sch13d.htm

0000893750-11-000080.txt : 20111031 0000893750-11-000080.hdr.sgml : 20111031 20111031104611 ACCESSION NUMBER: 0000893750-11-000080 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20111031 DATE AS OF CHANGE: 20111031 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FNB United Corp. CENTRAL INDEX KEY: 0000764811 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 561456589 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-37059 FILM NUMBER: 111166958 BUSINESS ADDRESS: STREET 1: 150 SOUTH FAYETTEVILLE STREET STREET 2: P O BOX 1328 CITY: ASHEBORO STATE: NC ZIP: 27203 BUSINESS PHONE: 3366268300 MAIL ADDRESS: STREET 1: P.O. BOX 1328 CITY: ASHEBORO STATE: NC ZIP: 27204 FORMER COMPANY: FORMER CONFORMED NAME: FNB CORP/NC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DBD Cayman Holdings, Ltd. CENTRAL INDEX KEY: 0001510768 IRS NUMBER: 000000000 STATE OF INCORPORATION: F3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O THE CARLYLE GROUP, SUITE 220 SOUTH STREET 2: 1001 PENNSYLVANIA AVENUE, N.W. CITY: WASHINGTON STATE: DC ZIP: 20004 BUSINESS PHONE: (202) 729-5438 MAIL ADDRESS: STREET 1: C/O THE CARLYLE GROUP, SUITE 220 SOUTH STREET 2: 1001 PENNSYLVANIA AVENUE, N.W. CITY: WASHINGTON STATE: DC ZIP: 20004 SC 13D 1 sch13d.htm SCHEDULE 13D sch13d.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

FNB United Corp.

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

302519103

(CUSIP Number)

Jeffrey Ferguson

The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, D.C. 20004-2505

(202) 729-5626

With a copy to:

Maripat Alpuche, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017-3954

Telephone: (212) 455-2000

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

October 21, 2011

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box¨.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act.

CUSIP No. 302519103				Page 2 of 22 Pages

1	NAMES OF REPORTING PERSONS DBD Cayman Holdings, Ltd.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS (see Instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 493,031,250
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 493,031,250
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (1)
14	TYPE OF REPORTING PERSON (see instructions) OO (Cayman Islands exempted company)

(1) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

CUSIP No. 302519103				Page 3 of 22 Pages

15	NAMES OF REPORTING PERSONS DBD Cayman, Ltd.
16	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
17	SEC USE ONLY
18	SOURCE OF FUNDS (see Instructions) OO
19	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
20	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		21	SOLE VOTING POWER 0
		22	SHARED VOTING POWER 493,031,250
		23	SOLE DISPOSITIVE POWER 0
		24	SHARED DISPOSITIVE POWER 493,031,250
25	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
26	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
27	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (2)
28	TYPE OF REPORTING PERSON (see instructions) OO (Cayman Islands exempted company)

(2) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

CUSIP No. 302519103				Page 4 of 22 Pages

1	NAMES OF REPORTING PERSONS TCG Holdings Cayman II, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 493,031,250
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 493,031,250
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (3)
14	TYPE OF REPORTING PERSON (see instructions) PN (Cayman Islands exempted limited partnership)

(3) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

CUSIP No. 302519103				Page 5 of 22 Pages

1	NAMES OF REPORTING PERSONS TC Group Cayman Investment Holdings, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 493,031,250
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 493,031,250
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (4)
14	TYPE OF REPORTING PERSON (see instructions) PN (Cayman Islands exempted limited partnership)

(4) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

CUSIP No. 302519103				Page 6 of 22 Pages

1	NAMES OF REPORTING PERSONS Carlyle Financial Services, Ltd.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 493,031,250
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 493,031,250
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (5)
14	TYPE OF REPORTING PERSON (see instructions) OO (Cayman Islands exempted company)

(5) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

CUSIP No. 302519103				Page 7 of 22 Pages

1	NAMES OF REPORTING PERSONS TCG Financial Services, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 493,031,250
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 493,031,250
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (6)
14	TYPE OF REPORTING PERSON (see instructions) PN (Cayman Islands exempted limited partnership)

(6) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

CUSIP No. 302519103				Page 8 of 22 Pages

1	NAMES OF REPORTING PERSONS Carlyle Financial Services Harbor, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)				(a) ¨ (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)				¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 493,031,250
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 493,031,250
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 493,031,250
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)				¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.37% (7)
14	TYPE OF REPORTING PERSON (see instructions) PN (Delaware limited partnership)

(7) This calculation is based on 2,109,638,988 shares of common stock of FNB United Corp. outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

Item 1. Security and Issuer

This statement on Schedule 13D (this “Schedule 13D”) relates to the shares of common stock, no par value (the “Common Stock”), of FNB United Corp., a North Carolina corporation (the “Issuer”). The principal executive office of the Issuer is located at 150 South Fayetteville Street, Asheboro, North Carolina, 27203.

Item 2.

Identity and Background

(a) – (f)

This Schedule 13D is being filed jointly on behalf of the following persons (collectively, the “Reporting Persons”): (1) DBD Cayman Holdings, Ltd., a Cayman Islands exempted company, (2) DBD Cayman, Ltd., a Cayman Islands exempted company, (3) TCG Holdings Cayman II, L.P., a Cayman Islands exempted limited partnership, (4) TC Group Cayman Investment Holdings, L.P., a Cayman Islands exempted limited partnership, (5) Carlyle Financial Services, Ltd., a Cayman Islands exempted company, (6) TCG Financial Services, L.P., a Cayman Islands exempted limited partnership, and (7) Carlyle Financial Services Harbor, L.P., a Delaware limited partnership. The agreement among the Reporting Persons relating to the joint filing of this Schedule 13D, in accordance with Rule 13d-1(k) of the Securities Exchange Act of 1934, as amended, is attached hereto as Exhibit 99.1.

DBD Cayman Holdings, Ltd. is the sole shareholder of DBD Cayman, Ltd., which is the general partner of TCG Holdings Cayman II, L.P., which is the general partner of TC Group Cayman Investment Holdings, L.P., which is the sole shareholder of Carlyle Financial Services, Ltd., which is the general partner of TCG Financial Services, L.P., which is the general partner of Carlyle Financial Services Harbor, L.P. The shares of Common Stock reported in this Schedule 13D are held directly by Carlyle Financial Services Harbor, L.P.

William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein are the ordinary members as well as the directors of DBD Cayman Holdings, Ltd. The ordinary members control DBD Cayman Holdings, Ltd. based on a majority vote. Such individuals expressly disclaim any beneficial ownership of the shares of Common Stock held by Carlyle Financial Services Harbor, L.P. William E. Conway, Jr., Daniel A. D’Aniello, David M. Rubenstein and Jeffrey W. Ferguson are the executive officers of DBD Cayman Holdings, Ltd. Each of these executive officers is a citizen of the United States.

William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein are the directors of DBD Cayman, Ltd. Each of these directors is a citizen of the United States. William E. Conway, Jr., Daniel A. D’Aniello, David M. Rubenstein and Walkers SPV Limited are the executive officers of DBD Cayman, Ltd. Each of these executive officers is a citizen of the United States, except that Walkers SPV Limited is a Cayman Islands exempted company.

William E. Conway, Jr., Daniel A. D’Aniello, David M. Rubenstein and Glenn Youngkin are the directors of Carlyle Financial Services, Ltd. Each of these directors is a citizen of the United States. The executive officers of Carlyle Financial Services, Ltd. are Daniel A. D’Aniello, William E. Conway, Jr., David M. Rubenstein, Jeffrey Ferguson, Curt Buser, P.

Olivier Sarkozy, James Burr, Randal K. Quarles and John C. Redett. Each of these executive officers is a citizen of the United States.

William E. Conway, Jr., Daniel A. D’Aniello, David M. Rubenstein, Glenn Youngkin, Jeffrey Ferguson, Curt Buser, P. Olivier Sarkozy, James Burr, Randal K. Quarles, John C. Redett and Walkers SPV Limited are collectively referred to as the “Related Persons”.

The business address of each of the Reporting Persons and the Related Persons is c/o The Carlyle Group, 1001 Pennsylvania Avenue, N.W., Suite 220 South, Washington, D.C. 20004-2505, except that the business address of Walkers SPV Limited is Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9002, Cayman Islands.

The Reporting Persons are principally engaged in the business of investments in securities.

To the best knowledge of the Reporting Persons and the Related Persons, none of the Reporting Persons nor the Related Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

To the best knowledge of the Reporting Persons and the Related Persons, none of the Reporting Persons nor the Related Persons has, during the last five years, been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.

Source and Amount of Funds or Other Consideration

Pursuant to the Investment Agreement, dated as of April 26, 2011, by and among the Issuer and Carlyle Financial Services Harbor, L.P. (“Carlyle”), as amended by Amendment No. 1, dated as of June 16, 2011, Amendment No. 2, dated as of August 4, 2011 and Amendment No. 3, dated as of October 20, 2011 (as amended by the Amendments, the “Investment Agreement”), on October 21, 2011 (the “Closing”), Carlyle acquired, for an aggregate purchase price of $78,885,000.00 (the “Purchase Price”), 493,031,250 shares of Common Stock, including the associated preferred share purchase rights issued to the shareholders of the Issuer, including Carlyle, pursuant to the Issuer’s Tax Benefits Preservation Plan (the “Rights Plan”).

The Purchase Price was funded by capital contributions by the partners of Carlyle.

The foregoing references to and description of the Investment Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the full text of the Investment Agreement and the Amendments, which are included as Exhibits 99.3, 99.4, 99.5 and 99.6 hereto and are each incorporated by reference to this Item 3.

Item 4. Purpose of Transaction

The information set forth in Items 3 and 6 is incorporated herein by reference.

Carlyle acquired the Common Stock described in Item 3 (the “Investment”) for investment purposes. The Investment was not motivated by an intent to exercise control, directly or indirectly, over the management, policies or business operations of the Issuer.

Subject to the limitations imposed by the Investment Agreement and applicable federal and state securities laws, the Reporting Persons may seek to dispose of the Common Stock (including, without limitation, distributing some or all of the Common Stock to the Reporting Persons’ respective members, partners, stockholders or beneficiaries, as applicable) from time to time, subject to market conditions and other investment considerations. To the extent permitted by the Investment Agreement and applicable bank regulatory limitations, each Reporting Person may directly or indirectly acquire additional shares of Common Stock or associated rights or securities exercisable for or convertible into Common Stock, depending upon an ongoing evaluation of its investment in Common Stock and securities exercisable for or convertible into Common Stock, applicable legal restrictions, prevailing market conditions, liquidity requirements of such Reporting Person and/or other investment considerations.

To the extent permitted under the Investment Agreement, the Reporting Persons may engage in discussions with management, the board of directors, other stockholders of the Issuer and other relevant parties concerning the business, operations, board composition, management, strategy and future plans of the Issuer.

Other than as described in this Schedule 13D, each of the Reporting Persons and, to the knowledge of each of the Reporting Persons, each of the Related Persons has no present plans or proposals that relate to or would result in any of the events set forth in Items 4(a) through (j) of Schedule 13D.

Item 5.

Interest in Securities of the Issuer

The information contained on the cover pages to this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4 and 6 is incorporated herein by reference.

(a) and (b)

Reporting Person	Amount Beneficially Owned	Percent of Class	Sole Power to Vote or Direct the Vote	Shared Power to Vote or Direct the Vote	Sole Power to Dispose or to Direct the Disposition	Shared Power to Dispose or Direct the Disposition
DBD Cayman Holdings, Ltd.	493,031,250	23.37%	0	493,031,250	0	493,031,250

DBD Cayman, Ltd.	493,031,250	23.37%	493,031,250	493,031,250
TCG Holdings Cayman II, L.P.	493,031,250	23.37%	493,031,250	493,031,250
TC Group Cayman Investment Holdings, L.P.	493,031,250	23.37%	493,031,250	493,031,250
Carlyle Financial Services, Ltd.	493,031,250	23.37%	493,031,250	493,031,250
TCG Financial Services, L.P.	493,031,250	23.37%	493,031,250	493,031,250
Carlyle Financial Services Harbor, L.P.	493,031,250	23.37%	493,031,250	493,031,250

The percentage calculations are based on 2,109,638,988 shares of Common Stock outstanding as of the close of business on October 21, 2011, as provided by FNB United Corp.

DBD Cayman Holdings, Ltd. is controlled by its three-person board of directors, and all action relating to the voting or disposition of the shares of Common Stock referred to herein requires the approval of a majority of the board. The members of the board are William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein, each of whom disclaims beneficial ownership of the shares of Common Stock referred to herein.

(c) Except as set forth in this Item 5, none of the Reporting Persons nor, to the knowledge of each of the Reporting Persons, without independent verification, any of the Related Persons, has engaged in any transaction during the past 60 days involving the securities of the Issuer.

(d) Other than the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities of the Issuer referred to in this Item 5.

(e) Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information set forth in Items 2, 3, 4 and 5 is incorporated herein by reference.

Investment Agreement

The Investment Agreement includes, among other provisions, the following terms:

Representations and Warranties. Customary representations and warranties were made by the Issuer to Carlyle relating to the Issuer, its business and the issuance of the Common Stock. The Issuer and Carlyle each agreed to indemnify the other party for breaches of its respective representations and warranties, subject to certain limitations.

Board Representation. Pursuant to the terms of the Investment Agreement, John Bresnan was appointed as Carlyle’s representative to the board of directors of the Issuer (the “Board of Directors”) as well as the boards of directors of the following subsidiaries of the Issuer: CommunityONE Bank, National Association and Bank of Granite (the “Bank Boards”). Carlyle will be entitled to maintain a representative on the Board of Directors and the Bank Boards for so long as Carlyle and its affiliates own in the aggregate 5% or more of the outstanding shares of Common Stock ((as adjusted from time to time for any reorganization, recapitalization, stock dividend, stock split, reverse stock split, or other like changes in the Issuer’s capitalization) ) (the “Ownership Threshold”). Subject to applicable law, the Carlyle representative shall be appointed to two committees of each of the Board of Directors and the Bank Boards, as applicable. Subject to the Ownership Threshold, Carlyle shall also be entitled to designate one nonvoting board observer to attend meetings of the Board of Directors and the Bank Boards, including any meeting of committees which the Carlyle representative is a member.

Avoidance of Control. Neither the Issuer nor any of its subsidiaries shall take any action that would cause Carlyle’s ownership of voting securities of the Issuer and its affiliates (as such term is used under the Bank Holding Company Act of 1956, as amended (the “BHC Act”)) to increase above 24.9% without the prior written consent of Carlyle, or to increase to an amount that would constitute “control” under the BHC Act, or otherwise cause Carlyle to “control” the Issuer under and for purposes of the BHC Act. Carlyle (together with its affiliates (as such term is used under the BHC Act)) shall not have the ability to exercise any voting rights of any securities in excess of 24.9% of the total outstanding voting securities of the Issuer. In addition, Carlyle shall not take, permit or allow any action that would cause any of the Issuer’s

subsidiaries to become a “commonly controlled insured depository institution” (as that term is defined for purposes of 12 U.S.C. §1815(e), as may be amended or supplemented from time to time, and any successor thereto) with respect to any institution that is not a direct or indirect subsidiary of the Issuer.

Transfer Restrictions. Subject to certain exceptions specified in the Investment Agreement, prior to the Lockup Termination Date, Carlyle will not transfer, sell, assign or otherwise dispose of (“Transfer”) any shares of Common Stock. On or after the Lockup Termination Date, Carlyle may Transfer shares of Common Stock (1) only in a privately negotiated transaction to any person or group of persons that would not require pursuant to such Transfer beneficial ownership of Common Stock in violation of the Passivity Commitments (described below) or (2) into the public market (in a registered public offering, pursuant to Rule 144 under the Securities Act of 1933, as amended, or otherwise, including through any broker, dealer or underwriter, acting in a capacity as such, that purchases shares of Common Stock for distribution); provided that Carlyle does not knowingly (without, however, imposing a duty of inquiry on Carlyle) effect any public market sale or transfer that would result in beneficial ownership in violation of Carlyle’s obligations described under “Avoidance of Control” above. As used in the Investment Agreement, the term “Lockup Termination Date” means the earlier of: (1) July 21, 2012, (2) the date on which Carlyle owns in aggregate with its affiliates less than 5% of the outstanding shares of Common Stock (as adjusted from time to time for any reorganization, recapitalization, stock dividend, stock split, reverse stock split, or other like changes in the Issuer’s capitalization), (3) the date on which any person commences a bona fide public tender or exchange offer which, if consummated, would result in a Change in Control (as defined in the Investment Agreement), (4) the public announcement (including a public filing) by the Issuer that it is “for sale” in a transaction that would result in a Change in Control and (5) the execution by Issuer of a definitive agreement which, if consummated, would result in a Change in Control.

Registration Rights. The Issuer has granted Carlyle customary registration rights, including “shelf” registration rights, demand registration rights and “piggy-back” registration rights with respect to the Common Stock acquired by Carlyle in connection with the Investment Agreement. Pursuant to such registration rights, the Issuer has agreed to prepare and file with the Securities and Exchange Commission a shelf registration statement covering the resale of the Common Stock (or, if permitted by securities laws, otherwise designate an existing shelf registration statement to cover the resale of the Common Stock) as promptly as practicable after (and in any event no more than fifteen (15) days after) the Lockup Termination Date.

Preemptive Rights. So long as Carlyle owns shares of Common Stock equal to the Ownership Threshold, if the Issuer at any time makes any public or non-public offering or sale of any equity (including Common Stock, preferred stock and restricted stock), or any securities, options or debt that is convertible or exchangeable into equity or that include an equity component (any such security, a “New Security”) (other than the issuance and sale of securities (i) in connection with the Warrant Offering, (ii) upon conversion of convertible securities issued in compliance with the preemptive rights requirements set forth in the Investment Agreement, (iii) to employees, officers, directors or consultants of the Issuer pursuant to employee benefit plans or compensatory arrangements approved by the Board of Directors (including upon the exercise of employee stock options granted pursuant to any such plans or

arrangements), (iv) as consideration in connection with any bona fide, arm’s-length direct or indirect merger, acquisition or similar transaction or joint venture, strategic alliance, license agreement or other similar commercial transaction (including, for the avoidance of doubt, the Granite Merger (as such term is defined in the Investment Agreement), (v) in connection with the exercise of the TARP Warrant (as such term is defined in the Investment Agreement) or (vi) pursuant to the Rights Plan or any other rights plan, Carlyle shall first be afforded the opportunity to acquire from the Issuer for the same price and on the same terms (except that, to the extent permitted by law and the articles of incorporation and bylaws of the Issuer, Carlyle may elect to receive such securities in nonvoting form, convertible into voting securities in a widely dispersed offering) as such securities are proposed to be offered to others, up to the amount of such New Securities to be offered in the aggregate required to enable Carlyle to maintain its proportionate equivalent interest in the Common Stock of the Issuer immediately prior to any such issuance of New Securities. Notwithstanding the foregoing, in no event shall Carlyle have the right to purchase New Securities to the extent that such purchase would result in Carlyle exceeding the ownership limitations set forth under “Avoidance of Control” above. The above provisions are not applicable to any New Securities offered or issued at the written direction of a banking regulator of the Issuer or an insured depository institution subsidiary of the Issuer, as applicable.

Warrant Offering. Following the Closing, but no earlier than January 1, 2012, subject to applicable law, the Issuer will distribute non-transferable warrants to the holders of record of the Common Stock as of the close of business on October 20, 2011 giving such shareholders the right to purchase one share of Common Stock for each four shares of Common Stock held as of the close of business on October 20, 2011 at the same price per share paid by Carlyle under the Investment Agreement; provided that the beneficial ownership of any such holder, together with any other person aggregated with such holder under applicable law, shall not thereby exceed 4.99% of the Issuer’s equity securities. The warrants will be exercisable for a period of 30 days after the later of the date of distribution of such warrants or the effective date of a registration statement related to the warrant offering.

Reverse Stock Split. Pursuant to the terms of the Investment Agreement, the Issuer has agreed to take all steps necessary to prevent the Common Stock from being delisted from NASDAQ, including, without limitation, effecting a reverse stock split of the Common Stock, if necessary, to comply with NASDAQ Listing Rule 5450(a)(1). The shareholders of the Issuer have approved an amendment to the Issuer’s articles of incorporation to effect a reverse stock split of the Common Stock on a one-for-100 basis.

Preservation of Tax Benefits. Until the first day of a taxable year of the Issuer as to which the Board of Directors determines that no Tax Benefit of the Issuer, or any direct or indirect subsidiary thereof, may be carried forward, the Issuer shall not take any action with respect to its stock or any “options” (within the meaning of Section 1.382-4(d) of the Treasury Regulations) to acquire its stock following the Closing, unless the Issuer shall have first received an unqualified opinion (based on reasonable assumptions and factual representations) of nationally recognized tax counsel or a private letter ruling from the Internal Revenue Service, in either case to the effect that such action would not cause an “ownership change” of the Company (within the meaning of Section 382(g) of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable Treasury Regulations), taking into account the maximum reasonably

expected effect of the exercise of any outstanding “options” (as defined above). As used in the Investment Agreement “Tax Benefits” means net operating loss carryovers, capital loss carryovers, general business credit carryovers, alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any potential loss or deduction attributable to an existing “net unrealized built-in loss” within the meaning of Section 382 of the Code.

Passivity Commitments

In connection with the Investment Agreement, Carlyle made certain commitments to the Board of Governors of the Federal Reserve System to ensure that neither Carlyle nor any of its affiliates will, among other things, exercise or attempt to exercise a controlling influence over the management or policies of the Issuer or any of its subsidiaries for purposes of the BHC Act.

Item 7.

Materials to be Filed as Exhibits

Exhibit 99.1

Joint Filing Agreement, dated October 31, 2011, by and among DBD Cayman Holdings, Ltd., DBD Cayman, Ltd, TCG Holdings Cayman II, L.P., TC Group Cayman Investment Holdings, L.P., Carlyle Financial Services, Ltd., TCG Financial Services, L.P. and Carlyle Financial Services Harbor, L.P.

Exhibit 99.2

Power of Attorney dated February 11, 2011.

Exhibit 99.3

Investment Agreement, dated as of April 26, 2011, by and among FNB United Corp. and Carlyle Financial Services Harbor, L.P. (filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed on April 27, 2011 and incorporated by reference herein).

Exhibit 99.4

Amendment No. 1, dated as of June 16, 2011, to the Investment Agreement, dated as of April 26, 2011, by and among FNB United Corp. and Carlyle Financial Services Harbor, L.P. (filed as Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed on June 16, 2011 and incorporated by reference herein).

Exhibit 99.5

Amendment No. 2, dated as of August 4, 2011, to the Investment Agreement, dated as of April 26, 2011, as amended by Amendment No. 1, dated as of June 16, 2011, by and among FNB United Corp. and Carlyle Financial Services Harbor, L.P. (filed as Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed on August 5, 2011 and incorporated by reference herein).

Exhibit 99.6

Amendment No. 3, dated as of October 20, 2011, to the Investment Agreement, dated as of April 26, 2011, as amended by Amendment No. 1, dated as of June 16,

2011 and Amendment No. 2, dated as of August 4, 2011, by and among FNB United Corp. and Carlyle Financial Services Harbor, L.P.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated:

October 31, 2011

DBD CAYMAN HOLDINGS, LTD.

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd.

DBD CAYMAN, LTD.

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd., as sole shareholder

of DBD Cayman, Ltd.

TCG HOLDINGS CAYMAN II, L.P.

By: DBD CAYMAN, LTD.,

its general partner

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd., as sole shareholder

of DBD Cayman, Ltd.

TC GROUP CAYMAN INVESTMENT HOLDINGS, L.P.

By: TCG HOLDINGS CAYMAN II, L.P.,

its general partner

By: DBD CAYMAN, LTD.,

its general partner

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd., as sole shareholder

of DBD Cayman, Ltd.

CARLYLE FINANCIAL SERVICES, LTD.

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of Carlyle Financial Services, Ltd.

TCG FINANCIAL SERVICES, L.P.

By: CARLYLE FINANCIAL SERVICES, LTD.,

its general partner

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of Carlyle Financial Services, Ltd.

CARLYLE FINANCIAL SERVICES HARBOR, L.P.

By: TCG FINANCIAL SERVICES, L.P.,

its general partner

By: CARLYLE FINANCIAL SERVICES, LTD.,

its general partner

By: /s/ Ann Siebecker

Name:

Ann Siebecker

Title: Attorney-in-Fact for David M. Rubenstein, Director

of Carlyle Financial Services, Ltd.

EXHIBIT INDEX

Exhibit No. Description

99.1	Joint Filing Agreement, dated October 31, 2011, by and among DBD Cayman Holdings, Ltd., DBD Cayman, Ltd, TCG Holdings Cayman II, L.P., TC Group Cayman Investment Holdings, L.P., Carlyle Financial Services, Ltd., TCG Financial Services, L.P. and Carlyle Financial Services Harbor, L.P.

99.2	Power of Attorney dated February 11, 2011.

99.3	Investment Agreement, dated as of April 26, 2011, by and among FNB United Corp. and Carlyle Financial Services Harbor, L.P. (filed as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed on April 27, 2011 and incorporated by reference herein).

99.4

99.5

99.6	Amendment No. 3, dated as of October 20, 2011, to the Investment Agreement, dated as of April 26, 2011, as amended by Amendment No. 1, dated as of June 16, 2011 and Amendment No. 2, dated as of August 4, 2011, by and among FNB United Corp. and Carlyle Financial Services Harbor, L.P.

EX-99.1 2 exh991.htm JOINT FILING AGREEMENT exh991.htm

Exhibit 99.1

JOINT FILING AGREEMENT

The undersigned hereby agree that this statement on Schedule 13D dated October 31, 2011 with respect to the common stock of FNB United Corp. is, and any amendments hereto signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended.

Dated: October 31, 2011

DBD CAYMAN HOLDINGS, LTD.

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd.

DBD CAYMAN, LTD.

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd., as sole shareholder

of DBD Cayman, Ltd.

TCG HOLDINGS CAYMAN II, L.P.

By: DBD CAYMAN, LTD.,

its general partner

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd., as sole shareholder

of DBD Cayman, Ltd.

TC GROUP CAYMAN INVESTMENT HOLDINGS, L.P.

By: TCG HOLDINGS CAYMAN II, L.P.,

its general partner

By: DBD CAYMAN, LTD.,

its general partner

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of DBD Cayman Holdings, Ltd., as sole shareholder

of DBD Cayman, Ltd.

CARLYLE FINANCIAL SERVICES, LTD.

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of Carlyle Financial Services, Ltd.

TCG FINANCIAL SERVICES, L.P.

By: CARLYLE FINANCIAL SERVICES, LTD.,

its general partner

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of Carlyle Financial Services, Ltd.

CARLYLE FINANCIAL SERVICES HARBOR, L.P.

By: TCG FINANCIAL SERVICES, L.P.,

its general partner

By: CARLYLE FINANCIAL SERVICES, LTD.,

its general partner

By: /s/ Ann Siebecker

Name: Ann Siebecker

Title:

Attorney-in-Fact for David M. Rubenstein, Director

of Carlyle Financial Services, Ltd.

EX-99.2 3 exh992.htm POWER OF ATTORNEY exh992.htm

EXHIBIT 99.2

POWER OF ATTORNEY

The undersigned understands that, from time to time, the Carlyle Companies (defined below) are required to prepare, execute and file certain federal and state securities laws filings.

Know all by these presents, that the undersigned hereby constitutes and appoints each of Curt Buser, Jeff Ferguson, David Pearson, Catherine Ziobro, R. Rainey Hoffman, Joanne Cosiol, Monica Harris, Jeremy Anderson, Bruno De Gusmao, Ann Siebecker, Andrea Pekala, Tom Mayrhofer, David Willich, Glen Goold, Orit Mizrachi, John Beczak, Rick Kappler, Matt LoRusso, Rob Konigsberg, Katey Bogue, James Sloan, or any of them signing singly, and with full power of substitution, the undersigned’s true and lawful attorney-in-fact to:

(1) prepare, execute in the name of each Carlyle Company and on behalf of each Carlyle Company, and submit to the U.S. Securities and Exchange Commission (the “SEC”) a Form ID, including amendments thereto, and any other documents necessary or appropriate to obtain codes and passwords enabling the undersigned to make electronic filings with the SEC of Forms D (“Form D”) required to be filed in accordance with Rule 503 (“Rule 503”) promulgated with respect to Sections 4(2), 4(6) and 3(b) of the Securities Act of 1933 (the “1933 Act”) and reports required by Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 (the “1934 Act”) or any rule or regulation of the SEC;

(2) prepare and execute for and on behalf of each Carlyle Company, in the undersigned’s capacity as a Managing Director, authorized person, officer and/or director of each Carlyle Company, federal and state securities laws filings including without limitation Forms D pursuant to Rule 503 and Schedules 13D and 13G and Forms 3, 4, and 5 in accordance with Sections 13(d) and 16(a) of the 1934 Act and the rules thereunder;

(3) do and perform any and all acts for and on behalf of each Carlyle Company which may be necessary or desirable to complete and execute any such federal and state securities laws filings including without limitation Forms D, Schedules 13D and 13G and Forms 3, 4, and 5, complete and execute any amendment or amendments thereto, and timely file such form with the SEC and the securities administrators of any state, the District of Columbia, the Commonwealth of Puerto Rico, Guam and the United States Virgin Islands or their designees and any stock exchange or similar authority; and

(4) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorney-in-fact may approve in such attorney-in-fact’s discretion.

The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-

fact’s substitute or substitutes, shall lawfully do or cause to be done by virtue of this power of attorney and the rights and powers herein granted, whether the same needs to be executed, taken or done by him in his capacity as a current or former member, partner, shareholder, director or officer of any company, partnership, corporation, organization, firm, branch or other entity connected with, related to or affiliated with any of the entities constituting the Carlyle Companies or entities that directly or indirectly hold interests in the Carlyle Companies.

The undersigned acknowledges that the foregoing attorneys-in-fact, in serving in such capacity at the request of the undersigned, are not assuming any of the undersigned’s responsibilities to comply with federal and state securities laws, including without limitation Rule 503 of the 1933 Act or Section 13 and Section 16 of the 1934 Act.

This Power of Attorney and all authority conferred hereby shall not be terminated by operation of law, whether by the death or incapacity of the undersigned or by occurrence of any other event. Actions taken by an attorney-in-fact pursuant to this Power of Attorney shall be as valid as if any event described in the preceding sentence had not occurred, whether or not the attorney-in-fact shall have received notice of such event. Notwithstanding the foregoing, (i) in the event that an attorney-in-fact is no longer employed by The Carlyle Group Employee Co., L.L.C. or its affiliates, this Power of Attorney and all authority conferred hereby shall be immediately terminated with respect to such Attorney, and (ii) the undersigned may terminate or revoke this Power of Attorney at any time.

For purposes hereof, the “Carlyle Companies” shall consist of: (i) TWC Virginia, Inc., a Delaware corporation, TC Group, L.L.C., a Delaware limited liability company, TC Group Cayman, L.P., a Cayman Islands exempted limited partnership, TC Group Investment Holdings, L.P., a Delaware limited partnership and TC Group Cayman Investment Holdings, L.P., a Cayman Islands exempted limited partnership; (ii) their respective owners, including without limitation TCG Holdings, L.L.C., a Delaware limited liability company, TCG Holdings Cayman, L.P., a Cayman Islands exempted limited partnership, TCG Holdings II, L.P., a Delaware limited partnership, TCG Holdings Cayman II, L.P., a Cayman Islands exempted limited partnership, TCG Employee Co., L.L.C., a Delaware limited liability company, Carlyle Offshore Partners II, Ltd., a Cayman Islands exempted company with limited liability, Carlyle Offshore Partners II Holdings, Ltd., a Cayman Islands exempted company with limited liability, DBD Investors V, L.L.C., a Delaware limited liability company, DBD Investors V Holdings, L.L.C., a Delaware limited liability company, DBD Cayman, Ltd., a Cayman Islands exempted company with limited liability and DBD Cayman Holdings, Ltd., a Cayman Islands exempted company with limited liability; and (iii) the subsidiaries and affiliates of the foregoing in clauses (i) and (ii), including without limitation investment funds sponsored directly or indirectly by one or more of the Carlyle Companies.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 11th day of February, 2011.

/s/ David M. Rubenstein

Name: David M. Rubenstein

)

DISTRICT OF COLUMBIA

)

On the 11th day of February, 2011, before me personally came and appeared David M. Rubenstein to me known and known to me to be the individual described in and who executed the foregoing instrument and who duly acknowledged to me that he executed the same.

/s/ Jasmine D. Harrell

Notary Public

My term expires: February 28, 2014

EX-99.6 4 exh996.htm INVESTMENT AGREEMENT - AMENDMENT NO. 3 exh996.htm

Exhibit 99.6

AMENDMENT NO. 3, dated as of October 20, 2011 (this “Amendment”), to that Investment Agreement, dated as of April 26, 2011, as amended by Amendment No. 1, dated as of June 16, 2011, and Amendment No. 2, dated August 4, 2011 (as amended, the “Agreement”), by and between FNB United Corp., a North Carolina corporation (the “Company”), and Carlyle Financial Services Harbor, L.P., a Delaware limited partnership (the “Investor”). Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Agreement.

RECITALS

A. Pursuant to Section 6.4 of the Agreement, the Company and the Investor may amend the Agreement in writing; and

B. The parties desire to make certain amendments to the Agreement as set forth below.

NOW, THEREFORE, in consideration of the foregoing mutual covenants contained in this Amendment, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investor hereby agree to amend the Agreement as follows:

1. Amendments.

(a) Recital A is hereby amended and restated in its entirety as follows:

A. The Investment. The Company intends to issue and sell to the Investor, and the Investor intends to purchase from the Company, on the terms and conditions described herein, 493,031,250 shares of common stock of the Company, no par value (the “Common Stock” or “Common Shares”), at a price of $0.16 per share for aggregate cash consideration of $78,885,000 (the “Investment”). The number of Common Shares purchased by the Investor pursuant to this Agreement shall not exceed 23.37% of the Common Shares outstanding as of the Closing Date after giving effect to the issuance of Common Shares in the Other Private Placements (as defined below), the TARP Exchange and the Granite Merger but excluding any issuance of Common Shares pursuant to outstanding Company Options and the TARP Warrant (“Pro Forma Basis”) (rounded down to the nearest whole share).

(b) Recital B is hereby amended and restated in its entirety as follows:

B. Other Private Placements. The Company intends to issue (i) to Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P. (together, “Investor 2”), on the terms and subject to the conditions set forth in the Investment Agreement between Investor 2 and the Company, dated as of the date hereof (the “Investor 2 Investment Agreement”), 493,031,250 shares of Common Stock, at a price of $0.16 per share for aggregate cash consideration of $78,885,000 (the “Investor 2 Investment”), and (ii) in one or more private

placement transactions with other investors (the “Additional Investors,” and together with the Investor and Investor 2, the “Investors”) pursuant to agreements with the Additional Investors (the “Additional Agreements”), Common Shares at the same per share price and for an aggregate purchase price of, together with the Investment and the Investor 2 Investment, $310 million, with the closing of such transactions to occur simultaneously with the Closing (together with the Investor 2 Investment, the “Other Private Placements”). The number of shares of Common Stock purchased by Investor 2 pursuant to the Investor 2 Investment Agreement will not exceed 23.37% of the Common Shares outstanding as of the Closing date on a Pro Forma Basis (rounded down to the nearest whole shares). The number of shares of Common Stock purchased by any Additional Investor pursuant to any Additional Agreements will not exceed 4.99% of the Common Shares outstanding as of the Closing date on a Pro Forma Basis (rounded down to the nearest whole share).

1.1 Issuance, Sale and Purchase. On the terms and subject to the satisfaction or waiver of the conditions set forth herein, the Company agrees to issue and sell to the Investor, and the Investor agrees to purchase from the Company, free and clear of any Liens, 493,031,250 shares of Common Stock equal to 23.37% of the Common Shares outstanding at the Closing Date on a Pro Forma Basis (rounded down to the nearest whole share) at a price of $0.16 per share, for an aggregate cash consideration of $78,885,000 (the aggregate purchase price payable pursuant to this Section 1.1, the “Purchase Price”).

2. General.

(a) Except as expressly amended hereby, the Agreement shall remain in full force and effect in accordance with the terms thereof. All references in the Agreement to “this Agreement” shall be deemed to refer to the Agreement as amended by this Amendment.

(b) For the convenience of the parties hereto, this Amendment 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 Amendment may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered.

(c) The provisions of Article 6 (Miscellaneous) of the Agreement shall apply mutatis mutandis to this Amendment, and to the Agreement as modified by this Amendment, taken together as a single agreement, reflecting the terms therein as modified hereby.

[Signature page follows.]

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first above written.

FNB UNITED CORP.

By: /s/ Mark A. Severson

Name: Mark A. Severson

Title: Treasurer and Executive Vice President

CARLYLE FINANCIAL SERVICES HARBOR, L.P.

By: TCG Financial Services, L.P.,

its general partner

By: Carlyle Financial Services, Ltd.,

its general partner

By: /s/ John C. Redett

Name: John C. Redett

Title: Principal