Document:

<PAGE>

September 28, 2001

[LOGO] First Union

Mr. William R. Frazier, Executive Vice President & CFO
P.O. Box 19247
Charlotte, North Carolina 28219

Re: Loan Agreement dated as of November 5, 1999

Dear Bill;

Reference is made to that certain Loan Agreement dated as of November 5, 1999
(the "Agreement") between Nations Express, Inc. (the "Borrower") and First Union
National Bank (the "Bank"). The Agreement and all other documents executed and
delivered in connection therewith are collectively referred to herein as the
"Loan Documents". All capitalized terms used but not defined herein shall have
the meanings assigned in the Loan Documents.

The Agreement provides:

Total Liabilities to Effective Tangible Net Worth Ratio. Borrower shall, at all
-------------------------------------------------------
times, maintain a ratio of Total Liabilities to Effective Tangible Net Worth of
not more than 2.00 to 1.00. "Effective Tangible Net Worth" shall mean total
assets minus Total Liabilities. For purposes of this computation, the aggregate
amount of any intangible assets of Borrower including without limitation,
goodwill, franchises, licenses, patents, trademarks,, trade names, copyrights,
service marks, and brand names, shall be subtracted from total assets. "Total
Liabilities" shall mean all liabilities of Borrower, excluding debt fully
subordinated to Bank on terms and conditions acceptable to Bank, and including
capitalized leases and all reserves for deferred taxes and other deferred sums
appearing on the liabilities side of a balance sheet, in accordance with
generally accepted accounting principles applied on a consistent basis.

The Bank has determined that the Borrower has violated the above-referenced
provision due to the following:

Borrower did not maintain a ratio of Total Liabilities to Effective Tangible Net
Worth of not more than 2.00 to 1.00 as of June 30, 2001.

The Borrower has requested the Bank's waiver, and the Bank does hereby waive the
Borrower's default under this provision for the fiscal year ended June 30, 2001,
subject to Borrower's execution of and return of this letter. This waiver is
limited to the default recited above and shall not be construed to be a waiver
of any subsequent default under the referenced provision, or of any existing or
future defaults under any other provision of any Loan Document.

The Borrower, by signature below, represents and warrants that there exist no
defaults or event of default under the Loan Documents other than those
specifically waived herein, that the Loan Documents are in full force and
effect, and that Borrower does not have any defenses to its obligations under
the Loan Documents nor any claims against Bank.

<PAGE>

Please evidence your acceptance of the terms of this waiver by signing and
returning to the Bank a copy of this letter bearing original authorized
signature of each of the parties indicated.

Sincerely,

FIRST UNION NATIONAL BANK

/s/ Janet R. Helms

Janet R. Helms
Vice President

ACCEPTED AND AGREED TO:

Nations Express, Inc.

By: /s/ William R. Frazier     Date:
    ----------------------          ----------
    William R. Frazier
    Executive Vice President & CFO<PAGE>

                                                                    Exhibit 10.1

STATE OF NORTH CAROLINA

COUNTY OF HENDERSON
                                                             EMPLOYMENT CONTRACT

          THIS AGREEMENT is made and entered into this   26th   day of June,
                                                       --------
1997 (the "Effective Date"), between MountainBank, a bank organized under North
Carolina law ("Employer") and J. W. Davis ("Employee");

          WHEREAS, Employer has been formed in Hendersonville, Henderson County,
North Carolina; and

          WHEREAS, Employee has agreed to become President and Chief Executive
Officer of said bank; and

          WHEREAS, Employer wishes to provide for the terms and conditions of
Employee's employment;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:

     1.   Relationship Established and Duties.
          -----------------------------------

          (a) Duties.  Employer hereby employs Employee as the President and
              ------
Chief Executive Officer of Employer, and to hold the title of President and
Chief Executive Officer.  Subject to the terms and conditions hereof, Employee
will perform such duties and exercise such authority as are customarily
performed and exercised by persons holding such office, together with such other
duties and responsibilities as shall be assigned to him from time to time by the
Board of Directors, all subject to the general direction of the Board of
Directors of Employer, exercised in good faith in accordance with standards of
reasonable judgment.

          (b) Election as a Director.  During the term of this Agreement,
              ----------------------
Employee shall be nominated for election and shall serve as a member of
Employer's Board of Directors and as a member of its Executive Committee,
subject to the terms hereof; provided, however, that Employee's service as a
director shall be subject to (i) election by Employer's shareholders in
accordance with its bylaws and applicable law, and to (ii) Employee's continued
satisfaction of qualification requirements applicable to service as a director
of FDIC-insured, North Carolina banks and to his continued acceptability to
Employer's banking regulators.

          (c) Standards of Performance and Conduct.  Employee accepts such
              ------------------------------------
employment and agrees to (i) faithfully and diligently discharge his obligations
under this Agreement and promote Employer, its business and its business
development activities in its market areas, (ii) perform the duties associated
with his position with Employer or assigned to him by the Board of Directors in
a manner that is competent and reasonably satisfactory to Employer's Board of
Directors, and (iii) to use his best efforts to implement Employer's business
policies and procedures currently in effect or as are established from time to
time by the Board of Directors.  Employee shall devote his full time, attention,
and efforts to the diligent performance of his duties herein specified and as
<PAGE>

an officer and director of Employer and will not accept employment with any
other individual, corporation, partnership, governmental authority or other
entity, or engage in any other venture for profit which Employer may consider to
be in conflict with his or its best interest or to be in competition with the
Employer's business, or which may interfere in any way with the Employee's
performance of his duties hereunder.

          Employee, in the execution of his duties under this Agreement, shall
comply in all material respects with personnel policies or any code of conduct
adopted by the Board of Directors and generally applicable to Employer's
officers and employees as the same shall be in effect, amended or supplemented
from time to time, and with all applicable federal and state statutes applicable
to Employer and all rules, regulations, administrative orders, statements of
policy and other pronouncements or standards promulgated thereunder.

     2.   Term of Employment.  Employment shall commence upon the Effective Eate
          ------------------
of this Agreement.  The term of this Agreement shall continue until the date
three (3) consecutive years from the Effective Date hereof or, if earlier, until
the first to occur of the following conditions:

               (i)    the death of Employee;

               (ii)   the complete disability of Employee. "Complete disability"
as used herein shall mean the inability of Employee, due to illness, accident,
or any other physical or mental incapacity, to perform the services provided for
hereunder for an aggregate of sixty (60) days within any period of one hundred
twenty (120) consecutive days during the term hereof;

               (iii)  the discharge of Employee by Employer for "Cause" which,
as used herein, shall mean (A) such negligence or misconduct as shall
constitute, as a matter of law, a breach of the covenants and obligations of
Employee hereunder, (B) failure or refusal of Employee to comply with or
discharge his duties and obligations under this Agreement, (C) Employee being
convicted of a crime involving dishonesty, breach of trust or moral turpitude,
or the occurrence of any event described in Section 19 of the Federal Deposit
Insurance Act or any other event or circumstance which disqualifies Employee
from serving as an employee or executive officer of, or a party affiliated with,
Employer; (D) if Employee is removed, suspended or prohibited from participating
in the conduct of Employer's affairs (or if proceedings for that purpose are
commenced), by any banking regulatory authority; or (E) the exclusion of
Employee by the carrier or underwriter from coverage under Employer's then
current "blanket bond" or other fidelity bond or insurance policy covering its
directors, officers or employees, or the occurrence of any event which Employer
believes, in good faith, will result in Employee being excluded from such
coverage, or having coverage limited as to Employee as compared to other covered
officers or employees, pursuant to the terms and conditions of such "blanket
bond" or other fidelity bond or insurance policy.

          Termination of Employee's employment shall constitute a tender by
Employee of his resignation as an officer and director of Employer.

     3.   Compensation.  For all services which Employee may render to Employer
          ------------
during the term hereof, Employer shall pay to Employee, subject to deductions as
may be required by law:

                                       2
<PAGE>

          (a) Base Salary.  An annual salary of $108,000.00 payable in equal
              -----------
monthly installments and subject to such deductions as may be required by law.
The Employer's Board of Directors shall review the Employee's base salary at
least annually and, in its sole discretion and for any reason satisfactory to
it, the Board of Directors may increase or decrease Employee's base salary on
each anniversary of the Effective Date of this Agreement; provided, however,
that on any such anniversary date the Board of Directors may not decrease
Employee's base salary by more than 10% of Employee's previous annual salary
rate.

          (b) Performance Bonuses.  Following the end of each of Employer's
              -------------------
fiscal years during the term of this Agreement, the Employee shall be eligible
to receive a cash bonus equaling five percent (5%) of Employer's net pre-tax
income for the just-ended fiscal year (determined in accordance with generally
accepted accounting principles) if Employer achieves certain performance levels
established by the Board of Directors from time to time.

     4.   Other Benefits.  During the term of his employment hereunder, Employer
          --------------
shall furnish to Employee (i) use of an automobile (value not to exceed
$30,000.00), provided that Employer's lease costs and related vehicle insurance
expenses shall not exceed a total of $500.00 per month; (ii) a term life
insurance policy providing for death benefits of $500,000.00, and having a
beneficiary designated by Employee, at a cost not to exceed $900.00 per year;
(iii) group health and hospital insurance covering Employee and his family; (iv)
long term disability insurance with benefits of at least $75,000.00 per year, at
a cost not to exceed $3,100.00 per year; (v) retirement and other benefits plan
generally applicable to senior executives of the Employer; (vi) initiation fee
and monthly dues for membership in Hendersonville County Club, not to exceed
$1,500.00 and $50.00 respectively, and the Rotary Club dues; and (vii) normal
director's fees.

     5.   Stock Incentive Plan.  The Employer shall participate in and be
          --------------------
eligible for the grant of stock options, restricted stock awards, or other
awards provided for under any stock option plan, long-term incentive program or
any similar plan adopted by the Employer from time to time.  Upon approval by
the Commissioner of Banks and adoption of a stock option plan by the Employer's
shareholders, the Employer shall grant the Employee an option to purchase
3.3333% of the original number of shares of common stock issued by Employer in
connection with its organization at a price per share equal to the fair market
value of a share of such stock on the date the option is granted to Employee.
The award agreement for the stock option shall provide vestiture of one-fifth
(1/5) of the shares at the end of each fiscal year over a five (5) year period.
To be eligible for these stock incentives, the Employee must be employed by the
Employer at the end of each fiscal year, and the Employer must have met the
following performance goals:

               (i)  met or exceeded 100% of the performance projections for each
respective year as contained in the Employer's charter application filed with
the North Carolina State Banking Commission in connection with its organization;
and,

               (ii) the Employer's regulatory examination overall rating on its
most recent regular examination by the FDIC or the Commissioner of Bank is
satisfactory or better;

provided, however, that if the Employer does not meet the performance criteria
for any year, the shares subject to the option for such year may vest on the
following fiscal year, in the sole discretion

                                       3
<PAGE>

of the Employer if the Employer meets or exceeds the performance criteria for
such year in the following year.

          In the event of a change of control of Employer prior to the
expiration of three (3) years from the Effective Date of this Agreement and
before the final vesting date of any such incentive award, and provided that at
that time the Employee is still employed by Employer, then all previously
granted stock incentive awards contemplated above not already vested shall be
deemed to become fully vested immediately prior to the date of such change in
control in the same manner as if such had been earned by the Employee.

     6.   Expenses.  Upon presentment to Employer of expense reports in
          --------
sufficiently detailed form to comply with standards for deductibility of
business expenses established from time to time by the Internal Revenue Service,
Employer will reimburse Employee for all reasonable business expenses incurred
by Employee in connection with performance of his duties hereunder.  Such
expenses will be reviewed and approved by the Personnel Committee on a monthly
basis.  Reasonable moving and related travel expenses are acceptable.

     7.   Post Termination Covenants.
          --------------------------

          (a)  General.  Employee hereby acknowledges and agrees that (i)
               -------
Employer has made a significant investment in the development of its business in
the geographic area identified below as the "Relevant Market" and has acquired a
valuable economic interest which it is entitled to protect; (ii) in the course
of his service as an officer and employee of Employer, he will gain substantial
knowledge of and familiarity with Employer's customers and its dealings with
them, and other information concerning Employer's business, all of which
constitute valuable assets and privileged information; and, (iii) in order to
protect Employer's interest in its business, it is reasonable and necessary to
place certain restrictions on Employee's ability to compete against Employer and
on his disclosure of information about Employer's business and customers.  For
that purpose, and in consideration of Employer's agreements contained herein,
Employee covenants and agrees as provided below.

          (b)  Covenant Not to Compete.  During a period commencing on the date
               -----------------------
of this Agreement and ending on the date one (1) year following the effective
date of any termination (for any reason, and whether by Employer or Employee) of
Employee's employment with Employer (the "Restriction Period"), Employee will
not "Compete" (as defined below), directly or indirectly, with Employer in the
geographic area consisting of Henderson County, North Carolina, and any counties
contiguous thereto (the "Relevant Market").  Employee acknowledges and agrees
that the Relevant Market and Restriction Period are limited in scope to the
geographic territory and period of time reasonably necessary to protect
Employer's economic interest.

                 For the purposes of this Paragraph 7, the following terms shall
have the meanings set forth below:

                 Compete.  The term "Compete" means: (i) soliciting or securing
deposits from any Person residing in the Relevant Market for any Financial
Institution; (ii) soliciting any Person residing in the Relevant Market to
become a borrower from any Financial Institution, or assisting

                                       4
<PAGE>

(other than through the performance of ministerial or clerical duties) any
Financial Institution in making loans to any such Person; (iii) soliciting any
Person residing in the Relevant Market to obtain any other service or product
from any Financial Institution, (iv) inducing or attempting to induce any Person
who was a Customer of Employer on the date of termination of Employee's
employment with Employer to change any depository, loan and/or other banking
relationship of the Customer from Employer to another Financial Institution; (v)
acting as a consultant, officer, director, independent contractor, or employee
of any Financial Institution that has its main or principal office in the
Relevant Market, or, in acting in any such capacity with any other Financial
Institution, to maintain an office or be employed at or assigned to or to have
any direct involvement in the management, supervision, business or operation of
any office of such Financial Institution located in the Relevant Market; or (vi)
communicating to any Financial Institution the names or addresses or any
financial information concerning any Person who was a Customer of Employer at
the date of termination of this Agreement or Employee's employment with Employer
for any reason.

                 Customer. The term "Customer of Employer" means any Person with
whom Employer has or has had a depository or loan relationship and/or to whom
Employer has provided any other service or product.

                 Financial Institution. The term "Financial Institution" means
(i) any federal or state chartered bank, savings bank, savings and loan
association or credit union, (ii) any holding company for or corporation that
owns or controls any such entity, (iii) any subsidiary or service corporation of
any such entity or holding company, or any entity controlled in any way by any
such entity or holding company, or (iv) any other Person engaged in the business
of making loans of any type, soliciting deposits, or providing any other service
or product that is provided by Employer.

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

          (c)  Confidentiality Covenant.  Employee covenants and agrees that any
               ------------------------
and all data, figures, projections, estimates, lists, files, records, documents,
manuals or other such materials or information (whether financial or otherwise,
and including any files, data or information maintained electronically, on
microfiche or otherwise) relating to Employer and its lending and deposit
operations and related businesses, regulatory examinations, financing sources,
financial results and condition, Customers (including lists of Customers and
former customers and information regarding their accounts and business dealings
with Employer), prospective customers, contemplated acquisitions (whether of
business or assets), ideas, methods, marketing investigations, surveys,
research, policies and procedures, computer systems and software, shareholders,
employees, officers and directors (herein referred to as "Confidential
Information") are confidential and proprietary to Employer and are valuable,
special and unique assets of Employer's business which are not directly
reproducible from any other source and to which Employee will have access during
his employment with Employer.  Employee agrees that (i) all such Confidential
Information shall be considered and kept as the confidential, private and
privileged records and information of Employer, and (ii) during the Term of
Employment and at all times following the termination of this Agreement or his
employment for any reason, and except as shall be required in the course of the
performance by Employee of his duties on behalf of Employer or otherwise
pursuant to the direct, written

                                       5
<PAGE>

authorization of Employer, Employee will not: divulge any such Confidential
Information to any other Person; remove any such Confidential Information in
written or other recorded form from Employer's premises; or make any use of any
Confidential Information for his own purposes or for the benefit of any Person
other than Employer. However, following the termination of Employee's employment
with Employer, this Paragraph 7(c) shall not apply to any Confidential
Information which then is in the public domain (provided that Employee was not
responsible, directly or indirectly, for permitting such Confidential
Information to enter the public domain without Employer's consent), or which is
obtained by Employee from a third party which or who is not obligated under an
agreement of confidentiality with respect to such information and who did not
acquire such Confidential Information in a manner which constituted a violation
of the covenants contained in this Paragraph 7(c) or which otherwise breached
any duty of confidentiality.

          (d) Reasonableness of Restrictions.  If any of the restrictions set
              ------------------------------
forth in this Paragraph 7 shall be declared invalid for any reason whatsoever by
a court of competent jurisdiction, the validity and enforceability of the
remainder of such restrictions shall not thereby be adversely affected.
Employee acknowledges that Employer has a legitimate economic interest in the
Relevant Market which this Paragraph 7 specifically is intended to protect, and
that the foregoing geographic and time limitations are reasonable and proper.
In the event the Restriction Period or any other such time limitation is deemed
to be unreasonable by a court of competent jurisdiction, Employee hereby agrees
to submit to the reduction of such period as the court shall deem reasonable.
In the event the Relevant Market is deemed by a court of competent jurisdiction
to be unreasonable, Employee hereby agrees that the Relevant Market shall be
reduced by excluding any separately identifiable and geographically severable
area necessary to make the remaining geographic restriction reasonable, but this
Paragraph 7 shall be enforced as to all other areas included in the Relevant
Market which are not so excluded.

          (e)  Remedies for Breach.  Employee understands and acknowledges that
               -------------------
a breach or violation by him of any of the covenants contained in Paragraphs
7(b) and 7(c) shall be deemed a material breach of this Agreement and will cause
substantial, immediate and irreparable injury to Employer, and that Employer
will have no adequate remedy at law for such breach or violation.  In the event
of Employee's actual or threatened breach or violation of the covenant contained
in either such Paragraph, Employer shall be entitled to bring a civil action
seeking, and shall be entitled to, an injunction restraining Employee from
violating or continuing to violate such covenant or from any threatened
violation thereof, or for any other legal or equitable relief relating to the
breach or violation of such covenant.  Employee agrees that, if Employer
institutes any action or proceeding against Employee seeking to enforce any of
such covenants or to recover other relief relating to an actual or threatened
breach or violation of any of such covenants, Employee shall be deemed to have
waived the claim or defense that Employer has an adequate remedy at law and
shall not urge in any such action or proceeding the claim or defense that such a
remedy at law exists.  However, the exercise by Employer of any such right,
remedy, power or privilege shall not preclude Employer or its successors or
assigns from pursuing any other remedy or exercising any other right, power or
privilege available to it for any such breach or violation, whether at law or in
equity, including the recovery of damages, all of which shall be cumulative and
in addition to all other rights, remedies, powers or privileges of Employer.

                                       6
<PAGE>

                    Notwithstanding anything contained herein to the contrary,
Employee agrees that the provisions of Paragraph 7(c) above and the remedies
provided in this Paragraph 7(e) for a breach by Employee shall be in addition
to, and shall not be deemed to supersede or to otherwise restrict, limit or
impair the rights of Employer under any state or federal law or regulation
dealing with or providing a remedy for the wrongful disclosure, misuse or
misappropriation of trade secrets or other proprietary or confidential
information.

          (f)  Survival of Covenants.  Employee's covenants and agreements and
               ---------------------
Employer's rights and remedies provided for in this Paragraph 7 shall survive
and remain fully in effect following any actual termination of Employee's
employment with Employer or the other termination of this Agreement.

     8.   Additional Regulatory Requirements.  Notwithstanding anything
          ----------------------------------
contained in this Agreement to the contrary, it is understood and agreed that
Employer (or any of its successors in interest) shall not be required to make
any payment or take any action under this Agreement if:

          (a) Employer is declared by any bank regulatory authority to be
insolvent, in default or operating in an unsafe or unsound manner; or,

          (b) in the opinion of counsel to Employer such payment or action (i)
would be prohibited by or would violate any provision of state or federal law
applicable to Employer, including without limitation the Federal Deposit
Insurance Act as now in effect or hereafter amended, (ii) would be prohibited by
or would violate any applicable rules, regulations, orders or statements of
policy, whether now existing or hereafter promulgated, of any bank regulatory
authority, or (iii) otherwise would be prohibited by any bank regulatory
authority.

     8.   Waiver of Provisions.  Failure of any of the parties to insist, in one
          --------------------
or more instances, on performance by the others in strict accordance with the
terms and conditions of this Agreement shall not be deemed a waiver or
relinquishment of any right granted hereunder or of the future performance of
any such term or condition or of any other term or condition of this Agreement,
unless such waiver is contained in writing signed by or on behalf of all the
parties.

     9.   Governing Law.  This Agreement shall be governed by and construed and
          -------------
enforced in accordance with the laws of the State of North Carolina.  If for any
reason any provision of this Agreement shall be held by a court of competent
jurisdiction to be void or unenforceable, the same shall not affect the
remaining provisions thereof.

     10.  Modification and Amendment.  This Agreement contains the sole and
          --------------------------
entire agreement among the parties hereto and supersedes all prior discussions
and agreements among the parties, and any such prior agreements shall, from and
after the date hereof, be null and void.  This Agreement shall not be modified
or amended except by an instrument in writing signed by or on behalf of the
parties hereto.

     11.  Counterparts and Headings.  This Agreement may be executed
          -------------------------
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which shall

                                       7
<PAGE>

constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this Agreement.

     12.  Contract Nonassignable.  This Agreement may not be assigned or
          ----------------------
transferred by Employee, in whole or in part.

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

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above.

                                        EMPLOYEE:

                                        /s/ J. W. Davis
                                        -----------------------------------
                                        J. W. Davis

                                        EMPLOYER:

                                        MOUNTAINBANK

                                        By: /s/ Boyd L. Hyder
                                           --------------------------------
ATTEST:                                 Title: Chairman
                                              -----------------------------

/s/ Wm Wilkerson
------------------------------------
Secretary

                                       8

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