, the expertise and experience of Greenwood and his
relationships and reputation in the financial institutions industry are
extremely valuable to the Bank; and

         WHEREAS, it is in the best interests of the Bank and its shareholders
to maintain an experienced and sound executive management team to manage the
Bank and to further the Bank's overall strategies to protect and enhance the
value of its shareholders' investments; and

         WHEREAS, the Bank and Greenwood desire to enter into this Agreement to
establish the scope, terms and conditions of Greenwood's employment by the Bank;
and

         WHEREAS, the Bank and Greenwood desire to enter into this Agreement
also to provide Greenwood with security in the event of a change of control of
the Bank and to insure the continued loyalty of Greenwood during any such change
of control in order to maximize shareholder value as well as the continued safe
and sound operation of the Bank.

         NOW, THEREFORE, for and in consideration of the premises and mutual
promises, covenants and conditions hereinafter set forth, and other good and
valuable considerations, the receipt and sufficiency of which hereby are
acknowledged, the Bank and Greenwood hereby agree as follows:

                  1. EMPLOYMENT. The Bank hereby agrees to employ Greenwood, and
Greenwood hereby agrees to serve as an officer of the Bank, all upon the terms
and conditions stated herein. As an officer of the Bank, Greenwood will (i)
serve as President and Chief Executive Officer of the Bank, and (ii) have such
other duties and responsibilities, and render to the Bank such other management
services, as are customary for persons in Greenwood's position with the Bank or
as shall otherwise be reasonably assigned to him from time to time by the Bank.
Greenwood shall faithfully and diligently discharge his duties and
responsibilities under this Agreement and shall use his best efforts to
implement the policies established by the Bank. Greenwood hereby agrees to
devote such number of hours of his working time and endeavors to

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the employment granted hereunder as Greenwood and the Bank shall deem to be
necessary to discharge his duties hereunder, and, for so long as employment
hereunder shall exist, Greenwood shall not engage in any other occupation which
requires a significant amount of Greenwood's personal attention during the
Bank's regular business hours or which otherwise interferes with Greenwood's
attention to or performance of his duties and responsibilities as an officer of
the Bank hereunder except with the prior written consent of the Bank. However,
nothing herein contained shall restrict or prevent Greenwood from personally,
and for Greenwood's own account, trading in stocks, bonds, securities, real
estate or other forms of investment for Greenwood's own benefit so long as said
activities do not interfere with Greenwood's attention to or performance of his
duties and responsibilities as an officer of the Bank hereunder.

                  During the term of this Agreement, Greenwood shall be allowed,
in his sole discretion, to maintain his primary work location in Asheville,
North Carolina.

                  2. COMPENSATION. For all services rendered by Greenwood to the
Bank under this Agreement, the Bank shall pay Greenwood a base salary at a rate
of One Hundred Twenty-Five Thousand Dollars and 00/100's ($125,000.00) per
annum; provided that the rate of such salary shall be reviewed by the Board of
directors not less often than annually. Salary paid under this Agreement shall
be payable in cash not less frequently than monthly. All compensation hereunder
shall be subject to customary withholding taxes and such other employment taxes
as are required by law. In the event of a Change in Control (as defined in
Paragraph 8), Greenwood's base salary shall be increased not less than six
percent (6%.) annually during the term of this Agreement.

                  3. PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS;
FRINGE BENEFITS. Subject to the terms and conditions of this Agreement,
Greenwood shall be entitled to participate in any and all employee benefit
programs and compensation plans from time to time maintained by the Bank and
available to all employees of the Bank, all in accordance with the terms and
conditions (including eligibility requirements) of such programs and plans of
the Bank, resolutions of the Bank's Board of Directors establishing such
programs and plans, and the Bank's normal practices and established policies
regarding such programs and plans.

                  In addition to the other compensation and benefits described
in this Agreement, the Bank shall :

                  (i) Provide Greenwood with four (4) weeks of paid vacation
leave;

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                  (ii) The Bank shall assume payment of Greenwood's dues of the
Asheville Country Club, Asheville, North Carolina provided that Greenwood shall
be responsible for all personal expenses for use of such clubs;

                  (iii) The Bank shall reimburse Greenwood for all reasonable
expenses incurred by him in the performance of his duties under this Agreement
and documented to the reasonable satisfaction of the Bank pursuant to
established policies;

                  (iv) The Bank shall provide Greenwood, his spouse, and his
dependent son major medical insurance coverage at no cost to Greenwood which
will be a policy at least equivalent to the major medical insurance coverage
generally provided to active full-time employees of the Bank from time to time;
and

                  (v) The Bank shall provide, effective upon completion of the
initial five year term of this Agreement or sooner should a "change of control"
of the Bank occur within such five year period, a retirement annuity that will
pay Greenwood $40,000 per year for ten years commencing on the date of his
retirement.

                  (vi) Upon adoption by the Board of Directors of either the
Bank, or its holding company, of a stock incentive plan, Greenwood shall be
granted options to purchase shares of common stock reserved under such plan in
such amount as shall be determined by the stock option committee established
pursuant to such plan. The minimum aggregate number of options that will be
granted to Greenwood after adoption of such stock incentive plan and during the
initial five (5) year term of this Agreement and prior to any
"change-in-control" of the Bank will be equal in value to an amount equivalent
to three hundred percent (300%) of his compensation set forth in Paragraph 2
hereof. Additionally, the grant of such options will provide for immediate
vesting should a "change-in-control" of the Bank occur as such term is defined
in Paragraph 8 hereof.

                  4. TERM. Unless sooner terminated as provided in this
Agreement and subject to the right of either Greenwood or the Bank to terminate
Greenwood's employment at any time as provided herein, the term of this
Agreement and Greenwood's employment with the Bank hereunder shall be for a
period commencing on the date hereof and continuing for a period of five (5)
years. Within ninety (90) days prior to the third anniversary of this Agreement,
and within ninety (90) days of each anniversary thereafter, the Board of
Directors shall determine whether the term shall be extended. Should the Board
of Directors make such an affirmative

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decision to extend the Agreement, one additional year to the term of this
Agreement shall be added at the end of the third anniversary of this Agreement
and, with subsequent affirmative decisions to extend, on each anniversary date
thereafter.

                  5. CONFIDENTIALITY AND NON-COMPETITION. Greenwood hereby
acknowledges and agrees that (i) in the course of his service as an officer of
the Bank, he will gain substantial knowledge of and familiarity with the Bank's
customers and its dealings with them, and other information concerning the
Bank's business, all of which constitutes valuable assets and privileged
information that is particularly sensitive due to the fiduciary responsibilities
inherent in the banking business; and, (ii) in order to protect the Bank's
interest in and to assure it the benefit of its business, it is reasonable and
necessary to place certain restrictions on Greenwood's ability to compete
against the Bank and on his disclosure of information about the Bank's business
and customers. For that purpose, and in consideration of the Bank's agreements
contained herein, Greenwood covenants and agrees as provided below.

                  For the purposes of this Paragraph 5, the following terms
shall have the meanings set forth below:

                  CUSTOMER. The term "Customer" means any Person with whom, as
of the effective date of termination of this Agreement or Greenwood's employment
with the Bank for any reason, the Bank has or has had a depository, loan and/or
other banking relationship.

                  FINANCIAL INSTITUTION. The term "Financial Institution" means
any federal or state chartered bank, savings bank, savings and loan association
or credit union, or any holding company for or corporation that owns or controls
any such entity, or any other Person engaged in the business of making loans of
any type or receiving deposits, other than the Bank.

                  PERSON. The term "Person" means any natural person or any
corporation, partnership, proprietorship, joint venture, limited liability
company, trust, estate, governmental agency or instrumentality, fiduciary,
unincorporated association or other entity.

                  (a) CONFIDENTIALITY COVENANT. Greenwood covenants and agrees
that any and all data, figures, projections, estimates, lists, files, records,
documents, manuals or other such materials or information (financial or
otherwise) relating to the Bank and its banking business, regulatory
examinations, financial results and condition, lending and deposit operations,
customers (including lists of the Bank's customers and information regarding
their

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accounts and business dealings with the Bank), policies and procedures, computer
systems and software, shareholders, employees, officers and directors (herein
referred to as "Confidential Information") are proprietary to the Bank and are
valuable, special and unique assets of the Bank's business to which Greenwood
will have access during his employment with the Bank. Greenwood agrees that (i)
all such Confidential Information shall be considered and kept as the
confidential, private and privileged records and information of the Bank, and
(ii) at all times during the term of his employment with the Bank and following
the termination of this Agreement or his employment for any reason, and except
as shall be required in the course of the performance by Greenwood of his duties
on behalf of the Bank or otherwise pursuant to the direct, written authorization
of the Bank, Greenwood will not: divulge any such Confidential Information to
any other Person or Financial Institution; remove any such Confidential
Information in written or other recorded form from the Bank's premises; or make
any use of any Confidential Information for his own purposes or for the benefit
of any Person or Financial Institution other than the Bank. However, following
the termination of Greenwood's employment with the Bank, this subparagraph (b)
shall not apply to any Confidential Information which then is in the public
domain (provided that Greenwood was not responsible, directly or indirectly, for
permitting such Confidential Information to enter the public domain without the
Bank's consent), or which is obtained by Greenwood from a third party which or
who is not obligated under an agreement of confidentiality with respect to such
information.

                  (b) NON-COMPETITION COVENANT. During the term of this
Agreement and for a period of two years after termination, Greenwood agrees that
he will not, within Buncombe County, North Carolina, directly or indirectly own,
manage, operate, join, control or participate in the management, operation or
control of or be employed by or connected in any manner with, any financial
institution which competes with the Bank without the prior written consent of
the Board of Directors of the Bank and provided, however, that the provisions of
this Section 5(b) shall not apply in the event that Greenwood's employment
hereunder is terminated by the Board of Directors of the Bank without "cause" as
such term is defined in Section 6(d) hereof, and in the event that no additional
non-competition agreement is made as part of a separate severance agreement
giving rise to Greenwood's termination of this Agreement.

                  (c) REMEDIES FOR BREACH. Greenwood understands and agrees that
a breach or violation by him of the covenants contained in Paragraph 5 of this
Agreement will be

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deemed a material breach of this Agreement and will cause irreparable injury to
the Bank, and that it would be difficult to ascertain the amount of monetary
damages that would result from any such violation. In the event of Greenwood's
actual or threatened breach or violation of the covenants contained in Paragraph
5, the Bank shall be entitled to bring a civil action seeking an injunction
restraining Greenwood from violating or continuing to violate those covenants or
from any threatened violation thereof, or for any other legal or equitable
relief relating to the breach or violation of such covenant. Greenwood agrees
that, if the Bank institutes any action or proceeding against Greenwood seeking
to enforce any of such covenants or to recover other relief relating to an
actual or threatened breach or violation of any of such covenants, Greenwood
shall be deemed to have waived the claim or defense that the Bank has an
adequate remedy at law and shall not urge in any such action or proceeding the
claim or defense that such a remedy at law exists. However, the exercise by the
Bank of any such right, remedy, power or privilege shall not preclude the Bank
or its successors or assigns from pursuing any other remedy or exercising any
other right, power or privilege available to it for any such breach or
violation, whether at law or in equity, including the recovery of damages, all
of which shall be cumulative and in addition to all other rights, remedies,
powers or privileges of the Bank.

                  Notwithstanding anything contained herein to the contrary,
Greenwood agrees that the provisions of Paragraph 5(a) above and the remedies
provided in this Paragraph 5(c) for a breach by Greenwood shall be in addition
to, and shall not be deemed to supersede or to otherwise restrict, limit or
impair the rights of the Bank under the Trade Secrets Protection Act contained
in Article 24, Chapter 66 of the North Carolina General Statutes, or any other
state or federal law or regulation dealing with or providing a remedy for the
wrongful disclosure, misuse or misappropriation of trade secrets or other
proprietary or confidential information.

                  (d) SURVIVAL OF COVENANTS. Greenwood's covenants and
agreements and the Bank's rights and remedies provided for in this Paragraph 5
shall survive any termination of this Agreement or Greenwood's employment with
the Bank.

                  6. TERMINATION AND TERMINATION PAY.

                  (a) Greenwood's employment under this Agreement may be
terminated at any time by Greenwood upon sixty (60) days written notice to the
Bank. Upon such termination, Greenwood shall be entitled to receive compensation
through the effective date of such termination; provided, however, that the
Bank, in its sole discretion, may elect for

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Greenwood not to serve out part or all of said notice period.

                  (b) Greenwood's employment under this Agreement shall be
terminated upon the death of Greenwood during the term of this Agreement. Upon
any such termination, Greenwood estate shall be entitled to receive any
compensation due to Greenwood computed through the last day of the calendar
month in which his death shall have occurred but which remains unpaid.

                  (c) In the event Greenwood becomes disabled during the term of
his employment hereunder and it is determined by the Bank that Greenwood is
permanently unable to perform his duties under this Agreement, the Bank shall
continue to compensate Greenwood at the level of compensation described in
Paragraph 2 above, and shall continue to provide Greenwood each of the other
benefits set forth or described in this Agreement, for the remaining term of
this Agreement, less any other payments provided under any disability income
plan of the Bank which is applicable to Greenwood. In the event of any
disagreement between Greenwood and the Bank as to whether Greenwood is
physically or mentally incapacitated such as will result in the termination of
Greenwood's employment pursuant to this Paragraph 6(c), the question of such
incapacity shall be submitted to an impartial and reputable physician for
determination, selected by mutual agreement of Greenwood and the Bank or,
failing such agreement, by two (2) physicians (one (1) of whom shall be selected
by the Bank and the other by Greenwood), and such determination of the question
of such incapacity by such physician or physicians shall be final and binding on
Greenwood and the Bank. The Bank shall pay the reasonable fees and expenses of
such physician or physicians in making any determination required under this
Paragraph 6 (c) .

                  (d) The Bank may terminate Greenwood's employment at any time
for any reason with or without "Cause" (as defined below), but any termination
by the Bank other than termination for "Cause", (as defined below) shall not
prejudice Greenwood's right to compensation or other benefits under this
Agreement for its remaining term. Following any termination of Greenwood's
employment by the Bank for "Cause", Greenwood shall have no further rights under
this Agreement (including any right to receive compensation or other benefits
for any period after such termination).

                  For purposes of this Paragraph 6 (d) , the Bank shall have
"Cause" to terminate Greenwood's employment upon:

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                  (i) A determination by the Bank, in good faith, that Greenwood
(A) has breached in any material respect any of the terms or conditions of this
Agreement, or (B) is engaging or has engaged in willful misconduct or conduct
which is detrimental to the business prospects of the Bank or which has had or
likely will have a material adverse effect on the Bank's business or reputation.
Prior to any termination by the Bank of Greenwood's employment for a breach,
failure to perform or conduct described in this subparagraph (i), the Bank shall
give Greenwood written notice which describes such breach, failure to perform or
conduct and if during a period of five business (5) days following such notice
Greenwood cures or corrects the same to the reasonable satisfaction of the Bank,
then this Agreement shall remain in full force and effect. However,
notwithstanding the above, if the Bank has given written notice to Greenwood on
a previous occasion of the same or a substantially similar breach, failure to
perform or conduct, or of a breach, failure to perform or conduct which the Bank
determines in good faith to be of substantially similar import, or if the Bank
determines in good faith that the then current breach, failure to perform or
conduct is not reasonably curable, then termination under this subparagraph (i)
shall be effective immediately and Greenwood shall have no right to cure such
breach, failure to perform or conduct.

                  (ii) The violation by Greenwood of any applicable federal or
state law, or any applicable rule, regulation, order or statement of policy
promulgated by any governmental agency or authority having jurisdiction over the
Bank or any of its affiliates or subsidiaries (a "Regulatory Authority",
including without limitation the Federal Deposit Insurance Corporation, the
North Carolina Commissioner of Banks or any other banking regulator having legal
jurisdiction over the Bank), which results from Greenwood's gross negligence,
willful misconduct or intentional disregard of such law, rule, regulation, order
or policy statement and results in any substantial damage, monetary or
otherwise, to the Bank or any of its affiliates or subsidiaries or to the Bank's
reputation;

                  (iii) The commission in the course of Greenwood's employment
with the Bank of an act of fraud, embezzlement, theft or proven personal
dishonesty (whether or not resulting in criminal prosecution or conviction);

                  (iv) The conviction of Greenwood of any felony or any criminal
offense involving dishonesty or breach of trust, or the occurrence of any event
described in Section 19 of the Federal Deposit Insurance Act or any other event
or circumstance which

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disqualifies Greenwood from serving as an employee or executive officer of, or a
party affiliated with, the Bank or its bank holding company;

                  (v) Greenwood becomes unacceptable to, or is removed,
suspended or prohibited from participating in the conduct of the Bank's affairs
(or if proceedings for that purpose are commenced) by any Regulatory Authority;
and,

                  (vi) The occurrence of any event believed by the Bank, in good
faith, to have resulted in Greenwood being excluded from coverage, or having
coverage limited as to Greenwood as compared to other covered officers or
employees, under the Bank's then current "blanket bond" or other fidelity bond
or insurance policy covering its directors, officers or employees.

                  7. ADDITIONAL REGULATORY REQUIREMENTS. Notwithstanding
anything contained in this Agreement to the contrary, it is understood and
agreed that the Bank (or its successors in interest) shall not be required to
make any payment or take any action under this Agreement if (a) the Bank is
declared by any Regulatory Authority to be insolvent, in default or operating in
an unsafe or unsound manner, or if (b) in the opinion of counsel to the Bank
such payment or action (i) would be prohibited by or would violate any provision
of state or federal law applicable to the Bank, including without limitation the
Federal Deposit Insurance Act and Chapter 53 of the North Carolina General
Statutes as now in effect or hereafter amended, (ii) would be prohibited by or
would violate any applicable rules, regulations, orders or statements of policy,
whether now existing or hereafter promulgated, of any Regulatory Authority, or
(iii) otherwise would be prohibited by any Regulatory Authority.

                  8. CHANGE IN CONTROL

                  (a) In the event of a "Change in Control" (as defined in
Subparagraph (d) below), of the Bank, Greenwood shall be entitled to terminate
this Agreement upon the occurrence within twenty-four (24) months following a
change in control of any Termination Event as defined in Subparagraph (b) below.

                           (b)     A Termination Event shall mean the occurrence
                                   of any of the following events:

                                   (i) Greenwood is assigned any duties and/or
                                   responsibilities that are inconsistent with
                                   his position, duties, responsibilities, or
                                   status at the time of the Change in Control
                                   or with his reporting

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                                   responsibilities or titles with the Bank in
                                   effect at such time;

                                   (ii) Greenwood's annual base salary is
                                   reduced below the amount in effect as of the
                                   effective date of a Change in Control or as
                                   the same shall have been increased from time
                                   to time following such effective date;

                                   (iii) Greenwood's life insurance, medical or
                                   hospitalization insurance, disability
                                   insurance, dental insurance, stock option
                                   plans, stock purchase plans, deferred
                                   compensation plans, management retention
                                   plans, retirement plans, or similar plans or
                                   benefits being provided by the Bank to
                                   Greenwood as of the effective date of the
                                   Change in Control are reduced in their level,
                                   scope, or coverage, or any such insurance,
                                   plans, or benefits are eliminated, unless
                                   such reduction or elimination applies
                                   proportionately to all salaried employees of
                                   the Bank who participated in such benefits
                                   prior to such Change in Control; or

                                   (iv) Greenwood is transferred to a location
                                   outside of Asheville, North Carolina, without
                                   Greenwood's express written consent.

                  A Termination Event shall be deemed to have occurred on the
date such action or event is implemented or takes effect.

                  (c) In the event that Greenwood terminates this Agreement or
the Bank terminates this Agreement pursuant to this Paragraph 8, the Bank will
be obligated to pay or cause to be paid to Greenwood the greater of (i) all
amounts due and owing to the end of the term of this Agreement, or (ii) an
amount equal to two hundred ninety-nine percent (299%) of Greenwood's "base
amount" as defined in Section 28OG(b) (3) (A) of the Internal Revenue Code of
1986, as amended (the "Code").

                  (d) For the purposes of this Agreement, the term Change in
Control shall mean any of the following events:

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                                   (i) After the effective date of this
                                   Agreement, any "person" (as such term is
                                   defined in Section 7 (j) (8) (A) of the
                                   Change in Bank Control Act of 1978) ,
                                   directly or indirectly, acquires beneficial
                                   ownership of voting stock, or acquires
                                   irrevocable proxies or any combination of
                                   voting stock and irrevocable proxies,
                                   representing thirty-five percent (35%) or
                                   more of any class of voting securities of the
                                   Bank, or acquires control of in any manner
                                   the election of a majority of the directors
                                   of the Bank;

                                   (ii) The Bank consolidates or merges with or
                                   into another corporation, association, or
                                   entity, or is otherwise reorganized, where
                                   the Bank is not the surviving corporation in
                                   such transaction; or

                                   (iii) All or substantially all of the assets
                                   of the Bank are sold or otherwise transferred
                                   to or are acquired by any other corporation,
                                   association, or other person, entity, or
                                   group.

                  Notwithstanding the other provisions of this Paragraph 8, a
transaction or event shall not be considered a Change in Control if, (i) the
transaction is effected to reorganize the Bank into a holding company form of
organization or, (ii) prior to the consummation or occurrence of such
transaction or event, Greenwood and the Bank agree in writing that the same
shall not be treated as a Change in Control for purposes of this Agreement.

                  (e) Amounts payable pursuant to this Paragraph 8 shall be
paid, at the option of Greenwood either in one lump sum or in equal monthly
payments over the remaining term of this Agreement.

                  (f) Following a Termination Event which gives rise to
Greenwood's rights hereunder, Greenwood shall have twenty-four (24) months from
the date of occurrence of the Termination Event to terminate this Agreement
pursuant to this Paragraph 8. Any such termination shall be deemed to have
occurred only upon delivery to the Bank or any successor thereto, of written
notice of termination which describes the Change in Control and Termination

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Event. If Greenwood does not so terminate this Agreement within such twenty-four
month period, Greenwood shall thereafter have no further rights hereunder with
respect to that Termination Event, but shall retain rights, if any, hereunder
with respect to any other Termination Event as to which such period has not
expired.

                  (g) It is the intent of the parties hereto that all payments
made pursuant to this Agreement be deductible by the Bank for federal income tax
purposes and not result in the imposition of an excise tax on Greenwood.
However, if any payments to be made to or for the benefit of Greenwood are
deemed to be "parachute payments" as that term is defined in Section 28OG(b) (2)
of the Code, the Bank shall pay to Greenwood the amount of any excise taxes
imposed on Greenwood as well as any additional tax imposed on Greenwood as a
result of such payment.

                  (h) In the event any dispute shall arise between Greenwood and
the Bank as to the terms or interpretation of this Agreement, including this
Paragraph 8, whether instituted by formal legal proceedings or otherwise,
including any action taken by Greenwood to enforce the terms of this Paragraph 8
or in defending against any action taken by the Bank, the Bank shall reimburse
Greenwood for all costs and expenses, proceedings or actions, in the event
Greenwood prevails in any such action.

                  9. SUCCESSORS AND ASSIGNS.

                  (a) This Agreement shall inure to the benefit of and he
binding upon any corporate or other successor of the Bank which shall acquire,
directly or indirectly, by conversion, merger, consolidation, purchase or
otherwise, all or substantially all of the assets of the Bank.

                  (b) The Bank is contracting for the unique and personal skills
of Greenwood. Therefore, Greenwood shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Bank.

                  10. MODIFICATION; WAIVER; AMENDMENTS. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the parties hereto. No waiver
by either party hereto, at any time, of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No amendments or

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additions to this Agreement shall be binding unless in writing and signed by
both parties, except as herein otherwise provided.

                  11. APPLICABLE LAW. This Agreement shall be governed in all
respects whether as to validity, construction, capacity, performance or
otherwise, by the laws of North Carolina, except to the extent that federal law
shall be deemed to apply.

                  12. SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.

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                  IN WITNESS WHEREOF, the parties have executed this Agreement
under seal and in such form as to be binding as of the day and year first
hereinabove written.

                                            THE BANK OF ASHEVILLE

                                            By:  _____________________________
                                                    Max O. Cogburn, Chairman

ATTEST:

_______________________________
____________________, Secretary

                                                  ____________________________
                                                    G. Gordon Greenwood

                                       14<PAGE>

                                                                    EXHIBIT 10.4

                                CONTRACT OF SALE

   THIS CONTRACT OF SALE is made by and between ISLANDS BANCORP, a South
Carolina corporation hereinafter referred to as "Buyer", and N. EDWARD
MARCHETTI, hereinafter referred to as "Seller". The term "Buyer" shall include
any permitted assignee of Islands Bancorp hereunder. In good consideration of
the agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
agree as follows:

                                   ARTICLE I

                                  The Property

   1.1  Subject to the terms and provisions of this Contract, Seller agrees to
sell and convey to Buyer, and Buyer agrees to purchase from Seller, the
following property:

     All that certain piece, parcel or lot of land situate, lying and
     being on U.S. Hwy 21, Lady's Island, Beaufort County, State of South
     Carolina, containing 2.3+/- acres, and is more particularly shown and
     described on that certain plat, which is attached hereto as Exhibit
     "A".

                                   ARTICLE II

                                 Purchase Price

   2.1  Purchase Price: The purchase price for the property is FIVE HUNDRED
TWENTY THOUSAND ($520,000.00) DOLLARS.

   2.2  Method of Payment: The purchase price shall be paid by Buyer in the
following manner:

   (a)  Escrow Deposit: Buyer shall simultaneously with the execution hereof
        pay to the Seller the sum of FIFTEEN THOUSAND AND NO/100
        ($15,000.00) Dollars as a deposit to be applied toward the purchase
        price of the property. The Escrow Deposit shall be held in an
        account by Seller's attorney, Thomas C. Davis, Harvey & Battey,
        P.A., attorneys at law, Beaufort, South Carolina.

   (b)  Balance of Purchase Price: The balance of the purchase price (after
        credit for the Escrow Deposit) shall be paid at closing (as
        hereinafter defined) by Buyer as FIVE HUNDRED FIVE THOUSAND AND
        NO/100 ($505,000) in cash or certified bank funds.

                                  ARTICLE III

                                Title and Survey

   3.1  Survey: If Buyer desires to do so, within thirty (30) days from the
date hereof, Buyer may obtain a current boundary survey of the Property,
prepared by a South Carolina Registered Land Surveyor.

   3.2  Review of Title Abstract and Survey: Buyer shall have a review period
(the "Review Period") ending thirty (30) days from the date hereof. Any title
encumbrances or exceptions to which Buyer does not object within the Review
Period shall be deemed to be permitted exceptions to the status of Seller's
title (the "Permitted Exceptions"). With regard to any title or survey items to
which a Buyer objects within the Review Period, Seller shall have a period of
fifteen (15) business days from the date of Buyer's notice of such objections,
in which to elect to cure or otherwise satisfy Buyer's objections. For example,
Seller may satisfy

                                       1
<PAGE>

Buyer's objections to title by providing a title insurance binder issued by an
ALTA title insurance company at standard rates subject only to standard
exceptions for Beaufort County, and to no other exceptions or conditions
reasonably unsatisfactory to Buyer. If Seller elects not to cure said title
objections, or the same are not satisfied to Buyer's satisfaction within
Seller's 15 day cure period, then Buyer may elect to terminate this Contract by
providing written notice thereof to Seller within three (3) business days after
the end of such cure period, and receive the return of the Escrow Deposit. If
the Contract is not so terminated, Buyer will have been deemed to have fully
and completely waived any said objections and accept the status of title and
the survey "as is". Buyer shall also have the right to notify Seller of any
objectionable title matters that appear of record subsequent to the date of
Buyer's title abstract and/or title insurance binder and on or prior or date of
Closing. In such event, Seller shall have the same 15 business day cure period
as set forth above, and Buyer shall have the same rights to terminate this
Contract as set forth above.

                                   ARTICLE IV

                       Inspection, Termination and Waiver

   4.1  Due Diligence Period: For a period of ninety (90) days after the date
hereof (the "Due Diligence Period"), Buyer shall have the right to conduct
investigations, inspections and studies of the Property and to satisfy the
following contingencies, unless otherwise waived by Buyer:

  (a)  Buyer has applied for all necessary preliminary permits and approvals
       from Beaufort County, DHEC/OCRM, Lady's Island Fire Department, all
       utility providers in connection with the development of the property.

  (b)  Buyer has satisfied itself that public water and sewer is available
       for service to the property.

  (c)  Buyer has satisfied itself that the property meets all local, state
       and federal environmental regulations as evidenced by a Phase I or
       Phase II Environmental Assessment, which Buyer may obtain at its
       expense. If Buyer elects to obtain such Environmental Assessment,
       Buyer agrees to have such study or studies prepared within sixty (60)
       days after the Execution Date hereof, and Buyer agrees to provide
       Seller with a copy of such studies and Buyer's written confirmation of
       the acceptability or unacceptability of such studies within ten (10)
       days after the receipt by Buyer of such studies.

  (d)  Buyer may at buyer's option obtain an (MAI) appraisal which shall
       indicate a fair market value of the property at or above the Purchase
       Price and said appraisal shall in all regards be acceptable to any and
       all regulatory agencies involved in the chartering process for Islands
       Community Bank, NA (Proposed).

  (e)  Buyer has applied for and obtained preliminary approval from Beaufort
       County and the South Carolina Department of Transportation, or any
       other governmental entity or agency providing a curb cut for ingress
       and egress off of United States Highway 21 to the property.

  (f)  Buyer and/or Buyer's Architects and/or Engineers shall be satisfied
       that the property has adequate usable land situated and configured
       such that a banking main office can be located upon it. Further, Buyer
       and/or Buyer's Architects and/or Engineers shall be satisfied that the
       depression located in areas to be utilized in the construction of a
       building, parking, or any other capacity necessary to the erection and
       operation of a commercial bank may be filled at a cost acceptable to
       Buyer.

   4.2  Termination and Waiver: Should one or more of the above contingencies
not be satisfied, Buyer may give written notice to Seller on or before the
expiration of the Due Diligence Period that this Contract will be terminated
fifteen (15) business days after such notice (unless Seller can persuade Buyer
within such time period to rescind such notice), and the Escrow Deposit shall
be refunded to buyer upon such termination except for any portion of said
deposit that may previously become non-refundable pursuant to paragraph 4.2 (a)
herein. If such notice is given and not rescinded, neither party shall have any
further rights or obligations hereunder upon such termination, except Seller's
obligation to refund to Buyer the Escrow Deposit. Seller may however, be
granted an extension of time to satisfy any one or more of the above
contingencies as may be agreed upon by the parties to this agreement.

                                       2
<PAGE>

  (a)  $5,000 of the earnest money deposit shall become non-refundable 60
       days from date of this agreement and an additional $5,000 shall become
       non-refundable 90 days from date of this agreement, unless the sale in
       not consummated due to Seller's failure to meet its obligations and
       conditions for closing under this agreement. In the event Seller fails
       to meet its obligations under this agreement the entire ($15,000)
       earnest money deposit shall be returned to Buyer. Additionally, no
       earnest money deposits shall become non-refundable as a result of
       delay or disapproval by the Federal Bankruptcy Court in the process of
       approving this contract.

   4.3  Inspection: Buyer and its employees and designated agents and
consultants may, before closing or termination of this Contract, have access as
Seller's invitees to enter upon the Property to inspect, examine, and survey it
and to make test borings and soil borings tests, however, no trees or
vegetation shall be cut or removed other than brush necessary to clear for
surveying or testing on the property. Buyer shall at its expense, restore
property to its former condition in the event Buyer does not acquire the
property. Buyer agrees to indemnify, save and hold harmless Seller from and
against all liens and for any damages, or any death or injury to any person,
occurring on the property and from and against any other liability, cost of
expense including attorneys fees and court costs as a result of the activities
or presence of Buyer or persons acting on its behalf in the exercise of such
inspection rights. Notwithstanding anything herein to the contrary, Buyer shall
not do anything which materially interrupts Sellers' business on the property
prior to closing date.

   4.4  Cooperation: While this Contract is in effect, Seller and Buyer agree
to cooperate in good faith to achieve a closing of the sale and purchase of the
Property. Buyer agrees to keep the Seller fully informed of its efforts to
investigate the property and to otherwise perform this agreement. Seller agrees
to cooperate with Buyer in connection with obtaining any title insurance
binders and the preparation of any development plan applications submitted to
the County, State of Federal Government, and Seller agrees to provide the
necessary "consent" forms required by any governmental body or agency in
connection with such applications. Seller agrees to provide Buyer any existing
or proposed agreements, plans, information or knowledge with or from any
governmental entity(ies) or agency(ies) including, but not limited to, South
Carolina Department of Transportation and/or Beaufort County, relating to the
property as contained herein.

   4.5  Wetland and Environmental Protection Matters: Seller warrants to Buyer
that during all periods prior to and including the date of the closing
hereunder (a) no ponds or other wetlands on the Property have been altered,
filled or otherwise disturbed, and (b) no matter or materials have been stored
or buried on the Property that would be in contravention of any public health
law, whether by the U.S. Environmental Protection Agency or by the South
Carolina Department of Health and Environmental Control, and (c) no other
prohibited materials have been placed or stored on the Property. With respect
to such matters, Seller agrees at Seller's expense to remove them and to bring
the property into compliance with all appropriate laws and regulations prior to
the time of closing.

                                   ARTICLE V

                           Condition of the Property

   5.1  Buyer hereby acknowledges its familiarity with the Property and agrees
that during the Due Diligence Period it will conduct and complete any and all
investigations, inspections, and studies considered necessary and prudent to
determine the condition of the Property, and to determine any approvals needed
from the appropriate governmental authorities for the development of the
Property. At closing Seller will convey good, marketable and insurable Fee
Simple title to the Property to Buyer "as is" without express or implied
warranties of any nature, except as contained in the Deed conveying the
Property to Buyer.

   5.2  Seller shall not remove any timber, dirt materials, or otherwise affect
the condition of the Property after the signing of this Contract. All timber,
dirt, minerals, etc./shall remain with the Property and be a part of the
Property, and be transferred to the Buyer unless agreed to in writing by both
Parties. Seller shall not bring

                                       3
<PAGE>

any trash, refuse, debris, medical or other hazardous waste, or other improper
materials upon the Property. In the event any condemnation proceedings is
brought by any governmental authority, agency, utility, etc. prior to the
closing, then Buyer may elect to rescind this Contract and receive a refund of
the Escrow Deposit and any incremental payments made to Seller under Section
7.1 hereof. Seller shall remove any and all items considered as "Merchandise
for Resale", debris, vehicles, equipment, landscaping and gardening materials,
greenhouses, and furnishings from buildings that are located on the property.

                                   ARTICLE VI

                             Conditions to Closing

   6.1  In addition to any other conditions set forth in this Contract, Buyer's
obligation to purchase the Property at the closing shall be subject to the
fulfillment of each of the following conditions, it being understood that Buyer
may, at its election, waive in whole or in part, any or all of said conditions:

  (a)  Seller shall have (i) cured or otherwise addressed to Buyer's
       satisfaction any and all title and survey objections as to which Buyer
       has provided proper notification to Seller pursuant to section 3.2
       hereof; (ii) satisfied any contingency as to which Seller is obligated
       to satisfy under Article IV hereunder; and (iii) complied with all its
       other covenants and obligations under this Contract and not be in
       default hereunder.

  (b)  Buyer shall have satisfied any objections to the purchase of the
       Property which have been raised by the Office of the Comptroller of
       the Currency, or any other governmental agency which may be involved
       with the chartering, deposit insurance and/or operation of a bank.

  (c)  The minimum offering conditions for the release of offering proceeds
       to Islands Bancorp from the escrow agent in the initial public
       offering by Islands Bancorp of its common stock shall have been
       satisfied and such proceeds shall have been delivered to Islands
       Bancorp.

  (d)  No suit, action or other proceeding shall have been instituted before
       any court or administrative agency which could result in an order or
       decree enjoining the consummation of the transaction contemplated by
       this Contract or the divestment of any portion of the Property, other
       than any such suit, action or other proceeding instituted as a result
       of the sole act of Buyer.

   6.2  The Parties hereto agree that in the event Islands Bancorp shall
determine at any time prior to the end of the Due Diligence Period to terminate
its initial public offering of common stock, Buyer may terminate this Contract
by providing written notice thereof to Seller, whereupon the Escrow Deposit
shall be promptly refunded to Buyer except for any portion of said deposit that
may have previously become non-refundable pursuant to said provision pursuant
to paragraph 4.2 (a) herein.

                                  ARTICLE VII

                                    Closing

   7.1  Time and Place of Closing: If all pre-closing contingencies and
conditions have been satisfied or waived by Buyer, the Closing of this
transaction shall take place at the office of the Buyer's attorney on or before
May 15, 2000. If such contingencies or conditions have not been satisfied
within such time period, Buyer shall have the right to extend the Due Diligence
Period and to extend the time for Closing for thirty (30) day increments up to
six (6) months for a consideration of Three Thousand ($3,000.00) Dollars for
each incremental thirty (30) day extension. The consideration paid for any
incremental extension hereunder shall be advanced directly to Seller and shall
not be applied toward the purchase price of the Property. Notwithstanding the
foregoing, no incremental payment shall be due from Buyer with respect to any
extension of the Due Diligence Period or extension of the time for Closing
resulting from the failure of Seller to satisfy its obligations with respect to
any pre-closing contingency or condition including but not limited to delays
resulting from Federal Bankruptcy Court.

                                       4
<PAGE>

   7.2 Events of Closing: At the Closing:

  (a)  Seller shall deliver to Buyer the following:

     (i)  A General Warranty Deed (in form and substance customarily used
          in Beaufort County, South Carolina) duly executed and
          acknowledged by Seller conveying to Buyer fee simple title to
          the land which is the subject of this agreement free and clear
          of any lien, encumbrances or exception other than the Permitted
          Exceptions

     (ii) A Seller's Affidavit attesting to the absence unless otherwise
          provided for herein or for settlement at Closing, of any
          financing statements, claims of liens or potential lienors known
          to Seller and further attesting that (A) there have been no
          improvements to the Property for ninety (90) days immediately
          preceding the Closing Date for which payment in full has not
          been made; (B) that to the knowledge of Seller the Property has
          never been used for the storage or disposal of hazardous wastes;
          and (C) that since the date of this Contract, Seller has not
          caused to be placed against the Property and has no knowledge of
          the placement against the Property since such date of any
          easements, (except those to accommodate cross-easements for
          improved traffic flow), restrictions, leases, tenancies,
          encumbrances or rights affecting the Property, and has not taken
          any other action, either directly or indirectly, which would
          otherwise adversely affect title to the Property;

     (iii) a non-foreign affidavit, and

     (iv) possession of the Property.

  (b)  Buyer shall deliver to Seller the consideration required pursuant to
       this agreement.

   7.3  Expenses: Buyer shall pay the cost of the title abstract, the cost of
any title insurance, Buyer's share of the prorations, the fee to record the
Deed, and the Buyer's own attorney's fees. Except as otherwise provided in this
Section, all other expenses hereunder shall be paid by the party incurring such
expenses. Seller shall pay the cost of the statutory recording fee (formerly
called deed stamps), and Seller's own attorney's fees. Seller shall pay
Seller's proportionate share of the prorations as set forth below.

   7.4  Prorations: Real estate taxes shall be prorated to the day of Closing
based upon the number of actual days involved. Seller shall be responsible for
all such taxes for any period prior to the Closing. In connection with the
proration of the real estate taxes, if actual tax figures for the year of
Closing are not available on the Closing Date, an estimated proration of taxes
shall be made using tax figures from the preceding year; provided, however that
when actual taxes for the year of Closing become available, a corrected
proration required hereunder, if such taxes for the year of Closing increase
over those for the preceding year, Seller shall pay to Buyer a pro rata portion
of such increase, computed to the Closing Date, and conversely, if such taxes
for the year of Closing decrease from those of the preceding year, Buyer shall
have to pay to Seller a pro rata portion of such decrease, computed to the
Closing Date, any such payment to be made within (15) days after notification
by either party that such adjustment is necessary.

                                  ARTICLE VIII

                              Default and Remedies

   8.1  Default by Seller: Seller shall be in default hereunder if Seller shall
fail to meet, comply with or perform any covenant, agreement, or obligation
required, within the time limits and in the manner required in this Contract,
for any reason other than a Permitted Termination or a default by Buyer. Upon
the failure of Seller to comply with the terms hereof within the stipulated
time, and after receipt of notice of said default with a ten (10) day right to
cure, it is understood and agreed by and between the parties hereto that Buyer
pursue any and all rights and remedies available at law or in equity against
Seller.

                                       5
<PAGE>

   8.2  Default by Buyer: Buyer shall be in default hereunder if Buyer shall
fail to deliver at the Closing the consideration required by Section 2.1 (b)
hereof, for any reason other than a default by Seller hereunder or a Permitted
Termination. Upon the failure of Buyer to comply with the terms herein within
the stipulated time, and after receipt of notice of said default with a ten
(10) day right to cure, it is understood and agreed by and between the parties
hereto that Seller may pursue any and all rights and remedies available at law
or in equity against Buyer.

   8.3  Attorneys' Fees: If it is necessary for either the Buyer or Seller to
employ an attorney to enforce its rights pursuant to this Contract because of
the default of the other party, the defaulting party shall reimburse the
nondefaulting party for reasonable attorneys' fees incurred at trial or on
appeal.

                                   ARTICLE IX

                              Brokerage Commission

   Buyer represents to Seller that Buyer has not engaged the services of a
broker, nor is any commission or fee due from Buyer on account of the sale of
the Property. Seller represents to Buyer that Seller has listed the property
with ReMax, with the specification that Buyer is an excluded party and not
subject to any brokerage commission or fee due from Seller on account of the
sale of the Property. Each party agrees to indemnify the other party and to
hold the other party harmless from any loss, liability, damage, cost or expense
(including, without limitation reasonable attorneys' fees incurred in
negotiation, at trial or on appeal) paid or incurred by reason of any said
breach of the representation made in this Article.

                                   ARTICLE X

                                 Miscellaneous

   10.1  Notices: All notices, demands, requests and other communications
required or permitted hereunder Shall be in writing, and shall be deemed to be
delivered and received upon the earlier or occur of actual receipt, or
regardless of whether actually received (except where receipt is specified in
this Contract), deposited in a regularly maintained receptacle for the United
States mail, registered or certified, return receipt requested, postage fully
prepaid, addressed to the address as such party may have specified theretofore
by notice delivered in accordance with this Article and actually received by
the addressee:

      As to SELLER:  N. Edward Marchetti
                       131 Sea Island Parkway
                       Beaufort, South Carolina 29902

      As to BUYER:   Martin Goodman, Chairman
                       Islands Bancorp
                       211 Charles Street, Suite 100
                       Beaufort, South Carolina 29902

   10.2  Section 1031 Exchange: Buyer acknowledges and agrees that Seller
intends to sell the subject property pursuant to Section 1031 of the U.S.
Internal Revenue Service Code and agrees to cooperate with Seller in meeting
the requirements of such tax deferred sale and exchange.

   10.3  Integration; Modification; Waiver: This Contract constitutes the
complete and final expression of the agreement of the parties relating to the
Property, and supersedes all previous contracts, agreements, and understandings
of the parties, either oral or written, relating to the Property. This Contract
cannot be modified except by an instrument in writing (referring specifically
to this Contract) executed by the party against whom enforcement of the
modification is sought.

                                       6
<PAGE>

   10.4  Counterpart; Execution: This Contract may be executed in several
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.

   10.5  Headings; Construction: The headings which have been used throughout
this contract have been inserted for convenience of reference only and do not
constitute matter to be construed in interpreting this Contract. Words of any
gender used in this Contract shall be construed to include any other gender and
words in the singular number shall be held to include the plural; and vice
versa, unless the context requires otherwise. The words "herein", "hereunder",
and other similar compounds of the word "here" when used in this Contract refer
to the entire Contract and not to any particular provision or section. If the
last day of any time period stated herein shall fall on a Saturday, Sunday,
legal or banking holiday, then the duration of such time period shall be
extended so that it shall end on the next succeeding day which is not a
Saturday, Sunday, legal or banking holiday. The term "business day" shall mean
any day other than a Saturday, Sunday, legal or banking holiday.

   10.6  Invalid Provision: If any one or more of the provisions of this
Contract, or the applicability of any such provision to a specified situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Contract
and all other applications of any such provision shall not be affected thereby.

   10.7  Further Acts. In Addition to the acts recited in this Contract to be
performed by Seller arid Buyer, Seller and Buyer agree to perform at the
Closing or after the Closing any and all such further acts as may be reasonably
necessary to consummate the transactions contemplated hereby.

   10.8  Date of Contract: The date of this Contract shall for all purposes be
the date of the signature of the last of the parties to sign this Contract (the
"Execution Date").

   10.9  Assignment of Contract: This Contract may not be assigned by either
party hereto without the prior written consent of the other party; provided,
however, that the parties hereto agree that this Contract may be assigned at
any time by Islands Bancorp to Islands Community Bank, N.A. (Proposed). Seller
may assign this contract to a qualified intermediary in connection with
discharging the requirements of IRS Section 1031.

   10.10  Time for Acceptance: This offer shall expire on January 26, 2000 at
1:00 p.m. Eastern Standard Time.

   10.11  Restriction of Use: Buyer agrees that Buyer or assigns shall not
operate a retail landscape or garden center upon the property subject to this
contract for a period of five (5) years from date hereof.

   10.12  Approval by Federal Bankruptcy Court: Buyer and Seller acknowledge
that this agreement is subject to approval by Federal Bankruptcy Court. Seller
shall submit to Federal Bankruptcy Court and petition made for approval to the
Court within fifteen (15) days of the signing of this agreement with a copy of
petition to be provided to Seller.

<TABLE>
<CAPTION>
EXECUTED BY BUYER ON:                       EXECUTED BY SELLER ON:
<S>                                         <C>
          January 24, 2000      (Date)              1-24-00           (Date)
________________________________            __________________________
ISLANDS BANCORP                             EDWARD MARCHETTI

By: /s/ D. Martin Goodman                       /s/ Edward Marchetti
________________________________            __________________________
  D. Martin Goodman, Chairman                    Edward Marchetti
</TABLE>

                                       7

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