Exhibit 10.2

<TABLE>
<CAPTION>

                                          COMMERCIAL PLEDGE AGREEMENT

--------------------------------------------------------------------------------------------------------------
<S>              <C>              <C>          <C>        <C>              <C>         <C>         <C>
    Principal       Loan Date     Maturity     Loan No     Call / Coll     Account     Officer     Initials
  $30,000,000.00    12-27-2005   01-31-2006                04AD / STKU                  53803
--------------------------------------------------------------------------------------------------------------

                 References in the shaded area are for Lender's use only and do nut limit lbs
                         applicability of this document toany particular loan or item

               Any item above containing "***" has been omitted due to text length limitations.
--------------------------------------------------------------------------------------------------------------

Borrower: Capital Bank Corporation (TIN:  56-2101930)       Lender: First Tennessee Bank National Association
          4901 Glen wood Avenue                                     Financial Institutions
          Raleigh NC 27612                                          845 Crossover Lane, Suits 150
                                                                    Memphis, TN  38117
                                                                    (901) 435-7972
==============================================================================================================
</TABLE>

THIS  COMMERCIAL  PLEDGE  AGREEMENT dated December 27, 2005 is made and executed
between Capital Bank  Corporation  ("Grantor") and First Tennessee Bank National
Association ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the Indebtedness and agrees that
Lender  shall  have the  rights  stated in this  Agreement  with  respect to the
Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL  DESCRIPTION.  The word  "Collateral" as used in this Agreement means
Grantor's present and future rights, title and interest in and to, together with
any and all present and future additions thereto,  substitutions  therefore, and
replacements  thereof together with any and all present and future  certificates
and/or instruments evidencing any Stock and further together with all income and
proceeds as described herein:

         100% of stock in Capital Bank.

RIGHT OF SETOFF.  To the extent  permitted by applicable  law. Lender reserves a
right of setoff  in all  Grantor  s  accounts  with  Lender  (whether  checking,
savings, or some other account).  This includes all accounts Grantor may open in
the future.  However,  this does not  include  any IRA or Keogh  accounts or any
trust accounts for which setoff would be prohibited by law.  Grantor  authorizes
Lender,  to the extent permitted by applicable law, to charge or setoff all sums
owing on the  Indebtedness  against any and all such accounts,  and, at Lender's
option, to administratively  freeze all such accounts to allow Lender to protect
Lender's charge and setoff rights provided in this paragraph

REPRESENTATIONS   AND  WARRANTIES  WITH  RESPECT  TO  THE  COLLATERAL.   Grantor
represents end warrants to Lender that:

         Ownership. Grantor is the lawful owner of the Collateral free and clear
         of all security  interests,  liens,  encumbrances  and claims of others
         except as  disclosed  to and  accepted  by Lender in  writing  prior to
         execution of this Agreement.

<PAGE>

         Right to Pledge.  Grantor  has the full right  power and  authority  to
         enter into this Agreement and to pledge the Collateral.

         Authority;  Binding  Effect.  Grantor  has the full  right,  power  and
         authority to enter into this Agreement and to grant a security interest
         in the Collateral to Lender.  This Agreement is binding upon Grantor as
         well as Grantor's successors and assigns, and is legally enforceable in
         accordance   with  its  terms.   The  foregoing   representations   and
         warranties,  and all other  representations and warranties contained in
         this  Agreement  are and shall be continuing in nature and shall remain
         in  full  force  and  effect  until  such  time as  this  Agreement  is
         terminated or cancelled as provided herein.

         Valid  Issuance  of Stock.  All of the Stock have been duly and validly
         issued and are fully paid and nonassessable.

         Ownership of Stock. Unless otherwise  previously disclosed to Lender in
         writing,  the shares of Stock subject to this Agreement  constitute all
         shares owned by of Grantor of the issued and outstanding  shares of the
         capital stock of the corporation or corporations listed above.

         Free Transferability of Stock. Unless otherwise previously disclosed to
         Lender in writing,  all of the shares of Stock are freely  transferable
         and subject to sale without being subject to limitations,  restriction,
         stock  legends,  or  prohibitive  covenants  under  any  agreements  or
         otherwise  under  which  Grantor or the issuer of any such Stock may be
         bound or obligated.

         Stock Dividend;  Stock Split. In order to prevent  Lender's  collateral
         position from becoming  diluted by any stock dividends or stock splits,
         Grantor agrees to notify Lender  immediately when knowledge of any such
         transaction or  transactions  becomes known,  and to deliver all of the
         stock  certificates  to Lender  for  pledging  within  five (5) days of
         receipt  of  the  stock  dividend  and/or  stock  split  together  with
         appropriately executed stock powers.

         No Further  Assignment.  Grantor  has not,  and shall not set,  assign,
         transfer,  encumber or otherwise  dispose of any of Grantor s rights in
         the Collateral except as provided in this Agreement.

         No Defaults.  There are no defaults existing under the Collateral,  and
         there  are no  offsets  or  counterclaims  to the  same.  Grantor  will
         strictly and promptly  perform each of the terms  conditions  covenants
         and  agreements  if any,  contained in the  Collateral  which are to be
         performed by Grantor.

         No Violation.  The execution  and delivery of this  Agreement  will not
         violate any law or agreement governing Grantor or to which Grantor is a
         party and its  certificate or articles of  incorporation  and bylaws do
         not prohibit any term or condition of this Agreement.


                                       2
<PAGE>

         Financing Statements. Grantor authorizes Lender to file a UCC financing
         statement,  or  alternatively,  a copy of  this  Agreement  to  perfect
         Lender's security interest.  At Lender's request,  Grantor additionally
         agrees to sign all  other  documents  that are  necessary  to  perfect,
         protect,  and  continue  Lender's  security  interest in the  Property.
         Grantor will pay all filing fees,  title  transfer fees, and other fees
         and  costs  involved  unless  prohibited  by law or  unless  Lender  is
         required by law to pay such fees and costs Grantor irrevocably appoints
         Lender to execute  documents  necessary to transfer title if there is a
         default.  Lender  may  file a copy of  this  Agreement  as a  financing
         statement. If Grantor changes Grantor's name or address, or the name or
         address of any person granting a security interest under this Agreement
         changes Grantor will promptly notify the Lender of such change.

LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL.  Lender may hold
the Collateral until all  Indebtedness  has been paid and satisfied.  Thereafter
Lender may  deliver  the  Collateral  to  Grantor  or to any other  owner of the
Collateral.  Lender  shall have the  following  rights in  addition to all other
rights Lender may have by law:

         Maintenance and Protection of Collateral.  Lender may, but shall not be
         obligated  to, take such steps as it deems  necessary  or  desirable to
         protect, maintain, insure, store, or care for the Collateral, including
         paying of any liens or claims against the Collateral.  This may include
         such things as hiring other people,  such as  attorneys,  appraisers or
         other  experts.  Lender may charge  Grantor for any cost incurred in so
         doing.  When applicable law provides more than one method of perfection
         of Lender's  security  interest,  Lender may choose the method(s) to be
         used. If the Collateral  consists of stock,  bonds or other  investment
         property for which no certificate has been issued.  Grantor agrees,  at
         Lender's   request  either  to  request   issuance  of  an  appropriate
         certificate  or to give  instructions  on Lender's forms to the issuer,
         transfer agent,  mutual fund company or broker,  as the case may be, to
         record  on its  books or  records  Lender's  security  interest  in the
         Collateral.  Grantor also agrees to execute any  additional  documents,
         including but not limited to a control  agreement  necessary to perfect
         Lender's security interest as Lender may desire.

         Income and Proceeds from the Collateral.  Lender may receive all Income
         and Proceeds and add it to the Collateral. Grantor agrees to deliver to
         Lender immediately upon receipt, in the exact form received and without
         commingling  with other  property,  all Income  and  Proceeds  from the
         Collateral  which may be received  by, paid or  delivered to Grantor or
         for Grantor s account  whether as an addition  to in  discharge  of. in
         substitution of or in exchange for any of the Collateral.

         Application  of Cash At  Lender's  option.  Lender  may apply any cash,
         whether  included in the  Collateral or received as Income and Proceeds
         or through liquidation,  sale, or retirement, of the Collateral, to the
         satisfaction  of the  Indebtedness  or such  portion  thereof as Lender
         shall choose whether or not matured.

         Transactions  with  Others.  Lender may (1) extend  time for payment or
         other  performance,   (2)  grant  a  renewal  or  change  in  terms  or
         conditions,  or (3) compromise  compound or release any obligation with
         any one or more Obligors,  endorsers, or

                                       3
<PAGE>

         Guarantors  of the  Indebtedness  as Lender  deems  advisable,  without
         obtaining  the prior  written  consent of  Grantor,  and no such act or
         failure  to act shall  affect  Lender s rights  against  Grantor or The
         Collateral.

         All Collateral Secures  Indebtedness.  All Collateral shall be security
         for the Indebtedness,  whether the Collateral is located at one or more
         offices or branches of Lender This will be the case  whether or not the
         office or branch where Grantor obtained  Grantor's loan knows about the
         Collateral or relies upon the Collateral as security.

         Collection of  Collateral.  Grantor agrees that Lender may, at any time
         and for any reason, whether or not Grantor is then in default under any
         indebtedness,  collect  the  Income  and  Proceeds  directly  from  the
         Obligors. Grantor authorizes and directs the Obligors if Lender decides
         to collect  the Income and  Proceeds  to pay and  deliver to Lender all
         Income and Proceeds from the Collateral and to accept Lender's  receipt
         for the payments.

         Power of Attorney.  Grantor  irrevocably  appoints  Lender as Grantor's
         attorney-in-fact  with  full  power  of  substitution,  (a) to  demand,
         collect,  receive, receipt for, sue and recover all Income and Proceeds
         and other sums of money and other  property  which may now or hereafter
         become due,  owing or payable from the Obligors in accordance  with the
         terms of the  Collateral;  (b) to  execute,  sign,  endorse any and all
         instruments, receipts, checks drafts and warrants issued in payment for
         the Collateral;  (c) to settle or compromise any and all claims arising
         under the Collateral, ad in the place and stead of Grantor, execute and
         deliver Grantor's release and acquittance for Grantor;  (d) to file any
         claim or claims or to take any action or  institute or take part in any
         proceedings,  either in Lender's own name or in the name of Grantor, or
         otherwise,  which in the  discretion of Lender may seem to be necessary
         or  advisable;  and (e) to execute in Grantor's  name and to deliver to
         the  Obligors  on  Grantor's  behalf  at the  time  and  in the  manner
         specified by the Collateral any necessary instruments or documents.

         Perfection of Security  Interest Upon  Lender's  request.  Grantor will
         deliver  to  Lender  any  and  all  of  the  documents   evidencing  or
         constituting the Collateral. When applicable law provides more than one
         method of perfection of Lender's security  interest.  Lender may choose
         the method(s) to be used. Upon Lender's request,  Grantor will sign and
         deliver any writings  necessary to perfect Lender's security  interest.
         If  any  of  the  Collateral   consists  of  securities  for  which  no
         certificate has been issued, Grantor agrees, at Lender's option, either
         to  request  issuance  of an  appropriate  certificate  or  to  execute
         appropriate  instructions  on Lender's  forms  instructing  the issuer,
         transfer agent,  mutual fund company,  or broker, as the case may be to
         record on its books or records,  by book-entry  or otherwise.  Lender's
         security interest in the Collateral.  Grantor hereby appoints Lender as
         Grantor's irrevocable attorney-in-fact for the purpose of executing any
         documents  necessary  to perfect,  amend,  or to continue  the security
         interest granted in this Agreement or to demand  termination of filings
         of other secured parties.  This is a continuing  Security Agreement and
         will continue in effect even though all or any part of the Indebtedness
         is paid in full and even though for a period of time Grantor may not be
         indebted to Lender.

                                       4
<PAGE>

LENDERS  EXPENDITURES.  If any  action or  proceeding  is  commenced  that would
materially  affect  Lender's  interest in the  Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related  Documents  including
but not limited to  Grantor's  failure to  discharge or pay when due any amounts
Grantor is  required to  discharge  or pay under this  Agreement  or any Related
Documents  Lender on Grantor's  behalf may (but shall not be obligated  to) take
any  action  that  Lender  deems  appropriate,  including  but  not  limited  to
discharging or paying all taxes,  liens,  security  interests  encumbrances  and
other claims at any time levied or placed on the Collateral and paying all costs
for insuring  maintaining and preserving the Collateral.  All such  expenditures
incurred or paid by Lender for such purposes will then bear interest at the rate
charged under the Note,  from the date incurred or paid by Lender to the date of
repayment by Grantor.  All such expenses will become a part of the  Indebtedness
and,  at  Lender's  option,  will (A) be payable on demand;  (B) be added to the
balance of the Note and be apportioned among and be payable with any installment
payments to become due during  either (1) the term of any  applicable  insurance
policy;  or (2) the  remaining  term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note's maturity. The Agreement also
will  secure  payment of these  amounts.  Such right shall be in addition to all
other rights and remedies to which Lender may be entitled upon Default.

LIMITATIONS ON OBLIGATIONS OF LENDER.  Lender shall use ordinary reasonable care
in  the  physical  preservation  and  custody  of  the  Collateral  in  Lender's
possession,  but shall have no other obligation to protect the Collateral or its
value.   In   particular,   but  without   limitation,   Lender  shall  have  no
responsibility  for (A) any  depreciation  in value of the Collateral or for the
collection or protection  of, any Income and Proceeds  from the  Collateral  (B)
preservation  of rights  against  parties to the  Collateral  or  against  third
persons, (C) ascertaining any maturities, calls, conversions, exchanges, offers,
tenders, or similar matters relating to any of the Collateral,  or (D) informing
Grantor  about any of the above,  whether or not Lender has or is deemed to have
knowledge  of such  matters.  Except as  provided  above,  Lender  shall have no
liability for depreciation or deterioration of the Collateral.

DEFAULT.  Each of the following shall  constitute an Event of Default under this
Agreement:

         Payment  Default.  Grantor fails to make any payment when due under the
         Indebtedness.

         Other  Defaults.  Grantor  fails to comply with or to perform any other
         term obligation covenant or condition contained in this Agreement or in
         any of the Related  Documents  or to comply with or to perform any term
         obligation  covenant  or  condition  contained  in any other  agreement
         between Lender and Grantor.

         Default in Favor of Third Parties Should Grantor or any Grantor default
         under any loan, extension of credit.,  security agreement,  purchase or
         sales agreement,  or any other agreement in favor of any other creditor
         or person  that may  materially  affect any of  Grantor's  property  or
         Grantor's or any Grantor's ability to repay the Indebtedness or perform
         their respective obligations under this Agreement or any of the Related
         Documents.

                                       5
<PAGE>

         False  Statements.  Any warranty,  representation  or statement made or
         furnished  to Lender by  Grantor  or on  Grantor's  behalf,  or made by
         Guarantor,  or any other guarantor  endorser,  surety, or accommodation
         party under this Agreement or the Related  Documents in connection with
         the obtaining of the Indebtedness evidenced by the Note of any security
         document directly or indirectly securing repayment of the Note is false
         or misleading in any material respect either now or at the time made or
         furnished or becomes false or misleading at any time thereafter.

         Defective  Collateralization.  This  Agreement  or any  of the  Related
         Documents ceases to be in full force and effect  (including  failure of
         any  collateral  document  to  create a valid  and  perfected  security
         interest or lien) at any time and for any reason.

         Insolvency.  The dissolution or termination of Grantor's existence as a
         going  business,  the  insolvency  of  Grantor,  the  appointment  of a
         receiver for any part of Grantor's  property,  any  assignment  for the
         benefit of creditors any type of creditor  workout of the  commencement
         of any proceeding under any bankruptcy or insolvency Jaws by or against
         Grantor.

         Creditor or Forfeiture  Proceedings.  Commencement  of  foreclosure  or
         forfeiture  proceedings,  whether by  judicial  proceeding,  self-help,
         repossession or any other method,  by any creditor of Grantor or by any
         governmental  agency against any collateral  securing the Indebtedness.
         This includes a  garnishment  of any of Grantor's  accounts,  including
         deposit  accounts with Lender.  However this Event of Default shall not
         apply if there is a good faith dispute by Grantor as to the validity or
         reasonableness  of the  claim  which is the  basis of the  creditor  or
         forfeiture proceeding and if Grantor gives Lender written notice of the
         creditor or forfeiture  proceeding and deposits with Lender monies or a
         surety bond for the  creditor or  forfeiture  proceeding,  in an amount
         determined  by  Lender  in its sole  discretion  as  being an  adequate
         reserve or bond for the dispute.

         Execution;  Attachment.  Any execution or attachment is levied  against
         the  Collateral  and such  execution  or  attachment  is not set  aside
         discharged or stayed within thirty (30) days after the same is levied.

         Change  in  Zoning  or Public  Restriction.  Any  change in any  zoning
         ordinance or  regulation  or any other public  restriction  is enacted,
         adopted or  implemented  that  limits or defines  the uses which may be
         made of the  Collateral  such that the present or  intended  use of the
         Collateral as specified in the Related  Documents would be in violation
         of such  zoning  ordinance  or  regulation  or  public  restriction  as
         changed.

         Default Under Other Lien  Documents.  A default  occurs under any other
         mortgage  deed of  trust  or  security  agreement  covering  all or any
         portion of the Collateral.

         Judgment.  Unless  adequately  covered by  insurance  in the opinion of
         Lender,  the  entry  of a final  judgment  for  the  payment  of  money
         involving more than ten thousand dollars  ($10,000.00)  against Grantor
         and the  failure by Grantor to  discharge  the same,  or cause it to be
         discharged,  or bonded off to Lender's  satisfaction within thirty (30)
         days  from the

                                       6
<PAGE>

         date of the order  decree or process  under  which or pursuant to which
         such judgment was entered.

         Events  Affecting  Guarantor.  Any of the preceding  events occurs with
         respect to any Guarantor,  or any other guarantor  endorser surety,  or
         accommodation  party of any of the  Indebtedness  or Guarantor,  or any
         other  guarantor,  endorser,  surety,  or  accommodation  party dies or
         becomes  incompetent  or  revokes  or  disputes  the  validity  of,  or
         liability under any Guaranty of the Indebtedness.

         Adverse Change. A material adverse change occurs in Grantor's financial
         condition or Lender  believes the prospect of payment or performance of
         the Indebtedness is impaired.

         Cure  Provisions.  If any  default,  other than a default in payment or
         failure to satisfy  Lender's  requirement  in the  Insufficient  Market
         Value of  Securities  section  is curable  and if Grantor  has not been
         given a notice  of a breach  of the same  provision  of this  Agreement
         within the  preceding  twelve (12) months,  it may be cured if Grantor,
         after  receiving  written  notice  from Lender  demanding  cure of such
         default:  (1) cures the default within fifteen (15) days; or (2) if the
         cure requires more than fifteen (15) days  immediately  initiates steps
         which Lender deems in Lenders sole  discretion to be sufficient to cure
         the default and  thereafter  continues and completes all reasonable and
         necessary steps sufficient to produce  compliance as soon as reasonably
         practical.

RIGHTS  AND  REMEDIES  ON  DEFAULT.  If an Event of  Default  occurs  under this
Agreement  at any time  thereafter,  Lender may  exercise any one or more of the
following rights and remedies:

         Accelerate  Indebtedness.  Declare  all  Indebtedness,   including  any
         prepayment  penalty which Grantor would be required to pay  immediately
         due and payable without notice of any kind to Grantor.

         Collect the  Collateral.  Collect any of the Collateral and at Lender's
         option and to the extent permitted by applicable law retain  possession
         of the Collateral while suing on the Indebtedness.

         Sell the Collateral.  Sell the Collateral at Lender's discretion,  as a
         unit or in parcels,  at one or more public or private sales. Unless the
         Collateral is  perishable or threatens to decline  speedily in value or
         is of a type customarily sold on a recognized market, Lender shaft give
         or mail to  Grantor,  and other  persons as  required  by law notice at
         least ten (10)  days in  advance  of the time and  place of any  public
         sale, or of the time after which any private sale may be made. However,
         no notice need be provided to any person who, after an Event of Default
         occurs, enters into and authenticates an agreement waiving that persons
         right to  notification  of sale Grantor agrees that any  requirement of
         reasonable  notice as to Grantor is satisfied if Lender mails notice by
         ordinary  mail  addressed  to Grantor at the last  address  Grantor has
         given  Lender in  writing.  If a public  safe is held,  there  shall be
         sufficient  compliance with all requirements of notice to the public by
         a single  publication  in any newspaper of general  circulation  in the
         county  where the

                                       7
<PAGE>

         Collateral  is located,  setting forth the time and place of sale and a
         brief  description of the property to be sold Lender may be a purchaser
         at any public sale.

         Self  Securities.  Sell any securities  included in the Collateral in a
         manner consistent with applicable federal and state securities laws. If
         because of restrictions  under such laws Lender is unable,  or believes
         Lender is unable, to sell the securities in an open market transaction.
         Grantor  agrees that Lender wilt have no obligation to delay sale until
         the securities  can be registered.  Then Lender may make a private sale
         to one or more persons or to a restricted  group of persons even though
         such sale may  result in a price that is less  favorable  than might be
         obtained in an open market transaction.  Such a sale will be considered
         commercially  reasonable.  If any  securities  held as  Collateral  are
         "restricted  securities"  as defined in the Rules of the Securities and
         Exchange  Commission (such as Regulation D or Rule 144) or the rules of
         state securities departments under state "Blue Sky" laws, or if Grantor
         or any other owner of the  Collateral  is an affiliate of the issuer of
         the securities.  Grantor agrees that neither Grantor, nor any member of
         Grantor's family, nor any other person signing this Agreement will sell
         or dispose of any securities of such issuer without  obtaining Lender s
         prior written consent.

         Rights and Remedies  with  Respect to  Investment  Property.  Financial
         Assets and Related Collateral. In addition to other rights and remedies
         granted  under this  Agreement  and under  applicable  law.  Lender may
         exercise any or all of the following rights and remedies:  (1) register
         with any issuer or broker or other  securities  intermediary any of the
         Collateral  consisting  of  investment  property  or  financial  assets
         (collectively herein,  "investment property") in Lender's, sole name or
         in the name of Lender's broker, agent or nominee; (2) cause any issuer,
         broker or other securities intermediary to deliver to Lender any of the
         Collateral consisting of securities,  or investment property capable of
         being  delivered;  (3)  enter  into a  control  agreement  or  power of
         attorney with any issuer or securities intermediary with respect to any
         Collateral  consisting of investment property,  on such terms as Lender
         may  deem  appropriate  in  its  sole  discretion,   including  without
         limitation,  an agreement granting to Lender any of the rights provided
         hereunder without further notice to or consent by Grantor;  (4) execute
         any such control  agreement on Grantor s behalf and in Grantor's  name,
         and hereby irrevocably  appoints Lender as agent and  attorney-in-fact,
         coupled  with an interest,  for the purpose of  executing  such control
         agreement  on  Grantor's  behalf;  (5)  exercise  any and alt rights of
         Lender  under any such  control  agreement  or power of  attorney;  (6)
         exercise any voting, conversion, registration purchase option, or other
         rights with respect to any  Collateral;  (7)  collect,  with or without
         legal action, and issue receipts  concerning any notes,  checks drafts,
         remittances or  distributions  that are paid or payable with respect to
         any Collateral  consisting of investment property Any control agreement
         entered  with  respect to any  investment  property  shall  contain the
         following   provisions,   at  Lender's  discretion.   Lender  shall  be
         authorized  to  instruct  the  issuer,   broker  or  other   securities
         intermediary  to take or to  refrain  from  taking  such  actions  with
         respect to the  investment  property  as Lender may  instruct,  without
         further  notice to or consent by  Grantor.  Such  actions  may  include
         without   limitation  the  issuance  of   entitlement   orders  account
         instructions,  general  trading  or buy or sell  orders,  transfer  and
         redemption  orders,  and step  loss  orders.  Lender  shall be  further
         entitled to instruct the issuer  broker or securities  intermediary  to
         sell or to

                                       8
<PAGE>

         liquidate  any  investment  property,  or to pay the cash  surrender or
         account  termination  value  with  respect  to any and  all  investment
         property,  and to deliver all such payments and liquidation proceeds to
         Lender. Any such control agreement shall contain such authorizations as
         are  necessary  to  place  Lender  in  "control"  of  such   investment
         collateral,  as  contemplated  under  the  provisions  of  the  Uniform
         Commercial Code, and shall fully authorize Lender to issue "entitlement
         orders" concerning the transfer  redemption  liquidation or disposition
         of investment  collateral  in  conformance  with the  provisions of the
         Uniform Commercial Code.

         Foreclosure.  Maintain a judicial suit for  foreclosure and sale of the
         Collateral.

         Specific  Performance.  Lender  may,  in  addition to or in lieu of the
         foregoing remedies, in Lenders sole discretion, commence an appropriate
         action against  Grantor  seeking  specific  performance of any covenant
         contained in this  Agreement or in aid of the execution or  enforcement
         of any power in this Agreement granted.

         Transfer  Title.  Effect  transfer of title upon sale of all or part of
         the Collateral. For this purpose Grantor irrevocably appoints Lender as
         Grantor's  attorney-in-fact  to execute  endorsements  assignments  and
         instruments  in the name of Grantor and each of them (if more than one)
         as shall be necessary or reasonable.

         Other Rights and  Remedies.  Have end exercise any or all of the rights
         and remedies of a secured  creditor under the provisions of the Uniform
         Commercial Code at law in equity or otherwise.

         Application  of  Proceeds.   Apply  any  cash  which  is  part  of  the
         Collateral,  or which is received  from the  collection  or sale of the
         Collateral,  to reimbursement of any expenses,  including any costs for
         registration of securities,  commissions  incurred in connection with a
         sale,  attorneys'  fees and  court  costs,  whether  or not  there is a
         lawsuit  and  including  any fees on  appeal,  incurred  by  Lender  in
         connection  with the collection and sale of such  Collateral and to the
         payment of the Indebtedness of Grantor to Lender, with any excess funds
         to be paid to Grantor as the  interests of Grantor may appear.  Grantor
         agrees,  to the extent  permitted by law. to pay any  deficiency  after
         application of the proceeds of the Collateral to the Indebtedness.

         Election of Remedies.  Except as may be prohibited  by applicable  law,
         all  of  Lender's  rights  and  remedies,  whether  evidenced  by  this
         Agreement,  the Related  Documents  or by any other  writing,  shall be
         cumulative and may be exercised singularly or concurrently  Election by
         Lender to pursue  any  remedy  shall not  exclude  pursuit of any other
         remedy,  and an  election  to make  expenditures  or to take  action to
         perform an obligation of Grantor under this Agreement,  after Grantor's
         failure to perform shall not affect Lender's right to declare a default
         and exercise its remedies.

EXCLUSION  FROM   INDEBTEDNESS.   Excluded  from   indebtedness   shall  be  any
indebtedness governed by the Federal Truth in Lending Act.

                                       9
<PAGE>

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

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

         Attorneys  Fees;  Expenses.  Grantor  agrees to pay upon  demand all of
         Lender's  costs and  expenses  including  Lender's  attorneys  fees and
         Lender's legal expenses  incurred in connection with the enforcement of
         this  Agreement.  Lender may hire or pay someone  else to help  enforce
         this  Agreement,  and Grantor  shall pay the costs and expenses of such
         enforcement.  Costs and expenses include  Lender's  attorneys' fees and
         legal expenses whether or not there is a lawsuit,  including attorneys'
         fees and legal expenses for bankruptcy  proceedings  (including efforts
         to modify or vacate any automatic stay or injunction), appeals, and any
         anticipated  post-judgment  collection  services Grantor also shall pay
         all court  costs and such  additional  fees as may be  directed  by the
         court.

         Caption   Headings.   Caption   headings  in  this  Agreement  are  for
         convenience  purposes  only and are not to be  issued to  Interpret  or
         define the provisions of this Agreement.

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

         Non-Liability of Lender.  The  relationship  between Grantor and Lender
         created  by  this   Agreement   is  strictly  a  debtor  and   creditor
         relationship and not fiduciary in nature, nor is the relationship to be
         construed as creating any  partnership or joint venture  between Lender
         and Grantor, Grantor is exercising Grantor's own judgement with respect
         to  Grantor's  business.  All  information  supplied  to  Lender is for
         Lender's protection only and no other party is entitled to rely on such
         information.  There is no duty for Lender to review,  inspect supervise
         or inform  Grantor of any matter with  respect to  Grantor's  business,
         Lender  and  Grantor  intend  that  Lender may  reasonably  rely on all
         information   supplied  by  Grantor  to  Lender,   together   with  all
         representations  and  warranties  given by  Grantor  to Lender  without
         investigation  or confirmation by Lender and that any  investigation or
         failure to investigate will not diminish Lender's right to so rely.

                                       10
<PAGE>

         Notices.  Any notice required to be given under this Agreement shall be
         given in writing,  and shall be effective when actually  delivered when
         actually received by telefacsimile  (unless otherwise required by law),
         when deposited with a nationally  recognized  overnight courier, or, if
         mailed  when  deposited  in the United  States  mail,  as first  class,
         certified or registered mail postage prepaid, directed to the addresses
         shown near the  beginning of this  Agreement.  Any party may change its
         address for  notices  under this  Agreement  by giving  formal  written
         notice to the other parties,  specifying that the purpose of the notice
         is to change the party s address.  For notice purposes,  Grantor agrees
         to keep Lender  informed  at all times of  Grantor's  current  address.
         Unless otherwise  provided or required by law if there is more than one
         Grantor  any  notice  given by  Lender to any  Grantor  is deemed to be
         notice given to all Grantors.

         Severability.  If a court of competent jurisdiction finds any provision
         of this Agreement to be illegal,  invalid,  or  unenforceable as to any
         circumstance,  that  finding  shall  not make the  offending  provision
         illegal  invalid,  or unenforceable  as to any other  circumstance.  If
         feasible,  the offending provision shall be considered modified so that
         it becomes legal,  valid and  enforceable.  If the offending  provision
         cannot  be so  modified,  it  shall be  considered  deleted  from  this
         Agreement.   Unless   otherwise   required  by  law,  the   illegality,
         invalidity,  or  unenforceability  of any  provision of this  Agreement
         shall not effect the legality  validity or  enforceability of any other
         provision of this Agreement.

         Sole  Discretion  of Lender.  Whenever  Lender s consent or approval is
         required  under this  Agreement,  the  decision as to whether or not to
         consent or approve  shall be in the sole and  exclusive  discretion  of
         Lender and Lender's decision shall be final and conclusive.

         Successors  and  Assigns.  Subject  to any  limitations  stated in this
         Agreement on transfer of Grantor's  interest,  this Agreement  shall be
         binding upon and inure to the benefit of the parties,  their successors
         and assigns.  If ownership of the Collateral becomes vested in a person
         other than Grantor,  Lender,  without notice to Grantor,  may deal with
         Grantor's   successors   with  reference  to  this  Agreement  and  the
         Indebtedness  by way of  forbearance  or  extension  without  releasing
         Grantor from the  obligations of this Agreement or liability  under the
         Indebtedness.

         Time is of the Essence.  Time is of the essence in the  performance  of
         this Agreement.

         Waive Jury. All parties to this Agreement hereby waive the right to any
         jury  trial in any action  proceeding  or  counterclaim  brought by any
         party against any other party.

DEFINITIONS.  The following capitalized words and terms shall have the following
meanings  when  used  in  this  Agreement.  Unless  specifically  stated  to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the  plural,  and the plural  shall  include  the  singular,  as the

                                       11
<PAGE>

context  may require  Words and terms not  otherwise  defined in this  Agreement
shall have the meanings attributed to such terms In the Uniform Commercial Code:

         Agreement. The word "Agreement" means this Commercial Pledge Agreement,
         as this  Commercial  Pledge  Agreement  may be amended or modified from
         time to time, together with all exhibits and schedules attached to this
         Commercial Pledge Agreement from time to time.

         Borrower.  The word  "Borrower"  means  Capital  Bank  Corporation  and
         includes all co-signers and co-makers signing the Note.

         Collateral.  The word  "Collateral"  means all of Grantor s right title
         and  interest  in  and  to  all  the  Collateral  as  described  in the
         Collateral Description section of this Agreement.

         Default.  The  word  "Default"  means  the  Default  set  forth in this
         Agreement in the section titled "Default".

         Event of  Default.  The words  "Event  of  Default"  mean  individually
         collectively,  and  interchangeably  any of the events of  default  set
         forth in this Agreement in the default section of this Agreement.

         Grantor. The word "Grantor" means Capital Bank Corporation.

         Guarantor.  The  word  "Guarantor"  means  any  guarantor,  surety,  or
         accommodation  party of any or all of the  Indebtedness,  and,  in each
         case, Grantor's successors,  assigns,  heirs personal  representatives,
         executors and  administrators  of any guarantor surety or accommodation
         party.

         Guaranty. The word "Guaranty" means the guaranty from Guarantor, or any
         other  guarantor  endorser  surety or  accommodation  party to  Lender,
         including without limitation a guaranty of all or part of the Note.

         Income and Proceeds.  The words "Income and Proceeds"  mean all present
         and future income,  proceeds,  earnings,  increases,  and substitutions
         from or for the Collateral of every kind and nature,  including without
         limitation all payments,  interest, profits,  distributions,  benefits,
         rights,  options,  warrants.,  dividends  stock dividends stock splits,
         stock rights,  regulatory dividends  subscriptions,  monies, claims for
         money  due  and  to  become  due,  proceeds  of  any  insurance  on the
         Collateral,  shares  of stock of  different  par  value or no par value
         issued  in   substitution  or  exchange  for  shares  included  in  the
         Collateral,  and all other  property  Grantor is entitled to receive on
         account of such Collateral including accounts, documents,  instruments,
         chattel paper, and general intangibles.

         Indebtedness.  The word "Indebtedness" means the indebtedness evidenced
         by the Note or Related Documents,  including all principal and interest
         together with all other

                                       12
<PAGE>

         indebtedness  and costs and expenses for which  Grantor is  responsible
         under this Agreement or under any of the Related Documents.

         Lender.   The  word  "Lender"  means  First   Tennessee  Bank  National
         Association, its successors and assigns.

         Note.  The  word  "Note"  means  the  Note  executed  by  Capital  Bank
         Corporation in the principal  amount of  $30,000,000.00  dated December
         27, 2005,  together with all renewals of extensions of modifications of
         refinancings of  consolidations  of and  substitutions  for the note or
         credit agreement.

         Obligor.  The  word  "Obligor"  means  individually,  collectively  and
         interchangeably without limitation any and all persons obligated to pay
         money or to perform some other act under the Collateral.

         Property.  The word  "Property"  means all of Grantor's right title and
         interest in and to all the  Property as  described  in the  "Collateral
         Description" section of this Agreement.

         Related  Documents.  The words "Related  Documents" mean all promissory
         notes, credit agreements,  loan agreements,  environmental  agreements,
         guaranties,  security agreements,  mortgages,  deeds of trust, security
         deeds,  collateral  mortgages and all other instruments  agreements and
         documents,  whether now or hereafter  existing  executed in  connection
         with the Indebtedness.

         Stock.   The  word  "Stock"  means   individually,   collectively   and
         interchangeably  Grantor's  stock, and other securities to pledge under
         this   Agreement   together  with  any  and  all   additions   thereto,
         substitutions therefor or replacements thereof.

GRANTOR HAS READ AND  UNDERSTOOD ALL THE  PROVISIONS OF THIS  COMMERCIAL  PLEDGE
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED DECEMBER 27 2005

GRANTOR:

Capital Bank Corporation



By: /s/ B. Grant Yarber                      By:  /s/ William R. Lampley
    --------------------------------             -----------------------=-------
    B. Grant Yarber, President & CEO             William R. Lampley, Interim CFO
    of Capital Bank Corporation                  of Capital Bank Corporation


                                       13