REVOLVING CREDIT AGREEMENT

THIS REVOLVING CREDIT AGREEMENT (this " Agreement ")   is made and entered into as of May 27, 2008, by and between FNB UNITED CORP.,   a North Carolina corporation (the “ Borrower ”), and SUNTRUST BANK, a Georgia banking corporation (the " Lender ").

WHEREAS, the Borrower has requested the Lender, and the Lender has agreed, subject to the terms and conditions of this Agreement, to establish a 364-day revolving credit facility in an original principal amount of $10,000,000;

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

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

“ Acquisition” shall mean any transaction or a series of related transactions for the purpose of, or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of any Person, (b) the acquisition of greater than 50% of the capital stock, partnership interest, membership interest or other equity of any Person, or otherwise causing a Person to become a Subsidiary, or (c) a merger or consolidation of, or any other combination with, another Person (other than a Person that is a Subsidiary), provided that the Borrower or any Subsidiary is the surviving entity.

 “ Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person.

“ Availability Period” shall mean the period from the Closing Date to the Commitment Termination Date.

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

“ Base Rate Loan” shall mean a Revolving Loan which bears interest at the Base Rate.

“ Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Atlanta, Georgia are authorized or required by law to close and (ii) if such day relates to a borrowing or continuation of, a payment or prepayment of principal or interest on, or an Interest Period for, a

Eurodollar Loan or a notice with respect thereto, any day on which dealings in Dollars are carried on in the London interbank market.

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

“ Change in Control” shall mean (a) with respect to the Borrower,  the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Borrower to any Person or "group" (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder in effect on the date hereof),  (ii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or "group" (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder as in effect on the date hereof) of 25% or more of the outstanding shares of the voting stock of the Borrower or (iii) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (A) nominated by the current board of directors or (B) appointed by directors so nominated, or (b) the Borrower shall own, directly or indirectly, less than 100% of the voting stock of any Financial Institution Subsidiary.

“ Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by the Lender (or for purposes of Section 2.10 ( b ), by the Lender’s holding company, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.

“ Commission” shall mean the Securities and Exchange Commission, and any successor thereto.

“ Commitment Termination Date” shall mean May 22, 2009, or such later date as the Revolving Commitment has been extended pursuant to Section 2.3 ,   or earlier if terminated pursuant to Section 2.3 or Section 8.1 .

“ Control” shall mean the power, directly or indi­rectly, to direct or cause the direction of the man­agement and policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms " Controlling ", " Controlled by ", and " under common Control with " have meanings correlative thereto.

“ Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of De­fault.

" Default Interest " shall have the meaning set forth in Section 2.5 ( b ).

“ Dollar(s)” and the sign " $ " shall mean lawful money of the United States of America.

“ Environmental Laws ” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ ERISA” shall mean the Employee Retirement Income Secu­rity Act of 1974, as amended from time to time, and any successor statute.

“ ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for the purposes of Section 302 of ERISA and Section  412 of the Code, is treated as a single employer under Section 414 of the Code.

" ERISA Event " shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator appointed by the PBGC of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“ Eurodollar Loan” shall mean a Revolving Loan which bears interest at a rate determined by reference to LIBOR.

“ Event of Default” shall have the meaning provided in Article VIII.

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

“ Financial Institution Subsidiary” shall mean each of (a) CommunityONE Bank, National Association, a national banking association, and (b) each other Subsidiary of the Borrower existing on the Closing Date or thereafter formed or acquired that is a depository institution with FDIC-insured deposits.

“ Fiscal Quarter” shall mean each fiscal quarter (including the fiscal quarter at the fiscal year-end) of the Borrower and its Subsidiaries.

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

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

 “ GAAP ” shall mean generally accepted accounting prin­ciples in the United States applied on a consistent basis and subject to the terms of Section 1.2 .

“ Governmental Authority ” shall mean the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreements ” shall mean interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts, foreign exchange contracts (forward and/or spot), commodity agreements and other similar agreements or arrangements designed to protect against fluctuations in interest rates, currency values or commodity values.

“ Indebtedness ” of any Person shall mean, without dupli­cation (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all obligations of such Person under capital leases and all monetary obligations of such Person under Synthetic Leases, (vi) all obligations, contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar extensions of credit, (vii) all guarantees by such Person of Indebtedness of others, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any common stock of such Person, and (x) all net obligations incurred by such Person under Hedging Agreements.

“ Interest Period” shall mean, with respect to any Eurodollar Loan, a period of three months, provided that:

(ii)           if any Interest Period would otherwise end on a day other than a Business Day, such Interest Pe­riod shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the next preceding Business Day;

(iii)           any Interest Period which begins on the last Business Day of a calendar month or on a day for which there is no nu­merically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such subsequent calendar month;

“ Investments” shall have the meaning set forth in Section 7.6 hereof.

" LIBOR " shall mean for any applicable Interest Period with respect to a Eurodollar Loan,  that rate per annum that is equal to the quotient of:

(ii) a percentage equal to 1.00 minus the maximum reserve percentages (including any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upward to the next 1/100th of 1%) in effect on any day to which the Bank is subject with respect to any Eurodollar loan pursuant to regulations issued by the Board of Governors of the Federal Reserve System with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities" under Regulation D).  This percentage will be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Lien ” shall mean any mortgage, pledge, security inter­est, lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having the practical effect of the foregoing or any preference, priority or other security agree­ment or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).

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

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

“ Multiemployer Plan ” shall have the meaning set forth in Section 4001(a)(3) of ERISA.

"Nonperforming Assets" shall mean the sum of (a) Nonperforming Loans, (b) nonaccrual investment securities and (c) Other Real Estate Owned (determined in accordance with, and as set forth on, Borrower’s FR Report Y-9C).

“Nonperforming Loans” shall mean the sum of (a) nonaccrual loans and lease financing receivables, (b) loans and lease financing receivables that are contractually past due 90 days or more as to interest or principal and are still accruing interest and (c) loans for which the terms have been modified due to a deterioration in the financial position of the Borrower (determined in accordance with, and as set forth on, Borrower’s FR Report Y-9C).

“ Notice of Borrowing ” shall have the meaning as set forth in Section 2.2 .

“ Obligations ” shall mean all amounts owing by the Borrower to the Lender pursuant to or in connection with this Agreement or any other Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), all reimbursement obligations,  all net obligations under Hedging Agreements, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliqui­dated, now existing or hereafter arising hereunder or thereunder, together with all renew­als, extensions, modifications or refinancings thereof.

“ Other Real Estate Owned ” shall mean the sum of (a) real estate acquired in satisfaction of debts previously contracted and (b) other real estate owned, as set forth on Schedule HC-M of Borrower’s FR Report Y-9C.

“ Participant ” shall have the meaning set forth in Section 9.4 ( c ).

 “ Payment Office ” shall mean the office of the Lender located at 303 Peachtree Street, Atlanta, Georgia 30308, or such other location as to which the Lender shall have given written notice to the Borrower.

“ PBGC”   shall mean the Pension Benefit Guaranty Corpora­tion referred to and defined in ERISA, and any successor entity performing similar functions.

 “ Permitted Encumbrances ” shall mean

(i)           Liens imposed by law for taxes not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP;

provided , that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

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

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 “ Regulation D ” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Responsible Officer " shall mean any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of the Borrower or such other representative of the Borrower as may be designated in writing by any one of the foregoing with the consent of the Lender; and, with respect to the financial covenants only, the chief financial officer or the treasurer of the Borrower.

“ Revolving Commitment” shall mean the obligation of the Lender to make Revolving Loans to the Borrower in an aggregate principal amount not exceeding $10,000,000.

                        “ Revolving Loan ” shall mean a loan made by the Lender to the Borrower under its Revolving Commitment, which will at all times be a Eurodollar Loan except under circumstances set forth in Section 2.8 or Section 2.9 hereof.

“ Revolving Credit Note ” shall mean a promissory note of the Borrower payable to the order of the Lender in the principal amount of the Revolving Commitment, in substantially the form of Exhibit A .

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

“ Synthetic Lease ” of any Person shall mean (a) a lease designed to have the characteristics of a loan for federal income tax purposes while obtaining operating lease treatment for financial accounting purposes, or (b) an agreement for the use or possession of property creating obligations that are not required to appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person would be characterized by a court of competent jurisdiction as indebtedness of such Person.

“ Tangible Net Worth” shall mean, as of any date, the total shareholders’ equity of the Borrower and its Subsidiaries that would be reflected on the Borrower's consolidated balance sheet as of such date prepared in accordance with GAAP, minus the amount of all assets of the Borrower and its Subsidiaries that would be classified as intangible assets (including without limitation goodwill and net core deposit intangible) on the Borrower’s consolidated balance sheet as of such date prepared in accordance with GAAP.

“ Total Loans” shall mean for the Borrower on a consolidated basis the line item  “Loans net of unearned income” set forth on the Borrower’s consolidated balance sheet delivered pursuant to Section 5.1 ( a ) and ( b ).

“ Withdrawal Liability ” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.2.   Accounting Terms and Determination .  Un­less otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent (except for such changes approved by the Borrower's independent public accountants) with the most recent audited consolidated financial statement of the Borrower delivered pursuant to Section 5.1 ( a ); provided , that if the Borrower notifies the Lender that the Borrower wishes to amend any covenant in Article VI to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Lender notifies  the Borrower that it wishes to amend Article VI for such purpose), then the Borrower's compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Lender.

Section 1.3.   Terms Generally .   The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  The words "include", "includes" and "including" shall be deemed to be followed by the phase "without limitation".  In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the word "to" means "to but excluding". Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed or as it may from time to time be amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person's successors and permitted assigns, (iii) the words "hereof", "herein" and "hereunder" and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v) all references to a specific time shall be construed to refer to the time in the city and state of the Lender's principal office, unless otherwise indicated.

  AMOUNT AND TERMS OF THE REVOLVING COMMITMEN

Section 2.1.   Revolving Loans and Revolving Credit Note .  (a) Subject to the terms and conditions set forth herein, the Lender agrees to make Revolving Loans to the Borrower, from time to time during the   Availability Period, in an aggregate principal amount outstanding at any time not to exceed the Revolving Commitment. During the Availability Period, the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in accordance with the terms and conditions of this Agreement; pro­vided , that the Borrower may not borrow or reborrow should there exist a Default or Event of Default.

(b)           The Borrower's obligation to pay the principal of, and interest on, Revolving Loans shall be evidenced by the records of the Lender and by the Revolving Credit Note.  The entries made in such records and/or on the schedule annexed to the Revolving Credit Note shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded;   provided , that the failure or delay of the Lender in maintaining or making entries into any such record or on such schedule or any error therein shall not in any manner affect the obligation of the Borrower to repay the Revolving Loans (both principal and unpaid accrued interest) in accordance with the terms of this Agreement.

Section 2.2.     Procedure for Revolving Loans .  The Borrower shall give the Lender written notice (or telephonic notice promptly confirmed in writing) of each Revolving Loan substantially in the form of Exhibit 2.2 (a " Notice of Borrowing ") prior to 11:00 a.m. two (2) Business Days prior to which a Revolving Loan is being requested. Each Notice of Borrowing shall be irrevocable and   shall specify: (i) the principal amount of the Revolving Loan, (ii) the proposed date of the Revolving Loan (which shall be a Business Day), and  (iii) if the Revolving Loan is $1,000,000 or greater, its purpose (provided in sufficient detail  that is  reasonably satisfactory to the Lender).  The aggregate principal amount of each Revolving Loan shall be not less than $500,000 or a larger multiple of $100,000, or in such lesser amounts equal to the amount of the unused Revolving Commitment. Upon the satisfaction of the applicable conditions set forth in Article III hereof, the Lender will make the proceeds of each Revolving Loan available to the Borrower at the Payment Office on the date specified in the applicable Notice of Borrowing by crediting an account maintained by the Borrower with the Lender or at the Borrower’s option, by effecting a wire transfer of such amount to an account designated by the Borrower to the Lender.

Section 2.3.   Optional Reduction and Termination and/or Extension of Revolving Commitment .

(a)           The Revolving Commitment shall terminate on the Commitment Termination Date; provided , that the Commitment Termination Date may be extended by the Lender for additional 364-day periods in its sole discretion upon receiving a written request from the Borrower not earlier than 60 days and not later than 45 days prior to then existing Commitment Termination Date for an extension. Upon the receipt of such request, the Lender shall use its best efforts to notify the Borrower not later than 30 days prior to any Commitment Termination Date whether it will extend the then existing Commitment Termination Date for an additional 364-day period; provided , that the failure of the Lender to give any such notice to the Borrower shall mean that the then existing Commitment Termination Date will not be so extended.

(b)           Upon at least two (2) Business Days' prior written notice (or telephonic notice promptly confirmed in writing) to the Lender (which notice shall be irrevocable), the Borrower may reduce the Revolving Commitment in part or terminate the Revolving Commitment in whole; provided , that (i) any partial reduction pursuant to this Section 2.3 shall be in an amount of at least $100,000 and any larger multiple of $50,000 and (ii) no such reduction shall be permitted which would reduce the Revolving Commitment (after giving effect thereto and any concurrent prepayments made under Section 2.4 ) to an amount less than the outstanding Revolving Loans.

Section 2.4.   Repayment and Prepayments of Revolving Loans .

(a)           The outstanding principal amount of all Revolving Loans shall be due and payable (together with accrued and unpaid interest thereon) on the Commitment Termination Date.

(b)           The Borrower shall have the right at any time and from time to time to prepay any Eurodollar Loan, in whole or in part, without premium or penalty, subject to Section 2.12 hereof. Each partial prepayment shall be in an amount not less than $100,000 and integral multiples thereof.

(c)           Subject to Sections 2.8 and 2.9 , each Eurodollar Loan shall automatically continue on the last day of an Interest Period for another three-month Interest Period unless the Borrower elects to repay in whole or in part such Eurodollar Loan on the last day of such Interest Period. In the case of a partial repayment, such Eurodollar Loan shall be continued for another one-month Interest Period in the principal amount designated by the Borrower, subject to the minimum amounts specified in Section 2.2 .

Section 2.5.   Interest on Loans .

(a)           The Borrower shall pay interest on each Eurodollar Loan at LIBOR, plus 1.50% per annum. If a Base Rate Loan shall be outstanding under the circumstances set forth in Section 2.8 or 2.9 , then the Borrower shall pay interest on each Base Rate Loan at the Base Rate in effect from time to time.

(b)           While an Event of Default exists or after acceleration, at the option of the Lender, the Borrower shall pay interest (" Default Interest ") with respect to all Eurodollar Loans at the rate otherwise applicable for the then-current Interest Pe­riod plus an additional 2% per annum until the last day of such Interest Period, and thereafter, and with respect to all Base Rate Loans and all other Obligations hereunder, at the Base Rate, plus 2% per annum.

(c)           Interest on the principal amount of all Revolving Loans shall accrue from and includ­ing the date such Revolving Loans are made to but excluding the date of any repay­ment thereof. Interest on all outstanding Eurodollar Loans shall be payable on the last day of each Interest Period applicable thereto and on the Commitment Termination Date. Interest on any Base Rate Loans shall be payable on the last day of each calendar month and on the Commitment Termination Date. All Default Interest shall be payable on demand.

(d)           The Lender shall determine each interest rate applicable to the Revolving Loans hereunder and shall promptly notify the Borrower of such rate in writing (or by telephone, promptly con­firmed in writing).  Any such determination shall be conclusive and binding for all purposes, absent manifest error.

Section 2.6.   Intentionally Omitted.

Section 2.7.   Computation of Interest . All computations of interest hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable (to the extent computed on the basis of days elapsed). Each determination by the Lender of an interest amount hereunder shall be made in good faith and, except for manifest error, shall be final, con­clusive and binding for all purposes.

Section 2.8.    Inability to Determine Interest Rates .  If prior to the commencement of any Interest Period for any Eurodollar Loan, the Lender shall have determined (which determination shall be conclusive and binding upon the Borrower ) that (a) by reason of circumstances affecting the relevant interbank market, ad­equate means do not exist for ascertaining LIBOR, or (b) LIBOR does not adequately and fairly reflect the cost to the Lender of making, funding or maintaining its Eurodollar Loans, the Lender shall give written notice (or telephonic notice, promptly confirmed in writing) to the Borrower as soon as practicable thereafter. Until the Lender notifies the Borrower that the circumstances giv­ing rise to such notice no longer exist, (x) the obligation of the Lender to make Eurodollar Loans or to continue outstanding Revolving Loans as Eurodollar Loans shall be suspended and (y) all such affected Eurodollar Loans shall be converted into Base Rate Loans on the last day of the then current Interest Period unless the Borrower elects to prepay such Revolving Loans in accordance with this Agreement.

Section 2.9.   Illegality .   If any Change in Law shall make it unlawful or impossible for the Lender to make, maintain or fund any Eurodollar Loan, the Lender shall promptly give notice thereof to the Borrower, whereupon until the Lender notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Lender to make Eurodollar Loans, or to continue any outstanding Revolving Loans as Eurodollar Loans, shall be suspended. Any new Revolving Loan shall be made as a Base Rate Loan and all then outstanding Eurodollar Loans shall be converted to a Base Rate Loan either (x) on the last day of the then current Interest Period if the Lender may lawfully continue to maintain such Eurodollar Loans to such date or (y) immediately if the Lender shall determine that it may not lawfully continue to maintain such Eurodollar Loans to such date.

Section 2.10.   Increased Costs .

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

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

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

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

Section 2.11.    Payments Generally . The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or of amounts payable under Section 2.10   or otherwise) prior to 12:00 noon, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Lender, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Lender at its Payment Office.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension.  All payments hereunder shall be made in Dollars.

Section 2.12.   Funding Indemnity .  In the event of (a) the payment of any principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), or (b) the failure by the Borrower to borrow, prepay, or continue any Eurodollar Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked), then, in any such event,  the Borrower shall compensate the Lender, within five (5) Business Days after written demand from the Lender,  for any loss, cost or expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount determined by the Lender to be the excess, if any, of  (A) the amount of interest that would have accrued on the principal amount of such Eurodollar Loan if such event had not occurred at LIBOR applicable to such Eurodollar Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or in the case of a failure to borrow or continue, for the period that would have been the Interest Period for such Eurodollar Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar Loan for the same period if LIBOR were set on the date such Eurodollar Loan was prepaid or converted or the date on which the Borrower failed to b