Document:

<PAGE>

                                PROMISSORY NOTE
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<TABLE>
<CAPTION>
<S>                <C>             <C>             <C>         <C>      <C>           <C>           <C>           <C>

    Principal         Loan Date        Maturity      Loan No     Call     Collateral     Account       Officer       Initials
   $500,000.00        12-24-1999      12-24-2000                                                         MB
------------------------------------------------------------------------------------------------------------------------------

References in the shaded area are for Lender's use and do not limit the applicability of this document to any particular loan
 or item.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Borrower:       ISLANDS BANCORP                 Lender:    The Bankers Bank
                500 CARTERET STREET, SUITE A               2410 Paces Ferry Road
                BEAUFORT, SC 29902                         600 Paces Summit
                Atlanta, GA 30339
<TABLE>
<CAPTION>
<S>                                       <C>                             <C>
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Principal Amount: $500,000.00            Initial Rate: 8.000%            Date of Note: December 24, 1999
</TABLE>

PROMISE TO PAY.  ISLANDS BANCORP ("Borrower") promises to pay to The Bankers
Bank ("Lender"), or order, in lawful money of the United States of America, the
principal amount of Five Hundred Thousand & 00/100 Dollars ($500,000.00) or so
much as may be outstanding, together with Interest on the unpaid outstanding
principal balance of each advance.  Interest shall be calculated from the date
of each advance until repayment of each advance.

PAYMENT.  Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on December 24, 2000.  In addition,
Borrower will pay regular quarterly payments of accrued unpaid Interest
beginning March 24, 2000, and all subsequent interest payments are due on the
same day of each quarter after that.  Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate in writing.
Unless otherwise agreed or required by applicable law, payments will be applied
first to accrued unpaid interest, then to principal, and any remaining amount to
any unpaid collection costs and late charges.

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to change
from lime to time based on changes in an index which is the Prime rate as
published in the Money Rates section of the Wall Street Journal.  (the "Index").
If two or more rates exist, then the highest rate will prevail.  Lender will
tell Borrower the current Index rate upon Borrower's request.  Borrower
understands that Lender may make loans based on other rates as well.  The
interest rate change will not occur more often than each day.  The Index
currently is 8.500% per annum.  The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 0.500 percentage points
under the Index, resulting in an initial annual rate of simple interest of
8.000%.  NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT.  Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due.  Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to make
payments of accrued unpaid interest.  Rather, they will reduce the principal
balance due.

LATE CHARGE.  If a payment is 15 days or more late, Borrower will be charged
$100.00.

DEFAULT.  Borrower will be In default if any of the following happens: (a)
Borrower fails to make any payment when due.  (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender.  (c) Any representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished.  (d) Borrower
becomes insolvent, a receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the, benefit of creditors, or any proceeding is
commenced either by Borrower or against Borrower under any bankruptcy or
insolvency laws.  (e) Any creditor tries to take any of Borrower's property on
or in which Lender has a lien or security interest.  This includes a garnishment
of any of Borrower's accounts with Lender.  (f) Any guarantor dies or any of the
other events described in this default section occurs with respect to any
guarantor of this Note.  (g) A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is Impaired.  (h) Lender in good faith deems itself
insecure.

LENDER'S RIGHTS.  Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount.  Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note 3.000
percentage points.  The interest rate will not exceed the maximum rate permitted
by applicable law.  Lender may hire or pay someone else to help collect this
Note if Borrower does not pay.  Borrower also will pay Lender that amount.  This
includes, subject to any limits under applicable law.  Lender's, costs of
collection, including court costs and fifteen percent (15%) of the principal
plus accrued interest as attorneys' fees, if any sums owing under this Note are
collected by or through an attorney-at-law, whether or not there is a lawsuit,
and legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated post-
judgment collection services.  If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law.
This Note has been delivered to Lender and accepted by Lender In the State of
Georgia.  Subject to the provisions on arbitration, this Note shall be governed
by and construed In accordance with the laws of the State of Georgia.

DISHONORED ITEM FEE.  Borrower will pay a fee to Lender of twenty dollars
($20.00) or five percent (5%) of the face amount of the check, whichever is
greater, if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law.  Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.

LINE OF CREDIT.  This Note evidences a straight line of credit.  Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances.  Advances under this Note may be requested only in writing by Borrower
or by an authorized person.  All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender's office shown
above.  The following party or parties are authorized to request advances under
the line of credit until Lender receives from Borrower at Lender's address shown
above written notice of revocation of their authority: BILL GOSSETT, PROPOSED
PRESIDENT.  Borrower agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited to any
of Borrower's accounts with Lender.  The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by Lender's
iniernal records, including daily computer print-outs.  Lender will have no
obligation to advance funds under this Note if: (e) Borrower or any guarantor is
in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender; or (e) Lender in good faith
deems itself Insecure under this Note or any other agreement between Lender and
Borrower.

ARBITRATION.  Lender and Borrower agree that all disputes, claims and
controversies between them, whether Individual, joint. or class in nature,
arising from this Note or otherwise, including without limitation contract and
tort disputes, shall be arbitrated pursuant to the Rules of the American
Arbitration Association upon request of either party.  No act to take or dispose
of any collateral securing this Note shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration agreement.  This
includes, without limitation, obtaining injunctive relief or a temporary
restraining order; invoking a power of sale under any deed of trust or mortgage;
obtaining a writ of attachment or imposition of a receiver; or exercising any
rights relating to personal property, including taking or disposing of such
property with or without judicial process pursuant to Article 9 of the Uniform
Commercial Code.  Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of any act, or exercise of any right, concerning
any collateral securing this Note, including any claim to rescind, reform, or
otherwise modify any agreement relating to the collateral securing this Note,
shall also be arbitrated, provided however that no arbitrator shall have the
right or the power to enjoin or restrain any act of any party.  Judgment upon
any award rendered by any arbitrator may be entered in any court having
jurisdiction.  Nothing in this Note shall preclude any party from seeking
equitable relief from a court of competent jurisdiction.  The statute of
limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes.  The Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement
of this arbitration provision.

ACCRUAL METHOD.  Interest will be calculated on an Actual/360 basis.

GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them.  Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor.  Upon any
change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability.  All such
parties waive any right to require Lender to take action against any other party
who signs this Note as provided in O.C.G.A. Section 10-7-24 and agree that
Lender may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone.  All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
<PAGE>

12-24-1999           PROMISSORY NOTE           Page 2
Loan No                (Continued)

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IN WITNESS WHEREOF, THIS NOTE HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED, WHO
ACKNOWLEDGES A COMPLETED COPY HEREOF.

BORROWER:

ISLANDS BANKCORP

By:    /S/ WILLIAM S. GOSSETT       (SEAL)
  ---------------------------------
  BILL GOSSETT, PROPOSED PRESIDENT

LENDER:

The Bankers Bank

By:
   --------------------------------
  Authorized Officer

--------------------------------------------------------------------------------
Variable Rate.  Line of Credit.         LASER PRO, Reg.  U.S. Pat.& T.M.Off Ver.
3.24a(c)1999CFI ProServices, Inc, All rights reserved.   (GA-D20 E3.241SLANDS.LN
C1.OVL)
<PAGE>

                              COMMERCIAL GUARANTY

<TABLE>
<CAPTION>
<S>                 <C>                <C>             <C>        <C>     <C>           <C>          <C>         <C>
    Principal        Loan Date        Maturity      Loan No     Call     Collateral     Account       Officer       Initials
                                                                                                         MB
------------------------------------------------------------------------------------------------------------------------------

References in the shaded area are for Lender's use and do not limit the applicability of this document to any particular loan
 or item.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S>                  <C>                              <C>               <C>
Borrower:            ISLANDS BANCORP                    Lender:        The Bankers Bank
                     500 CARTERET STREET, SUITE A                      2410 Paces Ferry Road
                     BEAUFORT, SC 29202                                600 Paces Summit
                                                                       Atlanta, GA 30339
</TABLE>

Guarantor:
--------------------------------------------------------------------------------

AMOUNT OF GUARANTY.  The principal amount of this Guaranty is 100.000% of all
amounts due now or later from Borrower to Lender as provided below, however in
no event to exceed Five Hundred Thousand & 00/100 Dollars ($500,000.00).

CONTINUING GUARANTY.  In consideration of the sum of Five Dollars ($5.00) and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged by Guarantor and to induce Lender to make loans or otherwise
extend credit to Borrower, or to renew or extend In whole or in part any
existing indebtedness of Borrower to Lender, or to make other financial
accommodations to Borrower, ______________________________________ ("Guarantor")
absolutely and unconditionally guarantees and promises to pay to The Bankers
Bank ("Lender") or its order, in legal tender of the United States of America,
100.000% of the Indebtedness (as that term is defined below) of ISLANDS BANCORP
("Borrower") to Lender on the terms and conditions set forth in this Guaranty.
The obligations of Guarantor under this Guaranty are continuing.  Guarantor
agrees that Lender, in its sole discretion, may determine which portion of
Borrower's indebtedness to Lender is covered by Guarantor's percentage guaranty.

DEFINITIONS.  The following words shall have the following meanings when used in
this Guaranty:

     Borrower.  The word "Borrower" means ISLANDS BANCORP.

     Guarantor.  The word "Guarantor" means ______________________________.

     Guaranty.  The word "Guaranty" means this Guaranty made by Guarantor for
the benefit of Lender dated December 24, 1999.

     Indebtedness.  The word "Indebtedness" is used in its most comprehensive
sense and means and includes any and all of Borrower's liabilities, obligations,
debts, and indebtedness to Lender, now existing or hereinafter incurred or
created, including, without limitation, all  loans, advances, interest, costs,
debts, overdraft indebtedness, credit card indebtedness, lease obligations,
other obligations, and liabilities of Borrower, or any of them, and any present
or future judgments against Borrower, or any of them; and whether any such
Indebtedness is voluntarily or involuntarily incurred, due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined; whether
Borrower may be liable individually or jointly with others, or primarily or
secondarily, or as guarantor or surety; whether recovery on the Indebtedness may
be or may become barred or unenforceable against Borrower for any reason
whatsoever; and whether the Indebtedness arises from transactions which may be
voidable on account of Infancy, insanity, ultra vires, or otherwise.

     Lender.  The word "Lender" means The Bankers Bank, its successors and
assigns.

     Related Documents.  The wards "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, security deeds,
mortgages, deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Indebtedness.

MAXIMUM LIABILITY.  The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time the sum of the principal amount of $500,000.00, plus
all interest thereon, plus all of Lender's costs, expenses, and attorneys' fees
incurred in connection with or relating to (a) the collection of the
Indebtedness, (b) the collection and sale of any collateral for the Indebtedness
or this Guaranty, or (c) the enforcement of this Guaranty.  Attorneys' fees
include, without limitation, attorneys' fees whether or not there is a lawsuit,
and if there is a lawsuit, any fees and costs for trial and appeals.

The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, the rights of Lender under all guaranties
shall be cumulative.  This Guaranty shall not (unless specifically provided
below to the contrary) affect or invalidate any such ether guaranties.  The
liability of Guarantor will be the aggregate liability of Guarantor under the
terms of this Guaranty and any such other unterminated guaranties.

NATURE OF GUARANTY.  Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force.   Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all Indebtedness
within the limits set forth in the preceding section of this Guaranty.
Accordingly, no payments made upon the Indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the Indebtedness or any of the Indebtedness which subsequently arises or is
thereafter incurred or contracted.

DURATION OF GUARANTY.  This Guaranty will take effect when received by Lender
without the necessity of any acceptance by lender, or any notice to Guarantor or
to Borrower, and will continue in full force until all Indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full.  If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing.  Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
Indebtedness created after actual receipt by Lender of Guarantor's written
revocation.  For this purpose and without limitation, the term "new
Indebtedness" does not include Indebtedness which at the time of notice of
revocation is contingent, unliquidated, undetermined or not due and which later
becomes absolute, liquidated, determined or due.  This Guaranty will continue to
bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender
prior to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the Indebtedness. All
renewals, extensions, substitutions, and modifications of the Indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness.  This Guaranty shall
bind the estate of Guarantor as to Indebtedness created both before and after
the death or incapacity of Guarantor, regardless of Lender's actual -notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect.  Release of any other guarantor or termination of any other guaranty
<PAGE>

12-24-99                     COMMERCIAL GUARANTY                     PAGE 2
Loan No                          (Continued)
--------------------------------------------------------------------------------
of the Indebtedness shall not affect the liability of Guarantor under this
Guaranty.  A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty.  It is
anticipated that fluctuations may occur in the aggregate amount of Indebtedness
covered by this Guaranty, and it is specifically acknowledged and agreed by
Guarantor that reductions in the amount of Indebtedness, even to zero Dollars
($0.00), prior written revocation of this Guaranty by Guarantor shall not
constitute a termination of this Guaranty.  This Guaranty Is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of the
guaranteed Indebtedness remains unpaid and even though the Indebtedness
guaranteed may from time to time be zero dollars ($0.00).

GUARANTOR'S AUTHORIZATION TO LENDER.  Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time:  (a) prior to
revocation as  set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness,
including increases and decreases of the rate of Interest on the  Indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(c) to take and hold security for the payment of  this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security,  with or without the substitution of new
collateral; (d) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's  sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (e) to determine how, when and what application
of payments and credits shall be made on the Indebtedness; (f) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(g) to sell, transfer, assign, or grant participations in all or any part of the
Indebtedness; and (h) to assign or transfer this Guaranty in whole or in part.

GUARANTOR'S REPRESENTATIONS AND WARRANTIES.  Guarantor represents and warrants
to Lender that (a) no representations or agreements of any kind have been made
to Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and do
not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest (herein; (f) upon  Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information  which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the dale of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation claim, Investigation, administrative proceeding or similar action
(Including those for unpaid taxes) against Guarantor is pending or threatened;
(I) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower, and (1) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
demotion. Guarantor agrees to keep adequately Informed from such means of any
facts, events, or circumstances which might In any way affect Guarantor's s
risks under this Guaranty, and Guarantor further agrees that, absent a request
for information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to command landing money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the Indebtedness or of any
nonpayment related to any collateral, or notice of any action or correction on
the part of Borrower, Lender, any surely, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans of obligations; of to resort for payment or to proceed directly
or al once against any person, Including Borrower or any other guarantor; (d) to
proceed directly against or exhaust any collateral held by Lander Tram Borrower,
any other guarantor, or any ether person; (e) to give notice of the terms, lime,
and place of any public or private sale of personal properly security held by
Lender from Borrower or to comply with any other applicable provisions of the
Uniform Commercial Code; (f) to pursue any other remedy within Lender's power;
or (g) to commit any act or omission of any kind, or at any time, with respect
to any matter whatsoever.

If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that al no lime shall Guarantor be or become a
"creditor" of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.

Guarantor also waives any and all rights or defenses arising by reason of (a)
the provisions of O.C.G.A.  Section 10-7-24 concerning Guarantor's right to
require Lender to lake action against Borrower or any Aone action@ or Aanti-
deficiency@ law or any other law which may prevent Lender from bringing any
action, including a claim for deficiency, against Guarantor, before or after
Lender's commencement or completion of any foreclosure action, either judicially
or by exercise of a power of sale; (b) any election of remedies by Lender which
destroys or otherwise adversely affects Guarantor's subrogation rights or
Guarantor's rights to proceed against Borrower for reimbursement, including
without limitation, any loss of rights Guarantor may suffer by reason of any law
limiting, qualifying, or discharging the Indebtedness; (c) any disability or
other defense of Borrower, of any other guarantor, or of any ether person, or by
reason of the cessation of Borrower's liability from any cause whatsoever, other
than payment in full in legal tender, of the Indebtedness; (d) any right to
claim discharge of the Indebtedness on the basis of unjustified impairment of
any collateral for the  Indebtedness; (e) any statute of limitations, if at any
time any action or suit brought by Lender against Guarantor is commenced there
is outstanding Indebtedness of Borrower to Lender which is not barred by any
applicable statute of limitations; or (f) any defenses given to guarantors allow
or in equity other than actual payment and performance of the Indebtedness. If
payment is made by Borrower, whether voluntarily or otherwise, or by any third
party, on the Indebtedness and thereafter Lender is forced to remit the amount
of that payment to Borrower's trustee in bankruptcy or to any similar person
under any federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of enforcement of this
Guaranty.

Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of setoff,
counterclaim, counter demand, recoupment or similar right, whether such claim,
demand or right may be asserted by the Borrower, the Guarantor, or both.

GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor's full knowledge
of its significance and consequences and that, under the circumstances, the
waivers are
<PAGE>

12-24-99                     COMMERCIAL GUARANTY                     PAGE 3
Loan No                          (Continued)
--------------------------------------------------------------------------------
reasonable and not contrary to public policy or law. It any such waiver is
determined to be contrary to any applicable law or public policy, such waiver
shall be effective only to the extent permitted by law or public policy.

LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other properly of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and retailers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
properly of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, whether held
jointly with someone else, or whether held for safekeeping or otherwise,
excluding however all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand upon or notice to
Guarantor.  No security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any neglect to exercise
such right of setoff or to enforce such security interest or by any delay In so
doing. Every right of setoff and security interest shall continue in lull force
and effect until such right of setoff or security interest is specifically
waived or released by an instrument In writing executed by Lender.

SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of borrower to Lender, whether now existing or hereafter created,
shall be prior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes Insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender and
shall be first applied by Lander to the Indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee In bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the Indebtedness. If
Lender so requests, any notes or credit agreements now or hereafter evidencing
any debts or obligations of Borrower to Guarantor shall be marked with a legend
that the same are subject to this Guaranty and shall be delivered to Lender
Guarantor agrees, and Lender hereby is authorized, in the name of Guarantor,
from time to time to execute and file financing statements and continuation
statements and to execute such other documents and to take such other actions as
Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:

Amendments. This Guaranty, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Guaranty. No alteration of or amendment to this Guaranty shall be effective
unless given in writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.

Applicable Law. This Guaranty has been delivered to Lender and accepted by
Lender in the Stale of Georgia. Subject to the provisions an arbitration, this
Guaranty shall be governed by and construed in accordance with the laws of the
Stale of Georgia.

Arbitration. Lender and Guarantor agree that all disputes, claims and
controversies between them, whether Individual, joint, or class In nature,
arising from this Guaranty or adherents, including without limitation contract
and tort disputes, shall be arbitrated personal to the Rules of the American
Arbitration Association, upon request of either party. No act to take or dispose
of any Collateral shall constitute a waiver of this arbitration agreement or be
prohibited by this arbitration agreement. This includes, without limitation,
obtaining injunctive relief or a temporary restraining order; invoking a power
of sale under any deed of trust or mortgage; obtaining a writ of attachment or
imposition of a receiver, or exercising any rights relating to personal
properly, including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial Code. Any
disputes, claims, or controversies concerning the lawfulness or reasonableness
of any act, or exercise of any right, concerning any Collateral, including any
claim to rescind, reform, or otherwise modify any agreement relating to the
Collateral, shall also be arbitrated, provided however that no arbitrator shall
have the right or the power to enjoin or restrain any act of any party. Judgment
upon any award rendered by any arbitrator may be entered in any court having
jurisdiction Nothing in this Guaranty shall preclude any party from seeking
equitable relief from a court of competent jurisdiction. The statute of
limitations, estoppel, waiver, aches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any monarch proceeding, and the commencement of an arbitration proceeding shall
be deemed the commencement of an action for these purposes. The Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement
of this arbitration provision.

Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand all of Lender's
costs and expenses, including attorneys' lees and Lender's legal expenses,
incurred in connection with the enforcement of this Guaranty. Lender may pay
someone else to help enforce this Guaranty, and Guarantor shall pay the costs
and expenses of such enforcement. Costs and expenses include all costs and
expenses of collection, including fifteen percent (15%) of the principal plus
accrued interest as attorneys' lees, if any sums awing under this Guaranty are
collected by or through an attorney-at-law, whether or not there is a lawsuit,
including attorney's fees and legal expenses for bankruptcy proceedings (and
including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Guarantor also
shall pay all court costs and such additional lees as may be directed by the
court.

Notices. All notices required to be given by either party to the other under
this Guaranty shall be in writing, may be sent by telefacsimile (unless
otherwise required by law), and, except for revocation notices by Guarantor,
shall be effective when actually delivered or when deposited with a nationally
recognized overnight courier, or when deposited in the United States mail, first
class postage prepaid, addressed to the party to whom the notice is to be given
al the address shown above or to such other addresses as either party may
designate to the ether in writing. All revocation notices by Guarantor shall be
in writing and shall be effective only upon delivery to Lender as provided above
in the section titled "ADURATION OF GUARANTY."  If there is more than one
Guarantor, notice to any Guarantor will constitute notice to all Guarantors. For
notice purposes, Guarantor agrees to keep Lender informed at all times of
Guarantor's current address.

Interpretation. In all cases where there is more then one Borrower or Guarantor,
then all words used in this Guaranty in the singular shall be deemed to have
been used in the plural where the context and construction so require; and where
there is more than one Borrower named in this Guaranty or when this Guaranty is
executed by more than one Guarantor, the words "Borrower" and "Guarantor"
respectively shall mean all and any one or more of them. The words "Guarantor,"
"Borrower," and "Lender" include the heirs, successors, assigns, and transferees
of each of them. Caption headings in this Guaranty are for convenience purposes
only and are not to be used to interpret or define the provisions of this
Guaranty. If a court of competent jurisdiction finds any provision of this
Guaranty to be invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more of Borrower or
Guarantor are corporations or partnerships, it is not necessary for Lender to
inquire into the powers of Borrower or Guarantor or of the officers, directors,
partners, or agents acting or purporting to act an their behalf, and any
Indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty.
<PAGE>

12-24-99                     COMMERCIAL GUARANTY                     PAGE 4
Loan No                          (Continued)
--------------------------------------------------------------------------------
Waiver. Lender shall not be deemed to have waived any rights under this Guaranty
unless such waiver is given in writing and signed by Lender.  No delay or
omission on the part of Lender in exercising any right shall operate as a waiver
of such right or any other right.  A waiver by Lender of a provision of this
Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise
to demand strict compliance with that provision or any other provision of this
Guaranty. No prior waiver by Lender, nor any course of dealing between Lender
and Guarantor, shall constitute a waiver of any of Lender's rights or of any of
Guarantor's obligations as to any future transactions.  Whenever the consent of
Lender is required under this Guaranty, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent instance,
where such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED DECEMBER 24, 1999.

IN WITNESS WHEREOF, THIS GUARANTY HAS BEEN SIGNED AND SEALED BY THE UNDERSIGNED,
WHO ACKNOWLEDGES A COMPLETED COPY HEREOF.

GUARANTOR:

X______________________________________________________________ (SEAL)
 (NAME OF GUARANTOR)

Signed, Sealed and Delivered in the presence of:

X__________________________________________________________________________
Unofficial Witness

--------------------------------------------------------------------------------
Notary Public, _________________________________________County

(NOTARY SEAL)

My Commission expires: ____________________________________

LENDER:

The Bankers Bank
By:  ____________________________________________________________________
     Authorized Officer

                           INDIVIDUAL ACKNOWLEDGMENT
STATE OF_________________________________)
                                         ) SS
COUNTY OF _______________________________)

PERSONALLY appeared before me
__________________________________________________________________________ who,
being duly sworn, says that he or she saw the within-named
_____________________________________________________ sign, seal, and, as his or
her act and deed, deliver the within-written Guaranty; and that he or she with
________________________________________________________________________________
________________ witnessed the execution thereof.

                                          --------------------------------------
                                                           (Witness)

SWORN to before me this______________________
day of _________________________A.D. 19___________.

______________________________________________(Seal)
Notary Public

My Commission expires:_____________________________

--------------------------------------------------------------------------------
LASER PRO. Reg. U.S. Pat & T. M. Off., Ver. 3.24a (c) 1999 CFI ProServices, Inc.
All rights reserved. [GA-E20 E3.24 F3.24 ISLANDS, LN C1.OVL]<PAGE>

                                                                    EXHIBIT 10.8

   STATE OF SOUTH CAROLINA
                                   LEASE AGREEMENT
   COUNTY OF BEAUFORT

   This is a Lease Agreement (hereinafter LEASE) between Anthony R. Porter
hereinafter LANDLORD), and Islands Bancorp (hereinafter TENANT) upon the terms
and conditions set forth herein.

   1. LANDLORD leases the real property (hereinafter PREMISES), which is
described below, and hereby subleases to the TENANT the PREMISES, to wit:

   211 Charles Street, Suite 100
   (southernmost four offices and reception area)

   2. TENANT acknowledges that (a) it has examined the PREMISES and will accept
them together with the fixtures, appurtenances and improvements thereto in
their existing state and condition, (b) that no representations, warranties or
guarantees have been made by the LANDLORD, and, (c) that the LEASE is subject
to the following, to wit:

  (a) All zoning regulations, past or future, which have or may affect the
     PREMISES; and,

  (b) The right of eminent domain; and,

  (c) All ordinances, statutes or regulations of any governmental or
     regulatory body thereof, whether or not of public record.

   3. The term of the LEASE will be for three (3) months beginning February 1,
2000 and ending April 30, 2000, both dates inclusive, unless sooner terminated
as herein provided. In the event the TENANT fails to vacate the PREMISES at the
end of the term, all terms and conditions of this LEASE will continue except
TENANT will be considered a holdover tenant at will. This LEASE will not
terminate nor will the obligation for the rent terminate until TENANT has (a)
cleaned and washed the PREMISES to the same state and condition as when
received, (b) completely locked and secured the PREMISES, (c) returned all keys
to the PREMISES to the LANDLORD, and (d) obtained the written signature of the
LANDLORD that the terms hereof and all rent payments have been fully and
completely complied with.

   4. The TENANT shall pay rent to the LANDLORD in the total amount of
$3,750.00 Dollars to be payable by the month in the sum of $1,250.00 per month
in advance beginning on February 1, 2000 to the LANDLORD at
                      and thereafter on the same day of each month.

   TENANT will pay $500.00 deposit in advance as a breakage and damage deposit
to be refunded should there be no breakage or damage at the end of the LEASE.
The breakage or damage deposit is not part of the rent and may not be deducted
from the last month's rent.

   Any payment not paid within five (5) days of the first day of each month
will incur a late charge of $3.00 per day.

   LANDLORD may withhold any portion of the deposit for unpaid rent.

   5. TENANT agrees to the following use and occupancy of the leased PREMISE
during the term hereof, to wit:

  (a) To use the PREMISES solely for the purpose of a commercial office
      space.

  (b) PREMISES will at all times be kept in a clean manner so as not to
      permit any offensive noise, odor or visual disturbance or other
      undesirable nuisance or anything which might unreasonably interfere
      with the safety, comfort or convenience of the LANDLORD or other
      Tenants.

                                       1
<PAGE>

  (c) All garbage, refuse and rubbish will be promptly removed from the
      PREMISES at the expense of the TENANT and they will not allow any
      burning, burying or other disposal of the same on the PREMISES.

  (d) Upon the expiration of this term, the TENANT shall surrender the
      PREMISES in the same order and condition as when received, normal wear
      and tear excepted, and shall remove from the PREMISES all properties
      not owned by the LANDLORD.

  (e) TENANT will not use or allow the use of the PREMISES for any illegal or
      unlawful purpose or permit the use or sale of drugs thereon.

   6. LANDLORD agrees that they are responsible for and will make all necessary
repairs, improvements and replacements of the appurtenances, including but not
limited to, the water lines, water system, sewer system, heating system,
plumbing system, cooling system, electrical system and wiring if such is in
excess of $50.00 per occurrence with such amount acting as a deductible from
the total bill. No TENANT incurred expenses shall be deducted from the monthly
rent under any circumstances.

   7. LANDLORD will be responsible for all utilities and services of any kind
which are provided to the PREMISES, such as, but not limited to, water, heat,
gas, and electricity. TENANT to pay its own telephone bills.

   8. TENANT will not make any alterations, additions or remodel the PREMISES
in any manner without the written consent of the LANDLORD.

   9. TENANT will insure itself against any and all personal injuries to TENANT
and TENANT'S guests or invitees and also for any damage of any kind or nature
to any property owned by TENANT and TENANT'S invitees or guests. LANDLORD shall
be named payee in all such policies. TENANT shall hold LANDLORD harmless and
indemnify LANDLORD for such personal injuries or damages to property as are
referred to herein.

    10. The following events will constitute a default by the TENANT and will
entitle the LANDLORD to enter the PREMISES upon five (5) days' written notice
and to assume possession thereof and will immediately terminate their LEASE, to
wit:

  (a) A failure to comply with any of the terms or conditions of the LEASE;
      or,

  (b) A failure to pay the rent within five (5) days after it is due; or,

  (c) The desertion or vacating of the PREMISES for thirty (30) days; or,

  (d) The allowance of any pet or animal on the PREMISES without the written
      consent of the LANDLORD.

  (e) The institution by or against the TENANT or any bankruptcy or
      insolvency proceedings; or,

  (f) The assignment or subletting of the PREMISES or any portion thereof
      except by the written permission of the LANDLORD.

    11. LANDLORD or his designated representative may enter the PREMISES at any
reasonable time for the purpose of inspecting the leased PREMISES or to correct
and enforce any default by the TENANT.

    12. This Agreement shall be construed, interpreted and enforced by the laws
of the State of South Carolina.

    13. The covenants and conditions of this LEASE shall be binding on the
heirs, executors or legal representatives of the respective parties and shall
be construed as covenants running with the land.

    14. This LEASE constitutes the entire agreement between the parties and may
not be modified or changed except in writing and signed by all parties hereto.

    15. TENANT shall pay and be liable for all legal costs and charges
including reasonable attorney's fees, which may be lawfully incurred by the
LANDLORD (a) in obtaining a correction ion or enforcement of any default of
this LEASE, (b) in obtaining possession upon default of this LEASE, or (c) in
obtaining possession after the termination of the LEASE.

                                       2
<PAGE>

   Executed on January 7, 2000.

LANDLORD

        /s/ Anthony R. Porter
_____________________________________
          Anthony R. Porter

TENANT

Islands Bancorp

        /s/ William B. Gossett
By___________________________________
          William B. Gossett

                                       3

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