Document:

OFFICE LEASE

NORTH CAROLINA:
WAKE COUNTY:

         THIS LEASE,  made this the day of , 199 , by and between  Beacon Center
Properties,  LLC , a North Carolina Limited  Liability  Corporation  hereinafter
"Landlord" and Capital Bank, a North Carolina Banking  Corporation,  hereinafter
(whether one or more) "Tenant":

                              W I T N E S S E T H :

         Upon the terms and conditions hereinafter set forth, Landlord leases to
Tenant and Tenant leases from Landlord  property to be constructed,  referred to
as the Premises, all as follows:

         1. PREMISES. The property hereby leased to Tenant is that area shown on
Exhibit A hereto attached, which consists of approximately 4,000 rentable square
feet,  which is located in what is sometimes  called the Beacon Center Building,
located at 8816 Six Forks Road,  Suite 100,  Wake County,  North  Carolina  (the
"Premises")  drive-through  area as set forth in Exhibit A. and a drive  through
area set forth in Exhibit A-1.

         The usable area of the Premises, 3,478 square feet, shall be multiplied
by the core area factor of 1.15 to  determine  the  rentable  square  footage as
referred to above.

         2. TERM.  This  Lease Term is for 120  months,  and shall  commence  on
August 1, 2000, or the date Tenant takes  occupancy,  whichever is earlier,  and
shall terminate  (unless  extended as herein  provided) at noon on July 31, 2010
("Termination  Date");  provided,  however,  the Commencement  Date shall not be
earlier  than the date the  premises  are  substantially  complete  for Tenant's
beneficial   occupancy  and  a   certificate   of  occupancy  is  received  (the
"Commencement  Date").  Landlord  will provide  Tenant  access to the Premises a
minimum of four (4) weeks prior to the Commencement Date for installation of its
vault, ATM and other equipment,  furniture,  fixtures, and to wire and cable its
computer network and phone system throughout the Premises. In the event Landlord
shall permit Tenant to take possession of the Premises prior to the Commencement
Date  referenced  above,  all the terms and  conditions of this Lease except for
Rent shall apply.

         If Landlord,  for any reason  whatsoever,  cannot deliver possession of
the Premises to Tenant on the Commencement Date, this Lease shall not be void or
voidable,  no  obligation  of Tenant  shall be  affected  thereby,  and  neither
Landlord nor Landlord's  agents shall be liable to Tenant for any loss or damage
resulting from the delay in delivery of possession;  provided,  however, that in
such event,  the  Commencement  Date and Termination Date of this Lease, and all
other dates that may be affected by their change, shall be revised to conform to
the date of Landlord's delivery of possession to Tenant. The above,  however, is
subject to the provision that the period  permitted for the delay of delivery of
possession of the Premises shall not exceed 120 days from the Commencement  Date
set forth in the first line of this Paragraph 2 (except that those delays beyond
Landlord's  control  or  caused  by  Tenant  ["Delays"]  shall  be  excluded  in
calculating  such  period).  If the time for  possession  exceeds the  permitted
period,  Tenant may terminate this Lease and all of its obligations hereunder by
written notice to Landlord;  provided,  that written notice shall be ineffective
if given after Tenant takes possession of any part of the Premises,  or if given
more than 130 days after August 1, 2000 the original  Commencement Date plus the
time of any Delays.  Unless  expressly  otherwise  provided  herein,  Rent shall
commence on the earlier of: (a) the  Commencement  Date;  (b)  occupancy  of the
Premises by Tenant;  (c) the date Landlord has the Premises  ready for occupancy
by Tenant as set forth above, as such date is adjusted under the Work Letter, if
any, attached hereto; or (d) the date after the Commencement Date Landlord could
have had them ready had there been no Delays attributable to Tenant.  Unless the
context otherwise so requires, the term "Rent" as used herein includes both Base
Rent and Additional Rent as set forth in Paragraphs 4 and 5.

         If the Termination  Date, as determined  herein,  does not occur on the
last day of a calendar month, Landlord, at its option, may extend the Lease Term
by the number of days  necessary to cause the  Termination  Date to occur on the
last day of the last  calendar  month of the Lease Term.  Tenant  shall pay Base
Rent and Additional  Rent for such  additional days at the same rate payable for
the portion of the last calendar month immediately preceding such extension. The
Commencement  Date, Lease Term (including any extension by Landlord  pursuant to
this  Paragraph  2) and  Termination  Date shall be set forth in a  Commencement
Letter or Commencement  Agreement prepared by Landlord and executed by Tenant in
accordance with the provisions of this Paragraph 2.

         3. USE. Tenant may use the Premises only for retail banking,  and other
financial  services and general  office  purposes,  but for no other use without
Landlord's  prior written  consent,  not to be unreasonably  withheld.  Landlord
agrees not to Lease any  portion  of the  Premises  to a thrift,  bank or credit
union.  Further,  Landlord agrees not to lease any portion of the first floor of
the Premises to a retail  mortgage  company.  Tenant shall never make any use of
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the  Premises  which  is  in  violation  of  any  governmental  laws,  rules  or
regulations,  whether now existing or hereafter enacted, nor may Tenant make any
use of the Premises not permitted,  or otherwise prohibited,  by any restrictive
covenants  which apply to the Premises.  Tenant may not make any use which is or
may be a nuisance or trespass,  which increases the fire insurance premiums,  or
makes such insurance unavailable to Landlord on the Building. In the event of an
increase in Landlord's  fire insurance  premiums which results from Tenant's use
or occupancy of the Premises,  if Tenant does not pay Landlord,  on demand,  the
amount of such  increase,  Landlord  may treat such use as a default  hereunder.
Landlord  acknowledges  that  Tenant's  proposed  use as a retail  bank does not
affect Landlord's fire insurance premiums.

         4. BASE  RENT.  All Rent  payable by Tenant  shall be without  previous
demand or notice  therefor by Landlord  and  without set off or  deduction.  The
Minimum  Base Rent for the Term  shall be the sum of  $1,227,093.64,  which Rent
shall be payable in accordance  with the Rent Schedule in paragraph 25,  payable
in advance on or before the first day of each calendar  month during the Term of
this  Lease,  unless the Term  commences  on a day other than the first day of a
calendar  month, in which event prorated Rent at the above rate until the end of
the month in which the Lease  Term  commences  shall be due and  payable  on the
Commencement Date. Landlord agrees no more than two (2) times per calendar year,
to provide  Tenant with written  notice if Landlord does not receive the monthly
Rent by the tenth  (10th)  calendar  day after Rent is due.  In addition to such
remedies  as may be  provided  under the Default  provisions  of this Lease,  if
Tenant  fails to make any  payment  of Rent or other  sums  required  to be paid
hereunder  more than two times per calendar year and more than ten (10) calendar
days  after the date when  payment  is due,  Tenant  shall pay to  Landlord,  as
Additional  Rent, a late charge of twelve percent (12%) per annum of such amount
remaining  unpaid beginning on the first day of the month following the calendar
month in which it is due,  until such amount is paid;  provided,  however,  that
should such late charge at any time violate any applicable  law, the late charge
shall be reduced to the highest rate permitted by law. Landlord's  acceptance of
any rent after it has become due and  payable  shall not excuse any delays  with
respect to future  rental  payments  or  constitute  a waiver of any  Landlord's
rights under this lease.

Tenant  shall also pay  Landlord  the sum of $50.00 for each and every  check of
Tenant returned for insufficient funds.

         5.  ADDITIONAL RENT.  Intentionally deleted.

         6.  SERVICES BY LANDLORD.  Provided  that Tenant is not then in default
beyond  applicable  cure  period,  Landlord  shall cause to be  furnished to the
Premises,  in common with other tenants,  during  business hours of 7:30 A.M. to
6:30 P.M.,  Monday  through  Friday  (excluding  Christmas  Day,  New Years Day,
Thanksgiving Day,  Memorial Day, Labor Day and Independence  Day), and Saturdays
from 8:00 A.M. to 1:00 P.M., the following  services;  janitorial services (once
per working day after normal working  hours),  water for drinking,  lavatory and
toilet purposes,  operatorless elevator service and heating and air conditioning
for the  reasonably  comfortable  use and  occupancy of the  Premises,  provided
heating  and  cooling  conforming  to any  governmental  regulation  prescribing
limitations thereon shall be deemed to comply with this service.  Landlord shall
furnish the Premises with  electricity for the maintenance of building  standard
fluorescent lighting composed of 2' x 4' fixtures.  Incandescent fixtures, table
lamps,  all lighting  other than the  aforesaid  building  standard  fluorescent
light,  dimmers and all lighting  controls other than controls for the aforesaid
building  standard  fluorescent   lighting  shall  be  serviced,   replaced  and
maintained at Tenant's  expense.  Landlord  shall also furnish the Premises with
electricity  for  lighting  for  the  aforesaid  building  standard  fluorescent
lighting and for the  operation  of general  office  machines,  such as electric
typewriters, desk top computers, word processing equipment, dictating equipment,
adding machines and calculators,  and general service non-production type office
copy  machines.  Landlord shall have the right to enter and inspect the Premises
and all electrical  devices therein from time to time,  upon reasonable  notice,
provided  that  Landlord  shall have no obligation to provide more than four (4)
watts per usable square foot of electricity for convenience  outlets serving the
Premises.  All additional costs resulting from Tenant's  extraordinary  usage of
heating,  air conditioning or electricity shall be paid by Tenant upon demand as
Additional Rent for each month or portion thereof,  and Tenant shall not install
equipment with unusual demands for any of the foregoing without Landlord's prior
written  consent,  which  Landlord  may  withhold if it  determines  that in its
opinion such equipment may not be safely used in the Premises or that electrical
service is not adequate therefor. If heat generating machines or equipment shall
be used in the Premises by Tenant  which  significantly  affect the  temperature
otherwise maintained by the heating and air conditioning system,  Landlord shall
have the right to install  supplemental air  conditioning  units in the Premises
and the cost thereof,  including the cost of engineering and  installation,  and
the cost of  operation  and  maintenance  thereof,  shall be paid by Tenant upon
demand by Landlord.  Landlord shall further provide a reasonable pro rata amount
of  unreserved  free  parking  (no less than four (4) per one  thousand  (1,000)
usable square feet),  in common with the other tenants,  for Tenant's  employees
and visitors.  Landlord agrees to designate ten (10) visitor parking spaces near
the main entrance of the Building.  Landlord will be responsible  for the prompt
removal  of any snow  and ice in the  parking  lot and  walkways  servicing  the
Demised Premises.

         So long as Landlord acts  reasonably and in good faith,  there shall be
no abatement or reduction of Rent by reason of any of the foregoing services not
being continuously provided to Tenant.

         Tenant shall report promptly to Landlord any defective  condition in or
about the Premises known to Tenant.  Except in cases of Landlord's negligence or
willful misconduct, Landlord shall not be liable to Tenant for any damage caused

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to Tenant  and its  property  due to the  Building  or any part or  appurtenance
thereof  being  improperly  constructed  or being or becoming out of repair,  or
arising  from  the  leaking  of  gas,  water,  sewer  or  steam  pipes,  or from
electricity.

         7. TENANT'S  ACCEPTANCE AND MAINTENANCE OF PREMISES;  LANDLORD'S DUTIES
AND RIGHTS.  Tenant on occupancy of the Premises  represents to Landlord that it
has examined and inspected the same,  finds the Premises to be as represented by
Landlord and  satisfactory for Tenant's  intended use, and constitutes  Tenant's
acceptance  "as is"  excluding  punch list items which will be completed  within
thirty (30) days of occupancy.  Landlord makes no  representation or warranty as
to the condition of said Premises. Tenant shall deliver at the end of this Lease
each and every part of the Premises in as good repair and  condition as received
at the Commencement Date,  ordinary wear and tear and damage by insured casualty
excepted.  Tenant,  at Tenant's sole cost, will have the right to install an ATM
kiosk,  vault  and  safe  at a  location  acceptable  to  Landlord.  Upon  Lease
Expiration,  Tenant, at its option may either remove the vault in it's entirety,
or leave the vault in it's entirety.  All other Tenant fixtures,  except for the
ATM machine,  will remain as part of the Premises.  Tenant  shall:  (A) keep the
Premises and fixtures in good order;  (B) make repairs and  replacements  to the
Premises or Building  needed because of Tenant's  misuse or primary  negligence;
(C) repair and replace special equipment or decorative treatments above Building
Standard  installed by or at Tenant's  request and that serve the Premises only,
except (i) to the  extent the  repairs  or  replacements  are needed  because of
Landlord's  or  another  tenant's  misuse or primary  negligence,  which are not
covered by  Tenant's  insurance,  or the  insurance  Tenant is required to carry
under this Lease,  whichever coverage is greater, or (ii) if this Lease is ended
because of casualty loss or condemnation; and (D) not commit waste and (E) shall
comply  with all  federal,  state and local  laws and  regulations  except as to
pre-existing defects,  violations or conditions.  Tenant, however, shall make no
structural or exterior  alterations  to the  Premises.  Except for minor work or
interior  cosmetic  alterations,  if Tenant requires  alterations,  Tenant shall
provide   Landlord  or  Landlord's   managing  agent  with  a  complete  set  of
construction  drawings,  and such agent shall then  determine the actual cost of
the work to be done.  Landlord  will  provide  three (3) bids.  Tenant  may then
either  agree to pay  Landlord to have the work done or withdraw its request for
alterations.  At the  time  Tenant  makes a  written  request  for  alterations,
Landlord will determine if Tenant must remove the improvements at the end of the
term,  at Tenant's sole  expense,  and restore the Demised  Premises to the same
condition as existed at the commencement of the term, ordinary wear and tear and
damage by  insured  casualty  only  excepted.  Landlord,  however,  may elect to
require Tenant to leave  alterations  performed for Tenant unless at the time of
such alterations  Landlord agreed in writing they could be removed on expiration
of this Lease.

         Except for  repairs and  replacements  that Tenant must make under this
Paragraph 7, Landlord shall pay for and make all other repairs and  replacements
to the  Premises,  common areas and Building  (including  Building  fixtures and
equipment, roof and parking lot).

         Except for non-standard items installed for Tenant's sole use, Landlord
shall make the repairs and  replacements to maintain the Building in a condition
comparable to other first class office buildings in the Metropolitan  area where
the Premises are located.  This maintenance shall include the roof,  foundation,
exterior walls,  interior structural walls, all structural  components,  and all
exterior (outside of walls) systems, such as mechanical,  electrical,  HVAC, and
plumbing.  Repairs or  replacements  required  under  Paragraph  7 shall be made
within a reasonable  time  (depending on the nature of the repair or replacement
needed) after  receiving  notice from Tenant or having  actual  knowledge of the
need for a repair or replacement.

         Notwithstanding  anything  to the  contrary  set  forth  above  in this
Paragraph 7, if Tenant does not perform its maintenance  obligations in a timely
manner as set forth in this Lease,  commencing  the same within five (5) days of
receipt of notice  from  Landlord  specifying  the work  needed  and  thereafter
diligently  and  continuously  pursuing  completion of  unfulfilled  maintenance
obligations,  Landlord shall have the right, but not the obligation,  to perform
such  maintenance,  and any reasonable  amounts so expended by Landlord shall be
paid by Tenant to Landlord  within thirty (30) days after demand,  with interest
at the maximum  rate  allowed by law (or the rate of fifteen  percent  (15%) per
annum, whichever is less) from the date of expenditure through the date paid.

         8. DAMAGES TO PREMISES.  If the Premises shall be partially  damaged by
fire or other  casualty  insured under  Landlord's  insurance  policies,  and if
Landlord's lender(s) shall permit insurance proceeds paid as a result thereof to
be so used, then upon receipt of the insurance proceeds,  Landlord shall, except
as otherwise provided herein, promptly repair and restore the same (exclusive of
improvements made by Tenant,  Tenant's trade fixtures,  decorations,  signs, and
contents unless caused by Landlord's negligence or misconduct)  substantially to
the condition  thereof  immediately  prior to such damage or destruction.  If by
reason of such  occurrence:  (a) the Premises are rendered wholly  untenantable;
(b) the  Premises are damaged in whole or in part as a result of a risk which is
not covered by Landlord's  insurance  policies;  (c) Landlord's  lender does not
permit a sufficient amount of the insurance  proceeds to be used for restoration
purposes;  (d) the Premises are damaged in whole or in part during the last year
of the Lease  Term;  or (e) the  building  containing  the  Premises  is damaged
(whether or not the Premises are damaged) to an extent of fifty percent (50%) or
more of the fair market value  thereof,  Landlord may elect either to repair the
damage as aforesaid,  or to cancel this Lease by written notice of  cancellation
given to Tenant  within sixty (60) days after the date of such  occurrence,  and
thereupon  this Lease shall  terminate.  Tenant shall vacate and  surrender  the
Premises to  Landlord  within  thirty (30) days after  receipt of such notice of
termination. In addition, Tenant may also terminate this Lease by written notice
given to Landlord at any time between the one hundred  eighty-first  (181st) and
one hundred ninety-sixth (196th) days after the occurrence of any such casualty,
if  Landlord  has  failed  to  restore  the  damaged  portions  of the  Building

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(including the Premises)  within one hundred eighty (180) days of such casualty.
However,  if Landlord  is  prevented  by causes  beyond its  reasonable  control
(including,  without  limitation,  those  encompassed in the meaning of the term
force  majeure)  ["Delays"],  from  completing the  restoration  within said one
hundred eighty (180) day period,  and if Landlord  provides  Tenant with written
notice of such  cause  for  delay  within  fifteen  (15) days of the  occurrence
thereof,  said notice to contain the reason for delay and a good faith  estimate
of the  period  of the  delay  caused  thereby,  then  Landlord  shall  have  an
additional  period  beyond said one  hundred  eighty  (180) days,  equal to such
delays in which to restore the damaged areas of the Building; and Tenant may not
elect to  terminate  this  Lease  until  said  additional  period  required  for
completion has expired with the Building not having been substantially restored.
In such case, Tenant's fifteen (15) day notice of termination period shall begin
to run upon the expiration of Landlord's  additional  period for restoration set
forth  in the  preceding  sentence.  Upon  the  termination  of  this  Lease  as
aforesaid,  Tenant's liability for the Rent and other charges reserved hereunder
shall cease as of the effective date of the termination of this Lease,  subject,
however, to the provisions for abatement of Rent hereinafter set forth.

         Unless this Lease is terminated  as aforesaid,  this Lease shall remain
in full force and effect, and upon Landlord's determination that it will restore
the  Premises,  Tenant  shall  promptly  repair,  restore,  or replace  Tenant's
improvements,  trade fixtures,  decorations, signs, and contents in the Premises
in a manner and to at least a condition  equal to that  existing  prior to their
damage or  destruction,  and the proceeds of all insurance  carried by Tenant on
said property  shall be held in trust by Tenant for the purposes of such repair,
restoration, or replacement.

         If, by reason of such fire or other casualty, the Premises are rendered
wholly untenantable, the Rent and other charges payable by Tenant shall be fully
abated,  or if only  partially  damaged  and Tenant can  reasonably  continue to
conduct business, such Rent and other charges shall be abated proportionately as
to that portion of the Premises rendered  untenantable,  in either event (unless
the Lease is  terminated,  as aforesaid)  from the date of such  casualty  until
fifteen  (15) days  after the  Premises  have been  substantially  repaired  and
restored,  and Tenant has  received  notice  from  Landlord,  or until  Tenant's
business  operations are restored in the entire Premises,  whichever shall first
occur.  Tenant shall continue the operation of Tenant's business in the Premises
or any part  thereof  not so  damaged  during  any  such  period  to the  extent
reasonably  practicable  from the  standpoint  of prudent  business  management.
However,  if such damages or other casualty shall be caused by the negligence or
other  wrongful  conduct  of  Tenant  or  of  Tenant's  subtenants,   licensees,
contractors,  or invitees, or their respective agents or employees,  there shall
be no abatement of Rent or other  charges.  Except for the abatement of the Rent
and other charges  hereinabove  set forth,  Tenant shall not be entitled to, and
hereby waives,  all claims against  Landlord for any  compensation or damage for
loss  of use  of  the  whole  or  any  part  of  the  Premises  and/or  for  any
inconvenience or annoyance occasioned by any such damage,  destruction,  repair,
or restoration.

         9. ASSIGNMENT - SUBLEASE.  Tenant may not assign or encumber this Lease
or its interest in the Premises arising under this Lease, and may not sublet any
part or all of the Premises  without the written  consent of Landlord  first had
and  obtained,  such  consent not to be  unreasonably  witheld or  delayed.  Any
assignment or sublease shall not relieve Tenant of any or all of its obligations
hereunder.  For the purpose of this Paragraph 9, the word "assignment"  shall be
defined and deemed to include the following: (i) if Tenant is a partnership, the
withdrawal or change,  whether voluntary,  involuntary or by operation of law of
partners  owning  thirty  percent  (30%)  or  more  of the  partnership,  or the
dissolution of the partnership; (ii) if Tenant consists of more than one person,
an assignment,  whether voluntary,  involuntary,  or by operation of law, by one
person  to one of the  other  persons  that is a  Tenant;  (iii) if  Tenant is a
corporation,  any dissolution or  reorganization of Tenant, or the sale or other
transfer of a  controlling  percentage  (hereafter  defined) of capital stock of
Tenant other than to an affiliate or subsidiary or the sale of fifty-one percent
(51%) in value of the  assets of Tenant;  (iv) if Tenant is a Limited  Liability
Company,  the change of members  whose  interest in the Company is fifty percent
(50%) or more. The phrase  "controlling  percentage" means the ownership of, and
the right to vote,  stock  possessing  at least  fifty-one  percent (51%) of the
total  combined  voting power of all classes of Tenant's  capital  stock issued,
outstanding  and entitled to vote for the election of directors,  or such lesser
percentage  as is required  to provide  actual  control  over the affairs of the
corporation.  Acceptance of Rent by Landlord after any non-permitted  assignment
shall not constitute approval thereof by Landlord. Notwithstanding the foregoing
provisions of this Paragraph 9, Tenant may assign or sublease part or all of the
Premises without  Landlord's consent to: (i) any corporation or partnership that
controls, is controlled by, or is under common control with, Tenant; or (ii) any
corporation  resulting  from the merger or  consolidation  with Tenant or to any
entity that  acquires all of Tenant's  assets as a going concern of the business
that is being conducted on the Premises, as long as the assignee or sublessee is
a bona fide entity and assumes the obligations of Tenant, and continues the same
use as  permitted  under  Paragraph  3.  However,  Landlord  must be given prior
written notice of any such assignment or subletting,  and failure to do so shall
be a default hereunder. Landlord will never consent to an assignment or sublease
that might result in a use that conflicts with the rights of an existing Tenant.
Notwithstanding the foregoing,  Tenant will not be required to obtain Landlord's
consent  to  sublease  a  portion  of its  space  to an  insurance,  securities,
equipment leasing, or investment banking company provided each sublease does not
exceed more than 500 usable square feet.

         In no event shall this Lease be assignable by operation of any law, and
Tenant's rights  hereunder may not become,  and shall not be listed by Tenant as
an asset under any bankruptcy,  insolvency or reorganization proceedings. Tenant
is not,  may not  become,  and shall  never  represent  itself to be an agent of
Landlord,  and Tenant acknowledges that Landlord's title is paramount,  and that
it can do nothing to affect or impair Landlord's title.

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         If this Lease  shall be assigned  or the  Premises or any portion  that
exceeds 500 usable  square  feet  sublet by Tenant at a rental that  exceeds the
rentals  to be paid to  Landlord  hereunder,  attributable  to the  Premises  or
portion  thereof so assigned or sublet,  then one-half  (1/2) of any such excess
less the cost of  tenant  improvements,  leasing  commissions  and  other  costs
associated  with the sublease or  assignment,  shall be paid over to Landlord by
Tenant.

         10. TENANT'S COMPLIANCE-INSURANCE REQUIREMENTS. Tenant shall obtain and
maintain, at its own cost and expense, throughout the term of this agreement the
following coverage's and limits:

         Throughout the Term of this Lease,  Tenant at its sole cost and expense
shall keep or cause to be kept for its' benefit,  public  liability and property
damage  insurance with combined single limit coverage of at least $1,000,000 and
a $5,000,000  umbrella  policy,  which policies  insure against all liability of
Tenant,  Tenant's  authorized  representatives,  and anyone  for whom  Tenant is
responsible, arising out of and in connection with Tenant's use of the Premises,
and  which  shall  insure  Tenant's  performance  of  the  indemnity  provisions
contained  herein.  Tenant shall also insure its personal  property and fixtures
located  in the  Premises  and any  improvements  made by Tenant  for their full
reasonable  insurable  value,  and except for cases of Landlord's  negligence or
misconduct,  Tenant shall neither have, nor make, any claim against Landlord for
any loss or damage to the same, regardless of the cause thereof.

         Landlord shall keep the Building,  including the improvements,  insured
against damage and destruction by fire, earthquake,  vandalism, and other perils
in the amount of ninety five percent (95%) of the full replacement  value of the
Building, as the value may exist from time to time.

         Each party shall keep its personal  property and trade  fixtures in the
Premises and Building  insured with "all risks"  insurance in an amount to cover
ninety five percent (95%) of the replacement  cost of the property and fixtures.
Tenant  shall  also  keep  any  non-Building-standard  improvements  made to the
Premises at  Tenant's  request  insured to the same degree as Tenant's  personal
property.

All policies  discussed above shall be written in insurance  companies  licensed
and admitted to do business in the State(s) of North Carolina and rated no lower
than AVIII in the most recent  edition of the AM Best's  Rating Guide and BBB in
Standard & Poor's.  All  policies  discussed  above shall be endorsed to provide
that in the event of a cancellation,  non-renewal or material modification,  the
owner and managing  agent shall receive thirty (30) days prior written notice by
certified mail, return receipt requested.

Compliance Documentation. The Tenant shall furnish owner and managing agent with
copies of  Certificates  of Insurance  evidencing  compliance with all insurance
provisions  noted  above,  no later than seven (7) days prior to the  expiration
date of all policies.  All Certificates or policy  termination  notices shall be
delivered to:

                           Beacon Center Properties, LLC
                           100 Sawmill Road, Suite 200
                           Raleigh, NC  27615

                           Attn: Kathleen Stines

Hold  Harmless/Indemnification  Provision.  The Landlord or Tenant shall, to the
fullest extent permitted by law, at its own cost and expense,  defend, indemnify
and  hold  each  other,  their  directors,   officers,   employees,  agents  and
representatives  harmless from any and all claims,  loss  (including  reasonable
attorney's  fees,  witness fees and all court costs),  damages,  expense and any
liability resulting from injury and/or death of any person, or damage to or loss
of any property arising out of any negligent or wrongful act, error, omission or
breach of this lease in connection with the premises  occupied and operations of
the  Landlord  or  Tenant  as the case may be and their  employees,  agents  and
representative.

Failure to comply  with any of the  insurance  provisions  by Landlord or Tenant
shall result in a breach of this agreement by the Tenant.

         11.   SUBORDINATION-ATTORNMENT  -  LANDLORD  FINANCING.  Providing  the
mortgagee agrees not to disturb Tenant's possession  hereunder so long as Tenant
is in compliance  with this Lease,  Tenant agrees that this Lease will be either
subordinate  or superior to any mortgage  heretofore  or  hereafter  executed by
Landlord covering the Premises, depending on the requirements of such mortgagee.
Tenant  within ten (10) days of receipt of request to do so from Landlord or its
mortgagee will execute such agreement  making this Lease superior or subordinate
and  containing  such  other  agreements  and  covenants  on  Tenant's  part  as
Landlord's  mortgagee may request,  and will agree to attorn to said  mortgagee.
Further,  Tenant  agrees to execute  within ten (10) business days of receipt of
request therefor,  and as often as requested,  estoppel certificates  confirming
any  factual  matter  requested  therein  which is true and is  within  Tenant's
knowledge  regarding  this  Lease,  the  Premises,   or  Tenant's  use  thereof,
including, but not limited to date of occupancy, termination date of this Lease,
the amount of Rent due and date to which Rent is paid, whether or not Tenant has
any  defense  or offsets to the  enforcement  of this Lease or the Rent  payable
hereunder or knowledge of any default or breach by Landlord, and that this Lease
together  with any  modifications  or  amendments  is in full force and  effect.
Tenant shall attach to such estoppel  certificate copies of all modifications or
amendments.

                                       5
<PAGE>
         Tenant  agrees to give any  mortgagee of Landlord  which has provided a
non-disturbance  agreement to Tenant,  notice of, and a  reasonable  opportunity
(which  shall in no event be more than  thirty  (30) days after  written  notice
thereof is  delivered  to  mortgagee  as herein  provided)  to cure any Landlord
default  hereunder;  and Tenant  agrees to accept  such cure if effected by such
mortgagee.  No termination of this Lease by Tenant shall be effective until such
notice has been given and the cure period has expired without the default having
been cured.  Further Tenant agrees to permit such mortgagee (or other  purchaser
at  any  foreclosure  sale),  and  its  successors  and  assigns,  on  acquiring
Landlord's interest in the Premises and the Lease, to become substitute Landlord
hereunder,  with  liability  only for such Landlord  obligations as accrue after
Landlord's  interest  is so  acquired,  except  as to  pre-existing  restoration
obligations or obligations  necessary to permit Tenant's  peaceful  enjoyment of
the Premises. Tenant agrees to attorn to any successor Landlord.

         12.  SIGNS.  Tenant  may not  erect,  install  or  display  any sign or
advertising  material upon the Building exterior,  the exterior of the Premises,
or the  exterior  walls  thereof,  or in any window  therein,  without the prior
written  consent  of  Landlord,  which  consent  shall  not  to be  unreasonably
withheld.  Notwithstanding  the forgoing,  Tenant will have the right to install
two internally illuminated green and white signs on the exterior of the Building
substantially  similar to the  specifications  shown in Exhibit B. Tenant at its
option  may  position  the sign on the  opposite  corner  from  what is shown on
Exhibit B. The cost to install and maintain the Tenant's  exterior signs will be
at the Tenant's sole cost and expense. All signage will require Landlord's prior
reasonable  written  consent on the design and will be subject to all  municipal
approvals.

         Landlord  shall  furnish,  install  and  maintain a  building  standard
directory  at a location  in or near the lobby.  In  addition,  Tenant  may,  at
Tenant's option and cost, install a non-building standard suite signage which is
subject  to  the  approval  of  the  Landlord,   which  approval  shall  not  be
unreasonably withheld or delayed.

         Tenant will provide at Tenant's  cost,  ground  directional  signage to
direct bank customers to the drive-through and ATM facility. Design and location
shall require the approval of Landlord, which approval shall not be unreasonably
withheld or delayed.

         Landlord shall provide a panel on the exterior  building's  ground sign
which shall be used to identify Tenant's name, logo and its 24 hour ATM service.
All costs  associated  with the  production  and  installation  of Tenant's logo
and/or  signage on the  exterior  ground sign will be at Tenant's  expense.  All
costs  associated with the  installation and maintenance of the ground sign will
be at Landlord's expense.

         13. ACCESS TO PREMISES.  Landlord shall have the right with  reasonable
notice (except in cases of  emergency),  either itself or through its authorized
agents,  to enter the Premises at all  reasonable  times for  inspection to show
prospective  tenants if within one hundred eighty (180) days of the  termination
date as extended by any exercised option,  to allow  inspection,  by mortgagees,
and to make such repairs,  alterations or changes as Landlord  deems  necessary.
Landlord  warrants that it will not  unreasonably  disturb  Tenants  possession.
Tenant, its agents,  employees,  invitees,  and guests,  shall have the right of
ingress and egress to common and public areas of the Building, provided Landlord
by reasonable  regulation may control such access for the comfort,  convenience,
safety and  protection of all tenants in the  Building,  or as needed for making
repairs and alterations.

         14. DEFAULT. If Tenant: (i) fails to pay within ten (10) days any Rent,
or any other sum of money which  Tenant is obligated to pay, as provided in this
Lease,  more than two (2) times in any  twelve  (12)  consecutive  month  period
following notice;  or (ii) breaches any other agreement,  covenant or obligation
herein set forth and such  breach  shall  continue  and not be  remedied  within
thirty (30) days after Tenant receives written notice  specifying the breach, or
if such breach cannot, with due diligence, be cured within said period of thirty
(30) days and Tenant does not within said  thirty (30) day period  commence  and
thereafter  with  reasonable  diligence  completely cure the breach within sixty
(60)  days  after  notice or as soon as  reasonably  possible  after  diligently
pursuing;  or (iii)  files (or has filed  against  it and not  stayed or vacated
within sixty (60) days after filing) any petition or action for relief under any
creditor's law (including bankruptcy, reorganization, or similar action), either
in state or federal  court;  or (iv) makes any transfer in fraud of creditors as
defined in Section 548 of the United States  Bankruptcy Code (11 U.S.C.  548, as
amended or replaced),  has a receiver  appointed for its assets (and appointment
shall not have been stayed or vacated  within  thirty  (30)  days),  or makes an
assignment for benefit of creditors;  then Tenant shall be in default hereunder,
and, in addition to any other lawful right or remedy which it may have, Landlord
may do the following: (i) terminate this Lease; (ii) repossess the Premises, and
with or without  terminating,  relet the same at such amount as  Landlord  deems
reasonable;  and if the  amount  for  which the  Premises  is relet is less than
Tenant's Rent and all other obligations of Tenant to Landlord hereunder,  Tenant
shall immediately pay the difference on demand to Landlord,  but if in excess of
Tenant's Rent, and all other obligations of Tenant hereunder,  the entire amount
obtained  from such  reletting  shall belong to  Landlord,  free of any claim of
Tenant thereto; All reasonable expenses of Landlord in repairing,  restoring, or
altering the  Premises for  reletting as general  office  space,  together  with
leasing fees and all other expenses in seeking and obtaining a new Tenant, shall
be charged to and be a liability  of Tenant.  Landlord's  reasonable  attorneys'
fees in pursuing any of the foregoing remedies, or in collecting any Rent due by
Tenant hereunder, shall be paid by Tenant.

         Tenant  further  agrees that  Landlord  may obtain an order for summary
ejectment  from  any  court  of  competent  jurisdiction  without  prejudice  to
Landlord's rights to otherwise collect rents from Tenant.

                                       6
<PAGE>
         All rights and remedies of Landlord are cumulative, and the exercise of
any one shall  not be an  election  excluding  Landlord  at any other  time from
exercise of a different or inconsistent  remedy.  No exercise by Landlord of any
right or remedy granted herein shall  constitute or effect a termination of this
Lease unless Landlord shall so elect by written notice delivered to Tenant.

         No waiver by Landlord of any covenant or  condition  shall be deemed to
imply or constitute a further waiver of the same at a later time, and acceptance
of Rent by  Landlord,  even with  knowledge  of a default by  Tenant,  shall not
constitute a waiver of such default.

         15.  PROPERTY  OF  TENANT.  Tenant  shall  timely pay any and all taxes
levied or assessed  against or upon  Tenant's  equipment,  fixtures,  furniture,
leasehold improvements and personal property located in the Premises. Tenant (if
not in default hereunder), prior to the expiration date of this Lease may remove
all fixtures and equipment which it has placed in the Premises, providing Tenant
repairs  all  damages  caused by such  removal.  If Tenant  does not  remove its
property from the Premises upon  termination (for whatever cause) of this Lease,
such property shall be deemed  abandoned by Tenant,  and Landlord may dispose of
the same in whatever manner Landlord may elect without any liability to Tenant.

         16.  EMINENT  DOMAIN.  If all of the Premises,  or such part thereof as
will make the same  unusable for the  purposes  contemplated  by this Lease,  be
taken under the power of eminent domain (or a conveyance in lieu thereof),  then
this Lease shall  terminate as of the date possession is taken by the condemnor,
and Rent shall be adjusted  between Landlord and Tenant as of such date. If only
a portion of the Premises is taken and Tenant can continue use of the remainder,
then  this  Lease  will  not  terminate,  but  Rent  shall  abate  in a just and
proportionate  amount to the loss of use occasioned by the taking.  Tenant shall
have no right or claim to any part of any award made to or  received by Landlord
for any taking other than its personal property.

         17. QUIET  ENJOYMENT.  If Tenant  complies with each of its obligations
hereunder,  it shall  peacefully  have and enjoy the  possession of the Premises
during the Term hereof,  provided that no reasonable action of Landlord or other
tenants working in other space in the Building, or in repairing or restoring the
Premises, shall be deemed a breach of this covenant, or give to Tenant any right
to modify this Lease either as to term, rent payable, or other obligations to be
performed.

         18.  SECURITY DEPOSIT. Intentionally Deleted.

         19.  NOTICES.  All notices,  demands and requests which may be given or
which are  required to be given by either party to the other must be in writing.
All  notices,  demands and  requests by the  Landlord or Tenant shall be sent by
express,  registered  or  certified  mail,  return  receipt  requested,  postage
prepaid,  by overnight  courier service such as Federal Express,  or by personal
delivery  and  addressed  as follows  (or to such  other  address as a party may
specify by duly given notice):

         LANDLORD:         Rivercrest Realty
                           8816 Six Forks Road
                           Raleigh, North Carolina 27615
                           Attn:  Jonathan Gaines
                           Fax: 919-846-5814

         TENANT:           Capital Bank
                           4400 Falls of the Neuse Road
                           Raleigh, North Carolina 27609
                           Attn:  James A. Beck
                           Fax: 919-645-6401

         Notices,  demands or requests  which Landlord or Tenant are required or
desire to give the other  hereunder  shall be deemed to have been properly given
for all purposes if (i) delivered  against a written  receipt of delivery,  (ii)
mailed by express,  registered  or certified  mail of the United  States  Postal
Service,  return receipt  requested,  postage  prepaid,  or (iii) delivered to a
nationally  recognized overnight courier service for next business day delivery,
to its  addressee at such party's  address as set forth above or (iv)  delivered
via telecopier or facsimile  transmission to the facsimile  number listed above,
provided,  however,  that if such  communication  is  given  via  telecopier  or
facsimile  transmission,  an original  counterpart of such  communication  shall
concurrently  be sent in either the manner  specified  in section  (ii) or (iii)
above. Each such notice, demand or request shall be deemed to have been received
upon the earlier of (i) actual receipt or refusal by the addressee or (ii) three
business  days after  deposit  thereof at any main or branch  United States post
office if sent in accordance with section (ii) above,  and the next business day
after deposit  thereof with the courier if sent pursuant to section (iii) above.
The parties shall notify the other of any change in address,  which notification
must be at least fifteen (15) days in advance of it being effective.

         Notices  may be given on  behalf  of any  party by such  party's  legal
counsel.

                                       7
<PAGE>
         20. HOLDING OVER. If Tenant shall hold over after the expiration of the
Lease Term or other  termination  of this Lease,  such holding over shall not be
deemed  to be a  renewal  of  this  Lease  but  shall  be  deemed  to  create  a
tenancy-at-sufferance and by such holding over Tenant shall continue to be bound
by all of the terms  and  conditions  of this  Lease  except  that  during  such
tenancy-at-sufferance,  Tenant  shall pay to Landlord (A) Rent at the rate equal
to one  hundred  fifty  percent  (150%) of that  provided  for in the  foregoing
Paragraph 4, as such rental amount may have been  increased in  accordance  with
the terms of  Paragraph 5 hereof,  and (B) any and all  operating  expenses  and
other  forms of  Additional  Rent  payable  under the terms of this  Lease.  The
increased  Rent during such  holding  over is intended to  partially  compensate
Landlord for losses,  damages and expenses,  including  frustrating and delaying
Landlord's  ability  to  secure  a  replacement  tenant.  If  Landlord  loses  a
prospective  tenant because Tenant fails to vacate the Premises on expiration of
this Lease  after  notice to do so,  Tenant  will be liable for such  damages as
Landlord can prove because of Tenant's wrongful failure to vacate.

         21. RIGHT TO RELOCATE.  Intentionally deleted.

         22. BROKER'S  COMMISSIONS.  Tenant  represents and warrants that it has
not dealt with any real estate broker,  finder or other person,  with respect to
this Lease in any manner,  except Thomas  Commercial Inc., whose address is 4601
Six Forks Road, Suite 330, Raleigh, North Carolina 27609. Landlord shall pay any
commissions  or fees that are payable only to the  above-named  broker or finder
with respect to this Lease.  Tenant shall  indemnify and hold Landlord  harmless
from any and all damages  resulting  from  claims  that may be asserted  against
Landlord  by any  other  broker,  finder  or other  person  (including,  without
limitation,  any substitute or replacement  broker claiming to have been engaged
by Tenant in the future),  claiming to have dealt with Tenant in connection with
this Lease or any amendment or extension  hereto,  or which may result in Tenant
leasing other or enlarged space from Landlord.  The provisions of this paragraph
shall survive the termination of this Lease.

         23.  ENVIRONMENTAL COMPLIANCE.

         (a) Tenant's  Responsibility.  Tenant shall not (either with or without
negligence) cause or permit the escape,  disposal or release of any biologically
active or other hazardous substances,  or materials.  Tenant shall not allow the
storage or use of such  substances or materials in any manner not  sanctioned by
law or by the highest  standards  prevailing in the industry for the storage and
use of such  substances or materials,  nor allow to be brought into the Building
in which the Premises are any such materials or substances  except to use in the
ordinary  course of Tenant's  business,  and then only after  written  notice is
given to Landlord of the identity of such substances or materials.  Except as to
pre-existing  conditions,  Tenant covenants and agrees that the Premises will at
all times during its use or occupancy  thereof be kept and  maintained  so as to
comply with all now  existing or  hereafter  enacted or issued  statutes,  laws,
rules, ordinances,  orders, permits and regulations of all state, federal, local
and  other  governmental  and  regulatory   authorities,   agencies  and  bodies
applicable to the Premises,  pertaining to environmental  matters or regulating,
prohibiting  or  otherwise  having  to do with  asbestos  and all  other  toxic,
radioactive,  or hazardous wastes or material including, but not limited to, the
Federal  Clean  Air Act,  the  Federal  Water  Pollution  Control  Act,  and the
Comprehensive Environmental Response,  Compensation,  and Liability Act of 1980,
as from time to time amended (all hereafter collectively called "Laws").  Tenant
shall execute  affidavits,  representations  and the like, from time to time, at
Landlord's request,  concerning Tenant's best knowledge and belief regarding the
presence of hazardous substances or materials on the Premises.

         (b) Tenant's Liability.  Tenant shall hold Landlord free, harmless, and
indemnified from any penalty,  fine, claim, demand,  liability,  cost, or charge
whatsoever  which Landlord shall incur, or which Landlord would otherwise incur,
by reason of Tenant's  failure to comply with this  Paragraph 23 including,  but
not limited to: (1) the cost of bringing the Premises into  compliance  with all
Laws; (2) the reasonable cost of all appropriate  tests and  examinations of the
Premises to confirm that the Premises have been brought into compliance with all
Laws;  and (3)  the  reasonable  fees  and  expenses  of  Landlord's  attorneys,
engineers,  and  consultants  incurred by Landlord in enforcing  and  confirming
compliance with this Paragraph 23.

         (c) Property. For the purposes of this Paragraph 23, the Premises shall
include the real estate covered by this Lease;  all  improvements  thereon;  all
personal property used in connection with the Premises  (including that owned by
Tenant);  and the soil, ground water, and surface water of the Premises,  if the
Premises include any ground area.

         (d) Inspections by Landlord.  Landlord and its engineers,  technicians,
and consultants (collectively the "Auditors") may, from time to time as Landlord
deems appropriate, but no more than once every two years, conduct periodic tests
and  examinations  ("Audits")  of the  Premises to confirm and monitor  Tenant's
compliance  with this  Paragraph  23. Such Audits  shall be  conducted in such a
manner as to minimize the interference with Tenant's permitted activities on the
Premises;  however in all cases, the Audits shall be of such nature and scope as
shall be  reasonably  required by then existing  technology to confirm  Tenant's
compliance  with this  Paragraph 23. Tenant shall fully  cooperate with Landlord
and its Auditors in the conduct of such Audits. The cost of such Audits shall be
paid by Landlord unless an Audit shall disclose a material  failure of Tenant to
comply with this  Paragraph 23, in which case,  the cost of such Audit,  and the
cost of all subsequent Audits where Tenant is found to be in non-compliance made
during the Lease Term and within thirty (30) days  thereafter (not to exceed two
[2] such Audits per calendar year), shall be paid for on demand by Tenant.

                                       8
<PAGE>

         (e) Landlord's  Liability.  Provided,  however, the foregoing covenants
and undertakings of Tenant contained in this Paragraph 23 shall not apply to any
condition or matter including any constituting a violation of any Law: (1) which
existed prior to the  commencement of Tenant's use or occupancy of the Premises;
(2) which was not caused,  in whole or in part,  by Tenant or  Tenant's  agents,
employees,  officers,  partners,  contractors or invitees;  or (3) to the extent
such violation is caused by, or results from the acts or neglects of Landlord or
Landlord's  agents,  employees,  officers,  partners,  contractors,  guests,  or
invitees, and Landlord shall defend, indemnify and hold Tenant harmless from all
such conditions and matters.

         (f) Tenant's and Landlord's  Liability After  Termination of Lease. The
covenants  contained  in this  Paragraph  23 shall  survive  the  expiration  or
termination of this Lease, and shall continue for so long as Landlord and Tenant
and their  successors  and  assigns  may be subject to any  expense,  liability,
charge,  penalty,  or obligation against which they have agreed to indemnify the
other under this Paragraph 23.

         24. MISCELLANEOUS.  Headings of paragraphs are for convenience only and
shall not be  considered  in  construing  the  meaning of the  contents  of such
paragraph. The invalidity of any portion of this Lease shall not have any effect
on the balance hereof. Should Landlord or Tenant institute any legal proceedings
against the other for breach of any provision herein contained, the losing party
shall in addition be liable for the costs and expenses of the prevailing  party,
including  reasonable  attorneys' fees (at all tribunal levels).  This agreement
shall be binding  upon the  respective  parties  hereto,  and upon their  heirs,
executors,  successors and assigns.  This  agreement  supersedes and cancels all
prior negotiations between the parties, and no changes shall be effective unless
in  writing  signed  by both  parties.  Landlord  may sell the  Premises  or the
Building without affecting the obligations of Tenant hereunder; upon the sale of
the Premises or the Building,  Landlord shall be relieved of all  responsibility
for the Premises and shall be released  from any liability  thereafter  accruing
under this  Lease.  If any  security  deposit  or prepaid  Rent has been paid by
Tenant,  Landlord  shall  transfer  the  security  deposit  or  prepaid  Rent to
Landlord's  successor.  This Lease may not be recorded without  Landlord's prior
written  consent,  but  Landlord  agrees  on  request  of  Tenant  to  execute a
memorandum hereof for recording purposes. The singular shall include the plural,
and the masculine,  feminine or neuter includes the other.  If Landlord,  or its
employees,  officers,  directors,  stockholders  or partners  are ordered to pay
Tenant a money  judgment  because of Landlord's  default under this Lease,  said
money judgment may only be enforced against and satisfied out of: (i) Landlord's
interest in the Building in which the Premises are located  including the rental
income and proceeds from sale; and (ii) any insurance or  condemnation  proceeds
received  because of damage or  condemnation  to, or of, said  Building that are
available for use by Landlord. No other assets of Landlord or said other parties
exculpated  by the  preceding  sentence  shall be liable for, or subject to, any
such money judgment, provided that Tenant should be entitled to withhold rent to
satisfy any unsatisfied judgements attorned against Landlord.

         25. SPECIAL CONDITIONS OR ADDENDUMS.  The following special conditions,
if any, shall apply, and where in conflict with earlier provisions in this Lease
shall control. If any addendums are noted below, such addendums are incorporated
herein  and made a part of this  Lease.  If there are no special  conditions  or
addendums, the word NONE shall be written in the blank below.

              (1) Lease Addendums  Number One and Two,  Exhibits A and A-1, B, C
         and D are attached hereto and made a part hereof.

              (2) Notwithstanding any other provision contained in this Lease to
         the  contrary,  this Lease is subject to Tenant  obtaining  approval of
         this site from all  applicable  regulatory  authorities,  including the
         North  Carolina  Banking  Commission and FDIC. If this agreement is not
         approved  by all such  authorities  within  ninety (90) days from Lease
         Execution,  Tenant  shall  have the  option  to  cancel  this  Lease by
         providing written notice to Landlord.  Tenant shall reimburse  Landlord
         for all  reasonable,  costs  incurred  by  Landlord  that are  directly
         attributed  to  Tenant's   occupancy,   including   Architectural   and
         Engineering drawings and permits, provided such reimbursable costs will
         not exceed $20,000.

              (3) Pursuant to a deed  restriction  encumbering  Landlord's title
         (the  "Restriction"),  Landlord is required to obtain architectural and
         site plan approval for the Beacon Center  Building (the "Building) from
         COLONADE DEVELOPMENT LLC, its successors or assigns  ("Colonnade").  By
         instrument  dated  March  22,  1999,  Landlord  hereby  discloses  that
         Colonnade  provided  such  approval  for the  Building  at  that  time.
         Inasmuch as the  architecture  and site plan of the  Building  has been
         modified to accommodate Tenant's occupancy thereof,  Landlord will need
         to obtain  approval  of the  Building's  architectural  design and site
         plan.

         Therefore,  notwithstanding any other provision contained in this Lease
         to the contrary,  this Lease is subject to and contingent upon Landlord
         obtaining architectural and site plan approval from COLONNADE. Landlord
         agrees to make  such  request  within  seven  (7) days of  obtaining  a
         building  permit  from the City of  Raleigh  by but no later than sixty
         (60) days from Date of this Lease Agreement providing Colonnade with an
         elevation  and  site  plan  of the  building  approved  by the  City of
         Raleigh. Pursuant to the Restriction,  COLONNADE is required to respond
         within  fifteen (15) days after  request  therefore.  In the event that
         COLONNADE  objects  within  said 15 day  period,  the  Lease  shall  be
         terminated with proper written notice from Landlord to Tenant.

                                        9
<PAGE>

         (4)  Notwithstanding  any other provisions  contained in this lease, in
         the event the  Lessee  is  closed or taken  over by the North  Carolina
         Commission of Banks, or other bank  supervisory  authority,  the Lessor
         may terminate the lease only with the  concurrence of the  Commissioner
         of Banks or other bank  supervisory  authority,  and any such authority
         shall in any event have the election either to continue or to terminate
         the lease:  Provided,  that in the event this lease is terminated,  the
         maximum claim of Lessor for damages or indemnity  for injury  resulting
         from the rejection or  abandonment  of the unexpired  term of the lease
         shall in no event be in an amount  exceeding  the rent  reserved by the
         lease, without  acceleration,  for the year next succeeding the date of
         the surrender of the premises to the Lessor, or the date of re-entry of
         the Lessor, whichever first occurs, whether before or after the closing
         of the bank,  plus an amount equal to the unpaid rent accrued,  without
         acceleration up to such date.

                                       10
<PAGE>

IN WITNESS  WHEREOF,  Landlord and Tenant have  executed this lease in duplicate
originals, all as of the day and year first above written.

<TABLE>
<CAPTION>

<S>                                    <C>
NAME: Capital Bank                     NAME: Beacon Center Properties, LLC

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

a North Carolina Banking Corporation   a North Carolina Limited Liability Corporation

By: _________________________________  By: __________________________________
        President                                       President

         (CORPORATE SEAL)                               (CORPORATE SEAL)

ATTEST:                                ATTEST:

-------------------------------------  --------------------------------------
Secretary                                       Secretary

</TABLE>
                                       11

<PAGE>

                                    EXHIBIT A
                         8816 Six Forks Road, Suite 1000
                         Approximately 4000 square feet

                                       12
<PAGE>

                                   EXHIBIT A1

                                       13
<PAGE>

                                    EXHIBIT B

                                       14
<PAGE>

                                    EXHIBIT C
                              WORK LETTER AGREEMENT

To induce  Tenant to enter  into said  Lease  (which is hereby  incorporated  by
reference to the extent that the  provisions of this letter  agreement may apply
thereto) and in  consideration of the mutual  covenants  hereinafter  contained,
Landlord and Tenant mutually agree as follows:

1.    Tenant  agrees  to  provide,  by  Tenant's  designated   Architect  and/or
      Engineer,  no later than April 1, 2000,  (the "Tenant Plan Delivery Date")
      the following Building Standard  architectural and mechanical drawings and
      specifications  of Tenant's  approved floor plan,  sufficient to receive a
      construction  permit,  to be drawn for the  leased  premises  on  Tenant's
      behalf:

         (a)      Complete,  finished and detailed 1/8 inch scale  architectural
                  drawings and  specifications  for Tenant's  partition  layout,
                  reflected  ceiling,  telephone  and  electrical  outlets,  and
                  finish schedule: and

         (b)      Complete Building Standard mechanical plans and specifications
                  where necessary for  installation  of normal air  conditioning
                  system, ductwork, heating, electrical and plumbing.

      Tenant's  vault  specifications  must  be  submitted  to  Landlord  before
      December 1, 1999.

      Once final architectural and engineering  construction  drawings have been
      prepared by the Tenant's  Architect,  Landlord  will obtain at least three
      (3) competitive bids from reputable  general  contractors who are approved
      by the  Tenant,  which  approval  shall not be  unreasonably  withheld  or
      delayed.  Landlord and Landlord's  managing  agent.  Tenant shall have the
      opportunity  to review all bids;  final  selection of a mutually  approved
      contractor  shall  be made by  mutual  consent  of  Landlord  and  Tenant.
      Landlord  agrees to manage and  supervise  the work to be done on Tenant's
      behalf at no cost. Installation of furniture,  office equipment,  data and
      voice  wiring  for  communications   and  computers,   trade  fixtures  or
      decorative effects (such as draperies and pictures), shall be performed by
      Tenant, its employees, agents and contractors.

2.   The Landlord  will provide  Tenant with a Tenant  Improvement  Allowance of
     $21.00 per usable  square  foot.  Further,  the  Landlord  will provide the
     following in the Demised Premises.

     LandLord's Work:
     ----------------

     1.     Concrete slab throughout tenant space.
     2.     Adequate electrical power grid installed overhead.
     3.     2' x 4' 18 cell parabolic  light fixtures not installed but supplied
            by Landlord at a rate of 1 per 100 square feet.
     4.     Electrical  panels  shall  be  provided  in a  core  area  room  for
            lighting, power and mechanical.
     5.     Telephone backboard shall be provided in a core area room.
     6.     Power wiring for main HVAC equipment.
     7.     HVAC trunk line installed.
     8.     Landlord  will provide HVAC PIU and/or VAV boxes and controls at the
            rate of 1/1000 square feet of usable space.
     9.     4' x 4'  ceiling  grid  installed,  2' x 2' ceiling  grid,  tees and
            ceiling tile not installed but supplied by Landlord.
     10.    Completed restrooms shall be provided in core areas.
     11.    Building standard suite entrance door.
     12.    Blinds in shell.

     The  Tenant  Improvement  Allowance  shall  be used to pay for all  cost of
     construction related to Tenant's improvements, which shall include, but not
     be limited to,  architectural and engineering fees,  signage and keying and
     the following:

     TENANT'S WORK:
     --------------

     1.     Sheetrocking of all interior walls.
     2.     Paint/wallpaper finishing of walls.
     3.     Install flooring - carpet, tile, etc.
     4.     Installation of Landlord supplied 2' x 2' ceiling grid tees and 2' x
            2' ceiling tiles.
     5.     Electrical outlets, switches, lighting, etc.
     6.     Power wiring of HVAC PIU or VAV boxes and thermostats.
     7.     Additional electrical equipment (i.e. sub panels) may be required by
            tenant.
     8.     Telephone  wiring as required by the utility  company  supplying the
            service.
     9.     HVAC air distribution, dampers, and diffusers.
     10.    Installation  of Landlord  supplied 2' x 4' parabolic light fixtures
            (per Landlord selection).

                                       15
<PAGE>

     11.    All other items not included in  landlord's  work as may be required
            by Tenant.
     12.    Keying, locksets, and passage sets.
     13.    Exterior walls and columns with sheetrock ready for paint.

     Should the cost of Tenant  improvements  and alterations  exceed the Tenant
     Improvements  Allowance  for any reason,  then in that event,  Tenant shall
     reimburse  Landlord  for such  overage  within  ten (10) days of receipt of
     Landlord's  invoice for same,  provided  that  Tenant  shall in no event be
     responsible  for any such excess  costs  which were not  approved by Tenant
     prior to their incurrence.

3.   Substantial Completion
     ----------------------

     The Premises shall be deemed to be substantially  complete when the work to
     be  performed  by mutually  approved  contractor  pursuant to the plans and
     working  drawings  approved by Landlord and Tenant have been  completed and
     approved  by  appropriate  governmental  authorities,  as  evidenced  by  a
     certificate of occupancy  permitting intended use as certified by Architect
     except for items of work and  adjustment of equipment and fixtures that can
     be  completed  after the Premises are  occupied  without  causing  material
     interference with Tenant's use of the Premises (i.e., "punch list items").

     Notwithstanding   the   foregoing,   if   Landlord   shall  be  delayed  in
     substantially completing the Premises as a result of:

         (1)      Tenant's  failure  to  furnish  to  Landlord  on or before the
                  Tenant Plan Delivery Date the final plans and working drawings
                  for the construction and completion of the Premises, including
                  all Additional or Non-Standard Work and Materials requested by
                  Tenant; or

         (2)      Tenant's request for changes in or modifications to such plans
                  or working  drawings  subsequent  to the Tenant Plan  Delivery
                  Date; or

     then, in any such event for purposes of determining the Commencement  Date,
     the Premises  shall be deemed to have been  substantially  completed on the
     date that Landlord and  architect  determine  that the Premises  would have
     been substantially completed if such Delay or Delays had not occurred.

4.   Materials and Workmanship
     -------------------------

     Landlord  covenants and agrees that all work  performed in connection  with
     the  construction  of  the  Premises  shall  be  performed  in a  good  and
     workmanlike   manner  and  in  accordance  with  all  applicable  laws  and
     regulations  and  with the  final  approved  plans  and  working  drawings.
     Landlord agrees to exercise due diligence in completing the construction of
     the Premises.

5.   Repairs and Corrections
     ------------------------

     Landlord  agrees to repair and correct any work or  materials  installed by
     Landlord or its contractor in the Premises that prove defective as a result
     of faulty materials,  equipment or workmanship and that first appear within
     one (1) year of the date of occupancy of the Premises.  Notwithstanding the
     foregoing,  Landlord  shall not be  responsible  to repair or  correct  any
     defective  work or materials  installed by Tenant or any  contractor  other
     than the mutually agreed upon contractor.

6.   Possession by Tenant
     ---------------------

     The taking of  possession  of the  Premises by Tenant shall  constitute  an
     acknowledgement  by Tenant that the Premises are in good condition and that
     all work and  materials  provided by Landlord are  satisfactory  as of such
     date of occupancy,  except as to any patent defects or incomplete work that
     are described in a written notice given by Tenant to Landlord no later than
     thirty (30) days after Tenant takes occupancy of the Premises.

7.   Access During Construction
     --------------------------

     During  construction  of the Tenant  Improvements  in the Premises with the
     approval  of the  Landlord,  Tenant  shall  have  access to the  Premises a
     minimum of four (4) weeks prior to  occupancy,  as long as such access does
     not  interfere  with or delay  construction  work on the  Premises  for the
     purposes of taking measurements,  making plans,  installing trade fixtures,
     data and voice  wiring for  communications  and  computers,  and doing such
     other work as may be appropriate  or desirable to enable Tenant  eventually
     to assume possession of and operate in the Premises.

                                       16
<PAGE>

                                    EXHIBIT D

                              RULES AND REGULATIONS

(1) Access to  Building.  On  Saturdays,  before 8:00 a.m.  and after 1:00 p.m.,
Sundays,  Christmas Day, New Year's Day,  Thanksgiving  Day, Memorial Day, Labor
Day and  Independence  Day,  and on weekdays  between the hours of 6:30 P.M. and
7:30 A.M., access to the Building and/or to the halls,  corridors,  elevators or
stairways in the Building may be restricted and access shall be gained by use of
a key or electronic card to the outside doors of the Building. Landlord may from
time to time establish security controls for the purpose of regulating access to
the  Building.  Tenant shall cause each of its employees to comply with all such
security regulations so established.

(2) Protecting  Premises.  The last member of Tenant to leave the Premises shall
close and  securely  lock all doors or other means of entry to the  Premises and
shut off all utilities in the Premises.

(3) Building Directories.  The directories for the Building in the form selected
by Landlord shall be used  exclusively  for the display of the name and location
of tenants.  Any additional  names and/or name change  requested by Tenant to be
displayed  in the  directories  must be  approved,  which  approval  will not be
unreasonably  conditioned  or withheld or delayed by Landlord  and, if approved,
will be provided at the sole expense of Tenant.

(4) Large Articles.  Furniture, freight and other large or heavy articles may be
brought into the Building only at times and in the manner designated by Landlord
and always at Tenant's sole responsibility.  All damage done to the Building, or
its furnishings, fixtures or equipment, by moving or maintaining such furniture,
freight or articles shall be repaired at the expense of Tenant.

(5) Signs.  Except as provided for in Section 12 of this Lease, Tenant shall not
paint,  display,  inscribe,  maintain  or  affix  any  sign,  placard,  picture,
advertisement,  name, notice,  lettering or direction on any part of the outside
or inside of the  Building,  or on any part of the inside of the Premises  which
are designed primarily to be seen from outside the Premises, without the written
consent  of  Landlord,   which  consent  will  not  be  unreasonably   withheld,
conditioned  or  delayed  and then only such name or names or matter and in such
color,  size,  style,  character  and  material  as shall be first  approved  by
Landlord in writing.  Landlord  reserves the right to remove at Tenant's expense
all matter other than that above provided for without notice to Tenant.

(6)  Compliance with Laws (Intentionally Deleted)

(7) Hazardous  Materials.  Tenant shall not use or permit to be brought into the
Premises or the Building any flammable  oils or fluids or any explosive or other
article deemed hazardous to persons or property,  or do or permit to be done any
act or thing  which  will  invalidate,  or which,  if  brought  in,  would be in
conflict with any insurance  policy  covering the Building or its operation,  or
the  Premises,  or any part of  either,  and will  not do or  permit  to be done
anything in or upon the Premises, or bring or keep anything therein, which shall
not  comply  with  all  rules,  orders,   regulations  or  requirements  of  any
organization,  bureau,  department  or body  having  jurisdiction  with  respect
thereto  (and Tenant  shall at all times  comply  with all such  rules,  orders,
regulations or  requirements),  or which shall increase the rate of insurance on
the Building, its appurtenances, contents or operation.

(8) Defacing Premises and Overloading.  Tenant shall not place anything or allow
anything  to be placed in the  Premises  near the glass of any door,  partition,
wall or window which may be unsightly  from outside the  Premises.  Tenant shall
not place or permit to be placed any article of any kind on any window  ledge or
on the  exterior  walls;  blinds,  shades,  awnings or other  forms of inside or
outside window  ventilators  or similar  devices shall not be placed in or about
the outside  windows in the  Premises  except to the extent that the  character,
shape,  color,  material and make  thereof is approved by  Landlord.  Except for
minor  interior  cosmetic  alterations,  Tenant  shall  not do any  painting  or
decorating  in the  Premises or install any floor  coverings  in the Premises or
make,  paint,  cut, drill into, or in any way deface any part of the Premises or
Building  without  in each  instance  obtaining  the prior  written  consent  of
Landlord,  which  consent  will not be  unreasonably  withheld,  conditioned  or
delayed. Tenant shall not overload any floor or part thereof in the Premises, or
any  facility in the Building or any public  corridors  or elevators  therein by
bringing in or removing any large or heavy  articles and Landlord may direct and
control the  location of safes,  files,  and all other  heavy  articles  and, if
considered  necessary  by Landlord  may require  Tenant at its expense to supply
whatever supplementary supports necessary to properly distribute the weight.

(9)  Obstruction  of  Public  Areas.  Tenant  shall  not,  whether  temporarily,
accidentally or otherwise,  allow anything to remain in, place or store anything
in, or obstruct in any way, any sidewalk, court, hall, passageway,  entrance, or
shipping  area.  Tenant shall lend its full  cooperation to keep such areas free
from  all  obstruction  and in a clean  and  sightly  condition,  and  move  all
supplies,  furniture and equipment as soon as received directly to the Premises,
and shall move all such items and waste (other than waste customarily removed by
Building  employees) that are at any time being taken from the Premises directly
to the areas designated for disposal. All courts, passageways, entrances, exits,
elevators, escalators, stairways, corridors, halls and roofs are not for the use
of the  general  public  and  Landlord  shall in all cases  retain  the right to
control  and  prevent  access  thereto by all  persons  whose  presence,  in the

                                       17
<PAGE>
judgment of Landlord,  may be prejudicial to the safety,  character,  reputation
and interest of the Building  and its  tenants;  provided,  however that nothing
herein  contained shall be construed to prevent such access to persons with whom
Tenant  deals  within the normal  course of  Tenant's  business  so long as such
persons are engaged in illegal activities.

(10)  Additional  Locks.  Tenant  shall not  attach,  or permit to be  attached,
additional locks or similar devices to any door or window, change existing locks
or the  mechanism  thereof,  or make or  permit to be made any keys for any door
other than those  provided by  Landlord.  Upon  termination  of this Lease or of
Tenant's  possession,  Tenant  shall  immediately  surrender  all  keys  to  the
Premises.

(11) Communications or Utility  Connections.  If Tenant desires signal, alarm or
other utility or similar service connections installed or changed,  Tenant shall
not install or change the same without the  approval of Landlord,  and then only
under direction of Landlord and at Tenant's expense. Tenant shall not install in
the  Premises  any  equipment  which  requires a greater  than normal  amount of
electrical  current for the permitted use without the advance written consent of
Landlord.  Tenant shall  ascertain  from Landlord the maximum  amount of load or
demand for or use of  electrical  current  which can safely be  permitted in the
Premises,  taking  into  account  the  capacity  of the  electric  wiring in the
Building and the Premises and the needs of other  tenants in the  Building,  and
shall not in any event connect a greater load than that which is safe.

(12) Office of the Building.  Service requirements of Tenant will be attended to
only upon application at the office of Rivercrest Realty.  Employees of Landlord
shall not  perform,  and Tenant  shall not engage them to do any work outside of
their duties unless  specifically  authorized by Landlord,  which  authorization
will not be unreasonably withheld, conditioned or delayed.

(13) Restroom. The restroom,  toilets, urinals, vanities and the other apparatus
shall  not be  used  for any  purpose  other  than  that  for  which  they  were
constructed,  and no foreign  substance of any kind  whatsoever  shall be thrown
therein.  The expense of any  breakage,  stoppage or damage  resulting  from the
violation  of this rule  shall be borne by Tenant  who,  or whose  employees  or
invitees, shall have caused it.

(14)  Intoxication.  Landlord  reserves  the right to  exclude or expel from the
Building any person who, in the judgment of Landlord,  is intoxicated,  or under
the  influence  of liquor or drugs,  or who in any way violates any of the rules
and regulations of the Building.

(15) Nuisances and Certain Other Prohibited  Uses.  Tenant shall not (a) install
or operate any internal  combustion engine,  boiler,  machinery,  refrigerating,
heating or air  conditioning  apparatus in or about the Premises;  (b) engage in
any mechanical business, or in any service in or about the Premises or Building,
except  those  ordinarily  embraced  within the  permitted  use of the  Premises
specified in Article 3; (c) use the Premises for housing,  lodging,  or sleeping
purposes;  (d) prepare or warm food in the  Premises or allow food to be brought
into  the  Premises  for   consumption   therein   (heating   coffee,   customer
refreshments,  and individual  lunches of employees  excepted) except by express
permission of Landlord;  (e) place any radio or television  antennae on the roof
or on or in any part of the  inside or outside  of the  Building  other than the
inside of the  Premises,  or place a musical or sound  producing  instrument  or
device  inside or outside the Premises  which may be heard outside the Premises;
(f) use any power source for the operation of any equipment or device other than
dry cell batteries or electricity;  (g) operate any electrical device from which
may  emanate  waves  that could  interfere  with or impair  radio or  television
broadcasting  or reception  from or in the Building or  elsewhere;  (h) bring or
permit to be in the  Building  any bicycle,  other  vehicle,  dog (except in the
company  of a blind  person)  other  animal  or  bird;  (i) make or  permit  any
objectionable noise or odor to emanate from the Premises;  (j) disturb,  harass,
solicit or canvass any occupant of the Building; (k) do anything in or about the
Premises  which  could be a  nuisance  or tend to injure the  reputation  of the
Building.

(16)  Solicitation.  Tenant shall not canvass  other  tenants in the Building to
solicit business or contributions and shall not exhibit,  sell or offer to sell,
use,  rent or exchange any  products or services in or from the Premises  unless
ordinarily  embraced  within the Tenant's use of the Premises for which specific
authority is granted in the Lease agreement.

(17) Energy Conservation. Tenant shall not waste electricity, water, heat or air
conditioning  and agrees to  cooperate  fully with  Landlord  to insure the most
effective  operation of the Building's  heating and air conditioning,  and shall
not allow the adjustment (except by Landlord's authorized Building personnel) of
any controls.

(18)  Building  Security.  At all times  other than  normal  business  hours the
exterior building doors and suite entry door(s) must be kept locked to assist in
security.  The janitorial service,  upon completion of its duties, will lock all
Building  doors.  Problems in Building and suite security  should be directed to
Rivercrest Realty.

(19)  Parking.  Parking is in  designated  parking  areas only.  There may be no
vehicles  in  "no  parking"  zones  or at  curbs.  Handicapped  spaces  are  for
handicapped   persons  and  the  Police  Department  will  ticket   unauthorized
(unidentified) cars in handicapped spaces.

(20) Janitorial  Service.  The janitorial staff will remove all trash from trash
cans.  Any containers or boxes left in hallways or apparently  discarded  unless
clearly and conspicuously labeled DO NOT REMOVE may be removed without liability

                                       18
<PAGE>

to the Tenant.  Any large volume of trash  resulting from delivery of furniture,
equipment,  etc., should be removed by the delivery company, Tenant, or Landlord
at  Tenant's  expense.  Janitorial  service  will be  provided  after hours each
business  day  Monday  through  Friday.  All  requests  should  be  directed  to
Rivercrest Realty at (telephone) .

(21) Construction (Intentionally Deleted).

(22) Lobby Area. Suites adjacent to the Lobby Area shall be maintained by Tenant
to present a clean,  neat and professional  look.  Tenants will keep suite entry
doors close at all times.

                                       19
<PAGE>

                             LEASE ADDENDUM NO. ONE

(1)  Rent  Schedule:  Rent as defined in Paragraph 4, Rent,  shall be payable in
     accordance with the following rent schedule:

                          Monthly          Number of
Term                        Rent            Months                  Extended
----                        ----            ------                  -----------
8/1/00 - 7/31/01          $8,920.00            12                  $ 107,040.00
----------------
8/1/01 - 7/31/02          $9,187.60            12                  $ 110,251.20
----------------
8/1/02 - 7/31/03          $9,463.23            12                  $ 113,558.74
----------------
8/1/03 - 7/31/04          $9,747.12            12                  $ 116,965.50
----------------
8/1/04 - 7/31/05          $10,039.54           12                  $ 120,474.46
----------------
8/1/05 - 7/31/06          $10,340.72           12                  $ 124,088.70
----------------
 8/1/06 - 7/31/07         $10,650.95           12                  $ 127,811.36
-----------------
 8/1/07 - 7/31/08         $10,970.47           12                  $ 131,645.70
-----------------
 8/1/08 - 7/31/09         $11,299.59           12                  $ 135,595.07
-----------------
 8/1/09 - 7/31/10         $11,638.58           12                  $ 139,662.92
-----------------                         -------                 -------------
                                              120                 $1,227,093.64

(1)  After Hours Use: Tenant shall pay as additional rent for after-hours use of
     the HVAC System beyond normal  business  hours as defined in paragraph 6 of
     this Lease a rate of $25.00 per hour.

                                       20
<PAGE>

                             LEASE ADDENDUM NO. TWO

OPTION TO EXTEND.  On condition  that Tenant has complied with all the terms and
conditions  of this  Lease and not then be in  default  beyond  applicable  cure
periods under any of the terms hereof,  and on the further condition that Tenant
give Landlord at least one hundred  eighty (180) days written notice of exercise
of this option to extend  (failure to give notice  being an absolute  bar to any
right on the part of Tenant to so extend),  Landlord hereby gives the Tenant the
right to extend  this  Lease for  three (3)  additional  terms of five (5) years
each.

All terms and  conditions of this Lease shall be in effect during the extension,
save and except  that the Rent to be paid by Tenant  during such  extended  term
shall be calculated  by increasing  the last year's Rent of the original term or
previous option term by three percent (3%) and for each year thereafter.

                                       21FIRST AMENDMENT TO RIGHTS AGREEMENT

                  This First Amendment dated February 7, 2001 (the "Amendment")
to the Rights Agreement restated on April 20, 2000 (the "Rights Agreement")
between Thomas Industries Inc., Company, a Delaware corporation (the "Company")
and National City Bank, an Ohio corporation (the "Rights Agent").

                  A. Acting pursuant to Section 27 of the Rights Agreement, the
         parties hereby agree that the definition of Acquiring Person as set
         forth in the Rights Agreement shall be and hereby is amended to read in
         its entirely as follows:

                  (a) "ACQUIRING PERSON" shall mean any Person (as such term is
                  hereinafter defined) who or which, together with all
                  Affiliates (as hereinafter defined) and Associates (as
                  hereinafter defined) of such Person, shall be the Beneficial
                  Owner (as hereinafter defined) or 20% or more of the shares of
                  Common Stock then outstanding and shall include all Affiliates
                  and Associates of such Person, but shall not include the
                  Company, any Subsidiary of the Company, any employee benefit
                  plan of the Company or any Subsidiary of the Company or any
                  entity holding shares of Common Stock organized, appointed or
                  established by the Company for or pursuant to the terms of any
                  employee benefit plan. Further, no Person shall be deemed to
                  be an Acquiring Person if that Person becomes the Beneficial
                  Owner of 20% or more of the shares of Common Stock then
                  outstanding solely by virtue of a repurchase or repurchase of
                  Common Stock on the part of the Company and does not
                  thereafter purchase Common Stock equal to more than 1/2% of
                  the outstanding Common Stock of the Company. Notwithstanding
                  the foregoing, if a Person who would otherwise be an
                  "Acquiring Person,"

                           (i) notifies the Company in writing within five (5)
                  business days thereafter (the "Notification Period") that it
                  has inadvertently become the Beneficial Owner of 20% or more
                  of the shares of Common Stock then outstanding, and

                           (ii) within three(3) business days after the end of
                  the Notification Period divests a sufficient number of shares
                  of Common Stock so as to reduce its holdings to less than 20%
                  and delivers proof thereof in writing to the Company no more
                  than six (6) business days after the end of the Notification
                  Period,

                  then that Person shall not be deemed to be an "Acquiring
Person" for any purpose of this Agreement."

                                     F - 4
<PAGE>

                  B. As promptly as practicable following the date of this First
         Amendment, the Company shall cause: (i) the legend on the certificates
         for the Common Stock referring to the Rights Agreement to be
         supplemented so as to accommodate this Amendment, and (ii) the form of
         Rights Certificate (attached as Exhibit B to the Rights Agreement) to
         be supplemented to accommodate this Amendment.

                  IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed and their respective corporate seals to be hereto affixed and
attested, all as of the date and year first above written.

         Attest:                                    THOMAS INDUSTRIES INC.

By:      /s/ Phillip J. Stuecker                 By: /s/ Timothy C. Brown
         ----------------------------------         ------------------------
         Name:    Phillip J. Stuecker            Name:  Timothy C. Brown
         Title:   Vice President of Finance      Title:  Chief Executive Officer
                  Chief Financial Officer
                  and Secretary

                                                          NATIONAL CITY BANK

By;      /s/ David B. Davis                      By: /s Sherry Damore
         ----------------------------------         ----------------------------
         Name:    David B. Davis                    Name:  Sherry Damore
         Title:   Vice President                    Title:  Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}]]