Document:

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                                   DEMAND NOTE
                    GreenPoint Home Equity Loan Trust 2000-3
                                December 18, 2000

         ON DEMAND, for value received, GreenPoint Bank ("GreenPoint"), promises
to pay, in lawful money of the United States of America, to Bankers Trust
Company, as trustee (the "Trustee"), under the Indenture, dated as of December
1, 2000 (the "Indenture"), between the Trustee and GreenPoint Home Equity Loan
Trust 2000-3, as Issuer, on the dates and in the amounts requested by the
Trustee in accordance with the terms of the Indenture.

         GreenPoint has issued this Demand Note to the Trustee. Demand for
payment hereunder shall be made by the Trustee pursuant to a Demand Request
substantially in the form of Exhibit A hereto. This Demand Note will terminate
and cease to be of further force or effect immediately following the close of
business on December 16, 2002 or such earlier date as of which no further
payments hereunder may be demanded by the Trustee pursuant to the Indenture.

         Interest shall accrue on the amount due under this Demand Note from the
date of demand until the date payment is made (payable on demand and computed on
the basis of a 360-day year for the actual number of days elapsed) at the rate
for overnight funds as published in N.Y. Federal Reserve Statistical Release
H.15(519).

         If the indebtedness represented by this Demand Note, or any part
thereof, is collected at law or in equity or in bankruptcy, receivership or
other court proceedings, or this Demand Note is placed in the hands of attorneys
for collection, GreenPoint agrees to pay, in addition to the principal and
interest (if any) due under this Demand Note, reasonable attorneys' and
collection fees.

         The undersigned and all sureties, endorsers and guarantors of this
Demand Note waive demand, presentment for payment, notice of nonpayment,
protest, notice of dishonor and protest, notice of intention to accelerate,
notice of acceleration and all other notices, filing of suit and such security
or release of any party primarily or secondarily liable hereon and further agree
that it will not be necessary for any holder hereof, in order to enforce payment
of this Demand Note by it, to first institute suit or exhaust its remedies
against GreenPoint or others liable hereunder, and consent to any extension or
postponement of time of payment of this Demand Note or any other indulgence with
respect hereto, without notice thereof to any of them.

         The undersigned hereby irrevocably submits to the jurisdiction of the
United States District Court for the District of New York and any court in the
State of New York located in the City of New York and County of New York, and
any appellate court from any thereof, in any action, suit or proceeding brought
against it in connection with this Demand Note or for the recognition or
enforcement of any judgment, and the undersigned hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard or determined in such New York state court or, to the
extent permitted by law, in such federal court. The undersigned hereto agrees
that a final judgment in any such action, suit or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. To the extent permitted by applicable law, the
undersigned

                                       1

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hereby waives and agrees not to assert by way of motion, as a defense or
otherwise in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that the Demand Note may not be litigated in
or by such courts.

         To the extent permitted by applicable law, the undersigned agrees that
it shall not seek and hereby waives the right to seek any review of the judgment
of any such court by any court of any other nation or jurisdiction which may be
called upon to grant an enforcement of such judgment.

         The undersigned hereby irrevocably agrees that the summons and
complaint or any other process in connection with this Demand Note may be served
by mailing to the address set forth below or by hand delivery to a person of
suitable age and discretion at the address set forth below. Such service will be
complete on the date such process is so mailed or delivered, and the undersigned
will have thirty days from such completion of service in which to respond in the
manner provided by law. The undersigned may also be served in any other manner
permitted by law, in which event the undersigned's time to respond shall be the
time provided by law.

         THE UNDERSIGNED HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR
INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS DEMAND NOTE. THE UNDERSIGNED
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE AGENT OR ATTORNEY OR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
HAS BEEN ADVISED BY THE TRUSTEE THAT THE TRUSTEE HAS BEEN INDUCED TO ACCEPT THIS
DEMAND NOTE BY, AMONG OTHER THINGS, THIS WAIVER.

                                       2

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         This Demand Note shall be governed by, and for all purposes construed
in accordance with, the laws of the State of New York.

                                       GREENPOINT BANK

                                       By: /s/ Howard C. Bluver
                                           --------------------------------
                                           Name:  Howard C. Bluver
                                           Title: Senior Vice President and
                                                    General Counsel

                                           Address: 90 Park Avenue
                                                    New York, NY  10016

                                       3

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                                    EXHIBIT A

                                 DEMAND REQUEST

To:               GreenPoint Bank
                  90 Park Avenue, 4th Floor
                  New York, NY  10016
                  Attention:  General Counsel
                  Telephone:  (212) 834-1724
                  Telecopier:  (212) 834-1404

Re:               GreenPoint Home Equity Loan Trust 2000-3
                  Home Equity Loan Asset-Backed
                  Securities, Series 2000-3 - Demand Note

Payment Date:
                           -----------------------------------------------------

         We refer to that certain Indenture dated as of December 1, 2000 (the
"Indenture"), by and between GreenPoint Home Equity Loan Trust 2000-3, as Issuer
and Bankers Trust Company, as Trustee, relating to the above-referenced
Securities and Demand Note. All capitalized terms not otherwise defined herein
shall have the same respective meanings assigned to such terms in the Indenture.

         (a) The Trustee has determined under the Indenture that in respect of
the above-referenced Payment Date the following amounts are payable under the
Demand Note:

<TABLE>
<S>                                                                                        <C>
                  (1)      For Realized Losses:                                            $_________

                  (2)      To achieve the Specified Overcollateralization
                           Amount (applies only to December 16, 2002 Payment
                           Date):                                                          $_________

                  (3)      For Capitalized Interest Shortfalls:                            $_________
</TABLE>

         (b) Accordingly, pursuant to the Indenture, this statement constitutes
a demand for payment under the Demand Note in the amount of $______ [(a)(1) +
(a)(2) + (a)(3)].

         No payment demanded hereunder is in excess of the amount payable under
the Demand Note.

         The amount demanded in this Demand Request should be paid to: [Payment
Instructions].

                                       1

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         IN WITNESS WHEREOF, the Trustee has executed and delivered this Demand
Request this ____ day of ______________.

                                       BANKERS TRUST COMPANY,
                                       as Trustee

                                       By:
                                              ---------------------------------

                                       Title:
                                              ---------------------------------EXHIBIT 4.1

                                  WARRANT PLAN
                                       OF
                          SMITH RIVER BANKSHARES, INC.

                                    ARTICLE I
                               PURPOSE OF THE PLAN

             The Board of Directors of Smith River Bankshares,  Inc. ("Company")
has determined that it is in the best interests of the Company to issue Warrants
to the Company's organizers to purchase the Company's Common Stock in connection
with the  Company's  initial  public  offering of Common Stock  ("Initial  Stock
Offering").  The Company  proposes to issue up to 87,500  shares of Common Stock
and Warrants to purchase Common Stock in Units in the respective  amount to each
organizer set forth on Exhibit A hereto (as to each such organizer, the "Initial
Warrants").  Each Unit will  contain  one share of Common  Stock and one Warrant
which will  entitle  the holder  thereof to  purchase  additional  Common  Stock
subject to the terms and conditions hereof.  Therefore,  the Board of Directors,
in order to provide for the above, has adopted this Warrant Plan ("Plan") on the
date set forth herein.

                                   ARTICLE II
                                SCOPE OF THE PLAN

         Section 1. Definitions. Unless the context clearly indicates otherwise,
the following terms have the meanings set forth below:

         1.01.    "Board" means the Board of Directors of the Company.

         1.02.  "Change in Control"  means a change in control  occurring  after
Commencement  Date of a nature that would be  required to be reported  (assuming
such event has not been  "previously  reported") in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act");
provided  that,  notwithstanding  the foregoing and without  limitation,  such a
change  in  control  shall be  deemed to have  occurred  at such time  after the
Opening Date as (a) any Person is or becomes the "beneficial  owner" (as defined
in Rule  13d-3 or Rule  13d-5  under  the  Exchange  Act as in effect on June 1,
1999), directly or indirectly of 20% or more of the combined voting power of the
Company's  voting  securities;  (b) the Incumbent Board ceases for any reason to
constitute at least the majority of the Board, provided that any person becoming
a director  subsequent  to the date hereof whose  election,  or  nomination  for
election by the Company's  shareholders,  was approved by a vote of at least 75%
of the directors comprising the Incumbent Board (either by a specific vote or by
approval of the proxy  statement of the Company in which such person is named as
a nominee for  director,  without  objection to such  nomination)  shall be, for

<PAGE>

purposes of Section 1.02  considered  as though such person were a member of the
Incumbent Board;  (c) all or  substantially  all of the assets of the Company or
the assets of Smith River Community Bank, N.A. are sold, transferred or conveyed
by any means,  including  but not limited to direct  purchase or merger,  if the
transferee  is not  controlled  by the Company.  (For  purposes of the foregoing
"control"  means the ownership of more than 50% of the combined  voting power of
such entity's voting  securities);  or (d) the Company is merged or consolidated
with  another  corporation  or  entity  and  as  a  result  of  such  merger  or
consolidation  less  than  75%  of  the  outstanding  voting  securities  of the
surviving or resulting  corporation or entity shall be owned in the aggregate by
the  former  shareholders  of  the  Company.  Notwithstanding  anything  in  the
foregoing to the contrary, no change in control shall be deemed to have occurred
for purposes of this Plan by virtue of any  transaction  after the  Commencement
Date (x)  arranged  or caused by a federal  bank  regulatory  agency  possessing
appropriate  jurisdiction on the grounds of failing  financial  condition of the
Company or Smith River Community  Bank,  N.A. which results in the  acquisition,
directly  or  indirectly,  of 20% or more of the  combined  voting  power of the
Company's  voting  securities by any Person or (y) which results in the Company,
any  subsidiary  of the  Company  or any profit  sharing  plan,  employee  stock
ownership  plan  or  employee  benefit  plan  of  the  Company  or  any  of  its
subsidiaries  (or any  trustee  of or  fiduciary  with  respect to any such plan
acting in such capacity) acquiring,  directly or indirectly,  20% or more of the
combined voting power of the Company's voting securities.

         1.03.  "Common  Stock"  means the  common  stock (no par  value) of the
Company.

         1.04.  "Commencement  Date" means the date Smith River  Community Bank,
N.A. opens for business.

         1.05. "Expiration Date" shall be 5:00 p.m. Eastern Standard Time on the
tenth anniversary of the Commencement Date.

         1.06. "Incumbent Board" means the Board as constituted on the date this
Plan is adopted.

         1.07.  "Person"  has the  meaning  ascribed  to that  term in  Sections
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934.

         1.08.  "Plan"  means this  Warrant  Plan as adopted by the Board as set
forth herein and as amended from time to time.

         1.09. "Warrant" means the right to purchase additional shares of Common
Stock pursuant to this Plan.

         1.10.  "Warrant   Certificate"  means  the  evidence  of  ownership  of
Warrants,  as  executed  and  issued by the  Company in  substantially  the form
attached hereto as Exhibit B.

         Section 2. Warrants.  There is hereby authorized 87,500 Warrants,  each
of which  shall be  redeemable  for one  share of Common  Stock of the  Company.
Warrants  shall be included  only in Units offered by the Company in its Initial
Stock  Offering  and may be issued only to those  persons set forth on Exhibit A
hereto in the amount of the Initial Warrants set forth on Exhibit A with respect
to them.  Any Warrants not issued in connection  with the Initial Stock Offering
shall automatically expire.

<PAGE>

         Section 3. Form of Warrants.  The certificates  evidencing the Warrants
(the "Warrant  Certificates")  shall be  substantially  in the form set forth in
Exhibit B attached hereto, and may have such letters,  numbers or other marks of
identification  or  designation  and such  legends,  summaries  or  endorsements
printed,  lithographed or engraved  thereon as the Company may deem  appropriate
and as are not inconsistent  with provisions of this Plan, or as may be required
to comply with any law, or with any rule or regulation made pursuant thereto, or
to conform to usage.  Each  Warrant  Certificate  shall  entitle the  registered
holder  thereof,  subject  to the  provisions  of this Plan and of such  Warrant
Certificate, to purchase (when exercisable and prior to the Expiration Date) one
fully paid and  non-assessable  share of Common Stock for each Warrant evidenced
by such Warrant Certificate, at $10.00 per share.

         Section 4. Issuance of Warrants.  The Warrant  Certificates when issued
shall be dated and signed on behalf of the  Company,  manually  or by  facsimile
signature, by its Chairman of the Board or President, and by its Secretary or an
Assistant  Secretary  under its corporate seal, if any. The seal of the Company,
if any, may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrants.

         Section 5. Registration of Warrant Certificates; Registered Owners. The
Company  shall  maintain or cause to be  maintained  books for  registration  of
ownership and permitted transfer of ownership of the Warrant Certificates issued
hereunder.  Such books  shall  show the names and  addresses  of the  respective
holders of the Warrant Certificates and the number of Warrants evidenced by each
such Warrant  Certificate.  The Company may deem and treat the registered holder
of a Warrant  Certificate  as the  absolute  owner  thereof and of the  Warrants
evidenced  thereby  (notwithstanding  any notation of ownership or other writing
thereon made by anyone),  for the purpose of any  exercise of such  Warrants and
for all other  purposes,  and the Company shall not be affected by any notice to
the contrary.

         Section  6.  Transfers  and  Exchanges.   The  Warrants  shall  not  be
transferable  by the holder  except by operation of the law. The Warrants may be
detached from the Unit of which they are a part and the Common Stock forming the
other part of the Unit sold or otherwise transferred separately.

         Section 7. Mutilated,  Destroyed,  Lost or Stolen Warrant Certificates.
Upon receipt by the Company of evidence  reasonably  satisfactory to the Company
of the loss, theft,  destruction or mutilation of any Warrant Certificate,  and,
in the case of loss,  theft or destruction,  receipt by the Company of indemnity
or security  reasonably  satisfactory to them, and  reimbursement to them of all
reasonable  expenses incidental  thereto,  and, in the case of mutilation,  upon
surrender and cancellation of the Warrant Certificate, the Company shall deliver
a new Warrant  Certificate of like tenor  representing in the aggregate the same
number of Warrants.

         Section 8. Payment of Taxes.  With respect to any Warrant,  the Company
will pay all documentary  stamp taxes  attributable  to the initial  issuance of
shares of Common Stock upon the exercise of the Warrant; provided, however, that
the  Company  shall not be required to pay any tax or taxes which may be payable
in  respect  of any  transfer  involved  in the  issue  of  any  Warrant  or any
certificates  for  shares  of  Common  Stock in a name  other  than  that of the

<PAGE>

registered  holder of the Warrant or Warrant  Certificate  surrendered  upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such Warrant or  certificates  unless or until the person or persons  requesting
the  issuance  thereof  shall have paid to the Company the amount of such tax if
any, or shall have  established to the satisfaction of the Company that such tax
if required, has been paid.

         Section 9. Exercise,  Purchase Price and Duration of Warrants.  Subject
to the  provisions of this Plan, the holder of a Warrant shall have the right to
purchase  from the Company (and the Company shall issue and sell to that holder)
one fully paid and  non-assessable  share of Common  Stock for each  Warrant the
holder is then entitled to exercise  hereunder at the initial  exercise price of
$10.00 per share (subject to adjustment as provided in Section 11 hereof),  upon
the surrender of the Warrant Certificate  evidencing such Warrant to the Company
on any business day prior to 5:00 p.m.  Eastern  Standard  Time on or before the
Expiration  Date,  with the Form of Election to Exercise on the reverse  thereof
duly  completed and executed,  and payment of the Exercise Price in lawful money
of the United  States of  America in cash or by  cashiers'  or  certified  check
payable to the  Company.  The holder may  exercise its rights under the Warrants
only as follows:  (a) no Warrant may be exercised prior to the first anniversary
of the  Commencement  Date;  (b)  beginning  on  the  first  anniversary  of the
Commencement  Date,  33-1/3% of the Initial  Warrants  may be  exercised  by the
holder;  (c) beginning on the second  anniversary of the  Commencement  Date, an
additional  33-1/3% of the Initial Warrants may be exercised by the holder;  and
(d) beginning on the third  anniversary date of the Commencement  Date, the last
33-1/3% of the Initial  Warrants  may be  exercised  by each holder and, in each
case,  (i) the holder has  continuously  served as a director  of the Company or
Smith River Community Bank,  N.A. since the  Commencement  Date through the date
such Warrants become exercisable;  and (ii) the holder has attended at least 75%
of all  meetings  of the  boards of  directors  of the  Company  or Smith  River
Community  Bank,  N.A.  during such  period.  Notwithstanding  the  foregoing or
anything  to the  contrary  in  this  Plan  all of the  Initial  Warrants  shall
automatically and unconditionally  become immediately  exercisable upon a Change
in Control of the  Company.  The  exercise  price and the shares of Common Stock
issuable upon exercise of a Warrant shall be subject to adjustment  from time to
time in the manner  specified in Section 11 and, as initially  established or as
so adjusted,  are referred to herein as the  "Exercise  Price" and the "Shares",
respectively. The Warrants shall be so exercisable either as an entirety or from
time to time in part at the election of the  registered  holder  thereof  except
that the Company shall not be required to issue certificates in denominations of
less than 100 shares.  In the event that fewer than all Warrants  evidenced by a
Warrant  Certificate  are  exercised  at any  time  prior to 5:00  p.m.  Eastern
Standard Time on the Expiration  Date a new Warrant  Certificate  will be issued
for the Warrants not so exercised.

              No payments or adjustments  shall be made for any cash  dividends,
whether paid or declared, on Shares issuable on the exercise of a Warrant.

              No  fractional  Shares  shall be issued upon  exercise of Warrant,
but,  in lieu  thereof,  there  shall be paid to the  registered  holder  of the
Warrant  Certificate  evidencing such Warrant or other person  designated on the
Form of Election to Exercise as soon as practicable after date of surrender,  an
amount in cash equal to the  fraction of the current  market value of a share of
Common Stock equal to the fraction of a Share to which such Warrant related. For

<PAGE>

such purpose, the current market value of a Share shall be the book value of the
Common Stock as of the last day of the month  immediately  preceding the date of
the Election to Exercise.

              Subject  to  Section  8  hereof,   upon  surrender  of  a  Warrant
Certificate,  with the Form of Election to Exercise duly completed and executed,
together with payment of the Exercise Price, the Company shall issue and deliver
the full number of Shares  issuable upon  exercise of the Warrants  tendered for
exercise.  Shares  shall be  deemed  to have  been  issued,  and any  Person  so
designated by the registered holder shall be deemed to have become the holder of
record of a Share, as of the date of the surrender of the Warrant Certificate to
which the Share relates and payment of the appropriate Exercise Price; provided,
however,  if the date of surrender of a Warrant  Certificate  shall occur within
any period during which the transfer  books for the  Company's  Common Stock are
closed for any purpose,  such Person shall not be deemed to have become a holder
of record of a Share until the opening of business on the day of reopening  said
transfer books, and certificates  representing such Shares shall not be issuable
until such day.

         Section  10.  Reservation  of  Shares.  The  Company  will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its  authorized  but unissued  Common  Stock,  for the purpose of enabling it to
satisfy any  obligation to issue Shares upon  exercise of Warrants,  through the
close of business on the Expiration Date, the number of Shares  deliverable upon
the exercise of all outstanding Warrants.

         The  Company  covenants  that all Shares  issued  upon  exercise of the
Warrants will, upon issuance in accordance with the terms of this Agreement,  be
fully paid and non-assessable.

         The shares  allocated for such Warrants were included for  Registration
under  the  Securities  Act of  1993,  and  Rule 415  adopted  thereunder,  in a
registration of securities filed by the Company with the Securities and Exchange
Commission on November 2, 1999.

         Section  11.   Adjustment  of  Exercise  Price  and  Number  of  Shares
Purchasable.  The Exercise Price and the number of Shares which may be purchased
upon the  exercise of each Warrant are subject to  adjustment  from time to time
upon the occurrence,  after the date hereof,  if the Company shall (i) declare a
dividend on the Common Stock payable in shares of common stock,  (ii)  subdivide
the  outstanding  Common Stock into a greater  number of shares or (iii) combine
the outstanding Common Stock into a smaller number of shares,  then the Exercise
Price in effect on the record date for that dividend or on the effective date of
that subdivision or combination, and/or the number and kind of shares of capital
stock  issuable  on that date,  shall be  proportionately  adjusted  so that the
holder of any  Warrant  exercised  after such time shall be  entitled to receive
solely the aggregate  number and kind of shares of capital  stock which,  if the
Warrant had been  exercised  immediately  prior to that date,  such holder would
have  owned  upon  exercise  and been  entitled  to  receive  by  virtue of that
dividend,  subdivision, or combination.  The foregoing adjustments shall be made
by the Company successively whenever any event listed above shall occur.

         Section 12.  Notices to Warrant  Holders.  Upon any  adjustment  to the
Exercise Price pursuant to Section 11 hereof, the Company within twenty calendar
days thereafter shall cause to be given to the registered holders of outstanding

<PAGE>

Warrant  Certificates  at their  respective  addresses  appearing on the Warrant
Certificate  register  written notice of the  adjustments  by first-class  mail,
postage prepaid.

         Section 13.  Supplements and  Amendments.  The Company may from time to
time  supplement  or amend this Plan  without the consent or  concurrence  of or
notice to any holders of Warrant  Certificates  or Warrants in order to cure any
ambiguity,   to  correct  or  supplement  any  provision  herein  which  may  be
inconsistent   with  any  other  provision  herein,  to  correct  any  defective
provision,  clerical omission, mistake or manifest error herein contained, or to
make any other provision with respect to matters or questions arising under this
Plan  which  shall  not be  inconsistent  with  the  provisions  of the  Warrant
Certificates; provided that such action shall not adversely affect the interests
of the holders of the Warrant Certificates or Warrants.

         Section  14.  Governing  Law.  This Plan and each  Warrant  Certificate
issued  hereunder  shall be deemed to be a  contract  made under the laws of the
State of Virginia  and for all  purposes  shall be governed  by,  construed  and
enforced in accordance with the laws of said State.

         Section  15.  Benefits  of This  Plan.  Nothing  in this Plan  shall be
construed  to give to any person or  corporation  other than the Company and the
registered  holders  of the  Warrant  Certificates  or  Warrants  any  legal  or
equitable  right,  remedy or claim  under this Plan;  this Plan shall be for the
sole and  exclusive  benefit of the  Company and the  registered  holders of the
Warrant Certificates.

         Section  16.  Forfeiture.  If  at  any  time  while  the  Warrants  are
outstanding, the Board of Governors of the Federal Reserve System makes a formal
capital call on the Company or the  Comptroller  of the Currency  makes a formal
capital call on Smith River Community Bank, N.A., the holder will be required to
exercise  all  exercisable  Warrants  in  whole  or  part as may be  needed  for
additional  required  capital or the Warrants shall be forfeited.  The number of
Shares as to which the  Warrants  shall be  exercised by each holder to meet the
capital  call will be  calculated  pro rata on the basis of the number of Shares
subject to Warrant.  The exercise price for Shares  purchased upon such exercise
shall be equal to the  greater of $10 per Share or the then  current  book value
per share of the Shares.  Any Warrants  not  required to be exercised  under the
terms of any such capital call may be exercised under the original terms of this
Agreement.

Adopted by the Board of Directors of Smith River Bankshares, Inc.
On the 27th day of July, 1999.
Amended by the Board of Directors of Smith River Bankshares, Inc.
On the 26th day of August, 1999.
Amended by the Board of Directors of Smith River Bankshares, Inc.
On the 21st day of December, 2000.

<PAGE>

CERTIFICATE NO.

NUMBER OF WARRANTS:

                       WARRANT CERTIFICATE FOR PURCHASE OF
                         COMMON STOCK (NO PAR VALUE) OF
                          SMITH RIVER BANKSHARES, INC.

             (See Reverse side for Summary of Terms of Warrant Plan)

            THIS CERTIFIES THAT, for value  received,  _________________________
is the owner of the number of Warrants set forth above,  each of which  entitles
the owner to  purchase,  subject to the terms and  conditions  hereof and of the
Warrant  Plan  referred  to  herein,  prior to the  Expiration  Date (as  herein
defined), one share of Common Stock, no par value per share ("Shares"), of Smith
River Bankshares,  Inc., a Virginia corporation  ("Company") at $10.00 per share
("Exercise  Price"),  payable to the Company in cash,  or by  cashiers  check or
other official bank check. Exercisable Warrants may be exercised by delivery and
surrender  of this  Warrant  Certificate,  along  with the form of  Election  to
Exercise on the reverse hereof duly completed and executed together with payment
of the Exercise Price at the office of the Company or its duly appointed  agent.
The Warrants evidenced by this Warrant  Certificate are NOT TRANSFERABLE  except
as specifically permitted by the Warrant Plan.

            This Warrant  Certificate  and each Warrant  represented  hereby are
issued  pursuant  to  and  are  subject  to all of  the  terms,  provisions  and
conditions of that certain  Warrant Plan dated as of July 27, 1999  (hereinafter
called the  "Warrant  Plan"),  as amended  on August  26,  1999,  adopted by the
Company, to all of which terms,  provisions and conditions the registered holder
of this Warrant Certificate  consents by acceptance hereof. The Warrant Plan and
the  summary  of its  terms  set  forth  on the  reverse  side of  this  Warrant
Certificate are hereby  incorporated into this Warrant  Certificate by reference
and made a part  hereof.  The Warrant  Plan sets forth the terms and  conditions
under  which  the  exercise  price  for a  Warrant,  the  number of shares to be
received  upon  exercise of a Warrant,  or both,  may be adjusted.  Reference is
hereby  made  to  the  Warrant  Plan  for a  full  description  of  the  rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Company and the holders of the Warrant Certificates or Warrants and all Warrants
and Warrant Certificates are subject, in all respects, to the same. In the event
of any  conflict  between the  provisions  of this Warrant  Certificate  and the
Warrant Plan, the provisions of the Warrant Plan shall control.

            Copies of the  Warrant  Plan are  available  for  inspection  at the
Company's  Office,  or may be obtained  upon  written  request  addressed to the
Secretary,  Smith River  Bankshares,  Inc.,  730 E. Church Street & Booker Road,
Martinsville,  Virginia  24112.  The  Company  shall  not be  required  upon the
exercise  of the  Warrants  evidenced  by  this  Warrant  Certificate  to  issue
fractions of Warrants or Shares, but shall make adjustments  therefor in cash on
the basis of the current market value of any fractional  interest as provided in
the Warrant Plan.

<PAGE>

The Warrants  evidenced by this  Warrant  Certificate  shall expire at 5:00 p.m.
Eastern Standard Time on ______________________ or sooner if called by The Board
of Directors  pursuant to the Warrant  Plan.  The day and time of  expiration is
referred to herein as the "Expiration Date".

            IN WITNESS  WHEREOF,  Smith River  Bankshares,  Inc. has caused this
certificate to be executed by the signature of its duly authorized  officers and
has caused its corporate seal to be hereunto affixed.

Dated:
      -----------------------           -------------------------------------
                                        President

                                        -------------------------------------
                                        Secretary/Treasurer
<PAGE>
                      (Reverse Side of Warrant Certificate)

                          SMITH RIVER BANKSHARES, INC.
                        Summary of Terms of Warrant Plan

           The  Warrant  Plan  provides  that,  upon the  occurrence  of certain
events,  the  initial  exercise  price  set  forth on the  face of this  Warrant
Certificate  may,  subject to specified  conditions,  be adjusted (such exercise
price, as initially established or as adjusted from time to time, is referred to
herein as the "Exercise Price"). If the Exercise Price is adjusted,  the Warrant
Plan provides that the number of shares which can be purchased upon the exercise
of  each  Warrant  represented  by this  Warrant  Certificate  and  the  type of
securities  or other  property  subject to  purchase  upon the  exercise of each
Warrant  represented by this Warrant  Certificate are subject to modification or
adjustment.

           The  Warrants  evidenced  by  this  Warrant  Certificate  may  not be
immediately  exercisable  and may not be exercisable at all unless and until the
conditions  to the same, as specified in the Warrant  Plan,  occur.  The Warrant
Plan also permits  acceleration of the right to exercise the Warrants  evidenced
by this Warrant  Certificate  in the event of a Change of Control of the Company
(as defined in the Warrant Plan).

           The Warrants  evidenced by this Warrant  Certificate  shall expire at
5:00 p.m.  Local Time on  _________________,  or sooner if called in  accordance
with the Warrant Plan.

           In the event that upon any exercise the number of Warrants  exercised
shall be fewer than the total number of Warrants represented hereby, the Company
shall issue to the registered  holder a new Warrant  Certificate  evidencing the
Warrants not so exercised.

           No payment or adjustment will be made for any cash dividends, whether
paid or declared, on any Shares issuable upon exercise of a Warrant. The Company
shall not be required to issue  fractions  of Shares or any  certificates  which
evidence  fractional  Shares. In lieu of a fractional Share, if any, the Company
shall  pay to the  registered  holder  of a  Warrant  with  regard  to which the
fractional Share would be issuable, an amount in cash equal to the same fraction
of the current  market value (as  determined  pursuant to the Warrant Plan) of a
Share.

           The Company may deem and treat the registered  holder of this Warrant
Certificate as the absolute owner hereof and of the Warrants represented by this
Warrant Certificate  (notwithstanding any notation of ownership or other writing
hereon made by anyone) for the purposes of any exercise of such Warrants and for
all other  purposes,  and the Company shall not be affected by any notice to the
contrary.

           Prior  to  the  exercise  of the  Warrants  represented  hereby,  the
registered holder of this Warrant Certificate,  shall not be entitled to vote on
or be deemed the holder of Common Stock or any other  securities  of the Company
which may at any time be issuable on the exercise  hereof for any  purpose,  and
nothing  contained  in the Warrant  Plan or herein  shall be construed to confer

<PAGE>

upon the holder of this Warrant Certificate,  any of the rights of a stockholder
of the Company or any right to vote for the  election of  directors  or upon any
matter submitted to stockholders at any meeting thereof,  or to give or withhold
consent to any corporate  action  (whether upon any  recapitalization,  issue of
stock,  reclassification  of stock, change of par value or change of stock to no
par value, consolidation,  merger, conveyance or otherwise) or to receive notice
of meetings or other actions,  affecting stockholders or to receive dividends or
subscription rights or otherwise.

                              ELECTION TO EXERCISE

           The  undersigned  hereby  irrevocably  elects  to  exercise  Warrants
evidenced by this  warrant  Certificate,  to purchase  full Shares of the Common
Stock of the Company  ("Shares") and herewith tenders payment for such Shares in
the amount of $_________ in accordance  with the terms hereof.  The  undersigned
requests that a certificate  representing  such Shares be registered in the name
of  ____________________________  and  that  the  Certificate  be  delivered  as
follows:

                        --------------------------------
                               Name (Please Print)

             Whose address is
                              --------------------------------------
                             Address (Please Print)

              ----------------------------------------------------
                 Delivery Address (if different) (Please Print)

<PAGE>

If said  Shares  are  fewer  than  all the  Shares  purchasable  hereunder,  the
undersigned  requests  that a new Warrant  Certificate  evidencing  the right to
purchase the balance of the Shares be registered in the name of the undersigned,
whose address is listed below.

                 -----------------------------------------------
               Name of Registered Holder of Warrant (Please Print)

                 -----------------------------------------------
                             Address (Please Print)

              ----------------------------------------------------
                 Delivery Address (if different) (Please Print)

---------------------                       -------------------------------
Dated                                       Signature

----------------------------
(Social Security or Other Taxpayer
Identification Number of Holder)

Signature Guaranteed:

----------------------------

         NOTE: The above signature must correspond with the name as written upon
the face of this Warrant Certificate in every particular,  without alteration or
enlargement or any change whatsoever. If the holder hereof is hereby electing to
exercise fewer than all Warrants  represented by this Warrant Certificate and is
requesting that a new Warrant Certificate  evidencing the Warrants not exercised
be  registered  in a name other than that in which this Warrant  Certificate  is
registered,  the  signature  of the holder of this Warrant  Certificate  must be
guaranteed.

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