Exhibit
10.43
















CONFORMED
COPY
































SUBORDINATED
DEBT LOAN AGREEMENT








dated as
of June 30, 2008








between








COMMUNITYONE
BANK, NATIONAL ASSOCIATION


as
Borrower








and








SUNTRUST
BANK


as
Lender



































SUBORDINATED DEBT LOAN
AGREEMENT








THIS SUBORDINATED DEBT LOAN AGREEMENT(this "Agreement")is made and entered into
as of June 30, 2008, by and between COMMUNITYONE BANK, NATIONAL
ASSOCATION,   a national banking association  (the
“Borrower”),
and SUNTRUST BANK, a Georgia banking corporation (the "Lender").





W I T N E S S E T
H:





WHEREAS,the Borrower has
requested the Lender, and the Lender has agreed, subject to the terms and
conditions of this Agreement, to make a $15,000,000 seven (7) year subordinated
term loan that will qualify as Tier II capital.





NOW, THEREFORE, in
consideration of the premises and the mutual covenants herein contained, the
Borrower and the Lender agree as follows:








ARTICLE
I





DEFINITIONS;
CONSTRUCTION





Section 1.1.Definitions.  In
addition to the other terms defined herein, the following terms used herein
shall have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):





“Base Rate”
shall mean the higher of (i) the per annum rate which the Lender publicly
announces from time to time to be its prime lending rate, as in effect from time
to time, and (ii) the Federal Funds Rate, as in effect from time to time,
plus one-half of one
percent (0.50%). The Lender's prime lending rate is a reference rate and does
not necessarily represent the lowest or best rate charged to
customers.  The Lender may make commercial loans or other loans at
rates of inter­est at, above or below the Lender's prime lend­ing
rate.  Each change in the Lender’s prime lending rate shall be
effective from and including the date such change is publicly announced as being
effective.





“Call
Report”shall
mean, with respect to the Borrower, the “Consolidated Reports of Condition and
Income” (FFIEC Form 031 or 041 or any successor form of the Federal Financial
Institutions Examination Council).





“Change in
Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any Governmental Authority after the date of this Agreement, or
(iii) compliance by the Lender (or for purposes of Section 2.5(b), by the Lender’s
holding company, if applicable) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.





“Closing
      Date” shall mean the date on which the conditions precedent set
      forth in Section
      3.1 have been satisfied or waived in accordance with Section 9.2,
      and unless otherwise indicated, shall be the date of this
      Agreement.





“Company”
shall mean FNB United Corp., a North Carolina corporation.


1





“Federal Funds
Rate” shall mean, for any day, the rate per annum (rounded upwards, if
necessary, to the next 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with member banks of the Federal Reserve System arranged by Federal
funds brokers, as published by the Federal Reserve Bank of New York on the next
succeeding Business Day or if such rate is not so published for any Business
Day, the Federal Funds Rate for such day shall be the average rounded upwards,
if necessary, to the next 1/100th of 1% of the quotations for such day on such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by the Lender.





“FR Report
Y-9C” shall mean the “Consolidated Financial Statements for Bank Holding
Companies-FR Y-9C” submitted by the Company as required by Section 5(c) of the
Bank Holding Company Act (12 U.S.C. 1844) and Section 225.5(b) of Regulation Y
[12 CFR 225.5(b)], or any successor or similar replacement report.




“FR Report
Y9-LP” shall mean the “Parent Company Only Financial Statements for Large
Bank Holding Companies-FR Y-9LP” submitted by the Company as required by Section
5(c) of the Bank Holding Company Act (12 U.S.C. 1844) and Section 225.5(b) of
Regulation Y [12 CFR 225.5(b)], or any successor or similar replacement
report.





“GAAP”
shall mean generally accepted accounting prin­ciples in the United States
applied on a consistent basis.





“Governmental
Authority”shall mean
the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including
without limitation any federal or state agency charged with the supervision or
regulation of depositary institutions or holding companies of depositary
institutions (as used herein, including any trust company subsidiaries whether
or not they take deposits), or engaged in the insurance of depositary
institution deposits, or any court, administrative agency or commission or other
governmental agency, authority or instrumentality having supervisory or
regulatory authority with respect to the Company or any of its Subsidiaries
(including the Borrower).





"Loan
Documents" shall mean, collectively, this Agree­ment, the
Subordinated Note, [any Hedging Agreemententered into with Lender
in connection with the Indebtedness under this Agreement or the Subordinated
Note] and any and all other instruments, agreements, documents and writings
executed by the Borrower in connection with any of the foregoing.





“Material Adverse
Effect” shall mean, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences whether or not related, a material
adverse change in, or a material adverse effect on, (i) the business,
results of operations, finan­cial condition, assets, or
liabilities  of the Company and of Company and its Subsidiaries taken
as a whole , (ii) the ability of the Borrower to perform any of its
obligations under the Loan Documents, or (iii)  the legality, validity
or enforceability of any of the Loan Documents.





Maturity Date”shall mean June 30, 2015.


2


“Person”
shall mean any individual, partnership, firm, corporation, association, joint
venture, limited liability company, trust or other entity, or any Governmental
Authority.





“Revolving Credit
Agreement” shall mean that certain Revolving Credit Agreement dated as of
May 27, 2008 between the Company and the Lender.





“Subordinated Term
Loan” shall mean the Fifteen Million Dollar ($15,000,000) term loan made
to the Borrower by the Lender pursuant to the Subordinated Note and this
Agreement.





“Subordinated
Note”shall mean that certain Floating Rate Subordinated Note due 2015
dated June 30, 2008 made by the Borrower in favor of the Lender in the form
attached as Exhibit
A hereto.





“Subsidiary”
shall mean, with respect to any Person (the “parent”),
any corporation, part­nership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, part­nership, joint venture, limited
liability company, association or other entity (i) of which
securities  or other ownership interests representing more than 30% of
the equity  or more than 30% of  the ordinary voting power,
or in the case of a partnership, more than 30% of the general partnership
interests are, as of such date, owned, controlled or held, or (ii) that is, as
of such date, otherwise controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent. Unless
otherwise indicated, all references to "Subsidiary" hereunder shall mean a
Subsidiary of the Company.





Section 1.2.Terms
Generally.The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  The words "include", "includes" and "including" shall be
deemed to be followed by the phase "without limitation".  In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the word "to" means "to but
excluding". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and permitted assigns,
(iii) the words "hereof", "herein" and "hereunder" and words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular provision hereof, and (iv) all references to a specific time shall be
construed to refer to the time in the city and state of the Lender's principal
office, unless otherwise indicated. All defined terms used in this Agreement
that are not defined herein shall have the meanings set forth in the
Subordinated Note.








ARTICLE II





AMOUNT AND TERMS OF THE
SUBORDINATED TERM LOAN





Section 2.1.Subordinated
Term Loan and Subordinated Note.  (a) Subject to the terms and
conditions set forth herein, the Lender agrees to make the Subordinated Term
Loan to the Borrower on the Closing Date in a principal amount equal to Fifteen
Million Dollars ($15,000,000).





(b)           The
Borrower's obligation to pay the principal of, and interest on, the Subordinated
Term Loan shall be evidenced by the records of the Lender and by the
Subordinated Note.  The entries made in such records shall be prima facieevidence of the
existence and amounts of the obligations of the Borrower therein recorded;provided, that the
failure or delay of the Lender in maintaining or making entries into
any


3


such
record or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Subordinated Term Loan (both principal and unpaid accrued
interest) in accordance with the terms of this Agreement and the Subordinated
Note.





Section 2.2.Subordinated
Note. The terms of the Subordinated Note are hereby incorporated by
reference into this Agreement as if fully set forth herein.





Section
2.3.Inability
to Determine Interest Rates.  If prior to the occurrence of any
Interest Reset Date, the Lender shall have determined (which determination shall
be conclusive and binding upon the Borrower) that (a) by reason of
circumstances affecting the relevant interbank market, ad­equate means do
not exist for ascertaining LIBOR, or (b) LIBOR does not adequately and fairly
reflect the cost to the Lender of maintaining the Subordinated Term Loan, the
Lender shall give written notice (or telephonic notice, promptly confirmed in
writing) to the Borrower as soon as practicable thereafter. Until the Lender
notifies the Borrower that the circumstances giv­ing rise to such notice no
longer exist, interest on the Subordinated Term Loan shall be calculated at the
Base Rate, plus1.30%per
annum.





Section
2.4.Illegality.If any Change in
Law shall make it unlawful or impossible for the Lender to maintain the
Subordinated Term Loan, the Lender shall promptly give notice thereof to the
Borrower, whereupon until the Lender notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
the Lender to continue accruing interest based on LIBOR shall be suspended. In
such case, the outstanding Subordinated Term Loan shall be converted to a loan
accruing interest at the Base Rate, plus1.30% per annum either
(x) on the next Interest Reset Date if the Lender may lawfully continue to
maintain the Subordinated Term Loan using LIBOR to such date or (y) immediately
if the Lender shall determine that it may not lawfully continue to maintain the
Subordinated Term Loan at LIBOR to such Interest Reset Date.





Section 2.5.Increased
Costs.





(a)
            If
      any Change in Law shall:





(i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
the Lender; or





(ii)           impose
on the Lender or the eurodollar interbank market any other condition affecting
this Agreement or the Subordinated Term Loan; and the result of the foregoing is
to increase the cost to the Lender of maintaining the Subordinated Term Loan or
to reduce the amount received or receivable by the Lender hereunder (whether of
principal, interest or any other amount), then the Borrower shall promptly pay,
upon written notice from and demand by the Lender, within five Business Days
after the date of such notice and demand, additional amount or amounts
sufficient to compensate the Lender for such additional costs incurred or
reduction suffered.





(b)           If
the Lender shall have determined that on or after the date of this Agreement any
Change in Law regarding capital requirements has or would have the ef­fect
of reducing the rate of return on the Lender's capital (or on the capital of the
Lender's parent corporation) as a consequence of its obligations here­under
to a level below that which the Lender or the Lender's parent corporation could
have achieved but for such Change in Law (taking into consideration the Lender's
policies or the policies of the Lender's parent corporation with respect to
capital adequacy) then, from time to time, within five (5) Business Days after
receipt by the Borrower of written de­mand by the Lender, the Borrower shall
pay to the Lender such additional amounts as will compensate the Lender or the
Lender's parent corporation for any such reduction suffered.


4


(c)           A
certifi­cate of the Lender setting forth the amount or amounts necessary to
compensate the Lender or its parent corporation, as the case may be, specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be con­clusive, absent manifest error.  The Borrower shall
pay the Lender such amount or amounts within 10 days after receipt
thereof.





(d)           Failure
or delay on the part of the Lender to demand compensation pursuant to this
Section shall not constitute a waiver of the Lender's right to demand such
compensation.





Section 2.6.  Funding
Indemnity.  In the event of the payment of any principal of the
Subordinated  Loan other than on an Interest Reset Date or the
Maturity Date, the Borrower shall compensate the Lender, within five (5)
Business Days after written demand from the Lender,  for any loss,
cost or expense attributable to such event. Such loss, cost or expense shall be
deemed to include an amount determined by the Lender to be the excess, if any,
of  (A) the amount of interest that would have accrued on the
principal amount of the Subordinated Term Loan if such event had not occurred at
LIBOR applicable to the Subordinated Term Loan for the period from the date of
such event to the next Interest Reset Date  over (B) the amount of
interest that would accrue on the principal amount of the Subordinated Loan for
the same period if LIBOR were set on the date the Subordinated Term Loan was
prepaid.  A certifi­cate as to any additional amount payable under
this Section 2.6
submitted to the Borrower by the Lender shall be con­clusive, absent
manifest error.





ARTICLE
III





CONDITIONS PRECEDENT TO
SUBORDINATED  TERM LOAN








Section
3.1.Conditions
To Making the Subordinated Term Loan.  The obligation of the
Lender to make the Subordinated Term Loan hereunder is subject to the receipt by
the Lender of the following documents in form and substance reasonably
satisfactory to the Lender:





(a)
            this
      Agreement duly executed and delivered by the
  Borrower;





(b)
            a
      duly executed Subordinated Note;





(c)           a
certificate of the Secretary or Assistant Secre­tary of the Borrower,
attaching and certifying copies of its articles of incorporation, bylaws and of
the resolutions of its board of directors, authorizing the execution, delivery
and performance of the Loan Documents and certifying the name, title and true
signature of each officer of the Borrower authorized to execute the Loan
Documents;





(d)           a
certificate of corporate existence issued by the Office of the Comptroller of
the Currency dated not later than 5 Business Days prior to the Closing
Date;





(e)           a
favorable written opinion of  Schell Bray Aycock Abel & Livingston
PLLC, counsel to the Borrower, addressed to the Lender, and covering such
matters relating to the Borrower, the Loan Documents and the transactions
contemplated therein as the Lender shall reasonably request;





(f)           a
certificate of Borrower, signed by the Chief Executive Officer, President or an
Executive Vice President and by the Chief Financial Officer, Treasurer or
Assistant Treasurer of the Borrower,  certifying that : (a)all representations and
warranties of the Borrower  herein shall be true and correct in all
material respects on and as of the Closing Date, both before and after giving
effect to the Subordinated Term Loan,  and (b) since December 31,
2007, there has been no material adverse change in the condition (financial or
other), earnings, business, prospects or assets of the Borrower or of the
Company and its Subsidiaries; and


5








(g)           the
payment of the fee owed to SunTrust Robinson Humphrey, Inc. set forth in that
certain letter dated June 6, 2008 from SunTrust Robinson Humphrey, Inc. to the
Borrower.








ARTICLE IV





REPRESENTATIONS AND
WARRANTIES





The
Borrower represents and warrants to the Lender as follows:





Section 4.1.Existence;
Power. The Borrower is a national bank chartered under the laws of the
United States and has all requisite power and authority to carry on its business
as now conducted.





Section 4.2.Organizational
Power; Authorization.  The execution, delivery and performance
by the Borrower of each of the Loan Documents are within the Borrower’s
corporate powers and have been duly authorized by all necessary corporate, and
if required, stockholder, action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by the Borrower will constitute, valid and binding
obligations of the Borrower, en­forceable against it in accordance with
their re­spective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.





Section 4.3.Governmental
Approvals; No Conflicts. The execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents  (a) do not
require any consent or approval of, registration or filing with, or any action
by, any Governmental Authority, except those as have been obtained or made and
are in full force and effect, (b) will not violate any applicable law or
regulation or the articles of incorporation or by-laws of the Borrower or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, material agreement or other material instrument binding on
the Company or any of its Subsidiaries or any of their respective assets or give
rise to a right thereunder to require any payment to be made by the Company or
any of its Subsidiaries and (d) will not result in the creation or imposition of
any Lien on any asset of the Borrower.





Section 4.4.  Financial
Statements.  (a) The Borrower has furnished to the Lender (i)
the con­solidated balance sheet of the Company and its Subsidiaries as of
December 31, 2007 and the related consolidated statements of income, of
shareholders' equity and comprehensive income and of cash flows for the fiscal
year then ended, each as audited by Dixon Hughes PLLC and (ii) the unaudited
consolidated balance sheet of the Company and its Subsidiaries as at the end of
the March 31, 2008, and the related unaudited consolidated statements of
in­come and of cash flows for the fiscal quarter then ending, certified by
the Chief Financial Officer of the Company.  Such financial statements
fairly present the consolidated financial condition of the Company and its
Subsidiaries as of such dates and the consolidated results of
op­erations  and cash flows for such periods in conformity with
GAAP consistently applied, subject to year end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii). Since
December 31, 2007, there have been no changes with respect to the Company and
its Subsidiaries which have had or couldreasonably be expected
to have, singly or in the aggregate, a Material Adverse Effect.








(b)           The
Company’s FR Report Y-9C and FR Report Y-9LP, each dated March 31, 2008,
provided to the Lender is the most recently available of
such  reports, and the information therein fairly presents in all
material respects the financial position of the Company and its Subsidiaries as
of such date.


6











(c)           The
Borrower’s then-current and a duly executed copy of the then-current Call Report
provided to the Lender is the most recently available of such report, and the
information therein fairly presents in all material respects the financial
position of the Borrower.





Section 4.5.Litigation
Matters.  No litigation, investigation or proceeding of or
before any arbitra­tors or Governmental Authorities is pending against, or,
to the knowledge of the Borrower, threatened against or affecting the Company or
any of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect or (ii) which in any
manner draws into question the validity or enforceability of this Agreement or
any other Loan Document.





Section 4.6.Compliance
with Laws and Agreements.  The Company  and each
Subsidiary is in compliance with (a) all applicable laws (including without
limitation all federal and state banking statutes) and all rules, regulations
(including without limitation all federal and state banking regulations) and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except in each case where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.





Section
4.7. Regulatory Enforcement Matters.Neither
the Company nor any of its Subsidiaries (including the Borrower), nor any of
their respective officers, directors, employees or representatives, is subject
or is party to, or has received any notice from any Governmental Authority that
any of them will become subject or party to any investigation with respect to,
any cease-and-desist order, agreement, civil monetary penalty, bar or suspension
from the securities investment or banking businesses, consent agreement,
memorandum of understanding or other regulatory enforcement action, proceeding
or order with or by, or is a party to any commitment letter or similar
undertaking to, or is subject to any directive by, or has been a recipient of
any supervisory letter from, or has adopted any board resolutions at the request
or suggestion of, any Governmental Authority that, in any such case, currently
restricts in any material respect the conduct of their business or that in any
material manner relates to their capital adequacy, their credit policies, their
management or their business (each, a “Regulatory Action”),
nor has the Company or any of its Subsidiaries (including the Borrower) been
advised by any Governmental Authority that it is considering issuing or
requesting any such Regulatory Action; and there is no unresolved violation,
criticism or exception by any Governmental Authority with respect to any report
or statement relating to any examinations of the Company or any of its
Subsidiaries (including the Borrower), except where such unresolved violation,
criticism or exception would not, singly or in the aggregate, have a Material
Adverse Effect.




Section 4.8.Investment
Company Act.  The Borrower is not an "investment company", as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended.





Section 4.9.Taxes.  The
Borrower and its Subsidiaries have timely filed or caused to be filed all
Federal income tax returns and all other material tax returns that are
re­quired to be filed by them, and have paid all taxes shown to be due and
payable on such returns or on any assessments made against it or its property
and all other taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority, except (i) to the extent the failure to do so
would not have a Material Adverse Effect or (ii)where the same are
currently being contested in good faith by ap­propriate proceedings and for
which the Borrower or such Subsidiary, as the case may be, has set aside on its
books adequate reserves.





Section
4.10.   Disclosure.
The Borrower has disclosed to the Lender all agreements, instruments, and
corporate or other restrictions to which the Borrower or any of its Subsidiaries
is subject, and all other matters known to any of them, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.  None of the reports (including without limitation all reports
that the


7


Borrower
is required to file with the Commission), financial statements, certificates or
other information furnished by or on behalf of the Borrower to the Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not
misleading.





Section 4.11. Dividend
Restrictions; Other Restrictions.(a)The Borrower has not
violated any applicable regulatory restrictions on dividends, and no
Governmental Authority has taken any action to restrict the payment of dividends
by the Borrower.





(b) Neither the Company nor any
Subsidiary is under investigation by, or is operating under any restrictions
(excluding any restrictions on the payment of dividends referenced in subsection
(a) above) imposed by or agreed to with, any Governmental Authority, other than
routine examinations by such Governmental Authorities.





Section 4.12.Capital
Measures.On the Closing
Date, the Borrower has been, or is deemed to have been, notified by the
appropriate Governmental Authority having regulatory authority over it that it
is “adequately capitalized”,  as determined in accordance with any
regulations established by such Governmental Authority.





Section 4.13.FDIC
Insurance.The
deposits of the Borrower are insured by the FDIC to the fullest extent permitted
by law and the rules and regulations of the FDIC, and no proceedings for the
termination of such insurance are pending or, to the knowledge of the Borrower,
threatened.





Section 4.14.OFAC.Neither the Company nor any
of its Subsidiaries (i) is a person whose property or interest in property is
blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such person in any
manner violative of Section 2 or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.





Section 4.15.Patriot
Act.Each of the
Company and its Subsidiaries is in compliance, in all material respects, with
(i) the Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto and (ii) the Uniting And Strengthening America
By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA
Patriot Act of 2001).  No part of the proceeds of the Revolving Loans
will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as
amended.


8








ARTICLE V





COVENANTS





The
Borrower covenants and agrees that so long as the Subordinated Term Loan has not
been repaid in full and the Subordinated Note has been cancelled:





Section 5.1.  Financial
Statements and Other Information. The Borrower will deliver to the
Lender:





(a)           as
soon as available and in any event within 90 days after the end of each fiscal
year of the Company, a copy of the annual audited report for such fiscal year
for the Company and its Subsidiaries, containing a consolidated balance sheet
and the related consolidated statements of income, of shareholders' equity and
comprehensive income, and of cash flows (together with all footnotes thereto),
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and reported on by independent public
accountants of nationally recognized standing (without a "going concern" or like
qualification, exception or explanation  and without any qualification
or exception as to scope of such audit) to the effect that  such
financial statements present fairly in all material respects the financial
condition and the results of operations and cash flows on a consolidated basis
of the Company for such fiscal year in accordance with GAAP and that the
exami­nation by such accountants in connection with
such  financial statements has been made in accordance with generally
accepted auditing standards; provided, that the
requirements set forth in this clause (a) may be fulfilled by providing to the
Lender the report of the Company to the Commission on Form 10-K for the
applicable fiscal year;





(b)           as
soon as avail­able and in any event within 45 days after the end of each of
the first three fiscal quarters of each fiscal year of the Company, an unaudited
balance sheet of the Company and its Subsidiaries on a consolidated basis as of
the end of such fiscal quarter and the related unaudited statements of
in­come and cash flows of the Company and its Subsidiaries on a consolidated
basis for such fiscal quarter and the then elapsed portion of such fiscal year,
setting forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of Company's previous fiscal year, all
certified by the chief financial officeror treasurerof the Company as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes; provided, that the
requirements set forth in this clause (b) may be fulfilled by providing to the
Lender the report of the Company to the Commission on Form 10-Q for the
applicable fiscal quarter;





(c)           concurrently
with the delivery of the financial statements referred to in clauses (a) and (b)
above, duly executed copies of the Company’s then-current FR Report Y-9C and FR
Report Y-9LP and a duly executed copy of the then-current Call Report for the
Borrower; and





(e)           promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed with the Commission, or any
Governmental Authority succeeding to any or all functions of said Commission, or
with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be.





Documents
required to be delivered pursuant to Section 5.1(a) or (b) or Section 5.1(e) that are filed
with, or furnished to, the Commission electronically shall be deemed to have
been delivered to the Lender on the date (i) on which the Company posts such
documents or provides a link thereto on the Company’s website on the internet at
the website address set forth in Section 9.1 or (ii)
on which such documents are posted on the Company’s behalf on an internet or
intranet website, if any, to which the Lender has access; provided, that (A)
the Borrower shall deliver paper copies of such documents to the Lender if the
Lender so requests in writing


9


until a
further written notice is received by the Borrower from the Lender to cease
delivering paper copies and (B) the Borrower shall notify (which may be by
facsimile or electronic mail) the Lender of the posting of any such documents.
Notwithstanding the foregoing, as long as the Revolving Credit Agreement remains
in effect, compliance by the Company of its requirements under Sections 5.1 and
5.2 of the Revolving Credit Agreement shall satisfy the Borrower’s requirements
under Section 5.1 and Section 5.2 of this Agreement.





Section 5.2.Notices
of Material Events.  The Borrower will furnish to the Lender
prompt written notice of the following:





(a)           the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or, to the knowledge of the
Borrower, affecting the Company or any Subsidiary which could reasonably be
expected to result in a Material Adverse Effect;





(b)           any
material investigation of the Company or any Subsidiary by any Governmental
Agency having regulatory authority over the Company or any such Subsidiary
(other than routine examinations of the Borrower and/or any such
Subsidiary);





(c)           the
issuance of any cease and desist order, written agreement, cancellation of
insurance or other public enforcement action by the FDIC or other Governmental
Authority having regulatory authority over the Company or any
Subsidiary;





(d)           the
issuance of any memorandum of understanding or proposed disciplinary action by
or from any Governmental Authority having regulatory authority over the Company
or any Subsidiary, to the extent that the Company or any such Subsidiary is
permitted to disclose such information (provided that the Borrower shall take
all reasonable efforts to obtain any necessary regulatory
consents);





(e)           any
other development that results in, or could reasonably be expected to result in,
a Material Adverse Effect.





Each notice delivered under this
Section shall be accompanied by a written statement of a Responsible Officer
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.





Section 5.3.Use of
Proceeds.  The Borrower will use the proceeds of the
Subordinated  Loan for general working capital purposes. No part of
the proceeds of the Subordinated Term Loan will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulation T, U or
X.








ARTICLE VI





MISCELLANEOUS





Section 6.1.Notices.





(a)           Except
in the case of notices and other communications expressly permitted to be given
by telephone, all notices and other communications to any party herein to be
effective shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy, as
follows:


10





To
      the Borrower:
            CommunityONE
      Bank, National Association150
      South Fayetteville StreetAsheboro,
      North Carolina 27203Attn:
      Carey Chapman, TreasurerTelephone
      Number: (336) 318-7872Fax
      Number: (336) 328-1623Email:
      carey.chapman@myyesbank.comWebsite:
      www.myyesbank.comTo
      the Lender:
            SunTrust
      BankAtlanta,
      Georgia 30308Attn:
      Susan ThigpenTelephone
      Number: (404) 588-7270Fax
      Number: (404) 581-1775Email:
      Susan.Thigpen@suntrust.com








Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient).





Any
      party hereto may change its address or telecopy number for notices and
      other communications hereunder by notice to the other parties
      hereto.  All such notices and other communications shall, when
      transmitted by overnight delivery, or faxed, be effective when delivered
      for overnight (next-day) delivery, or transmitted in legible form by
      facsimile machine, respectively, or if mailed, upon the third Business Day
      after the date deposited into the mails or if delivered, upon delivery;
      provided,
      that notices delivered to the Lender shall not be effective until actually
      received by the Lender at its address specified in this Section 6.1.
      With respect to any communications delivered or furnished by electronic
      communication under Section 5.1,
      such communications sent to an e-mail address shall be deemed received
      upon the sender’s receipt of an acknowledgement from the intended
      recipient (such as by the “return receipt requested” function, as
      available, return e-mail or other written acknowledgement); provided, that
      if such communications are not sent during the normal business hours of
      the recipient, such communications shall be deemed to have been sent at
      the opening of business on the next Business Day for the recipient, and
      (ii)  communications posted to an internet or intranet website shall
      be deemed received upon the deemed receipt by the intended recipient at
      its e-mail address as described in the foregoing clause (i) of
      notification that such communication is available and identifying the
      website address therefor.





(b)           Any
agreement of the Lender herein to receive certain notices by telephone or
facsimile is solely for the convenience and at the request of the
Borrower.  The Lender shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Borrower to give such
notice and the Lender shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Lender in reliance
upon such telephonic or facsimile notice.





Section 6.2.Waiver;
Amendments.





(a)           No
failure or delay by the Lender in exercising any right or power hereunder or any
other Loan Document, and no course of dealing between the Borrower and the
Lender,shall
oper­ate as a waiver thereof, nor shall any single or partial exercise of
any such right or power or any abandonment or


11


discontinuance
of steps to enforce such right or power, preclude any other or further exercise
thereof or the exer­cise of any other right or power hereunder or
thereunder.  The rights and remedies of the Lender hereunder and under
the other Loan Documents are cumulative and are not exclu­sive of any rights
or remedies provided by law. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.





(b)           No
amendment or waiver of any provision of this Agreement or the other Loan
Documents, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Borrower and the Lender and then such waiver or consent shall be effective only
in the specific instance and for the spe­cific purpose for which
given.





Section 6.3.Expenses;
Indemnification.





(a)           The
Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of the
Lender (including, without limitation, the reasonable fees, charges and
disbursements of outside counsel and the allocated cost of inside counsel) in
connection with the preparation and administration of the Loan Documents and any
amendments, modifications or waivers thereof (whether or not the transactions
contemplated in this Agreement or any other Loan Document shall be consummated),
and (ii) all out-of-pocket costs and expenses (including, without limitation,
the reasonable fees, charges and disbursements of outside coun­sel and the
allocated cost of inside counsel) incurred by the Lender in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Subordinated
Term Loan, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Subordinated Term
Loan.





(b)The Borrower shall indemnify the
Lender and each affiliate of the Lender, and each officer, director, employee,
agents and advisors of the Lender and each affiliate of the Lender (each, an
"Indemnitee")
against, and hold each of them harmless from, any and all costs, losses,
liabilities, claims, damages and related expenses, including the reasonable
fees, charges and disbursements of any counsel for any Indemnitee, which may be
incurred by any Indemnitee,  or asserted against any Indemnitee by the
Borrower or any third Person, arising out of, in connection with or as a result
of (i) the execution or delivery of any this Agreement or any other agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation  of any of the
transactions contemplated hereby, (ii) the Subordinated Term Loan or any actual
or proposed use of the proceeds therefrom, or (iii)any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether brought by the Borrower or any third Person and whether
based on contract, tort, or any other theory  and regardless of
whether any Indemnitee is a party thereto; provided, that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined  by a
court of competent jurisdiction in a final and nonappealable judgment to have
resulted from the  gross negligence or willful misconduct of such
Indemnitee.





(c)The Borrower shall pay, and
hold the Lender harmless from and against, any and all present and future stamp,
documentary, and other similar taxes with re­spect to this Agreement and any
other Loan Documents, any collateral described therein, or any payments due
thereunder, and save the Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay such
taxes.





(d)           To
the extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to actual or
direct damages) arising out of, in connection with or as a result
of,


12


this
Agreement, any other Loan Document, the transactions contemplated herein or
therein, the Subordinated Term Loan or the use of proceeds thereof.





(e)           All
amounts due under this Section shall be payable promptly after written demand
therefor.





Section 6.4.  Successors
and Assigns.





(a)           The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights hereunder without the
prior written consent of the Lender (and any attempted assignment or transfer by
the Borrower without such consent shall be null and void).





(b)           The
Lender may at any time sell participations or assignments in all or a portion of
its rights and obligations under this Agreement and the other Loan
Documents.





Section
6.5.   Governing
Law; Jurisdic­tion; Consent to Service of Process.





(a)           This
Agreement and the other Loan Documents shall be construed in accordance with and
be governed by the law (without giving effect to the conflict of law principles
thereof) of the State of North Carolina.





(b)           The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the non-exclusive jurisdiction of any Federal and/or state court
(including without limitation the North Carolina Business Court, if
applicable)  located in the State of North Carolina and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any other Loan Document or the transactions contemplated
hereby or thereby, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such North Carolina state court (including the North Carolina Business Court)
or, to the extent permitted by applicable law, such Federal court. Each of the
parties hereto agrees that a final nonappealable judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that the Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Borrower or its properties in the courts of
any jurisdiction.





(c)           The
Borrower ir­­revocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action
or proceeding described in paragraph (b) of this Section and brought in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.





(d)           Each
party to this Agreement irrevocably consents to the service of process in the
manner provided for notices in Section
6.1.  Nothing in this Agreement or in any other Loan Document
will affect the right of any party hereto to serve process in any other manner
permitted by law.





Section 6.6.WAIVER OF
JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS


13


CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).





Section
6.7.Counterparts;
Integration.  This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement, the other Loan
Documents, and any separate letter agreement(s) relating to any fees payable to
the Lender constitute the entire agreement among the parties hereto and thereto
regarding the subject matters hereof and thereof and supersede all prior
agreements and understandings, oral or written, regarding such subject
matters.





Section 6.8.Survival.
All covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this
Agreement and the making  of the Subordinated Term Loan, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on the Subordinated Term Loan or any other amount
payable under this Agreement is outstanding and unpaid.  The
provisions of Section 6.3 shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Subordinated Term
Loan,  or the termination of this Agreement or any provision
hereof.  All representations and warranties made herein, in the
cer­tifi­cates, reports, notices, and other documents delivered
pursu­ant to this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents.





Section 6.9.Severability.  Any
provision of this Agreement ­or any other Loan Document held to be illegal,
invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining
provisions hereof or thereof; and the illegality, invalidity or unenforceability
of a particular provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.





Section 6.10.Patriot
Act.The Lender
hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow the Lender  to identify
the Borrower in accordance with the Patriot Act.  The Borrower shall,
and shall cause each of its Subsidiaries to, provide to the extent commercially
reasonable, such information and take such other actions as are reasonably
requested by the Lender in order to assist the Lender in maintaining compliance
with the Patriot Act.














[Remainder
of Page Intentionally Left Blank]


14


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed under seal in the
case of the Borrower by their respective authorized officers as of the day and
year first above written.





COMMUNITYONE
      BANK, NATIONAL ASSOCIATIONBy
            /s/ Mark A. SeversonName:  Mark
      A. SeversonTitle:  EVP/
      CFO[SEAL]SUNTRUST
      BANKBy
            /s/ Susan M. ThigpenName:  Susan
      M. ThigpenTitle:  Director





15











EXHIBIT
A





FLOATING RATE SUBORDINATED
NOTE DUE 2015





THIS NOTE
IS NOT REQUIRED TO BE, AND IS NOT, REGISTERED UNDER




THE
SECURITIES ACT OF 1933, AS AMENDED.




THIS
OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.  THIS
OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND GENERAL CREDITORS OF
THE BORROWER, IS UNSECURED, AND IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE
BORROWER.




Principal
      Amount:  $15,000,000
            Original
      Issue Date: June 30, 2008







COMMUNITYONE
BANK, NATIONAL ASSOCIATION




FOR VALUE
RECEIVED, CommunityONE Bank, National Association (the “Borrower”), hereby
promises to pay to SunTrust Bank (the “Bank”) at its offices at 303 Peachtree
Street, Atlanta, GA 30308 or at any other place as the Bank may from time to
time designate the principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) on
June 30, 2015 (the “Maturity Date”) and to pay interest thereon in arrears on
each March 31, June 30, September 30, and December 31 of each year and on the
Maturity Date (each, an “Interest Payment Date”), beginning on September 30,
2008, at a rate equal to LIBOR plus three and one-half percent (3.50%) per annum
(the “Interest Rate”).





The
Interest Rate for the initial interest period from the Original Issue Date to
September 30, 2008 shall be 6.30063% per annum, which was determined by
reference to the then prevailing LIBOR.  Thereafter, the Interest Rate
shall be reset quarterly (the “Interest Reset Period” and the first day of each
Interest Reset Period shall be an “Interest Reset Date”) by reference to the
then prevailing LIBOR.  The Interest Reset Dates for this Note shall
be March 31, June 30, September 30, and December 31of each year, beginning on
September 30, 2008.  If any Interest Reset Date falls on a day that is
not a Business Day, the Interest Reset Date shall be postponed to the next
succeeding Business Day, except if that Business Day is in the next succeeding
calendar month, the Interest Reset Date shall be the immediately preceding
Business Day.





"LIBOR"
means that rate per annum that is equal to the London interbank offered rate for
deposits in U.S. dollars for a three-month period, which rate appears on Reuters
Screen LIBOR01 Page (or any successor page), or such similar service as
determined by the Bank that displays British Bankers' Association interest
settlement rates for deposits in U.S. dollars, as of 11:00 A.M. (London, England
time) two (2) London Business Days prior to the Original Issue Date and each
Interest Reset Date; provided, that if no
such offered rate appears on such page, the rate used will be the per annum rate
of interest determined by the Bank to be the rate at which deposits in U.S.
dollars for a three-month period are offered to the Bank in the London
Inter-Bank Market as of 10:00 A.M. (Atlanta, Georgia time), on the day which is
two (2) Business Days prior to each Interest Reset Date.





The
amount of interest payable for any interest period shall be computed and paid on
the basis of a 360-day year and the actual number of days elapsed in the
relevant interest period. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name


16


this Note
is registered at the close of business on the date for such interest
installment.





The term
“Business Day” means any day that is not a Saturday or Sunday and that is not a
day on which banking institutions are generally authorized or required to be
closed in Atlanta, Georgia. The term “London Banking Day” means any day that is
not a Saturday or Sunday and that is not a day on which banking institutions are
generally authorized or required to be closed in Atlanta, Georgia and London,
England.





Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which further provisions shall for all purposes have the same effect as though
fully set forth at this place.





IN
WITNESS WHEREOF, the Borrower has caused this Note to be duly executed and its
corporate seal to be hereunto affixed and attested.





COMMUNITYONE
      BANK, NATIONAL ASSOCIATIONBy:Name:Title:

















[Reverse
Side of Note]




1.        Payment
of the principal on the Maturity Date and interest payable on each Interest
Payment Date will be made by wire transfer in immediately available funds to a
bank account in the United States designated by the Bank (the Bank, and any
assignee or transferee of the Bank, shall herein be referred to as the
“Holder”), in a written notice received by the Borrower. To the extent permitted
by applicable law, interest shall accrue at the rate at which interest accrues
on the principal of this Note, on any amount of principal of or interest on this
Note not paid when due.  All payments on this Note shall be applied
first to accrued interest and the balance, if any, to principal.




2.        Payments
of principal and interest on this Note shall be made in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts.  Until the date on which the
Note shall have been surrendered or delivered to the Borrower for cancellation
or destruction, or become due and payable and a sum sufficient to pay the
principal of and interest on the Note shall have been made available for payment
and either paid or returned to the Borrower as provided herein, the Borrower
shall at all times maintain an office where the Note or Notes may be presented
or surrendered for payment, and the location shall be communicated promptly to
the Holder of this Note.




3.        Except
as otherwise provided on the face of this Note, this Note is transferable, in
whole or in part, and may be exchanged for a like aggregate principal amount of
Notes of other authorized denominations, by the Holder in person, or by his
attorney duly authorized in writing, at the office of the
Borrower.  Upon surrender or presentation of this Note for exchange or
transfer, the Borrower shall execute and deliver in exchange therefor a Note or
Notes, which has or have an aggregate denomination equal to the denomination of
this Note and is or are issued in such name or names requested by the
Holder.  Any Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or accompanied by a written
instrument of transfer with such evidence of due authorization and guarantee of
signature as may reasonably be required by the




17


Borrower
in form satisfactory to the Borrower, duly executed by the Holder or his
attorney duly authorized in writing, and with such tax identification number or
other information for each person in whose name a Note is to be issued as the
Borrower may reasonably request to comply with applicable law.  No
exchange or transfer of this Note shall be made on or after the 15th day
immediately preceding the Maturity Date.




No
service charge (other than any cost of delivery) shall be imposed for any
exchange or transfer of this Note, but the Borrower may require the payment of a
sum sufficient to cover any stamp or other tax or governmental charge that may
be imposed in connection therewith (or presentation of evidence that such tax or
charge has been paid).




Prior to
due presentment of this Note for exchange or transfer, the Borrower and its
respective agents may treat the Holder on its books as the absolute owner of
this Note for the purpose of receiving payments of principal of and interest on
this Note and for all other purposes whatsoever, whether or not this Note be
overdue, and the Borrower shall not be affected by any notice to the
contrary.




4.        ANYTHING
TO THE CONTRARY HEREIN NOTWITHSTANDING, THIS NOTE IS NOT SUBJECT TO ANY SINKING
FUND.




5.        This
Note ranks pari passu with all other Notes issued hereunder and pari passu, in
the event of a liquidation or similar proceeding with respect to the Borrower,
with all other present or future unsecured subordinated debt obligations of the
Borrower, except any unsecured subordinated debt which may be expressly stated
to be subordinated to this Note and any other Notes issued
hereunder.




6.        The
indebtedness of the Borrower evidenced by this Note, including the principal and
interest, is unsecured and subordinate and junior in right of payment to the
Borrower’s obligations to its depositors, its obligations under bankers’
acceptances and letters of credit, its obligations to any Federal Reserve Bank
or the Federal Deposit Insurance Corporation (“FDIC”) and its obligations to its
other creditors, and to any rights acquired by the FDIC as a result of loans
made by the FDIC to the Borrower or the purchase or guarantee of any of its
assets by the FDIC pursuant to the provisions of 12 U.S.C. Section 1823(c),
(d) or (e), in each case whether outstanding at the date of this Note or
hereafter incurred (except any obligations which expressly rank on a parity with
or junior to this Note).  In the event of any insolvency proceedings,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation, dissolution
or winding-up of or relating to the Borrower, whether voluntary or involuntary,
all such obligations, except obligations that expressly rank on a parity with or
junior to this Note, shall be entitled to be paid in full before any payment
shall be made on account of the principal of, or interest on, this
Note.  In the event of any such proceedings, after payment in full of
all sums owing with respect to such prior obligations, the Holder, together with
the holders of any other obligations of the Borrower ranking on a parity with
this Note, shall be entitled to be paid from the remaining assets of the
Borrower, the unpaid principal of, and the unpaid interest on, this Note or such
other obligations before any payment or other distribution, whether in cash,
property or otherwise, shall be made on account of any capital stock or any
obligations of the Borrower ranking junior to this Note.  Nothing
herein shall impair the obligation of the Borrower, which is absolute and
unconditional, to pay the principal of and any premium and any interest on this
Note in accordance with its terms.




7.        Notwithstanding
any other provisions of this Note, including specifically those set forth in the
sections relating to subordination, events of default and covenants of the
Borrower, it is expressly understood and agreed that the Office of the
Comptroller of the Currency (the “Comptroller”) or any receiver or conservator
of the Borrower appointed by the Comptroller shall have the right in the
performance of his legal duties, and as part of any transaction or plan of
reorganization or liquidation designed to protect or further the continued
existence of the Borrower or the rights of any parties or agencies with an
interest in, or claim against, the Borrower or its assets, to transfer or direct
the transfer of the obligations of this Note to any national banking
association, state bank or bank holding company selected by such official which
shall expressly assume the obligation of the due and punctual payment of the
unpaid principal, interest and premium, if any, on this Note and the due and
punctual performance of all covenants and conditions hereof; and the completion
of such




18


transfer
and assumption shall serve to supersede and void any default, acceleration or
subordination which may have occurred, or which may occur due or related to such
transaction, plan, transfer or assumption, pursuant to the provisions of this
Note, and shall serve to return the Holder to the same position, other than for
substitution of the obligor, it would have occupied had no default, acceleration
or subordination occurred; except that any interest and principal previously
due, other than by reason of acceleration, and not paid shall, in the absence of
a contrary agreement by the Holder of this Note, be deemed to be immediately due
and payable as of the date of such transfer and assumption, together with the
interest from its original due date at the rate provided for
herein.




8.        All
notices to the Borrower under this Note shall be in writing and addressed to the
Borrower at 150 South Fayetteville, Asheboro, North Carolina 27203,
Attention:  Carey Chapman, Treasurer, or to such other address of the
Borrower as the Borrower may notify to the Holder.




9.        The
term “Event of Default,” as used in this Note, means any of the following events
(whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any decree, order, rule or regulation of any
governmental agency or body):




(i)           the
Borrower shall consent to the appointment of a receiver, liquidator, trustee or
other similar official in any receivership, liquidation, insolvency or similar
proceeding with respect to the Borrower or all or substantially all of the
property of the Borrower; or


(ii)           a
court or other governmental agency or body having jurisdiction in the premises
shall enter a decree or order for the appointment of a receiver, liquidator,
trustee or other similar official of the Borrower in any receivership,
liquidation, insolvency or similar proceeding with respect to the Borrower or
all or substantially all of the property of the Borrower, or for the winding up
or liquidation of the affairs or business of the Borrower.


The
Borrower will promptly notify the Holder upon the occurrence of an Event of
Default.




10.        If
an Event of Default shall occur and be continuing, the Holder may, at its
option, by written notice to the Borrower, declare this Note to be, and on the
day of such declaration shall have been delivered to the Borrower, this Note
shall become, immediately due and payable at its principal amount, together with
accrued and unpaid interest thereon to the date of payment;  provided,however, that to the extent then required
under or pursuant to applicable regulations of the Comptroller (including,
without limitation 12 C.F.R. § 5.47) no accelerated payment may be made
without the prior written approval of the Comptroller.




The
Holder of this Note may rescind a declaration of an Event of Default and
acceleration with respect to this Note under certain circumstances and may waive
any past Event of Default and its consequences.




11.        There
is no right of acceleration in the case of a default in the payment of the
principal of or interest on this Note or the performance of any other obligation
of the Borrower under this Note.




12.        Subject
to paragraph 7 hereof, the Borrower shall not consolidate with or merge into any
other person or convey, transfer or lease its properties and assets
substantially as an entirety to any person, unless (a) the person formed by
such consolidation or into which the Borrower is merged or the person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Borrower substantially as an entirety shall be a corporation, partnership
or other entity organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume the due and punctual payment of the principal of and any
premium and interest on this Note and the performance or observance of every
provision of this Note on the part of the Borrower to be performed or observed
and (b) immediately after giving effect to such transaction, no Event of
Default or nonpayment as described in Section 13 of this Note, and no event
which, after notice or lapse of time or both, would become such an Event of
Default or nonpayment, shall have happened and be continuing.




13.        No
provision of this Note shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or




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currency,
herein prescribed.  No failure or delay on the part of the Holder in
exercising any right under this Note shall operate as a waiver of, or impair,
any such right.  No waiver of any such rights shall be effective
unless given in writing.




14.        This
Note constitutes subordinated debt which qualifies as capital as provided in
12 C.F.R. Part 3, Appendix A.




15.        This
Note is a debt of the Borrower only and is not an obligation of FNB United Corp.
or any of its affiliates other than the Borrower.




16.        THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NORTH CAROLINA AND, WHERE APPROPRIATE, THE LAWS OF THE
UNITED STATES.










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