Pledge And Security Agreement

EXHIBIT 10.4

BB&T Account No. [REDACTED]

PLEDGE AND SECURITY AGREEMENT THIS PLEDGE AND SECURITY AGREEMENT ("" Agreement" ) is made this 25 th day of June, 2008, by 1 st FINANCIAL SERVICES CORPORATION, a North Carolina bank holding company (the " Pledgor" ) for the benefit of BRANCH BANKING AND TRUST COMPANY , a North Carolina banking corporation (the " Bank" ).

RECITALS

A. The Bank has agreed to lend to the Pledgor the principal sum of $10,000,000.00 which shall be evidenced by a Promissory Note dated as of the date herewith, payable to the order of the Bank (including all extensions, renewals, modifications and substitutions thereof, the " Note" ).

B. The Pledgor is a shareholder of Mountain 1 st Bank & Trust Company . To secure payment of all indebtedness and obligations evidenced by the Note and under this Agreement and all of Pledgor' s future indebtedness or obligations to us (the " Obligations" ), the Pledgor has agreed to pledge and grant to the Bank the Pledged Securities (hereinafter defined).

NOW, THEREFORE, it is agreed as follows: 1. Pledge . As collateral security for the full and timely payment, performance and observance of the Obligations, whether now existing or hereafter arising, the Pledgor herewith pledges, assigns, transfers, hypothecates, delivers and deposits with the Bank, in a form transferable for delivery (together with stock powers duly executed in blank by the Pledgor), and grants to the Bank, a first priority security interest in the shares of stock and the certificates or other instruments or documents evidencing same more particularly described in Exhibit A hereto and such additional property at any time and from time to time receivable by the Bank hereunder or otherwise distributed in respect of or in exchange for any or all such shares and any other shares or instruments issued to the Pledgor by the corporations shown on Exhibit A (herein collectively called the " Pledged Securities" ) together with any and all products and proceeds of any of the foregoing in whatever form (the Pledged Securities and the products and proceeds thereof may be referred to collectively as the " Pledged Collateral" ).

2. Title . The Pledgor represents and warrants that the Pledged Securities are, and will be on deposit hereunder, duly and validly issued and duly and validly pledged with the Bank in accordance with the law, and agrees to defend the Bank' s right, title, lien and security interest in and to the Pledged Collateral against the claims and demands of all persons whomsoever. The Pledgor also represents and warrants to the Bank that he has, and will have on deposit hereunder, good title to all of the Pledged Securities, free and clear of all claims, mortgages, pledges, liens, encumbrances and security interests of every nature whatsoever except those granted to the Bank herein, and that no consent or approval of any governmental or regulatory authority, or of any securities exchange which has not been obtained, was or is necessary to the validity of this pledge. In addition, the Pledgor represents and warrants that he is the sole shareholder of record and the sole beneficial owner of the Pledged Securities. The Pledgor covenants and warrants that he will not, except with the written consent of the Bank, exercise any rights of conversion with respect to any of the Pledged Securities which are convertible into debt instruments, cash or any other securities or instruments of any kind. 3 . Voting Prior to Event of Default . So long as no Event of Default shall have occurred, the Pledgor shall be entitled to exercise, as it shall determine, but in a manner not inconsistent with the terms hereof or, the Note, any loan document or any of the security documents, the voting power with respect to the Pledged Securities, if any. 4. Event of Default . Upon the occurrence of an event of default under this Agreement, the Note or any other security documents (" Event of Default" ), the Bank may cause all or any of the Pledged Securities to be transferred to or registered in its name or the name of the Bank' s nominee or nominees. 5. Rights and Remedies . Bank shall have, by way of example and not of limitation, the rights and remedies in subparagraph (a) of this paragraph at all times prior to and/or after the occurrence of an Event of Default, and shall have all the rights and remedies enumerated herein after the occurrence of an Event of Default.

1

(a) Bank may, at its option and without notice: (i) transfer to its name or the name of its nominee all or any part of the Pledged Collateral including stocks, bonds, and other securities; (ii) demand, sue for, collect and receive all interest, dividends, including liquidating dividends, and other proceeds thereof, and hold same as security for payment of the Borrower' s Obligations or, if cash proceeds, apply same as payment thereof; (iii) notify any person obligated on any of the Pledged Collateral of the security interest of Bank therein and request such person to make payment directly to Bank; or (iv) demand, sue for, collect, or make any settlement or compromise Bank deems desirable with respect to any of the Pledged Collateral. (b) The Bank shall be a secured party under the North Carolina Uniform Commercial Code and, from and after an Event of Default hereunder, without obligations to resort to other security, shall have the right at any time and from time to time to sell, resell, assign and deliver, in its discretion, all or any of the Pledged Collateral, at the same or different times, and all right, title and interest, claim and demand therein and right of redemption thereof, on any securities exchange on which the Pledged Securities or any of them may be listed, or at public or private sale, for cash, upon credit or for future delivery, and in connection therewith the Bank may grant options, the Pledgor hereby waiving and releasing any and all equity or right of redemption. If any of the Pledged Collateral is sold by the Bank upon credit or for future delivery, the Bank shall not be liable for the failure of the purchaser to purchase or pay for the same and, in the event of any such failure, the Bank may resell such Pledged Collateral. In no event shall the Pledgor be credited with any part of the proceeds of sale of any Pledged Collateral until cash payment of such sale has actually been received by the Bank.

(c) Should the market value of the Pledged Collateral at any time fall below the unpaid principal balance of the Note; or if the Bank has required that a minimum loan to value ratio be maintained throughout the term of the loan, and the market value of the Pledged Collateral at any time falls below the amount required to maintain the minimum loan to value ratio, the Pledgor shall deposit such funds or additional securities as may be required to restore the market value to a satisfactory level within five (5) days.

6. Covenants of Pledgor . Pledgor covenants and agrees to and in favor of Bank that, so long as any of the Obligations s ...