Unassociated Document


    
      

    

    Exhibit
10.1

     

    UNITED STATES DEPARTMENT OF THE TREASURY

    1500
PENNSYLVANIA AVENUE, NW

    WASHINGTON, D.C.
20220

    


    


    Dear
Ladies and Gentlemen:

    


    The
company set forth on the signature page hereto (the “Company”) intends to issue in a
private placement the number of shares of a series of its preferred stock set
forth on Schedule A hereto (the “Preferred
Shares”) and a
warrant to purchase the number of shares of a series of its preferred stock set
forth on Schedule A hereto (the “Warrant” and, together with the
Preferred Shares, the “Purchased
Securities”) and
the United States Department of the Treasury (the “Investor”) intends to purchase from
the Company the Purchased Securities.

    


    The
purpose of this letter agreement is to confirm the terms and conditions of the
purchase by the Investor of the Purchased Securities. Except to the extent
supplemented or superseded by the terms set forth herein or in the Schedules
hereto, the provisions contained in the Securities Purchase Agreement – Standard
Terms attached hereto as Exhibit A (the “Securities
Purchase Agreement”) are incorporated by
reference herein. Terms that are defined in the Securities Purchase Agreement
are used in this letter agreement as so defined. In the event of any
inconsistency between this letter agreement and the Securities Purchase
Agreement, the terms of this letter agreement shall govern.

    


    Each of
the Company and the Investor hereby confirms its agreement with the other party
with respect to the issuance by the Company of the Purchased Securities and the
purchase by the Investor of the Purchased Securities pursuant to this letter
agreement and the Securities Purchase Agreement on the terms specified on
Schedule A hereto.

    


    This
letter agreement (including the Schedules hereto), the Securities Purchase
Agreement
(including the Annexes thereto), the Disclosure Schedules and the Warrant
constitute the entire agreement, and supersede all other prior agreements,
understandings, representations and warranties, both written and oral, between
the parties, with respect to the subject matter hereof. This letter agreement
constitutes the “Letter Agreement” referred to in the Securities Purchase
Agreement.

    


    This
letter agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed signature
pages to this letter agreement may be delivered by facsimile and such facsimiles
will be deemed as sufficient as if actual signature pages had been
delivered.

    


    


    * *
*


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    In
witness whereof, this letter agreement has been duly executed and delivered by
the duly authorized representatives of the parties hereto as of the date written
below.

    


    


    
      
        
          
            	 
      	
                    UNITED
      STATES DEPARTMENT OF THE TREASURY

                  
	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Neel Kashkari

                  
	 
      	 
      	
                    Name:

                  	
                    Neel
      Kashkari

                  
	 
      	 
      	
                    Title:

                  	
                    Interim
      Assistant Secretary

                  
	 
      	 
      	
                     

                  	
                     for
      Financial Stability

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    FNB
      UNITED CORP.

                  
	 
      	 
      	 
      	 
      
	 
      	

                    By:

                  	
                    /s/
      Michael C. Miller

                  
	 
      	 
      	
                    Name:

                  	
                    Michael
      C. Miller

                  
	 
      	 
      	
                    Title:

                  	
                    President

                  


          

        

      

    

    


    


    


    


    Date:  February
13, 2009


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
A

    ADDITIONAL TERMS AND
CONDITIONS

    


    Company
Information:

    


    Name of
the Company:  FNB United Corp.

    


    Corporate
or other organizational form:  corporation

    


    Jurisdiction
of Organization:  North Carolina

    


    Appropriate
Federal Banking Agency:  Board of Governors of the Federal Reserve
System

    


    
      	
              Notice
      Information:

            	
              FNB
      United Corp.

            


    

    150 South
Fayetteville Street

    Asheboro,
North Carolina 27203

    Attention:  Michael
C. Miller, President

    Telecopier:  336-625-2452

    


    Terms of the
Purchase:

    


    Series of
Preferred Stock Purchased:  Fixed Rate Cumulative Perpetual Preferred
Stock, Series A

    


    Per Share
Liquidation Preference of Preferred Stock:  $1,000

    


    Number of
Shares of Preferred Stock Purchased:  51,500

    


    Dividend
Payment Dates on the Preferred Stock:  February 15, May 15, August 15,
and November 15 of each year

    


    Number of
Initial Warrant Shares:  2,207,143

    


    Exercise
Price of the Warrant:  $3.50

    


    Purchase
Price:  $51,500,000

    


    Closing:

    


    Location
of Closing:  Hughes Hubbard & Reed LLP, One Battery Park Plaza,
New York, NY 10004

    


    Time of
Closing:  9:00 a.m., New York time

    


    Date of
Closing:  February 13, 2009

    


    
      	
              Wire
      Information for Closing:

            	
              ABA
      Number:

            


    

    Bank:  CommunityONE
Bank, NA

    Account
Name:  FNB United Corp.

    Account
Number:

    Beneficiary:


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
B

    


    


    CAPITALIZATION

    


    


    Capitalization
Date:  January 31, 2009

    


    


    Common
Stock

    


    Par
value:  $2.50

    


    Total
Authorized:  50,000,000

    


    Outstanding:  11,428,003

    


    Subject
to warrants, options, convertible

    securities,
etc.:  662,612

    


    Reserved
for benefit plans and other

    issuances:  2,314,133

    


    Remaining
authorized but unissued:  35,595,252

    


    Shares
issued after Capitalization Date

    (other
than pursuant to warrants, options,

    convertible
securities, etc. as set forth

    above):  0

    


    


    Preferred
Stock

    


    Par
value:  $10.00

    


    Total
Authorized:  200,000

    


    Outstanding
(by series):  none

    


    Reserved
for issuance:  none

    


    Remaining
authorized but unissued:  200,000


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
C

    


    REQUIRED STOCKHOLDER
APPROVALS

    


    


    
      
        
          	 
      	
                  Required %                      
      Vote
      Required

                


        

      

    

    


    Warrants -- Common Stock
Issuance

    


    Charter
Amendment

    


    Stock
Exchange Rules

    


    


    If no
stockholder approvals are required, please so indicate by checking the box:
x


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
D

    


    LITIGATION

    


    List any
exceptions to the representation and warranty in Section 2.2(l) of the
Securities

    Purchase
Agreement – Standard Terms.

    


    


    


    


    


    


    


    


    


    


    If none,
please so indicate by checking the box: x

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
E

    


    COMPLIANCE WITH
LAWS

    


    List any
exceptions to the representation and warranty in the second sentence of Section
2.2(m) of the Securities Purchase Agreement – Standard Terms.

    


    


    


    


    


    


    


    


    


    


    If none,
please so indicate by checking the box: x

    


    


    List any
exceptions to the representation and warranty in the last sentence of Section
2.2(m) of the Securities Purchase Agreement – Standard Terms.

    


    


    


    


    


    


    


    


    


    


    If none,
please so indicate by checking the box: x


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE
F

    


    REGULATORY
AGREEMENTS

    


    List any
exceptions to the representation and warranty in Section 2.2(s) of the
Securities Purchase Agreement – Standard Terms.

    


    


    


    


    


    


    


    


    


    


    If none,
please so indicate by checking the box:  x


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

    


    


    


     

    


    
      
        

      
  


           


    SECURITIES PURCHASE
AGREEMENT

    


    STANDARD
TERMS

      

       

      
        
  

    

      

     

     

     

     

     

     

     

     

    

      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    TABLE
OF CONTENTS

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 
      	 
      	
                                          Page

                                        
	 
      	 
      	 
      
	 
      	
                                          Article
      I

                                        	 
      
	 
      	 
      	 
      
	 
      	
                                          Purchase;
      Closing

                                        	 
      
	
                                           
      

                                        	 
      	
                                           
      

                                        
	
                                          1.1

                                        	
                                          Purchase

                                        	
                                          2

                                        
	
                                          1.2

                                        	
                                          Closing

                                        	
                                          2

                                        
	
                                          1.3

                                        	
                                          Interpretation

                                        	
                                          4

                                        
	 
      	 
      	 
      
	 
      	
                                          Article
      II

                                        	 
      
	 
      	 
      	 
      
	 
      	
                                          Representations
      and Warranties

                                        	 
      
	 
      	 
      	 
      
	
                                          2.1

                                        	
                                          Disclosure

                                        	
                                          4

                                        
	
                                          2.2

                                        	
                                          Representations
      and Warranties of the Company

                                        	
                                          5

                                        
	 
      	 
      	 
      
	 
      	
                                          Article
      III

                                        	 
      
	 
      	 
      	 
      
	 
      	
                                          Covenants

                                        	 
      
	 
      	 
      	 
      
	
                                          3.1

                                        	
                                          Commercially
      Reasonable Efforts

                                        	
                                          14

                                        
	
                                          3.2

                                        	
                                          Expenses

                                        	
                                          15

                                        
	
                                          3.3

                                        	
                                          Sufficiency
      of Authorized Common Stock; Exchange Listing

                                        	
                                          16

                                        
	
                                          3.4

                                        	
                                          Certain
      Notifications Until Closing

                                        	
                                          16

                                        
	
                                          3.5

                                        	
                                          Access,
      Information and Confidentiality

                                        	
                                          16

                                        
	 
      	 
      	 
      
	 
      	
                                          Article
      IV

                                        	 
      
	 
      	 
      	 
      
	 
      	
                                          Additional
      Agreements

                                        	 
      
	 
      	 
      	 
      
	
                                          4.1

                                        	
                                          Purchase
      for Investment

                                        	
                                          17

                                        
	
                                          4.2

                                        	
                                          Legends

                                        	
                                          17

                                        
	
                                          4.3

                                        	
                                          Certain
      Transactions

                                        	
                                          19

                                        
	
                                          4.4

                                        	
                                          Transfer
      of Purchased Securities and Warrant Shares; Restrictions on Exercise of
      the Warrant

                                        	
                                          19

                                        
	
                                          4.5

                                        	
                                          Registration
      Rights

                                        	
                                          20

                                        
	
                                          4.6

                                        	
                                          Voting
      of Warrant Shares

                                        	
                                          32

                                        
	
                                          4.7

                                        	
                                          Depositary
      Shares

                                        	
                                          32

                                        
	
                                          4.8

                                        	
                                          Restriction
      on Dividends and Repurchases

                                        	
                                          33

                                        
	
                                          4.9

                                        	
                                          Repurchase
      of Investor Securities

                                        	
                                          34

                                        
	
                                          4.10

                                        	
                                          Executive
      Compensation

                                        	
                                          35

                                        
	
                                          4.11

                                        	
                                          Bank
      and Thrift Holding Company Status

                                        	
                                          35

                                        
	
                                          4.12

                                        	
                                          Predominantly
      Financial

                                        	
                                          36

                                        


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            	 
      	
                    Article
      V

                  	 
      
	 
      	 
      	 
      
	 
      	
                    Miscellaneous

                  	 
      
	
                     

                  	 	
                     

                  
	
                    5.1

                  	
                    Termination

                  	
                    36

                  
	
                    5.2

                  	
                    Survival
      of Representations and Warranties

                  	
                    37

                  
	
                    5.3

                  	
                    Amendment

                  	
                    37

                  
	
                    5.4

                  	
                    Waiver
      of Conditions

                  	
                    37

                  
	
                    5.5

                  	
                    Governing Law: Submission to
      Jurisdiction, Etc.

                  	
                    37

                  
	
                    5.6

                  	
                    Notices

                  	
                    37

                  
	
                    5.7

                  	
                    Definitions

                  	
                    38

                  
	
                    5.8

                  	
                    Assignment

                  	
                    38

                  
	
                    5.9

                  	
                    Severability

                  	
                    39

                  
	
                    5.10

                  	
                    No
      Third Party Beneficiaries

                  	
                    39

                  


          

        

      

    

    


    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    


    LIST OF
ANNEXES

    


     

    
      	
              ANNEX
      A:

            	
              FORM
      OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED
  STOCK

            


    

    


    
      	
              ANNEX
      B:

            	
              FORM
      OF WAIVER

            


    

    


    
      	
              ANNEX
      C:

            	
              FORM
      OF OPINION

            


    

    


    
      	
              ANNEX
      D:

            	
              FORM
      OF WARRANT

            


    


    
      
         


      

      
        -iii-

        
          

        

      

      
         


      

    


    INDEX
OF DEFINED TERMS

    


    
      
        
          
            
              	 
      	 	
                      Location
      of

                    
	
                      Term

                    	  
    	
                      Definition

                    
	
                      Affiliate

                    	 	
                      5.7(b)

                    
	
                      Agreement

                    	 	
                      Recitals

                    
	
                      Appraisal
      Procedure

                    	 	
                      4.9(c)(i)

                    
	
                      Appropriate
      Federal Banking Agency

                    	 	
                      2.2(s)

                    
	
                      Bank
      Holding Company

                    	 	
                      4.11

                    
	
                      Bankruptcy
      Exceptions

                    	 	
                      2.2(d)

                    
	
                      Benefit
      Plans

                    	 	
                      1.2(d)(iv)

                    
	
                      Board
      of Directors

                    	 	
                      2.2(f)

                    
	
                      Business
      Combination

                    	 	
                      4.4

                    
	
                      business
      day

                    	 	
                      1.3

                    
	
                      Capitalization
      Date

                    	 	
                      2.2(b)

                    
	
                      Certificate
      of Designations

                    	 	
                      1.2(d)(iii)

                    
	
                      Charter

                    	 	
                      1.2(d)(iii)

                    
	
                      Closing

                    	 	
                      1.2(a)

                    
	
                      Closing
      Date

                    	 	
                      1.2(a)

                    
	
                      Code

                    	 	
                      2.2(n)

                    
	
                      Common
      Stock

                    	 	
                      Recitals

                    
	
                      Company

                    	 	
                      Recitals

                    
	
                      Company
      Financial Statements

                    	 	
                      2.2(h)

                    
	
                      Company
      Material Adverse Effect

                    	 	
                      2.1(a)

                    
	
                      Company
      Reports

                    	 	
                      2.2(i)(i)

                    
	
                      Company
      Subsidiary; Company Subsidiaries

                    	 	
                      2.2(i)(i)

                    
	
                      control;
      controlled by; under common control with

                    	 	
                      5.7(b)

                    
	
                      Controlled
      Group

                    	 	
                      2.2(n)

                    
	
                      CPP

                    	 	
                      Recitals

                    
	
                      EESA

                    	 	
                      1.2(d)(iv)

                    
	
                      ERISA

                    	 	
                      2.2(n)

                    
	
                      Exchange
      Act

                    	 	
                      2.1(b)

                    
	
                      Fair
      Market Value

                    	 	
                      4.9(c)(ii)

                    
	
                      Federal
      Reserve

                    	 	
                      4.11

                    
	
                      GAAP

                    	 	
                      2.1(a)

                    
	
                      Governmental
      Entities

                    	 	
                      1.2(c)

                    
	
                      Holder

                    	 	
                      4.5(k)(i)

                    
	
                      Holders’
      Counsel

                    	 	
                      4.5(k)(ii)

                    
	
                      Indemnitee

                    	 	
                      4.5(g)(i)

                    
	
                      Information

                    	 	
                      3.5(b)

                    
	
                      Initial
      Warrant Shares

                    	 	
                      Recitals

                    
	
                      Investor

                    	 	
                      Recitals

                    
	
                      Junior
      Stock

                    	 	
                      4.8(c)

                    
	
                      knowledge
      of the Company; Company’s knowledge

                    	 	
                      5.7(c)

                    
	
                      Last
      Fiscal Year

                    	 	
                      2.1(b)

                    
	
                      Letter
      Agreement

                    	 	
                      Recitals

                    


            

          

        

      

    

    

      
        
           


        

        
          -iv-

          
            

          

        

        
           


        

      

    

     

    
      
        
          
            
              	 
      	 	
                      Location
      of

                    
	
                      Term

                    	   
      	
                      Definition

                    
	
                      officers

                    	 	
                      5.7(c)

                    
	
                      Parity
      Stock

                    	 	
                      4.8(c)

                    
	
                      Pending
      Underwritten Offering

                    	 	
                      4.5(l)

                    
	
                      Permitted
      Repurchases

                    	 	
                      4.8(a)(ii)

                    
	
                      Piggyback
      Registration

                    	 	
                      4.5(a)(iv)

                    
	
                      Plan

                    	 	
                      2.2(n)

                    
	
                      Preferred
      Shares

                    	 	
                      Recitals

                    
	
                      Preferred
      Stock

                    	 	
                      2.1(b)

                    
	
                      Proprietary
      Rights

                    	 	
                      2.2(u)

                    
	
                      Purchase

                    	 	
                      Recitals

                    
	
                      Purchase
      Price

                    	 	
                      1.1

                    
	
                      Purchased
      Securities

                    	 	
                      Recitals

                    
	
                      Qualified
      Equity Offering

                    	 	
                      4.4

                    
	
                      register;
      registered; registration

                    	 	
                      4.5(k)(iii)

                    
	
                      Registrable
      Securities

                    	 	
                      4.5(k)(iv)

                    
	
                      Registration
      Expenses

                    	 	
                      4.5(k)(v)

                    
	
                      Regulatory
      Agreement

                    	 	
                      2.2(s)

                    
	
                      Rule
      144; Rule 144A; Rule 159A; Rule 405; Rule 415

                    	 	
                      4.5(k)(vi)

                    
	
                      Savings
      and Loan Holding Company

                    	 	
                      4.11

                    
	
                      Schedules

                    	 	
                      Recitals

                    
	
                      SEC

                    	 	
                      2.1(b)

                    
	
                      Securities
      Act

                    	 	
                      2.2(a)

                    
	
                      Selling
      Expenses

                    	 	
                      4.5(k)(vii)

                    
	
                      Senior
      Executive Officers

                    	 	
                      4.10

                    
	
                      Share
      Dilution Amount

                    	 	
                      4.8(a)(ii)

                    
	
                      Shelf
      Registration Statement

                    	 	
                      4.5(a)(ii)

                    
	
                      Signing
      Date

                    	 	
                      2.1(a)

                    
	
                      Special
      Registration

                    	 	
                      4.5(i)

                    
	
                      Stockholder
      Proposals

                    	 	
                      3.1(b)

                    
	
                      subsidiary

                    	 	
                      5.8(a)

                    
	
                      Tax;
      Taxes

                    	 	
                      2.2(o)

                    
	
                      Transfer

                    	 	
                      4.4

                    
	
                      Warrant

                    	 	
                      Recitals

                    
	
                      Warrant
      Shares

                    	 	
                      2.2(d)

                    


            

          

        

      

    


    
      
         


      

      
        -v-

        
          

        

      

      
         


      

    


    SECURITIES
PURCHASE AGREEMENT – STANDARD TERMS

    


    Recitals:

    


    WHEREAS,
the United States Department of the Treasury (the “Investor”)
may from time to time agree to purchase shares of preferred stock and warrants
from eligible financial institutions which elect to participate in the Troubled
Asset Relief Program Capital Purchase Program (“CPP”);

    


    WHEREAS,
an eligible financial institution electing to participate in the CPP and issue
securities to the Investor (referred to herein as the “Company”)
shall enter into a letter agreement (the “Letter
Agreement”) with the Investor which incorporates this Securities Purchase
Agreement – Standard Terms;

    


    WHEREAS,
the Company agrees to expand the flow of credit to U.S. consumers and businesses
on competitive terms to promote the sustained growth and vitality of the U.S.
economy;

    


    WHEREAS,
the Company agrees to work diligently, under existing programs, to modify the
terms of residential mortgages as appropriate to strengthen the health of the
U.S. housing market;

    


    WHEREAS,
the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (“Preferred
Stock”) set forth on Schedule A to the Letter Agreement (the “Preferred
Shares”) and a warrant to purchase the number of shares of its Common
Stock (“Common
Stock”) set forth on Schedule A to the Letter Agreement (the “Initial
Warrant Shares”) (the “Warrant”
and, together with the Preferred Shares, the “Purchased
Securities”) and the Investor intends to purchase (the “Purchase”)
from the Company the Purchased Securities; and

    


    WHEREAS,
the Purchase will be governed by this Securities Purchase Agreement – Standard
Terms and the Letter Agreement, including the schedules thereto (the “Schedules”),
specifying additional terms of the Purchase. This Securities Purchase Agreement
– Standard Terms (including the Annexes hereto) and the Letter Agreement
(including the Schedules thereto) are together referred to as this “Agreement”.
All references in this Securities Purchase Agreement – Standard Terms to
“Schedules” are to the Schedules attached to the Letter Agreement.

    


    NOW,
THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:


    
      
         


      

      
        -1-

        
          

        

      

      
         


      

    

     

    Article
I

    Purchase;
Closing

    


    1.1          
Purchase.  On
the terms and subject to the conditions set forth in this Agreement, the Company
agrees to sell to the Investor, and the Investor agrees to purchase from the
Company, at the Closing (as hereinafter defined), the Purchased Securities for
the price set forth on Schedule A (the “Purchase
Price”).

    


    1.2          
Closing.

    


    (a)           
On the terms and subject to the conditions set forth in this Agreement, the
closing of the Purchase (the “Closing”)
will take place at the location specified in Schedule A, at the time and on the
date set forth in Schedule A or as soon as practicable thereafter, or at such
other place, time and date as shall be agreed between the Company and the
Investor. The time and date on which the Closing occurs is referred to in this
Agreement as the “Closing
Date”.

    


    (b)          
Subject to the fulfillment or waiver of the conditions to the Closing in this
Section 1.2, at the Closing the Company will deliver the Preferred Shares and
the Warrant, in each case as evidenced by one or more certificates dated the
Closing Date and bearing appropriate legends as hereinafter provided for, in
exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the
Company on Schedule A.

    


    (c)          
The respective obligations of each of the Investor and the Company to consummate
the Purchase are subject to the fulfillment (or waiver by the Investor and
the

    Company,
as applicable) prior to the Closing of the conditions that (i) any approvals or
authorizations of all United States and other governmental, regulatory or
judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Purchase shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect and all waiting periods required by United
States and other applicable law, if any, shall have expired and (ii) no
provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
purchase and sale of the Purchased Securities as contemplated by this
Agreement.

    


    (d)           The
obligation of the Investor to consummate the Purchase is also subject to the
fulfillment (or waiver by the Investor) at or prior to the Closing of each of
the following conditions:

    


    (i)          
(A) the representations and warranties of the Company set forth in (x) Section 2.2(g) of this
Agreement shall be true and correct in all respects as though made on and
as of the Closing Date, (y) Sections 2.2(a) through (f) shall be true and
correct in all material respects as though made on and as of the Closing Date
(other than representations and warranties that by their terms
speak


    
      
         


      

      
        -2-

        
          

        

      

      
         


      

    


    as of
another date, which representations and warranties shall be true and correct in
all material respects as of such other date) and (z) Sections 2.2(h) through (v)
(disregarding all qualifications or limitations set forth in such
representations and warranties as to “materiality”, “Company Material Adverse
Effect” and words of similar import) shall be true and correct as though made on
and as of the Closing Date (other than representations and warranties that by
their terms speak as of another date, which representations and warranties shall
be true and correct as of such other date), except to the extent that the
failure of such representations and warranties referred to in this Section
1.2(d)(i)(A)(z) to be so true and correct, individually or in the aggregate,
does not have and would not reasonably be expected to have a Company Material
Adverse Effect and (B) the Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or prior
to the Closing;

    


    (ii)        
the Investor shall have received a certificate signed on behalf of the Company
by a senior executive officer certifying to the effect that the conditions set
forth in Section 1.2(d)(i) have been satisfied;

    


    (iii)       
the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the
amendment to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”)
in substantially the form attached hereto as Annex A (the “Certificate
of Designations”) and such filing shall have been accepted;

    


    (iv)       
(A) the Company shall have effected such changes to its compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden
parachute, severance and employment agreements) (collectively, “Benefit
Plans”) with respect to its Senior Executive Officers (and to the extent
necessary for such changes to be legally enforceable, each of its Senior
Executive Officers shall have duly consented in writing to such changes), as may
be necessary, during the period that the Investor owns any debt or equity
securities of the Company acquired pursuant to this Agreement or the Warrant, in
order to comply with Section 111(b) of the Emergency Economic Stabilization Act
of 2008 (“EESA”)
as implemented by guidance or regulation thereunder that has been issued and is
in effect as of the Closing Date, and (B) the Investor shall have received a
certificate signed on behalf of the Company by a senior executive officer
certifying to the effect that the condition set forth in Section 1.2(d)(iv)(A)
has been satisfied;

    


    (v)        
each of the Company’s Senior Executive Officers shall have delivered to the
Investor a written waiver in the form attached hereto as Annex B releasing the
Investor from any claims that such Senior Executive Officers may otherwise have
as a result of the issuance, on or prior to the Closing Date, of any regulations
which require the modification of, and the agreement of the Company hereunder to
modify, the terms of any Benefit Plans with respect to its
Senior


    
      
         


      

      
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    Executive
Officers to eliminate any provisions of such Benefit Plans that would not be in
compliance with the requirements of Section 111(b) of the EESA as implemented by
guidance or regulation thereunder that has been issued and is in effect as of
the Closing Date;

    


    (vi)       
the Company shall have delivered to the Investor a written opinion from counsel
to the Company (which may be internal counsel), addressed to the Investor and
dated as of the Closing Date, in substantially the form attached hereto as Annex
C;

    


    (vii)      
the Company shall have delivered certificates in proper form or, with the prior
consent of the Investor, evidence of shares in book-entry form, evidencing the
Preferred Shares to Investor or its designee(s); and

    


    (viii)      the
Company shall have duly executed the Warrant in substantially the form attached
hereto as Annex D and delivered such executed Warrant to the Investor or its
designee(s).

    


    1.3           
Interpretation.  When
a reference is made in this Agreement to “Recitals,”

    “Articles,”
“Sections,” or “Annexes” such reference shall be to a Recital, Article or
Section of, or Annex to, this Securities Purchase Agreement – Standard Terms,
and a reference to “Schedules” shall be to a Schedule to the Letter Agreement,
in each case, unless otherwise indicated. The terms defined in the singular have
a comparable meaning when used in the plural, and vice versa. References to
“herein”, “hereof”, “hereunder” and the like refer to this Agreement as a whole
and not to any particular section or provision, unless the context requires
otherwise. The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement. Whenever the
words “include,” "includes” or “including” are used in this Agreement, they
shall be deemed followed by the words “without limitation.” No rule of
construction against the draftsperson shall be applied in connection with the
interpretation or enforcement of this Agreement, as this Agreement is the
product of negotiation between sophisticated parties advised by counsel. All
references to “$” or “dollars” mean the lawful currency of the United States of
America. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the
section. References to a “business
day” shall mean any day except Saturday, Sunday and any day on which
banking institutions in the State of New York generally are authorized or
required by law or other governmental actions to close.

    


    Article
II

    Representations
and Warranties

    


    2.1          
Disclosure.


    
      
         


      

      
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    (a)          
“Company
Material Adverse Effect” means a material adverse effect on (i) the
business, results of operation or financial condition of the Company and its
consolidated subsidiaries taken as a whole; provided,
however,
that Company Material Adverse Effect shall not be deemed to include the effects
of (A) changes after the date of the Letter Agreement (the “Signing
Date”) in general business, economic or market conditions (including
changes generally in prevailing interest rates, credit availability and
liquidity, currency exchange rates and price levels or trading volumes in the
United States or foreign securities or credit markets), or any outbreak or
escalation of hostilities, declared or undeclared acts of war or terrorism, in
each case generally affecting the industries in which the Company and its
subsidiaries operate, (B) changes or proposed changes after the Signing Date in
generally accepted accounting principles in the United States (“GAAP”)
or regulatory accounting requirements, or authoritative interpretations thereof,
(C) changes or proposed changes after the Signing Date in securities, banking
and other laws of general applicability or related policies or interpretations
of Governmental Entities (in the case of each of these clauses (A), (B) and (C),
other than changes or occurrences to the extent that such changes or occurrences
have or would reasonably be expected to have a materially disproportionate
adverse effect on the Company and its consolidated subsidiaries taken as a whole
relative to comparable U.S. banking or financial services organizations), or (D)
changes in the market price or trading volume of the Common Stock or any other
equity, equity-related or debt securities of the Company or its consolidated
subsidiaries (it being understood and agreed that the exception set forth in
this clause (D) does not apply to the underlying reason giving rise to or
contributing to any such change); or (ii) the ability of the Company to
consummate the Purchase and the other transactions contemplated by this
Agreement and the Warrant and perform its obligations hereunder or thereunder on
a timely basis.

    


    (b)          
“Previously
Disclosed” means information set forth or incorporated in the
Company’s
Annual Report on Form 10-K for the most recently completed fiscal year of the
Company filed with the Securities and Exchange Commission (the “SEC”)
prior to the Signing Date (the “Last
Fiscal Year”) or in its other reports and forms filed with or furnished
to the SEC under Sections 13(a), 14(a) or 15(d) of the Securities Exchange Act
of 1934 (the “Exchange
Act”) on or after the last day of the Last Fiscal Year and prior to the
Signing Date.

    


    2.2           
Representations and
Warranties of the Company.  Except as Previously Disclosed, the
Company represents and warrants to the Investor that as of the Signing Date and
as of the Closing Date (or such other date specified herein):

    


    (a)          
Organization,
Authority and Significant Subsidiaries.  The Company has been
duly incorporated and is validly existing and in good standing under the laws of
its jurisdiction of organization, with the necessary power and authority to own
its properties and conduct its business in all material respects as currently
conducted, and except as has not, individually or in the aggregate, had and
would not reasonably be expected to have a Company Material Adverse Effect, has
been duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require 


    
      
         


      

      
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    such
qualification; each subsidiary of the Company that is a “significant subsidiary”
within the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act of
1933 (the “Securities
Act”) has been duly organized and is validly existing in good standing
under the laws of its jurisdiction of organization. The Charter and bylaws of
the Company, copies of which have been provided to the Investor prior to the
Signing Date, are true, complete and correct copies of such documents as in full
force and effect as of the Signing Date.

    


    (b)           Capitalization.  The
authorized capital stock of the Company, and the outstanding capital stock of
the Company (including securities convertible into, or exercisable or
exchangeable for, capital stock of the Company) as of the most recent fiscal
month-end preceding the Signing Date (the “Capitalization
Date”) is set forth on Schedule B. The outstanding shares of capital
stock of the Company have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive rights
(and were not issued in violation of any preemptive rights). Except as provided
in the Warrant, as of the Signing Date, the Company does not have outstanding
any securities or other obligations providing the holder the right to acquire
Common Stock that is not reserved for issuance as specified on Schedule B,
and the Company has not made any other commitment to authorize, issue or sell
any Common Stock. Since the Capitalization Date, the Company has not issued any
shares of Common Stock, other than (i) shares issued upon the exercise of stock
options or delivered under other equity-based awards or other convertible
securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule B and (ii) shares disclosed on Schedule
B.

    


    (c)           
Preferred
Shares.  The Preferred Shares have been duly and validly
authorized, and, when issued and delivered pursuant to this Agreement, such
Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and
will rank pari
passu with or senior to all other series or classes of Preferred Stock,
whether or not issued or outstanding, with respect to the payment of dividends
and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Company.

    


    (d)           
The Warrant and
Warrant Shares.  The Warrant has been duly authorized and, when
executed and delivered as contemplated hereby, will constitute a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law
or in equity (“Bankruptcy
Exceptions”). The shares of Common Stock issuable upon exercise of the
Warrant (the “Warrant
Shares”) have been duly authorized and reserved for issuance upon
exercise of the Warrant and when so issued in accordance with the terms of the
Warrant will be validly issued, fully paid and non-assessable, subject, if
applicable, to the approvals of its stockholders set forth on Schedule
C.


    
      
         


      

      
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    (e)           
Authorization,
Enforceability.

    


    (i)           The
Company has the corporate power and authority to execute and deliver this
Agreement and the Warrant and, subject, if applicable, to the approvals of its
stockholders set forth on Schedule C, to carry out its obligations hereunder and
thereunder (which includes the issuance of the Preferred Shares, Warrant and
Warrant Shares). The execution, delivery and performance by the Company of this
Agreement and the Warrant and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of the Company and its stockholders, and no further approval or
authorization is required on the part of the Company, subject, in each case, if
applicable, to the approvals of its stockholders set forth on Schedule C. This
Agreement is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to the Bankruptcy
Exceptions.

    


    (ii)          The
execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and thereby
and compliance by the Company with the provisions hereof and thereof, will not
(A) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or any
Company Subsidiary under any of the terms, conditions or provisions of (i)
subject, if applicable, to the approvals of the Company’s stockholders set forth
on Schedule C, its organizational documents or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by which
it or any Company Subsidiary may be bound, or to which the Company or any
Company Subsidiary or any of the properties or assets of the Company or any
Company Subsidiary may be subject, or (B) subject to compliance with the
statutes and regulations referred to in the next paragraph, violate any statute,
rule or regulation or any judgment, ruling, order, writ, injunction or decree
applicable to the Company or any Company Subsidiary or any of their respective
properties or assets except, in the case of clauses (A)(ii) and (B), for those
occurrences that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.

    


    (iii)        Other
than the filing of the Certificate of Designations with the Secretary of State
of its jurisdiction of organization or other applicable Governmental Entity, any
current report on Form 8-K required to be filed with the SEC, such filings and
approvals as are required to be made or obtained under any state “blue sky”
laws, the filing of any proxy statement contemplated by Section


    
      
         


      

      
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    3.1 and
such as have been made or obtained, no notice to, filing with, exemption or
review by, or authorization, consent or approval of, any Governmental Entity is
required to be made or obtained by the Company in connection with the
consummation by the Company of the Purchase except for any such notices,
filings, exemptions, reviews, authorizations, consents and approvals the failure
of which to make or obtain would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.

    


    (f)           Anti-takeover Provisions and
Rights Plan.  The Board of Directors of the

    Company
(the “Board of
Directors”) has taken all necessary action to ensure that the
transactions contemplated by this Agreement and the Warrant and the consummation
of the transactions contemplated hereby and thereby, including the exercise of
the Warrant in accordance with its terms, will be exempt from any anti-takeover
or similar provisions of the Company’s Charter and bylaws, and any other
provisions of any applicable “moratorium”, “control share”, “fair price”,
“interested stockholder” or other anti-takeover laws and regulations of any
jurisdiction. The Company has taken all actions necessary to render any
stockholders’ rights plan of the Company inapplicable to this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and
thereby, including the exercise of the Warrant by the Investor in accordance
with its terms.

    


    (g)           No Company Material Adverse
Effect.  Since the last day of the last completed fiscal period
for which the Company has filed a Quarterly Report on Form 10-Q or an Annual
Report on Form 10-K with the SEC prior to the Signing Date, no fact,
circumstance, event, change, occurrence, condition or development has occurred
that, individually or in the aggregate, has had or would reasonably be expected
to have a Company Material Adverse Effect.

    


    (h)           Company Financial
Statements.  Each of the consolidated financial statements of
the Company and its consolidated subsidiaries (collectively the “Company Financial
Statements”) included or incorporated by reference in the Company Reports
filed with the SEC since December 31, 2006, present fairly in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated therein (or if amended prior to the
Signing Date, as of the date of such amendment) and the consolidated results of
their operations for the periods specified therein; and except as stated
therein, such financial statements (A) were prepared in conformity with GAAP
applied on a consistent basis (except as may be noted therein), (B) have been
prepared from, and are in accordance with, the books and records of the Company
and the Company Subsidiaries and (C) complied as to form, as of their respective
dates of filing with the SEC, in all material respects with the applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto.


    
      
         


      

      
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    (i)           
Reports.

    


    (i)           Since
December 31, 2006, the Company and each subsidiary of the Company (each a “Company Subsidiary” and,
collectively, the “Company
Subsidiaries”) has timely filed all reports, registrations, documents,
filings, statements and submissions, together with any amendments thereto, that
it was required to file with any Governmental Entity (the foregoing,
collectively, the “Company
Reports”) and has paid all fees and assessments due and payable in
connection therewith, except, in each case, as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. As
of their respective dates of filing, the Company Reports complied in all
material respects with all statutes and applicable rules and regulations of the
applicable Governmental Entities. In the case of each such Company Report filed
with or furnished to the SEC, such Company Report (A) did not, as of its date or
if amended prior to the Signing Date, as of the date of such amendment, contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, and (B) complied as to
form in all material respects with the applicable requirements of the Securities
Act and the Exchange Act. With respect to all other Company Reports, the Company
Reports were complete and accurate in all material respects as of their
respective dates. No executive officer of the Company or any Company Subsidiary
has failed in any respect to make the certifications required of him or her
under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

    


    (ii)           The
records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the Company Subsidiaries or their accountants (including all
means of access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a material
adverse effect on the system of internal accounting controls described below in
this Section 2.2(i)(ii). The Company (A) has implemented and maintains
disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange
Act) to ensure that material information relating to the Company, including the
consolidated Company Subsidiaries, is made known to the chief executive officer
and the chief financial officer of the Company by others within those entities,
and (B) has disclosed, based on its most recent evaluation prior to the Signing
Date, to the Company’s outside auditors and the audit committee of the Board of
Directors (x) any significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting (as defined in Rule
13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information and (y) any fraud, whether or not material, that involves
management


    
      
         


      

      
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    or other
employees who have a significant role in the Company’s internal controls over
financial reporting.

    


    (j)            
No Undisclosed
Liabilities.  Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected or reserved
against in the Company Financial Statements to the extent required to be so
reflected or reserved against in accordance with GAAP, except for (A)
liabilities that have arisen since the last fiscal year end in the ordinary and
usual course of business and consistent with past practice and (B) liabilities
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.

    


    (k)          
 Offering of
Securities.  Neither the Company nor any person acting on its
behalf has taken any action (including any offering of any securities of the
Company under circumstances which would require the integration of such offering
with the offering of any of the Purchased Securities under the Securities Act,
and the rules and regulations of the SEC promulgated thereunder), which might
subject the offering, issuance or sale of any of the Purchased Securities to
Investor pursuant to this Agreement to the registration requirements of the
Securities Act.

    


    (l)           
 Litigation and
Other Proceedings.  Except (i) as set forth on Schedule D or
(ii) as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect, there is no (A) pending or, to the
knowledge of the Company, threatened, claim, action, suit, investigation or
proceeding, against the Company or any Company Subsidiary or to which any of
their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or
exception by any Governmental Entity with respect to any report or relating to
any examinations or inspections of the Company or any Company
Subsidiaries.

    


    (m)           Compliance with
Laws.  Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company
and the Company Subsidiaries have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, Governmental Entities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material to the business of the
Company or such Company Subsidiary. Except as set forth on Schedule E, the
Company and the Company Subsidiaries have complied in all respects and are not
in default or violation of, and none of them is, to the knowledge of the
Company, under investigation with respect to or, to the knowledge of the
Company, have been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline, order,
demand, writ, injunction, decree or judgment of any Governmental Entity, other
than such noncompliance, defaults or violations that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.  Except for statutory or regulatory
restrictions


    
      
         


      

      
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    of
general application or as set forth on Schedule E, no Governmental Entity has
placed any restriction on the business or properties of the Company or any
Company Subsidiary that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.

    


    (n)           Employee Benefit
Matters.  Except as would not reasonably be expected to have,
either individually or in the aggregate, a Company Material Adverse Effect: (A)
each “employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)) providing benefits
to any current or former employee, officer or director of the Company or any
member of its “Controlled
Group” (defined as any organization which is a member of a controlled
group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) that is sponsored,
maintained or contributed to by the Company or any member of its Controlled
Group and for which the Company or any member of its Controlled Group would have
any liability, whether actual or contingent (each, a “Plan”) has been maintained in
compliance with its terms and with the requirements of all applicable statutes,
rules and regulations, including ERISA and the Code; (B) with respect to each
Plan subject to Title IV of ERISA (including, for purposes of this clause (B),
any plan subject to Title IV of ERISA that the Company or any  member
of its Controlled Group previously maintained or contributed to in the six years
prior to the Signing Date), (1) no “reportable event” (within the meaning of
Section 4043(c) of ERISA), other than a reportable event for which the notice
period referred to in Section 4043(c) of ERISA has been waived, has occurred in
the three years prior to the Signing Date or is reasonably expected to occur,
(2) no “accumulated funding deficiency” (within the meaning of Section 302 of
ERISA or Section 412 of the Code), whether or not waived, has occurred in the
three years prior to the Signing Date or is reasonably expected to occur, (3)
the fair market value of the assets under each Plan exceeds the present value of
all benefits accrued under such Plan (determined based on the assumptions used
to fund such Plan) and (4) neither the Company nor any member of its Controlled
Group has incurred in the six years prior to the Signing Date, or reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and
without default) in respect of a Plan (including any Plan that is a
“multiemployer plan”, within the meaning of Section 4001(c)(3) of ERISA); and
(C) each Plan that is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the Internal Revenue Service
with respect to its qualified status that has not been revoked, or such a
determination letter has been timely applied for but not received by the Signing
Date, and nothing has occurred, whether by action or by failure to act, which
could reasonably be expected to cause the loss, revocation or denial of such
qualified status or favorable determination letter.

    


    (o)           Taxes.  Except
as would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, (i) the Company and the Company Subsidiaries
have filed all federal, state, local and foreign income and franchise Tax
returns required to be filed through the Signing Date, subject to permitted
extensions, and have paid all Taxes due thereon, and (ii) no Tax deficiency has
been determined


    
      
         


      

      
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    adversely
to the Company or any of the Company Subsidiaries, nor does the Company have any
knowledge of any Tax deficiencies. “Tax” or “Taxes” means any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add on
minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any Governmental
Entity.

    


    (p)           Properties and
Leases.   Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens, encumbrances, claims and defects that would affect the value thereof
or interfere with the use made or to be made thereof by them. Except as would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Company and the Company Subsidiaries hold all
leased real or personal property under valid and enforceable leases with no
exceptions that would interfere with the use made or to be made thereof by
them.

    


    (q)           Environmental
Liability.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect:

    


    (i)           there
is no legal, administrative, or other proceeding, claim or action of any nature
seeking to impose, or that would reasonably be expected to result in the
imposition of, on the Company or any Company Subsidiary, any liability relating
to the release of hazardous substances as defined under any local, state or
federal environmental statute, regulation or ordinance, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
pending or, to the Company’s knowledge, threatened against the Company or any
Company Subsidiary;

    


    (ii)          to
the Company’s knowledge, there is no reasonable basis for any such proceeding,
claim or action; and

    


    (iii)         neither
the Company nor any Company Subsidiary is subject to any agreement, order,
judgment or decree by or with any court, Governmental Entity or third party
imposing any such environmental liability.

    


    (r)           Risk Management
Instruments.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all
derivative instruments, including, swaps, caps, floors and option agreements,
whether entered into for the Company’s own account, or for the account of one or
more of the Company Subsidiaries or its or their customers, were entered into
(i) only in the ordinary course of business, (ii) in accordance with prudent
practices and in all material respects with all applicable laws, rules,
regulations and regulatory policies and (iii) with counterparties believed to be
financially responsible at the time; and each of such


    
      
         


      

      
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    instruments
constitutes the valid and legally binding obligation of the Company or one of
the Company Subsidiaries, enforceable in accordance with its terms, except as
may be limited by the Bankruptcy Exceptions. Neither the Company or the Company
Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is
in breach of any of its obligations under any such agreement or arrangement
other than such breaches that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.

    


    (s)           Agreements with Regulatory
Agencies.  Except as set forth on Schedule F, neither the
Company nor any Company Subsidiary is subject to any material cease-and-desist
or other similar order or enforcement action issued by, or is a party to any
material written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any capital directive by, or since December 31, 2006, has adopted any
board resolutions at the request of, any Governmental Entity (other than the
Appropriate Federal Banking Agencies with jurisdiction over the Company and the
Company Subsidiaries) that currently restricts in any material respect the
conduct of its business or that in any material manner relates to its capital
adequacy, its liquidity and funding policies and practices, its ability to pay
dividends, its credit, risk management or compliance policies or procedures, its
internal controls, its management or its operations or business (each item in
this sentence, a “Regulatory
Agreement”), nor has the Company or any Company Subsidiary been advised
since December 31, 2006 by any such Governmental Entity that it is considering
issuing, initiating, ordering, or requesting any such Regulatory Agreement. The
Company and each Company Subsidiary are in compliance in all material respects
with each Regulatory Agreement to which it is party or subject, and neither the
Company nor any Company Subsidiary has received any notice from any Governmental
Entity indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory Agreement. "Appropriate Federal Banking
Agency" means the “appropriate Federal banking agency” with respect to
the Company or such Company Subsidiaries, as applicable, as defined
in

    Section
3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section
1813(q)).

    


    (t)          
 Insurance.  The
Company and the Company Subsidiaries are insured with reputable insurers against
such risks and in such amounts as the management of the Company reasonably has
determined to be prudent and consistent with industry practice. The Company and
the Company Subsidiaries are in material compliance with their insurance
policies and are not in default under any of the material terms thereof, each
such policy is outstanding and in full force and effect, all premiums and other
payments due under any material policy have been paid, and all claims thereunder
have been filed in due and timely fashion, except, in each case, as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.

    


    (u)           Intellectual
Property.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, (i)
the Company and each Company Subsidiary owns or otherwise has the right to use,
all intellectual property rights, including all trademarks, trade dress, trade
names, service marks, domain names, patents, inventions, trade secrets,
know-how, works of authorship


    
      
         


      

      
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    and
copyrights therein, that are used in the conduct of their existing businesses
and all rights relating to the plans, design and specifications of any of its
branch facilities (“Proprietary Rights”) free and
clear of all liens and any claims of ownership by current or former employees,
contractors, designers or others and (ii) neither the Company nor any of the
Company Subsidiaries is materially infringing, diluting, misappropriating or
violating, nor has the Company or any or the Company Subsidiaries received any
written (or, to the knowledge of the Company, oral) communications alleging that
any of them has materially infringed, diluted, misappropriated or violated, any
of the Proprietary Rights owned by any other person. Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Company’s knowledge, no other person is
infringing, diluting, misappropriating or violating, nor has the Company or any
or the Company Subsidiaries sent any written communications since January 1,
2006 alleging that any person has infringed, diluted, misappropriated or
violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.

    


    (v)           Brokers and
Finders.  No broker, finder or investment banker is entitled to
any financial advisory, brokerage, finder's or other fee or commission in
connection with this Agreement or the Warrant or the transactions contemplated
hereby or thereby based upon arrangements made by or on behalf of the Company or
any Company Subsidiary for which the Investor could have any
liability.

    


    


    Article
III

    Covenants

    


    3.1           Commercially Reasonable
Efforts.

    


    (a)           Subject
to the terms and conditions of this Agreement, each of the parties will use its
commercially reasonable efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of
the Purchase as promptly as practicable and otherwise to enable consummation of
the transactions contemplated hereby and shall use commercially reasonable
efforts to cooperate with the other party to that end.

    


    (b)           If
the Company is required to obtain any stockholder approvals set forth on
Schedule C, then the Company shall comply with this Section 3.1(b) and Section
3.1(c). The Company shall call a special meeting of its stockholders, as
promptly as practicable following the Closing, to vote on proposals
(collectively, the “Stockholder Proposals”) to
(i) approve the exercise of the Warrant for Common Stock for purposes of the
rules of the national security exchange on which the Common Stock is listed
and/or (ii) amend the Company’s Charter to increase the number of authorized
shares of Common Stock to at least such number as shall be sufficient to permit
the full exercise of the Warrant for Common Stock and comply with the other
provisions of this Section 3.1(b) and Section 3.1(c). The Board of Directors
shall recommend to the Company’s


    
      
         


      

      
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    stockholders
that such stockholders vote in favor of the Stockholder Proposals. In connection
with such meeting, the Company shall prepare (and the Investor will reasonably
cooperate with the Company to prepare) and file with the SEC as promptly as
practicable (but in no event more than ten business days after the Closing) a
preliminary proxy statement, shall use its reasonable best efforts to respond to
any comments of the SEC or its staff thereon and to cause a definitive proxy
statement related to such stockholders’ meeting to be mailed to the Company’s
stockholders not more than five business days after clearance thereof by the
SEC, and shall use its reasonable best efforts to solicit proxies for such
stockholder approval of the Stockholder Proposals. The Company shall notify the
Investor promptly of the receipt of any comments from the SEC or its staff with
respect to the proxy statement and of any request by the SEC or its staff for
amendments or supplements to such proxy statement or for additional information
and will supply the Investor with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to such proxy statement. If at any time
prior to such stockholders’ meeting there shall occur any event that is required
to be set forth in an amendment or supplement to the proxy statement, the
Company shall as promptly as practicable prepare and mail to its stockholders
such an amendment or supplement. Each of the Investor and the Company agrees
promptly to correct any information provided by it or on its behalf for use in
the proxy statement if and to the extent that such information shall have become
false or misleading in any material respect, and the Company shall as promptly
as practicable prepare and mail to its stockholders an amendment or supplement
to correct such information to the extent required by applicable laws and
regulations. The Company shall consult with the Investor prior to filing any
proxy statement, or any amendment or supplement thereto, and provide the
Investor with a reasonable opportunity to comment thereon. In the event that the
approval of any of the Stockholder Proposals is not obtained at such special
stockholders meeting, the Company shall include a proposal to approve (and the
Board of Directors shall recommend approval of) each such proposal at a meeting
of its stockholders no less than once in each subsequent six-month period
beginning on January 1, 2009 until all such approvals are obtained or
made.

    


    (c)           None
of the information supplied by the Company or any of the Company Subsidiaries
for inclusion in any proxy statement in connection with any such stockholders
meeting of the Company will, at the date it is filed with the SEC, when first
mailed to the Company’s stockholders and at the time of any stockholders
meeting, and at the time of any amendment or supplement thereof, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading.

    


    3.2           Expenses.  Unless
otherwise provided in this Agreement or the Warrant, each of the parties hereto
will bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated under this Agreement and the
Warrant, including fees and expenses of its own financial or other consultants,
investment bankers, accountants and counsel.


    
      
         


      

      
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    3.3           Sufficiency of Authorized
Common Stock; Exchange Listing.

    


    (a)           During
the period from the Closing Date (or, if the approval of the Stockholder
Proposals is required, the date of such approval) until the date on which the
Warrant has been fully exercised, the Company shall at all times have reserved
for issuance, free of preemptive or similar rights, a sufficient number of
authorized and unissued Warrant Shares to effectuate such exercise. Nothing in
this Section 3.3 shall preclude the Company from satisfying its obligations in
respect of the exercise of the Warrant by delivery of shares of Common Stock
which are held in the treasury of the Company. As soon as reasonably practicable
following the Closing, the Company shall, at its expense, cause the Warrant
Shares to be listed on the same national securities exchange on which the Common
Stock is listed, subject to official notice of issuance, and shall maintain such
listing for so long as any Common Stock is listed on such exchange.

    (b) If
requested by the Investor, the Company shall promptly use its reasonable best
efforts to cause the Preferred Shares to be approved for listing on a national
securities exchange as promptly as practicable following such
request.

    


    3.4           Certain Notifications Until
Closing.  From the Signing Date until the Closing, the Company
shall promptly notify the Investor of (i) any fact, event or circumstance of
which it is aware and which would reasonably be expected to cause any
representation or warranty of the Company contained in this Agreement to be
untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of which
the Company is aware and which, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect; provided, however, that delivery of any
notice pursuant to this Section 3.4 shall not limit or affect any rights of or
remedies available to the Investor; provided, further, that a failure to
comply with this Section 3.4 shall not constitute a breach of this Agreement or
the failure of any condition set forth in Section 1.2 to be satisfied unless the
underlying Company Material Adverse Effect or material breach would
independently result in the failure of a condition set forth in Section 1.2 to
be satisfied.

    


    3.5           Access, Information and
Confidentiality.

    


    (a)           From
the Signing Date until the date when the Investor holds an amount of
Preferred
Shares having an aggregate liquidation value of less than 10% of the Purchase
Price, the Company will permit the Investor and its agents, consultants,
contractors and advisors (x) acting through the Appropriate Federal Banking
Agency, to examine the corporate books and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at
such reasonable times and as often as the Investor may reasonably request and
(y) to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate Federal Banking Agency. Any
investigation pursuant to this Section 3.5 shall be conducted during normal
business hours and in such manner as not to interfere


    
      
         


      

      
        -16-

        
          

        

      

      
         


      

    


    unreasonably
with the conduct of the business of the Company, and nothing herein shall
require the Company or any Company Subsidiary to disclose any information to the
Investor to the extent (i) prohibited by applicable law or regulation, or (ii)
that such disclosure would reasonably be expected to cause a violation of any
agreement to which the Company or any Company Subsidiary is a party or would
cause a risk of a loss of privilege to the Company or any Company Subsidiary
(provided that the
Company shall use commercially reasonable efforts to make appropriate substitute
disclosure arrangements under circumstances where the restrictions in this
clause (ii) apply).

    


    (b)           The
Investor will use reasonable best efforts to hold, and will use reasonable best
efforts to cause its agents, consultants, contractors and advisors to hold, in
confidence all nonpublic records, books, contracts, instruments, computer data
and other data and information (collectively, “Information”) concerning the
Company furnished or made available to it by the Company or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (i) previously known by such party on a non-confidential
basis, (ii) in the public domain through no fault of such party or (iii) later
lawfully acquired from other sources by the party to which it was furnished (and
without violation of any other confidentiality obligation)); provided that nothing herein
shall prevent the Investor from disclosing any Information to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process.

    


    


    Article
IV

    Additional
Agreements

    


    4.1           Purchases for
Investment.  The Investor acknowledges that the Purchased
Securities and the Warrant Shares have not been registered under the Securities
Act or under any state securities laws. The Investor (a) is acquiring the
Purchased Securities pursuant to an exemption from registration under the
Securities Act solely for investment with no present intention to distribute
them to any person in violation of the Securities Act or any applicable U.S.
state securities laws, (b) will not sell or otherwise dispose of any of the
Purchased Securities or the Warrant Shares, except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
applicable U.S. state securities laws, and (c) has such knowledge and experience
in financial and business matters and in investments of this type that it is
capable of evaluating the merits and risks of the Purchase and of making an
informed investment decision.

    


    
      	
               
      

            	
              4.2

            	
              Legends.

            


    

    


    (a)           The
Investor agrees that all certificates or other instruments representing the
Warrant and the Warrant Shares will bear a legend substantially to the following
effect:


    
      
         


      

      
        -17-

        
          

        

      

      
         


      

    

     

    “THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEENREGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS.”

    


    
      	
               
      

            	
              (b)

            	
              The
      Investor agrees that all certificates or other instruments representing
      the Warrant will also bear a legend substantially to the following
      effect:

            


    

    


    “THIS
INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER
AND OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT
BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES
REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE
WITH SAID AGREEMENT WILL BE VOID.”

    


    (c)           In
addition, the Investor agrees that all certificates or other instruments
representing the Preferred Shares will bear a legend substantially to the
following effect:

    


    “THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

    


    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS.  EACH PURCHASER OF THE
SECURITIES REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT
BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE


    
      
         


      

      
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    SECURITIES
ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE
SECURITIES REPRESENTED BY THIS INSTRUMENT
EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER
THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES REPRESENTED BY THIS
INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE SECURITIES
REPRESENTED BY THIS INSTRUMENT
ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.”

    


    (d)           In
the event that any Purchased Securities or Warrant Shares (i) become registered
under the Securities Act or (ii) are eligible to be transferred without
restriction in accordance with Rule 144 or another exemption from registration
under the Securities Act (other than Rule 144A), the Company shall issue new
certificates or other instruments representing such Purchased Securities or
Warrant Shares, which shall not contain the applicable legends in Sections
4.2(a) and (c) above; provided
that the Investor surrenders to the Company the previously issued
certificates or other instruments. Upon Transfer of all or a portion of the
Warrant in compliance with Section 4.4, the Company shall issue new certificates
or other instruments representing the Warrant, which shall not contain the
applicable legend in Section 4.2(b) above; provided that the Investor
surrenders to the Company the previously issued certificates or other
instruments.

    


    4.3           Certain
Transactions.  The Company will not merge or consolidate with,
or sell, transfer or lease all or substantially all of its property or assets
to, any other party unless the successor, transferee or lessee party (or its
ultimate parent entity), as the case may be (if not the Company), expressly
assumes the due and punctual performance and observance of each and every
covenant, agreement and condition of this Agreement to be performed and observed
by the Company.

    


    4.4           Transfer of Purchased
Securities and Warrant Shares; Restrictions on Exercise of the
Warrant.   Subject to compliance with applicable
securities laws, the Investor shall be permitted to transfer, sell, assign or
otherwise dispose of (“Transfer”) all or a portion
of the Purchased Securities or Warrant Shares at any time, and the Company shall
take all steps as may be reasonably requested by the Investor to facilitate the
Transfer of the Purchased Securities and the Warrant Shares; provided that the Investor
shall not Transfer a portion or portions of the Warrant with respect to, and/or
exercise the Warrant for, more than one-half of the Initial Warrant Shares (as
such number may be adjusted from time to time pursuant to Section 13 thereof) in
the aggregate until the


    
      
         


      

      
        -19-

        
          

        

      

      
         


      

    


    earlier
of (a) the date on which the Company (or any successor by Business Combination)
has received aggregate gross proceeds of not less than the Purchase Price (and
the purchase price paid by the Investor to any such successor for securities of
such successor purchased under the CPP) from one or more Qualified Equity
Offerings (including Qualified Equity Offerings of such successor) and (b)
December 31, 2009. “Qualified
Equity Offering” means the sale and issuance for cash by the Company to
persons other than the Company or any of the Company Subsidiaries after the
Closing Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included in
Tier 1 capital of the Company at the time of issuance under the applicable
risk-based capital guidelines of the Company’s Appropriate Federal Banking
Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008). “Business Combination” means a
merger, consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s stockholders.

    


    4.5           Registration
Rights.

    


    (a)           Registration.

    


    (i)           Subject
to the terms and conditions of this Agreement, the Company covenants and agrees
that as promptly as practicable after the Closing Date (and in any event no
later than 30 days after the Closing Date), the Company shall prepare and file
with the SEC a Shelf Registration Statement covering all Registrable Securities
(or otherwise designate an existing Shelf Registration Statement filed with the
SEC to cover the Registrable Securities), and, to the extent the Shelf
Registration Statement has not theretofore been declared effective or is not
automatically effective upon such filing, the Company shall use reasonable best
efforts to cause such Shelf Registration Statement to be declared or become
effective and to keep such Shelf Registration Statement continuously effective
and in compliance with the Securities Act and usable for resale of such
Registrable Securities for a period from the date of its initial effectiveness
until such time as there are no Registrable Securities remaining (including by
refiling such Shelf Registration Statement (or a new Shelf Registration
Statement) if the initial Shelf Registration Statement expires). So long as the
Company is a well-known seasoned issuer (as defined in Rule 405 under the
Securities Act) at the time of filing of the Shelf Registration Statement with
the SEC, such Shelf Registration Statement shall be designated by the Company as
an automatic Shelf Registration Statement. Notwithstanding the foregoing, if on
the Signing Date the Company is not eligible to file a registration statement on
Form S-3, then the Company shall not be obligated to file a Shelf Registration
Statement unless and until requested to do so in writing by the
Investor.

    


    (ii)           Any
registration pursuant to Section 4.5(a)(i) shall be effected by means of a shelf
registration on an appropriate form under Rule 415 under the Securities Act (a
“Shelf Registration
Statement”). If the Investor or any other


    
      
         


      

      
        -20-

        
          

        

      

      
         


      

    


    Holder
intends to distribute any Registrable Securities by means of an underwritten
offering it shall promptly so advise the Company and the Company shall take all
reasonable steps to facilitate such distribution, including the actions required
pursuant to Section 4.5(c); provided that the Company
shall not be required to facilitate an underwritten offering of Registrable
Securities unless the expected gross proceeds from such offering exceed (i) 2%
of the initial aggregate liquidation preference of the Preferred Shares if such
initial aggregate liquidation preference is less than $2 billion and (ii) $200
million if the initial aggregate liquidation preference of the Preferred Shares
is equal to or greater than $2 billion. The lead underwriters in any such
distribution shall be selected by the Holders of a majority of the Registrable
Securities to be distributed; provided that to the extent
appropriate and permitted under applicable law, such Holders shall consider the
qualifications of any broker-dealer Affiliate of the Company in selecting the
lead underwriters in any such distribution.

    


    (iii)           The
Company shall not be required to effect a registration (including a resale of
Registrable Securities from an effective Shelf Registration Statement) or an
underwritten offering pursuant to Section 4.5(a): (A) with respect to securities
that are not Registrable Securities; or (B) if the Company has notified the
Investor and all other Holders that in the good faith judgment of the Board of
Directors, it would be materially detrimental to the Company or its
securityholders for such registration or underwritten offering to be effected at
such time, in which event the Company shall have the right to defer such
registration for a period of not more than 45 days after receipt of the request
of the Investor or any other Holder; provided that such right to
delay a registration or underwritten offering shall be exercised by the Company
(1) only if the Company has generally exercised (or is concurrently exercising)
similar black-out rights against holders of similar securities that have
registration rights and (2) not more than three times in any 12-month period and
not more than 90 days in the aggregate in any 12-month period.

    


    (iv)           If
during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other
than a registration pursuant to Section 4.5(a)(i) or a Special Registration, and
the registration form to be filed may be used for the registration or
qualification for distribution of Registrable Securities, the Company will give
prompt written notice to the Investor and all other Holders of its intention to
effect such a registration (but in no event less than ten days prior to the
anticipated filing date) and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within ten business days after the date of the Company’s
notice (a “Piggyback
Registration”). Any such person that has made such a written request may
withdraw its Registrable Securities from such Piggyback Registration by giving
written notice to the Company and the managing underwriter, if any, on or before
the fifth business day prior to the planned effective date of such Piggyback
Registration. The Company may terminate or withdraw any registration under this
Section 4.5(a)(iv) prior to the effectiveness of such registration, whether or
not


    
      
         


      

      
        -21-

        
          

        

      

      
         


      

    


    Investor
or any other Holders have elected to include Registrable Securities in such
registration.

    


    (v)           If
the registration referred to in Section 4.5(a)(iv) is proposed to be
underwritten, the Company will so advise Investor and all other Holders as a
part of the written notice given pursuant to Section 4.5(a)(iv). In such event,
the right of Investor and all other Holders to registration pursuant to Section
4.5(a) will be conditioned upon such persons’ participation in such underwriting
and the inclusion of such person’s Registrable Securities in the underwriting if
such securities are of the same class of securities as the securities to be
offered in the underwritten offering, and each such person will (together with
the Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the
Company;  provided
that the Investor (as opposed to other Holders) shall not be required to
indemnify any person in connection with any registration. If any participating
person disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the managing underwriters
and the Investor (if the Investor is participating in the
underwriting).

    


    (vi)           If
either (x) the Company grants “piggyback” registration rights to one or more
third parties to include their securities in an underwritten offering under the
Shelf Registration Statement pursuant to Section 4.5(a)(ii) or (y) a Piggyback
Registration under Section 4.5(a)(iv) relates to an underwritten offering on
behalf of the Company, and in either case the managing underwriters advise the
Company that in their reasonable opinion the number of securities requested to
be included in such offering exceeds the number which can be sold without
adversely affecting the marketability of such offering (including an adverse
effect on the per share offering price), the Company will include in such
offering only such number of securities that in the reasonable opinion of such
managing underwriters can be sold without adversely affecting the marketability
of the offering (including an adverse effect on the per share offering price),
which securities will be so included in the following order of priority: (A)
first, in the case of a Piggyback Registration under Section 4.5(a)(iv), the
securities the Company proposes to sell, (B) then the Registrable Securities of
the Investor and all other Holders who have requested inclusion of Registrable
Securities pursuant to Section 4.5(a)(ii) or Section 4.5(a)(iv), as applicable,
pro rata on the basis
of the aggregate number of such securities or shares owned by each such person
and (C) lastly, any other securities of the Company that have been requested to
be so included, subject to the terms of this Agreement; provided, however, that if
the Company has, prior to the Signing Date, entered into an agreement with
respect to its securities that is inconsistent with the order of priority
contemplated hereby then it shall apply the order of priority in such
conflicting agreement to the extent that it would otherwise result in a breach
under such agreement.


    
      
         


      

      
        -22-

        
          

        

      

      
         


      

    


    


    (b)           Expenses of
Registration.  All Registration Expenses incurred in connection
with any registration, qualification or compliance hereunder shall be borne by
the Company. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the holders of the securities so registered pro rata on the basis of the
aggregate offering or sale price of the securities so registered.

    


    (c)           Obligations of the
Company.  The Company shall use its reasonable best efforts,
for so long as there are Registrable Securities outstanding, to take such
actions as are under its control to not become an ineligible issuer (as defined
in Rule 405 under the Securities Act) and to remain a well-known seasoned issuer
(as defined in Rule 405 under the Securities Act) if it has such status on the
Signing Date or becomes eligible for such status in the future. In addition,
whenever required to effect the registration of any Registrable Securities or
facilitate the distribution of Registrable Securities pursuant to an effective
Shelf Registration Statement, the Company shall, as expeditiously as reasonably
practicable:

    (i)            
Prepare and file with the SEC a prospectus supplement with respect to a proposed
offering of Registrable Securities pursuant to an effective registration
statement, subject to Section 4.5(d), keep such registration statement effective
and keep such prospectus supplement current until the securities described
therein are no longer Registrable Securities.

    


    (ii)           
Prepare and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in
connection with such registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.

    


    (iii)         
 Furnish to the Holders and any underwriters such number of copies of the
applicable registration statement and each such amendment and supplement thereto
(including in each case all exhibits) and of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned or to be distributed
by them.

    


    (iv)         
 Use its reasonable best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders or
any managing underwriter(s), to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and to take
any other action which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the securities owned by such
Holder; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.


    
      
         


      

      
        -23-

        
          

        

      

      
         


      

    


    (v)          
Notify each Holder of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the applicable prospectus, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.

    


    (vi)           Give
written notice to the Holders:

    


    (A)           when
any registration statement filed pursuant to Section 4.5(a) or any amendment
thereto has been filed with the SEC (except for any amendment effected by the
filing of a document with the SEC pursuant to the Exchange Act) and when such
registration statement or any post-effective amendment thereto has become
effective;

    


    (B)           of
any request by the SEC for amendments or supplements to any registration
statement or the prospectus included therein or for additional
information;

    


    (C)           of
the issuance by the SEC of any stop order suspending the effectiveness of any
registration statement or the initiation of any proceedings for that
purpose;

    


    (D)           of
the receipt by the Company or its legal counsel of any notification with respect
to the suspension of the qualification of the Common Stock for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;

    


    (E)           of
the happening of any event that requires the Company to make changes in any
effective registration statement or the prospectus related to the registration
statement in order to make the statements therein not misleading (which notice
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made); and

    


    (F)         
  if at any time the representations and warranties of the Company
contained in any underwriting agreement contemplated by Section 4.5(c)(x) cease
to be true and correct.

    


    (vii)         Use
its reasonable best efforts to prevent the issuance or obtain the withdrawal of
any order suspending the effectiveness of any registration statement referred to
in Section 4.5(c)(vi)(C) at the earliest practicable time.

    


    (viii)         Upon
the occurrence of any event contemplated by Section 4.5(c)(v) or 4.5(c)(vi)(E),
promptly prepare a post-effective amendment to such registration statement or a
supplement to the related prospectus or file any other


    
      
         


      

      
        -24-

        
          

        

      

      
         


      

    


    required
document so that, as thereafter delivered to the Holders and any underwriters,
the prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. If the Company
notifies the Holders in accordance with Section 4.5(c)(vi)(E) to suspend the use
of the prospectus until the requisite changes to the prospectus have been made,
then the Holders and any underwriters shall suspend use of such prospectus and
use their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company’s expense) other than permanent file copies then in
such Holders’ or underwriters’ possession. The total number of days that any
such suspension may be in effect in any 12-month period shall not exceed 90
days.

    


    (ix)           Use
reasonable best efforts to procure the cooperation of the Company’s transfer
agent in settling any offering or sale of Registrable Securities, including with
respect to the transfer of physical stock certificates into book-entry form in
accordance with any procedures reasonably requested by the Holders or any
managing underwriter(s).

    


    (x)          
 If an underwritten offering is requested pursuant to Section 4.5(a)(ii),
enter into an underwriting agreement in customary form, scope and substance and
take all such other actions reasonably requested by the Holders of a majority of
the Registrable Securities being sold in connection therewith or by the managing
underwriter(s), if any, to expedite or facilitate the underwritten disposition
of such Registrable Securities, and in connection therewith in any underwritten
offering (including making members of management and executives of the Company
available to participate in “road shows”, similar sales events and other
marketing activities), (A) make such representations and warranties to the
Holders that are selling stockholders and the managing underwriter(s), if any,
with respect to the business of the Company and its subsidiaries, and the Shelf
Registration Statement, prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in customary form,
substance and scope, and, if true, confirm the same if and when requested, (B)
use its reasonable best efforts to furnish the underwriters with opinions of
counsel to the Company, addressed to the managing underwriter(s), if any,
covering the matters customarily covered in such opinions requested in
underwritten offerings, (C) use its reasonable best efforts to obtain “cold
comfort” letters from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public accountants
of any business acquired by the Company for which financial statements and
financial data are included in the Shelf Registration Statement) who have
certified the financial statements included in such Shelf Registration
Statement, addressed to each of the managing underwriter(s), if any, such
letters to be in customary form and covering matters of the type customarily
covered in “cold comfort” letters, (D) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures customary
in underwritten offerings (provided that the Investor shall not be obligated to
provide any indemnity), and (E) deliver such documents and


    
      
         


      

      
        -25-

        
          

        

      

      
         


      

    


    certificates
as may be reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith, their counsel and the managing
underwriter(s), if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.

    


    (xi)           
Make available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices
where normally kept, during reasonable business hours, financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company to supply all information
in each case reasonably requested (and of the type customarily provided in
connection with due diligence conducted in connection with a registered public
offering of securities) by any such representative, managing underwriter(s),
attorney or accountant in connection with such Shelf Registration
Statement.

    


    (xii)          Use
reasonable best efforts to cause all such Registrable Securities to be listed on
each national securities exchange on which similar securities issued by the
Company are then listed or, if no similar securities issued by the Company are
then listed on any national securities exchange, use its reasonable best efforts
to cause all such Registrable Securities to be listed on such securities
exchange as the Investor may designate.

    


    (xiii)         If
requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s),
if any, promptly include in a prospectus supplement or amendment such
information as the Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith or managing underwriter(s), if
any, may reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such prospectus
supplement or such amendment as soon as practicable after the Company has
received such request.

    


    (xiv)         Timely
provide to its security holders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder.

    


    (d)           Suspension of
Sales.  Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may
contain an untrue statement of a material fact or omits or may omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that circumstances exist that make inadvisable use of
such registration statement, prospectus or prospectus supplement, the Investor
and each Holder of Registrable Securities shall forthwith discontinue
disposition of Registrable Securities until the Investor and/or Holder has
received copies of a supplemented or amended prospectus or


    
      
         


      

      
        -26-

        
          

        

      

      
         


      

    


    prospectus
supplement, or until the Investor and/or such Holder is advised in writing by
the Company that the use of the prospectus and, if applicable, prospectus
supplement may be resumed, and, if so directed by the Company, the Investor
and/or such Holder shall deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies then in the Investor and/or such
Holder’s possession, of the prospectus and, if applicable, prospectus supplement
covering such Registrable Securities current at  the time of receipt
of such notice. The total number of days that any such suspension may be in
effect in any 12-month period shall not exceed 90 days.

    


    (e)           Termination of Registration
Rights.  A Holder’s registration rights as to any securities
held by such Holder (and its Affiliates, partners, members and former members)
shall not be available unless such securities are Registrable
Securities.

    


    
      	
               
      

            	
              (f)

            	
              Furnishing
      Information.

            


    

    


    (i)            
Neither the Investor nor any Holder shall use any free writing prospectus (as
defined in Rule 405) in connection with the sale of Registrable Securities
without the prior written consent of the Company.

    


    (ii)           
It shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 4.5(c) that Investor and/or the selling Holders and
the underwriters, if any, shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to effect the
registered offering of their Registrable Securities.

    


    (g)            Indemnification.

    


    (i)           
The Company agrees to indemnify each Holder and, if a Holder is a person other
than an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and each Person, if any, that controls a Holder
within the meaning of the Securities Act (each, an “Indemnitee”), against any and
all losses, claims, damages, actions, liabilities, costs and expenses (including
reasonable fees, expenses and disbursements of attorneys and other professionals
incurred in connection with investigating, defending, settling, compromising or
paying any such losses, claims, damages, actions, liabilities, costs and
expenses), joint or several, arising out of or based upon any untrue statement
or alleged untrue statement of material fact contained in any registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto or any documents incorporated
therein by reference or contained in any free writing prospectus (as such term
is defined in Rule 405) prepared by the Company or authorized by it in writing
for use by such Holder (or any amendment or supplement thereto); or any omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided, that the Company
shall not be liable to such Indemnitee in


    
      
         


      

      
        -27-

        
          

        

      

      
         


      

    


    any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon (A) an
untrue statement or omission made in such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or authorized by
it in writing for use by such Holder (or any amendment or supplement thereto),
in reliance upon and in conformity with information regarding such Indemnitee or
its plan of distribution or ownership interests which was furnished in writing
to the Company by such Indemnitee for use in connection with such registration
statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto, or (B) offers
or sales effected by or on behalf of such Indemnitee “by means of” (as defined
in Rule 159A) a “free writing prospectus” (as defined in Rule 405) that was not
authorized in writing by the Company.

    


    (ii)           If
the indemnification provided for in Section 4.5(g)(i) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Indemnitee, on the other hand, shall be determined by reference
to, among other factors, whether the untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Indemnitee and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
the Company and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 4.5(g)(ii) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in Section 4.5(g)(i). No Indemnitee guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.

    


    (h)           Assignment of Registration
Rights.  The rights of the Investor to registration of
Registrable Securities pursuant to Section 4.5(a) may be assigned by the
Investor to a transferee or assignee of Registrable Securities with a
liquidation preference or, in the case of Registrable Securities other than
Preferred Shares, a market value, no less than an amount equal to (i) 2% of the
initial aggregate liquidation preference of the Preferred Shares if such initial
aggregate liquidation preference is less than $2 billion and


    
      
         


      

      
        -28-

        
          

        

      

      
         


      

    


    (ii) $200
million if the initial aggregate liquidation preference of the Preferred Shares
is equal to or greater than $2 billion; provided, however, the transferor
shall, within ten days after such transfer, furnish to the Company written
notice of the name and address of such transferee or assignee and the number and
type of Registrable Securities that are being assigned. For purposes of this
Section 4.5(h), “market value” per share of Common Stock shall be the last
reported sale price of the Common Stock on the national securities exchange on
which the Common Stock is listed or admitted to trading on the last trading day
prior to the proposed transfer, and the “market value” for the Warrant (or any
portion thereof) shall be the market value per share of Common Stock into which
the Warrant (or such portion) is exercisable less the exercise price per
share.

    


    (i)           Clear
Market.  With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Section
4.5, the Company agrees not to effect (other than pursuant to such registration
or pursuant to a Special Registration) any public sale or distribution, or to
file any Shelf Registration Statement (other than such registration or a Special
Registration) covering, in the case of an underwritten offering of Common Stock
or Warrants, any of its equity securities or, in the case of an underwritten
offering of Preferred Shares, any Preferred Stock of the Company, or, in each
case, any securities convertible into or exchangeable or exercisable for such
securities, during the period not to exceed ten days prior and 60 days following
the effective date of such offering or such longer period up to 90 days as may
be requested by the managing underwriter for such underwritten offering. The
Company also agrees to cause such of its directors and senior executive officers
to execute and deliver customary lock-up agreements in such form and for such
time period up to 90 days as may be requested by the managing underwriter.
“Special Registration”
means the registration of (A) equity securities and/or options or other rights
in respect thereof solely registered on Form S-4 or Form S-8 (or successor form)
or (B) shares of equity securities and/or options or other rights in respect
thereof to be offered to directors, members of management, employees,
consultants, customers, lenders or vendors of the Company or Company
Subsidiaries or in connection with dividend reinvestment plans.

    


    (j)           Rule 144; Rule
144A.  With a view to making available to the Investor and
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its reasonable best efforts
to:

    


    (i)           make
and keep public information available, as those terms are understood and defined
in Rule 144(c)(1) or any similar or analogous rule promulgated under the
Securities Act, at all times after the Signing Date;

    


    (ii)           (A)
file with the SEC, in a timely manner, all reports and other documents required
of the Company under the Exchange Act, and (B) if at any time the Company is not
required to file such reports, make available, upon the request of any Holder,
such information necessary to permit sales pursuant to Rule 144A (including the
information required by Rule 144A(d)(4) under the Securities
Act);


    
      
         


      

      
        -29-

        
          

        

      

      
         


      

    


    (iii)           so
long as the Investor or a Holder owns any Registrable Securities, furnish to the
Investor or such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 under
the Securities Act, and of the Exchange Act; a copy of the most recent annual or
quarterly report of the Company; and such other reports and documents as the
Investor or Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such securities to the public
without registration; and

    


    (iv)           take
such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act.

    


    (k)           As
used in this Section 4.5, the following terms shall have the following
respective meanings:

    


    (i)            
“Holder” means the
Investor and any other holder of Registrable

    Securities
to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 4.5(h) hereof.

    


    (ii)           
 “Holders’
Counsel” means one counsel for the selling Holders chosen by Holders
holding a majority interest in the Registrable Securities being
registered.

    


    (iii)           “Register,” “registered,” and “registration” shall refer to
a registration effected by preparing and (A) filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
registration statement or (B) filing a prospectus and/or prospectus supplement
in respect of an appropriate effective registration statement on Form
S-3.

    


    (iv)           “Registrable Securities” means
(A) all Preferred Shares, (B) the Warrant (subject to Section 4.5(p)) and (C)
any equity securities issued or issuable directly or indirectly with respect to
the securities referred to in the foregoing clauses (A) or (B) by way of
conversion, exercise or exchange thereof, including the Warrant Shares, or share
dividend or share split or in connection with a combination of shares,
recapitalization, reclassification, merger, amalgamation, arrangement,
consolidation or other reorganization, provided that, once issued,
such securities will not be Registrable Securities when (1) they are sold
pursuant to an effective registration statement under the Securities Act, (2)
except as provided below in Section 4.5(o), they may be sold pursuant to Rule
144 without limitation thereunder on volume or manner of sale, (3) they shall
have ceased to be outstanding or (4) they have been sold in a private
transaction in which the transferor's rights under this Agreement are not
assigned to the


    
      
         


      

      
        -30-

        
          

        

      

      
         


      

    


    transferee
of the securities. No Registrable Securities may be registered under more than
one registration statement at any one time.

    


    (v)           “Registration Expenses” mean
all expenses incurred by the Company in effecting any registration pursuant to
this Agreement (whether or not any registration or prospectus becomes effective
or final) or otherwise complying with its obligations under this Section 4.5,
including all registration, filing and listing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, expenses
incurred in connection with any “road show”, the reasonable fees and
disbursements of Holders’ Counsel, and expenses of the Company’s independent
accountants in connection with any regular or special reviews or audits incident
to or required by any such registration, but shall not include Selling
Expenses.

    


    (vi)           “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, in each case,
such rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.

    


    (vii)          “Selling Expenses” mean all
discounts, selling commissions and stock transfer taxes applicable to the sale
of Registrable Securities and fees and disbursements of counsel for any Holder
(other than the fees and disbursements of Holders’ Counsel included in
Registration Expenses).

    


    (l)          
 At any time, any holder of Securities (including any Holder) may elect to
forfeit its rights set forth in this Section 4.5 from that date forward; provided, that a Holder
forfeiting such rights shall nonetheless be entitled to participate under
Section 4.5(a)(iv) – (vi) in any Pending Underwritten Offering to the same
extent that such Holder would have been entitled to if the holder had not
withdrawn; and provided, further, that no such
forfeiture shall terminate a Holder’s rights or obligations under Section 4.5(f)
with respect to any prior registration or Pending Underwritten Offering. “Pending Underwritten Offering”
means, with
respect to any Holder forfeiting its rights pursuant to this Section 4.5(l), any
underwritten offering of Registrable Securities in which such Holder has advised
the Company of its intent to register its Registrable Securities either pursuant
to Section 4.5(a)(ii) or 4.5(a)(iv) prior to the date of such Holder’s
forfeiture.

    


    (m)           Specific
Performance.  The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform any of its
obligations under this Section 4.5 and that the Investor and the Holders from
time to time may be irreparably harmed by any such failure, and accordingly
agree that the Investor and such Holders, in addition to any other remedy to
which they may be entitled at law or in equity, to the fullest extent permitted
and enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this Section 4.5 in
accordance with the terms and conditions of this Section 4.5.


    
      
         


      

      
        -31-

        
          

        

      

      
         


      

    


    (n)           No Inconsistent
Agreements.  The Company shall not, on or after the Signing
Date, enter into any agreement with respect to its securities that may impair
the rights granted to the Investor and the Holders under this Section 4.5 or
that otherwise conflicts with the provisions hereof in any manner that may
impair the rights granted to the Investor and the Holders under this Section
4.5. In the event the Company has, prior to the Signing Date, entered into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Investor and the Holders under this Section 4.5 (including
agreements that are inconsistent with the order of priority contemplated by
Section 4.5(a)(vi)) or that may otherwise conflict with the provisions hereof,
the Company shall use its reasonable best efforts to amend such agreements to
ensure they are consistent with the provisions of this Section 4.5.

    


    (o)           Certain Offerings by the
Investor.  In the case of any securities held by the
Investor
that cease to be Registrable Securities solely by reason of clause (2) in the
definition of “Registrable Securities,” the provisions of Sections 4.5(a)(ii),
clauses (iv), (ix) and (x)-(xii) of Section 4.5(c), Section 4.5(g) and Section
4.5(i) shall continue to apply until such securities otherwise cease to be
Registrable Securities. In any such case, an “underwritten” offering or other
disposition shall include any distribution of such securities on behalf of the
Investor by one or more broker-dealers, an “underwriting agreement” shall
include any purchase agreement entered into by such broker-dealers, and any
“registration statement” or “prospectus” shall include any offering document
approved by the Company and used in connection with such
distribution.

    


    (p)           Registered Sales of the
Warrant.  The Holders agree to sell the Warrant or any portion
thereof under the Shelf Registration Statement only beginning 30 days after
notifying the Company of any such sale, during which 30-day period the Investor
and all Holders of the Warrant shall take reasonable steps to agree to revisions
to the Warrant to permit a public distribution of the Warrant, including
entering into a warrant agreement and appointing a warrant agent.

    


    4.6           Voting of Warrant
Shares.  Notwithstanding anything in this Agreement to the
contrary, the Investor shall not exercise any voting rights with respect to the
Warrant Shares.

    


    4.7           Depositary
Shares.  Upon request by the Investor at any time following the
Closing
Date, the Company shall promptly enter into a depositary arrangement, pursuant
to customary agreements reasonably satisfactory to the Investor and with a
depositary reasonably acceptable to the Investor, pursuant to which the
Preferred Shares may be deposited and depositary shares, each representing a
fraction of a Preferred Share as specified by the Investor, may be issued. From
and after the execution of any such depositary arrangement, and the deposit of
any Preferred Shares pursuant thereto, the depositary shares issued pursuant
thereto shall be deemed “Preferred Shares” and, as applicable, “Registrable
Securities” for purposes of this Agreement.


    
      
         


      

      
        -32-

        
          

        

      

      
         


      

    

     

    4.8           Restriction on Dividends and
Repurchases.

    


    (a)           Prior
to the earlier of (x) the third anniversary of the Closing Date and (y) the date
on which the Preferred Shares have been redeemed in whole or the Investor has
transferred all of the Preferred Shares to third parties which are not
Affiliates of the Investor, neither the Company nor any Company Subsidiary
shall, without the consent of the Investor:

    


    (i)           declare
or pay any dividend or make any distribution on the Common Stock (other than (A)
regular quarterly cash dividends of not more than the amount of the last
quarterly cash dividend per share declared or, if lower, publicly announced an
intention to declare, on the Common Stock prior to October 14, 2008, as adjusted
for any stock split, stock dividend, reverse stock split, reclassification or
similar transaction, (B) dividends payable solely in shares of Common Stock and
(C) dividends or distributions of rights or Junior Stock in connection with a
stockholders’ rights plan); or

    


    (ii)           redeem,
purchase or acquire any shares of Common Stock or other capital stock or other
equity securities of any kind of the Company, or any trust preferred securities
issued by the Company or any Affiliate of the Company, other than (A)
redemptions, purchases or other acquisitions of the Preferred Shares, (B)
redemptions, purchases or other acquisitions of shares of Common Stock or other
Junior Stock, in each case in this clause (B) in connection with the
administration of any employee benefit plan in the ordinary course of business
(including purchases to offset the Share Dilution Amount (as defined below)
pursuant to a publicly announced repurchase plan) and consistent with past
practice; provided that
any purchases to offset the Share Dilution Amount shall in no event exceed the
Share Dilution Amount, (C) purchases or other acquisitions by a broker-dealer
subsidiary of the Company solely for the purpose of market-making, stabilization
or customer facilitation transactions in Junior Stock or Parity Stock in the
ordinary course of its business, (D) purchases by a broker-dealer subsidiary of
the Company of capital stock of the Company for resale pursuant to an offering
by the Company of such capital stock underwritten by such broker-dealer
subsidiary, (E) any redemption or repurchase of rights pursuant to any
stockholders’ rights plan, (F) the acquisition by the Company or any of the
Company Subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Company or any other
Company Subsidiary), including as trustees or custodians, and (G) the exchange
or conversion of Junior Stock for or into other Junior Stock or of Parity Stock
or trust preferred securities for or into other Parity Stock (with the same or
lesser aggregate liquidation amount) or Junior Stock, in each case set forth in
this clause (G), solely to the extent required pursuant to binding contractual
agreements entered into prior to the Signing Date or any subsequent agreement
for the accelerated exercise, settlement or exchange thereof for Common Stock
(clauses (C) and (F), collectively, the “Permitted Repurchases”).
“Share Dilution Amount”
means the increase in the number of diluted shares outstanding (determined in
accordance


    
      
         


      

      
        -33-

        
          

        

      

      
         


      

    


    with
GAAP, and as measured from the date of the Company’s most recently filed Company
Financial Statements prior to the Closing Date) resulting from the grant,
vesting or exercise of equity-based compensation to employees and equitably
adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction.

    


    (b)           Until
such time as the Investor ceases to own any Preferred Shares, the Company shall
not repurchase any Preferred Shares from any holder thereof, whether by means of
open market purchase, negotiated transaction, or otherwise, other than Permitted
Repurchases, unless it offers to repurchase a ratable portion of the Preferred
Shares then held by the Investor on the same terms and conditions.

    


    (c)           “Junior Stock” means Common
Stock and any other class or series of stock of the Company the terms of which
expressly provide that it ranks junior to the Preferred Shares as to dividend
rights and/or as to rights on liquidation, dissolution or winding up of the
Company.  “Parity
Stock” means any class or series of stock of the Company the terms of
which do not expressly provide that such class or series will rank senior or
junior to the Preferred Shares as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the Company (in each case without
regard to whether dividends accrue cumulatively or
non-cumulatively).

    


    4.9           Repurchase of Investor
Securities.

    


    (a)           Following
the redemption in whole of the Preferred Shares held by the Investor or the
Transfer by the Investor of all of the Preferred Shares to one or more third
parties not affiliated with the Investor, the Company may repurchase, in whole
or in part, at any time any other equity securities of the Company purchased by
the Investor pursuant to this Agreement or the Warrant and then held by the
Investor, upon notice given as provided in clause (b) below, at the Fair Market
Value of the equity security.

    


    (b)           Notice
of every repurchase of equity securities of the Company held by the Investor
shall be given at the address and in the manner set forth for such party in
Section 5.6. Each notice of repurchase given to the Investor shall state: (i)
the number and type of securities to be repurchased, (ii) the Board of
Director’s determination of Fair Market Value of such securities and (iii) the
place or places where certificates representing such securities are to be
surrendered for payment of the repurchase price. The repurchase of the
securities specified in the notice shall occur as soon as practicable following
the determination of the Fair Market Value of the securities.

    


    (c)           As
used in this Section 4.9, the following terms shall have the following
respective meanings:

    


    (i)           “Appraisal Procedure” means a
procedure whereby two independent appraisers, one chosen by the Company and one
by the Investor, shall mutually agree upon the Fair Market Value. Each party
shall deliver a notice to the other appointing its appraiser within 10
days


    
      
         


      

      
        -34-

        
          

        

      

      
         


      

    


    after the
Appraisal Procedure is invoked. If within 30 days after appointment of the two
appraisers they are unable to agree upon the Fair Market Value, a third
independent appraiser shall be chosen within 10 days thereafter by the mutual
consent of such first two appraisers. The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the selection of such
third appraiser. If three appraisers shall be appointed and the determination of
one appraiser is disparate from the middle determination by more than twice the
amount by which the other determination is disparate from the middle
determination, then the determination n of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be binding
and conclusive upon the Company and the Investor; otherwise, the average of all
three determinations shall be binding upon the Company and the Investor. The
costs of conducting any Appraisal Procedure shall be borne by the
Company.

    


    (ii)           “Fair Market Value” means,
with respect to any security, the fair market value of such security as
determined by the Board of Directors, acting in good faith in reliance on an
opinion of a nationally recognized independent investment banking firm retained
by the Company for this purpose and certified in a resolution to the Investor.
If the Investor does not agree with the Board of Director’s determination, it
may object in writing within 10 days of receipt of the Board of Director’s
determination. In the event of such an objection, an authorized representative
of the Investor and the chief executive officer of the Company shall promptly
meet to resolve the objection and to agree upon the Fair Market Value. If the
chief executive officer and the authorized representative are unable to agree on
the Fair Market Value during the 10-day period following the delivery of the
Investor’s objection, the Appraisal Procedure may be invoked by either party to
determine the Fair Market Value by delivery of a written notification thereof
not later than the 30th
day after delivery of the Investor’s objection.

    


    4.10          Executive
Compensation.  Until such time as the Investor ceases to own
any debt or equity securities of the Company acquired pursuant to this Agreement
or the Warrant, the Company shall take all necessary action to ensure that its
Benefit Plans with respect to its Senior Executive Officers comply in all
respects with Section 111(b) of the EESA as implemented by any guidance or
regulation thereunder that has been issued and is in effect as of the Closing
Date, and shall not adopt any new Benefit Plan with respect to its Senior
Executive Officers that does not comply therewith. “Senior Executive Officers”
means the Company's "senior executive officers" as defined in subsection
111(b)(3) of the EESA and regulations issued thereunder, including the rules set
forth in 31 C.F.R. Part 30.

    


    4.11          Bank and Thrift Holding Company
Status.  If the Company is a Bank Holding Company or a Savings
and Loan Holding Company on the Signing Date, then


    
      
         


      

      
        -35-

        
          

        

      

      
         


      

    


    the
Company shall maintain its status as a Bank Holding Company or Savings and Loan
Holding Company, as the case may be, for as long as the Investor owns any
Purchased Securities or Warrant Shares. The Company shall redeem all Purchased
Securities and Warrant Shares held by the Investor prior to terminating its
status as a Bank Holding Company or Savings and Loan Holding Company, as
applicable. “Bank Holding
Company” means a company registered as such with the Board of Governors
of the Federal Reserve System (the “Federal Reserve”) pursuant to
12 U.S.C. §1842 and the regulations of the Federal Reserve promulgated
thereunder. “Savings and Loan
Holding Company” means a company registered as such with the Office of
Thrift Supervision pursuant to 12 U.S.C. §1467(a) and the regulations of the
Office of Thrift Supervision promulgated thereunder.

    


    4.12          Predominantly
Financial.  For as long as the Investor owns any Purchased
Securities
or Warrant Shares, the Company, to the extent it is not itself an insured
depository institution, agrees to remain predominantly engaged in financial
activities. A company is predominantly engaged in financial activities if the
annual gross revenues derived by the company and all subsidiaries of the company
(excluding revenues derived from subsidiary depository institutions), on a
consolidated basis, from engaging in activities that are financial in nature or
are incidental to a financial activity under subsection (k) of Section 4 of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) represent at least 85
percent of the consolidated annual gross revenues of the company.

    


    Article
V

    Miscellaneous

    


    5.1           Termination.  This
Agreement may be terminated at any time prior to the Closing:

    


    (a)           by
either the Investor or the Company if the Closing shall not have occurred by the
30th calendar day
following the Signing Date; provided, however, that in the event
the Closing has not occurred by such 30th calendar day, the parties
will consult in good faith to determine whether to extend the term of this
Agreement, it being understood that the parties shall be required to consult
only until the fifth day after such 30th calendar day and not be under
any obligation to extend the term of this Agreement thereafter; provided, further, that the right to
terminate this Agreement under this Section 5.1(a) shall not be available to any
party whose breach of any representation or warranty or failure to perform any
obligation under this Agreement shall have caused or resulted in the failure of
the Closing to occur on or prior to such date; or

    


    (b)           by
either the Investor or the Company in the event that any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or

    


    (c)           by
the mutual written consent of the Investor and the Company.


    
      
         


      

      
        -36-

        
          

        

      

      
         


      

    


    


    


    In the
event of termination of this Agreement as provided in this Section 5.1, this
Agreement shall forthwith become void and there shall be no liability on the
part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.

    


    5.2           Survival of Representations
and Warranties.  All covenants and agreements, other than those
which by their terms apply in whole or in part after the Closing, shall
terminate as of the Closing. The representations and warranties of the Company
made herein or in any certificates delivered in connection with the Closing
shall survive the Closing without limitation.

    


    5.3           Amendment.  No
amendment of any provision of this Agreement will be effective unless made in
writing and signed by an officer or a duly authorized representative of each
party; provided that
the Investor may unilaterally amend any provision of this Agreement to the
extent required to comply with any changes after the Signing Date in applicable
federal statutes. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative of any rights or remedies provided by law.

    


    5.4           Waiver of
Conditions.  The conditions to each party’s obligation to
consummate the Purchase are for the sole benefit of such party and may be waived
by such party in whole or in part to the extent permitted by applicable law. No
waiver will be effective unless it is in a writing signed by a duly authorized
officer of the waiving party that makes express reference to the provision or
provisions subject to such waiver.

    


    5.5           Governing
Law: Submission to Jurisdiction, Etc.  This Agreement will be
governed by and construed in accordance with the federal law of the United
States if and to the extent such law is applicable, and otherwise in accordance
with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.  Each of the parties
hereto agrees (a) to submit to the exclusive jurisdiction and venue of the
United States District Court for the District of Columbia and the United States
Court of Federal Claims for any and all civil actions, suits or proceedings
arising out of or relating to this Agreement or the Warrant or the transactions
contemplated hereby or thereby, and (b) that notice may be served upon (i) the
Company at the address and in the manner set forth for notices to the Company in
Section 5.6 and (ii) the Investor in accordance with federal law. To the extent
permitted by applicable law, each of the parties hereto hereby unconditionally
waives trial by jury in any civil legal action or proceeding relating to
this Agreement or the Warrant or the transactions contemplated hereby or
thereby.

    


    5.6           Notices.  Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally, or by facsimile,
upon


    
      
         


      

      
        -37-

        
          

        

      

      
         


      

    


    confirmation
of receipt, or (b) on the second business day following the date of dispatch if
delivered by a recognized next day courier service. All notices to the Company
shall be delivered as set forth in Schedule A, or pursuant to such other
instruction as may be designated in writing by the Company to the Investor. All
notices to the Investor shall be delivered as set forth below, or pursuant to
such other instructions as may be designated in writing by the Investor to the
Company.

    


    If to the
Investor:

    


    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW, Room 2312

    Washington,
D.C. 20220

    Attention:
Assistant General Counsel (Banking and Finance)

    Facsimile:
(202) 622-1974

    


    5.7           Definitions

    


    (a)           When
a reference is made in this Agreement to a subsidiary of a person, the term
“subsidiary” means any
corporation, partnership, joint venture, limited liability company or other
entity (x) of which such person or a subsidiary of such person is a general
partner or (y) of which a majority of the voting securities or other voting
interests, or a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the board of directors
or persons performing similar functions with respect to such entity, is directly
or indirectly owned by such person and/or one or more subsidiaries
thereof.

    


    (b)           The
term “Affiliate” means,
with respect to any person, any person directly or indirectly controlling,
controlled by or under common control with, such other person. For purposes of
this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.

    


    (c)           The
terms “knowledge of the
Company” or “Company’s
knowledge” mean the actual knowledge after reasonable and due inquiry of
the “officers” (as such
term is defined in Rule 3b-2 under the Exchange Act, but excluding any Vice
President or Secretary) of the Company.

    


    5.8           Assignment.  Neither
this Agreement nor any right, remedy, obligation nor liability arising hereunder
or by reason hereof shall be assignable by any party hereto without the prior
written consent of the other party, and any attempt to assign any right, remedy,
obligation or liability hereunder without such consent shall be void, except (a)
an assignment, in the case of a Business Combination where such party is not the
surviving entity, or a sale of substantially all of its assets, to the entity
which is the survivor of such Business Combination or the purchaser in such sale
and (b) as provided in Section 4.5.


    
      
         


      

      
        -38-

        
          

        

      

      
         


      

    


    5.9  
         Severability.  If
any provision of this Agreement or the Warrant, or the application thereof to
any person or circumstance, is determined by a court of competent jurisdiction
to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, will remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby is
not affected in any manner materially adverse to any party. Upon such
determination, the parties shall negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.

    


    5.10          No Third Party
Beneficiaries.  Nothing contained in this Agreement, expressed
or implied, is intended to confer upon any person or entity other than the
Company and the Investor any benefit, right or remedies, except that the
provisions of Section 4.5 shall inure to the benefit of the persons referred to
in that Section.

    


    #  #  #


    
      
         


      

      
        -39-

        
          

        

      

      
         


      

    


    ANNEX
A

    


    FORM OF CERTIFICATE OF
DESIGNATIONS

    


    [SEE
ATTACHED]

    



    
      
         


      

      
        A-1

        
          

        

      

      
         


      

    


    ARTICLES
OF AMENDMENT

    OF

    FNB
UNITED CORP.

    


    


    FNB
United Corp., a corporation organized and existing under the laws of the State
of North Carolina (the “Corporation”), for the purpose of amending its articles
of incorporation to fix the preferences, limitations and relative rights of a
new series of its Preferred Stock in accordance with the provisions of Sections
55-6-02 and 55-10-06 of the North Carolina Business Corporation Act, hereby
submits these Articles of Amendment:

     

    1.      The
name of the Corporation is FNB United Corp.

     

    2.      The
following resolution relating to the amendment of the Corporation’s articles of
incorporation to create a series of Preferred Stock and to fix the designation,
preferences, limitations, and relative rights of such series was duly adopted by
the board of directors of the Corporation (the “Board of Directors”) on February
2, 2009, without shareholder approval, which was not required because the
articles of incorporation, as amended, of the Corporation provide that the Board
of Directors may determine the preferences, limitations, and relative rights of
that series:

     

    RESOLVED,
that pursuant to the authority granted to and vested in the Board of Directors
of the Corporation by the articles of incorporation, as amended, of the
Corporation, the Board of Directors hereby amends the articles of incorporation
to create a series of Preferred Stock of the Corporation and hereby states the
designation and number of shares, and fixes the preferences, limitations, and
relative rights thereof as follows:

     

     Part
1.  Designation and Number of
Shares.  There is hereby created out of the authorized and
unissued shares of the Corporation’s Preferred Stock, par value $10.00 per
share, a series designated as the “Fixed Rate Cumulative Perpetual Preferred
Stock, Series A” (the “Designated Preferred
Stock”).  The authorized number of shares of Designated
Preferred Stock shall be 51,500.

    


    Part
2.   Standard
Provisions.  The Standard Provisions contained in Annex A
attached hereto are incorporated herein by reference in their entirety and shall
be deemed to be a part of these Articles of Amendment to the same extent as if
such provisions had been set forth in full herein.

    


    Part
3.  Definitions.  The
following terms are used in these Articles of Amendment (including the Standard
Provisions in Annex A hereto) as defined below:

    


    (a)         “Common Stock” means
the common stock, par value $2.50 per share, of the
Corporation.


    
      
         


      

      
        A-2

        
          

        

      

      
         


      

    


    (b)         “Dividend Payment
Date” means February 15, May 15, August 15 and November 15 of each
year.

    


    (c)         “Junior Stock” means
the Common Stock and any other class or series of stock of the Corporation the
terms of which expressly provide that it ranks junior to Designated Preferred
Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Corporation.

    


    (d)         “Liquidation Amount”
means $1,000 per share of Designated Preferred Stock.

    


    (e)         “Minimum Amount” means
$12,875,000.

    


    (f)          “Parity Stock” means
any class or series of stock of the Corporation (other than Designated Preferred
Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of the Corporation
(in each case without regard to whether dividends accrue cumulatively or
non-cumulatively).

    


    (g)         “Signing Date” means
the Original Issue Date.

    


    Part
4.  Certain
Voting Matters.  Holders of shares of Designated Preferred
Stock will be entitled to one vote for each such share on any matter on which
holders of Designated Preferred Stock are entitled to vote, including any action
by written consent.

    


    This the
11th day of February, 2009.

     

    
      
        	 
      	
                FNB
      UNITED CORP.

              
	 
      	 
      
	 
      	
                By

              	
                /s/ Michael C. Miller

              
	 
      	 
      	
                Michael
      C. Miller

              
	 
      	
                 

              	

                President

              


      

    


    
      
         


      

      
        A-3

        
          

        

      

      
         


      

    


    ANNEX
A

    


    STANDARD
PROVISIONS

    


    Section
1.  General
Matters.  Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock.
The Designated Preferred Stock shall be perpetual, subject to the provisions of
Section 5 of these Standard Provisions that form a part of the Certificate of
Designations. The Designated Preferred Stock shall rank equally with Parity
Stock and shall rank senior to Junior Stock with respect to the payment of
dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Corporation.

    


    Section
2.  Standard
Definitions.  As used herein with respect to Designated
Preferred Stock:

    


    (a)           “Applicable Dividend
Rate” means (i) during the period from the Original Issue Date to, but
excluding, the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and
after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.

    


    (b)         “Appropriate Federal Banking
Agency” means the “appropriate Federal banking agency” with respect to
the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1813(q)), or any successor provision.

    


    (c)         “Business Combination”
means a merger, consolidation, statutory share exchange or similar transaction
that requires the approval of the Corporation’s shareholders.

    


    (d)         “Business Day” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.

    


    (e)         “Bylaws” means the
bylaws of the Corporation, as they may be amended from time to
time.

    


    (f)          “Certificate of
Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.

    


    (g)         “Charter” means the
Corporation’s certificate or articles of incorporation, articles of association,
or similar organizational document.

    


    (h)         “Dividend Period” has
the meaning set forth in Section 3(a).

    


    (i)          “Dividend Record Date”
has the meaning set forth in Section 3(a).


    
      
         


      

      
        A-1

        
          

        

      

      
         


      

    


    (j)         
“Liquidation
Preference” has the meaning set forth in Section 4(a).

    


    (k)         “Original Issue Date”
means the date on which shares of Designated Preferred Stock are first
issued.

    


    (l)         
“Preferred
Director” has the meaning set forth in Section 7(b).

    


    (m)        “Preferred Stock”
means any and all series of preferred stock of the Corporation, including the
Designated Preferred Stock.

    


    (n)        
“Qualified Equity
Offering” means the sale and issuance for cash by the Corporation
to persons other than the Corporation or any of its subsidiaries after the
Original Issue Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included in
Tier 1 capital of the Corporation at the time of issuance under the applicable
risk-based capital guidelines of the Corporation’s Appropriate Federal Banking
Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008).

    


    (o)        
“Share Dilution
Amount” has the meaning set forth in Section 3(b).

    


    (p)        
“Standard
Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred
Stock.

    


    (q)        
“Successor Preferred
Stock” has the meaning set forth in Section 5(a).

    


    (r)         
“Voting Parity
Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a)
and 7(b) of these Standard Provisions that form a part of the Certificate of
Designations, any and all series of Parity Stock upon which like voting rights
have been conferred and are exercisable with respect to such
matter.

    


    Section
3.  Dividends.

    


    (a)         Rate.  Holders
of Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cumulative cash dividends with respect to each
Dividend Period (as defined below) at a rate per annum equal to the Applicable
Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred
Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend
Period on such share of Designated Preferred Stock, if any. Such dividends shall
begin to accrue and be cumulative from the Original Issue Date, shall compound
on each subsequent Dividend Payment Date (i.e.,
no dividends shall accrue on other dividends unless and until the first Dividend
Payment Date for such other dividends has passed without such other dividends
having been paid on such date) and shall be payable quarterly in arrears on each
Dividend


    
      
         


      

      
        A-2

        
          

        

      

      
         


      

    


    Payment
Date, commencing with the first such Dividend Payment Date to occur at least 20
calendar days after the Original Issue Date.  In the event that any
Dividend Payment Date would otherwise fall on a day that is not a Business Day,
the dividend payment due on that date will be postponed to the next day that is
a Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date to, but
excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment
Date.

    


    Dividends
that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. The amount of dividends payable on Designated Preferred Stock on any
date prior to the end of a Dividend Period, and for the initial Dividend Period,
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months, and actual days elapsed over a 30-day month.

    


    Dividends
that are payable on Designated Preferred Stock on any Dividend Payment Date will
be payable to holders of record of Designated Preferred Stock as they appear on
the stock register of the Corporation on the applicable record date, which shall
be the 15th calendar day immediately preceding such Dividend Payment Date or
such other record date fixed by the Board of Directors or any duly authorized
committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any
such day that is a Dividend Record Date shall be a Dividend Record Date whether
or not such day is a Business Day.

    


    Holders
of Designated Preferred Stock shall not be entitled to any dividends, whether
payable in cash, securities or other property, other than dividends (if any)
declared and payable on Designated Preferred Stock as specified in this Section
3 (subject to the other provisions of the Certificate of
Designations).

    


    (b)     
   Priority
of Dividends. So long as any share of Designated Preferred Stock
remains
outstanding, no dividend or distribution shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than dividends payable solely
in shares of Common Stock) or Parity Stock, subject to the immediately following
paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or
Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise
acquired for consideration by the Corporation or any of its subsidiaries unless
all accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of
Designated Preferred Stock have been or are contemporaneously declared and paid
in full (or have been declared and a sum sufficient for the payment thereof has
been set aside for the benefit of the holders of shares of Designated Preferred
Stock on the applicable record date). The foregoing limitation shall not apply
to (i) redemptions, purchases or other acquisitions of shares of Common Stock or
other Junior Stock in connection with the administration of any employee benefit
plan in the ordinary course of business (including purchases to offset the Share
Dilution Amount (as defined


    
      
         


      

      
        A-3

        
          

        

      

      
         


      

    


    below)
pursuant to a publicly announced repurchase plan) and consistent with past
practice, provided
that any purchases to offset the Share Dilution Amount shall in no event
exceed the Share Dilution Amount; (ii) purchases or other acquisitions by a
broker-dealer subsidiary of the Corporation solely for the purpose of
market-making, stabilization or customer facilitation transactions in Junior
Stock or Parity Stock in the ordinary course of its business; (iii) purchases by
a broker-dealer subsidiary of the Corporation of capital stock of the
Corporation for resale pursuant to an offering by the Corporation of such
capital stock underwritten by such broker-dealer subsidiary; (iv) any dividends
or distributions of rights or Junior Stock in connection with a shareholders’
rights plan or any redemption or repurchase of rights pursuant to any
shareholders’ rights plan; (v) the acquisition by the Corporation or any of its
subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Corporation or any of
its subsidiaries), including as trustees or custodians; and (vi) the exchange or
conversion of Junior Stock for or into other Junior Stock or of Parity Stock for
or into other Parity Stock (with the same or lesser aggregate liquidation
amount) or Junior Stock, in each case, solely to the extent required pursuant to
binding contractual agreements entered into prior to the Signing Date or any
subsequent agreement for the accelerated exercise, settlement or exchange
thereof for Common Stock. “Share Dilution Amount” means the increase in the
number of diluted shares outstanding (determined in accordance with generally
accepted accounting principles in the United States, and as measured from the
date of the Corporation’s consolidated financial statements most recently filed
with the Securities and Exchange Commission prior to the Original Issue Date)
resulting from the grant, vesting or exercise of equity-based compensation to
employees and equitably adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction.

    


    When
dividends are not paid (or declared and a sum sufficient for payment thereof set
aside for the benefit of the holders thereof on the applicable record date) on
any Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within a Dividend Period related to such Dividend Payment Date) in
full upon Designated Preferred Stock and any shares of Parity Stock, all
dividends declared on Designated Preferred Stock and all such Parity Stock and
payable on such Dividend Payment Date (or, in the case of Parity Stock having
dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment
Date) shall be declared pro
rata so that the respective amounts of such dividends declared shall bear
the same ratio to each other as all accrued and unpaid dividends per share on
the shares of Designated Preferred Stock (including, if applicable as provided
in Section 3(a) above, dividends on such amount) and all Parity Stock payable on
such Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within the Dividend Period related to such Dividend Payment Date)
(subject to their having been declared by the Board of Directors or a duly
authorized committee of the Board of Directors out of legally available funds
and including, in the case of Parity Stock that bears cumulative dividends, all
accrued but unpaid dividends) bear to each other. If the Board of Directors or a
duly authorized


    
      
         


      

      
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    committee
of the Board of Directors determines not to pay any dividend or a full dividend
on a Dividend Payment Date, the Corporation will provide written notice to the
holders of Designated Preferred Stock prior to such Dividend Payment
Date.

    


    Subject
to the foregoing, and not otherwise, such dividends (payable in cash, securities
or other property) as may be determined by the Board of Directors or any duly
authorized committee of the Board of Directors may be declared and paid on any
securities, including Common Stock and other Junior Stock, from time to time out
of any funds legally available for such payment, and holders of Designated
Preferred Stock shall not be entitled to participate in any such
dividends.

    


    Section
4.  Liquidation
Rights.

    


    (a)         Voluntary or Involuntary
Liquidation.  In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each
share of Designated Preferred Stock, out of the assets of the Corporation or
proceeds thereof (whether capital or surplus) available for distribution to
shareholders of the Corporation, subject to the rights of any creditors of the
Corporation, before any distribution of such assets or proceeds is made to or
set aside for the holders of Common Stock and any other stock of the Corporation
ranking junior to Designated Preferred Stock as to such distribution, payment in
full in an amount equal to the sum of (i) the Liquidation Amount per share and
(ii) the amount of any accrued and unpaid dividends (including, if applicable as
provided in Section 3(a) above, dividends on such amount), whether or not
declared, to the date of payment (such amounts collectively, the “Liquidation
Preference”).

    


    (b)        
Partial
Payment.  If in any distribution described in Section 4(a)
above the assets of the Corporation or proceeds thereof are not sufficient to
pay in full the amounts payable with respect to all outstanding shares of
Designated Preferred Stock and the corresponding amounts payable with respect of
any other stock of the Corporation ranking equally with Designated Preferred
Stock as to such distribution, holders of Designated Preferred Stock and the
holders of such other stock shall share ratably in any such distribution in
proportion to the full respective distributions to which they are
entitled.

    


    (c)        
Residual
Distributions.  If the Liquidation Preference has been paid in
full to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Corporation ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.

    


    (d)        
Merger, Consolidation
and Sale of Assets Not Liquidation.  For purposes of this
Section 4, the merger or consolidation of the Corporation with any other
corporation or other entity, including a merger or consolidation in which the
holders of 


    
      
         


      

      
        A-5

        
          

        

      

      
         


      

    


    Designated
Preferred Stock receive cash, securities or other property for their shares, or
the sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation.

    


    Section
5.  Redemption.

    


    (a)         
Optional
Redemption.  Except as provided below, the Designated Preferred
Stock may not be redeemed prior to the first Dividend Payment Date falling on or
after the third anniversary of the Original Issue Date. On or after the first
Dividend Payment Date falling on or after the third anniversary of the Original
Issue Date, the Corporation, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, out of funds legally available therefor, the shares of
Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section 5(c) below, at a redemption price equal to the sum of (i)
the Liquidation Amount per share and (ii) except as otherwise provided below,
any accrued and unpaid dividends (including, if applicable as provided in
Section 3(a) above, dividends on such amount) (regardless of whether any
dividends are actually declared) to, but excluding, the date fixed for
redemption.

    


    Notwithstanding
the foregoing, prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Corporation, at its option,
subject to the approval of the Appropriate Federal Banking Agency, may redeem,
in whole or in part, at any time and from time to time, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section
3(a) above, dividends on such amount) (regardless of whether any dividends are
actually declared) to, but excluding, the date fixed for redemption; provided
that (x) the Corporation (or any successor by Business Combination) has
received aggregate gross proceeds of not less than the Minimum Amount (plus the
“Minimum Amount” as defined in the relevant certificate of designations for each
other outstanding series of preferred stock of such successor that was
originally issued to the United States Department of the Treasury (the
“Successor Preferred Stock”) in connection with the Troubled Asset Relief
Program Capital Purchase Program) from one or more Qualified Equity Offerings
(including Qualified Equity Offerings of such successor), and (y) the aggregate
redemption price of the Designated Preferred Stock (and any Successor Preferred
Stock) redeemed pursuant to this paragraph may not exceed the aggregate net cash
proceeds received by the Corporation (or any successor by Business Combination)
from such Qualified Equity Offerings (including Qualified Equity Offerings of
such successor).

    


    The
redemption price for any shares of Designated Preferred Stock shall be payable
on the redemption date to the holder of such shares against surrender of the
certificate(s) evidencing such shares to the Corporation or its agent. Any
declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend


    
      
         


      

      
        A-6

        
          

        

      

      
         


      

    


    Record
Date for a Dividend Period shall not be paid to the holder entitled to receive
the redemption price on the redemption date, but rather shall be paid to the
holder of record of the redeemed shares on such Dividend Record Date relating to
the Dividend Payment Date as provided in Section 3 above.

    


    (b)        
No Sinking
Fund. The Designated Preferred Stock will not be subject to any mandatory
redemption, sinking fund or other similar provisions. Holders of Designated
Preferred Stock will have no right to require redemption or repurchase of any
shares of Designated Preferred Stock.

    


    (c)        
Notice of
Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the
holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in the
mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred
Stock.  Notwithstanding the foregoing, if shares of Designated
Preferred Stock are issued in book-entry form through The Depository Trust
Company or any other similar facility, notice of redemption may be given to the
holders of Designated Preferred Stock at such time and in any manner permitted
by such facility. Each notice of redemption given to a holder shall state: (1)
the

    redemption
date; (2) the number of shares of Designated Preferred Stock to be redeemed and,
if less than all the shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (3) the redemption price; and
(4) the place or places where certificates for such shares are to be surrendered
for payment of the redemption price.

    


    (d)        
Partial
Redemption.  In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro
rata or in such other manner as the Board of Directors or a duly
authorized committee thereof may determine to be fair and equitable. Subject to
the provisions hereof, the Board of Directors or a duly authorized committee
thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed
from time to time. If fewer than all the shares represented by any certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without charge to the holder thereof.

    


    (e)        
Effectiveness of
Redemption. If notice of redemption has been duly given and if on or
before the redemption date specified in the notice all funds necessary for the
redemption have been deposited by the Corporation, in trust for the pro
rata benefit of the holders of the shares called for redemption, with a
bank or trust company doing business in the Borough of Manhattan, The City of
New York, and having a capital and surplus of at least $500 million and selected
by the Board of Directors, so as to be and 


    
      
         


      

      
        A-7

        
          

        

      

      
         


      

    


    continue
to be available solely therefor, then, notwithstanding that any certificate for
any share so called for redemption has not been surrendered for cancellation, on
and after the redemption date dividends shall cease to accrue on all shares so
called for redemption, all shares so called for redemption shall no longer be
deemed outstanding and all rights with respect to such shares shall forthwith on
such redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption from such bank or trust
company, without interest. Any funds unclaimed at the end of three years from
the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption
shall look only to the Corporation for payment of the redemption price of such
shares.

    


    (f)         
Status of Redeemed
Shares.  Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Corporation shall revert to
authorized but unissued shares of Preferred Stock (provided
that any such cancelled shares of Designated Preferred Stock may be
reissued only as shares of any series of Preferred Stock other than Designated
Preferred Stock).

    


    Section
6.  Conversion.  Holders
of Designated Preferred Stock shares shall have no right to exchange or convert
such shares into any other securities.

    


    Section
7.  Voting
Rights.

    


    (a)        
General.  The
holders of Designated Preferred Stock shall not have any voting rights except as
set forth below or as otherwise from time to time required by law.

    


    (b)        
Preferred Stock
Directors. Whenever, at any time or times, dividends payable on the
shares of Designated Preferred Stock have not been paid for an aggregate of six
quarterly Dividend Periods or more, whether or not consecutive, the authorized
number of directors of the Corporation shall automatically be increased by two
and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred
Directors”
and each a “Preferred
Director”)
to fill such newly created directorships at the Corporation’s next annual
meeting of shareholders (or at a special meeting called for that purpose prior
to such next annual meeting) and at each subsequent annual meeting of
shareholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been declared and paid in
full at which time such right shall terminate with respect to the Designated
Preferred Stock, except as herein or by law expressly provided, subject to
revesting in the event of each and every subsequent default of the character
above mentioned; provided
that it shall be a qualification for election for any Preferred Director
that the election of such Preferred Director shall not cause the Corporation to
violate any corporate governance requirements of any securities exchange or
other trading facility on which securities of the Corporation may then be listed
or traded that listed or traded companies must have a majority of independent
directors. Upon any termination of the 


    
      
         


      

      
        A-8

        
          

        

      

      
         


      

    


    right of
the holders of shares of Designated Preferred Stock and Voting Parity Stock as a
class to vote for directors as provided above, the Preferred Directors shall
cease to be qualified as directors, the term of office of all Preferred
Directors then in office shall terminate immediately and the authorized number
of directors shall be reduced by the number of Preferred Directors elected
pursuant hereto. Any Preferred Director may be removed at any time, with or
without cause, and any vacancy created thereby may be filled, only by the
affirmative vote of the holders a majority of the shares of Designated Preferred
Stock at the time outstanding voting separately as a class together with the
holders of shares of Voting Parity Stock, to the extent the voting rights of
such holders described above are then exercisable. If the office of any
Preferred Director becomes vacant for any reason other than removal from office
as aforesaid, the remaining Preferred Director may choose a successor who shall
hold office for the unexpired term in respect of which such vacancy
occurred.

    


    (c)        
Class Voting Rights as
to Particular Matters.  So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
shareholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:

    


    (i)         
Authorization of
Senior Stock.  Any amendment or alteration of the Certificate
of Designations for the Designated Preferred Stock or the Charter to authorize
or create or increase the authorized amount of, or any issuance of, any shares
of, or any securities convertible into or exchangeable or exercisable for shares
of, any class or series of capital stock of the Corporation ranking senior to
Designated Preferred Stock with respect to either or both the payment of
dividends and/or the distribution of assets on any liquidation, dissolution or
winding up of the Corporation; 

    


    (ii)         Amendment of Designated
Preferred Stock.  Any amendment, alteration or repeal of any
provision of the Certificate of Designations for the Designated Preferred Stock
or the Charter (including, unless no vote on such merger or consolidation is
required by Section 7(c)(iii) below, any amendment, alteration or repeal by
means of a merger, consolidation or otherwise) so as to adversely affect the
rights, preferences, privileges or voting powers of the Designated Preferred
Stock; or 

    


    (iii)        Share Exchanges,
Reclassifications, Mergers and Consolidations.  Any
consummation of a binding share exchange or reclassification involving the
Designated Preferred Stock, or of a merger or consolidation of the Corporation
with another corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such merger
or consolidation with respect to which the Corporation is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such shares
remaining 


    
      
         


      

      
        A-9

        
          

        

      

      
         


      

    


    outstanding
or such preference securities, as the case may be, have such rights,
preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders
thereof than the rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, of Designated Preferred Stock immediately
prior to such consummation, taken as a whole;

    


    provided,
however,
that for all purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of
Designated Preferred Stock necessary to satisfy preemptive or similar rights
granted by the Corporation to other persons prior to the Signing Date, or the
creation and issuance, or an increase in the authorized or issued amount,
whether pursuant to preemptive or similar rights or otherwise, of any other
series of Preferred Stock, or any securities convertible into or exchangeable or
exercisable for any other series of Preferred Stock, ranking equally with and/or
junior to Designated Preferred Stock with respect to the payment of dividends
(whether such dividends are cumulative or non-cumulative) and the distribution
of assets upon liquidation, dissolution or winding up of the Corporation will
not be deemed to adversely affect the rights, preferences, privileges or voting
powers, and shall not require the affirmative vote or consent of, the holders of
outstanding shares of the Designated Preferred Stock.

    


    (d)        
Changes after
Provision for Redemption.  No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above if,
at or prior to the time when any such vote or consent would otherwise be
required pursuant to such Section, all outstanding shares of the Designated
Preferred Stock shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in
trust for such redemption, in each case pursuant to Section 5
above.

    


    (e)        
Procedures for Voting
and Consents. The rules and procedures for calling and conducting any
meeting of the holders of Designated Preferred Stock (including, without
limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred
Stock is listed or traded at the time.

    


    Section
8.  Record
Holders.  To the fullest extent permitted by applicable law,
the Corporation
and the transfer agent for Designated Preferred Stock may deem and treat the
record holder of any share of Designated Preferred Stock as the true and lawful
owner thereof for all purposes, and neither the Corporation nor such transfer
agent shall be affected by any notice to the contrary.


    
      
         


      

      
        A-10

        
          

        

      

      
         


      

    

     

    Section
9.  Notices.  All
notices or communications in respect of Designated Preferred Stock shall be
sufficiently given if given in writing and delivered in person or by first class
mail, postage prepaid, or if given in such other manner as may be permitted in
this Certificate of Designations, in the Charter or Bylaws or by applicable law.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Company or any similar
facility, such notices may be given to the holders of Designated Preferred Stock
in any manner permitted by such facility.

    


    Section
10.  No
Preemptive Rights.  No share of Designated Preferred Stock
shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.

    


    Section
11.  Replacement
Certificates. The Corporation shall replace any mutilated certificate at
the holder’s expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at
the holder’s expense upon delivery to the Corporation of reasonably satisfactory
evidence that the certificate has been destroyed, stolen or lost, together with
any indemnity that may be reasonably required by the Corporation.

    


    Section
12.  Other
Rights.  The shares of Designated Preferred Stock shall not
have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations
or restrictions thereof, other than as set forth herein or in the Charter or as
provided by applicable law.

    

      
        
           


        

        
          A-11

          
            

          

        

        
           


        

      



    ANNEX
B

    


    FORM OF
WAIVER

    


    


    In
consideration for the benefits I will receive as a result of my employer’s
participation in the United States Department of the Treasury’s TARP Capital
Purchase Program, I hereby voluntarily waive any claim against the United States
or my employer for any changes to my compensation or benefits that are required
to comply with the regulation issued by the Department of the Treasury as
published in the Federal Register on October 20, 2008.

    


    I
acknowledge that this regulation may require modification of the compensation,
bonus, incentive and other benefit plans, arrangements, policies and agreements
(including so-called “golden parachute” agreements) that I have with my employer
or in which I participate as they relate to the period the United States holds
any equity or debt securities of my employer acquired through the TARP Capital
Purchase Program.

    


    This
waiver includes all claims I may have under the laws of the United States or any
state related to the requirements imposed by the aforementioned regulation,
including without limitation a claim for any compensation or other payments I
would otherwise receive, any challenge to the process by which this regulation
was adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    ANNEX
C

    


    FORM OF
OPINION

    


    (a)           The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the state of its incorporation.

    


    (b)           The
Preferred Shares have been duly and validly authorized, and, when issued and
delivered pursuant to the Agreement, the Preferred Shares will be duly and
validly issued and fully paid and non-assessable, will not be issued in
violation of any preemptive rights, and will rank pari passu with or senior to
all other series or classes of Preferred Stock issued on the Closing Date with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Company.

    


    (c)           The
Warrant has been duly authorized and, when executed and delivered as
contemplated by the Agreement, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in
equity.

    


    (d)           The
shares of Common Stock issuable upon exercise of the Warrant have been duly
authorized and reserved for issuance upon exercise of the Warrant and when so
issued in accordance with the terms of the Warrant will be validly issued, fully
paid and non-assessable [insert, if
applicable: , subject to the approvals of the Company’s stockholders set
forth on Schedule C].

    


    (e)           The
Company has the corporate power and authority to execute and deliver the
Agreement and the Warrant and [insert, if
applicable: , subject to the approvals of the Company’s stockholders set
forth on Schedule C,] to
carry out its obligations thereunder (which includes the issuance of the
Preferred Shares, Warrant and Warrant Shares).

    


    (f)           The
execution, delivery and performance by the Company of the Agreement and the
Warrant and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of the Company and
its stockholders, and no further approval or authorization is required on the
part of the Company [insert, if
applicable:, subject, in each case, to the approvals of the Company’s
stockholders set forth on Schedule C].

    


    (g)           The
Agreement is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles,


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    regardless
of whether such enforceability is considered in a proceeding at law or in
equity; provided, however, such counsel need
express no opinion with respect to Section 4.5(g) or the severability provisions
of the Agreement insofar as Section 4.5(g) is concerned.

    

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

    

     

    ANNEX
D

    


    


    FORM OF
WARRANT

    


    [SEE
ATTACHED]

     

     

     

     

     

     

     

    

      
        
           


        

        
          
          

          
            

          

        

        
           


        

      



    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS.  THIS INSTRUMENT IS ISSUED
SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES
PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES
REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT
IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE
WITH SAID AGREEMENT WILL BE VOID.

    


    WARRANT

    to
purchase

    2,207,143

    Shares
of Common Stock

    


    of
FNB United Corp.

    


    Issue
Date:  February 13, 2009

    


    1.          
Definitions.  Unless
the context otherwise requires, when used herein the following
terms shall have the meanings indicated.

    


    “Affiliate” has the meaning ascribed
to it in the Purchase Agreement.

    


    “Appraisal
Procedure” means
a procedure whereby two independent appraisers, one chosen by the Company and
one by the Original Warrantholder, shall mutually agree upon the determinations
then the subject of appraisal.  Each party shall deliver a notice to
the other appointing its appraiser within 15 days after the Appraisal Procedure
is invoked.  If within 30 days after appointment of the two appraisers
they are unable to agree upon the amount in question, a third independent
appraiser shall be chosen within 10 days thereafter by the mutual consent of
such first two appraisers.  The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the selection of such
third appraiser.  If three appraisers shall be appointed and the
determination of one appraiser is disparate from the middle determination by
more than twice the amount by which the other determination is disparate from
the middle determination, then the determination of such appraiser shall be
excluded, the remaining two determinations shall be averaged and such average
shall be binding and conclusive upon the Company and the Original Warrantholder;
otherwise, the average of all three determinations shall be binding upon the
Company and the Original Warrantholder.  The costs of conducting
any
Appraisal Procedure shall be borne by the Company.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    “Board
of Directors”
means the board of directors of the Company, including any duly authorized
committee thereof.

    


    “Business
Combination”
means a merger, consolidation, statutory share exchange or similar transaction
that requires the approval of the Company’s stockholders.

    


    “business
day” means any
day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.

    


    “Capital
Stock” means (A)
with respect to any Person that is a corporation or company, any and all shares,
interests, participations or other equivalents (however designated) of capital
or capital stock of such Person and (B) with respect to any Person that is not a
corporation or company, any and all partnership or other equity interests of
such Person.

    


    “Charter” means, with respect to any
Person, its certificate or articles of incorporation, articles of association,
or similar organizational document.

    


    “Common
Stock” has the
meaning ascribed to it in the Purchase Agreement.

    


    “Company” means the Person whose
name, corporate or other organizational form and jurisdiction of organization is
set forth in Item 1 of Schedule A hereto.

    


    “conversion” has the meaning set forth
in Section 13(B).

    


    “convertible
securities” has
the meaning set forth in Section 13(B).

    


    “CPP” has the meaning ascribed
to it in the Purchase Agreement.

    


    “Exchange
Act” means the
Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

    


    “Exercise
Price” means the
amount set forth in Item 2 of Schedule A hereto.

    


    “Expiration
Time” has the
meaning set forth in Section 3.

    


    “Fair
Market Value”
means, with respect to any security or other property, the fair market value of
such security or other property as determined by the Board of Directors, acting
in good faith or, with respect to Section 14, as determined by the Original
Warrantholder acting in good faith.  For so long as the Original
Warrantholder holds this Warrant or any portion thereof, it may object in
writing to the Board of Director’s calculation of fair market value within 10
days of receipt of written notice thereof.  If the Original
Warrantholder and the Company are unable to agree on fair market value during
the 10-day period following the delivery of the Original 


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    Warrantholder’s
objection, the Appraisal Procedure may be invoked by either party to determine
Fair Market Value by delivering written notification thereof not later than the
30th
day after delivery of the Original Warrantholder’s objection.

    


    “Governmental
Entities” has
the meaning ascribed to it in the Purchase Agreement.

    


    “Initial
Number” has the
meaning set forth in Section 13(B).

    


    “Issue
Date” means
the date set forth in Item 3 of Schedule A hereto.

    


    “Market
Price” means,
with respect to a particular security, on any given day, the last reported sale
price regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on
the principal national securities exchange on which the applicable securities
are listed or admitted to trading, or if not listed or admitted to trading on
any national securities exchange, the average of the closing bid and ask prices
as furnished by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose.  “Market
Price” shall be determined without reference to after hours or extended hours
trading.  If such security is not listed and traded in a manner that
the quotations referred to above are available for the period required
hereunder, the Market Price per share of Common Stock shall be deemed to be (i)
in the event that any portion of the Warrant is held by the Original
Warrantholder, the fair market value per share of such security as determined in
good faith by the Original Warrantholder or (ii) in all other circumstances, the
fair market value per share of such security as determined in good faith by the
Board of Directors in reliance on an opinion of a nationally recognized
independent investment banking corporation retained by the Company for this
purpose and certified in a resolution to the Warrantholder.  For the
purposes of determining the Market Price of the Common Stock on the "trading
day" preceding, on or following the occurrence of an event, (i) that trading day
shall be deemed to commence immediately after the regular scheduled closing time
of trading on the New York Stock Exchange or, if trading is closed at an earlier
time, such earlier time and (ii) that trading day shall end at the next regular
scheduled closing time, or if trading is closed at an earlier time, such earlier
time (for the avoidance of doubt, and as an example, if the Market Price is to
be determined as of the last trading day preceding a specified event and the
closing time of trading on a particular day is 4:00 p.m. and the specified event
occurs at 5:00 p.m. on that day, the Market Price would be determined by
reference to such 4:00 p.m. closing price).

    


    “Ordinary
Cash Dividends”
means a regular quarterly cash dividend on shares of Common
Stock out of surplus or net profits legally available therefor (determined in
accordance with generally accepted accounting principles in effect from time to
time), provided
that Ordinary Cash Dividends shall not include any cash dividends paid
subsequent to the Issue Date to the extent the aggregate per share dividends
paid on the outstanding Common Stock in any quarter exceed the amount set forth
in Item 4 of Schedule A hereto, as adjusted for any stock split, stock dividend,
reverse stock split, reclassification or similar transaction.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    “Original
Warrantholder”
means the United States Department of the Treasury. Any actions specified to be
taken by the Original Warrantholder hereunder may only be taken by such Person
and not by any other Warrantholder.

    


    “Permitted
Transactions”
has the meaning set forth in Section 13(B).

    


    “Person” has the meaning given to
it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act.

    


    “Per
Share Fair Market Value” has the meaning set forth
in Section 13(C).

    


    “Preferred
Shares” means
the perpetual preferred stock issued to the Original Warrantholder
on the Issue Date pursuant to the Purchase Agreement.

    


    “Pro
Rata Repurchases” means any purchase of
shares of Common Stock by the Company
or any Affiliate thereof pursuant to (A) any tender offer or exchange offer
subject to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E
promulgated thereunder or (B) any other offer available to substantially all
holders of Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the Company,
evidences of indebtedness of the Company or any other Person or any other
property (including, without limitation, shares of Capital Stock, other
securities or evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding.  The “Effective
Date” of a Pro
Rata Repurchase shall mean the date of acceptance of shares for purchase or
exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase that
is not a tender or exchange offer.

    


    “Purchase
Agreement” means
the Securities Purchase Agreement – Standard Terms incorporated into the Letter
Agreement, dated as of the date set forth in Item 5 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department
of the Treasury (the “Letter
Agreement”),
including all annexes and schedules thereto. 

    


    “Qualified
Equity Offering”
has the meaning ascribed to it in the Purchase Agreement.

    


    “Regulatory
Approvals” with
respect to the Warrantholder, means, to the extent applicable
and required to permit the Warrantholder to exercise this Warrant for shares of
Common
Stock and to own such Common Stock without the Warrantholder being in violation
of applicable law, rule or regulation, the receipt of any necessary approvals
and authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    “SEC” means the U.S. Securities
and Exchange Commission.

    


    “Securities
Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.

    


    “Shares” has the meaning set forth
in Section 2.

    


    “trading
day” means
(A) if the shares of Common Stock are not traded on any national or regional
securities exchange or association or over-the-counter market, a business day or
(B) if the shares of Common Stock are traded on any national or regional
securities exchange or association or over-the-counter market, a business day on
which such relevant exchange or quotation system is scheduled to be open for
business and on which the shares of Common Stock (i) are not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common Stock.

    


    “U.S.
GAAP” means
United States generally accepted accounting principles.

    


    “Warrantholder” has the meaning set forth
in Section 2.

    


    “Warrant” means this Warrant, issued
pursuant to the Purchase Agreement.

    


    2.         
Number of Shares;
Exercise Price.  This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise
Price.  The number of shares of Common Stock (the “Shares”) and the Exercise Price
are subject to adjustment as provided herein, and all references to “Common
Stock,” “Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.

    


    3.         
Exercise of Warrant;
Term.  Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by
this Warrant is exercisable, in whole or in part by the Warrantholder, at any
time or from time to time after the execution and delivery of this Warrant by
the Company on the date hereof, but in no event later than 5:00 p.m., New York
City time on the tenth anniversary of the Issue Date (the “Expiration
Time”), by (A)
the surrender of this Warrant and Notice of Exercise annexed hereto, duly
completed and executed on behalf of the Warrantholder, at the principal
executive office of the Company located at the address set forth in Item 7 of
Schedule A hereto (or such other office or agency of the Company in the United
States as it may designate by notice in writing to the Warrantholder at the



    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    address
of the Warrantholder appearing on the books of the Company), and (B) payment of
the Exercise Price for the Shares thereby purchased:

    


    (i)         
by having the Company withhold, from the shares of Common Stock that would
otherwise be delivered to the Warrantholder upon such exercise, shares of Common
stock issuable upon exercise of the Warrant equal in value to the aggregate
Exercise Price as to which this Warrant is so exercised based on the Market
Price of the Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to this Section
3, or

    


    (ii)        
with the consent of both the Company and the Warrantholder, by tendering in
cash, by certified or cashier’s check payable to the order of the Company, or by
wire transfer of immediately available funds to an account designated by the
Company.

    


    If the
Warrantholder does not exercise this Warrant in its entirety, the Warrantholder
will be entitled to receive from the Company within a reasonable time, and in
any event not exceeding three business days, a new warrant in substantially
identical form for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number of Shares as
to which this Warrant is so exercised.  Notwithstanding anything in
this Warrant to the contrary, the Warrantholder hereby acknowledges and agrees
that its exercise of this Warrant for Shares is subject to the condition that
the Warrantholder will have first received any applicable Regulatory
Approvals.

    


    4.         
Issuance of Shares;
Authorization; Listing.  Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the
Warrantholder may designate and will be delivered to such named Person or
Persons within a reasonable time, not to exceed three business days after the
date on which this Warrant has been duly exercised in accordance with the terms
of this Warrant.  The Company hereby represents and warrants that any
Shares issued upon the exercise of this Warrant in accordance with the
provisions of Section 3 will be duly and validly authorized and issued, fully
paid and nonassessable and free from all taxes, liens and charges (other than
liens or charges created by the Warrantholder, income and franchise taxes
incurred in connection with the exercise of the Warrant or taxes in respect of
any transfer occurring contemporaneously therewith).  The Company
agrees that the Shares so issued will be deemed to have been issued to the
Warrantholder as of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in accordance with
the terms of this Warrant, notwithstanding that the stock transfer books of the
Company may then be closed or certificates representing such Shares may not be
actually delivered on such date.  The Company will at all times
reserve and keep available, out of its authorized but unissued Common Stock,
solely for the purpose of providing for the exercise of this Warrant, the
aggregate number of shares of Common Stock then issuable upon exercise of this
Warrant at any time.  The Company will (A) procure, at its sole
expense, the listing of the Shares issuable upon exercise of this Warrant at any
time, subject to issuance or notice of issuance, on all principal stock
exchanges on which the Common 


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    Stock is
then listed or traded and (B) maintain such listings of such Shares at all times
after issuance.  The Company will use reasonable best efforts to
ensure that the Shares may be issued without violation of any applicable law or
regulation or of any requirement of any securities exchange on which the Shares
are listed or traded.

    


    5.          
No Fractional Shares
or Scrip.  No fractional Shares or scrip representing
fractional
Shares shall be issued upon any exercise of this Warrant.  In lieu of
any fractional Share to which the Warrantholder would otherwise be entitled, the
Warrantholder shall be entitled to receive a cash payment equal to the Market
Price of the Common Stock on the last trading day preceding the date of exercise
less the pro-rated Exercise Price for such fractional share.

    


    6.          
No Rights as
Stockholders; Transfer Books.  This Warrant does not entitle
the Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof.  The Company will at no
time close its transfer books against transfer of this Warrant in any manner
which interferes with the timely exercise of this Warrant.

    


    7.          
Charges, Taxes and
Expenses.  Issuance of certificates for Shares to the
Warrantholder
upon the exercise of this Warrant shall be made without charge to the
Warrantholder
for any issue or transfer tax or other incidental expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by
the Company.

    


    8.          
Transfer/Assignment.

    


    (A)       
Subject to compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the
Company by the registered holder hereof in person or by duly authorized
attorney, and a new warrant shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of one or more
transferees, upon surrender of this Warrant, duly endorsed, to the office or
agency of the Company described in Section 3.  All expenses (other
than stock transfer taxes) and other charges payable in connection with the
preparation, execution and delivery of the new warrants pursuant to this Section
8 shall be paid by the Company.

    


    (B)        
The transfer of the Warrant and the Shares issued upon exercise of the Warrant
are subject to the restrictions set forth in Section 4.4 of the Purchase
Agreement.  If and for so long as required by the Purchase Agreement,
this Warrant shall contain the legends as set forth in Sections 4.2(a) and
4.2(b) of the Purchase Agreement.

    


    9.          
Exchange and Registry
of Warrant.  This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares.  The Company shall maintain a registry showing the name and
address of the Warrantholder as the registered holder of this
Warrant.  This Warrant may be surrendered 


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    for
exchange or exercise in accordance with its terms, at the office of the Company,
and the Company shall be entitled to rely in all respects, prior to written
notice to the contrary, upon such registry.

    


    10.        
Loss, Theft,
Destruction or Mutilation of Warrant.  Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated
Warrant.

    


    11.        
Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a business day, then such action may be taken or such right may be exercised
on the next succeeding day that is a business day.

    


    12.        
Rule 144
Information.  The Company covenants that it will use its
reasonable best efforts to timely file all reports and other documents required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best efforts
to take such further action as any Warrantholder may reasonably request, in each
case to the extent required from time to time to enable such holder to, if
permitted by the terms of this Warrant and the Purchase Agreement, sell this
Warrant without registration under the Securities Act within the limitation of
the exemptions provided by (A) Rule 144 under the Securities Act, as such rule
may be amended from time to time, or (B) any successor rule or regulation
hereafter adopted by the SEC.  Upon the written request of any
Warrantholder, the Company will deliver to such Warrantholder a written
statement that it has complied with such requirements.

    


    13.        
Adjustments and Other
Rights.  The Exercise Price and the number of Shares issuable
upon exercise of this Warrant shall be subject to adjustment from time to time
as follows; provided, that if more than one
subsection of this Section 13 is applicable to a single event, the subsection
shall be applied that produces the largest adjustment and no single event shall
cause an adjustment under more than one subsection of this Section 13 so as to
result in duplication:

    


    (A)       
Stock Splits,
Subdivisions, Reclassifications or Combinations.  If the
Company shall (i) declare and pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding shares of Common Stock into a smaller
number of shares, the number of 


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    Shares
issuable upon exercise of this Warrant at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that the Warrantholder
after such date shall be entitled to purchase the number of shares of Common
Stock which such holder would have owned or been entitled to receive in respect
of the shares of Common Stock subject to this Warrant after such date had this
Warrant been exercised immediately prior to such date.  In such event,
the Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be adjusted to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this Warrant
before such adjustment and (2) the Exercise Price in effect immediately prior to
the record or effective date, as the case may be, for the dividend,
distribution, subdivision, combination or reclassification giving rise to this
adjustment by (y) the new number of Shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.

    


    (B)        
 Certain
Issuances of Common Shares or Convertible Securities.  Until
the earlier of (i) the date on which the Original Warrantholder no longer holds
this Warrant or any portion thereof and (ii) the third anniversary of the Issue
Date, if the Company shall issue shares of Common Stock (or rights or warrants
or other securities exercisable or convertible into or exchangeable
(collectively, a “conversion”) for shares of Common
Stock) (collectively, “convertible
securities”)
(other than in Permitted Transactions (as defined below) or a transaction to
which subsection (A) of this Section 13 is applicable) without consideration or
at a consideration per share (or having a conversion price per share) that is
less than 90% of the Market Price on the last trading day preceding the date of
the agreement on pricing such shares (or such convertible securities) then, in
such event:

    


    (A)   the
number of Shares issuable upon the exercise of this Warrant immediately prior to
the date of the agreement on pricing of such shares (or of such convertible
securities) (the “Initial
Number”) shall
be increased to the number obtained by multiplying the Initial Number by a
fraction (A) the numerator of which shall be the sum of (x) the number of shares
of Common Stock of the Company outstanding on such date and (y) the number of
additional shares of Common Stock issued (or into which convertible securities
may be exercised or convert) and (B) the denominator of which shall be the sum
of (I) the number of shares of Common Stock outstanding on such date and (II)
the number of shares of Common
Stock which the aggregate consideration receivable by the Company for the total
number of shares of Common Stock so issued (or into which convertible securities
may be exercised or convert) would purchase at the Market Price on the last
trading day preceding the date of the agreement on pricing such shares (or such
convertible securities); and

    


    (B)   the
Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    securities)
by a fraction, the numerator of which shall be the number of shares of Common
Stock issuable upon exercise of this Warrant prior to such date and the
denominator of which shall be the number of shares of Common Stock issuable upon
exercise of this Warrant immediately after the adjustment described in clause
(A) above.

    


    For
purposes of the foregoing, the aggregate consideration receivable by the Company
in connection with the issuance of such shares of Common Stock or convertible
securities shall be deemed to be equal to the sum of the net offering price
(including the Fair Market Value of any non-cash consideration and after
deduction of any related expenses payable to third parties) of all such
securities plus the minimum aggregate amount, if any, payable upon exercise or
conversion of any such convertible securities into shares of Common Stock; and
“Permitted
Transactions”
shall mean issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit plans
and compensation related arrangements in the ordinary course and consistent with
past practice approved by the Board of Directors, (iii) in connection with a
public or broadly marketed offering and sale of Common Stock or convertible
securities for cash conducted by the Company or its affiliates pursuant to
registration under the Securities Act or Rule 144A thereunder on a basis
consistent with capital raising transactions by comparable financial
institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this
Section 13(B) shall become effective immediately upon the date of such
issuance.

    


    (C)Other
Distributions.  In case the Company shall fix a record date for
the making of a distribution to all holders of shares of its Common Stock of
securities, evidences of indebtedness, assets, cash, rights or warrants
(excluding Ordinary Cash Dividends, dividends of its Common Stock and other
dividends or distributions referred to in Section 13(A)), in each such case, the
Exercise Price in effect prior to such record date shall be reduced immediately
thereafter to the price determined by multiplying the Exercise Price in effect
immediately prior to the reduction by the quotient of (x) the Market Price of
the Common Stock on the last trading day preceding the first date on which the
Common Stock trades regular way on the principal national securities exchange on
which the Common Stock is listed or admitted to trading without the right
to receive such distribution, minus the amount of cash and/or the Fair Market
Value of the securities, evidences of indebtedness, assets, rights or warrants
to be so distributed in respect of one share of Common Stock (such amount and/or
Fair Market Value, the “Per
Share Fair Market Value”) divided by (y) such
Market Price on such date specified in clause (x); such adjustment shall be made
successively whenever such a record date is fixed. In such event, the number of
Shares issuable upon the exercise of this Warrant shall be increased to the
number obtained by dividing (x) the product of (1) the number of Shares issuable
upon the exercise of this Warrant before such adjustment, and (2) the Exercise
Price in effect immediately prior to the distribution giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the
immediately preceding sentence.  In the case of adjustment for a cash
dividend that is, or is coincident with, a regular quarterly cash dividend, the
Per Share Fair Market Value would be 


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    reduced
by the per share amount of the portion of the cash dividend that would
constitute an Ordinary Cash Dividend.  In the event that such
distribution is not so made, the Exercise Price and the number of Shares
issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to
distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in effect
and the number of Shares that would then be issuable upon exercise of this
Warrant if such record date had not been fixed.

    


    (D)        
Certain Repurchases of
Common Stock.  In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior
to the Effective Date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (i) the product of (x) the number of shares of Common Stock
outstanding immediately before such Pro Rata Repurchase and (y) the Market Price
of a share of Common Stock on the trading day immediately preceding the first
public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the
Pro Rata Repurchase, and of which the denominator shall be the product of (i)
the number of shares of Common Stock outstanding immediately prior to such Pro
Rata Repurchase minus the number of shares of Common Stock so repurchased and
(ii) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase.  In such event, the
number of shares of Common Stock issuable upon the exercise of this Warrant
shall be increased to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such
adjustment, and (2) the Exercise Price in effect immediately prior to the Pro
Rata Repurchase giving rise to this adjustment by (y) the new Exercise Price
determined in accordance with the immediately preceding sentence.  For
the avoidance of doubt, no increase to the Exercise Price or decrease in the
number of Shares issuable upon exercise of this Warrant shall be made pursuant
to this Section 13(D).

    


    (E)          Business
Combinations.  In case of
any Business Combination or reclassification of Common Stock (other than a
reclassification of Common Stock referred to in Section 13(A)), the
Warrantholder’s right to receive Shares upon exercise of this Warrant shall be
converted into the right to exercise this Warrant to acquire the number of
shares of stock or other securities or property (including cash) which the
Common Stock issuable (at the time of such Business Combination or
reclassification) upon exercise of this Warrant immediately prior to such
Business Combination or reclassification would have been entitled to
receive upon consummation of such Business Combination or reclassification; and
in any such case, if necessary, the provisions set forth herein with respect to
the rights and interests thereafter of the Warrantholder shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of
stock or other securities or property pursuant to this paragraph.  In
determining the kind and amount of stock, securities or the property receivable
upon exercise of this Warrant


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    following
the consummation of such Business Combination, if the holders of Common Stock
have the right to elect the kind or amount of consideration receivable upon
consummation of such Business Combination, then the consideration that the
Warrantholder shall be entitled to receive upon exercise shall be deemed to be
the types and amounts of consideration received by the majority of all holders
of the shares of common stock that affirmatively make an election (or of all
such holders if none make an election).

    


    (F)        
Rounding of
Calculations; Minimum Adjustments.  All calculations under this
Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to the
nearest one-hundredth (1/100th) of a share, as the case may be. Any provision of
this Section 13 to the contrary notwithstanding, no adjustment in the Exercise
Price or the number of Shares into which this Warrant is exercisable shall be
made if the amount of such adjustment would be less than $0.01 or one-tenth
(1/10th) of a share of Common Stock, but any such amount shall be carried
forward and an adjustment with respect thereto shall be made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a
share of Common Stock, or more.

    


    (G)       
Timing of Issuance of
Additional Common Stock Upon Certain Adjustments.  In any case
in which the provisions of this Section 13 shall require that an adjustment
shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Warrantholder of
this Warrant exercised after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such exercise by
reason of the adjustment required by such event over and above the shares of
Common Stock issuable upon such exercise before giving effect to such adjustment
and (ii) paying to such Warrantholder any amount of cash in lieu of a fractional
share of Common Stock; provided, however, that the Company upon
request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholder’s right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such
adjustment.

    


    (H)        Completion of Qualified
Equity Offering.  In the event the Company (or any successor by
Business Combination) completes one or more Qualified Equity Offerings on or
prior to December 31, 2009 that result in the Company (or any such successor)
receiving aggregate gross proceeds of not less than 100% of the aggregate
liquidation preference of the Preferred Shares (and any preferred stock issued
by any such successor to the Original Warrantholder under the CPP), the number
of shares of Common Stock underlying the portion of this Warrant then held by
the Original Warrantholder shall be thereafter reduced by a number of shares of
Common Stock equal to the product of (i) 0.5 and (ii) the number of shares
underlying the Warrant on the Issue Date (adjusted to take into account all
other theretofore made adjustments pursuant to this Section
13).


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    (I)         
Other
Events.  For so long as the Original Warrantholder holds this
Warrant or any portion thereof, if any event occurs as to which the provisions
of this Section 13 are not strictly applicable or, if strictly applicable, would
not, in the good faith judgment of the Board of Directors of the Company, fairly
and adequately protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then the Board of
Directors shall make such adjustments in the application of such provisions, in
accordance with such essential intent and principles, as shall be reasonably
necessary, in the good faith opinion of the Board of Directors, to protect such
purchase rights as aforesaid.  The Exercise Price or the number of
Shares into which this Warrant is exercisable shall not be adjusted in the event
of a change in the par value of the Common Stock or a change in the jurisdiction
of incorporation of the Company.

    


    (J)        
Statement Regarding
Adjustments.  Whenever the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be adjusted as provided in
Section 13, the Company shall forthwith file at the principal office of the
Company a statement showing in reasonable detail the facts requiring such
adjustment and the Exercise Price that shall be in effect and the number of
Shares into which this Warrant shall be exercisable after such adjustment, and
the Company shall also cause a copy of such statement to be sent by mail, first
class postage prepaid, to each Warrantholder at the address appearing in the
Company’s records.

    


    (K)        
Notice of Adjustment
Event.  In the event that the Company shall propose to take any
action of the type described in this Section 13 (but only if the action of the
type described in this Section 13 would result in an adjustment in the Exercise
Price or the number of Shares into which this Warrant is exercisable or a change
in the type of securities or property to be delivered upon exercise of this
Warrant), the Company shall give notice to the Warrantholder, in the manner set
forth in Section 13(J), which notice shall specify the record date, if any, with
respect to any such action and the approximate date on which such action is to
take place.  Such notice shall also set forth the facts with respect
thereto as shall be reasonably necessary to indicate the effect on the Exercise
Price and the number, kind or class of shares or other securities or property
which shall be deliverable upon exercise of this Warrant.  In the case
of any action which would require the fixing of a record date, such notice shall
be given at least 10 days prior to the date so fixed, and in case of all other
action, such notice shall be given at least 15 days prior to the taking of such
proposed action.  Failure to give such notice, or any defect therein,
shall not affect the legality or validity of any such action.

    


    (L)           Proceedings Prior to Any
Action Requiring Adjustment.  As a condition precedent to the
taking of any action which would require an adjustment pursuant to this Section
13, the Company shall take any action which may be necessary, including
obtaining regulatory, New York Stock Exchange, NASDAQ Stock Market or other
applicable national securities exchange or stockholder approvals or exemptions,
in order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock that the Warrantholder is entitled
to receive upon exercise of this Warrant pursuant to this Section
13.


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    (M)       
Adjustment
Rules.  Any adjustments pursuant to this Section 13 shall be
made successively whenever an event referred to herein shall
occur.  If an adjustment in Exercise Price made hereunder would reduce
the Exercise Price to an amount below par value of the Common Stock, then such
adjustment in Exercise Price made hereunder shall reduce the Exercise Price to
the par value of the Common Stock.

    


    14.        
Exchange.  At
any time following the date on which the shares of Common Stock of the Company
are no longer listed or admitted to trading on a national securities exchange
(other than in connection with any Business Combination), the Original
Warrantholder may cause the Company to exchange all or a portion of this Warrant
for an economic interest (to be determined by the Original Warrantholder after
consultation with the Company) of the Company classified as permanent equity
under U.S. GAAP having a value equal to the Fair Market Value of the portion of
the Warrant so exchanged.  The Original Warrantholder shall calculate
any Fair Market Value required to be calculated pursuant to this Section 14,
which shall not be subject to the Appraisal Procedure.

    


    15.        
No
Impairment.  The Company will not, by amendment of its Charter
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking
of all such action as may be necessary or appropriate in order to protect the
rights of the Warrantholder.

    


    16.        
Governing
Law.  This Warrant will be governed by and
construed in accordance with the federal law of the United States if and to the
extent such law is applicable, and otherwise in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.  Each of the Company and the Warrantholder agrees
(a) to submit to the exclusive jurisdiction and venue of the United States
District Court for the District of Columbia for any civil action, suit or
proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby, and (b) that notice may be served upon the Company at the
address in Section 20 below and upon the Warrantholder at the address for the
Warrantholder set forth in the registry maintained by the Company pursuant to
Section 9 hereof.  To the extent permitted by applicable law, each of
the Company and the Warrantholder hereby unconditionally waives trial by jury in
any civil legal action or proceeding relating to the Warrant or the transactions
contemplated hereby or thereby.

    


    17.        
Binding
Effect.  This Warrant shall be binding upon any successors or
assigns of the Company.


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    18.        
Amendments.  This
Warrant may be amended and the observance of any term of this Warrant may be
waived only with the written consent of the Company and the
Warrantholder.

    


    19.        
Prohibited
Actions.  The Company agrees that it will not take any action
which would entitle the Warrantholder to an adjustment of the Exercise Price if
the total number of shares of Common Stock issuable after such action upon
exercise of this Warrant, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon the exercise of
all outstanding options, warrants, conversion and other rights, would exceed the
total number of shares of Common Stock then authorized by its
Charter.

    


    20.        
Notices.  Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally, or by facsimile, upon
confirmation of receipt, or (b) on the second business day following the date of
dispatch if delivered by a recognized next day courier service.  All
notices hereunder shall be delivered as set forth in Item 8 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing
by the party to receive such notice.

    


    21.        
Entire
Agreement.  This Warrant, the forms attached hereto and
Schedule A hereto (the terms of which are incorporated by reference herein), and
the Letter Agreement (including all documents incorporated therein), contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.

    


    [Remainder
of page intentionally left blank]

    

      
        
           


        

        
          15

          
            

          

        

        
           


        

      

    

     

    [Form
of Notice of Exercise]

    Date:
___________

    


    TO:         
FNB United Corp.

    150 South Fayetteville
Street

    Asheboro, North Carolina
27203

    Attention:  Michael C.
Miller, President

    


    RE:Election
to Purchase Common Stock

    


    The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant.  The undersigned, in
accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate
Exercise Price for such shares of Common Stock in the manner set forth
below.  A new warrant evidencing the remaining shares of Common Stock
covered by such Warrant, but not yet subscribed for and purchased, if any,
should be issued in the name set forth below.

    


    
      	
              Number
      of Shares of Common Stock

            	
              _____________________

            


    

    


    Method of
Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of
the Warrant or cash exercise pursuant to Section 3(ii) of the Warrant, with
consent of the Company and the Warrantholder)  
______________________

    


    
      	
              Aggregate
      Exercise Price:

            	
              ______________________

            


    

    


    
      
        
          	 	
                  Holder:

                	 	
                  _______________________

                
	 	
                  By:

                	 	
                  _______________________

                
	 	
                  Name:

                	 	
                  _______________________

                
	 	
                  Title:

                	 	
                  _______________________

                


        

      

    


    
      
         


      

      
        16

        
          

        

      

      
         


      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 	IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
      by a duly authorized officer.	 
	 	 	 	 	 
	      
                                          Dated:  February
      13, 2009

                                        	 	 	 	 
	 
      	 
      	 
      	 
      	 
	 
      	
                                          FNB
      UNITED CORP.

                                        	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	 
      	
                                          By:

                                        	 
      	 
      	 
	 
      	 
      	
                                          Name:

                                        	
                                           Michael
      C. Miller

                                        	 
	 
      	 
      	
                                          Title:

                                        	
                                           President

                                        	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	 
      	
                                          Attest:

                                        	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
	 
      	
                                          By:

                                        	 
      	 
      	 
	 
      	 
      	
                                          Name:

                                        	
                                           R.
      Larry Campbell

                                        	 
	 
      	 
      	
                                          Title:

                                        	
                                          Executive
      Vice President and Secretary

                                        	 


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    


    [Signature
Page to Warrant]


    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    SCHEDULE
A

    


    


    Item 1

    Name:  FNB
United Corp.

    Corporate
or other organizational form:  Corporation

    Jurisdiction
of organization:  North Carolina

    


    Item 2

    Exercise
Price:   $3.50

    


    Item 3

    Issue
Date:  February 13, 2009

    


    Item 4

    Amount of
last dividend declared prior to the Issue Date:  $0.10

    


    Item 5

    Date of
Letter Agreement between the Company and the United States Department of
the

    Treasury:  February
13, 2009

    


    Item 6

    Number of
shares of Common Stock:  2,207,143

    


    Item 7

    Company’s
address:  150 South Fayetteville Street, Asheboro, North Carolina
27203

    


    Item 8

    
      	
              Notice
      information:

            	
              FNB
      United Corp.

            


    

    150 South
Fayetteville Street

    Asheboro,
North Carolina 27203

    Attention:  Michael
C. Miller, President

    Telecopier:  (336)
625-2452