STONE STREET BANCORP INC
8-K, 1999-04-20
SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED
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<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549



                                   FORM 8-K

                                CURRENT REPORT


    PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934



Date of Report (date of earliest event reported):   APRIL 14, 1999

                          STONE STREET BANCORP, INC.
                     ------------------------------------
            (Exact name of registrant as specified in its charter)

       NORTH CAROLINA                001-14230           56-1949352
- ------------------------------     -------------     ------------------
(State or other jurisdiction        (Commission        (IRS Employer
  of incorporation)                 File Number)     Identification No.)


                             232 SOUTH MAIN STREET
                       MOCKSVILLE, NORTH CAROLINA 27028
                      ----------------------------------
                   (Address of principal executive offices)



Registrant's telephone number, including area code:   (336) 751-5936
                                                      -------------- 


 
                                      N/A
                -----------------------------------------------
         (Former name or former address, if changed since last report)
<PAGE>
 
ITEM 5.  OTHER EVENTS

     The Board of Directors of Stone Street Bancorp, Inc., Mocksville, North
Carolina (the "Corporation"), the holding company for Stone Street Bank & Trust,
announced April 14, 1999 that it has entered into a definitive Agreement of
Combination (the "Agreement") with CCB Financial Corporation, Durham, North
Carolina ("CCB").  A copy of the Agreement is attached hereto as Exhibit (2) and
is incorporated by reference herein.

     The Agreement is contingent upon, among other things, receipt of approvals
from the Corporation's shareholders and regulatory authorities.  A special
meeting of the Corporation's shareholders will be scheduled to consider CCB's
proposal after all regulatory approvals have been received.

     A copy of the Corporation's press release announcing execution of the
Agreement is attached hereto as Exhibit (99)(a) and is incorporated by reference
herein.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

     (c)     Exhibits

     (2)     Agreement of Combination by and among CCB Financial Corporation,
             CCBFC, Inc., Central Carolina Bank and Trust Company, Stone Street
             Bancorp, Inc. and Stone Street Bank & Trust dated April 14, 1999

     (99)(a) Press Release of the Corporation, distributed April 14, 1999



                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                    STONE STREET BANCORP, INC.


Date: April 19, 1999                By:  /s/ J. Charles Dunn
                                       ------------------------------------
                                             J. Charles Dunn, President
                                             and Chief Executive Officer

                                    PAGE 2
<PAGE>
 
                                 EXHIBIT INDEX
                                 -------------

     Exhibit No.      Description
     -----------      -----------

      (2)           Agreement of Combination by and among CCB Financial
                    Corporation, CCBFC, Inc., Central Carolina Bank and Trust
                    Company, Stone Street Bancorp, Inc. and Stone Street Bank &
                    Trust dated April 14, 1999

      (99)(a)            Press Release of the Corporation,
                    distributed April 14, 1999

                                    PAGE 3

<PAGE>
 
================================================================================


                           AGREEMENT OF COMBINATION

                                 BY AND AMONG

                          CCB FINANCIAL CORPORATION,

                                  CCBFC, INC.

                                      AND

                   CENTRAL CAROLINA BANK AND TRUST COMPANY,

                                      AND

                          STONE STREET BANCORP, INC.

                                      AND

                           STONE STREET BANK & TRUST


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


                          DATED AS OF APRIL 13, 1999


================================================================================
<PAGE>
 
                               TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
                                   ARTICLE I

                                 DEFINITIONS..............................     2


                                  ARTICLE II

                     THE MERGERS AND RELATED TRANSACTIONS

2.1  Merger and Second Merger.............................................    13
2.2  Bank Merger..........................................................    13
2.3  Time and Place of Closing............................................    13
2.4  Effective Time.......................................................    13
2.5  Subsequent Actions...................................................    14
2.6  Advisory Directors...................................................    14

                                  ARTICLE III

                          MANNER OF CONVERTING SHARES

3.1  Conversion of Shares.................................................    15
3.2  Conversion of Options................................................    17
3.3  Anti-Dilution Provisions.............................................    17
3.4  Shares Held by CCBF or Stone Street..................................    17
3.5  Fractional Shares....................................................    17
3.6. Transfers............................................................    18

                                  ARTICLE IV

                              EXCHANGE OF SHARES

4.1  Exchange Procedures..................................................    18
4.2  Voting and Dividends.................................................    20
</TABLE> 

                                      (i)
<PAGE>
 
<TABLE> 
                                   ARTICLE V

                        REPRESENTATIONS AND WARRANTIES
                                OF STONE STREET

<S>                                                                    <C>
5.1   Organization, Standing, and Authority.........................   20
5.2   Capital Stock.................................................   21
5.3   Stone Street Subsidiaries.....................................   21
5.4   Authorization of Merger, Bank Merger and Related Transactions.   22
5.5   SEC Filings; Financial Statements.............................   23
5.6   Books and Corporate Records...................................   23
5.7   Absence of Undisclosed Liabilities............................   24
5.8   Tax Matters...................................................   24
5.9   Allowance for Loan Losses.....................................   25
5.10  Assets........................................................   25
5.11  Compliance with Laws..........................................   26
5.12  Employee Benefit Plans........................................   26
5.13  Commitments and Contracts.....................................   29
5.14  Material Contract Defaults....................................   30
5.15  Legal Proceedings.............................................   30
5.16  Absence of Certain Changes or Events..........................   30
5.17  Reports.......................................................   30
5.18  Insurance.....................................................   31
5.19  Labor.........................................................   31
5.20  Material Interests of Certain Persons.........................   31
5.21  Registration Obligations......................................   31
5.22  Environmental Matters.........................................   31
5.23  Accounting; Tax; Regulatory Matters...........................   33
5.24  Brokers and Finders...........................................   33
5.25  State Takeover Laws...........................................   33
5.26  Charter Provisions............................................   33
5.27  Derivatives Contracts.........................................   33
5.28  Y2K Compliance................................................   33
5.29  Statements True and Correct...................................   34

                                  ARTICLE VI

                    REPRESENTATIONS AND WARRANTIES OF CCBF

6.1   Organization, Standing, and Authority.........................   34
6.2   Capital Stock.................................................   35
6.3   CCBF Subsidiaries.............................................   35
6.4   Authorization of Merger and Related Transactions..............   36
</TABLE>
                                     (ii)
<PAGE>
 
<TABLE>
<S>                                                                         <C>
6.5   SEC Filings; Financial Statements.................................    36
6.6   Absence of Undisclosed Liabilities................................    37
6.7   Tax Matters.......................................................    37
6.8   Compliance With Laws..............................................    38
6.9   Employee Benefit Plans............................................    38
6.10  Legal Proceedings.................................................    41
6.11  Absence of Certain Changes or Events..............................    41
6.12  Reports...........................................................    41
6.13  Accounting; Tax; Regulatory Matters...............................    42
6.14  Brokers and Finders...............................................    42
6.15  Capital Stock Issued in Merger....................................    42
6.16  Derivatives Contracts.............................................    42
6.17  Y2K Compliance....................................................    42
6.18  Statements True and Correct.......................................    42

                                  ARTICLE VII

                      CONDUCT PRIOR TO THE EFFECTIVE TIME

7.1   Affirmative Covenants of Stone Street.............................    43
7.2   Negative Covenants of Stone Street................................    43
7.3   Covenants of CCBF.................................................    45
7.4   Adverse Changes in Condition......................................    45
7.5   Reports...........................................................    46
7.6   Confidentiality...................................................    46
7.7   Current Information...............................................    46
7.8   Registration Statement; Regulatory Matters........................    47
7.9   Directors' and Shareholders' Approvals............................    48
7.10  Agreements of Affiliates..........................................    48
7.11  Delivery of Monthly Financial Statements..........................    48
7.12  Tax-Free Reorganization...........................................    49
7.13  Press Releases....................................................    49
7.14  Exchange Listing..................................................    49
7.15  Miscellaneous Agreements and Consents.............................    49

                                 ARTICLE VIII

                             ADDITIONAL AGREEMENTS

8.1   Indemnification and Insurance.....................................    49
8.2   Employee Contracts; Employee Benefits; Director Benefits..........    50
8.3   Modification of Employee Benefits.................................    51
</TABLE>
                                     (iii)
<PAGE>
 
                                  ARTICLE IX

                                  CONDITIONS
<TABLE>
<S>                                                                          <C>
9.1   Conditions to Each Party's Obligations to Effect the Merger..........  52
9.2   Conditions to the Obligations of Stone Street and Mocksville.........  53
9.3   Conditions to the Obligations of CCBF, CCBFC and CCB Bank............  54

                                   ARTICLE X

                                  TERMINATION

10.1  Termination..........................................................  55
10.2  Effect of Termination................................................  56
10.3  Expenses.............................................................  56
10.4  Wrongful Termination.................................................  56
10.5  Termination Fee......................................................  57

                                  ARTICLE XI

                              GENERAL PROVISIONS

11.1  Non-Survival of Representations, Warranties and Covenants Following
       the Effective Time..................................................  57
11.2  Entire Agreement.....................................................  57
11.3  Amendments...........................................................  57
11.4  Waivers..............................................................  58
11.5  No Assignment........................................................  58
11.6  Notices..............................................................  58
11.7  Severability.........................................................  59
11.8  Governing Law........................................................  60
11.9  Counterparts.........................................................  60
11.10 Captions; Articles; and Section......................................  60
11.11 Interpretations......................................................  60
11.12 Enforcement of Agreement.............................................  60
</TABLE>

APPENDIX A     Plan of Merger

APPENDIX B     Bank Plan of Merger

APPENDIX C     Holding Company Plan of Merger

APPENDIX D     Affiliate Agreement

                                     (iv)
<PAGE>
 
                           AGREEMENT OF COMBINATION


     This AGREEMENT OF COMBINATION (this "Agreement") is made and entered into
as of April 13, 1999 by and among CCB Financial Corporation, a North Carolina
corporation ("CCBF"), CCBFC, Inc., a North Carolina corporation and a newly-
formed, wholly-owned subsidiary of CCBF ("CCBFC"), and Central Carolina Bank and
Trust Company, a North Carolina commercial bank and a wholly-owned subsidiary of
CCBF ("CCB Bank"), and Stone Street Bancorp, Inc., a North Carolina corporation
("Stone Street"), and Stone Street Bank & Trust, a North Carolina savings bank
formerly known as "Mocksville Savings Bank, Inc., SSB" and a wholly-owned
subsidiary of Stone Street ("Mocksville").

                             W I T N E S S E T H:

     WHEREAS, CCBF is a registered bank holding company and Stone Street is a
registered savings bank holding company under the Bank Holding Company Act of
1956, as amended (the "BHCA"); and

     WHEREAS, at the Effective Time, CCBFC shall merge with and into Stone
Street (the "Merger"), with Stone Street as the surviving corporation (the
"Surviving Corporation"), and Mocksville shall merge with and into CCB Bank
("Bank Merger"), with CCB Bank as the surviving financial institution (the
"Surviving Bank"); and

     WHEREAS, immediately after the Effective Time, Stone Street shall merge
with and into CCBF (the "Second Merger"), with CCBF as the surviving corporation
of the Second Merger (the "Resulting Corporation").

     WHEREAS, the Executive Committees of the Boards of Directors of CCBF and
CCB Bank, the Board of Directors of CCBFC, and the Boards of Directors of Stone
Street and Mocksville have resolved, as applicable, that the Merger, the Bank
Merger, the Second Merger, and the other transactions described herein are in
the best interests of the parties and their respective shareholders and have
approved this Agreement and authorized the execution hereof; and

     WHEREAS, the Boards of Directors of CCBF and CCB Bank, the shareholder of
CCBFC and CCB Bank, the shareholders of Stone Street and the shareholder of
Mocksville shall consider and act upon resolutions to approve and adopt this
Agreement and to authorize the execution and delivery of such other agreements
and other documents as are necessary to consummate, as applicable, the Merger,
the Bank Merger and the Second Merger and such other transactions; and

     WHEREAS, CCBF, CCBFC, CCB Bank, Stone Street and Mocksville desire to
provide for certain undertakings, conditions, representations, warranties and
covenants in connection with the transactions contemplated by this Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows:
<PAGE>
 
                                  ARTICLE  I

                                  DEFINITIONS

     "Action" shall mean any action, arbitration, cause of action, claim,
complaint, criminal prosecution, governmental or other examination or
investigation, hearing, inquiry, administrative or other proceeding relating to
or affecting a Party, its business, its Assets (including Contracts related to
it), or the transactions contemplated by this Agreement, but shall not include
regular, periodic examinations of depository institutions and their Affiliates
by Regulatory Authorities; provided such term shall include, notices, demand
letters, or requests from any Environmental Agency.

     "Affiliate" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.

     "Affiliate Agreement" shall mean the Affiliate Agreement substantially in
the form of Appendix D hereto.

     "Agreement" shall mean this Agreement of Combination.

     "Allowance" shall have the meaning set forth in Section 5.9 of this
Agreement.

     "AMEX" shall mean the American Stock Exchange, Inc.

     "Articles of Merger" shall have the meaning set forth in Section 2.4(a) of
this Agreement.

     "Assets" of a Person shall mean all of the assets, properties, businesses,
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.

     "Bank Act" shall mean Chapter 53 of the North Carolina General Statutes.

     "Bank Articles of Merger" shall have the meaning set forth in Section
2.4(b).

     "Bank Effective Time" shall have the meaning set forth in Section 2.4(b) of
this Agreement.

     "Bank Merger" shall have the meaning set forth in the preamble to this
Agreement.

                                       2
<PAGE>
 
     "BHCA" shall have the meaning set forth in the preamble to this Agreement.

     "Cash Election Shares" shall have the meaning set forth in Section 3.1(c)
of this Agreement.

     "CCBF" shall have the meaning set forth in the preamble to this Agreement.

     "CCBFC" shall have the meaning set forth in the preamble to this Agreement.

     "CCB Bank" shall have the meaning set forth in the preamble to this
Agreement.

     "CCBF Common Stock" shall have the meaning set forth in Section 3.1 of this
Agreement.

     "CCBF Financial Statements" shall mean (i) the audited consolidated balance
sheets of CCBF as of December 31, 1998 and 1997 and the related audited
consolidated statements of income, shareholders' equity and cash flows
(including related notes, schedules, if any, and independent auditors' reports)
for each of the years ended December 31, 1998, 1997 and 1996, as have been
Previously Disclosed and (ii) CCBF's  unaudited consolidated balance sheet
(including related notes and schedules, if any) and the related unaudited
consolidated statements of income, shareholders' equity and cash flows for each
three-month period subsequent to January 1, 1999 as will be provided to Stone
Street prior to the Effective Time.

     "CCBF Rights" shall have the meaning set forth in Section 3.1 of this
Agreement.
 
     "CCBF Rights Plan" shall have the meaning set forth in Section 3.1 of this
Agreement.

     "CCBF SEC Reports" shall have the meaning set forth in Section 6.5 of this
Agreement.

     "CCBF Stock Price" shall mean the closing sales price of CCBF Common Stock
on the NYSE - Composite Transactions List (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
CCBF) on the trading day, or the average closing sales price of CCBF Common
Stock (determined as provided previously in this definition) over the number of
consecutive trading days, specified in the context in which the defined term is
used.

     "CCBF Subsidiaries" shall mean any or all of CCB Bank, American Federal
Bank, F.S.B., and Central Carolina Bank - Georgia, all of which are subsidiaries
of CCBF, and the following direct or indirect subsidiaries of CCBF:  CCB
Investment and Insurance Service Corporation, Southland Associates, Inc., CCBDE,
Inc., Salem Trust Company; Corcoran Holdings, Inc.; AMFEDDE, Inc.; McBee
Holdings, Inc.; Finance South, Inc.; Mortgage North, Inc.; Greenville
Participations, Inc.; and, American Service Corporation of S.C.

     "Closing" shall have the meaning set forth in Section 2.3 of this
Agreement.

     "Closing Date" shall have the meaning set forth in Section 2.3 of this
Agreement.

                                       3
<PAGE>
 
     "Commission" shall mean the North Carolina Banking Commission.

     "Commissioner" shall mean the North Carolina Commissioner of Banks.

     "Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.

     "Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding, or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets, or business.

     "Costs" shall have the meaning set forth in Section 10.3 of this Agreement.

     "Default" shall mean (i) any breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, (ii)
any occurrence of any event that with the passage of time or the giving of
notice or both would constitute a breach or violation of, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right of any Person to exercise any
remedy or obtain any relief under, terminate or revoke, suspend, cancel, or
modify or change the current terms of, or renegotiate, or to accelerate the
maturity or performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit.

     "Derivatives Contract" shall have the meaning set forth in Section 5.27 of
this Agreement.

     "D&O Insurance" shall have the meaning set forth in Section 8.1(c) of this
Agreement.

     "Effective Time" shall mean the time and date specified pursuant to Section
2.6 of this Agreement as the effective time of the Merger.

     "Electing Holder" shall have the meaning set forth in Section 3.1(c) of
this Agreement.

     "Employee Benefit Plan" shall mean any (i) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan, (ii) qualified defined contribution retirement plan or arrangement
which is an Employee Pension Benefit Plan, (iii) qualified defined benefit
retirement plan or arrangement which is an Employee Pension Benefit Plan, (iv)
Employee Welfare Benefit Plan or material fringe benefit plan or program, or (v)
stock option, stock purchase, stock appreciation, stock or cash bonus, or
similar plan or arrangement.

     "Employee Welfare Benefit Plan" shall have the meaning set forth in ERISA
Section 3(1).

     "Environmental Agency" means the United States Environmental Protection
Agency or any other federal, state, or local agency responsible for regulating
or enforcing laws, relating to (i) the 

                                       4
<PAGE>
 
protection, preservation, or restoration of the environment (including, without
limitation, air, water, vapor, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life, or any other
natural resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, release,
or disposal of any substance presently listed, defined, designated, or
classified as hazardous, toxic, radioactive, or dangerous, or otherwise
regulated, whether by type or by quantity, including any material containing any
such substance as a component.

     "Environmental Costs" shall mean the total projected cost of curing all
indicated violations of Environmental Laws and all related remediation required
by applicable Environmental Laws and Environmental Agencies with respect to the
Assets of Stone Street and the Stone Street Subsidiaries, with such total
projected cost being determined by an environmental engineering firm selected by
CCBF, and reasonably satisfactory to Stone Street, and being set forth in a
written report of such firm to CCBF and Stone Street detailing the bases of such
projected costs and the standards used for their determination; provided,
however, that such total projected cost shall be reduced by any insurance
proceeds or governmental reimbursements which at or before the Effective Time
CCBF or Stone Street has received or is entitled to receive under the Law.

     "Environmental Law" shall mean any Law, Permit, Consent, Order, or
agreement with any Environmental Agency relating to (i) the protection,
preservation, or restoration of the environment (including, without limitation,
air, water, vapor, surface water, groundwater, drinking water supply, surface
soil, subsurface soil, plant and animal life, or any other natural resource),
and/or (ii) the use, storage, recycling, disposal of any substance presently
listed, defined, designated or classified as hazardous, toxic, radioactive, or
dangerous, or otherwise regulated, whether by type or by quantity, including any
material containing any such substance as a component.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

     "Exchange Agent" shall have the meaning set forth in Section 3.6 of this
Agreement.

     "Exchange Ratio" shall have the meaning set forth in Section 3.1 of this
Agreement.

     "FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.

     "FDIA" shall mean the Federal Deposit Insurance Act, as amended.

     "Federal Reserve" shall mean the Federal Reserve Bank of Richmond acting
under delegated authority from the Federal Reserve Board, or any successor
thereto.

     "Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System, or any successor thereto.

     "Fiduciary" shall have the meaning set forth in ERISA Section 3(21).

                                       5
<PAGE>
 
     "GAAP" shall mean generally accepted accounting principles in effect in the
United States from time to time, as applied by the entity in respect of which
the term is used consistently with its past practices.

     "Hazardous Materials" shall mean solid waste (as that term is defined under
the Resource Conservation and Recovery Act, 42 U.S.C.A. (S) 6901 et seq.
("RCRA"), and the regulations adopted pursuant to RCRA), hazardous waste (as
that term is defined under RCRA, and the regulations adopted pursuant to RCRA),
hazardous substances (as that term is defined in the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C.A. (S) 9601, et seq.
("CERCLA"), and the regulations adopted pursuant to CERCLA), and other
pollutants, including, without limitation, any solid, liquid, gaseous, or
thermal irritant or contaminant, such as smoke, vapor, soot, fumes, acids,
alkalis, or chemicals.

     "Holding Company Plan of Merger" shall have the meaning set forth in
Section 2.4(c) of this Agreement.

     "HSR Act"  shall have the meaning set forth in Section 5.4(c).

     "IRS" shall mean the Internal Revenue Service.

     "Indemnifiable Losses" shall mean any and all Actions, Orders, damages,
penalties, fines, costs, amounts paid in settlement or compromise, Liabilities,
expenses, fees (including attorneys' fees awarded to third parties), court
costs, and reasonable attorneys', expert witnesses', consultants', and
accountants' fees and expenses incurred by an Indemnified Party as a result or
by reason of the Indemnifying Party's breach of its obligations under this
Agreement or violation of Law, except to the extent that such otherwise
Indemnifiable Losses arise as a result or by reason of the Indemnified Party's
breach of its obligations under this Agreement or its violation of Law.

     "Knowledge," when used in the phrase "to the Knowledge" or a similar
phrase, shall mean the knowledge of the senior executive officers (including,
without limitation, the  senior executive officers responsible for Tax matters)
of CCBF (with respect to CCBF, CCBFC and CCB Bank) or Stone Street (with respect
to Stone Street and Mocksville), as applicable, after reasonable inquiry of the
other executive officers and the directors of CCBF (with respect to CCBF, CCBFC
and CCB Bank) or Stone Street (with respect to Stone Street and Mocksville), as
applicable.

     "Liabilities" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including costs
of investigation, collection and defense), claim, deficiency, guaranty or
endorsement of or by any Person (other than endorsements of notes, bills,
checks, and drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, or otherwise.

                                       6
<PAGE>
 
     "Law" shall mean any federal, state, local or foreign statute, code, law,
ordinance, regulation, rule, code, order, reporting requirement or licensing
requirement, including, without limitation, the BHCA, the Bank Act, the Savings
Bank Act, the FDIA and the NCBCA.

     "Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, deed of trust, pledge, reservation, restriction, security interest,
title retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property Taxes
not yet due and payable, (ii) for depository institution Subsidiaries of a
Person, pledges to secure deposits and other Liens incurred in the ordinary
course of the financial institution business, and (iii) Liens which do not
materially impair the use of, title to, or the ability to sell or transfer for
fair value  the Assets subject to such Lien.

     "Material Adverse Event" on a Party shall mean an event, change, or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken as
a whole, or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger, the Bank Merger or the other transactions
contemplated by this Agreement, provided that "Material Adverse Event" shall not
be deemed to include the impact of (a) changes in banking and similar Laws of
general applicability or interpretations thereof by courts or governmental
authorities, (b) changes in GAAP or regulatory accounting principles generally
applicable to banks, savings banks, and their holding companies, (c) actions and
omissions of a Party (or any of its Subsidiaries) taken with the prior informed
Consent of the other Party in contemplation of the transactions contemplated
hereby, and (d) the direct effects of compliance with this Agreement on the
operating performance of the Parties, including expenses incurred by the Parties
in consummating the transactions contemplated by this Agreement.

     "Merger" shall have the meaning set forth in the preamble to this
Agreement.

     "Mocksville" shall have the meaning set forth in the preamble to this
Agreement.

     "MRP Rights" shall mean the rights of a qualified participant in the Stone
Street MRP Plan to have issued and outstanding shares of Stone Street Common
Stock vested in such participant as provided in the Stone Street MRP Plan.

     "New Building" shall mean the building (and related improvements) under
construction by Mocksville at 915 Valley Road, Mocksville, North Carolina.

     "NCBCA" shall mean the North Carolina Business Corporation Act.

     "NC SecState" shall mean the North Carolina Secretary of State.

     "NYSE" shall mean the New York Stock Exchange, Inc.

                                       7
<PAGE>
 
     "1933 Act" shall mean the Securities Act of 1933, as amended.

     "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.

     "OMC" shall have the meaning set forth in Section 5.24.

     "Operating Property" shall mean any property owned, leased, or operated by
the Party in question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security interest or other interest (including an interest in
a fiduciary capacity), and, where required by the context, includes the owner or
operator of such property, but only with respect to such property; provided,
however, that with respect to any Operating Property in which a Party or one of
its Subsidiaries holds a security interest only and of which it is neither the
owner nor an operator, all representations, warranties, covenants and
disclosures in this Agreement, or provided pursuant to this Agreement, shall be
to the Knowledge of such Party (and its applicable Subsidiary).

     "Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency, or Regulatory Authority.

     "Ordinary Course of Business" shall mean the ordinary course of business of
the Party or its Subsidiary respecting which this term is used, conducted in the
same manner as theretofore conducted during the two (2) year period preceding
the date of this Agreement and consistent with such Party's or Subsidiary's past
policies, practices, and methods (including with respect to quantity and
frequency) in effect during such two year period.

     "PBGC" shall mean the Pension Benefit Guaranty Corporation.

     "PCBs" shall have the meaning set forth in Section 5.22 of this Agreement.

     "Party" shall mean either CCBF, CCBFC and CCB Bank (or any of them as the
context requires) or Stone Street and Mocksville (or either of them as the
context requires), and "Parties" shall mean all of the foregoing.

     "Participation Facility" shall mean any facility or property in which the
Party in question or any of its Subsidiaries participates in the management and,
where required by the context, said term means the owner or operator of such
facility or property, but only with respect to such facility or property.

     "Permit" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of Person or its securities, Assets, or
business.

                                       8
<PAGE>
 
     "Person" shall mean an individual, a partnership, a corporation, a
commercial bank, an industrial bank, a savings association, a savings bank, a
limited liability company, an association, a joint stock company, a trust, a
business trust, a joint venture, an unincorporated organization, a governmental
entity (or any department, agency, or political subdivision thereof).

     "Plan of Bank Merger" shall have the meaning set forth in Section 2.4(b) of
this Agreement.

     "Plan of Merger" shall have the meaning set forth in Section 2.4(a) of this
Agreement.

     "Previously Disclosed" shall mean, as to Stone Street, all  information
disclosed in a letter delivered by Stone Street to CCBF, and, as to CCBF, all
information disclosed in a letter delivered by CCBF to Stone Street, in each
case making such disclosure specifically referring to this Agreement and
arranged in sections, subsection, and items corresponding to the Sections,
subsections and items of this Agreement applicable thereto, which letters have
been delivered on or before the second business day preceding the date of this
Agreement.  Information shall be deemed Previously Disclosed for the purpose of
a given Section, subsection or item only to the extent a specific reference
thereto is made in connection with disclosure of such information at the time of
such delivery.

     "Prohibited Transaction" shall have the meaning set forth in ERISA Section
406 and Tax Code Section 4975.

     "Proxy Statement" shall have the meaning set forth in Section 7.8 of this
Agreement.

     "Registration Statement" shall mean the Registration Statement on Form S-4,
or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by CCBF under the 1933 Act
with respect to the offering and sale of the shares of CCBF Common Stock and the
attached CCBF Rights to be issued to the shareholders of Stone Street in
connection with the transactions contemplated by this Agreement.

     "Regulatory Agreement" shall have the meaning set forth in Section 5.11(b)
of this Agreement.

     "Regulatory Approvals" shall have the meaning set forth in Section 2.4(a)
of this Agreement.

     "Regulatory Authorities" shall mean, collectively, the SEC, the NYSE, the
AMEX, the United States Department of Justice, the Federal Reserve Board, the
Federal Reserve, the FDIC, the Commission, the Commissioner, the Savings Bank
Administrator, and all other federal, state, county, local, or other
governmental or regulatory agencies, authorities (including self-regulatory
authorities), instrumentalities, commissions, boards or bodies having
jurisdiction over the Parties and their respective Subsidiaries.

     "Reportable Event" shall have the meaning set forth in ERISA Section 4043.

                                       9
<PAGE>
 
     "Resulting Corporation" shall have the meaning set forth in the preamble to
this Agreement.

     "Rights" shall mean shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights or by which a Person is or may be bound to pay
cash by reference to the value, or any increase in the value, of shares of the
capital stock of such Person.

     "Savings Bank Act" shall mean Chapter 54C of the North Carolina General
Statutes.

     "Savings Bank Administrator" shall mean the Administrator of the Savings
Institutions Division of the North Carolina Department of Commerce.

     "SEC" shall mean the United States Securities and Exchange Commission.

     "SEC Document" shall mean any registration statement, proxy statement,
form, document, report, notice or other filing filed by a Person or any
Subsidiary of a Person with the SEC pursuant to the Securities Laws.

     "Second Articles of Merger" shall have the meaning set forth in Section
2.4(c) of this Agreement.

     "Securities Laws" shall have the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.

     "Shareholders' Meeting" shall have the meaning set forth in Section 7.9 of
this Agreement.

     "Significant Contract" shall mean (a) any Contract which evidences or
secures indebtedness of a Party (other than a deposit) with a balance
outstanding of $25,000 or more, which cannot be redeemed or prepaid at the
option of such Person for an amount which, when added to the outstanding
principal balance, would be less than $25,000, (b) any Contract, except a lease
of real or personal property, to which such Party is a party or by which it is
bound, if (i) such Contract was not made in the Ordinary Course of Business by
such Party, or (ii) the performance or nonperformance of such contract could
either (X) increase the Liabilities or decrease the Assets of the Party, or (Y)
decrease the income or increase the expenses of such Party, in each case by
$25,000 or more over the remaining term of the Contract, exclusive of all
optional renewal periods and extensions of the term; provided, however, that any
such Contract shall not be deemed to be a Significant Contract in the event such
Party has the contractual right to terminate the Contract in question on 30
days' notice or less, without incurring a penalty or premium in excess of
$25,000. 

                                       10
<PAGE>
 
It is understood that Significant Contracts do not include loans or commitments
to fund loans or to extend credit.

     "Significant Lease" shall mean (a) any lease of real or personal property,
or any sublease of real property, by a Party, as lessee, pursuant to which such
Party reasonably anticipates the payment of aggregate rent, Taxes, insurance,
utilities (if applicable) and other charges in excess of $25,000 over the
remaining term of the lease, exclusive of all optional renewal periods and
optional extensions of the term (provided, however, that any such lease shall
not be deemed a Significant Lease in the event that such Party has the
contractual right to terminate the lease in question on 30 days' notice or less,
without incurring a penalty or premium in excess of $25,000); or (b) any lease
of real or personal property, or any sublease of real property, by such Party,
as lessor, pursuant to which such Party reasonably anticipates the collection of
aggregate rent in excess of $25,000 over the remaining term of the lease,
exclusive of all optional renewal periods and extensions of the term (provided,
however, that any such lease shall not be deemed a Significant Lease in the
event that such Party has the contractual right to terminate the lease in
question on 30 days' notice or less, without incurring a penalty or premium in
excess of $25,000).

     "Stone Street" shall have the meaning set forth in the preamble to this
Agreement.

     "Stone Street Benefit Plans" shall have the meaning set forth in Section
5.12(a) of this Agreement.

     "Stone Street Common Stock" shall have the meaning set forth in Section 3.1
of this Agreement.

     "Stone Street ESOP" shall mean the Employee Stock Ownership Plan of
Mocksville Savings Bank, Inc. SSB.

     "Stone Street Financial Statements" shall mean (i) the audited consolidated
balance sheets of Stone Street as of December 31, 1998 and 1997 and the related
audited consolidated statements of income,  stockholders' equity and cash flows
(including related notes, schedules, if any, and independent auditors' reports)
for each of the years ended December 31, 1998, 1997 and 1996, as have been
Previously Disclosed, and (ii) Stone Street's unaudited consolidated balance
sheet (including related notes and schedules, if any) and the related unaudited
consolidated statements of income, stockholders' equity and cash flows for each
three-month period ended subsequent to January 1, 1999 as will be provided to
CCBF prior to the Effective Time.

     "Stone Street MRP Plan" shall mean the Mocksville Savings Bank, Inc., SSB
Management Recognition Plan.

     "Stone Street Options Plans" shall mean the Stone Street Bancorp, Inc.
Stock Option Plan, and all stock option plans and other plans providing for
options to acquire Stone Street Common Stock adopted or assumed by Stone Street.

                                       11
<PAGE>
 
     "Stone Street Retirement Plan" shall mean Stone Street's 401(k) Plan.

     "Stone Street SEC Reports" shall have the meaning set forth in Section 5.5.

     "Stone Street Stock Options" shall mean the options to acquire Stone Street
Common Stock outstanding as of April 13, 1999 under the Stone Street Options
Plan.

     "Stone Street Subsidiaries" shall mean Mocksville, Stone Street Financial
Services, Inc. and RAL II, Inc.

     "Subsidiaries" shall mean all those non-natural Persons of which the Person
in question either (i) owns or controls 50% or more of the outstanding equity
securities either directly or through an unbroken chain of entities as to each
of which 50% or more of the outstanding equity securities is owned directly or
indirectly by its parent (provided, there shall not be included any such Person
the equity securities of which are owned or controlled in a fiduciary capacity),
(ii) in the case of partnerships, serves as a general partner, (iii) in the case
of a limited liability company, serves as a manager or a managing member, or
(iv) otherwise has the ability to elect a majority of the directors, trustees,
managers, or managing members thereof.

     "Surviving Bank" shall have the meaning set forth in the preamble to this
Agreement.

     "Surviving Corporation" shall have the meaning set forth in the preamble to
this Agreement.

     "Tax" or "Taxes" shall mean any federal, state, county, local, or foreign
taxes, charges, fees, levies, imposts, duties, or other assessments, including
income, gross receipts, excise, employment, sales, use, transfer, license,
payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposes or required to be withheld by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, including any interest, penalties, and additions
imposed thereon or with respect thereto.

     "Tax Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Tax Return" shall mean any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, any amendment thereof, and any such document of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.

     Other terms used herein are defined elsewhere in this Agreement.

                                       12
<PAGE>
 
                                  ARTICLE  II
                     THE MERGERS AND RELATED TRANSACTIONS

     2.1  Merger and Second Merger.  Subject to the terms and conditions of this
Agreement, CCBFC shall be merged with and into Stone Street, with Stone Street
as the Surviving Corporation and with the effect set forth in Section 55-11-06
of the NCBCA.  The Articles of Incorporation and Bylaws of Stone Street and the
officers and director of CCBFC shall be those of the Surviving Corporation.
Immediately thereafter, the Surviving Corporation shall be merged with and into
CCBF, with CCBF as the Resulting Corporation and with the effect set forth in
Section 55-11-06 of the NCBCA.  The Amended and Restated Articles of
Incorporation (as amended), Amended Bylaws (as amended), officers and directors
of CCBF shall be those of the Resulting Corporation.

     2.2  Bank Merger.  Subject to the terms and conditions of this Agreement,
Mocksville shall be merged with and into CCB Bank, with CCB Bank as the
Surviving Bank and with the effect set forth in Sections 53-13 and 53-17 of the
Bank Act and Section 54C-40 of the Savings Bank Act. The Amended and Restated
Articles of Incorporation, Bylaws (as amended), officers and directors of CCB
Bank shall be those of the Surviving Bank.

     2.3  Time and Place of Closing.  The closing of the Merger, the Bank
Merger, the Second Merger, and the other transactions contemplated hereby (the
"Closing") will take place at the principal offices of CCBF in Durham, North
Carolina at 11:00 o'clock, a.m., on the date that the Effective Time occurs, or
at such other prior time, and at such place, as may be mutually agreed upon by
CCBF and Stone Street (the "Closing Date").

     2.4  Effective Time.

          (a)  Subject to the terms and conditions of this Agreement, the Merger
shall become effective on the date and at the time (the "Effective Time") on
which Articles of Merger containing a Plan of Merger in substantially the form
of Appendix A hereto (the "Plan of Merger") and the other provisions required
by, and executed in accordance with, Section 55-11-05 of the NCBCA (the
"Articles of Merger") shall have been accepted for filing by the NC SecState (or
such later date and time as may be specified in the Articles of Merger).  Unless
otherwise mutually agreed upon by CCBF and Stone Street, subject to the terms
and conditions hereof, the Effective Time shall occur on the first business day
following the last to occur of (i) the date that is 30 days after the date of
the order of the Federal Reserve approving the Merger pursuant to the BHCA, (ii)
the effective date of the last required Order or Consent of a Regulatory
Authority approving or exempting the Merger, the Second Merger and the Bank
Merger (the "Regulatory Approvals"), (iii) the expiration of all required
waiting periods after the filing of notices with, or the receipt of Regulatory
Approvals from, all Regulatory Authorities required for consummation of the
Merger, the Second Merger and the Bank Merger, and (iv) the later of the dates
on which the shareholder of CCB Bank and CCBFC and the shareholders of Stone
Street approve this Agreement and the transactions contemplated hereby.  The
separate corporate existence of CCBFC shall thereupon cease, and Stone Street
shall be the Surviving Corporation.

                                       13
<PAGE>
 
          (b) Subject to the terms and conditions of this Agreement, the Bank
Merger shall become effective in accordance with the provisions of Sections 55-
12, 55-13 and 55-17 of the Bank Act and Section 54C-40 of the Savings Bank Act
on the date and time ("Bank Effective Time") on which Articles of Merger
containing a Plan of Merger substantially in the form of Appendix B hereto
("Plan of Bank Merger") and the other provisions required by, and executed in
accordance with, the foregoing Sections of the Bank Act and the Savings Bank Act
shall have been approved by the Commissioner and the Savings Bank Administrator
and accepted for filing by the NC SecState (or such later date and time as may
be specified therein) ("Bank Articles of Merger").  The Bank Effective Time
shall occur immediately after the Effective Time and the receipt of all required
Regulatory Approvals. The separate corporate existence of Mocksville shall
thereupon cease, and CCB Bank shall be the Surviving Bank.

          (c) Subject to the terms and conditions of this Agreement, the Second
Merger shall become effective on the date and time on which Articles of Merger
containing a Plan of Merger in substantially the form of Appendix C hereto (the
"Holding Company Plan of Merger") and the other provisions required by, and
executed in accordance with, Section 55-11-05 of the NCBCA (the "Second Articles
of Merger") shall have been accepted for filing by the NC SecState (or such
later date and time as may be specified in the Second Articles of Merger).  The
effectiveness of the Second Merger shall only occur subsequent to the Effective
Time and the receipt of all required Regulatory Approvals.  The separate
corporate existence of Stone Street shall thereupon cease, and CCBF shall be the
Resulting Corporation.

     2.5  Subsequent Actions.  If, at any time after the Effective Time, Stone
Street or CCBF shall consider or be advised that any corporate or regulatory
filings, regulatory approvals, deeds, bills of sale, assignments, assurances or
any other actions or things are necessary or desirable to vest, perfect or
confirm of record, or otherwise, in the Surviving Corporation, the Resulting
Corporation or the Surviving Bank its right, title or interest in, to or under
any of the rights or Assets of the Parties acquired or to be acquired by the
Surviving Corporation, the Resulting Corporation or the Surviving Bank as a
result of, or in connection with, the Merger, the Second Merger or the Bank
Merger, or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation, the Resulting Corporation or the Surviving Bank shall
be authorized to execute and deliver, and file, if required in the name and on
behalf of each of the Parties or otherwise, all such corporate or regulatory
filings, deeds, bills of sale, assignments and assurances and to take and do, in
the name and on behalf of each of the Parties or otherwise, all such other
actions  and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights or Assets in
the Surviving Corporation, the Resulting Corporation or the Surviving Bank, or
otherwise to carry out this Agreement.

     2.6  Advisory Directors. Upon the Bank Effective Time, each member of the
Board of Directors of Mocksville in office immediately prior thereto shall be
appointed to CCB Bank's Mocksville Advisory Board and, for a period of two (2)
years from the Bank Effective Time, shall be paid for his or her service thereon
an annual amount equal to the current annual director's fee received by him or
her from Mocksville as of the date of this Agreement.  After such two (2) year

                                       14
<PAGE>
 
period, the members of CCB Bank's Mocksville Advisory Board and such Board shall
be subject to the compensation, participation, retirement and other policies of
CCB Bank applicable to its local advisory boards.


                                 ARTICLE  III

                          MANNER OF CONVERTING SHARES

     3.1  Conversion of Shares.  (a) Subject to the provisions of this Article
III, at the Effective Time, by virtue of the Merger and without any action on
the part of the holders thereof, each of the shares of common stock, no par
value per share, of Stone Street (the "Stone Street Common Stock") issued and
outstanding immediately prior to the Effective Time (excluding shares held by
CCBF, Stone Street, any CCBF Subsidiary or any Stone Street Subsidiary, in each
case other than in a fiduciary capacity or as a result of debts previously
contracted), shall be converted into and become the right to receive (i) cash as
provided in Section 3.1(c) or (ii) that percent of a share of the common stock,
$5.00 par value per share, of CCBF (the "CCBF Common Stock") and that percent of
a preferred share purchase right (a "CCBF Right") as described in CCBF's
Shareholder Rights Plan, amended and restated as of October 1, 1998 (the "CCBF
Rights Plan") computed as follows:  (a) if the CCBF Stock Price for the ten (10)
trading days ending on the last trading day prior to the Closing Date is equal
to or more than $44.52 but equal to or less than $60.24, such percent shall
equal $21.37 divided by such average CCBF Stock Price; (b) if the CCBF Stock
Price for such ten (10) trading days is less than $44.52, such percent shall be
 .48; and (c) if the CCBF Stock Price for such ten (10) trading days is more than
$60.24, such percent shall be .3548; provided, however, that if the amount of
Environmental Costs shall be greater than $150,000, but less than $500,000, then
each share of Stone Street Common Stock shall be converted into and become the
right to receive that percent of a share of CCBF Common Stock (and the same
percent of a CCBF Right) computed as follows:  (A) if item (a) above is
applicable, the percent shall be calculated by (i) dividing the Environmental
Costs in excess of $150,000 (but no more than $350,000) by the number of the
then outstanding shares of Stone Street Common Stock, (ii) subtracting the
resulting quotient from $21.37, and (iii) dividing the resulting remainder by
the average CCBF Stock Price described above; (B) if item (b) above is
applicable, the percent shall be calculated by (i) subtracting the Environmental
Costs in excess of $150,000 (but no more than $350,000) from $35,013,719, (ii)
dividing the resulting remainder by $35,013,719, and (iii) multiplying .48 by
the resulting quotient; and (C) if item (c) above is applicable, the percent
shall be calculated by (i) subtracting the Environmental Costs in excess of
$150,000 (but no more than $350,000) from $35,013,719, (ii) dividing the
resulting remainder by $35,013,719, and (iii) multiplying .3548 by the resulting
quotient (the "Exchange Ratio").

     (b)  Under the Stone Street MRP Plan, the legal and beneficial ownership
rights of the holder of each of the issued and outstanding shares of Stone
Street Common Stock subject to a MRP Right shall vest as of the Effective Time.
Accordingly, each such share shall be converted into cash as set forth in
Section 3.1(c) or that portion of a share of CCBF Common Stock (and that portion
of 

                                       15
<PAGE>
 
an attached CCBF Right) determined under Section 3.1(a).  Thereupon, each
such MRP Right shall be deemed canceled and of no further force or effect.

     (c)  Subject to the terms and conditions of this Agreement, the holder of a
share of Stone Street Common Stock converted under Section 3.1(a) or under
Section 3.1(b) may elect as provided herein to receive for such share (i) that
portion of a share of CCBF Common Stock (and that portion of an attached CCBF
Right) calculated by application of the Exchange Ratio or (ii) cash equal to one
(1) share of Stone Street Common Stock multiplied by the Exchange Ratio
multiplied by the CCBF Stock Price for the ten (10) trading days ending on the
last trading day prior to the Closing Date; provided, however that no more than
20% of such shares of Stone Street Common Stock may be converted into and become
rights to receive cash rather than portions of shares of CCBF Common Stock (and
attached CCBF Rights).  In the event that holders of shares of Stone Street
Common Stock described in Section 3.1(a) and (b) elect to receive cash
("Electing Holders") for more than 20% of such shares, then CCBF shall be
required to accept for conversion to cash only the percentage of shares of each
Electing Holder with respect to which such election was made ("Cash Election
Shares") determined by (x) dividing the total number of Cash Election Shares by
the total number of outstanding shares of Stone Street Common Stock, (y)
dividing .20 by the quotient resulting under item (x), and (z) multiplying such
Electing Holder's Cash Election Shares by the quotient resulting under item (y).
Except as provided in Section 3.5, each share of outstanding Stone Street Common
Stock not converted unto the right to receive cash as provided in this Section
3.1(c) shall be converted into a right to receive a portion of a share of CCBF
Common Stock (and a portion of an attached CCBF Right) as provided in Section
3.1(a) or (b).

     (d)  Each of the shares of common stock of CCBFC outstanding immediately
prior to the Effective Time, by virtue of the Merger and without any action on
the part of the holder thereof, shall be converted into and become a share of
Stone Street Common Stock.  Each of the shares of CCBF Common Stock (and the
attached CCBF Rights) outstanding immediately prior to the Effective Time shall
continue to be issued and outstanding, and shall not be converted, exchanged or
altered in any manner as a result of the Merger.

     (e)  At the Bank Effective Time, by virtue of the Bank Merger and without
any action on the part of Stone Street, each of the shares of common stock, no
par value per share of Mocksville issued and outstanding immediately prior to
the Bank Effective Time shall be canceled.

     (f)  Upon the effectiveness of the Second Merger, by virtue of the Second
Merger and without any action on the part of CCBF, each of the shares of Stone
Street Common Stock into which the shares of the common stock of CCBFC were
converted under Section 3.1(d) shall be canceled.  Each of the shares of CCBF
Common Stock (and the attached CCBF Rights) outstanding immediately prior to the
effectiveness of the Second Merger shall continue to be issued and outstanding,
and shall not be converted, exchanged or altered in any manner as a result of
the Second Merger.

                                       16
<PAGE>
 
     3.2. Conversion of Options.  At the Effective Time, all Stone Street Stock
Options granted under Stone Street Options Plans, whether or not then
exercisable, shall be converted into and become Rights with respect to CCBF
Common Stock, and CCBF shall assume all obligations of Stone Street with respect
to each Stone Street Stock Option, in accordance with the terms of the Stone
Street Options Plan under which it was issued and the stock option agreement by
which it may be evidenced.  From and after the Effective Time, (i) each Stone
Street Stock Option shall be assumed by CCBF in accordance with the foregoing,
except that each such Stone Street Stock Option may be exercised solely for
shares of CCBF Common Stock (which shall have attached thereto CCBF Rights),
(ii) the number of shares of CCBF Common Stock (with attached CCBF Rights)
subject to each Stone Street Stock Option shall be equal to the number of shares
of Stone Street Common Stock subject to such Stone Street Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio
(rounded up to the nearest whole share of CCBF Common Stock), and (iii) the per
share exercise price under each such Stone Street Stock Option shall be adjusted
by dividing the per share exercise price under each such Option by the Exchange
Ratio and rounding down to the nearest cent;  provided, however, that the number
of shares of CCBF Common Stock (with attached CCBF Rights) subject to each Stone
Street Stock Option and the per share exercise price for each Stone Street Stock
Option shall be subject to further adjustment as appropriate to reflect any
stock split, stock dividend, recapitalization or other similar transaction
declared or effected by CCBF subsequent to the Effective Time.  It is intended
that the foregoing adjustments and assumption shall be undertaken in a manner
that will not constitute a "modification" within the meaning of, and that is
otherwise consistent with, Tax Code Section 424(a) as to any stock option which
is an "incentive stock option" (as defined in Section 422 of the Tax Code).

     3.3  Anti-Dilution Provisions.  Except for the issuance of Stone Street
Common Stock pursuant to the exercise of Stone Street Stock Options, in the
event that Stone Street changes the number of shares of Stone Street Common
Stock issued and outstanding between the date hereof and the Effective Time or
grants additional Stone Street Stock Options or MRP Rights between the date
hereof and the Effective Time, either the Exchange Ratio shall be
proportionately adjusted or CCBF may exercise its rights under Article X, as
CCBF may so elect.  In the event that CCBF shall declare a stock split, a stock
dividend or a recapitalization having a record date prior to the Effective Time,
the Exchange Ratio shall be proportionately adjusted.

     3.4  Shares Held by CCBF or Stone Street.  Except as otherwise provided in
Section 3.1(d) and Section 3.1(f), each of the shares of Stone Street Common
Stock held by CCBF, any CCBF Subsidiary or Stone Street or any Stone Street
Subsidiary, other than shares held in a fiduciary capacity or as a result of
debts previously contracted, shall be canceled and retired at the Effective Time
and no consideration shall be issued in exchange therefor.

     3.5  Fractional Shares.  Notwithstanding any other provision of this
Agreement, each holder of a share of Stone Street Common Stock converted into a
portion of a share of CCBF Common Stock (and a portion of an attached CCBF
Right) pursuant to the Merger or of Stone Street Stock Options, who would
otherwise have been entitled to receive a portion of a share of CCBF Common
Stock and an attached CCBF Right (after taking into account the aggregate of all

                                       17
<PAGE>
 
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of the
CCBF Common Stock multiplied by the market value of one (1) share of CCBF Common
Stock at the Effective Time, in the case of shares of Stone Street Common Stock
converted into a portion of a share of CCBF Common Stock (and a portion of an
attached CCBF Right) pursuant to the Merger, or as of the date of exercise, in
the case of Stone Street Stock Options.  The market value of one share of CCBF
Common Stock at the Effective Time or the date of exercise, as the case may be,
shall be the CCBF Stock Price on the last trading day preceding the Effective
Time or the date of exercise, as the case may be.  No such holder will be
entitled to dividends, voting rights or any other rights as a shareholder in
respect of any fractional share.

     3.6  Transfers.  At the Effective Time, the stock transfer books of Stone
Street shall be closed as to holders of Stone Street Common Stock immediately
prior to the Effective Time and no transfer of Stone Street Common Stock by any
such holder shall thereafter be made or recognized except as provided in Section
3.1(d).  If, after the Effective Time, certificates are properly presented in
accordance with Article IV of this Agreement to the Registrar and Transfer
Company, acting as the exchange agent for CCBF Common Stock (the "Exchange
Agent"), such certificates shall be canceled and exchanged for certificates
representing the number of whole shares of CCBF Common Stock (and attached CCBF
Rights), and a check representing the amount of cash for fractional shares, if
any, into which the Stone Street Common Stock represented thereby was converted
in the Merger. Any other provision of this Agreement notwithstanding, none of
the Parties, the Exchange Agent or any Affiliate of the foregoing shall be
liable to a holder of Stone Street Common Stock for any amount paid or property
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat, or similar Law.


                                  ARTICLE  IV

                              EXCHANGE OF SHARES

     4.1  Exchange Procedures.

     (a)  Promptly after the Effective Time, CCBF shall cause the Exchange Agent
to mail appropriate transmittal materials (which shall specify that delivery
shall be effected, and risk of loss and title to the certificates theretofore
representing shares of Stone Street Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent) to the former shareholders
of Stone Street.  Such transmittal materials shall contain provisions allowing
the former shareholders of Stone Street to elect to receive cash in
consideration of shares of Stone Street Common Stock outstanding at the
Effective Time, when and to the extent permitted by this Agreement.  After the
Effective Time, each holder of shares of Stone Street Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares to be
canceled pursuant to Section 3.4 of this Agreement) shall surrender the
certificate or certificates theretofore representing such shares, together with
such transmittal materials properly executed, to the Exchange Agent and promptly

                                       18
<PAGE>
 
upon surrender shall receive in exchange therefor the consideration provided in
Section 3.1 and Section 3.5, if applicable, of this Agreement, together with all
declared but unpaid dividends in respect of shares of CCBF Common Stock (and an
attached CCBF Rights) received as all or a part of such consideration.  Subject
to the provisions of Section 3.1(c), consideration in the form of cash rather
than shares of CCBF Common Stock (and attached CCBF Rights) will be paid to each
Electing Holder who properly completes the "cash election" provisions of such
transmittal materials. Those holders of shares of Stone Street Common Stock who
submit transmittal materials without properly completed "cash election"
provisions will be deemed to have elected to receive consideration for their
shares in the form of shares of CCBF Common Stock (and attached CCBF Rights).
To the extent provided by Section 3.5 of this Agreement, each holder of shares
of Stone Street Common Stock issued and outstanding immediately prior to the
Effective Time also shall receive, upon surrender of the certificate or
certificates representing such shares, cash in lieu of any fractional shares of
CCBF Common Stock of which such holder would otherwise be entitled.  CCBF shall
not be obligated to deliver the consideration to which any former holder of
Stone Street Common Stock is entitled as a result of the Merger until such
holder surrenders his certificate or certificates representing shares of Stone
Street Common Stock for exchange as provided in this Article IV.  Any
certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and the Person requesting such exchange shall affix any
requisite stock transfer Tax stamps to the certificate surrendered, shall
provide funds for their purchase or for any transfer or other Taxes required by
reason of the delivery of such certificate, or shall establish to the
satisfaction of the Exchange Agent that such Taxes have been paid or are not
payable.  In addition, certificates surrendered for exchange by any Person
constituting an "affiliate" of Stone Street for purposes of Rule 145(c) under
the 1933 Act shall not be exchanged for certificates representing whole shares
of CCBF Common Stock until CCBF has received an Affiliate Agreement from such
Person as provided in Section 7.10.  In the event any certificate shall have
been lost, stolen or destroyed, upon receipt of appropriate evidence as to such
loss, theft or destruction and to ownership of such certificate by the Person
claiming such certificate to be lost, stolen or destroyed and the receipt by the
Exchange Agent of appropriate and customary indemnification, the Exchange Agent
will pay or issue in exchange for such lost, stolen or destroyed certificate
cash and/or shares of CCBF Common Stock (with attached CCBF Rights) and a check
representing cash in lieu of fractional shares, and declared but unpaid
dividends deliverable in respect of the shares of CCBF Common Stock to be
received.  Adoption of this Agreement by the shareholders of Stone Street shall
constitute ratification of the appointment of the Exchange Agent.

     (b)  At its election and subject to prior review by Stone Street, CCBF may
deliver to the shareholders of Stone Street at the time of the delivery of, and
together with, the Proxy Statement, or at any time thereafter occurring before
the Shareholders' Meeting, an election form pursuant to which shareholders of
Stone Street may elect to be Electing Holders.  Any such election form in which
a shareholder properly elects to be an Electing Holder, which such election form
is returned to CCBF by the required return date set forth therein and which CCBF
accepts, shall be deemed a binding and irrevocable election of such shareholder
to be an Electing Holder.  In the event such Electing Holder subsequently
delivers transmittal materials to the Exchange Agent inconsistent with such
returned and accepted election form, such election form shall be deemed
controlling.

                                       19
<PAGE>
 
     4.2  Voting and Dividends.  Former shareholders of record of Stone Street
shall be entitled to vote after the Effective Time, at any meeting of
shareholders of CCBF, the number of whole shares of CCBF Common Stock into which
their respective shares of Stone Street Common Stock have been converted,
regardless of whether such holders have exchanged their certificates
representing Stone Street Common Stock for certificates representing CCBF Common
Stock in accordance with the provisions of this Agreement.  Until surrendered
for exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of Stone Street Common Stock
(other than shares to be canceled pursuant to Section 3.4 of this Agreement and
other than shares into which shares of the common stock of CCBFC were converted)
shall from and after the Effective Time represent for all purposes only the
right to receive cash and/or shares of CCBF Common Stock (with attached CCBF
Rights), and cash in lieu of fractional shares as set forth in this Agreement.
Whenever a dividend or other distribution is declared by CCBF on the CCBF Common
Stock, the record date for which is at or after the Effective Time, the
declaration shall include dividends or other distributions on all shares of CCBF
Common Stock (and attached CCBF Rights) issuable pursuant to this Agreement, but
beginning on the 91st day after the date on which the Effective Time shall
occur, no dividend or other distribution payable to the holders of record of
CCBF Common Stock at or as of any time after the Effective Time shall be paid to
the holder of any certificate representing shares of Stone Street Common Stock
issued and outstanding at the Effective Time that have been converted into
rights to receive shares of CCBF Common Stock (and attached CCBF Rights) until
such holder physically surrenders such certificate for exchange as provided in
Section 4.1 of this Agreement, promptly after which time all such dividends or
distributions shall be paid (without interest).


                                   ARTICLE V

                REPRESENTATIONS AND WARRANTIES OF STONE STREET

     Stone Street represents and warrants to CCBF as follows:

     5.1  Organization, Standing, and Authority.  (a)  Stone Street is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of North Carolina, and is duly qualified to do business and in good
standing in all jurisdictions (whether federal, state, local or foreign) where
both its ownership or leasing of Assets or the conduct of its business requires
it to be so qualified and the failure to do so would constitute a Material
Adverse Event.  Stone Street has all requisite corporate power and authority to
carry on its business as now conducted and to own, lease and operate its Assets
and business, and to execute, deliver and perform its obligations under this
Agreement.  Stone Street is duly registered as a savings bank holding company
under the BHCA. Except as Previously Disclosed, Stone Street has in effect all
Permits necessary for it to own or lease its Assets and to carry on its business
as now conducted.

     (b)  Mocksville is a state savings bank duly organized, validly existing
and in good standing under the Laws of the State of North Carolina, and is duly
qualified to do business and in

                                       20
<PAGE>
 
good standing in all jurisdictions (whether federal, state, local or foreign)
where both its ownership or leasing of Assets or the conduct of its business
requires it to be so qualified and the failure to do so would constitute a
Material Adverse Event. Mocksville has all requisite corporate power and
authority to carry on its business as now conducted and to own, lease and
operate its Assets and business, and to execute, deliver and perform its
obligations under this Agreement. Except as Previously Disclosed, Mocksville has
in effect all Permits necessary for it to own or lease its Assets and to carry
on its business as now conducted. Mocksville is an "insured institution" as
defined in the FDIA and applicable regulations thereunder, and the deposits in
which are insured by the Savings Association Insurance Fund.

     5.2  Capital Stock.

          (a) The authorized capital stock of Stone Street consists of (i)
5,000,000 shares of preferred stock, no par value, none of which has been issued
and (ii) 20,000,000 shares of Stone Street Common Stock, no par value, of which
1,638,452 shares (including 73,002 shares subject to MRP Rights) were issued and
outstanding on April 13, 1999.  All of the issued and outstanding shares of
Stone Street Common Stock are duly and validly issued and outstanding and are
fully paid and nonassessable.  None of the outstanding shares of Stone Street
Common Stock has been issued in violation of any preemptive Rights.  Except for
the Stone Street Stock Options, there are no other shares of capital stock or
other equity securities of Stone Street outstanding and no Rights (other than
the MRP Rights) relating to the capital stock of Stone Street.  There are
outstanding Stone Street Stock Options to acquire 172,244 shares of Stone Street
Common Stock, and Stone Street has reserved a total of 182,505 shares of Stone
Street Common Stock with respect to the Stone Street Option Plan.

          (b) The Stone Street Common Stock is duly registered under the 1934
Act and is listed on the AMEX.  The Stone Street Common Stock is not subject to
any restrictions as to transfer thereof (exclusive of restrictions arising under
the Stone Street MRP Plan and restrictions respecting shares of Stone Street
Common Stock held by its directors, officers or other "affiliates" imposed in
accordance with the Securities Laws).  To the Knowledge of Stone Street and
except as Previously Disclosed, as of the date hereof, no Person is a beneficial
owner of, or has a Right to own beneficially, five percent (5%) or more of the
Stone Street Common Stock.  For purposes of this Section 5.2, the term
"beneficial owner" shall have the meaning provided in Rule 13d-3 of the rules
and regulations of the SEC as in effect on the date hereof, except that the term
"beneficial owner" shall not include ownership of any of the Stone Street Common
Stock held by the trustees of the Stone Street ESOP or by Mocksville as trustee
or in some other fiduciary or custodial capacity.

     5.3  Stone Street Subsidiaries.

          (a) Each of the Stone Street Subsidiaries (i) is duly organized,
validly existing and in good standing under the Laws of the state or other
jurisdiction of its incorporation, (ii) is duly qualified to do business and is
in good standing in all jurisdictions (whether federal, state, local or foreign)
where both its ownership or leasing of Assets or the conduct of its business
requires it to 

                                       21
<PAGE>
 
be so qualified and the failure to do so would constitute a Material Adverse
Event, and (iii) has all requisite corporate power and authority to, and, except
as Previously Disclosed, has in effect all Permits necessary for it to, carry on
its business as now conducted and to own, lease and operate its Assets and
business. Other than the Stone Street Subsidiaries, Stone Street neither owns
nor controls five percent (5%) or more of the outstanding equity securities,
either directly or indirectly, of any Person.

          (b) Stone Street is the direct, record and beneficial owner of 100% of
the outstanding shares of the capital stock of each of the Stone Street
Subsidiaries which are its direct subsidiaries, and Mocksville is the direct,
record and beneficial owner of 100% of the outstanding shares of capital stock
of each of the Stone Street Subsidiaries which are its direct subsidiaries.  All
of the shares of capital stock of each of the Stone Street Subsidiaries are
fully paid and nonassessable and are owned by Stone Street or Mocksville free
and clear of any Lien.  No equity securities of any Stone Street Subsidiary are
or may become required to be issued or sold (other than to Stone Street or
Mocksville) under any Rights.

     5.4. Authorization of Merger, Bank Merger and Related Transactions.

          (a) The execution and delivery of this Agreement by Stone Street and
Mocksville and the consummation of the transactions contemplated hereby to which
either or both of them are a party have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of Stone Street and
Mocksville, subject to the approval of the shareholders of Stone Street to the
extent required by applicable Law.  This Agreement, subject to such Stone Street
shareholder approval and Regulatory Approvals, represents a legal, valid and
binding obligation of Stone Street and Mocksville enforceable against Stone
Street and Mocksville in accordance with its terms.

          (b) Neither the execution and delivery of this Agreement by Stone
Street and Mocksville, nor the consummation by them of the transactions
contemplated hereby to which they are a party, nor compliance by them with any
of the provisions hereof  will (i) conflict with or result in a breach of any
provision of the Articles of Incorporation or Bylaws of Stone Street, Mocksville
or any Stone Street Subsidiary or any resolutions adopted by the Board of
Directors of Stone Street or Mocksville, (ii) constitute or result in a Default
under, or require any Consent pursuant to, or give rise to any right of
termination, cancellation or acceleration with respect to, or result in the
creation of any Lien upon any Asset of Stone Street or any Stone Street
Subsidiary under any Contract or Permit of Stone Street or any Stone Street
Subsidiary, or (iii) subject to receipt of all requisite shareholder approvals,
Consents and Regulatory Approvals, violate any Law or Order applicable to Stone
Street or any Stone Street Subsidiary or any of their respective Assets.

          (c) Other than (i) in connection or compliance with the provisions of
applicable Securities Laws and the rules and regulations of the AMEX, (ii)
Consents required from Regulatory Authorities, (iii) notices to or filings with
the IRS or the PBGC with respect to any employee benefit plans, or under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and (iv) filings of the Articles of Merger and the Bank Articles of
Merger with the NC 

                                       22
<PAGE>
 
SecState, no notice to, filing with or Consent of any public body or authority
is necessary for the consummation by Stone Street of the Merger, the
consummation by Mocksville of the Bank Merger or the consummation of the other
transactions contemplated in this Agreement.

     5.5  SEC Filings; Financial Statements.  Stone Street has timely filed and
made available to CCBF all SEC Documents required to be filed by Stone Street
since December 31, 1995 (the "Stone Street SEC Reports").  The Stone Street SEC
Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Laws and other applicable Laws and
(ii) did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Stone Street SEC Reports or necessary in order to
make the statements in such Stone Street SEC Reports, in light of the
circumstances under which they were made, not misleading.  No Stone Street
Subsidiary is registered or operates as a broker, dealer, or investment advisor,
and no Stone Street Subsidiary is required to file any SEC Documents.

          (b) Stone Street (i) has delivered (or will deliver, when issued) to
CCBF copies of the Stone Street Financial Statements.  The Stone Street
Financial Statements (as of the dates thereof and for the periods covered
thereby) (i) are or will be in accordance with the books and records of Stone
Street, which are or will be complete and accurate in all material respects and
which have been or will have been maintained in accordance with good business
practices, (ii) present or will present fairly in all material respects the
consolidated financial position and the consolidated results of operations,
changes in stockholders' equity and cash flows of Stone Street as of the dates
and for the periods indicated, in accordance with GAAP, subject in the case of
interim financial statements to normal recurring year-end adjustments which were
not or, to the Knowledge of Stone Street, are not expected to be material in
amount, and (iii) with respect to the Stone Street Financial Statements as of
and for the years ended December 31, 1998, December 31, 1997 and December 31,
1996, have been audited and reported upon by independent certified public
accountants.

     5.6  Books and Corporate Records.

          (a) Except as Previously Disclosed, the books of account of Stone
Street and the Stone Street Subsidiaries have been maintained in substantial
compliance with all applicable legal and accounting requirements and in such
manner as to reflect accurately their respective items of income and expense and
all of their respective Assets, Liabilities and stockholders' equity.  To the
Knowledge of Stone Street, Stone Street and the Stone Street Subsidiaries have
filed all material reports and returns, including Tax Returns, required by any
Law to be filed and have duly paid or accrued on their respective books of
account all Taxes and charges due pursuant to such reports and returns, or
assessed against any of them, including, without limitation, all such reports,
statements and assessments which Stone Street or Stone Street Subsidiary is
required to have filed or paid pursuant to all Laws, none of which reports,
returns, statements or assessments has been the subject of any material
objection by the Regulatory Authority with which filed.

                                       23
<PAGE>
 
          (b) The minute books of Stone Street and each Stone Street Subsidiary
accurately reflect in all material respects the corporate actions which its
shareholders and Board of Directors, and all committees thereof, have taken
during the time periods covered by such minute books.  Such minute books have
been or will be made available to CCBF and its representatives.

     5.7  Absence of Undisclosed Liabilities.  Except as Previously Disclosed or
reflected in any Stone Street SEC Report filed since December 31, 1998 and prior
to the date hereof, since December 31, 1998, neither Stone Street nor any Stone
Street Subsidiary has incurred or paid any Liability which could constitute a
Material Adverse Event.

     5.8  Tax Matters.

          (a) Except as Previously Disclosed, all Tax Returns required to be
filed by or on behalf of Stone Street or any Stone Street Subsidiary have been
timely filed, or requests for extensions have been timely filed and granted and
have not expired, for periods ending on or before January 1, 1999, and all such
Tax Returns filed are complete and accurate in all material respects. Except as
Previously Disclosed, all Taxes due under such Tax Returns have been paid.
Except as Previously Disclosed, there is no audit examination, deficiency or
refund litigation or matter in controversy with respect to any material amount
of Taxes.  All Taxes due from Stone Street or any Stone Street Subsidiary with
respect to completed and settled examinations or concluded Tax litigation have
been paid.

          (b) Except as Previously Disclosed, neither Stone Street nor any Stone
Street Subsidiary has executed an extension or waiver of any statute of
limitations on the assessment or collection of any Tax due that is currently in
effect.

          (c) In the opinion of Stone Street's management, adequate provision
for any Taxes due or to become due from Stone Street or any Stone Street
Subsidiary for any period or periods through and including December 31, 1998,
has been made and is reflected in the December 31, 1998 financial statements of
Stone Street included in the Stone Street Financial Statements.

          (d) Deferred Taxes of Stone Street and each Stone Street Subsidiary
have been provided for in the Stone Street Financial Statements in accordance
with GAAP.

          (e) Stone Street and each of the Stone Street Subsidiaries is in
compliance with, and its records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Tax Code,
except for such instances of noncompliance and such omissions as are not
reasonably likely to constitute a Material Adverse Event.

                                       24
<PAGE>
 
          (f) Neither Stone Street nor any Stone Street Subsidiary has made any
payments, is obligated to make any payments, or is a party to any Contract that
could obligate it to make any payments that would be disallowed as a deduction
under Sections 280G or 162(m) of the Tax Code.

          (g) There has not been an ownership change, as defined in Tax Code
Section 382(g), of Stone Street or any Stone Street Subsidiary that occurred
during or after any taxable period in which Stone Street and the Stone Street
Subsidiaries incurred a net operating loss that carries over to any taxable
period ending after December 31, 1998.

          (h) Neither Stone Street nor any Stone Street Subsidiary has or has
had in any foreign country a permanent establishment, as defined in any
applicable Tax treaty or convention between the United States and such foreign
country.

     5.9  Allowance for Loan Losses.  The allowance for loan losses (the
"Allowance") shown on the consolidated statements of financial condition of
Stone Street as of December 31, 1998 included in the Stone Street Financial
Statements was, and the Allowance shown on the consolidated statements of
financial condition of Stone Street as of dates subsequent to the execution of
this Agreement included in the Stone Street Financial Statements will be, in
each case as of the dates thereof, in the opinion of management of Stone Street,
adequate to provide for losses relating to or inherent in the loan portfolios
(including accrued interest receivables) of Stone Street and the Stone Street
Subsidiaries.

     5.10 Assets.  Except as Previously Disclosed, Stone Street and each Stone
Street Subsidiary has good and marketable title to all its material Assets,
including, but not limited to, all material Assets reflected in the consolidated
balance sheet of Stone Street as of December 31, 1998 included in the Stone
Street Financial Statements or reflected in the notes thereto, and all Assets
purchased by Stone Street or a Stone Street Subsidiary since such date, except
for such Assets which have been sold or otherwise disposed of in the Ordinary
Course of Business, are in each case free and clear of all Liens, except for (a)
Liens Previously Disclosed, (b) zoning ordinances, easements of record, permits
and other restrictions or limitations on the use of real property which do not
materially detract from the value of, or impair the use of, such property by
Stone Street or a Stone Street Subsidiary in the operation of its business, (c)
Liens for current Taxes on property not yet due, and (d) Liens which do not
materially affect the operation of the business of Stone Street or a Stone
Street Subsidiary.  Stone Street has Previously Disclosed all material Assets
which have been purchased or disposed of by Stone Street or a Stone Street
Subsidiary since December 31, 1998. Stone Street has Previously Disclosed all
business locations of Stone Street and the Stone Street Subsidiaries, including
whether such locations are owned or leased and a statement of when such
locations were first occupied by Stone Street or a Stone Street Subsidiary.
Stone Street has Previously Disclosed its construction of the New Building; the
architectural and construction drawings, plans and specifications, and the
planned equipment, furniture and fixtures of the New Building; the projected
total cost of such construction, equipment, furnishings and upfitting (including
land costs); and the current status of all Permits necessary to construct, own
and operate the New Building for its intended purpose.

                                       25
<PAGE>
 
     5.11 Compliance with Laws.

          (a)  To the Knowledge of Stone Street and except as Previously
Disclosed, Stone Street and each Stone Street Subsidiary is in compliance in all
material respects with all Laws, any Regulatory  Agreements and its internal
policies and procedures.

          (b)  Except as Previously Disclosed, neither Stone Street nor any
Stone Street Subsidiary has received any notification or communication from, or
consented to, entered into or been subjected to any Order with, any Regulatory
Authority, (i) asserting that it is not in substantial compliance with any of
the Laws which such Regulatory Authority has promulgated or enforces, or the
internal policies and procedures of such company, (ii) threatening to revoke any
Permit, (iii) requiring or threatening to require it, or indicating that it may
be required, to enter into a cease and desist Order restricting or limiting or
purporting to restrict or limit in any manner its operations, including, without
limitation, any restriction on the payment of dividends, or (iv) directing,
restricting or limiting, or purporting to direct, restrict or limit in any
manner its operations, including, without limitation, any restriction on the
payment of dividends (any such notification, communication, memorandum,
agreement or order described in this sentence herein referred to as a
"Regulatory Agreement").  True and correct copies of all Regulatory Agreements,
if any, have been or will be delivered to CCBF by Stone Street.

          (c)  Neither Stone Street nor any Stone Street Subsidiary:

               (i)  is in Default under any of the provisions of its certificate
     or articles of incorporation or bylaws (or other governing instruments); or

               (ii) is in Default under any Orders applicable to its business or
     employees conducting its business.

     5.12 Employee Benefit Plans.

          (a)  Stone Street has Previously Disclosed, and will deliver to CCBF
true and correct copies in each case of, all pension, retirement, profit-
sharing, supplemental retirement, deferred compensation, stock appreciation
right, stock option, employee stock ownership, severance pay, vacation, bonus,
or other incentive plan, all other written or unwritten employee programs or
Contracts, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit plans,
including "employee benefit plans" as that term is defined in Section 3(3) of
ERISA, currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by Stone Street, any Stone Street Subsidiary or any ERISA
Affiliate thereof for the benefit of current or former officers or employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate, including all amendments thereto adopted and effective since the
most recent restatement thereof (collectively, the "Stone Street Benefit
Plans").  In addition, Stone Street will deliver to CCBF (i) 

                                       26
<PAGE>
 
with respect to each Stone Street Benefit Plan, including any amendment thereto,
the most recent determination letter, if any, issued by the IRS, (ii) annual
reports or returns, audited or unaudited financial statements, actuarial
valuations and reports, and summary annual reports prepared for any Stone Street
Benefits Plan with respect to the most recent three plan years, and (iii) the
most recent summary plan descriptions (and any material modifications thereto).
Any of the Stone Street Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "Stone Street ERISA Plan." Each Stone Street ERISA Plan which is also a
"defined benefit plan" (as defined in Section 414(j) of the Tax Code) is
referred to herein as a "Stone Street Pension Plan." No Stone Street Pension
Plan is or has been a multiemployer plan within the meaning of Section 3(37) of
ERISA.

          (b) All Stone Street Benefit Plans and any related trusts, to the
extent applicable, are in compliance with the applicable terms of ERISA, the Tax
Code, any other applicable Laws, and the written terms of such Stone Street
Benefit Plans, the breach or violation of which are reasonably likely to
constitute a Material Adverse Event with respect to Stone Street.  Neither Stone
Street nor any Stone Street Subsidiary has received notice from any governmental
authority, including the IRS, questioning or challenging such compliance.  Each
Stone Street ERISA Plan which is intended to be qualified under Section 401(a)
of the Tax Code has received a favorable determination letter from the IRS, and
Stone Street is not aware of any circumstances likely to result in revocation of
any such favorable determination letter.  To the Knowledge of Stone Street,
neither it nor any Stone Street Subsidiary has engaged in a transaction with
respect to any Stone Street Benefit Plan that, assuming the taxable period of
such transaction expired as of the date hereof, would subject Stone Street or
any Stone Street Subsidiary to a Tax imposed by either Section 4975 of the Tax
Code or Section 502(i) of ERISA in amounts which are reasonably likely to
constitute a Material Adverse Event with respect to Stone Street.

          (c) No Stone Street Pension Plan has any "unfunded current liability,"
as that term is defined in Section 302(d)(8)(A) of ERISA, based on actuarial
assumptions set forth for such plan's most recent actuarial valuations.  Since
the date of the most recent actuarial valuation, there has been (i) no material
change in the financial position of any Stone Street Pension Plan, (ii) no
change in the actuarial assumptions with respect to any Stone Street Pension
Plan, and (iii) no increase in benefits under any Stone Street Pension Plan as a
result of plan amendments or changes in applicable Law which is reasonably
likely to constitute a Material Adverse Event or materially adversely affect the
funding status of any such plan.  Neither any Stone Street Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by Stone Street or any Stone Street Subsidiary,
or the single-employer plan of any entity which is considered one employer with
Stone Street under Section 4001 of ERISA or Section 414 of the Tax Code or
Section 302 of ERISA (an "ERISA Affiliate") has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of the Tax
Code or Section 302 of ERISA, which is reasonably likely to constitute a
Material Adverse Event.  Neither Stone Street nor any Stone Street Subsidiary
has provided, or is required to provide, security to a Stone Street Pension Plan
or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Tax Code.

                                       27
<PAGE>
 
          (d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by Stone Street or any Stone Street Subsidiary with respect to any
ongoing, frozen, or terminated single-employer plan or the single-employer plan
of any ERISA Affiliate, which Liability is reasonably likely to constitute a
Material Adverse Event with respect to Stone Street.  Neither Stone Street nor
any Stone Street Subsidiary has incurred any withdrawal Liability with respect
to a multiemployer plan under Subtitle B of Title IV of ERISA (regardless of
whether based on contributions of an ERISA Affiliate), which Liability is
reasonably likely to constitute a Material Adverse Event.  No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been required to be filed
for any Stone Street Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.

          (e) Neither Stone Street nor any Stone Street Subsidiary has any
Liability for retiree health and life benefits under any of the Stone Street
Benefit Plans and there are no restrictions on the rights of Stone Street or any
Stone Street Subsidiary to amend or terminate any such retiree health or benefit
plan without incurring any Liability thereunder, which Liability is reasonably
likely to constitute a Material Adverse Event with respect to Stone Street.

          (f) Except as disclosed in Stone Street SEC Reports and with respect
to the Stone Street MRP Plan, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including severance, unemployment compensation, golden
parachute, or otherwise) becoming due to any director or any employee of Stone
Street or any Stone Street Subsidiary from Stone Street or any Stone Street
Subsidiary under any Stone Street Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any Stone Street Benefit Plan, or (iii) result
in any acceleration of the time of payment or vesting of any such benefit, where
such payment, increase, or acceleration is reasonably likely to constitute a
Material Adverse Event with respect to Stone Street.  The provisions of this
Section 5.12(f) shall not apply to the acceleration of vesting or other payment
of compensation or other benefits under any Stone Street ERISA Plan, Stone
Street Option Plan, Special Termination Agreement between Mocksville and Allen
W. Carter, Special Termination Agreement between Mocksville and Marjorie D.
Foster, Mocksville Savings Bank, SSB Severance Plan, Retirement Payment
Agreements between Stone Street and the members of its Board of Directors, or
Employment Agreement between Mocksville and J. Charles Dunn Previously Disclosed
to CCBF; provided, however, that all acceleration of vesting and other payment
of compensation or other benefits provisions of the Employment Agreement between
Mocksville and Mr. Dunn shall be waived by Mocksville and Mr. Dunn, and shall
not become or be effective, upon the condition that an Amended and Restated
Employment between CCB Bank and Mr. Dunn, and acceptable to each of them, shall
be entered into and effective as of the Effective Time.

          (g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of Stone Street or any Stone Street Subsidiary and their respective
beneficiaries, other than entitlements accrued pursuant to funded retirement
plans 

                                       28
<PAGE>
 
subject to the provisions of Section 412 of the Tax Code or Section 302 of
ERISA, have been fully reflected on the Stone Street Financial Statements to the
extent required by and in accordance with GAAP.

          (h) There are no unresolved claims or disputes under the terms of, or
in connection with, the Stone Street Benefit Plans other than claims for
benefits which are payable in the Ordinary Course of Business, and no Action has
been commenced with respect to any Stone Street Benefit Plan.

          (i) All Stone Street Benefit Plan documents and annual reports or
returns, audited or unaudited financial statements, actuarial valuations,
summary annual reports, and summary plan descriptions issued with respect to the
Stone Street Benefit Plans are correct and complete in all material respects,
and there have been no changes in the information set forth therein.

          (j) All Liabilities of Stone Street or any Stone Street Subsidiary
arising out of or related to Stone Street Benefit Plans are reflected in the
Stone Street Financial Statements in accordance with GAAP.

          (k) All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports, and Summary Plan Descriptions) have been filed
or distributed appropriately with respect to each such Stone Street Benefit
Plan.  The requirements of Part 6 of Subtitle B of Title I of ERISA and of Tax
Code Section 4980B have been met with respect to each such Stone Street Benefit
Plan which is an Employee Welfare Benefit Plan and which is subject to such
requirements.

          (l) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such Stone Street Benefit Plan which is a Stone Street ERISA Plan.

     5.13 Commitments and Contracts.  Except as Previously Disclosed, neither
Stone Street nor any Stone Street Subsidiary is a party or subject to any of the
following:

          (a) any employment Contract (including any Contracts with respect to
severance or termination pay Liabilities or fringe benefits) with any present or
former officer, director, employee or spouse thereof, including in any such
Person's capacity as a consultant;

          (b) any labor Contract with any labor union;

          (c) any Contract which limits its ability to compete in any line of
business or which involves any restriction of the geographic area in which it
may carry on its business (other than as may be required by law or applicable
Regulatory Authorities), or which would restrict in any way the ability of the
Resulting Corporation or the Surviving Bank to so compete; or

                                       29
<PAGE>
 
          (d) any Significant Contract or Significant Lease.

     5.14 Material Contract Defaults.  Neither Stone Street nor any Stone Street
Subsidiary is, and none of them has received any notice or has any Knowledge
that any other party is, in Default in any respect under any Contract to which
Stone Street or any Stone Street Subsidiary is a party or by which Stone Street
or any Stone Street Subsidiary or the respective Assets, business or operations
may be bound or affected or under which it or its Assets, business or operations
receives benefits, except for those Defaults which would not constitute a
Material Adverse Event, and there has not occurred any event that with the lapse
of time or the giving of notice or both would constitute such a Default.

     5.15 Legal Proceedings.  Except as Previously Disclosed, there are no
Actions instituted or pending or, to the Knowledge of Stone Street, threatened
against Stone Street or any Stone Street Subsidiary, or against any Asset of
Stone Street or any Stone Street Subsidiary, that if decided adversely to it
could constitute a Material Adverse Event or that might reasonably be expected
to threaten or significantly impede the consummation of the transactions
contemplated by this Agreement.  Neither Stone Street nor any Stone Street
Subsidiary is subject to any Order that could constitute a Material Adverse
Event or that might reasonably be expected to threaten or significantly impede
the consummation of the transactions contemplated by this Agreement.

     5.16 Absence of Certain Changes or Events.  Since December 31, 1998, except
(i) as disclosed in any Stone Street SEC Report filed since December 31, 1998
and prior to the date hereof or (ii) as Previously Disclosed, neither Stone
Street nor any Stone Street Subsidiary has (A) failed to operate in the Ordinary
Course of Business, (B) suffered any change that could constitute a Material
Adverse Event, (C) incurred any material Liabilities or engaged in any material
transaction or entered into any material Contract outside of the Ordinary Course
of Business, (D) increased the salaries, compensation or general benefits
payable to its directors or employees other than in the Ordinary Course of
Business, (E) suffered any loss, destruction or damage to any of its Assets that
could constitute a Material Adverse Event, (F) made a material acquisition or
disposition of any Assets or entered into any Significant Contract or
Significant Lease other than in the Ordinary Course of Business, or (G) taken
any action, or failed to take any action, prior to the date of this Agreement,
which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the covenants
and agreements of Stone Street provided in Article VII.

     5.17 Reports.  Since December 31, 1994, Stone Street has filed all reports
and statements, together with all amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities.  A copy of
each such report or document has been delivered or will be made available to
CCBF.  As of their respective dates, each such report or document complied in
all material respects with applicable Laws enforced or promulgated by the
respective Regulatory Authorities, and no such report contained any information
that was false or misleading with respect to any material fact or omitted to
state any material fact necessary in order to make the statements therein not
misleading.

                                       30
<PAGE>
 
     5.18 Insurance.  Stone Street and each Stone Street Subsidiary is presently
insured, and during each of the past five (5) calendar years has been insured,
for reasonable amounts against such risks as companies engaged in a similar
business would, in accordance with good business practice, customarily be
insured.  The policies of fire, theft, liability and other insurance maintained
with respect to the Assets or businesses of Stone Street or such Stone Street
Subsidiary provide adequate coverage against loss, and the fidelity bonds in
effect as to which Stone Street and/or a Stone Street Subsidiary is a named
insured are sufficient for their purpose.

     5.19 Labor.  No work stoppage involving Stone Street or any Stone Street
Subsidiary is pending or, to the Knowledge of Stone Street, threatened.  Stone
Street and each Stone Street Subsidiary has, to the Knowledge of Stone Street,
complied in all material respects with all Laws relating to the employment of
labor, including, without limitation, any provisions thereof relating to wages,
and no Person has, to the Knowledge of Stone Street, asserted that Stone Street
or any Stone Street Subsidiary has Liabilities for any  arrears or wages or any
Taxes or penalties for failure to comply with any of the foregoing.  Except as
Previously Disclosed, there is no Action by any Person pending or, to the
Knowledge of Stone Street, threatened, against Stone Street or any Stone Street
Subsidiary (or any of the employees thereof), involving employment
discrimination, sexual harassment, wrongful discharge or similar claims.
Employees of Stone Street and the Stone Street Subsidiaries are not represented
by any labor union, and, to the Knowledge of Stone Street, no labor union is
attempting to certify a collective bargain unit of any such employees or
engaging in any other organizational activity.

     5.20 Material Interests of Certain Persons.  Except as Previously
Disclosed, no officer or director of Stone Street or any Stone Street
Subsidiary, or any "associate" (as such term is defined in Rule 14a-1 under the
1934 Act) of any such officer or director, has any material interest in any
Significant Contract or Significant Lease or any Asset used in or pertaining to
the business of Stone Street or any Stone Street Subsidiary.

     5.21 Registration Obligation.  Except as Previously Disclosed, Stone Street
is not under any obligation, contingent or otherwise, which will survive the
Merger by reason of any Contract to register any of its securities or Rights
relating thereto under the 1933 Act.

     5.22 Environmental Matters.

          (a) To the Knowledge of Stone Street, Stone Street and each Stone
Street Subsidiary and their respective Participation Facilities and Operating
Properties are, and have been, in compliance with all Environmental Laws and are
not subject to Liabilities under Environmental Laws, except for violations and
Liabilities which are not reasonably likely to constitute a Material Adverse
Event.

          (b) There is no Action pending or, to the Knowledge of Stone Street,
threatened before any court, governmental agency, or authority or other forum in
which Stone Street, any Stone Street Subsidiary or any of their respective
Operating Properties or Participation Facilities has been 

                                       31
<PAGE>
 
or, with respect to threatened Action, may be named as a defendant (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release, discharge, spillage, or disposal into the
environment of any Hazardous Material, whether or not occurring at, on, under,
adjacent to, or affecting (or potentially affecting) a site owned, leased, or
operated by Stone Street, any Stone Street Subsidiary or any of their respective
Operating Properties or Participation Facilities, except for such Action pending
or threatened that is not reasonably likely to constitute a Material Adverse
Event, nor is there any reasonable basis for any Action of a type described in
this sentence, except such as is not reasonably likely to constitute a Material
Adverse Event.

          (c) During the period of (i) any Stone Street's or any Stone Street
Subsidiary's ownership or operation of any of their respective current
properties, (ii) Stone Street's or any Stone Street Subsidiary's participation
in the management of any Participation Facility, or (iii) Stone Street's or any
Stone Street Subsidiary's holding of a security interest in an Operating
Property, (1) there have been no releases, discharges, spillages, or disposals
of Hazardous Material in, on, under, adjacent to, or affecting (or potentially
affecting) such properties, Participation Facilities or Operating Properties,
(2) no Hazardous Materials have been generated, treated, stored, or disposed of
at, or transported to or from, any such property, Operating Property or
Participation Facility at any time, except in compliance with the Environmental
Laws, (3) no friable asbestos containing material is or has been in use, or is
or has been stored or disposed of on or upon any such property, Operating
Property or Participation Facility, (4) no polychlorinated biphenyls ("PCBs")
are or have been located on or in any such property, Operating Property or
Participation Facility in any form or device, including, without limitation, in
the form of electrical transformers, fluorescent light fixtures with ballasts,
or cooling oils, except in compliance with the Environmental Laws, and (5) no
underground storage tanks are or have been located on any such property,
Operating Property or Participation Facility and subsequently removed or filled
except in compliance with all Environmental Laws, except such as are not
reasonably likely to constitute a Material Adverse Event.  Prior to the period
of (i) Stone Street's or any Stone Street Subsidiary's ownership or operation of
any of their respective current properties, (ii) Stone Street's or any Stone
Street Subsidiary's participation in the management of any Participation
Facility, or (iii) Stone Street's or any Stone Street Subsidiary's holding of a
security interest in an Operating Property, to the Knowledge of Stone Street,
(1) there were no releases, discharges, spillages, or disposals of Hazardous
Material in, on, under, or affecting any such property, Participation Facility
or Operating Property, (2) no Hazardous Materials were generated, treated,
stored, or disposed of at, or transported to or from, any such property,
Operating Property or Participation Facility at any time, except in compliance
with the Environmental Laws, (3) no friable asbestos containing material were
used, stored, or disposed of on or upon any such property, Operating Property or
Participation Facility, (4) no PCBs were located on or in any such Operating
Property or Participation Facility in any form or device, including, without
limitation, in the form of electrical transformers, fluorescent light fixtures
with ballasts, or cooling oils, except in compliance with the Environmental
Laws, and (5) no underground storage tanks were located on any such property,
Operating Property or Participation Facility and subsequently removed or filled
except in compliance with all 

                                       32
<PAGE>
 
Environmental Laws, except such as are not reasonably likely to constitute a
Material Adverse Event.

     5.23 Accounting; Tax; Regulatory Matters.  To its Knowledge, neither Stone
Street nor any Stone Street Subsidiary has taken or agreed to take any action
nor does Stone Street have any Knowledge of any fact or circumstance that would
(i) prevent (or, together with other events, would be reasonably likely to
prevent) the Merger and the Second Merger from qualifying as a Tax-free
reorganization within the meaning of Tax Code Section 368,  or (ii)
significantly impede or delay receipt of any Regulatory Approval.

     5.24 Brokers and Finders.  Except for Orr Management Company ("OMC"),
neither Stone Street nor any of its respective officers, directors or employees
has employed any broker or finder or incurred any Liability for any financial
advisory fees, brokerage fees, commissions or finders' fees, and no broker or
finder has acted directly or indirectly for Stone Street in connection with this
Agreement or the transactions contemplated hereby.

     5.25 State Takeover Laws.  Stone Street and each Stone Street Subsidiary
has taken all necessary action to exempt the transactions contemplated by this
Agreement from, or if necessary to challenge the validity or applicability of,
any applicable "moratorium," "fair price," "business combination," "control
share," or other anti-takeover Laws.

     5.26 Charter Provisions.  Stone Street and each Stone Street Subsidiary has
taken all action so that the entering into of this Agreement and the
consummation of the Merger, the Bank Merger, the Second Merger and the other
transactions contemplated by this Agreement do not and will not result in the
grant of any rights to any Person under the certificate or articles of
incorporation, bylaws, or other governing instruments of Stone Street or any
Stone Street Subsidiary or restrict or impair the ability of CCBF or any CCBF
Subsidiary to vote, or otherwise to exercise the rights of a shareholder with
respect to, shares of Stone Street or any Stone Street Subsidiary that may be
directly or indirectly acquired or controlled by them.

     5.27 Derivatives Contracts.  Neither Stone Street nor any Stone Street
Subsidiary is a party to or has agreed to enter into an exchange-traded or over-
the-counter swap, forward, future, option, cap, floor, or collar financial
Contract, or any other interest rate or foreign currency protection Contract
which is a financial derivative Contract (including various combinations
thereof) (each a "Derivatives Contract").

     5.28 Y2K Compliance.  Stone Street, with respect to itself and the Stone
Street Subsidiaries, has made and is making inquiries of its and their software
and data processing providers with respect to Year 2000 problem compliance, and
it and, to the Knowledge of Stone Street, they are in compliance in all material
respects with the FFIEC Interagency Statement, "Guidance Concerning Institution
Due Diligence in Connection with Service Provider and Software Vendor Year 2000
Readiness" (March 17, 1998) (the "Interagency Statement").

                                       33
<PAGE>
 
     5.29 Statements True and Correct.  No statement, certificate, instrument,
or other writing furnished or to be furnished by Stone Street, any Stone Street
Subsidiary or any Affiliate thereof to CCBF pursuant to this Agreement or any
other document, agreement, or instrument referred to herein contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.  None of the information supplied or
to be supplied by Stone Street, any Stone Street Subsidiary or any Affiliate
thereof for inclusion in the Registration Statement to be filed by CCBF with the
SEC will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein not misleading.  None of the
information supplied or to be supplied by Stone Street, any Stone Street
Subsidiary or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to Stone Street's shareholders in connection with the Shareholders'
Meeting, and any other documents to be filed by Stone Street, any Stone Street
Subsidiary or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of Stone Street, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the Shareholder's
Meeting, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for the
Shareholder's Meeting.  All documents that Stone Street, any Stone Street
Subsidiary or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all material respects with the provisions of
applicable Law.


                                  ARTICLE VI

                    REPRESENTATIONS AND WARRANTIES OF CCBF

     CCBF represents and warrants to Stone Street as follows:

     6.1  Organization, Standing and Authority.  CCBF is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
North Carolina, and is duly qualified to do business and in good standing in all
jurisdictions (whether federal, state, local or foreign) where both its
ownership or leasing of Assets or the conduct of its business requires it to be
so qualified and the failure to do so would constitute a Material Adverse Event.
CCBF has all requisite corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets and business, and to
execute, deliver and perform its obligations under this Agreement. CCBF is duly
registered as a bank holding company under the BHCA.  Except as Previously
Disclosed, CCBF has in effect all Permits necessary for it to own or lease its
Assets and to carry on its business as now conducted.

                                       34
<PAGE>
 
     6.2  Capital Stock.

          (a) The authorized capital stock of CCBF consists of (i) 100,000,000
shares of CCBF Common Stock, of which 40,058,092 shares were issued and
outstanding as of April 13, 1999, and (ii) 10,000,000 shares of serial preferred
stock, none of which were issued and outstanding on such date.  All of the
issued and outstanding shares of CCBF Common Stock are duly and validly issued
and outstanding and are fully paid and nonassessable.  None of the outstanding
shares of CCBF Common Stock has been issued in violation of any preemptive
Rights.

          (b) The CCBF Common Stock is duly registered under the 1934 Act and is
listed on the NYSE.  The CCBF Common Stock is not subject to any restrictions as
to the transfer thereof (exclusive of restrictions respecting CCBF Common Stock
held by its directors, officers or other Affiliates in accordance with the
Securities Laws).  To the Knowledge of CCBF and except as Previously Disclosed,
as of the date hereof, no Person is a beneficial owner of, or has a Right to own
beneficially, five percent (5%) or more of the CCBF Common Stock.  For purposes
of this Section 6.2, the term "beneficial owner" shall have the meaning provided
in Rule 13d-3 of the rules and regulations of the SEC as in effect on the date
hereof, except that the term shall not include ownership of any of the CCBF
Common Stock held by any CCBF Subsidiary or its designees as trustee or in some
other fiduciary or custodial capacity.

     6.3. CCBF Subsidiaries.

          (a) Each of the CCBF Subsidiaries (i) is duly organized, validly
existing and in good standing under the Laws of the state or other jurisdiction
of its incorporation, (ii) is duly qualified to do business and is in good
standing in all jurisdictions (whether federal, state, local or foreign) where
both its ownership or leasing of Assets or the conduct of its business requires
it to be so qualified and  the failure to do so would constitute a Material
Adverse Event, and (iii) has all requisite corporate power and authority to,
and, except as Previously Disclosed, has in effect all Permits necessary for it
to, carry on its business as now conducted and to own, lease and operate its
Assets and businesses.  Other than the CCBF Subsidiaries, CCBF neither owns nor
controls five percent (5%) or more of the outstanding equity securities, either
directly or indirectly, of any Person. CCB Bank is an "insured institution" as
defined in the FDIA and applicable regulations thereunder, and the deposits in
which are insured by the Bank Insurance Fund or the Savings Association
Insurance Fund.

          (b) CCBF is the direct, record and beneficial owner of 100% of the
outstanding shares of the capital stock of each of the CCBF Subsidiaries which
are its direct subsidiaries, and CCB Bank is the direct, record and beneficial
owner of 100% of the outstanding shares of capital stock of each of the CCBF
Subsidiaries which are its direct subsidiaries.  All of the shares of capital
stock of each of the CCBF Subsidiaries are fully paid and nonassessable (except,
with respect to CCB Bank, as otherwise provided under Section 53-42 of the Bank
Act) and are owned by CCBF, CCB Bank or another CCBF Subsidiary free and clear
of any Lien.  No equity securities of any 

                                       35
<PAGE>
 
CCBF Subsidiary are or may become required to be issued (other than to CCBF or
another CCBF Subsidiary) under any Rights.

     6.4  Authorization of Merger and Related Transactions.

          (a) The execution and delivery of this Agreement by CCBF, CCBFC and
CCB Bank and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action in respect thereof
on the part of CCBF, CCBFC and CCB Bank, subject to (a) ratification by the
Boards of Directors of CCBF and CCB Bank of the actions of their respective
Executive Committees in adopting this Agreement, and (b) the approval of the
shareholder of CCBFC and CCB Bank to the extent required by applicable Law.
This Agreement, subject to requisite director and shareholder approvals and
Regulatory Approvals, represents a legal, valid and binding obligation of CCBF,
CCBFC and CCB Bank, enforceable against CCBF, CCBFC and CCB Bank in accordance
with its terms.

          (b) Neither the execution and delivery of this Agreement by CCBF,
CCBFC or CCB Bank, nor the consummation by CCBF, CCBFC or CCB Bank of the
transactions contemplated hereby to which they are a party, nor compliance by
them with any of the provisions hereof  will (i) conflict with or result in a
breach of any provision of CCBF's Amended and Restated Articles of Incorporation
or Amended Bylaws (as amended), CCFC's Articles of Incorporation or Bylaws, or
CCB Bank's Amended and Restated Articles of Incorporation (as amended) or
Amended Bylaws (as amended), or (ii) constitute or result in a Default under, or
give rise to any right of termination, cancellation or acceleration with respect
to, or result in the creation of any Lien upon, any Assets of any of CCBF or any
CCBF Subsidiary, or (iii) subject to receipt of all requisite director and
shareholder approvals and Regulatory Approvals, violate any Law applicable to
CCBF or any CCBF Subsidiary or any of their respective Assets.

          (c) Other than (i) in connection or compliance with the provisions of
applicable Securities Laws and the rules and regulations of the NYSE, (ii)
Consents required from Regulatory Authorities, (iii) notices to or filings with
the IRS or the PBGC with respect to any employee benefit plans, or under the HSR
Act, and (iv) filings of the Articles of Merger and the Bank Articles of Merger
with the NC SecState, no notice to, filing with or Consent of any public body or
authority is necessary for the consummation by CCBF, CCBFC and CCB Bank of the
Merger, the Bank Merger, the Second Merger, and the other transactions
contemplated in this Agreement.

     6.5  SEC Filings; Financial Statements.

          (a) CCBF has timely filed and made available to Stone Street all SEC
Documents required to be filed by CCBF since December 31, 1995 (the "CCBF SEC
Reports").  The CCBF SEC Reports (i) at the time filed, complied in all material
respects with the applicable requirements of the Securities Laws and other
applicable Laws and (ii) did not, at the time they were filed (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be 

                                       36
<PAGE>
 
stated in such CCBF SEC Reports or necessary in order to make the statements in
such CCBF SEC Reports, in light of the circumstances under which they were made,
not misleading.

          (b) CCBF (i) has delivered (or will deliver, when issued) the CCBF
Financial Statements to Stone Street.  Except as Previously Disclosed, the CCBF
Financial Statements (as of the dates thereof and for the periods covered
thereby) (i) are or will be in accordance with the books and records of CCBF and
the CCBF Subsidiaries, which are or will be complete and accurate in all
material respects and which have been or will have been maintained in accordance
with good business practices, (ii) present or will present fairly in all
material respects the consolidated financial position and the consolidated
results of operations, changes in shareholders' equity and cash flows of CCBF
and the CCBF Subsidiaries as of the dates and for the periods indicated, in
accordance with GAAP, subject in the case of interim financial statements to
normal recurring year-end adjustments which were not or, to the Knowledge of
CCBF, are not expected to be material in amount, and (iii) with respect to the
CCBF Financial Statements as of and for the years ended December 31, 1998,
December 31, 1997 and December 31, 1996, have been audited and reported upon by
independent certified public accountants.

     6.6  Absence of Undisclosed Liabilities.  Except as Previously Disclosed or
reflected in any CCBF SEC Report filed since December 31, 1998 and prior to the
date hereof, neither CCBF nor any CCBF Subsidiary has incurred any Liabilities
that could constitute a Material Adverse Event.

     6.7  Tax Matters.

          (a) Except as Previously Disclosed, all Tax Returns required to be
filed by or on behalf of CCBF have been timely filed, or requests for extensions
have been timely filed and granted and have not expired, for periods ending
before January 1, 1999, and all such Tax Returns filed are complete and accurate
in all material respects.  Except as Previously Disclosed or reflected on any
SEC Document filed by CCBF since December 31, 1998 and prior to the date hereof,
there is no audit examination, deficiency or refund litigation or matter in
controversy with respect to any material amount of Taxes.  All Taxes due from
CCBF with respect to completed and settled examinations or concluded Tax
litigation have been paid.

          (b) Except as Previously Disclosed, CCBF has not executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due that is currently in effect.

          (c) In the opinion of CCBF's management, adequate provision for any
Taxes due or to become due from CCBF for any period or periods through and
including December 31, 1998, has been made and is reflected in the December 31,
1998 financial statements of CCBF included in the CCBF Financial Statements.

                                       37
<PAGE>
 
          (d) Deferred Taxes of CCBF and each CCBF Subsidiary have been provided
for in the CCBF Financial Statements in accordance with GAAP.

          (e) CCBF and each of the CCBF Subsidiaries is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Tax Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to constitute a
Material Adverse Event.

          (f) There has not been an ownership change, as defined in Tax Code
Section 382(g), of CCBF or any CCBF Subsidiary that occurred during or after any
taxable period in which CCBF and the CCBF Subsidiaries incurred a net operating
loss that carries over to any taxable period ending after December 31, 1998.

          (g) Neither CCBF nor any CCBF Subsidiary has or has had in any foreign
country a permanent establishment, as defined in any applicable Tax treaty or
convention between the United States and such foreign country.

     6.8  Compliance with Laws.

          (a) To the Knowledge of CCBF and except as Previously Disclosed, each
of CCBF and the CCBF Subsidiaries is in compliance in all material respects with
all Laws, any Regulatory Agreement (substituting CCBF and the CCBF Subsidiaries
for Stone Street and the Stone Street Subsidiaries within the definition of such
term) and with its internal policies and procedures.

          (b) Except as Previously Disclosed, neither CCBF nor any CCBF
Subsidiary has received, consented to or entered into any Regulatory Agreement
(substituting CCBF and the CCBF Subsidiaries for Stone Street within the
definition of such term).  True and complete copies of all such Regulatory
Agreements, if any, have been or will be delivered to Stone Street by CCBF.

     6.9  Employee Benefit Plans.

          (a) CCBF has Previously Disclosed, and will deliver to Stone Street
true and correct copies in each case of, all pension, retirement, profit-
sharing, stock appreciation right, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written or
unwritten employee programs, all medical, vision, dental, or other health plans,
all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including "employee benefit plans" as that term is defined in Section
3(3) of ERISA, currently adopted, maintained by, sponsored in whole or in part
by, or contributed to by CCBF, any CCBF Subsidiary or any ERISA Affiliate
thereof for the benefit of current officers or employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, 

                                       38
<PAGE>
 
directors, independent contractors, or other beneficiaries are eligible to
participate, including all amendments thereto adopted and effective since the
most recent restatement thereof (collectively, the "CCBF Benefit Plans"). In
addition, CCBF will deliver to Stone Street (i) with respect to each CCBF
Benefit Plan (including any amendment thereto), the most recent determination
letter, if any, issued by the IRS, (ii) annual reports or returns, audited or
unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for any CCBF Benefits Plan with respect to the most
recent three plan years, and (iii) the most recent summary plan descriptions
(and any material modifications thereto). Any of the CCBF Benefit Plans which is
an "employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "CCBF ERISA Plan." Each CCBF ERISA Plan which
is also a "defined benefit plan" (as defined in Section 414(j) of the Tax Code)
is referred to herein as a "CCBF Pension Plan." No CCBF Pension Plan is or has
been a multiemployer plan within the meaning of Section 3(37) of ERISA.

          (b) All CCBF Benefit Plans and any related trusts, to the extent
applicable, are in compliance with the applicable terms of ERISA, the Tax Code,
any other applicable Laws, and the written terms of such CCBF Benefit Plans, the
breach or violation of which are reasonably likely to constitute a Material
Adverse Event with respect to CCBF.  Neither CCBF nor any CCBF Subsidiary has
received notice from any governmental authority, including the IRS, questioning
or challenging such compliance.  Each CCBF ERISA Plan which is intended to be
qualified under Section 401(a) of the Tax Code has received a favorable
determination letter from the IRS, and CCBF is not aware of any circumstances
likely to result in revocation of any such favorable determination letter.  To
the Knowledge of CCBF, neither it nor any CCBF Subsidiary has engaged in a
transaction with respect to any CCBF Benefit Plan that, assuming the taxable
period of such transaction expired as of the date hereof, would subject CCBF or
any CCBF Subsidiary to a Tax imposed by either Section 4975 of the Tax Code or
Section 502(i) of ERISA in amounts which are reasonably likely to constitute a
Material Adverse Event with respect to CCBF.

          (c) No CCBF Pension Plan has any "unfunded current liability," as that
term is defined in Section 302(d)(8)(A) of ERISA, based on actuarial assumptions
set forth for such plan's most recent actuarial valuations.  Since the date of
the most recent actuarial valuation, there has been (i) no material change in
the financial position of any CCBF Pension Plan, (ii) no change in the actuarial
assumptions with respect to any CCBF Pension Plan, and (iii) no increase in
benefits under any CCBF Pension Plan as a result of plan amendments or changes
in applicable Law which is reasonably likely to constitute a Material Adverse
Event or materially adversely affect the funding status of any such plan.
Neither any CCBF Pension Plan nor any "single-employer plan," within the meaning
of Section 4001(a)(15) of ERISA, currently or formerly maintained by CCBF or any
CCBF Subsidiary, or the single-employer plan of any entity which is considered
one employer with CCBF under Section 4001 of ERISA or Section 414 of the Tax
Code or Section 302 of ERISA (an "ERISA Affiliate") has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of the Tax
Code or Section 302 of ERISA, which is reasonably likely to constitute a
Material Adverse Event.  Neither CCBF nor any CCBF Subsidiary has provided, or
is required to 

                                       39
<PAGE>
 
provide, security to a CCBF Pension Plan or to any single-employer plan of an
ERISA Affiliate pursuant to Section 401(a)(29) of the Tax Code.

          (d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by CCBF or any CCBF Subsidiary with respect to any ongoing, frozen,
or terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to constitute a Material Adverse
Event with respect to CCBF.  Neither CCBF nor any CCBF Subsidiary has incurred
any withdrawal Liability with respect to a multiemployer plan under Subtitle B
of Title IV of ERISA (regardless of whether based on contributions of an ERISA
Affiliate), which Liability is reasonably likely to constitute have a Material
Adverse Event.  No notice of a "reportable event," within the meaning of Section
4043 of ERISA for which the 30-day reporting requirement has not been waived,
has been required to be filed for any CCBF Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date hereof.

          (e) Except as Previously Disclosed, neither CCBF nor any CCBF
Subsidiary has any Liability for retiree health and life benefits under any of
the CCBF Benefit Plans and there are no restrictions on the rights of CCBF or
any CCBF Subsidiary to amend or terminate any such retiree health or benefit
plan without incurring any Liability thereunder, which Liability is reasonably
likely to constitute a Material Adverse Event with respect to CCBF.

          (f) Except as disclosed in CCBF SEC Reports, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including severance, unemployment
compensation, golden parachute, or otherwise) becoming due to any director or
any employee of CCBF or any CCBF Subsidiary from any CCBF or any CCBF Subsidiary
under any CCBF Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any CCBF Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit, where such payment, increase, or
acceleration is reasonably likely to constitute a Material Adverse Event with
respect to CCBF.

          (g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of CCBF or any CCBF Subsidiary and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Tax Code or Section 302 of ERISA, have been
fully reflected on the CCBF Financial Statements to the extent required by and
in accordance with GAAP.

          (h) There are no unresolved claims or disputes under the terms of, or
in connection with, the CCBF Benefit Plans other than claims for benefits which
are payable in the Ordinary Course of Business, and no Action has been commenced
with respect to any CCBF Benefit Plan.

                                       40
<PAGE>
 
          (i)  All CCBF Benefit Plan documents and annual reports or returns,
audited or unaudited financial statements, actuarial valuations, summary annual
reports, and summary plan descriptions issued with respect to the CCBF Benefit
Plans are correct and complete in all material respects, and there have been no
changes in the information set forth therein.

          (j)  All Liabilities of CCBF or any CCBF Subsidiary arising out of or
related to CCBF Benefit Plans are reflected in the CCBF Financial Statements in
accordance with GAAP.

          (k)  All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports, and Summary Plan Descriptions) have been filed
or distributed appropriately with respect to each such CCBF Benefit Plan. The
requirements of Part 6 of Subtitle B of Title I of ERISA and of Tax Code Section
4980B have been met with respect to each such CCBF Benefit Plan which is an
Employee Welfare Benefit Plan and which is subject to such requirements.

          (l)  All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
such CCBF Benefit Plan which is a CCBF ERISA Plan.

     6.10 Legal Proceedings. Except as Previously Disclosed, there are no
Actions, instituted or pending or, to the Knowledge of CCBF, threatened against
CCBF or any CCBF Subsidiary, or against any Asset of any of them, that, if
decided adversely to it, could constitute a Material Adverse Event or that might
reasonably be expected to threaten or significantly impede the consummation of
the transactions contemplated by this Agreement. Neither CCBF nor any CCBF
Subsidiary is subject to any Order might reasonably be expected to threaten or
significantly impede the consummation of the transactions contemplated by this
Agreement.

     6.11 Absence of Certain Changes or Events. Since December 31, 1998, except
(i) as disclosed in any CCBF SEC Report filed since December 31, 1998 and prior
to the date hereof or (ii) as Previously Disclosed, neither CCBF nor any CCBF
Subsidiary has (A) failed to operate in the Ordinary Course of Business, (B)
suffered any change that could constitute a Material Adverse Event, (C) incurred
any material Liabilities or engaged in any material transaction or entered into
any material agreement outside of the Ordinary Course of Business, or (D)
suffered a material loss, destruction or damage to any of its Assets, that could
constitute a Material Adverse Event.

     6.12 Reports. Since December 31, 1994, CCBF has filed all reports and
statements, together with all amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities. A copy of
each such report or document will be made available to Stone Street upon
request. As of their respective dates, each such report or document complied in
all material respects with all of the Laws enforced or promulgated by the
respective Regulatory Authorities and no such report contained any information
that was false or misleading with respect to any material fact or omitted to
state any material fact necessary in order to make the statements therein not
misleading.

                                       41
<PAGE>
 
     6.13 Accounting; Tax; Regulatory Matters. Neither CCBF nor any CCBF
Subsidiary has taken or agreed to take any action or has any Knowledge of any
fact or circumstance that would (i) prevent the Merger and the Second Merger
from qualifying as a Tax-free reorganization within the meaning of Tax Code
Section 368, or (ii) significantly impede or delay receipt of any Regulatory
Approval.

     6.14 Brokers and Finders. Neither CCBF nor any CCBF Subsidiary nor any of
their respective officers, directors or employees has employed any broker or
finder on a fee basis or incurred any Liability for any financial advisory fees,
brokerage fees, commissions or finder's fees in connection with this Agreement
or the transactions contemplated hereby.

     6.15 Capital Stock Issued in Merger. At the Effective Time, CCBF Common
Stock (and the attached CCBF Rights) issued pursuant to the Merger will be duly
authorized, validly issued, fully paid (except as provided in the CCBF Rights
Plan) and nonassessable and not subject to preemptive Rights, or any Rights
(other than the CCBF Rights), created by CCBF or any CCBF Subsidiary, and such
CCBF Common Stock will be approved for listing on the NYSE.

     6.16 Derivatives Contracts. Except as described in the CCBF Financial
Statements, neither CCBF nor any CCBF Subsidiary is a party to or has agreed to
enter into a Derivatives Contract.

     6.17 Y2K Compliance. CCBF, with respect to itself and the CCBF
Subsidiaries, has made and is making inquiries of its and their software and
data processing providers with respect to Year 2000 problem compliance, and it
and, to the Knowledge of CCBF, they are in compliance in all material respects
with the Interagency Statement.

     6.18 Statements True and Correct. No statement, certificate, instrument, or
other writing furnished or to be furnished by CCBF, any CCBF Subsidiary or any
Affiliate thereof to Stone Street pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by CCBF, any CCBF Subsidiary or any Affiliate thereof for inclusion in
the Registration Statement to be filed by CCBF with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by CCBF, any CCBF Subsidiary or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to Stone Street's shareholders in connection
with the Shareholders' Meeting, and any other documents to be filed by CCBF, any
CCBF Subsidiary or any Affiliate thereof with the SEC or any other Regulatory
Authority in connection with the transactions contemplated hereby, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the shareholders of Stone Street, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were 

                                       42
<PAGE>
 
made, not misleading, or, in the case of the Proxy Statement or any amendment
thereof or supplement thereto, at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the Shareholders' Meeting. All
documents that CCBF, any CCBF Subsidiary or any Affiliate thereof is responsible
for filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.

                                 ARTICLE  VII

                      CONDUCT PRIOR TO THE EFFECTIVE TIME

     7.1  Affirmative Covenants of Stone Street. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written Consent of CCBF shall have been obtained, and except as
otherwise expressly contemplated herein, Stone Street shall and shall cause each
of the Stone Street Subsidiaries to (a) operate its business only in the
Ordinary Course of Business, including with respect to loan underwriting and
loan and deposit pricing, (b) preserve intact its business organization and
Assets, use its reasonable efforts to retain the services of its officers and
key employees, and maintain its rights and franchises, (c) take no action which
would (i) materially adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby, or (ii) materially
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement, and (d) consult with CCBF prior to (i)
approving a new loan (which shall not include extensions or renewals of loans
outstanding or committed to as of the date of this Agreement) in excess of 25%
of Stone Street's legal lending limit, or (ii) purchasing (or otherwise
acquiring), or selling (or otherwise disposing of) any Asset with a cost or book
value in excess of $50,000, except with respect to the New Building.

     7.2  Negative Covenants of Stone Street. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written Consent of CCBF shall have been obtained, and except as
otherwise expressly contemplated herein, Stone Street covenants and agrees that
it will not do or agree or commit to do, or permit any Stone Street Subsidiary
to do or agree or commit to do, any of the following:

       (a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of Stone Street or any Stone Street Subsidiary, or

       (b) incur any additional debt obligation or other obligation for borrowed
money in excess of an aggregate of $100,000 except in its Ordinary Course of
Business (which shall include creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal Home Loan Bank,
and entry into repurchase agreements fully secured by U.S. government or agency
securities); or

                                       43
<PAGE>
 
       (c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the Ordinary Course of Business under Stone Street Benefit Plans or
with respect to put options under the Stone Street ESOP), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of Stone Street or any Stone Street Subsidiary, or declare or pay
any dividend or make any other distribution in respect of Stone Street Capital
Stock, provided that Stone Street may (to the extent legally and contractually
permitted to do so), but shall not be obligated to, declare and pay regular
quarterly cash dividends on the outstanding shares of Stone Street Common Stock
at a rate not in excess of $0.1175 per share with usual and regular record and
payment dates in accordance with past practice and such dates may not be changed
without the prior written consent of CCBF, provided that any dividend declared
or payable on the shares of Stone Street Common Stock for the quarterly period
during which the Effective Time occurs shall, unless otherwise agreed upon in
writing by CCBF and Stone Street, be declared with a record date prior to the
Effective Time only if the normal record date for payment of the corresponding
quarterly dividend to holders of CCBF Common Stock is before the Effective Time;
or

       (d) except pursuant to the exercise of Stone Street Stock Options
outstanding as of the date hereof under the Stone Street Option Plans and
pursuant to the terms thereof in existence on the date hereof, issue, sell,
pledge, encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise permit to
become outstanding, any shares of Stone Street Common Stock or any other capital
stock of Stone Street or any Stone Street Subsidiary, or any Rights; or

       (e) adjust, split, combine, or reclassify any capital stock of Stone
Street or any Stone Street Subsidiary or issue or authorize the issuance of any
Rights or other securities in respect of or in substitution for shares of Stone
Street Common Stock, or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber any shares of capital stock of Stone Street or any Stone
Street Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another Stone Street or a Stone Street Subsidiary); or

       (f) except for purchases of U.S. Treasury securities or U.S. Government
agency securities, which in either case have maturities of five years or less,
purchase, agree to purchase or otherwise incur an obligation to purchase any
securities or make any material investment, either by purchase of stock or
securities, contributions to capital, Asset transfers, or purchase of any
Assets, in any Person other than a Stone Street Subsidiary, or otherwise acquire
direct or indirect control over any Person, other than in connection with (i)
foreclosures in the Ordinary Course of Business, (ii) acquisitions of control by
a Stone Street Subsidiary that is a depository institution in its fiduciary
capacity, or (iii) the creation of new wholly-owned Stone Street Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement; or

       (g) grant any increase in compensation or benefits to the employees or
officers of Stone Street or any Stone Street Subsidiary, except in accordance
with its Ordinary Course of Business or as required by Law; pay any retirement
or pension allowance not required by a Stone Street Benefit Plan; pay any
severance or termination pay or any bonus other than pursuant to written
policies or

                                       44
<PAGE>
 
written Contracts in effect on the date of this Agreement; and enter into or
amend any severance agreements with officers of Stone Street or any Stone Street
Subsidiary; grant any increase in fees or other increases in compensation or
other benefits to directors of Stone Street or any Stone Street Subsidiary; or
voluntarily accelerate the vesting of any Stone Street Options or MRP Rights or
other stock-based compensation or employee benefits or other Rights; or

       (h) enter into or amend any employment Contract between Stone Street or
any Stone Street Subsidiary and any Person (unless such amendment is required by
Law) that Stone Street or any Stone Street Subsidiary does not have the
unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or

       (i) adopt any new employee benefit plan of Stone Street or any Stone
Street Subsidiary or terminate or withdraw from, or amend, any Stone Street
Benefit Plan other than any such change that is required by Law or that, in the
opinion of counsel, is necessary or advisable to maintain the Tax qualified
status of any such plan, or make any distributions from any Stone Street Benefit
Plan, except as required by Law, the terms of such Stone Street Benefit Plan or
in the Ordinary Course of Business; or

       (j) make any change in any Tax or accounting methods or systems of
internal accounting controls, except as may be appropriate to conform to changes
in Tax Laws or regulatory accounting requirements or GAAP; or

       (k) commence any Action other than in the Ordinary Course of Business,
settle any Action involving any Liability of Stone Street or any Stone Street
Subsidiary for material money damages or restrictions upon the operations of
Stone Street or any Stone Street Subsidiary; or

       (l) except in the Ordinary Course of Business, enter into, modify, amend,
or terminate any material Contract or waive, release, compromise, or assign any
material rights or claims.

   7.3 Covenants of CCBF. From the date of this Agreement until the earlier of
the Effective Time or the termination of this Agreement, unless the prior
written consent of Stone Street shall have been obtained, and except as
otherwise expressly contemplated herein, CCBF covenants and agrees that it shall
(a) continue to conduct its business and the business of the CCBF Subsidiaries
in a manner designed in its reasonable judgment, to enhance the long-term value
of the CCBF Common Stock and the business prospects of CCBF and the CCBF
Subsidiaries and to the extent consistent therewith use all reasonable efforts
to preserve intact CCBF's and the CCBF Subsidiaries' core businesses and
goodwill with their respective employees and the communities they serve, and (b)
take no action which would (i) materially adversely affect the ability of any
Party to obtain any Consents required for the transactions contemplated hereby,
or (ii) materially adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.

   7.4 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or

                                       45
<PAGE>
 
circumstance relating to it or any of its Subsidiaries which (i) is reasonably
likely to have a material adverse affect on any of the business, material
Assets, financial condition or results of operations of such Party, and (ii)
would cause or constitute a material breach of any of its representations,
warranties, agreements, or covenants contained herein, and to use its reasonable
efforts to prevent or promptly to remedy the same.

   7.5 Reports. Each Party and its Subsidiaries shall file all reports required
to be filed by it with Regulatory Authorities between the date of this Agreement
and the Effective Time and shall deliver to the other Party copies of all such
reports promptly after the same are filed. If financial statements are contained
in any such reports filed with the SEC, as applicable, such financial statements
will fairly present the consolidated financial position of the Party filing such
statements as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of their
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports. From and after the Effective
Time for so long as is necessary in order to permit "affiliates" of Stone Street
to offer and sell CCBF Common Stock pursuant to Rule 145, and to the extent
applicable, Rule 144, CCBF will file on a timely basis all reports required
pursuant to Section 13 or 15(d) of the 1934 Act, referred to in paragraph (c)(1)
of Rule 144 under the 1933 Act (or CCBF will make publicly available the
information regarding itself referred to in paragraph (c)(2) of Rule 144) in
order to permit "affiliates" of Stone Street to sell, pursuant to the terms and
conditions of Rule 145 and the applicable provisions of Rule 144, CCBF Common
Stock.

   7.6 Confidentiality. Each Party shall, and shall cause its Affiliates,
advisors and representatives to, (i) hold confidential all information obtained
in connection with any transaction contemplated hereby with respect to the other
Party which is not otherwise public knowledge, (ii) in the event of the
termination of this Agreement return all documents (including copies thereof)
obtained hereunder from the other Party, and (iii) use its best efforts to cause
all information obtained pursuant to this Agreement or in connection with the
negotiation hereof to be treated as confidential and not use, or knowingly
permit others to use, any such information unless such information becomes
generally available to the public through no fault of such Party. Each Party
acknowledges and agrees that a breach of any of their respective obligations
under this Section 7.6 would cause the other irreparable harm for which there is
no adequate remedy at law, and that, accordingly, each is entitled to injunctive
and other equitable relief for the enforcement thereof, in addition to damages
or any other relief available at law, and to recover its reasonable attorneys'
fees and expenses incurred in such enforcement.

   7.7 Current Information. During the period from the date of the execution of
this Agreement to the Effective Time, each of CCBF and Stone Street shall, and
each shall cause its representatives

                                       46
<PAGE>
 
to, confer on a regular and request basis with representatives of the other.
Each of CCBF and Stone Street shall promptly notify the other of (i) any
material change in its business, material Assets, results of operations or
prospects, (ii) any Actions (or communications indicating that the same may be
contemplated) of any Regulatory Authority or Environmental Agency, (iii) the
institution or the threat of a material Action involving such Party, or (iv) any
event or condition that might be reasonably expected to cause any of such
Party's representations or warranties set forth herein not to be true and
correct in all material respects as of the Effective Time; and in each case
shall keep the other Party fully informed with respect thereto.

   7.8 Registration Statement; Regulatory Matters.

       (a) None of the information supplied or to be supplied by CCBF or Stone
Street for inclusion in the Registration Statement to be filed by CCBF, the
proxy statement to be used by Stone Street to solicit any required approval of
its shareholders as contemplated by this Agreement (the "Proxy Statement") or
any other document to be filed with any Regulatory Authority in connection with
the transactions contemplated hereby will contain when filed, or, in the case of
the Proxy Statement, when it is first mailed to the shareholders of Stone
Street, any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which such statements are made, not misleading, or, in the
case of the Registration Statement, when it becomes effective under the 1933
Act, be false or misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements therein not
misleading, or, in the case of the Proxy Statement or any amendment thereof or
supplement thereto, at the time of the Shareholders' Meeting, including any
adjournments thereof, be false or misleading with respect to any material fact
or omit to state any material fact necessary to correct any statement or remedy
any omission in any earlier communication with respect to the solicitation of
any proxy for the Shareholders' Meeting.

       (b) CCBF shall (i) with the assistance of Stone Street, prepare and file
with the SEC as soon as practicable the Registration Statement and the Proxy
Statement, (ii) use its best efforts to cause the Registration Statement to
become effective under the 1933 Act, and (iii) take any action required to be
taken under any applicable state securities or "Blue Sky" Laws in connection
therewith. Stone Street shall furnish CCBF with all information concerning Stone
Street, the Stone Street Subsidiaries and the holders of Stone Street Common
Stock, Stone Street Stock Options and MRP Rights, as CCBF may reasonably request
in connection with the foregoing.

       (c) Each Party shall cooperate and use its respective best efforts (i) as
soon as practicable to prepare all documentation, to effect all filings and to
obtain all Regulatory Approvals and all other Permits and Consents of all third
parties, Regulatory Authorities and other governmental authorities necessary to
consummate the Merger, the Second Merger, the Bank Merger and the other
transactions contemplated by this Agreement, and (ii) to cause the Merger, the
Second Merger, the Bank Merger and the other transactions contemplated by this
Agreement to be consummated as soon as reasonably practicable. Each Party shall
advise one another concerning all filings to be made by it and all other
Consents and Permits required to be obtained by it, and shall

                                       47
<PAGE>
 
promptly furnish the other Party with copies of all such filings and all
correspondence and other communications in connection with all such filings,
Consents, Permits, Orders and all Regulatory Approvals.

   7.9    Directors' and Shareholders' Approvals. Stone Street shall cause a
duly called and noticed meeting of its shareholders to be held as soon as
practicable for the purpose of voting upon the Merger (including the Plan of
Merger), and related matters (the "Shareholders' Meeting"). Stone Street, as the
shareholder of Mocksville, shall approve this Agreement and the Bank Merger
(including the Bank Plan of Merger) promptly. CCBF shall cause a duly called and
noticed meeting of its directors and CCBFC and CCB Bank shall cause duly called
and noticed meetings of their directors and shareholder (which meetings shall be
held prior to the Shareholders' Meeting) for the purposes of (a) the Boards of
Directors of CCBF and CCB Bank voting upon ratification of their respective
Executive Committee's adoption of this Agreement, and (b) the Board of Directors
and shareholder of CCBFC and the shareholder of CCB Bank voting upon the Merger,
the Bank Merger, the Second Merger and related matters (including the Plan of
Merger and the Bank Plan of Merger). In connection with the Shareholders'
Meeting, CCBF and Stone Street shall prepare the Proxy Statement and mail it to
Stone Street's shareholders. The Board of Directors of Stone Street shall submit
for approval of Stone Street's shareholders the matters to be voted upon at the
Shareholders' Meeting, and shall, subject to its fiduciary obligations,
recommend approval of such matters and use its best efforts (including, without
limitation, soliciting proxies for such approvals) to obtain such shareholder
approval.

   7.10   Agreements of Affiliates. Stone Street shall Previously Disclose all
Persons whom it reasonably believes is an "affiliate" of Stone Street for
purposes of Rule 145 under the 1933 Act. Stone Street shall use its reasonable
efforts to cause each such Person to deliver to CCBF not later than 30 days
prior to the Effective Time, an Affiliate Agreement providing that such Person
will not sell, pledge, transfer, or otherwise dispose of the shares of Stone
Street Common Stock held by such Person except as contemplated by such Affiliate
Agreement or by this Agreement and will not sell, pledge, transfer, or otherwise
dispose of the shares of CCB Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act and the rules and regulations thereunder (and CCBF shall be
entitled to place restrictive legends upon certificates for shares of CCBF
Common Stock issued to affiliates of Stone Street pursuant to this Agreement to
enforce the provisions of this Section 7.10). CCBF shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act for
the purposes of resale of CCBF Common Stock by such affiliates.

   7.11   Delivery of Monthly Financial Statements. Within fifteen (15) days
after the end of each calendar month occurring after the date of this Agreement
and prior to the Effective Time, Stone Street shall deliver to CCBF its
unaudited monthly consolidated financial statements normally generated by it for
such month certified by its Chief Executive Officer. Such financial statements
shall fairly present in all material respects the financial condition and
results of operations of Stone Street on a consolidated basis on the dates and
for the periods indicated in accordance with GAAP, subject to normal and
recurring year-end audit adjustments.

                                       48
<PAGE>
 
   7.12   Tax-Free Reorganization. Each Party undertakes and agrees to use its
best efforts to cause the Merger, the Bank Merger and the Second Merger to
qualify as a Tax-free reorganization under Tax Code Section 368.

   7.13   Press Releases. CCBF and Stone Street shall promptly consult with each
other as to the form and substance, and prior to the release or issuance, of any
press release or other public disclosure materially related to this Agreement,
the Merger or any other transaction contemplated hereby. CCBF and Stone Street
agree not to release or issue any such press release or other public disclosure
without the approval of the other unless required by law.

   7.14   Exchange Listing. CCBF shall use its reasonable efforts to list, prior
to the Effective Time, on the NYSE, subject to official notice of issuance, the
shares of CCB Common Stock and the CCB Rights attached thereto to be issued to
the holders of Stone Street Common Stock pursuant to the Merger, and CCBF shall
give all notices and make all filings with the NYSE required in connection with
the transactions contemplated herein.

   7.15   Miscellaneous Agreements and Consents. Subject to the terms and
conditions of this Agreement, each of the Parties hereto agrees to use its best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement as expeditiously as reasonably practicable, including, without
limitation, using its best efforts to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby. CCBF and Stone Street shall
use, CCBF shall cause each of the CCBF Subsidiaries, and Stone Street shall
cause each of the Stone Street Subsidiaries to use, their best efforts to obtain
all Regulatory Approvals and all other Consents and Permits of third parties,
including the NYSE, AMEX and Regulatory Authorities, necessary or, in the
reasonable opinion of CCBF and Stone Street, desirable for the consummation of
the transactions contemplated by this Agreement. After the Effective Time, CCBF
shall cause appropriate documents to be delivered to holders of Stone Street
Stock Options and MRP Rights to reflect the Rights to acquire CCBF Stock into
which such Stone Street Stock Options and MRP Rights were converted. CCBF shall
reserve shares of CCBF Stock sufficient to issue the requisite number of shares
of CCBF Stock upon exercise of the former Stone Street Stock Options and MRP
Rights and shall take appropriate action to cause such shares to be offered in a
registered offering.

                                 ARTICLE VIII

                             ADDITIONAL AGREEMENTS

   8.1    Indemnification and Insurance.

          (a)  CCBF agrees to indemnify, defend and hold harmless Stone Street
and the Stone Street Subsidiaries, and each of the present and former officers,
directors, employees and agents of

                                       49
<PAGE>
 
Stone Street and the Stone Street Subsidiaries from and against all
Indemnifiable Losses attributable to CCBF, CCBFC or CCB Bank. Stone Street
agrees to indemnify, defend and hold harmless CCBF and the CCBF Subsidiaries,
and each of the present and former officers, directors, employees and agents of
CCBF and the CCBF Subsidiaries, from and against all Indemnifiable Losses
attributable to Stone Street or a Stone Street Subsidiary.

          (b)  In addition to the provisions of Section 8.1(a), after the
Effective Time, the Resulting Corporation and the Surviving Bank shall jointly
and severally indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of Stone Street and Mocksville from
and against all Indemnifiable Losses arising from or related to matters
occurring at or prior to the Effective Time and, further, to indemnify such
present and former officers, directors, employees and agents of Stone Street and
Mocksville to the full extent then permitted under the Bank Act and NCBCA,
including provisions relating to advances of expenses incurred in the defense of
any action or suit.

          (c)  CCBF shall maintain a policy or policies of directors' and
officers' liability insurance (the "D&O Insurance") covering Persons who are
currently covered by Stone Street's existing D&O Insurance, or shall otherwise
continue D&O Insurance coverage for such Persons for a period of at least three
(3) years after the Effective Time, which coverage shall have terms at least as
favorable as those of Stone Street's existing D&O Insurance in effect on the
date hereof; provided, that CCBF shall not be obligated to make annual premium
payments for such three-year period in respect of such policy (or coverage
replacing such policy) which exceed 150% of the annual premium payments on Stone
Street's current policy in effect as of the date of this Agreement (the "Maximum
Amount"). If the amount of the premiums necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, CCBF shall use its reasonable
efforts to maintain the most advantageous policies of D&O Insurance obtainable
for a premium equal to the Maximum Amount.

          (d)  If the Resulting Corporation or the Surviving Bank or any of
their respective successors or assigns (i) shall merge into any other Person and
shall not be the continuing or surviving corporation or entity of such merger,
or (ii) shall transfer all or substantially all of its Assets to any Person,
then and in each such case, proper provision shall be made so that such
successors and assigns shall assume the obligations set forth in this Section
8.1.

     8.2  Employee Contracts; Employee Benefits; Director Benefits. Following
the Effective Time, the Resulting Corporation and the Surviving Bank each and
together will continue to honor, and will assume and perform in accordance with
their terms, all Previously Disclosed employment, severance, deferred
compensation, split dollar insurance, salary continuation, consulting and other
compensation Contracts between Stone Street or Mocksville and any current or
former director, officer or employee thereof (including, but not limited to, the
Stone Street Options Plans, the Retirement Payment Agreements between Stone
Street and the members of its Board of Directors and the Supplemental Income
Agreement between Mocksville and J. Charles Dunn), and all provisions for vested
benefits or other vested amounts earned or accrued through the Effective Time

                                       50
<PAGE>
 
under any Stone Street Benefit Plan; provided, however, that the Stone Street
ESOP shall be terminated, unless prior to the Effective Time Stone Street and
CCBF agree to continue the Stone Street ESOP or merger it with a plan of CCBF.
The employment agreements between certain Stone Street's senior executive
officers and Stone Street (or certain of Mocksville's senior executive officers
and Mocksville) may be amended and restated effective as of the Effective Time
in the forms mutually agreed upon by CCBF, Stone Street (or Mocksville) and such
senior executive officers.

     8.3  Modification of Employee Benefits. Except as otherwise provided in
Section 8.2 or this Section 8.3, the Stone Street Benefit Plans will be reviewed
and appropriate amendments, consolidations or terminations will be made thereto
at or after the Effective Time; provided, however, that (i) the employees of
Stone Street shall be eligible to receive group hospitalization, medical, life,
disability and similar benefits on the same basis and under the same terms
available to the present employees of CCBF and the CCBF Subsidiaries, (ii) in
the event a Stone Street Benefit Plan is terminated, its affected participants
shall become fully vested in accordance with ERISA and the Tax Code, with each
participating Stone Street employee having the right or option either to receive
the benefits to which he or she is entitled as a result of such termination or
to have such benefits "rolled" into an Individual Retirement Account or the
appropriate CCBF Benefit Plan, on the same basis and applying the eligibility
standards as would apply to the employees of CCBF and the CCBF Subsidiaries as
if such employee's prior service to Stone Street had been performed on behalf of
CCBF and the CCBF Subsidiaries for qualification, participation and vesting, but
not for funding, purposes, and (iii) in the event a Stone Street Benefit Plan is
merged into a CCBF Benefit Plan, shall be entitled to participate in such CCBF
Benefit Plan on the same basis and applying the same eligibility standards as
would apply to employees of CCBF and the CCBF Subsidiaries. CCBF and Stone
Street agree that the overall level of benefits offered or provided to the
employees of Stone Street and the Stone Street Subsidiary under the CCBF Benefit
Plans will be no less than that offered or provided to the present employees of
CCBF and the CCBF Subsidiaries, and that for purposes of eligibility,
qualification and vesting (but not for purposes of calculating the amount of
benefits under any CCBF Pension Plan), the employees of Stone Street and the
Stone Street Subsidiary shall receive credit for their periods of service to
Stone Street or a Stone Street Subsidiary.

          For purposes of item (i) above, CCBF shall cause the relevant CCBF
Benefit Plans (A) to waive any pre-existing condition limitations for conditions
covered under the applicable Stone Street Benefit Plans, (B) to honor any
deductible and out-of-pocket expenses incurred by the employees and their
beneficiaries under the Stone Street Benefit Plans during the portion of 1999
preceding the Effective Time, and (C) with respect to any Stone Street Benefit
Plan providing group term life insurance, to waive any medical certification for
employees of Stone Street or a Stone Street Subsidiary up to the amount of term
life insurance coverage such employees had under such Stone Street Benefit Plan
at the Effective Time. Stone Street and CCBF may agree to (i) cause any Stone
Street Benefit Plan to be terminated at or prior to the Effective Time; (ii)
cause a CCBF Subsidiary chosen by CCBF to assume at the Effective Time any or
all fiduciary positions with respect to any Stone Street Benefit Plan which will
continue to have obligations to pay benefits

                                       51
<PAGE>
 
following the Effective Time; and (iii) cause the merger of any cafeteria plan
(within the meaning of Tax Code Section 125, and including any flexible spending
account arrangement thereunder) maintained by Stone Street or any Stone Street
Subsidiary with the similar plan of CCBF or a CCBF Subsidiary.

                                  ARTICLE IX

                                  CONDITIONS

     9.1  Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each Party to effect the Merger, the Bank Merger, the
Second Merger and the other transactions contemplated hereby shall be subject to
the fulfillment or waiver at or prior to the Effective Time of the following
conditions:

          (a)  The Boards of Directors of CCBF and CCB Bank shall ratify the
adoption of this Agreement by their respective Executive Committees, the Board
of Directors of CCBFC shall adopt this Agreement, and the shareholder of CCBFC
and CCB Bank and the shareholders of Stone Street and the shareholder of
Mocksville shall have approved all matters relating to this Agreement and the
Merger required to be approved by such shareholders by the votes required under
the Bank Act, the Savings Bank Act and the NCBCA.

          (b)  The Merger, the Bank Merger, the Second Merger and the other
transactions contemplated hereby shall have received all Regulatory Approvals,
including all required approvals by the Federal Reserve Board, Federal Reserve,
the FDIC, the Commission, the Commissioner, the Savings Bank Administrator, the
NYSE, the AMEX and any other Regulatory Authority whose approval is required for
consummation of the transactions contemplated hereby, and no such Regulatory
Approvals or other required approval shall have imposed any condition or
requirement which would so materially adversely impact the economic benefits of
the transactions contemplated by this Agreement as to render inadvisable in the
reasonable opinion of the Board of Directors of either CCBF or Stone Street the
consummation of the Merger.

          (c)  The Registration Statement shall have been declared effective by
the SEC and CCBF shall have received all state securities or "Blue Sky" law
Permits, or confirmations as to the availability of an exemption from
registration requirements, as may be necessary to issue CCBF Common Stock and
CCBF Rights pursuant to the terms of this Agreement. Neither the Registration
Statement nor any such Permit or confirmation shall be subject to any stop
order, threatened stop order, rescission or withdrawal by the SEC or any state
securities or "Blue Sky" authority with competent jurisdiction.

          (d)  No Party shall be subject to any Action which enjoins or
prohibits the consummation of the Merger, the Bank Merger or the Second Merger
or which could constitute a Material Adverse Event as to CCBF or Stone Street.
No Action shall be pending or threatened

                                       52
<PAGE>
 
which seeks to restrain or prohibit the Merger, the Bank Merger or the Second
Merger or to obtain any substantial monetary or other relief in connection with
this Agreement unless in the reasonable opinion of counsel to the Party wishing
to proceed (which opinion shall be satisfactory in substance to the other Party
in its reasonable judgment), such Action is likely to be resolved in such a way
as to not deprive any Party of any of the material benefits to be derived from
the consummation of the Merger, the Bank Merger or the Second Merger or in such
a way which would not constitute a Material Adverse Event as to the Party
subject thereto.

          (e)  The shares of CCBF Common Stock (and attached CCBF Rights)
issuable pursuant to the Merger shall have been approved for listing on the
NYSE.

          (f)  CCBF and Stone Street shall have received an opinion of KPMG Peat
Marwick LLP or CCBF's legal counsel, satisfactory in form and substance to each
of CCBF and Stone Street, to the effect that the Merger, the Bank Merger and
Second Merger together will constitute a Tax-free reorganization within the
meaning of Tax Code Section 368 and that (i) no gain or loss will be recognized
by a shareholder of Stone Street to the extent that such shareholder receives
CCBF Common Stock (and attached CCBF Rights) in exchange for such shareholder's
Stone Street Common Stock in the Merger, except that gain or loss will be
recognized on the receipt of cash that is received by Electing Holders rather
than shares of CCBF Common Stock (and attached CCBF Rights) and that gain or
loss will be recognized on the receipt of cash by any Stone Street shareholder
that is received in lieu of fractional shares; any cash received by a
shareholder of Stone Street in lieu of a fractional share will be treated as
received in exchange for such fractional share and not as a dividend, and any
gain or loss recognized as a result of the receipt of such cash will be capital
gain or loss equal to the difference between the cash received and the portion
of the shareholder's basis in Stone Street Common Stock allocable to such
fractional share interest; (ii) the tax basis of the shares of CCBF Common Stock
(and attached CCBF Rights) received by each shareholder of Stone Street will
equal the tax basis of such shareholder's shares of Stone Street Common Stock
(reduced by any amount allocable to fractional share interests for which cash is
received) exchanged in the Merger; and (iii) the holding period for the shares
of CCBF Common Stock (and attached CCBF Rights) received by each shareholder of
Stone Street will include the holding period for the shares of Stone Street
Common Stock of such shareholder exchanged in the Merger.

     9.2  Conditions to the Obligations of Stone Street and Mocksville. The
obligations of Stone Street and Mocksville to effect the Merger, the Bank Merger
and the other transactions contemplated hereby shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the following
additional conditions:

          (a)  Representations and Warranties. The representations and
warranties of CCBF, CCBFC and CCB Bank set forth in Article VI hereof shall be
true and correct in all material respects as of the date of this Agreement and
as of the Effective Time (as though made on and as of the Effective Time except
to the extent such representations and warranties are by their express
provisions made as of a specified date) and Stone Street shall have received a
certificate signed by the Chief Executive Officer and the Chief Financial
Officer of CCBF to that effect.

                                       53
<PAGE>
 
          (b)  Performance of Obligations. CCBF, CCBFC and CCB Bank shall have
performed in all material respects all obligations and covenants required to be
performed by them under this Agreement prior to the Effective Time, and Stone
Street shall have received a certificate signed by the Chief Executive Officer
and the Chief Financial Officer of CCBF to that effect. 

          (c)  Legal Opinion. Stone Street shall have received from Brooks,
Pierce, McLendon, Humphrey & Leonard, L.L.P., counsel to CCBF, CCBFC and CCB
Bank, an opinion as to such matters as Stone Street and its counsel may
reasonably request. In rendering the foregoing opinion, such counsel may rely as
to questions of fact and of good standing upon the representations and
warranties of CCBF, CCBFC and CCB Bank contained in this Agreement or upon the
certificate of appropriate officers of CCBF, CCBFC and CCB Bank and of public
officials.

          (d)  Fairness Opinion. Stone Street shall have received the opinion of
OMC, its financial advisor, that the consideration to be received by the
shareholders of Stone Street as a result of the transactions contemplated by
this Agreement is fair to the shareholders of Stone Street from a financial
point of view. The opinion shall be in a form reasonably satisfactory to Stone
Street and shall be dated as of the date of the Proxy Statement and confirmed as
of a date within five (5) business days prior to the Effective Time.

     9.3  Conditions to the Obligations of CCBF, CCBFC and CCB Bank. The
obligations of CCBF, CCBFC and CCB Bank to effect the Merger, the Bank Merger,
the Second Merger and the other transactions contemplated hereby shall be
subject to the fulfillment at or prior to the Effective Time of the following
additional conditions:

          (a)  Representations and Warranties. The representations and
warranties of Stone Street set forth in Article V hereof shall be true and
correct in all material respects as of the date of this Agreement and as of the
Effective Time (as though made on and as of the Effective Time except to the
extent such representations and warranties are by their express provisions made
as of a specified date) and CCBF, CCBFC and CCB Bank shall have received a
certificate signed by the Chief Executive Officer of Stone Street to that
effect.

          (b)  Performance of Obligations. Stone Street and Mocksville shall
have performed in all material respects all obligations and covenants required
to be performed by it under this Agreement prior to the Effective Time, and
CCBF, CCBFC and CCB Bank shall have received a certificate signed by the Chief
Executive Officer and the Chief Financial Officer of Stone Street to that
effect.

          (c)  Legal Opinion. CCBF, CCBFC and CCB Bank shall have received from
Poyner & Spruill, L.L.P., counsel to Stone Street and Mocksville, an opinion as
to such matters as CCBF and its counsel may reasonably request. In rendering the
foregoing opinion, such counsel may rely as to questions of fact and of good
standing upon the representations and warranties of Stone Street

                                       54
<PAGE>
 
and Mocksville contained in this Agreement or upon the certificate of
appropriate officers of Stone Street and Mocksville and of public officials.

          (d)  Affiliates Agreements. Stone Street shall have delivered to CCBF
the Affiliates Agreements described in Section 7.10.

                                   ARTICLE X

                                  TERMINATION

     10.1 Termination. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement, the Merger, the Bank Merger,
the Second Merger and the other transactions contemplated hereby by the
shareholder of CCBFC and CCB Bank or the shareholders of Stone Street, or the
shareholders of any of the Parties, this Agreement may be terminated and such
transactions abandoned at any time prior to the Effective Time:

          (a)  by mutual consent of the Boards of Directors of CCBF and Stone
Street;

          (b)  upon notice to the other Party, by the Board of Directors of CCBF
or the Board of Directors of Stone Street (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein) if the Effective Time shall not have occurred
on or before December 31, 1999;

          (c)  upon notice to the other Party, by the Board of Directors of CCBF
or the Board of Directors of Stone Street if any Regulatory Authority has denied
approval of the Merger, the Bank Merger or the Second Merger or any Regulatory
Approval (or any condition to the receipt of a Regulatory Approval) or an Order
from any Regulatory Authority or any court having competent jurisdiction has
imposed any condition or requirement which would so substantially and adversely
impact the economic or business benefits of the Merger to CCBF and its
shareholders or to Stone Street and its shareholders, as applicable, as to
render inadvisable in the reasonable opinion, exercised in good faith, of the
Boards of Directors of CCBF or the Board of Directors of Stone Street, as
applicable, the consummation of the Merger, the Bank Merger and the Second
Merger and such denial or imposition has become final and nonappealable;

          (d)  upon notice to the other Party, by the Board of Directors of CCBF
or the Board of Directors of Stone Street in the event of a material breach by
the other Party of any representation, warranty, covenant or other agreement
contained herein, which breach is not cured after 30 days' written notice
thereof is given to the Party committing such breach;

          (e)  upon notice to the other Party, by the Board of Directors of CCBF
or the Board of Directors of Stone Street if there has occurred an Action
seeking to restrain the Merger, the Bank Merger or the Second Merger or an
Action by a shareholder of CCBF or Stone Street to obtain

                                       55
<PAGE>
 
material money damages should such transactions be consummated (unless counsel
for the Party wishing to proceed with such transactions renders an opinion that
such Action is likely to be resolved in a way which would not deprive any Party
of the material benefits of the Merger or in a way which would not result in
substantial money damages to one or more directors of such Party which would not
be covered by D&O Insurance);

          (f)  upon notice to the other Party, by the Board of Directors of CCBF
or the Board of Directors of Stone Street if there has occurred a declaration of
war by the United States of America or a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States of America
or the State of North Carolina; or

          (g)  upon notice to Stone Street, by the Board of Directors of CCBF if
the Environmental Costs exceed $500,000; provided, however, that if Stone Street
delivers to CCBF within thirty (30) days from the date of delivery of such
notice a fixed price contract from a reputable environmental remediation firm
(which firm must have expertise, resources and financial capabilities reasonably
acceptable to CCBF) providing for the curing of all indicated violations of
Environmental Laws and all related remediation required by Environmental Laws
and Environmental Agencies with respect to the Assets of Stone Street and the
Stone Street Subsidiaries for an amount that is less than $500,000, then such
notice of termination by the CCBF Board of Directors shall be deemed withdrawn
and of no effect.

     10.2 Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 10.1, this Agreement shall become void and
have no effect, except that (i) the provisions of Section 7.6, Section 7.13,
Section 8.1(a), Section 10.3 and Section 10.4 (insofar as it applies to a
termination under Section 10.1(d)) shall survive any such termination and
abandonment, and (ii) no Party shall be relieved or released from any Liability
arising out of a willful or grossly negligent breach of any provision of this
Agreement.

     10.3 Expenses. Unless this Agreement is terminated as described in Section
10.4 and except as provided in the next following sentence, each Party hereto
shall bear its own expenses incident to preparing, entering into and carrying
out this Agreement and the transactions contemplated hereby, including filing
fees, printing and distribution costs, and consultant, financial advisor, legal,
accounting and investment banking fees and expenses (the "Costs"). In the event
of a termination and abandonment of this Agreement pursuant to the provisions of
this Article X (except in the event of (i) a termination by CCBF pursuant to
Section 10.1(d) or (g) or (ii) a wrongful termination by Stone Street), CCBF
shall reimburse Stone Street for all direct, documented costs incurred by Stone
Street that result from changes to the architectural and construction drawings,
plans and specifications or the equipment, furniture and fixture (including the
vault) specifications for the New Building requested by CCBF in anticipation of
consummation of the Merger ("Building Costs").

     10.4 Wrongful Termination. Notwithstanding the provisions of Sections 10.2
and 10.3, and except as otherwise provided in Section 10.5, if the Merger, the
Bank Merger and the Second Merger fail to be consummated because of the wrongful
termination of this Agreement or a willful or grossly

                                       56
<PAGE>
 
negligent breach by a Party of any representation, warranty, covenant,
undertaking, term, agreement or restriction contained herein, then the Party
wrongfully terminating or breaching this Agreement shall (i) reimburse the other
Party for all of such other Party's Costs (and, if CCBF is the wrongfully
breaching or terminating Party, it shall pay the Building Costs), and (ii) pay
the other Party $250,000 as liquidated damages in full compensation of all other
harm suffered by such Party as a result thereof. A termination of this Agreement
under the provisions of Section 10.1, other than a termination under Section
10.1(d), shall not cause application of this Section 10.4.

     10.5 Termination Fee. If (a) this Agreement is terminated because Stone
Street has entered theretofore into a letter of intent or an agreement with a
Person other than CCBF that provides for such Person to acquire Stone Street or
Mocksville, merge with or into Stone Street or Mocksville, or purchase all or
substantially all of the Assets of Stone Street or Mocksville or (b) prior to
termination of this Agreement Stone Street engages in negotiations relating to
any such transaction and a letter of intent or agreement with respect thereto is
entered into within twelve (12) months following the termination of this
Agreement, and CCBF has not given written Consent to such negotiations by Stone
Street pursuant to Section 7.2 hereof, then Stone Street shall pay to CCBF a
termination fee of $1,225,500.

                                  ARTICLE XI

                              GENERAL PROVISIONS

     11.1 Non-Survival of Representations, Warranties and Covenants Following
the Effective Time. Except for Articles III and IV and Sections 7.11, 8.1, 8.2
and 8.3, none of the respective representations, warranties, obligations,
covenants and agreements of the Parties thereto shall survive the Effective
Time.

     11.2 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement contains the entire agreement between the Parties with respect to the
transactions contemplated hereunder and thereunder, and such agreements
supersede all prior arrangements or understandings with respect thereto, written
or oral. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors. Other
than the provisions of Article III and Sections 8.1, 8.2 and 8.3, nothing in
this Agreement, expressed or implied, is intended to confer upon any Person,
other than CCBF, CCBFC, CCB Bank, Stone Street, Mocksville, the Surviving
Corporation, the Resulting Corporation and the Surviving Bank and their
respective successors, any rights, remedies, or Liabilities under or by reason
of this Agreement.

     11.3 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Board of Directors of each of them; provided, however, that the
provisions hereof relating to the manner or basis in which shares of Stone
Street Common Stock will be exchanged for CCBF Common Stock (and attached CCBF
Rights) shall not be amended after the Shareholders' Meeting in a manner adverse
to the holders of Stone Street Common Stock without any requisite approval of
the holders of the Stone Street Common Stock entitled to vote thereon.

                                       57
<PAGE>
 
     11.4 Waivers.

          (a)  Prior to or at the Effective Time, CCBF, acting through its Board
of Directors, Chief Executive Officer, or another officer authorized to so act
by such Board, shall have the right to waive any Default in the performance of
any term of this Agreement by Stone Street or Mocksville, to waive or extend the
time for the compliance or fulfillment by Stone Street or Mocksville of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of CCBF under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of CCBF.

          (b)  Prior to or at the Effective Time, Stone Street, acting through
its Board of Directors, Chief Executive Officer, or another officer authorized
to so act by such Board, shall have the right to waive any Default in the
performance of any term of this Agreement by CCBF, CCBFC or CCB Bank, to waive
or extend the time for the compliance or fulfillment by CCBF, CCBFC or CCB Bank
of any and all of its obligations under this Agreement, and to waive any or all
of the conditions precedent to the obligations of Stone Street under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of Stone Street.

          (c)  The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.

     11.5 No Assignment. None of the Parties hereto may assign any of its rights
or delegate any of its obligations under this Agreement to any other Person. Any
such purported assignment or delegation that is made without the prior written
consent of the other parties to this Agreement shall be void and of no effect.

     11.6 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, or by registered or certified mail, postage prepaid, to
the Persons at the addresses set forth below (or at such other address as may be
provided hereunder):

                                       58
<PAGE>
 
          If to CCBF, CCBFC or CCB Bank:

                Ernest C. Roessler
                Chairman, President and Chief Executive Officer   
                CCB Financial Corporation                         
                Post Office Box 931                               
                Durham, North Carolina 27702                      
                Telecopy:  (919)  683-7254                         

          With a required copy to:

               Robert A. Singer                                     
               Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P. 
               2000 Renaissance Plaza                               
               Post Office Box 26000                                
               Greensboro, North Carolina 27420-6000               
               Telecopy:  (336)  378-1001                            

          If to Stone Street or Mocksville:
 
               J. Charles Dunn, President       
               Stone Street Bancorp, Inc.       
               232 South Main Street            
               Mocksville, North Carolina 27028
               Telecopy: (336) 751-1362          

          With a required copy to:

               Michael S. Colo                   
               Poyner & Spruill, L.L.P.          
               130 S. Franklin Street            
               Rocky Mount, North Carolina 27802
               Telecopy: (252) 446-4060           

or to such other Person as any party shall specify by notice in writing to each
of the other party. All such notices or other communications shall be deemed to
have been delivered (i) upon receipt when delivery is made by hand, (ii) on the
third business day after deposit in the United States mail when delivery is made
by registered or certified mail, and (iii) upon transmission, when evidenced by
a sender transmission completed confirmation, when made by facsimile
transmission.

   11.7   Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by a Regulatory Authority or court of
competent jurisdiction to be invalid, void, unenforceable or against public or
regulatory policy, the remainder of the terms, provisions,

                                       59
<PAGE>
 
covenants and restrictions contained in this Agreement shall remain in full
force and effect and shall in no way be effected, impaired or invalidated.

   11.8   Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the Laws of the State of North Carolina, except to
the extent the Laws of the United States specifically apply.

   11.9   Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same instrument.

   11.10  Captions; Articles; and Section. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.

   11.11  Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all Parties
hereto.

   11.12  Enforcement of Agreement. The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement was not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.

                                       60
<PAGE>
 
     IN WITNESS WHEREOF, CCBF, CCBFC, CCB Bank, Stone Street and Mocksville have
caused this Agreement to be signed by their respective officers, hereunto duly
authorized, all as of the date first written above.

                                 CCB FINANCIAL CORPORATION
 
 
                                 By:  /s/ Ernest C. Roessler
                                      ---------------------------------------
                                      Ernest C. Roessler, Chairman, President
                                      and Chief Executive Officer

                                 CCBFC, INC.
 

                                 By:  /s/ Ernest C. Roessler
                                      ----------------------------------------
                                      Ernest C. Roessler, Chairman, President
                                      and Chief Executive Officer


                                 CENTRAL CAROLINA BANK AND TRUST
                                 COMPANY

                                 By:  /s/ Ernest C. Roessler
                                      ----------------------------------------
                                      Ernest C. Roessler, Chairman, President
                                      and Chief Executive Officer


                                 STONE STREET BANCORP, INC.

 
                                 By:  /s/ J. Charles Dunn
                                      ----------------------------------------
                                      J. Charles Dunn, President


                                 STONE STREET BANK & TRUST

 
                                 By:  /s/ J. Charles Dunn
                                      ----------------------------------------
                                      J. Charles Dunn, President

                                       61
<PAGE>
 
                                  APPENDIX A

                                Plan of Merger
<PAGE>
 
                                PLAN OF MERGER
                                      OF
                                  CCBFC, INC.
                                 WITH AND INTO
                          STONE STREET BANCORP, INC.


I.   CORPORATIONS PARTICIPATING IN THE MERGER.

     CCBFC, Inc., a North Carolina corporation ("CCBFC" or the "Merging
Corporation") and a wholly-owned subsidiary of CCB Financial Corporation
("CCBF"), shall merge with and into Stone Street Bancorp, Inc., a North Carolina
corporation ("Stone Street" or the "Surviving Corporation"), pursuant to the
provisions of, and with the effect provided under, Section 55-11-06 of the North
Carolina General Statutes.

II.  NAME OF SURVIVING CORPORATION.

     Upon the effectiveness of the merger (the "Effective Time"), the name of
the Surviving Corporation shall be Stone Street Bancorp, Inc. It is intended
that the Surviving Corporation subsequently shall be merged with and into CCBF.

III. TERMS AND CONDITIONS OF THE MERGER.

     1.   Subject to the terms and conditions of the Agreement of Combination,
          dated as of April 13, 1999, by and among CCBF, CCBFC, Central Carolina
          Bank and Trust Company ("CCB Bank"), Stone Street and Stone Street
          Bank & Trust, a wholly-owned subsidiary of Stone Street formerly known
          as Mocksville Savings Bank, Inc., SSB ("Mocksville") (the "Agreement
          of Combination"), and except insofar as the same may be continued by
          law or in order to carry out the purposes of this Plan of Merger and
          the Agreement of Combination, and except as continued in and merged
          into the Surviving Corporation, the separate existence of the Merging
          Corporation shall cease as of the Effective Time. The Surviving
          Corporation, upon the merger and without any order or other action on
          the part of any court of otherwise, shall hold and enjoy all rights of
          property, franchises and interest, including appointments,
          designations and nominations, and all other rights and interests as
          trustee, executor, administrator, registrar of stocks and bonds,
          guardian of estates, assignee and receiver, and in every other
          fiduciary capacity, in the same manner and to the same extent as such
          rights, franchises and interests were held or enjoyed by the Merging
          Corporation at the time of the merger. The Surviving Corporation shall
          be responsible and liable for all liabilities of every kind and
          description of the Merging Corporation, existing immediately prior to
          the Effective Time, to the extent provided by law.

                                       1
<PAGE>
 
     2.   The Articles of Incorporation of Stone Street in effect immediately
          prior to the Effective Time shall continue in full force and effect
          until amended in accordance with applicable laws.

     3.   The Bylaws of Stone Street in effect immediately prior to the
          Effective Time shall continue in full force and effect until amended
          in accordance with applicable laws.

     4.   The officers and director of CCBFC in office immediately prior to the
          Effective Time shall be the officers and director of the Surviving
          Corporation.

IV.  EFFECTIVENESS OF THE MERGER.

     The merger shall be effective on the date and at the time set forth in the
Articles of Merger setting forth, among other things, this Plan of Merger, that
are filed with, and accepted for filing by, the Secretary of State of North
Carolina as required under Section 55-11-05 of the North Carolina General
Statutes.

V.   CONVERSION AND EXCHANGE OF SHARES.

     As of the Effective Time, the outstanding shares of the corporations
participating in the merger will be converted and exchanged as follows:

          1.  Each outstanding share of the common stock of CCBFC shall be
     converted into a share of the common stock of Stone Street ("Stone Street
     Common Stock") by virtue of the merger. Any of the shares of common stock
     of CCBF ("CCBF Common Stock") and attached preferred stock purchase rights
     ("CCBF Rights") outstanding immediately prior to the Effective Time shall
     continue to be issued and outstanding, and shall not be converted,
     exchanged or altered in any manner as a result of the merger.

          2.  (a) Each of the shares of Stone Street Common Stock outstanding
     immediately prior to the Effective Time (excluding shares held, other than
     in a fiduciary capacity or as a result of debts previously contracted, by
     CCBF, CCBFC, CCB Bank, Stone Street or Mocksville or any of their
     subsidiaries) shall be converted into and become the right to receive (i)
     cash as provided in V.2.(c) below or (ii) that portion of a share of CCBF
     Common Stock and that percent a CCBF Right, as described in CCBF's
     Shareholder Rights Plan, amended and restated as of October 1, 1998,
     computed as follows: (x) if the CCBF Stock Price for the ten (10) trading
     days ending on the last trading day prior to the date on which the
     Effective Time occurs (the "Closing Date") is equal to or more than $44.52
     but equal to or less than $60.24, such percent shall equal $21.37 divided
     by such average CCBF Stock Price; (y) if the CCBF Stock Price for such ten
     (10) trading days is less than $44.52, such percent shall be .48; and (z)
     if the CCBF Stock Price for such ten (10) trading days is more than $60.24,
     such percent shall be .3548; provided, however, that if the amount of
     Environmental Costs shall be greater than $150,000, but less than $500,000,
     then each share of Stone Street Common Stock shall 

                                       2
<PAGE>
 
     be converted into and become the right to receive that percent of a share
     of CCBF Common Stock (and the same percent of a CCBF Right) computed as
     follows: (A) if item (x) above is applicable, the percent shall be
     calculated by (i) dividing the Environmental Costs in excess of $150,000
     (but no more than $350,000) by the number of the then outstanding shares of
     Stone Street Common Stock, (ii) subtracting the resulting quotient from
     $21.37, and (iii) dividing the resulting remainder by the average CCBF
     Stock Price described above; (B) if item (y) above is applicable, the
     percent shall be calculated by (i) subtracting the Environmental Costs in
     excess of $150,000 (but no more than $350,000) from $35,013,719, (ii)
     dividing the resulting remainder by $35,013,719, and (iii) multiplying .48
     by the resulting quotient; and (C) if item (z) above is applicable, the
     percent shall be calculated by (i) subtracting the Environmental Costs in
     excess of $150,000 (but no more than $350,000) from $35,013,719, (ii)
     dividing the resulting remainder by $35,013,719, and (iii) multiplying
     .3548 by the resulting quotient (the "Exchange Ratio").

          (b)  Under the Mocksville Savings Bank, Inc., SSB Management
     Recognition Plan, the legal and beneficial ownership rights of the holder
     of each of the issued and outstanding shares of Stone Street Common Stock
     subject to a Management Recognition Plan Award shall vest as of the
     Effective Time. Accordingly, each such share shall be converted into cash
     as set forth in V.2.(c) or that portion of a share of CCBF Common Stock
     (and that portion of an attached CCBF Right) determined under V.2.(a).
     Thereupon, each such Management Recognition Plan Award shall be deemed
     canceled and of no further force or effect.

          (c)  Subject to the terms and conditions of the Agreement of
     Combination, the holder of a share of Stone Street Common Stock converted
     under V.2.(a) or under V.2(b) immediately prior to the Effective Time may
     elect as provided herein to receive for such share (i) that portion of a
     share of CCBF Common Stock (and that portion of an attached CCBF Right)
     calculated by application of the Exchange Ratio or (ii) cash equal to one
     (1) share of Stone Street Common Stock multiplied by the Exchange Ratio
     multiplied by the CCBF Stock Price for the ten (10) trading days ending on
     the last trading day prior to the Closing Date; provided, however that no
     more than 20% of such shares of Stone Street Common Stock may be converted
     into and become rights to receive cash rather than portions of shares of
     CCBF Common Stock (and attached CCBF Rights). In the event that holders of
     shares of Stone Street Common Stock described in V.2.(a) and V.2.(b) elect
     to receive cash ("Electing Holders") for more than 20% of such shares, then
     CCBF shall be required to accept for conversion to cash only the percentage
     of shares of each Electing Holder with respect to which such election was
     made ("Cash Election Shares") determined by (x) dividing the total number
     of Cash Election Shares by the total number of outstanding shares of Stone
     Street Common Stock, (y) dividing .20 by the quotient resulting under item
     (x), and (z) multiplying such Electing Holder's Cash Election Shares by the
     quotient resulting under item (y). Except as otherwise provided herein,
     each share of outstanding Stone Street Common Stock not converted unto the
     right to receive cash as provided in this V.2.(a) shall be converted into a
     right to receive a portion of a share of CCBF Common Stock (and a portion
     of an attached CCBF Right) as provided in V.2.(a) or V.2.(b).

                                       3
<PAGE>
 
          3.   Any shares of any of the subsidiaries of CCBF, CCBFC, CCB Bank,
     Stone Street or Mocksville outstanding immediately prior to the Effective
     Time shall continue to be issued and outstanding, and shall not be
     converted, exchanged or altered in any manner as a result of the merger.

          4.   As of the Effective Time, all rights with respect to options to
     purchase shares of Stone Street Common Stock granted by Stone Street (the
     "Stone Street Stock Options") pursuant to stock option plans or other plans
     or agreements of Stone Street (the "Stone Street Option Plans"), which are
     outstanding immediately prior to the Effective Time in compliance with the
     Agreement of Combination, whether or not then exercisable, shall be
     converted into and become rights with respect to CCBF Common Stock (with
     attached CCBF Rights), and CCBF shall assume all obligations of Stone
     Street with respect to each Stone Street Stock Option, in accordance with
     the terms of the respective Stone Street Option Plan under which it was
     issued and the stock option agreement by which it may be evidenced. From
     and after the Effective Time, (i) each Stone Street Stock Option assumed by
     CCBF may be exercised solely for shares of the CCBF Common Stock (with
     attached CCBF Rights), (ii) the number of shares of the CCBF Common Stock
     (with attached CCBF Rights) subject to each Stone Street Stock Option shall
     be equal to the number of shares of Stone Street Common Stock subject to
     such Stone Street Stock Option immediately prior to the Effective Time
     multiplied by the Exchange Ratio (rounded up to the nearest whole share of
     CCBF Common Stock), and (iii) the per share exercise price under each such
     Stone Street Stock Option shall be adjusted by dividing the per share
     exercise price under each such option by the Exchange Ratio and rounding to
     the nearest cent; provided, however, that the number of shares of CCBF
     Common Stock (with attached CCBF Rights) subject to each Stone Street Stock
     Option and the per share exercise price shall be subject to further
     adjustment as appropriate to reflect any stock split, stock dividend,
     recapitalization or other similar transaction subsequent to the Effective
     Time.

          5.   Each holder of shares of Stone Street Common Stock converted into
     shares of CCBF Stock (and attached CCBF Rights) pursuant to the merger or
     of Stone Street Stock Options, who would otherwise have been entitled to
     receive a fraction of a share of the CCBF Common Stock and a fraction of a
     CCBF Right (after taking into account the aggregate of all certificates
     delivered or all Stone Street Stock Options held by such holder), shall
     receive, in lieu thereof, cash (without interest) in an amount equal to
     such fractional part of a share of the CCBF Common Stock multiplied by the
     market value of one share of the CCBF Common Stock as of the Effective
     Time, in the case of shares of Stone Street Common Stock converted pursuant
     to the merger, or the date of exercise, in the case of Stone Street Stock
     Options. The market value of one share of the CCBF Common Stock at the
     Effective Time or the date of exercise, as the case may be, shall be the
     closing sales price of the CCBF Common Stock on the New York Stock 
     Exchange - Composite Transactions List (as reported by The Wall Street
     Journal or, if not reported thereby, any of the authoritative source
     selected by CCBF) on the last trading day preceding the Effective Time or
     the date of exercise, as the case may be. No such holder will be entitled
     to dividends, voting rights or any other rights as a shareholder in respect
     of any fractional share.

                                       4
<PAGE>
 
          6.   From and after the Effective Time, each holder of any of the
     shares of Stone Street Common Stock to be converted as provided in items
     2., 4. and 5. above shall be entitled, upon presentation and surrender to
     CCBF of the certificates representing such shares, to receive in exchange
     therefor (a) cash and/or (b) certificates representing the number of whole
     shares of the CCBF Common Stock (with attached CCBF Rights), and a check
     representing the amount of cash for fractional shares, if any, into which
     such shares shall have been converted. The surrendered shares of Stone
     Street Common Stock shall be canceled. Until so surrendered, each
     outstanding certificate which prior to the Effective Time represented Stone
     Street Common Stock shall be deemed for all corporate purposes to evidence
     the right to receive cash and/or ownership of the number of shares of the
     CCBF Common Stock (with attached CCBF Rights) into which the same shall
     have been converted; provided, however, beginning on the 91st day after the
     date on which the Effective Time shall occur, no dividend or other
     distribution payable to the holders or record of the CCBF Common Stock (and
     attached CCBF Rights) at or as of any time after the Effective Time shall
     be paid to the holder of any certificate representing shares of Stone
     Street Common Stock issued and outstanding as of the Effective Time that
     have been converted into the rights to receive shares of CCBF Common Stock
     (and attached CCBF Rights) until such holder physically surrenders such
     certificate for exchange, promptly after which time all such dividends or
     distributions shall be paid (without interest). In the event any
     certificate representing shares to be converted pursuant to the merger
     shall have been lost, stolen or destroyed, upon receipt of appropriate
     indemnification therefor, cash and/or certificates representing the CCBF
     Common Stock (with attached CCBF Rights) will be paid or issued in exchange
     therefor as described above, along with a check representing cash in lieu
     of fractional shares, if any, and declared but unpaid dividends deliverable
     in respect of any shares of CCBF Common Stock (and attached CCBF Rights)
     into which such shares have been converted.

          7.   The outstanding shares of Stone Street Common Stock are listed on
     the American Stock Exchange, Inc. Therefore, dissenters' rights are not
     available to the holders of such shares under Section 55-13-02(c) of the
     North Carolina General Statutes.

          8.  Shares of Stone Street Common Stock held immediately prior to the
     Effective Time by CCBF, CCBFC or Stone Street or any of their subsidiaries,
     other than in a fiduciary capacity or as a result of debts previously
     contracted, shall be canceled as of the Effective Time.

VI.  ABANDONMENT.

     This Plan of Merger may be terminated and the merger abandoned at any time
prior to the Effective Time upon termination of the Agreement of Combination by
CCBF, CCBFC and CCB Bank, by Stone Street and Mocksville, or by all such parties
in accordance with the terms thereof.

                                       5
<PAGE>
 
                                  APPENDIX B

                              Plan of Bank Merger
<PAGE>
 
                              PLAN OF BANK MERGER
                                       OF
                           STONE STREET BANK & TRUST
                                 WITH AND INTO
                    CENTRAL CAROLINA BANK AND TRUST COMPANY


I.   CORPORATIONS PARTICIPATING IN THE MERGER.

     Stone Street Bank & Trust (formerly known as Mocksville Savings Bank, Inc.,
SSB), a North Carolina savings bank ("Mocksville" or the "Merging Bank"), shall
merge with and into Central Carolina Bank and Trust Company, a North Carolina
commercial bank ("CCB Bank" or the "Surviving Bank"), pursuant to the provisions
of, and with the effect provided under, Section 55-11-06, Sections 53-12, -13
and -17, and Section 54C-40 of the North Carolina General Statutes.

II.  NAME OF SURVIVING CORPORATION.

     Upon the effectiveness of the merger (the "Effective Time"), the name of
the Surviving Bank shall be "Central Carolina Bank and Trust Company."

III. TERMS AND CONDITIONS OF THE MERGER.

     1.   Subject to the terms and conditions of the Agreement of Combination,
          dated as of April 13, 1999, by and between CCB Financial Corporation
          ("CCBF"), CCBFC, Inc., CCB Bank, Stone Street Bancorp, Inc. ("Stone
          Street") and Mocksville (the "Agreement of Combination"), and except
          insofar as the same may be continued by law or in order to carry out
          the purposes of this Plan of Merger and the Agreement of Combination,
          and except as continued in and merged into the Surviving Bank, the
          separate existence of the Merging Bank shall cease as of the Effective
          Time. The Surviving Bank, upon the merger and without any order or
          other action on the part of any court of otherwise, shall hold and
          enjoy all rights of property, franchises and interest, including
          appointments, designations and nominations, and all other rights and
          interests as trustee, executor, administrator, registrar of stocks and
          bonds, guardian of estates, assignee and receiver, and in every other
          fiduciary capacity, in the same manner and to the same extent as such
          rights, franchises and interests were held or enjoyed by the Merging
          Bank at the time of the merger. The Surviving Bank shall be
          responsible and liable for all liabilities of every kind and
          description of the Merging Bank, existing immediately prior to the
          Effective Time, to the extent provided by law.

     2.   The Amended and Restated Articles of Incorporation (as amended) of CCB
          Bank in effect immediately prior to the Effective Time shall continue
          in full force and effect until amended in accordance with applicable
          laws.

                                       1
<PAGE>
 
     3.   The Amended Bylaws (as amended) of CCB Bank in effect immediately
          prior to the Effective Time shall continue in full force and effect
          until amended in accordance with applicable laws.

     4.   The directors and officers of CCB Bank shall be the directors and
          officers of the Surviving Bank, and shall serve in such capacities for
          the terms set forth in the Amended Bylaws (as amended) of CCB Bank.

IV.  EFFECTIVENESS OF THE MERGER.

     The merger shall be effective on the date and at the time set forth in the
Articles of Merger setting forth, among other things, this Plan of Merger, that
are filed with, and accepted for filing by, the Secretary of State of North
Carolina as required under Section 55-11-05, Section 53-13, and Section 54C-40
of the North Carolina General Statutes.

V.   CONVERSION AND EXCHANGE OF SHARES.

     As of the Effective Time, the outstanding shares of the parties
participating in the merger will be converted and exchanged as follows:

          1.   Any of the shares of common stock of CCB Bank ("CCB Bank Common
     Stock") outstanding immediately prior to the Effective Time shall continue
     to be issued and outstanding, and shall not be converted, exchanged or
     altered in any manner as a result of the Merger.

          2.   Each of the shares of common stock of Mocksville ("Mocksville
     Common Stock") outstanding immediately prior to the Effective Time shall be
     canceled.

          3.   Any shares of any of CCBF, CCBFC, Inc. or the subsidiaries of
     CCBF, CCBFC, Inc., CCB Bank or the Merging Bank outstanding immediately
     prior to the Effective Time shall continue to be issued and outstanding,
     and shall not be converted, exchanged or altered in any manner as a result
     of the merger.

VI.  ABANDONMENT.

     This Plan of Merger may be terminated and the merger abandoned at any time
prior to the Effective Time upon termination of the Agreement of Combination by
CCBF, CCBFC, Inc., CCB Bank, by Stone Street and Mocksville, or by all such
parties in accordance with the terms thereof.

                                       2
<PAGE>
 
                                  APPENDIX C

                        PLAN OF HOLDING COMPANY MERGER
<PAGE>
 
                        PLAN OF HOLDING COMPANY MERGER
                                      OF
                          STONE STREET BANCORP, INC.
                                 WITH AND INTO
                           CCB FINANCIAL CORPORATION


I.   CORPORATIONS PARTICIPATING IN THE MERGER.

     Stone Street Bancorp, Inc., a North Carolina corporation (the "Merging
Corporation") and a wholly-owned subsidiary of CCB Financial Corporation by
virtue of the merger of CCBFC, Inc. with and into the Merging Corporation, shall
merge with and into CCB Financial Corporation, a North Carolina corporation
("CCBF" or the "Surviving Corporation"), pursuant to the provisions of, and with
the effect provided under, Sections 55-11-04 and 55-11-06 of the North Carolina
General Statutes.

II.  NAME OF SURVIVING CORPORATION.

     Upon the effectiveness of the merger (the "Effective Time"), the name of
the Surviving Corporation shall be "CCB Financial Corporation."

III. TERMS AND CONDITIONS OF THE MERGER.

     4.   Subject to the terms and conditions of the Agreement of Combination,
          dated as of April 13, 1999, by and among CCBF, the Merging
          Corporation, Central Carolina Bank and Trust Company ("CCB Bank"),
          CCBFC, Inc., a wholly-owned subsidiary of CCBF ("CCBFC"), and
          Mocksville Savings Bank, Inc., SSB ("Mocksville") (the "Agreement of
          Combination"), and except insofar as the same may be continued by law
          or in order to carry out the purposes of this Plan of Merger and the
          Agreement of Combination, and except as continued in and merged into
          the Surviving Corporation, the separate existence of the Merging
          Corporation shall cease as of the Effective Time. The Surviving
          Corporation, upon the merger and without any order or other action on
          the part of any court of otherwise, shall hold and enjoy all rights of
          property, franchises and interest, including appointments,
          designations and nominations, and all other rights and interests as
          trustee, executor, administrator, registrar of stocks and bonds,
          guardian of estates, assignee and receiver, and in every other
          fiduciary capacity, in the same manner and to the same extent as such
          rights, franchises and interests were held or enjoyed by the Merging
          Corporation at the time of the merger. The Surviving Corporation shall
          be responsible and liable for all liabilities of every kind and
          description of the Merging Corporation, existing immediately prior to
          the Effective Time, to the extent provided by law.

                                       1
<PAGE>
 
     5.   The Amended and Restated Articles of Incorporation, as amended, of
          CCBF in effect immediately prior to the Effective Time shall continue
          in full force and effect until amended in accordance with applicable
          laws.

     6.   The Amended Bylaws (as amended) of CCBF in effect immediately prior to
          the Effective Time shall continue in full force and effect until
          amended in accordance with applicable laws.

     4.   The directors and officers of CCBF shall be the directors and officers
          of the Surviving Corporation, and shall serve in such capacities for
          the terms set forth in the Amended Bylaws (as amended) of CCBF.

IV.  EFFECTIVENESS OF THE MERGER.

     The merger shall be effective on the date and at the time set forth in the
Articles of Merger setting forth, among other things, this Plan of Merger, that
are filed with, and accepted for filing by, the Secretary of State of North
Carolina as required under Section 55-11-05 of the North Carolina General
Statutes.

V.   CONVERSION AND EXCHANGE OF SHARES.

     As of the Effective Time, the outstanding shares of the parties
participating in the merger will be converted and exchanged as follows:

          1.   Any of the shares of common stock of CCBF ("CCBF Common Stock")
     outstanding immediately prior to the Effective Time shall continue to be
     issued and outstanding, and shall not be converted, exchanged or altered in
     any manner as a result of the merger.

          2.   Each of the shares of common stock of the Merging Corporation
     outstanding immediately prior to the Effective Time shall be canceled.

          3.   Any shares of CCBF or any of its subsidiaries (other than the
     Merging Corporation) outstanding immediately prior to the Effective Time
     shall continue to be issued and outstanding, and shall not be converted,
     exchanged or altered in any manner as a result of the merger.

VI.  ABANDONMENT.

     This Plan of Merger may be terminated and the merger abandoned at any time
prior to the Effective Time upon termination of the Agreement of Combination by
CCBF, CCBFC, CCB Bank, by Stone Street and Mocksville, or by all such parties in
accordance with the terms thereof.

                                       2
<PAGE>
 
                                  APPENDIX D

                              AFFILIATE AGREEMENT
<PAGE>
 
CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27701

Attention:  Ernest C. Roessler
         Chairman, President and Chief Executive Officer

Ladies and Gentlemen:

     The undersigned is a shareholder of Stone Street Bancorp, Inc., a North
Carolina corporation ("Stone Street'), and will become a shareholder of CCB
Financial Corporation ("CCB"), a North Carolina corporation, pursuant to the
transactions described in the Agreement of Combination, dated as of April 13,
1999 (the "Agreement"), by and between CCB and Stone Street. Under the terms of
the Agreement, CCBFC, Inc., a CCB subsidiary, will be merged into Stone Street
(the "Merger"), and the shares of the common stock of Stone Street ("Stone
Street Common Stock") will be converted into and exchanged for cash and/or
shares of the common stock of CCB ("CCB Common Stock") and attached preferred
stock purchase rights (the "CCB Rights"). Stone Street subsequently will be
merged into CCB. This Affiliate Agreement represents an agreement between the
undersigned and CCB regarding certain rights and obligations of the undersigned
in connection with any shares of CCB Common Stock to be received by the
undersigned as a result of the Merger.

     In consideration of the Merger and the mutual covenants contained herein,
the undersigned and CCB hereby agree as follows:

     1.   Affiliate Status. The undersigned understands and agrees that as to
          ----------------                                                    
Stone Street he may be an "affiliate" under Rule 145(c) as defined in Rule 405
of the Rules and Regulations of the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended ("1933 Act"), and the undesigned
anticipates that he will be such an "affiliate" at the time of the Merger.

     2.   Covenants and Warranties of Undersigned. The undersigned represents,
          ---------------------------------------                              
warrants and agrees that:

          (a)  The CCB Common Stock to be received by the undersigned as a
     result of the Merger will be taken for his own account and not for others,
     directly or indirectly, in whole or in part.

          (b)  CCB has informed the undersigned that any distribution by the
     undersigned of CCB Common Stock has not been registered under the 1933 Act
     and that shares of CCB Common Stock received pursuant to the Merger may be
     sold by the undersigned only (1) following registration of a distribution
     of such shares under the 1933 Act, or (2) in conformity with the volume and
     other requirements of Rule 145(d) promulgated by the SEC as the same now
     exist or may hereafter be amended, or (3) to the extent some other
     exemption from registration

                                       1
<PAGE>
 
     under the 1933 Act might be available. The undersigned understands that CCB
                                            ------------------------------------
     is under no obligation to file a registration statement with the SEC
     --------------------------------------------------------------------
     covering the disposition of the undersigned's shares of CCB Common Stock or
     ---------------------------------------------------------------------------
     to take any other action necessary to make compliance with an exemption
     ---------------------------------------------------------------------------
     from such registration available.
     --------------------------------
     
          (c)  The undersigned is aware that CCB intends to treat the Merger as
     a tax-free reorganization under Section 368 of the Internal Revenue Code of
     1986, as amended ("Code"), for federal income tax purposes. The undersigned
     agrees to treat the transaction in the same manner as CCB for federal
     income tax purposes. The undersigned acknowledges that Section 1.368-1(b)
     of the Income Tax Regulations require "continuity of interest" in order for
     the Merger to be treated as tax-free under Section Code 368. This
     requirement is satisfied if, taking into account those Stone Street
     shareholders who receive cash in exchange for their stock or who receive
     cash in lieu of fractional shares, there is no plan or intention on the
     part of the Stone Street shareholders to sell or otherwise dispose of the
     CCB Common Stock to be received in the Merger that will reduce such
     shareholders' ownership to a number of shares having, in the aggregate, a
     value at the time of the merger of less than 80% of the total fair market
     value of the Stone Street Common Stock outstanding immediately prior to the
     Merger. The undersigned has no prearrangement, plan or intention to sell or
     otherwise dispose of an amount of his CCB Common Stock to be received in
     the Merger which would cause the foregoing requirement not to be satisfied.

     3.   Restrictions on Transfer. The undersigned understands and agrees that
          ------------------------                                              
stop transfer instructions with respect to the shares of CCB Common Stock
received by the undersigned pursuant to the Merger will be given to CCB's
Transfer Agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:

     The shares represented by this certificate may not be sold, transferred or
     otherwise disposed of except or unless (1) such distribution is the subject
     of an effective registration statement under the Securities Act of 1933, as
     amended, (2) in accordance with (i) Rule 145(d) (in the case of shares
     issued to an individual who is not an affiliate of CCB) or (ii) Rule 144
                                    ---
     (in the case of shares issued to an individual who is an affiliate of CCB)
     of the Rules and Regulations of such Act, or (3) in accordance with a legal
     opinion satisfactory to counsel for CCB that such sale or transfer is
     otherwise exempt from the registration requirements of such Act.

Such legend will also be placed on any certificate representing CCB securities
issued subsequent to the original issuance of the CCB Common Stock pursuant to
the Merger as a result of any transfer of such shares or any stock dividend,
stock split, or other recapitalization as long as the CCB Common Stock issued to
the undersigned pursuant to the Merger has not been transferred in such manner
to justify the removal of the legend therefrom. If the provisions of Rule 144
and 145 are amended to eliminate restrictions applicable to the CCB Common Stock
received by the undersigned pursuant to the Merger, or at the expiration of the
restriction period set forth in Rule 145(d), CCB, upon the request of the
undersigned, will cause the certificates representing the shares of CCB 

                                       2
<PAGE>
 
Common Stock issued to the undersigned in connection with the Merger to be
reissued free of any legend relating to the restrictions set forth in Rules 144
and 145(d) upon receipt by CCB of an opinion of its counsel to the effect that
such legend may be removed.

     4.   Understanding of Restrictions on Dispositions. The undersigned has
          ---------------------------------------------                      
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of CCB Common Stock to be received by the undersigned, to the
extent he believes necessary, with his counsel or counsel for Stone Street.

     5.   Filing of Reports by CCB. CCB agrees, for a period of three years
          ------------------------                                         
after the effective date of the Merger, to file on a timely basis all reports
required to be filed by it pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended ("1934 Act"), so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of CCB Common Stock to be issued to the undersigned pursuant to the
Merger.

     6.   Transfer Under Rule 145(d). If the undersigned desires to sell or
          --------------------------                                        
otherwise transfer the shares of CCB Common Stock received by him in connection
with the Merger at any time during the restrictive period set forth in Rule
145(d), the undersigned will provide the necessary representation letter to the
Transfer Agent for CCB Common Stock together with such additional information as
the Transfer Agent may reasonably request. If CCB's counsel concludes that such
proposed sale or transfer complies with the requirements of Rule 145(d), CCB
shall cause such counsel to provide such opinions as may be necessary to CCB's
Transfer Agent so that the undersigned may complete the proposed sale or
transfer.

     7.   Acknowledgments. The undersigned recognizes and agrees that the
          ---------------                                                 
foregoing provisions also apply to all shares of the capital stock of Stone
Street and CCB that are deemed to be beneficially owned by the undersigned
pursuant to applicable federal securities laws, which the undersigned agrees may
include, without limitation, shares owned or held in the name of (i) the spouse
of the undersigned, (ii) any relative of the undersigned or of the spouse of the
undersigned who has the same home as the undersigned, (iii) any trust or estate
in which the undersigned, the undersigned's spouse, and any such relative
collectively own at least a 10% beneficial interest or of which any of the
foregoing serves as trustee, executor, or in any similar capacity, and (iv) any
corporation or other organization in which the undersigned, the undersigned's
spouse and any such relative collectively own at least 10% of any class of
equity securities or of the equity interest. The undersigned further recognizes
that, in the event that the undersigned is a director or officer of Stone Street
or becomes a director or officer of CCB upon consummation of the Merger, among
other things, any sale of CCB Common Stock by the undersigned within a period of
less than six months following the effective time of the Merger may subject the
undersigned to liability pursuant to Section 16(b) of the 1934 Act.

                                       3
<PAGE>
 
     8.   Miscellaneous. This Affiliate Agreement is the complete agreement
          -------------                                                     
between CCB and the undersigned concerning the subject matter hereof. Any notice
required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such other address as shall be furnished in writing by the parties. This
Affiliate Agreement shall be governed by the laws of the State of North
Carolina.

     This Affiliate Agreement is executed as of the ___ day of _______________,
1999.

                               Very truly yours,


                               ___________________________________________
                               (Name)

                               ___________________________________________
                               (Address)


                               [add below the signatures of all registered 
                               owners of shares deemed beneficially owned by 
                               the affiliate]


                               ____________________________________________
                               Name:


                               ____________________________________________
                               Name:


                               ____________________________________________
                               Name:

AGREED TO AND ACCEPTED
as of _________________, 1999.


________________________________

By:_____________________________

                                       4

<PAGE>
 
FOR IMMEDIATE RELEASE              CCB Contact:   Jenny R. Kobin (919) 683-7646
April 14, 1999                     SSM Contact:   J. Charles Dunn (336) 751-5936


                           CCB FINANCIAL CORPORATION
                        TO ACQUIRE STONE STREET BANCORP

Durham, N.C. - CCB Financial Corporation (NYSE: CCB) announced today that it has
signed a definitive agreement to acquire Stone Street Bancorp, Inc. (AMEX: SSM),
which is headquartered in Mocksville, North Carolina.  Stone Street Bancorp
operates two branches in Davie County, which is adjacent to Winston-Salem, North
Carolina, and had $127 million in assets, $103 million in loans and $73 million
in deposits, as of December 31, 1998.

The transaction is valued at approximately $35 million and will be accounted for
as a purchase. Each Stone Street Bancorp shareholder will receive $21.37 per
share, provided CCB's stock trades between $44.52 and $60.24, during the pricing
period.  Stone Street Bancorp shareholders can elect to receive either cash or
CCB stock as consideration; however, at least 80% of the total consideration
must be paid in CCB stock.  The acquisition, which is expected to close in the
third quarter of 1999, is subject to approval by regulators and Stone Street
Bancorp shareholders.

"This combination results in a strong community institution with the dominant
market share in the attractive I-40 corridor, southwest of Winston-Salem," said
Ernest C. Roessler, CCB's chairman, president and chief executive officer.
"Stone Street has delivered outstanding personal service to its customers in
Davie County for seventy-eight years.  CCB also has a long history of providing
quality service and will offer new products, such as trust, investment and
insurance services, previously unavailable to Stone Street customers."


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