Document:

Exhibit 10.1
                                                                    ------------

                    BRANCH PURCHASE AND ASSUMPTION AGREEMENT

            This Agreement,  dated as of November 1, 2006 is made by and between
Sun National Bank, a national  banking  association  organized under the laws of
the United  States of America  and having its  principal  place of  business  in
Vineland,  New  Jersey  ("Seller"),  and City  National  Bank of New  Jersey,  a
national banking  association  chartered under the laws of the United States and
having its principal place of business in Newark, New Jersey ("Buyer").

                             ARTICLE I. DEFINITIONS

      1.1 Certain Defined Terms.
          ---------------------

            Some  of the  capitalized  terms  appearing  in this  Agreement  are
defined  below.  The definition of a term expressed in the singular also applies
to that term as used in the plural and vice versa.

            "Affiliate" means a Person that directly or indirectly,  through one
or more intermediaries,  controls,  is controlled by, or is under common control
with, a specified  Person,  except in those cases where the  controlling  Person
exercises control solely in a fiduciary capacity.

            "Amount of Deposit Premium" has the meaning set forth in Section 3.1
of this Agreement.

            "Amount of Loan Premium" has the meaning set forth in Section 3.1 of
this Agreement.

            "Assets" has the meaning set forth in Section 2.1 of this Agreement.

            "Assignment"  shall mean,  with respect to the Leased  Realty,  each
landlord's written consent to the assignment and assumption of the lease related
to the Leased Realty or a certificate  of estoppel with respect to the remaining
term of the lease with  respect to the  leased  Realty for the  benefit of Buyer
with respect to the Branch.

            "ATM" means automatic teller machine.

            "Benefit Plan" means any pension, profit-sharing,  or other employee
benefit, fringe benefit, severance or welfare plan maintained by or with respect
to which contributions are made by, Seller or any of its Affiliates with respect
to Seller's employees.

            "Branch"  means the branch  office of Seller  located at 1701 Market
Street, Philadelphia, Pennsylvania 19103.

            "Branch  Cash"  means cash on hand at the  Branch,  including  vault
cash, teller drawer cash, petty cash and ATM cash.

                                      -1-
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            "Business  Day" means any Monday,  Tuesday,  Wednesday,  Thursday or
Friday on which Seller is open for business.

            "Closing" means  consummation of the purchase of the Assets by Buyer
and the assumption of the Liabilities by Buyer.

            "Closing  Date" has the  meaning  set forth in  Section  9.1 of this
Agreement.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Deposit  Accounts"  means the deposit  accounts at the Branch,  the
balances of which are  included  in the  Deposits or would be so included if the
Deposit Account had a positive balance.

            "Deposits" or "Deposit  Liabilities"  means all deposits (as defined
in 12 U.S.C.  Section  1813(l))  which are booked at the  Branch on the  Closing
Date,  including in each case accrued but unpaid interest and both collected and
uncollected  funds, but excluding (i) deposits held in accounts for which Seller
acts as  fiduciary  (other  than  deposits  held by  Retirement  Plans  that are
transferring  from  Seller to Buyer in  accordance  with this  Agreement),  (ii)
deposits  constituting  official  checks,  travelers  checks,  money  orders  or
certified checks,  and (iii) the excluded deposit accounts  described in Section
2.2(a) or otherwise  set forth on Schedule  2.2(a)  ("Excluded  Deposits"  shall
refer to excluded deposits referred to at (i), (ii), and (iii).

            "Dispute  Resolver"  means an independent  accounting  firm or other
independent  third-party  mutually  acceptable  to Buyer  and  Seller  to act as
Dispute  Resolver;  provided,  however,  that if the parties are unable to agree
upon the  selection  of such  Dispute  Resolver  within  thirty (30) days of the
initial  request  by either  party to choose  such  Dispute  Resolver,  then the
Dispute Resolver shall be chosen,  or the dispute  resolved,  in accordance with
the arbitration provisions set forth in Section 11.3

            "Encumbrances"  means  all  mortgages,   claims,   charges,   liens,
encumbrances,  easements,  limitations,   restrictions,   commitments,  security
interests,  pledges or other similar  charges or liabilities,  whether  accrued,
absolute, contingent or otherwise, except any of the forgoing: (i) for Taxes not
yet due,  (ii) that is a lien of a landlord,  licensor,  carrier,  warehouseman,
mechanic, materialsman, or any other statutory lien, in each case arising in the
ordinary  course of business,  (iii) that otherwise does not materially  detract
from the value of the  property  as now used or  materially  interfere  with the
present use or anticipated  continuance of such use of the property,  or (iv) to
the extent created by or arising from actions of Buyer.

            "ERISA" means the Employee  Retirement  Income Security Act of 1974,
as amended.

            "ERISA  Affiliate"  means any entity that is considered one employer
with Seller under Section 4001 of ERISA or Section 414 of the Code.

            "Equipment  Leases" means those  operating and financial  leases and
conditional

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<PAGE>

sales  contracts  covering Fixed Assets which Seller may assign to Buyer without
restriction or with the lessor's written consent.

            "Federal  Funds  Rate"  means,  for any  day,  the  rate  per  annum
(expressed  on a basis of  calculation  of actual  days in a year)  equal to the
"near  closing bid" federal funds rate  published in The Wall Street  Journal on
the Business Day following the Closing Date.

            "Fixed  Assets"  means  all  fixtures   (including  signage  poles),
leasehold improvements,  furnishings, vaults, equipment (including, for example,
all  security   equipment  and  ATMs,  but  excluding  any  other  computer  and
telecommunications  equipment),  supplies  (other than forms and other  supplies
which bear Seller's name or logo), and other personal  property,  that are owned
or (to the extent of  Seller's  interest as lessee)  leased by Seller,  that are
located at the Branch on the Closing Date, as detailed on Schedule 2.1(a).

            "FDIC" means the Federal Deposit Insurance Corporation.

            "Governmental  Entity" means any  government or any agency,  bureau,
board, commission, court, department, official, political subdivision,  tribunal
or other  instrumentality  of any  government  having  authority  in the  United
States, whether federal, state or local.

            "Hazardous Material" means any substance presently listed,  defined,
designated  or  classified  as  hazardous,  toxic,  radioactive  or dangerous or
otherwise  regulated,  under any applicable state or federal law relating to the
protection,  preservation or restoration of the environment,  including, but not
limited  to,  the  following  federal   environmental  laws:  the  Comprehensive
Environmental  Response,  Compensation  and Liability Act of 1980, the Superfund
Amendment and Reauthorization  Act, the Water Pollution Control Act of 1972, the
Clean Air Act, the Clean Water Act, the Resource  Conservation  and Recovery Act
of 1976, the Solid Waste Disposal Act, the Toxic Substances  Control Act and the
Insecticide, Fungicide and Rodenticide Act, each as amended.

            "IRS" means the Internal Revenue Service.

            "Leased  Realty" shall mean Seller's  rights as lessee in and to any
real  property  leased  by Seller at the  Branch as  detailed  under the List of
Leases set forth at  Schedule  1.2,  together  with all of  Seller's  rights and
interests in the leasehold improvements therein.

            "Liabilities"  has the  meaning  set  forth in  Section  2.2 of this
Agreement.

            "Loans"  has  the  meaning  set  forth  in  Section  2.3(a)  of this
Agreement.

            "Overdrafts"  means  those  overdrafts  of the book  balance  of any
Deposit  Accounts  which are not  overdrawn  for more than  seven days as of the
Closing Date and which are not  evidenced  by a customer  loan  application  and
promissory note.

            "Person"  means an  association,  a corporation,  an  individual,  a
partnership,  a  trust  or  any  other  entity  or  organization,   including  a
Governmental Entity.

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<PAGE>

            "Retirement   Plans"   means  those   non-discretionary   individual
retirement  accounts (IRAs) and Keogh  retirement plan accounts  relating to the
Deposits for which Seller acts as custodian or trustee.

            "Tax" or "Taxes" shall  include any of the  following  imposed by or
payable to any  governmental  authority:  any income,  gross receipts,  license,
payroll, employment,  excise, severance, stamp, business,  occupation,  premium,
windfall profits, environmental, capital stock, franchise, profits, withholding,
social security (or similar), unemployment,  disability, real property, personal
property,  sales,  use,  transfer,   registration,   or  value  added  tax,  any
alternative  or add-on  minimum tax, any  estimated  tax, and any levy,  impost,
duty,  assessment,  withholding  or any  other  governmental  charge of any kind
whatsoever,  in each case including any interest,  penalty, or addition thereto,
whether disputed or not.

            "Training  Expenses" means the overtime and  out-of-pocket  expenses
(meals  and  mileage)  incurred  by Seller  as a result  of any  Buyer  training
conducted prior to Closing.

            "Welfare Benefit Plans" means those Benefit Plans which are "welfare
benefit plans" as defined by ERISA.

          ARTICLE II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES

      2.1 Purchase of Assets.
          ------------------

            Subject to the terms and conditions of this Agreement, Seller agrees
to sell, assign and transfer  possession of and all right, title and interest of
Seller in and to the following assets to Buyer (collectively,  the "Assets") and
Buyer agrees to purchase  the same from  Seller,  as of the close of business on
the Closing Date:

            (a) the Fixed Assets;

            (b) the Branch Cash;

            (c) the Overdrafts;

            (d) Seller's rights with respect to the Leased Realty;

            (e) the Loans transferred pursuant to Section 2.3 of this Agreement;
      and

            (f) With regard to each  Retirement  Plan,  all of  Seller's  right,
      title and  interest  in and to the  related  plan or trustee or  custodial
      arrangement, and in and to all assets held by Seller pursuant thereto.

      2.2 Assumption of Liabilities.
          -------------------------

            Buyer agrees to assume,  pay,  perform and  discharge  the following
liabilities  of Seller  (the  "Liabilities")  as of the close of business on the
Closing Date:

            (a) the  Deposits  and all  terms  and  agreements  relating  to the
      Deposit

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      Accounts,  excluding the deposit accounts set forth at Schedule 2.2(a) and
      the following:  escheatable  Deposits,  Deposits subject to or involved in
      litigation  and  Deposits  in which  Seller acts as  fiduciary  other than
      pursuant to the Retirement Plans;

            (b) Seller's  duties and  responsibilities  relating to the Deposits
      arising after the Closing Date with respect to any applicable law;

            (c)  Seller's  duties  and  responsibilities  with  respect  to  any
      Equipment Leases;

            (d)  Seller's  duties  and  responsibilities  with  respect  to  the
      Retirement Plans other than those relating to Excluded Deposits; and

            (e) Seller's duties and responsibilities  with respect to the Leased
      Realty.

            The Buyer is not  assuming  any  liabilities  relating to the Branch
      other than those expressly assumed under this Agreement.

      2.3 Transfer of Loans.
          -----------------

            (a)  Subject to Section  4.6(g) and 6.12 of this  Agreement,  Seller
      shall  transfer  to  Buyer  all of  Seller's  right,  title  and  interest
      (including accrued but unpaid interest and collateral relating thereto) in
      those  loans  selected  by Buyer,  as  detailed  on  Schedule  2.3(a) (the
      "Loans").  The Loans  (as well as any lien or  security  interest  related
      thereto)  shall  be  transferred  by  means  of  a  blanket   (collective)
      assignment and not  individually  (except as may be otherwise  required by
      law).

            (b) Seller and Buyer agree that Buyer will become the beneficiary of
      credit life  insurance  written on Loans and coverage  will continue to be
      the  obligation of the current  insurer after the Closing Date and for the
      duration of such  insurance  as provided  under the terms of the policy or
      certificate.  If Buyer becomes the  beneficiary  of credit life  insurance
      written on Loans,  Seller and Buyer  agree to  cooperate  in good faith to
      develop a mutually  satisfactory  method by which the current insurer will
      make  rebate  payments  to and  satisfy  claims  of the  holders  of  such
      certificates of insurance after the Closing Date.  After the Closing Date,
      Seller  will  promptly  deliver to Buyer the  proceeds  of any credit life
      insurance  relating to Loans  inadvertently  received by it. The  parties'
      obligations  in  this  Section  2.3(b)  are  subject  to any  restrictions
      contained in existing  insurance  contracts as well as applicable laws and
      regulations.

            (c) In connection with the transfer of any Loans requiring notice to
      the  borrower  and the  servicer,  Buyer and Seller  will  comply with all
      notice and reporting  requirements  of the loan documents or of any law or
      regulation.

            (d)  All  Loans  will  be  transferred  without  any  warranties  or
      representations as to their  collectability or the creditworthiness of any
      of the  obligors of the Loans,  except as set forth at Section 4.6 of this
      Agreement.

            (e) Promptly after the Closing Date, Buyer will at its expense issue
      new coupon books or other forms of payment  identification  for payment of
      Loans for which

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<PAGE>

      Seller provides coupon books,  with  instructions to utilize Buyer coupons
      or forms and to destroy coupons furnished by Seller.

            (f) After the  Closing  Date,  Seller  will  forward to Buyer,  Loan
      payments  received  by  Seller.  If the  balance  due on any Loan has been
      reduced  by Seller as a result of a payment  by check or other  instrument
      received prior to the Closing Date, and if such  instrument is returned to
      Seller after the Closing Date as uncollectable, an amount in cash equal to
      such  reduction  shall be paid by Buyer to Seller upon receipt by Buyer of
      the next Loan  payments  from  such  borrower,  and  Seller  shall  assign
      promptly  all right,  title and  interest  in such  uncollectable  item to
      Buyer.

            (g) As of the Closing  Date,  Seller  shall  transfer and assign all
      files, documents and records related to the Loans to Buyer, including such
      information  held in electronic  form, and Buyer will be  responsible  for
      maintaining  and  safeguarding  all  such  materials  in  accordance  with
      applicable law and sound banking practices.

      2.4 Transfer of Records.
          -------------------

            (a) At the Closing,  Seller also shall transfer to Buyer  possession
      and all  right,  title  and  interest  of  Seller  in and to all books and
      records relating to the Assets and the Liabilities which are maintained at
      the Branch or otherwise in Seller's possession.

            (b) All books and records relating to the Assets and the Liabilities
      held by either  Seller or Buyer after the Closing Date shall be maintained
      in accordance with (and for the period provided in) that party's  standard
      recordkeeping  policies and procedures and subject to applicable  laws and
      regulations governing records retention. Throughout such period, the party
      holding such books and records shall comply with the reasonable request of
      the other party to provide copies of specified  documents,  at the expense
      of the requesting party. The requesting party shall give reasonable notice
      of any such request.

      2.5 Tax Matters.
          -----------

            Notwithstanding  Section  2.6,  Buyer  shall  pay to  Seller  or the
relevant  taxing  jurisdiction  (as  appropriate  under the  circumstances),  or
reimburse  Seller if Seller  shall  have  paid,  any sales and use taxes and any
interest and  penalties  thereon  which are payable or arise as a result of this
Agreement or the  consummation of any of the  transactions  contemplated by this
Agreement,  excluding  any  taxes as a result  of the sale and  transfer  of the
Leased Realty (which shall be paid by Seller);  provided,  however, Seller shall
be  responsible  for payment of any taxes or levies that may arise under the New
Jersey Bulk Sales Act or any  analogous  statute or  regulation in effect in the
Commonwealth of Pennsylvania (including, without limitation, Section 1403 of the
Pennsylvania  Fiscal  Code)  with  respect to the sale of the Branch and for all
other transactions occurring on or prior to the Closing Date.

      2.6 Proration of Certain Items.
          --------------------------

            Except as  detailed  at Section  2.5  herein,  all rental  income or
expenses associated with the operation of the Branch (including, but not limited
to rental lease payments related to

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<PAGE>

the Branch and any  security  deposits  or  prepaid  rents paid  related to such
Leased  Realty),  real  estate  taxes,  personal  property  taxes  (tangible  or
intangible),  utility, water and sewer charges and assessments,  and any and all
other  pre-paid  charges  related to the operation of the Branch (and from which
the Buyer will derive a benefit  after the  Closing)  shall be prorated  between
Buyer and Seller as of the close of business on the Closing  Date.  In addition,
any quarterly  assessments actually paid by Seller to the Deposit Insurance Fund
of the  FDIC  prior to the  Closing  Date for the  quarterly  assessment  period
containing  the Closing  Date with  respect to the  Deposits,  shall be prorated
between  Buyer and Seller as of the close of business on the Closing  Date based
upon the daily  assessment  rate in effect as of such  assessment  quarter  with
respect to Seller,  the Deposits subject to assessment that actually transfer as
of the Closing Date and the number of calendar days  remaining  until the end of
such assessment  quarter,  such that Seller shall receive a  reimbursement  from
Buyer  for  such  number  of  calendar  days  remaining  until  the  end of such
assessment quarter.

      2.7 Back Office Conversion.
          ----------------------

            Seller and Buyer shall cooperate with each other and shall use their
reasonable best efforts (consistent with their internal  day-to-day  operations)
in order to cause the timely  transfer of information  concerning the Assets and
the Liabilities which is maintained on Seller's data processing  systems so that
Buyer can incorporate such  information into Buyer's data processing  systems no
later than the opening of business on the  Business  Day  following  the Closing
Date,  including testing of such data transfers prior to the Closing Date. Buyer
shall bear the costs of any third-party programming requirements related to such
data processing efforts.

      2.8 Certain Transitional Matters Following the Closing Date
          -------------------------------------------------------

            (a) Buyer agrees to honor in accordance  with  applicable law, up to
      the collected  amount on deposit (and any other funds  available by reason
      of any agreement between the depositor and Buyer),  all properly drawn and
      presented  checks,  drafts,  electronic  debits and credits and withdrawal
      orders presented to Buyer by mail, over its counters, throughout the check
      clearing system, and Automated Clearing House of the banking industry,  by
      depositors  of  the  accounts  assumed,   whether  drawn  on  the  checks,
      withdrawal or draft forms provided by Seller,  or by Buyer,  and all other
      respects to discharge,  in the usual course of the banking  business,  the
      duties and  obligations  of Seller with  respect to the  balances  due and
      owing to the  depositors  whose  accounts  are  assumed by Buyer.  Buyer's
      obligation under this Section to honor checks, withdrawal, draft forms and
      electronic  debits and credits provided by Seller and carrying its imprint
      shall expire at the close of business on the 60th  business day  following
      the Closing Date or a date mutually agreeable to both parties.

            (b) If any of such  depositors,  instead of accepting the obligation
      of Buyer to pay the Deposit Liabilities assumed, shall demand payment from
      Seller for all or any part of any such assumed Deposit Liabilities, Seller
      shall not be liable or  responsible  for  making  such  payment.  Instead,
      Seller may, at its  discretion,  assume custody of the check or other item
      presented for payment, including electronic items, on an account which has
      been transferred with the Branch,  batch such items and send them to Buyer
      by mail within one business day after  receipt  thereof by Seller.  Seller
      shall not, at any time, be

                                      -7-
<PAGE>

      liable or  responsible  for making  payment on such items by reason of its
      obtaining custody of them for transmittal to Buyer.

            In order to reduce  the  continuing  charges to Seller  through  the
check clearing system of the banking industry which will result from check forms
of Seller being used after the Closing Date by the depositors whose accounts are
assumed,  Buyer agrees, at its cost and expense, on or immediately after (and in
no event without the express written consent of Seller, if prior to) the Closing
Date, to notify depositors of Buyer's assumption of Deposit  Liabilities and, at
its sole cost and  expense  and  without  cost to  depositors,  to furnish  each
depositor  of an assumed  account  with not less than  fifty (50)  checks on the
forms of Buyer,  with  instructions  to  utilize  Buyer's  checks and to destroy
unused checks of Seller as of the Closing Date. Buyer will send Seller a copy of
notification letters forwarded to depositors by Buyer. Seller hereby agrees that
after the 60th  business  day  following  the  Closing  Date or a date  mutually
agreeable to both  parties,  it shall,  with respect to the Branch,  at its sole
option,  either: (1) return such check or other item with reference to the maker
thereof; or (2) assume custody thereof,  batch the same and make it available to
Buyer  for  pick-up  in  the  manner   aforesaid  and  telephone  Buyer  of  the
availability of the same for pick-up prior to 10:30 a.m. of the next banking day
after receipt.

            (c) Buyer agrees, no later than the start of the second business day
      after demand by Seller,  to pay Seller an amount  equivalent to the amount
      of any uncollected  item included in a depositor's  balance on the Closing
      Date which is returned  after the Closing Date as not  collected  less the
      Deposit Premium paid thereon. Buyer shall be required to make such payment
      for an  item  only  up to  the  amount  on  deposit  with  Buyer  in  such
      depositor's account at the time Seller makes the demand aforesaid.

            (d) Buyer  shall  timely  forward to Seller any mail,  facsimile  or
      other  correspondence,  received  at any of the Branch  after the  Closing
      Date,  that is (i)  addressed  to Seller,  or (ii)  addressed to Buyer but
      relating to an obligation of Seller that  originated  prior to the Closing
      Date.

            (e) Adjustments after the Closing Date shall be made daily as may be
      required. Such adjustments shall be by wire transfer.

            (f) At least ten (10) business days prior to the Closing Date, Buyer
      shall  notify  holders  of ATM  cards  that all ATM  cards  held by Branch
      customers will be void as of the Closing Date.

      2.9 Information Returns.
          -------------------

            (a) Buyer  shall  file all  required  information  returns  with the
      Internal  Revenue  Service with  respect to interest  paid on the Deposits
      after the Closing Date, interest received on Overdrafts or Loans after the
      Closing Date, and any other  information  returns required with respect to
      the Assets and the Liabilities for the periods beginning after the Closing
      Date.  Seller will file and otherwise  distribute to Depositors  and other
      parties as required by applicable  law, all required  information  returns
      with the Internal Revenue Service and any information  returns required by
      state or local  tax  authorities  with  respect  to  interest  paid on the
      Deposits on or before the Closing Date, interest received on the

                                      -8-
<PAGE>

      Overdrafts  or  Loans  on or  before  the  Closing  Date,  and  any  other
      information   returns   required  with  respect  to  the  Assets  and  the
      Liabilities for periods ending on or before the Closing Date.

      (b) At the Closing or as soon thereafter as is  practicable,  Seller shall
      provide  Buyer  with a list  of all  Deposits  for  which  Seller  has not
      received a properly  completed and  currently  valid Form W-8 or W-9 or on
      which Seller is back-up  withholding as of the Closing Date.  With respect
      to  information  returns filed and similar  reporting made by Buyer within
      12-months  after the Closing Date,  Seller agrees to indemnify Buyer in an
      amount equal to any initial penalty and interest imposed upon Buyer by the
      IRS or other Tax  authorities  or  self-assessed  by Buyer  which Buyer is
      thereafter  required  to, and does,  pay to the IRS where such penalty and
      interest  arises out of  actions  taken or omitted to be taken by Buyer in
      reasonable  reliance  upon the  representation  provided  by Seller  under
      Section 4.16(b), and such penalty and interest does not result from an act
      or omission of Buyer not made in reliance upon such information.  The term
      "interest" for purposes of this Section 2.9(b) includes  interest  accrued
      prior  to the  receipt  by  Buyer  of a  notice  of  penalty  from the IRS
      regarding  Form W-8 or W-9 (or other  Tax  authorities  regarding  similar
      forms) for the Deposits.

      2.10 Assignment and Assumption of Branch Lease.
           -----------------------------------------

            Promptly  following  execution of this Agreement,  Buyer and Seller,
shall  use  their  commercially  reasonable  efforts  to  obtain  any  necessary
Assignment from the landlord of the Leased Realty and any other party related to
the Leased Realty  effective as of the Closing Date;  including such  landlord's
execution of the Consent to the  Assignment  and Estoppel  Certificate in a form
substantially similar to the form attached hereto as Exhibit C.

      2.11 Tax Allocation
           --------------

            (i) Seller and Buyer agree to allocate the consideration  under this
Agreement in such a manner as reasonably  determined by Buyer in accordance with
the rules under  Section 1060 of the Code,  subject to Seller's  consent  (which
consent shall not be unreasonably withheld).

            (ii)  Within  sixty (60) days  following  the  Closing,  Buyer shall
deliver to Seller a statement  setting forth an allocation of the Purchase Price
(the  "Allocation").  Seller  shall have a period of thirty (30) days  following
receipt  of the  Allocation  in which to  review  the  Allocation  and raise any
objections that Seller may have.  Unless Seller timely  objects,  the Allocation
shall become binding on the parties without further adjustment.

            (iii) If Seller  timely  objects  to  Buyer's  proposed  Allocation,
Seller and Buyer shall use their best efforts to resolve the disagreement during
the ten-day period following  Seller's notice of objection.  If the disagreement
is not resolved during such ten-day period, the dispute shall be referred to the
Dispute  Resolver,  which  shall  be  asked  (A)  to  determine  whether  it was
unreasonable  for Seller to withhold its consent to the  Allocation  proposed by
Buyer and (B) if the Dispute  Resolver  determines that it was not  unreasonable
for Seller to withhold such consent, to specify those modifications  required to
be made so that Buyer's proposed Allocation

                                      -9-
<PAGE>

would be in  accordance  with the rules  under  Section  1060 of the  Code.  The
Allocation  proposed by Buyer,  as modified by  negotiation  between  Seller and
Buyer and by any modifications implemented pursuant to the immediately preceding
sentence, shall be deemed to be the "Final Allocation". All determinations under
this Section 2.11 made by the Dispute  Resolver  shall be binding upon Buyer and
Seller.  Buyer  and  Seller  shall  share  equally  in the  cost of any  Dispute
Resolver.

            (iv) Buyer shall  prepare  Form 8594 in a manner that  reflects  the
Final Allocation. Seller and Buyer shall each file such Form 8594 when due.

            (v) To the extent  consistent  with applicable law, Seller and Buyer
shall not file any Tax return or other  documents or otherwise take any position
with respect to Taxes that is inconsistent with the Final Allocation;  provided,
however,  that  neither  Seller nor Buyer shall be  obligated  to  litigate  any
challenge by a governmental authority to the Final Allocation.

            (vi)  Seller and Buyer  shall  promptly  inform  one  another of any
challenge by any governmental  authority to any allocation made pursuant to this
Section  2.11 and  agree to  consult  with and keep one  another  informed  with
respect to the state of, and any discussion, proposal or submission with respect
to, such challenge.

                           ARTICLE III. CONSIDERATION

      3.1 Calculation.
          -----------

            In   consideration  of  Buyer's  purchase  of  the  Assets  and  its
assumption  of the  Liabilities,  Seller  agrees to pay to Buyer in  immediately
available  funds not later than 2:00 pm, New Jersey time, on the Closing Date an
amount equal to the Deposits to be  transferred,  plus accrued  interest on such
Deposits  to be  transferred,  plus any  amount  required  to be paid by  Seller
pursuant to Section 6.13 less the sum of the following,  in each case calculated
as of the close of business on the Closing Date  (except as  otherwise  detailed
herein):

            (a) the sum of $50,000 as the aggregate purchase price for the Fixed
      Assets as of the Closing Date, as detailed on Schedule 2.1(a);

            (b) the amount of Branch Cash;

            (c) the principal  amount of the Overdrafts,  provided  however that
      Seller shall refund to Buyer the amount of such  Overdrafts  to the extent
      that such amount  shall remain  uncollected  as of 30 days  following  the
      Closing Date, plus accrued interest from the Closing Date through the date
      of  collection at the contract  rate  determined  in  accordance  with the
      policies of Seller as detailed at Schedule 3.1(c);

            (d) the net amount (which may be a negative amount) of taxes payable
      by Buyer and Seller under Section 2.5 (i.e.,  the amount  payable by Buyer
      less the amount payable by Seller);

            (e)  the  net  amount  (which  may  be a  negative  amount)  of  any
      adjustments  under Section 2.6 (i.e., the amount payable by Buyer less the
      amount payable by Seller);

                                      -10-
<PAGE>

            (f) an amount equal to the Amount of Deposit Premium. The "Amount of
      Deposit Premium" shall be equal to seven and 61/100 percent (7.61%) of the
      average closing daily Deposits attributable to the Branch for the five (5)
      calendar  day period  ending as of the  calendar day two days prior to the
      Closing.  For purposes of this  subparagraph,  Deposits  shall exclude any
      pledged  deposits  or  accounts  where such  pledged  deposits or accounts
      secured by a loan that is not being transferred and any Excluded Deposits;

            (g) an amount  equal to the Amount of Loan  Premium.  The "Amount of
      Loan Premium" shall be equal to one percent  (1.00%) of the net book value
      of the Loans as of the last business day prior to the Closing; and

            (h) the Training Expenses.

      3.2 Settlement.
          ----------

            (a) Not later than  three (3)  business  days  prior to the  Closing
      Date,  Seller  shall  deliver to Buyer the Closing  Statement  prepared in
      accordance  with  Seller's  customary  practices  and  procedures  used in
      preparing financial statements,  substantially in the form of Exhibit A to
      this Agreement,  which shall be completed based upon information as of the
      close of business  five  business days prior to the Closing Date and shall
      be the basis of the payment made to Buyer's account as of the Closing Date
      in the manner detailed at Section 3.1 herein (the "Settlement Payment").

            (b) The parties shall  cooperate in the  preparation of the Adjusted
      Closing  Statement  within 30 days after the Closing Date,  which shall be
      prepared in accordance  with Seller's  customary  practices and procedures
      used in  preparing  financial  statements,  substantially  in the  form of
      Exhibit B to this  Agreement,  which shall be completed as of the close of
      business on the Closing  Date.  On the Business Day after Buyer and Seller
      agree to the  Adjusted  Closing  Statement,  or Buyer and  Seller  receive
      notice  of any  determination  of the  Adjusted  Closing  Statement  under
      subsection (c) (the "Adjusted Settlement Date"), Seller shall pay to Buyer
      (or  Buyer  shall  pay to  Seller,  as the  case  may be) an  amount  (the
      "Adjustment  Payment")  equal to the  amount  due  stated on the  Adjusted
      Closing Statement, plus interest from the day after the Closing Date until
      the calendar day before the Adjustment Payment is made at a rate per annum
      (calculated  daily  based on a 360-day  year)  equal to the daily  Federal
      Funds Rate.

            (c) If the  parties  are  unable  to agree on the  Adjusted  Closing
      Statement  within 30 days after the Closing  Date,  either party may refer
      the matter to the Dispute  Resolver,  and such Adjusted Closing  Statement
      shall be modified  by any such  resolution  and  thereupon  such  Adjusted
      Closing  Statement  shall  become  final and  binding  on Buyer and Seller
      provided,  however,  for any claim that does not exceed $5,000 that in the
      event the fees of such  Dispute  Resolver as  estimated by such firm would
      exceed fifty percent (50%) of the net amount in dispute, the parties agree
      that  such  firm will not be  engaged  by  either  party and that such net
      amount in dispute will be equally  apportioned  between Seller, on the one
      hand,  and  Buyer,  on the other  hand.  Such  Dispute  Resolver  shall be
      instructed to resolve the disputed  items within ten (10) Business Days of
      engagement, to

                                      -11-
<PAGE>

      the extent reasonably practicable. All determinations under this Agreement
      made by the Dispute Resolver shall be binding upon Buyer and Seller. Buyer
      and Seller shall share equally in the cost of any Dispute Resolver.

            (d) The Settlement  Payment and the Adjustment Payment shall each be
      made by wire transfer of immediately available funds to the account of the
      party  receiving  the payment,  which  account  shall be identified by the
      party  receiving  the funds to the other party not less than two  Business
      Days prior to such payment.

            (e) Any  errors  associated  with the  Deposits  or  other  items or
      calculations as detailed on the Closing  Statement or the Adjusted Closing
      Statement  ("Mistakes-in-Fact") which are determined as of the date of the
      Adjusted  Closing  Statement  shall  be  reconciled  as of such  date  and
      appropriate  adjustments of payments shall be made to Seller or Buyer,  as
      appropriate, at such time. Notwithstanding the foregoing, or anything else
      herein to the contrary,  any Mistakes-in-Fact which shall be determined by
      Seller or Buyer thereafter  related to the transaction  consummated  under
      this Agreement  shall  nevertheless be reconciled by adjustment or payment
      to Seller or Buyer, as appropriate,  within 30 days of such determination;
      provided that any such Mistakes-in-Fact must be determined within one year
      after  the  Closing  Date in  order  for a claim to be made  with  respect
      thereto.

               ARTICLE IV. SELLER'S REPRESENTATIONS AND WARRANTIES

      Seller makes the following representations and warranties to Buyer.

      4.1 Power and Authority.
          -------------------

            (a) Seller has the  corporate  power and authority to enter into and
      perform this  Agreement.  The execution and delivery of this Agreement has
      been duly  authorized by all necessary  corporate  action by Seller.  Upon
      execution and delivery by both parties,  this Agreement will  constitute a
      valid and binding obligation of Seller, enforceable in accordance with its
      terms, subject to conservatorship, receivership, and a court's right under
      general principles of equity to refuse to direct specific performance.

            (b) The performance of this Agreement by Seller will not violate any
      provision  of the  Articles  of  Association  or Bylaws of Seller,  or any
      applicable law, rule,  regulation,  or order or any contract or instrument
      by which Seller or its Assets are bound,  except for such violations which
      alone, or taken in the aggregate, would not reasonably be expected to have
      a  material  adverse  effect  on  the  financial  condition,  business  or
      operations of the Branch,  taken as a whole,  or the  consummation  of the
      transactions  contemplated by this Agreement (a "Seller  Material  Adverse
      Effect").

      4.2 Litigation and Regulatory Proceedings.
          -------------------------------------

            There  are  no  actions,  complaints,   petitions,  suits  or  other
proceedings,  or any decree,  injunction,  judgment,  order or ruling,  entered,
promulgated or pending or (to Seller's  knowledge)  threatened against Seller or
any of the Assets or the Liabilities, which alone, or taken

                                      -12-
<PAGE>

in the aggregate, reasonably would be expected to have a Seller Material Adverse
Effect.  No governmental  agency has notified Seller that it would oppose or not
approve or consent to the transactions contemplated by this Agreement and Seller
knows  of no  reason  for  any  such  opposition,  disapproval  or  non-consent,
including,   but  not  limited  to  Seller's   compliance   with  the  Community
Reinvestment Act, the Bank Secrecy Act and the Truth-in-Lending Act.

      4.3 Consents and Approvals.
          ----------------------

            Except for required regulatory  approvals,  no consents,  approvals,
filings or  registrations  with any third  party or any public  body,  agency or
authority  are  required  in  connection  with  Seller's   consummation  of  the
transactions contemplated by this Agreement, other than any required Assignments
relating to the Leased Realty or any required  lessor consents to the assignment
of any the Equipment Leases, as detailed at Schedule 4.3, and as may be required
as a result of any facts or circumstances relating solely to Buyer.

      4.4 Leased Realty.
          -------------

            Schedule  4.4 sets forth a true,  correct and  complete  copy of the
lease applicable to the Leased Realty.

      4.5 Fixed Assets.
          ------------

            Seller has good and marketable title to the Fixed Assets as detailed
at Schedule 2.1(a), free and clear of all Encumbrances.

      4.6 Loans.
          -----

            (a) Seller  owns,  and will convey to Buyer at the  Closing,  all of
      Seller's  right,  title and interest to, all of the Loans, as set forth on
      Schedule 2.3(a), free and clear of any Encumbrances.

            (b) The collateral documents,  evidence of security interest, notes,
      guarantees and other documentation relating to the Loans are sufficient to
      enforce  such Loans  against the obligors  and any  guarantors  thereof in
      accordance   with  the  terms  of  such  Loans,   subject  to  bankruptcy,
      insolvency,  reorganization,  moratorium  or  other  similar  laws  now or
      hereafter in effect relating to creditors'  rights  generally and that the
      remedy of specific  performance  and  injunctive  relief or other forms of
      equitable  relief  may  be  subject  to  equitable  defenses  and  to  the
      discretion  of the court before  which any  proceedings  therefore  may be
      brought. Each Loan was made in the ordinary course of business and, unless
      approved by Seller in writing  and  documented  in its files,  no material
      provision of a Loan has been waived.

            (c) Each Loan (such term to include, for purposes of this paragraph,
      the  principal  documents  relating  in any way to such  Loans,  including
      notes,  mortgages,  security  instruments  and  guarantees) was solicited,
      originated  and exists in material  compliance  with all  requirements  of
      applicable  federal,  state and  local  laws and  regulations,  including,
      without  limitation,  usury,  truth-in-lending,   real  estate  settlement
      procedures,  consumer credit, equal credit opportunity and disclosure laws
      (for purposes

                                      -13-
<PAGE>

      of this  clause  (c), a Loan would not be in  material  compliance  if the
      non-compliance  adversely  affects  the  value or  collectability  of such
      Loan).

            (d)  Each  Loan  that is  secured  by  collateral  is  secured  by a
      perfected  mortgage or security  interest  in the  collateral  in favor of
      Seller as mortgagee or secured party. No collateral has been released from
      the interest  granted to Seller,  unless approved by Seller and documented
      in its files.

            (e) As of the Closing Date, each Loan, except those loans secured by
      deposit  accounts,  including  but not  limited  to savings  accounts  and
      certificates of deposit, and unsecured loans created by writing a check or
      similar  instrument on an overdraft line of credit,  will be not more than
      sixty (60) days past due and not otherwise in material default.

            (f)  Seller is not aware of any acts or  omissions  that  would give
      rise to any claim or right of rescission,  setoff, counterclaim or defense
      by borrowers,  obligors or any other person obligated to perform under any
      related Loan documents.

            (g)  Buyer's  sole  remedy for a breach of the  representations  and
      warranties in this Section 4.6 with respect to a Loan or Loans on or prior
      to the Closing  Date shall be Buyer's  right to exclude such Loan or Loans
      from Schedule 2.3(a) and, in such event,  such Loans or Loans shall not be
      transferred by Seller to Buyer pursuant to this Agreement. In addition, if
      the Buyer  advises the Seller  within sixty (60)  calendar  days after the
      Closing  Date  that  there  exists a  breach  of the  representations  and
      warranties  in Section 4.6 with  respect to a Loan,  then Buyer shall have
      the right to  immediately  return  such Loan to the Seller  and  receive a
      refund of the  consideration  paid with respect thereto provided that such
      determination  by the Buyer is deemed  reasonable and in good faith by the
      Seller.

      4.7 Compliance with Certain Laws.
          ----------------------------

            The Deposit  Accounts were opened,  extended or made,  and have been
maintained,   in  accordance  with  all  applicable   federal  and  state  laws,
regulations,  rules and orders,  and the Branch has been  operated in compliance
with Seller's policies and procedures and all applicable federal and state laws,
regulations,  rules and orders, except for such instances of noncompliance which
do not have, and are not reasonably  likely to have, a Seller  Material  Adverse
Effect.

      4.8 FDIC Insurance.
          --------------

            The Deposits  are insured by the FDIC through the Deposit  Insurance
Fund to the extent  permitted by law, and all premiums and assessments  required
to be paid in connection therewith have been paid when due by Seller.

      4.9 Absence of Employment Agreements.
          --------------------------------

            There are no employment  agreements,  contracts,  incentive plans or
similar  agreements  (other than such agreements,  contracts and plans that will
terminate automatically on

                                      -14-
<PAGE>

the Closing Date and with no liability to Buyer) or disputes  between Seller and
Seller's  Employees at the Branch,  whether  written or  otherwise,  relating to
wages, hours, terms of employment, benefits or working conditions.

      4.10 Books and Records.
           -----------------

            The books and records of Seller  respecting  the  operations  of the
Branch  accurately  reflect,  in accordance with generally  accepted  accounting
principles consistently applied, the amount of Branch Cash and the total balance
of each Deposit Account, Loan and Overdraft being transferred to Buyer.

      4.11 Deposit Accounts.
           ----------------

            All  of  the  Deposit   Accounts  were   originated  and  have  been
administered  in  compliance,  in  all  material  respects,  with  the  document
governing the relevant type of Deposit Account and all applicable  laws.  Seller
has properly accrued interest on the Deposit Accounts and the records respecting
the Deposit Accounts accurately  reflects such accruals of interest.  Seller has
delivered to Buyer a true and complete copy of each of the  documents  governing
the Deposit  Accounts and a true and correct copy of the current Deposit Account
forms for each of the types of Deposit Accounts offered by Seller at the Branch.

      4.12 No Broker.
           ---------

            No agent, broker, investment banker or other person acting on behalf
or under the  authority  of Seller is or will be  entitled  to any  broker's  or
finder's fee or any other  commission  or similar fee directly or  indirectly in
connection with this Agreement.

      4.13 Community Reinvestment Act.
           --------------------------

            Seller is in compliance in all material  respects with the Community
Reinvestment  Act ("CRA") and its  implementing  regulations  and,  there are no
threatened or pending  actions,  proceedings,  or  allegations  by any person or
regulatory  agency  which  may cause  bank  regulatory  authorities  to deny any
application or  non-objection  required to be filed pursuant to this  Agreement.
Seller has received a rating of not less than  "satisfactory" on its most recent
CRA  examination.  In addition,  Seller has not been advised of any  supervisory
concerns regarding compliance with CRA.

      4.14 Contracts.
           ---------

            A complete and accurate list of all  Equipment  Leases and all other
contracts  relating to the Branch's  operations  is set forth at Schedule  4.14.
Each  Equipment  Lease and contract  included in the Assets or Liabilities to be
expressly  assumed by Buyer  pursuant to Section 2.2 is valid and  subsisting in
full force and effect and Seller and, to  Seller's  knowledge,  each other party
thereto,  has performed in all material respects all obligations  required to be
performed thereunder, and no condition exists which constitutes,  or with notice
or lapse of time, or both, would constitute,  a material default. Each Equipment
Lease and other  contract  included  within the Assets or the  Liabilities to be
expressly assumed pursuant to Section 2.2 is assignable

                                      -15-
<PAGE>

without  the  consent  of any third  party  other  than the  consents  listed on
Schedule 4.3 and the landlord of the Leased  Realty.  True and correct copies of
all  Equipment  Leases  and other  contracts  included  within the Assets or the
Liabilities  to be  expressly  assumed  pursuant  to Section  2.2 have been made
available to Buyer (or if requested by Buyer,  delivered to it).  Except for the
Equipment  Leases and  contracts  included  within the Assets or included in the
Liabilities that Buyer is expressly assuming in accordance with Section 2.2, all
contracts set forth on Schedule  4.14 will be  terminated by Seller  without any
obligation or liability being incurred by Buyer.

      4.15 Fiduciary Obligations.
           ---------------------

            Except for the  Retirement  Plans,  Seller has no trust or fiduciary
relationship  or obligations in respect of any of the Deposit  Liabilities or in
respect of any other Assets being  transferred  or  Liabilities to be assumed by
Buyer hereunder.

      4.16 Tax Matters.
           -----------

            (a) All Tax returns with respect to the Assets or income  therefrom,
the Deposit  Liabilities or payments in respect  thereof or the operation of the
Branch, that are required to be filed on or before the Closing Date have been or
will be duly filed by Closing, and all Taxes shown to be due on such Tax returns
have been paid in full or will be paid in full by Closing.

            (b) With respect to the Deposit Liabilities, Seller is in compliance
with the law and IRS  regulations  relating to (i) obtaining from  depositors of
the Deposit Liabilities executed IRS Forms W-8 and W-9 when appropriate and (ii)
reports of interest. Seller has either obtained a properly completed Form W-8 or
W-9 when appropriate (and renewals of such forms,  where required) or is back-up
withholding on such account.

      4.17 Environmental Matters.
           ---------------------

            There is no legal, administrative,  arbitration or other proceeding,
claim,  action,  cause of action or  governmental  investigation  of any  nature
seeking  to impose on Seller in  connection  with the  Branch or the  Assets any
liability arising under any Environmental  Laws (as defined below) pending,  and
Seller  has not  received  any  written  notice  or is  otherwise  aware  of any
threatened such proceeding,  claim, action or governmental investigation;  there
is no reasonable  basis of which Seller has  knowledge for any such  proceeding,
claim,  action or governmental  investigation;  and Seller is not subject to any
agreement,  order,  judgment,  decree  or  memorandum  by  or  with  any  court,
governmental  authority,  regulatory  agency or third  party  imposing  any such
liability with respect to any real property. Should Seller receive knowledge for
any such  proceeding,  claim,  action or governmental  investigation,  including
locating  information  on a  past  proceeding,  claim,  action  or  governmental
investigation,  if any, Seller will promptly  furnish such information to Buyer.
For  purposes  of this  Agreement,  "Environmental  Law"  means  all  applicable
federal, state and local environmental laws, including the Resource Conservation
and Recovery Act, the Comprehensive  Environmental Response,  Compensation,  and
Liability  Act,  the  Clean  Water  Act,  the  Federal  Clean  Air Act,  and the
Occupational  Safety  and  Health  Act,  as  amended,   regulations  promulgated
thereunder,  and state  counterparts,  and  obligations  under the  common  law,
ordinances, rules and regulations, as any of the foregoing may

                                      -16-
<PAGE>

have been or may be from time to time amended,  supplemented or supplanted,  now
or hereafter existing,  relating to responsibility (or potential responsibility)
for the  cleanup  or  other  remediation  of any  pollutants,  contaminants,  or
hazardous  or  toxic  wastes,  substances  or  materials  at,  on,  beneath,  or
originating from any such property.

      4.18 Branch Offices Within the Restricted Area.
           -----------------------------------------

            There are no branch offices  operated by the Seller,  in addition to
the Branch,  within the "Restricted Area" (as such term in is defined in Section
6.11(b)).

                ARTICLE V. BUYER'S REPRESENTATIONS AND WARRANTIES

      Buyer makes the following representations and warranties to Seller.

      5.1 Power and Authority.
          -------------------

            (a) Buyer has the  corporate  power and  authority to enter into and
      perform this  Agreement.  The execution and delivery of this Agreement has
      been duly  authorized by all  necessary  corporate  action by Buyer.  Upon
      execution and delivery by both parties,  this Agreement will  constitute a
      valid and binding obligation of Buyer,  enforceable in accordance with its
      terms subject to conservatorship,  receivership, and a court's right under
      general principles of equity to refuse to direct specific performance.

            (b) The  performance of this Agreement by Buyer will not violate any
      provision of the Articles of  Incorporation,  Bylaws or similar  governing
      documents of Buyer, or any applicable law, rule,  regulation,  or order or
      any  contract  or  instrument  by which  Buyer is  bound  except  for such
      violations which alone, or taken in the aggregate, would not reasonably be
      expected  to have a material  adverse  effect on the  consummation  of the
      transactions  contemplated  by this Agreement (a "Buyer  Material  Adverse
      Effect").

      5.2 Litigation and Regulatory Proceedings.
          -------------------------------------

            There  are  no  actions,  complaints,   petitions,  suits  or  other
proceedings,  or any decree,  injunction,  judgment,  order or ruling,  entered,
promulgated or pending or (to Buyer's knowledge) threatened against Buyer or any
of its properties or assets which alone,  or taken in the aggregate,  reasonably
would be expected  to have a Buyer  Material  Adverse  Effect.  No  governmental
agency has notified  Buyer that it would oppose or not approve or consent to the
transactions  contemplated by this  Agreement,  and Buyer knows of no reason for
any such opposition,  disapproval or non-consent,  including, but not limited to
Buyer's compliance with the Community Reinvestment Act, the Bank Secrecy Act and
the Truth-in-Lending Act.

      5.3 Consents and Approvals.
          ----------------------

            Except for required regulatory  approvals,  no consents,  approvals,
filings or  registrations  with any third  party or any public  body,  agency or
authority  are  required  in  connection   with  Buyer's   consummation  of  the
transactions contemplated by this Agreement, other than any required Assignments
relating to the Leased  Realty or as set forth on  Seller's  Schedule  4.3,  and
other than what may be required as a result of any facts or circumstances

                                      -17-
<PAGE>

relating solely to Seller.

      5.4 FDIC Insurance.
          --------------

            Buyer is  authorized  to hold  Deposits that are insured by the FDIC
through the  Deposit  Insurance  Fund to the extent  permitted  by law,  and all
premiums and assessments  required to be paid in connection  therewith have been
paid when due.

      5.5 No Broker.
          ---------

            No agent, broker, investment banker or other person acting on behalf
or under  the  authority  of Buyer is or will be  entitled  to any  broker's  or
finder's fee or any other  commission  or similar fee directly or  indirectly in
connection with this Agreement.

      5.6 Community Reinvestment Act.
          --------------------------

            Buyer is in compliance in all material respects with the CRA and its
implementing  regulations  and,  there are no  threatened  or  pending  actions,
proceedings,  or allegations  by any person or regulatory  agency that may cause
bank regulatory authorities to deny any application or non-objection required to
be filed  pursuant to this  Agreement.  Buyer has  received a rating of not less
than "satisfactory" on its most recent CRA examination.  In addition,  Buyer has
not been advised of any supervisory concerns regarding compliance with CRA.

                   ARTICLE VI. ADDITIONAL AGREEMENTS OF SELLER

      6.1 Access to Seller's Premises, Records and Personnel.
          --------------------------------------------------

            (a) Upon  execution of this  Agreement,  Seller shall give Buyer and
      its  representatives  such  access to the  Branch as Buyer may  reasonably
      request,  provided  that Buyer does not  unreasonably  interfere  with the
      Branch's  business  operations.  Seller  shall not be  required to provide
      access to or to disclose information where such access or disclosure might
      violate or  prejudice  the rights of any  customer or employee or would be
      contrary to law,  rule,  regulation  or any legal or  regulatory  order or
      process or any fiduciary duty or binding  agreement  entered into prior to
      the date of this Agreement. To the extent the confidential and proprietary
      information  consists  of  "non-public  personal  information"  within the
      meaning of the Gramm-Leach-Bliley Act Section 509(4), each party receiving
      such  information  shall  take  reasonable  measures  to:  (i)  ensure the
      security and confidentiality of such non-public personal information; (ii)
      protect  against  any  anticipated  threats or hazards to the  security or
      integrity  of such  non-public  personal  information;  and (iii)  protect
      against  unauthorized  access  to  or  use  of  such  non-public  personal
      information.

            (b)   Anything   contained   in  this   Agreement  to  the  contrary
      notwithstanding, Seller shall not be required to disclose, or to cause the
      disclosure  to Buyer or its  representatives  (or  provide  access  to any
      offices,  properties, books or records of Seller, that could result in the
      disclosure to such Persons or others),  of any tax returns and/or any work
      papers relating thereto or any other confidential  information relating to
      income or  franchise  taxes or other  taxes of Seller,  or trade  secrets,
      patent or trademark applications,

                                      -18-
<PAGE>

      or product  research and  development  belonging to or performed by or for
      Seller,  nor shall  Seller  be  required  to permit or to cause  others to
      permit Buyer or its  representatives to copy or remove from the offices or
      properties of Seller any documents, drawings or other materials that might
      reveal any such confidential information;  provided,  however, Buyer shall
      have access to tax returns to the extent that  liability  for the taxes at
      issue could be imposed on Buyer.

            (c) At Buyer's request, Seller shall authorize and permit certain of
      its officers and members of management to engage in discussions with Buyer
      for the  purposes  of  discussing  the Branch  business,  and Buyer  shall
      maintain the confidentiality of any information furnished by such officers
      or members of  management  of Seller  pursuant  to such  discussions  with
      Buyer.

      6.2 Regulatory Approvals.
          --------------------

            Seller agrees to use its reasonable  best efforts to obtain promptly
any  regulatory   approval  on  which  its   consummation  of  the  transactions
contemplated by this Agreement is conditioned. Seller shall prepare and file any
necessary  regulatory  notices  and  applications  related  to the  transactions
contemplated by this Agreement  within 30 calendar days of the execution date of
the  Agreement.  Seller also agrees to  cooperate  with Buyer in  obtaining  any
regulatory  approval  that Buyer must obtain  before the  Closing.  Seller shall
notify  Buyer  promptly  of any  significant  development  with  respect  to any
application it files under this Section.  Seller also shall provide Buyer with a
copy of any regulatory  approval it receives under this Section,  promptly after
Seller's receipt of the same.

      6.3 Conduct of Business.
          -------------------

            Except as provided in this  Agreement or as may  otherwise be agreed
upon by Buyer, Seller will continue to carry on the business at the Branch until
the Closing in the ordinary course of business, consistent with prudent business
and past  practices.  Seller shall not  terminate  the  operation of the Branch,
unless those operations cease due to events beyond Seller's control. Seller will
notify Buyer of any event of which Seller obtains  knowledge that would make any
of Seller's  representations  under  Article IV of this  Agreement  false in any
material respect.

      6.4 Returned Items.
          --------------

            If Seller  accepts an item  before the Closing  Date,  which item is
returned as  uncollectible,  and no offset of funds is available to Buyer,  then
Seller  shall be  liable  for such item in an amount  equal to the  portion  not
covered  by  offset.  Adjustment  to the  Settlement  Payment  will  be  made as
necessary to reflect Seller's liability.

      6.5 Branch Property Lease.
          ---------------------

            Seller and Buyer shall use commercially reasonable efforts to obtain
any necessary consents or non-objections of the landlord of the Leased Realty to
the  Assignment  of the  Leased  Realty  to  Buyer,  including  such  landlord's
execution of the Consent and Assignment of Lease and Estoppel Certificate in the
form substantially similar to the form attached hereto as Exhibit C.

                                      -19-
<PAGE>

      6.6 Employee Payroll.
          ----------------

            Seller  shall not  increase the wages of any employee of the Branch,
as detailed at Schedule  6.6,  other than in  accordance  with the salary budget
guidelines presently in effect, as detailed at Schedule 6.6 and otherwise in the
ordinary course of business consistent with past practice,  without the approval
of a  representative  of Buyer,  which  shall not be  unreasonably  withheld  or
delayed.

      6.7 Branch Operations.
          -----------------

            Seller shall not materially alter the products or services presently
offered at the Branch or materially alter the pricing policy  applicable to such
products  without  the prior  written  consent of the Buyer,  which shall not be
unreasonably withheld or delayed.

      6.8 Final Payroll.
          -------------

            Seller shall pay all of its employees not later than as of the close
of  business on the Closing  Date all sums due for all wages  earned,  including
overtime pay, and all accrued, but unused paid time off days as of such time.

      6.9 Customer Records.
          ----------------

            At least thirty (30) days prior to the Closing Date, or as otherwise
agreed,  Seller agrees to provide to Buyer a list of all  Deposits,  identifying
the types of each such deposit,  the amount thereof,  the interest  rate(s) paid
thereon,  the  name(s)  and  address(es)  of each  deposit  as well as all other
pertinent   information   regarding  each  depositor  and  his  or  her  Deposit
(including,  without limitation, the amount of any Overdraft).  Seller agrees to
provide an updated list setting forth the same  information with respect to each
Deposit as of the same date that the Closing  Statement  is  delivered  to Buyer
pursuant to Section  3.2(a) and as of the close of  business as of the  business
day immediately  preceding the Closing Date. Seller represents and warrants that
each  such  list  shall be true and  correct  as of the date it,  or any  update
thereto, is delivered to Buyer. Buyer shall have the right, prior to the Closing
Date,  to review the books and records of Seller  relating to such  Deposits for
the purpose of verifying the accuracy of the foregoing list.

      6.10 IRA and Keogh Plan Deposits.
           ---------------------------

            (a) On or before the Closing  Date, to the extent that such accounts
      will  transfer  to  Buyer,  Seller  shall:  (i)  resign as of the close of
      business on the Closing Date as the trustee or custodian,  as  applicable,
      of each IRA and Keogh Plan of which it is the trustee or  custodian;  (ii)
      to the extent  permitted by the  documentation  governing each such IRA or
      Keogh Plan and  applicable  law,  appoint  Buyer as  successor  trustee or
      custodian, as applicable, of each such IRA or Keogh Plan, and Buyer hereby
      accepts  each  such  trusteeship  or  custodianship  under  the  terms and
      conditions  of Buyer's plan  documents  for its IRA and Keogh  Plans,  and
      assumes all fiduciary and custodial obligations with respect thereto as of
      the close of business on the Closing  Date;  and (iii)  deliver to the IRA
      grantor or Keogh Plan named fiduciary, of each such IRA or Keogh

                                      -20-
<PAGE>

      Plan such notice of the  foregoing  as is  required  by the  documentation
      governing such IRA or Keogh Plan or applicable  law. Buyer shall be solely
      responsible  for  delivering  its  IRA and  Keogh  Plan  documents  to the
      applicable IRA grantor and Keogh Plan named fiduciary,  including, but not
      limited  to,  a  beneficiary  designation  form  to be  completed  by  the
      applicable IRA grantor or Keogh Plan participant;  provided,  however that
      in the event the IRA  grantor or Keogh Plan  participant  dies before such
      time as Buyer receives a properly completed beneficiary  designation form,
      Seller  shall make  available  to Buyer such  information  as may exist in
      Seller's files regarding any beneficiary designation it may have regarding
      such decedent.  If, pursuant to the terms of the  documentation  governing
      any such IRA or Keogh Plan or applicable  law; (x) Seller is not permitted
      to appoint Buyer as successor trustee or custodian,  or the IRA grantor or
      Keogh Plan or named fiduciary objects in writing to such  designation,  or
      is entitled to, and does, in fact,  name a successor  trustee or custodian
      other than Buyer;  or (y) such IRA or Keogh Plan includes  assets that are
      not Deposits and are not being  transferred  to Buyer or the assumption of
      such  deposit  liabilities  included  in such IRA or  Keogh  Plan or would
      result  in a loss of  qualification  of such IRA or Keogh  Plan  under the
      Code, all deposit  liabilities of Seller held under such IRA or Keogh Plan
      shall be  excluded  from the  Deposits.  Upon  appointment  as a successor
      custodian  for such IRAs or as a successor  trustee for such Keogh  Plans,
      Buyer shall perform the services and carry out the duties and  obligations
      required of it under the applicable plans, the Code and applicable federal
      and state laws and regulations.

            (b) To the extent the Deposits  include certain IRAs and Keogh Plans
      that  are  required  to make  certain  periodic  distributions  to the IRA
      account owner or Keogh Plan or participant (or beneficiary)  either at the
      account owner's or  participant's  request or because the account owner or
      participant  has  attained age 70-1/2,  effective as of the Closing  Date,
      Buyer agrees to continue to make such periodic distributions in accordance
      with the  reasonable  distribution  instructions  forwarded  by  Seller to
      Buyer.   Buyer  hereby   assumes  the   obligation  to  pay  each  minimum
      distribution  required by federal law by December 31 of the calendar  year
      in which the Closing occurs and, in consideration  thereof,  Seller agrees
      not to withhold the amount of such distributions from the aggregate amount
      of the Deposits.

            (c) At a  reasonable  time prior to the Closing  Date,  Seller shall
      provide to Buyer copies of all plan documents and beneficiary  designation
      forms in Seller's  possession  with  respect to the IRAs and Keogh  Plans.
      Seller  represents and warrants that all such copies of plan documents and
      beneficiary  designation  forms, and any other  information  regarding the
      Retirement Plans provided by it, will be true, correct and complete.

      6.11 Non- Solicitation After Closing.
           -------------------------------

            (a)  Seller  agrees  that,  for a period  of one (1) year  after the
      Closing,   neither  the  Seller  nor  its  Affiliates  shall  directly  or
      indirectly solicit Bank Deposits (as hereinafter defined),  loans or other
      banking  business  from  customers of the Branch  maintaining  Deposits or
      having Loans transferred to the Buyer pursuant to this Agreement,  or from
      any other depositor, borrower or customer of the Branch at the time of the
      Closing except

                                      -21-
<PAGE>

      that  (a)  nothing   herein  shall  prevent  Seller  from  making  general
      solicitations  of the  public  (or any  segment  of the  public),  through
      advertising  campaigns or otherwise,  for the purpose of having the public
      establish Bank Deposits of the Seller,  so long as such  solicitations are
      not  specifically  directed  toward  customers of the Branch,  (b) nothing
      herein  shall  prevent  Seller  from   soliciting   so-called   "brokered"
      certificates of deposit,  and (c) nothing herein shall prevent Seller from
      displaying  brochures and other  marketing  materials with respect to Bank
      Deposits at Seller's offices. As used herein, "Bank Deposits" means demand
      deposits, time deposits and certificates of deposit insured by the FDIC.

            (b)  Seller  agrees  that,  for a period  of one (1) year  after the
      Closing,  Seller shall not, within the "Restricted  Area" described below,
      open or maintain any banking  branch office or purchase any single banking
      branch office from a third-party,  other than a branch office  operated by
      the  Seller  as of the date of the  Agreement.  For the  purposes  of this
      Agreement,  the Restricted  Area shall be defined as the  geographic  area
      within the Commonwealth of Pennsylvania within 5 miles of the Branch.

            (c) Seller agrees that unless prior written consent is obtained from
      the Buyer,  for a period of one (1) year after the  Closing,  Seller shall
      not, and shall cause its Affiliates not to, solicit, employ, or induce, or
      attempt to employ,  solicit or induce to become employed by Seller or such
      Affiliate or to leave the Buyer's  employment,  any former employee of the
      Seller that is a Transferred Employee.

            (d)  Notwithstanding  the foregoing,  the provisions in this Section
      6.11 shall not apply to Seller or its  successors or assigns if the Seller
      (a) is acquired in a merger or asset sale  transaction  with a third-party
      or (b) Seller acquires  another bank,  thrift or financial  institution by
      merger or asset sale  consisting of at least three retail banking  offices
      and one or more of such offices falls within the Restricted Area.

      6.12 Loan Review
           -----------

            The Buyer may inspect all files and payment histories  regarding the
Loans and,  based upon such review,  prior to Closing,  the Buyer may reject the
purchase of identified  Loans in the exercise of its good-faith  discretion.  In
addition,  for a period  of 30 days  after the  Closing,  Buyer has the right to
return any Loan,  and receive a refund of the  consideration  paid with  respect
thereto, which Loan is more than 30 days past due with respect to the payment of
principal or interest,  subject to a pending  legal  proceeding  or subject to a
bankruptcy proceeding as of the Closing Date.

      6.13 Environmental And Building Inspection
           -------------------------------------

            For a period of 45 days after the date of the  Agreement,  the Buyer
at is own  expense  and with the prior  written  consent of the  Landlord of the
Leased Realty,  may undertake a building  inspection  and Phase I  environmental
audit  of  the  Leased  Realty  including,  without  limitation,  such  physical
inspections of the Leased Realty as Buyer shall deem  necessary or  appropriate.
In the event Buyer conducts any such inspection or audit and as a result thereof
determines  that a Phase II study is  required,  Seller shall have the option to
either permit a Phase

                                      -22-
<PAGE>

II study, to be performed by a licensed and reputable  environmental  inspection
company,  or to terminate this  Agreement.  If the landlord of the Leased Realty
does not provide its consent to an  environmental  audit or building  inspection
that Buyer  desires to conduct or to the cure,  prior to the Closing  Date, of a
"Material  Defect" (as defined  below) which is  discovered  as a result of such
audit or inspection, Buyer shall have the right to terminate this Agreement.

            Buyer shall inform  Seller of any defect it discovers as a result of
such environmental audit or inspection which is reasonably  estimated to cost in
excess of $5,000 to repair  (any such  defect  being  referred to as a "Material
Defect").   Each  such  Material   Defect  shall  be  cured  to  the  reasonable
satisfaction of the Buyer within thirty days of such notice,  and, in any event,
not later than the date scheduled for the Closing.  If any such Material  Defect
is not so cured  prior the date  scheduled  for  Closing,  Buyer  shall have the
option of  terminating  this  Agreement or requiring  Seller to pay to Buyer the
reasonable  estimate  of the cost to  repair  such  Material  Defect on the date
scheduled  for the Closing  and Seller  shall  indemnify  Buyer for any costs or
expenses it  subsequently  incurs in repairing such Material  Defect that are in
excess of the  amount  reasonably  estimated  and paid by Seller on the  Closing
Date.  In the event the landlord of the Leased  Property  prohibits any physical
inspection  or  environmental  audit that Buyer desires to conduct on the Leased
Realty  and  Buyer  elects  not to  terminate  this  Agreement  and the  Closing
contemplated  hereby occurs, then Seller shall indemnify Buyer for the costs and
expenses  it  incurs in  effectuating  a repair of a  Material  Defect  which it
discovers within thirty days after the Closing Date.

      6.14 Prior Real Property Data.
           ------------------------

            Within thirty (30) days of the date of this Agreement,  Seller shall
furnish  Buyer  with  copies of any  prior  environmental  or title  information
relating to the Leased Realty that is readily in Seller's possession.

      6.15 Other Consents.
           --------------

            Seller shall use its  reasonable  best effort to obtain all consents
to the assignments of the Equipment Leases detailed on Schedule 4.3.

      6.16 Insurance.
           ---------

            Seller will  maintain in effect until and including the Closing Date
casualty  and  public  liability  insurance  policies  relating  to  the  Branch
consistent  with that which it  maintains  in  connection  with its other branch
offices.

      6.17 Damage or Destruction.
           ---------------------

            If,  prior to the  Closing,  the  Leased  Realty is damaged by fire,
vandalism, acts of God, or other casualty or cause, and the Leased Realty is not
repaired to substantially the same condition as existed  immediately before such
casualty  prior to the date  scheduled  for  Closing,  then Buyer shall have the
option  of  terminating  this  Agreement  or  proceeding  with the  Closing  and
accepting the Leased Realty as it is together  with the insurance  proceeds,  if
any,  and the right to receive the same and Buyer shall  receive a credit at the
Closing in the amount of any

                                      -23-
<PAGE>

deductible.  If Buyer  elects to  proceed  with the  Closing,  Seller  agrees to
cooperate  with Buyer in any loss  adjustment  negotiations,  legal  actions and
agreements  with the insurance  company,  and to assign to Buyer at Closing,  in
form  and  substance  reasonable  satisfactory  to  Buyer,  its  rights  to such
insurance  proceeds (and pay over to Buyer any such proceeds already  received),
and Seller  will not  settle  any  insurance  claims or legal  actions  relating
thereto without Buyer's prior written consent.

      6.18 Certificate of Occupancy
           ------------------------

            Seller shall use commercially reasonable efforts to assist the Buyer
in obtaining a Certificate of Occupancy and/or a Fire Safety Certificate, as and
if applicable,  to be issued by the appropriate municipal or county authority as
of the Closing  Date.  In the event repairs are required in order to qualify for
such Certificate(s),  Seller shall indemnify Buyer for the costs of such repairs
to the extend that such repairs are not required to be performed by the Landlord
of such property at such Landlord's expense, if applicable.

                       VII. ADDITIONAL AGREEMENTS OF BUYER

      7.1 Regulatory Approvals.
          --------------------

            Buyer agrees to use its reasonable  best efforts to obtain  promptly
any  regulatory   approval  on  which  its   consummation  of  the  transactions
contemplated by this Agreement is conditioned.  Buyer shall prepare and file all
necessary  regulatory  notices  and  applications  related  to  the  transaction
contemplated  by the Agreement  within 30 calendar days of the execution date of
the  Agreement.  Buyer also agrees to  cooperate  with Seller in  obtaining  any
regulatory  approval  which Seller must obtain  before the Closing.  Buyer shall
notify  Seller  promptly  of any  significant  development  with  respect to any
application it files under this Section.  Buyer also shall provide Seller with a
copy of any regulatory  approval it receives under this Section,  promptly after
Buyer's receipt of the same.  Notwithstanding  the foregoing or anything else to
the  contrary  contained  in this  Agreement,  Buyer  shall  not in any event be
required  to agree to any term or  condition,  or take any  action,  in order to
obtain such regulatory  approval which would adversely  affect in a material way
(a) Buyer's  operation of the Branch or (b) Buyer or any of its Affiliates  with
respect to their present business or activities.

      7.2 Change of Name, Etc.
          -------------------

            Immediately  after the  Closing,  Buyer will (a) change the name and
logo on all documents and facilities  relating to the Assets and the Liabilities
to Buyer's name and logo, (b) notify all persons whose Deposits are  transferred
under this Agreement of the  consummation  of the  transactions  contemplated by
this  Agreement,  and (c)  provide all  appropriate  notices to the FDIC and any
other  regulatory  authorities  required as a result of the consummation of such
transactions.  Buyer  agrees  not to use any  forms or other  documents  bearing
Seller's  name or logo after the Closing  without the prior  written  consent of
Seller, and, if such consent is given, Buyer agrees that all such forms or other
documents to which such consent  relates will be stamped or otherwise  marked in
such a way that identifies Buyer as the

                                      -24-
<PAGE>

party  using the form or other  document.  As soon as  practicable  and,  in any
event,  within seven calendar days after the Closing Date,  Buyer will issue new
checks reflecting its transit and routing number to customers of the Branch with
check writing  privileges.  Buyer shall use its best efforts to encourage  these
customers  to begin using such checks and cease using  checks  bearing  Seller's
name.

                        ARTICLE VIII. SELLER'S EMPLOYEES

      8.1 Transferred Employees.
          ---------------------

            (a) Buyer  will  notify  Seller  not later than 30 days prior to the
      Closing Date which employees of Seller it intends to offer to employ as of
      the day after the Closing Date. Seller's employees who become employees of
      Buyer after the Closing shall be referred to as  "Transferred  Employees."
      Seller shall be responsible for retaining or terminating the employment of
      its  employees  whom Buyer does not hire as of the day after the  Closing,
      and Seller  shall make  payment of any  severance  and other  payments due
      Seller's Branch employees that are not hired by Buyer.

            (b)  Seller  is  responsible  for the  filing  of Forms W-2 with the
      Internal   Revenue   Service  and  any  required  filing  with  state  tax
      authorities,  with respect to wages and benefits paid to each  Transferred
      Employee for periods ending on or prior to the Closing Date.

      8.2 Employee Benefits.
          -----------------

            (a) From and  after  the  Closing  Date,  Buyer  shall  provide  the
      Transferred  Employees  with the employee  benefits,  if any,  provided to
      similar  employees  of Buyer and its  Affiliates,  subject to the terms of
      Buyer's benefit plans;

            (b) Buyer will  grant for  purposes  of  determination  of  vacation
      benefits,  severance  pay and all  welfare  benefit  plans (as  defined in
      ERISA) past service  credit to all  Transferred  Employees  for periods of
      time credited to such Transferred Employees as employees of Seller. To the
      extent that any Transferred Employee has satisfied in whole or in part any
      annual   deductible  under  a  Welfare  Benefit  Plan,  or  has  paid  any
      out-of-pocket  expenses  pursuant to any Welfare Benefit Plan co-insurance
      provision,  such amount shall be counted  toward the  satisfaction  of any
      applicable  deductible or  out-of-pocket  expense  maximum,  respectively,
      under the benefit plans and programs provided to Transferred  Employees by
      Buyer,  and such plans and programs shall be applied without regard to any
      limitations  relating  to  preexisting  conditions  or  required  physical
      examinations  that would not otherwise apply under the respective  Welfare
      Benefit Plans to the extent that such Transferred Employees are covered by
      the Welfare Benefit Plans on the Closing Date;

            (c) For Transferred  Employees,  the terms of their participation in
      Buyer's  employee  benefit  plans,  including  credit for past  service or
      contributions shall be determined by Buyer.

                                      -25-
<PAGE>

            (d) If  applicable,  Buyer  agrees to permit  and shall  modify  its
      existing  defined  401(k)  plan  to  the  extent  necessary  to  permit  a
      trustee-to-trustee  transfer  from  Seller's  401(k)  plan  of the  vested
      account  balances of  participants  in that plan who become  employees  of
      Buyer.  Seller will cause the vested account  balances of  participants in
      Seller's  401(k) plan who become  employees of Buyer to be  transferred to
      Buyer's 401(k) plan in a trustee-to-trustee transfer.

            (e) Past service credit and credit for plan year  deductibles  under
      this Section 8.2 will only be given by Buyer to the Transferred Employees,
      and Buyer  shall only be required to comply  with  Section  8.2(d),  if no
      overly  burdensome  plan  amendments to Buyer's plans are necessary and no
      significant expense would be incurred to implement such provisions.

      8.3 Training.
          --------

            Seller shall permit Buyer to train the Transferred  Employees during
the 30 day period before Closing with regard to Buyer's operations, policies and
procedures  at Buyer's sole cost and  expense.  This  training  shall take place
outside of normal business hours and may, at Seller's option,  take place at the
Branch.

                      IX. CLOSING AND CONDITIONS TO CLOSING

      9.1 Time and Place of Closing.
          -------------------------

            The Closing shall be on a date  mutually  agreed upon by the parties
(the date of the Closing,  the "Closing  Date"),  which shall be no more than 45
days after the last  regulatory  approval  or  non-objection  necessary  for the
Closing has been  obtained  (without  regard to any  statutory  waiting  periods
following  such  approval),  but in no event later than February 28, 2007 to the
extent  feasible  and  acceptable  to  Seller's  and  Buyer's   respective  data
processing services. The Closing shall take place at Seller's offices located at
226 Landis Avenue, Vineland, New Jersey 08360 at 10:00 a.m. on the Closing Date,
or at a time and place otherwise determined by mutual agreement of the parties.

      9.2 Exchange of Closing Documents.
          -----------------------------

            The parties shall  exchange  drafts of all documents to be delivered
at the Closing  (including a preliminary  Closing  Statement) at least three (3)
Business Days prior to the Closing Date.

      9.3 Buyer's Conditions to Closing.
          -----------------------------

            Buyer's   obligations   to  purchase   the  Assets  and  assume  the
Liabilities is contingent  upon and subject to the  fulfillment of the following
conditions in all material respects:

            (a)  the  parties  obtaining  all  regulatory  approvals  which  are
      required in order for them to proceed with the  transactions  contemplated
      by this  Agreement  and the  expiration  of any  required  waiting  period
      without  the  commencement  of  adverse  proceedings  by any  governmental
      authority with jurisdiction over the transactions

                                      -26-
<PAGE>

      contemplated by this Agreement.  Notwithstanding the foregoing, regulatory
      approval will not be deemed  obtained if such approvals  obtained impose a
      condition or requirement  reasonably  deemed by Buyer to (i) significantly
      limit or  impair  the  ability  of the  Buyer to  operate  the  Branch  as
      contemplated by it or materially  increase the costs of such operations so
      as to  eliminate  the  opportunity  for the Buyer to realize a  reasonable
      return on its investment  over time on the operation of the Branch or (ii)
      adversely affect in a material way Buyer or its Affiliates with respect to
      their present business or activities;

            (b) each  representation  and  warranty of Seller in this  Agreement
      being true and correct in all material  respects (without giving effect to
      any materiality or Seller Material Adverse Effect qualification provisions
      contained  therein) as of the  Closing  Date as though made on the Closing
      Date (except to the extent  expressly made as of an earlier date, in which
      case as of such date) and all  covenants  and  conditions  of Seller to be
      performed  or met by Seller on or before  the  Closing  Date  having  been
      performed or met in all material respects;

            (c) Seller's  delivery to Buyer of the  following  documents in form
      and substance reasonably satisfactory to Buyer:

                  (i)  bills of  sale,  assignments  and  other  instruments  of
            transfer sufficient to convey to Buyer all of Seller's right, title,
            and interest in and to the Assets;

                  (ii) the  Assignment  of the Leased  Realty by the landlord of
            the Leased Realty  effective as of the Closing  Date,  including the
            Consent to  Assignment  of the Lease and Estoppel  Certificate  in a
            form substantially  similar to the form attached hereto as Exhibit C
            with respect to the remaining  term of the Lease with respect to the
            Leased Realty, duly executed by such landlord;

                  (iii) a  certificate  executed  by an  appropriate  officer of
            Seller  attesting to Seller's  compliance  with the  conditions  set
            forth in Section 9.3(b);

                  (iv)  documentation  executed by both  parties with respect to
            the transfer of the trusteeship under the Retirement Plans;

                  (v) any other  consents  or  approvals  required,  other  than
            regulatory  approvals,  if any, related to the transfer of the Fixed
            Assets or the Equipment Leases.

                  (vi) a copy of a  resolution  of the Board of Directors or the
            Executive  Committee  of Seller  approving  this  Agreement  and the
            transactions contemplated hereby;

                  (vii) a certificate from the Secretary or Assistant  Secretary
            of Seller as to the incumbency and signatures of officers  attesting
            to the  authority  of such  officers  to execute  and  deliver  this
            Agreement and all related documents; and

                                      -27-
<PAGE>

                  (viii)  such  other  instruments  and  documents  as  shall be
            reasonably   requested  by  Buyer,  all  of  which  instruments  and
            documents  (as  well as those  listed  above)  shall  be  reasonably
            acceptable to Buyer; and

            (d)  Buyer's  agreement  to receive the  Closing  Statement  and the
      Settlement  Payment as  provided in Section  3.2, in a form  substantially
      similar to that  furnished  pursuant to Section  9.2  herein,  and Buyer's
      receipt in immediately available funds of the Settlement Payment.

            (e) The absence of any Seller Material Adverse Effect.

            (f) The absences of any instituted or threatened claim, suit, damage
      or  litigation  seeking to restrain the  transaction  contemplated  by the
      Agreement  which  is  reasonably  evaluated  so as to have the  effect  of
      materially  impairing the Buyer's ownership of the Assets or the operation
      of the Branch.

      9.4 Seller's Conditions to Closing.
          ------------------------------

                  Seller's  obligation  to sell  the  Assets  and  transfer  the
Liabilities  to Buyer is contingent  upon and subject to the  fulfillment of the
following conditions in all material respects:

            (a)  the  parties  obtaining  all  regulatory  approvals  which  are
      required in order for them to proceed with the  transactions  contemplated
      by this  Agreement  and the  expiration  of any  required  waiting  period
      without  the  commencement  of  adverse  proceedings  by any  governmental
      authority with  jurisdiction  over the  transactions  contemplated by this
      Agreement;  Notwithstanding the foregoing, regulatory approval will not be
      deemed  obtained  if  such  approvals   obtained  impose  a  condition  or
      requirement  reasonably  deemed  by  Buyer to (i)  significantly  limit or
      impair the ability of the Buyer to operate the Branch as  contemplated  by
      it or  increase  the  costs  of such  operations  so as to  eliminate  the
      opportunity for the Buyer to realize a reasonable return on its investment
      over time on the  operation  of the Branch or (ii)  adversely  affect in a
      material  way,  Buyer or its  Affiliate  with  respect  to  their  present
      business or activities.

            (b) each  representation  and  warranty  of Buyer in this  Agreement
      being true and correct in all material respects as of the Closing Date and
      all covenants  and  conditions of Buyer to be performed or met by Buyer on
      or before the Closing  Date having been  performed  or met in all material
      respects;

            (c) Buyer's  delivery to Seller of the  following  documents in form
      and substance reasonably satisfactory to Seller:

                  (i) one or more executed instruments assuming the Deposits and
            all other Liabilities; and

                  (ii) a certificate executed by an appropriate officer of Buyer
            attesting,  to the officer's best knowledge,  to Buyer's  compliance
            with the conditions set forth in Section 9.4(b).

                                      -28-
<PAGE>

      9.5 Survival of Representations and Warranties.
          ------------------------------------------

            Unless provided  otherwise in this  Agreement,  Buyer's and Seller's
representations  and  warranties  under  this  Agreement  or  contained  in  any
certificate,  instrument or document delivered by either party at the Closing or
otherwise in accordance with this Agreement shall survive the Closing Date for a
period of one year.  Notwithstanding the foregoing, for tax matters set forth in
this Agreement and for title representations and warranties set forth in Section
4.5 for Fixed Assets, Buyer's and Seller's  representations and warranties under
this Agreement or contained in any certificate, instrument or document delivered
by either party at the Closing or otherwise in  accordance  with this  Agreement
shall survive the Closing Date for the applicable statute of limitations period.

                             ARTICLE X. TERMINATION

      10.1 Termination by Either Party.
           ---------------------------

            Either party may terminate this Agreement upon written notice to the
other if:

            (a)  as a  result  of any  material  breach  of any  representation,
      warranty or covenant,  the party  terminating this Agreement has given the
      other  party  written  notice of such  breach and such breach is not cured
      within 30 days thereafter;

            (b) the Closing does not occur on or before February 28, 2007;

            (c) the other party so agrees in writing; or

            (d) Seller fails to obtain the  necessary  Assignment  of the Leased
      Realty after Buyer and Seller both make commercially reasonable efforts to
      obtain  such  assignment,  including  the  refusal by the  landlord of the
      Leased  Realty to execute the Consent to  Assignment of Lease and Estoppel
      Certificate,  in a form substantially  similar to the form attached hereto
      as Exhibit C.

            The  termination  of this Agreement  under  subsection (a) shall not
absolve the breaching party from any liability to the other party arising out of
its breach of this Agreement.

                            ARTICLE XI. MISCELLANEOUS

      11.1 Continuing Cooperation.
           ----------------------

            (a) On and  after  the  Closing  Date,  Seller  agrees  to  execute,
      acknowledge  and  deliver  such  documents  and  instruments  as Buyer may
      reasonably  request to vest in Buyer the full legal and equitable title to
      the Assets and Liabilities.

            (b) On and after the Closing Date, Buyer shall execute,  acknowledge
      and  deliver  such  documents  and  instruments  as Seller may  reasonably
      request to relieve and discharge  Seller from its obligations with respect
      to the Liabilities.

            (c) Seller and Buyer shall  cooperate  with each other in connection
      with any  examination  conducted by any tax  authority  subsequent  to the
      Closing Date by promptly

                                      -29-
<PAGE>

      providing  upon request  information  relating to the tax liability of any
      business  operated  by Seller or Buyer  with  respect  to the  Branch  and
      promptly   informing  the  other  of  the  institution  of,  any  material
      developments concerning, and the outcome of, the same.

            (d) Except as  provided  in Section  7.2, no interest in or right to
      use Sun National Bank's logo or its name, or any other similar word, name,
      symbol  or  device  in which  Seller  has any  interest  by  itself  or in
      combination  with any other word, name,  symbol or device,  or any similar
      variation of any of the foregoing  (collectively,  the "Retained Names and
      Marks")  is  being  transferred  to  Buyer  pursuant  to the  transactions
      contemplated hereby. Unless permitted pursuant to Section 7.2, Buyer shall
      not after the  Closing  Date in any way  knowingly  use any  materials  or
      property,  whether or not in existence on the Closing Date,  that bear any
      Retained   Name  or  Mark.   Buyer   agrees  that  Seller  shall  have  no
      responsibility for claims by third parties arising out of, or relating to,
      the use by Buyer of any Retained Name or Mark after the Closing Date,  and
      Buyer agrees to indemnify and hold harmless Seller from any and all claims
      (and all expenses,  including reasonable attorneys' fees and disbursements
      incurred in connection  with any such claim) that may arise out of the use
      thereof by Buyer.

      11.2 Merger and Amendment.
           --------------------

            This Agreement  sets out the complete  agreement of the parties with
respect to the matters discussed in this Agreement,  and it supersedes all prior
agreements  between the parties,  whether written or oral,  which apply to these
matters.  No  provision  of this  Agreement  may be changed or waived  except as
expressly stated in a document executed by both parties.

      11.3 Dispute Resolution.
           ------------------

            Any  controversy  or  claim  arising  out  of or  relating  to  this
Agreement, or the breach thereof, shall be settled exclusively by arbitration in
accordance  with the  rules  for  commercial  arbitration  then in effect at the
district  office of the  American  Arbitration  Association  ("AAA")  nearest to
Vineland, New Jersey, and judgment upon the award rendered may be entered in any
court  having  jurisdiction  thereof,  except to the extent that the Parties may
otherwise reach a mutual settlement of such issue.

      11.4 Indemnification.
           ---------------

            After  the  Closing  Date,  and  unless  otherwise  provided  in the
Agreement:

            (a) Buyer shall  indemnify and hold Seller harmless from and against
      all  claims,  lawsuits,  costs  (including  reasonable  counsel  fees) and
      liabilities  which arise out of or relate to transactions or operations at
      the Branch after the Closing Date,  and from any loss or damage  resulting
      from any breach by Buyer of any  representation,  warranty  or covenant of
      Buyer  contained  in this  Agreement.  If any claim or  lawsuit is made or
      commenced as to which Seller proposes to demand such  indemnification,  it
      shall notify Buyer with reasonable promptness; provided, however, that any
      failure  by Seller to  notify  Buyer  shall  not  relieve  Buyer  from its
      obligations  hereunder,  except  to the  extent  that  Buyer  is  actually
      prejudiced by such failure to give notice. Buyer shall have the option of

                                      -30-
<PAGE>

      defending  such claim or lawsuit  with  counsel of its own choosing at its
      own cost and expense and such counsel shall, to the extent consistent with
      its professional  responsibilities,  cooperate with Seller and any counsel
      designated  by Seller.  Buyer  shall be liable for any  settlement  of any
      claim or lawsuit against Seller made with Buyer's written  consent,  which
      consent shall not be unreasonably withheld.

            (b) Seller shall  indemnify and hold Buyer harmless from and against
      all  claims,  lawsuits,  costs  (including  reasonable  counsel  fees) and
      liabilities  which arise out of or relate to transactions or operations at
      the Branch on or before the Closing  Date,  including,  but not limited to
      the tax liabilities, and from any loss or damage resulting from any breach
      by Seller of any representation,  warranty or covenant of Seller contained
      in this Agreement or in any  certificate  or other  document  delivered by
      Seller in connection with this Agreement.  If any claim or lawsuit is made
      or commenced as to which Buyer proposes to demand such indemnification, it
      shall notify Seller with reasonable  promptness;  provided,  however, that
      any failure by Buyer to notify  Seller  shall not relieve  Seller from its
      obligations hereunder,  except to the extent Seller is actually prejudiced
      by such failure to give notice.  Seller shall have the option of defending
      such claim or lawsuit with counsel of its own choosing at its own cost and
      expense  and  such  counsel  shall,  to the  extent  consistent  with  its
      professional  responsibilities,  cooperate  with  Buyer  and  any  counsel
      designated  by Buyer.  Seller  shall be liable for any  settlement  of any
      claim or lawsuit against Buyer made with Seller's written  consent,  which
      consent shall not be unreasonably withheld.

            (c)  Notwithstanding  anything  to the  contrary  contained  in this
      Section  11.4, no  indemnification  shall be required to be made by either
      party until the  aggregate  amount of all such  claims by a party  exceeds
      $10,000.

            (d) Any  disputes  between  the  parties  arising  from  claims  for
      indemnification  brought  under this  Section 11.4 shall be subject to the
      provisions of Section 11.3

            (e) Affiliates of the Buyer and the Seller shall each be entitled to
      the benefit of the  indemnification  provisions  contained in this Section
      11.4 as if named as an additional  indemnitee together with the party with
      whom it is Affiliated.

            (f) Notwithstanding  anything in this Agreement to the contrary, for
      purposes of determining  whether there has been a breach and the amount of
      any  liability,  loss or damage that is the subject matter of an indemnity
      claim, each  representation or warranty  contained in this Agreement shall
      be read  without  giving  effect  to any  materiality  or  Seller or Buyer
      Material Adverse Effect standard or  qualification  that has the effect of
      making such  representation  and warranty less restrictive.  Any indemnity
      payable pursuant to this Section 11.4 shall be paid within the later of 10
      days  after the  indemnified  party's  request  therefore  (in the case of
      claims not  involving a third party claim) or 10 days prior to the date on
      which the loss or expense upon which the indemnity is based is required to
      be  satisfied  or  paid  by the  indemnified  party.  All  indemnification
      payments  shall include  interest at the then prime rate as published from
      time to time in the Wall Street  Journal  plus 200 basis  points per annum
      accruing from the

                                      -31-
<PAGE>

      date that the indemnified party incurs the indemnified liability,  loss or
      damage up to and including the date of payment.

      11.5 Counterparts.
           ------------

            This Agreement may be executed in any number of  counterparts,  each
of which will  constitute  an original,  but all of which taken  together  shall
constitute one and the same instrument.

      11.6 Exhibits and Schedules.
           ----------------------

            All  exhibits  and  schedules  referred to in this  Agreement  shall
constitute a part of this Agreement.

      11.7 Assignment.
           ----------

            This Agreement is not assignable by either party without the written
consent of the other party, which shall not be unreasonably withheld.

      11.8 Headings.
           --------

            The  headings   contained  in  this   Agreement   are  inserted  for
convenience  only and shall not affect the meaning of this  Agreement  or any of
its provisions.

      11.9 Notices.
           -------

            Any notice under this  Agreement  shall be made in writing and shall
be deemed  given when  delivered in person,  when  delivered by first class mail
postage  prepaid  (in which case the notice  shall be deemed  given on the third
Business  Day  following  the date on which the notice is  postmarked),  or when
delivered by facsimile  transmission,  which  transmission also shall be sent by
first class mail,  postage  prepaid before the second Business Day following the
transmission  (in  which  case  the  notice  shall  be  deemed  given on the day
transmitted if transmitted before or during normal business hours or, otherwise,
on the next succeeding Business Day) to the parties at the respective  addresses
set forth below or at such other  addresses as each party shall inform the other
in writing.

      If to Buyer to:       Edward R. Wright
                            Senior Vice President and Chief Financial Officer
                            City National Bank of New Jersey
                            900 Broad Street
                            Newark, New Jersey 07102

      If to Seller to:      Dan A. Chila
                            Executive Vice President and Chief Financial Officer
                            Sun National Bank
                            226 Landis Avenue
                            Vineland, New Jersey 08360

                                      -32-
<PAGE>

      With a copy to:       Malizia Spidi & Fisch, PC
                            901 New York Avenue, NW
                            Suite 210 East
                            Washington, DC 20001
                            Attention: Richard Fisch, Esq.

      11.10 Expenses.
            --------

            Unless specifically  stated to the contrary in this Agreement,  each
party  will  assume  and pay for the  expenses  it incurs  with  respect  to the
purchase and sale of the Assets and  assumption  of the  Liabilities  under this
Agreement, including, without limitation, that each party shall pay all fees and
expenses  associated  with  obtaining  the required  regulatory  approvals  with
respect to such party.  Each party shall be  responsible  for any fee payable to
any agent, broker or finder acting on its behalf in this transaction.

      11.11 Notice to Customers/Public Disclosures.
            --------------------------------------

            As mutually  agreed upon by the parties,  Buyer and/or  Seller shall
notify  holders of all  accounts at the Branch  prior to the Closing Date of the
Transaction and its impact on such account holders.

            (a) Any press  release,  public notice or notice to local  officials
      regarding this  Agreement or the  transactions  contemplated  herein to be
      made  prior to the  Closing  Date  shall be  approved  in  writing by both
      parties prior to its release, unless such release or notice is mandated by
      law, regulations or regulatory authority.  Where required, the approval of
      either party shall not be  unreasonably  withheld.  Where  approval is not
      required,  the  parties,  nevertheless  agree to confer  prior to any such
      release or notice.

            (b) After all  applicable  regulatory  approvals have been received,
      Buyer shall, at its expense, mail a notice to all depositors of the Branch
      whose accounts are to be assumed notifying them of the impending  transfer
      of the banking business for that Branch to Buyer. Prior to mailing,  Buyer
      shall  submit the  proposed  form of such  notice to Seller for review and
      approval, which approval shall not be unreasonably withheld.

            (c) After all  applicable  regulatory  approvals have been received,
      Seller  shall,  at its  expense,  mail a notice to all  depositors  of the
      Branch whose  accounts are to be assumed for the purpose of advising  them
      of the  transactions  contemplated  by this  Agreement.  Prior to mailing,
      Seller shall  submit the proposed  form of such notice to Buyer for review
      and  approval,   which  approval  shall  not  be  unreasonably   withheld.
      Alternatively,   Seller  may,  at  no  expense  to  Seller,   fulfill  its
      obligations  under  this  subsection  (c) by  joining  in the notice to be
      mailed by Buyer pursuant to subsection (b) hereinabove.

      11.12 Governing Law; Jurisdiction.
            ---------------------------

            This Agreement and the legal relations  between the parties shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to contracts

                                      -33-
<PAGE>

made and to be performed entirely within the State of New Jersey,  except to the
extent that federal law shall be deemed to apply.

      11.13 No Third Party Beneficiaries.
            ----------------------------

            The parties intend that this  Agreement  shall not benefit or create
any right or cause of action in or on behalf of any Person other than Seller and
Buyer.

      IN WITNESS WHEREOF,  each of the parties to this Agreement has caused this
Agreement  to be  executed  by a duly  authorized  officer  as of the date first
written on page one of this Agreement.

                                     Sun National Bank (Seller)

                                           /Dan A. Chila/
                                     -------------------------------------------
                                     By:   Dan A. Chila
                                     Its:  Executive Vice President and Chief
                                           Financial Officer

                                     City National Bank of New Jersey (Buyer)

                                           /Louis E. Prezeau/
                                     -------------------------------------------
                                     By:   Louis E. Prezeau
                                     Its:  President and Chief Executive Officer

                                      -34-
<PAGE>

                                AMENDMENT TO THE
                    BRANCH PURCHASE AND ASSUMPTION AGREEMENT

            This Amendment to the Agreement,  dated as of March 8, 2007, is made
by and between Sun National Bank, a national banking association organized under
the laws of the United  States of America  and  having  its  principal  place of
business in  Vineland,  New Jersey  ("Seller"),  and City  National  Bank of New
Jersey,  a national banking  association  organized under the laws of the United
States of America and having its  principal  place of  business  in Newark,  New
Jersey ("Buyer").

      Whereas the Seller and the Buyer have  previously  entered into the Branch
Purchase and Assumption Agreement, dated November 1, 2006 ("Agreement"), and

      Whereas, the parties now wish to make certain amendments to such Agreement
("Amendment") in order to more closely reflect the intentions of the parties.

      The parties, intending to be legally bound, do hereby agree as follows:

            1.  Section  3.1 of the  Agreement  shall be  amended  by adding the
      following new Section 3.1(i) to provide as follows:

      (i) the  aggregate  unpaid  principal  balance  plus  accrued  and  unpaid
interest as of the Closing Date with respect to the Loans.

Nothing  contained  herein  shall be held to alter,  vary,  or affect any of the
terms,  provisions,  or conditions of the Agreement  other than as stated above.
Except as noted herein,  all of the provisions of the Agreement  shall remain in
full force and effect.

      IN WITNESS WHEREOF, each of the parties to this Amendment to the Agreement
has caused this  Amendment to the Agreement to be executed by a duly  authorized
officer as of the date first written above.

                                     Sun National Bank (Seller)

                                           /Dan A. Chila/
                                     -------------------------------------------
                                     By:   Dan A. Chila
                                     Its:  Executive Vice President and Chief
                                           Financial Officer

                                     City National Bank of New Jersey (Buyer)

                                           /Louis E. Prezeau/
                                     -------------------------------------------
                                     By:   Louis E. Prezeau
                                     Its:  President and Chief Executive Officer

                                      -1-Exhibit 10.4

EMPLOYMENT AGREEMENT

          AGREEMENT,
made and entered into as of this 23rd day of January, 2007, by and
between, Security Capital Assurance Ltd, a Bermuda corporation (the “Company”),
and David P. Shea (the “Executive”).

          WHEREAS,
the Executive has been employed by XL Capital Ltd as an Executive Vice
President, Chief Financial Officer of the Financial Products & Services
operations, which has included the business of the Company;

          WHEREAS,
the Executive and the Company desire that the Executive cease to be an employee
of XL Capital Ltd and become the Chief Financial Officer of the Company on the
terms and subject to the conditions set forth herein, effective upon the
consummation of the initial public offering of the common stock of the Company
(the “IPO”); 

          NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the Company, and the
Executive (the “Parties”) agree as follows:

          1.
EMPLOYMENT.

          The
Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company, for the term of this Agreement as set forth in
Section 2, below, in the position and with duties and responsibilities set forth
in Section 3, below, and upon such other terms and conditions as are hereinafter
stated.

          2.
TERM OF EMPLOYMENT.

          The
stated term of employment under this Agreement shall commence at the time of
consummation of the IPO (the “Date of the Agreement”) and shall continue
through the close of business on the third anniversary of the Date of the
Agreement, subject to earlier termination as provided in Section 8, below, and
extension as provided in the next succeeding sentence. On the third anniversary
of the Date of the Agreement and on each anniversary thereafter, the stated
term of employment shall be automatically extended for an additional one year
unless the Company gives notice in writing to the Executive or the Executive
gives notice in writing to the Company at least three months prior to such
anniversary that the term is not to be so extended.

          3.
POSITIONS, DUTIES AND RESPONSIBILITIES.

          (a)
General.  The Executive shall be
employed as Chief Financial Officer of the Company. In such position, the Executive
shall have the duties, responsibilities and authority normally associated with
the office, position and titles of such an officer of a financial guaranty company,
or holding company, whose shares are publicly traded in the United States. In
carrying out his duties and responsibilities, the Executive shall report to the
Chief Executive Officer of the Company.
During the term of this Agreement, the Executive shall devote his full
business time to the business and affairs of the Company and its subsidiaries,
and shall use his best efforts, skills and abilities to promote the interests
of the Company and its subsidiaries.

          (b)
Performance of Services.  The
Executive’s services under this Agreement, which are global in nature, shall be
performed either in the greater New York City metropolitan area, as reasonably
requested by the Company, in accordance with the guidelines established by the
Company from time to time for the location of the performance of services on
behalf of the Company and its subsidiaries. The Executive acknowledges that the
Company may require the Executive to travel to the extent such travel is
reasonably necessary to perform the services hereunder and that such travel may
be extensive. To the extent reasonably requested by the Company, the Executive
shall allocate greater business time to a location other than his principal
business location, if necessary.

          4.
BASE SALARY.

          The
Executive shall be paid a Base Salary by the Company not less than
US$385,000.00, payable in accordance with the Company’s regular pay
practices.  Such Base Salary shall be
subject to annual review in accordance with the Company’s practices for executives
as in effect from time to time and may be increased at the discretion of the
Compensation Committee of the Board of Directors of the Company (the “Compensation
Committee”).

          5.
BONUSES.

          In
addition to the Base Salary provided for in Section 4, above, the Executive
shall be eligible for an annual cash bonus under the Company’s Annual Incentive
Compensation Plan as in effect from time to time, with an annual target bonus
equal to 150% of the Executive’s Base Salary. The Executive may be awarded such
annual bonuses thereunder as may be approved by the Compensation Committee
based on corporate, individual and business unit performance measures, as
appropriate, established or approved from time to time, by the Compensation
Committee.  Any annual bonus shall be
paid in cash in a lump sum no later than March 15 following the year for which
the annual bonus is paid, unless deferred at the Executive’s option in
accordance with the provisions of any applicable deferred compensation plan of
the Company or it subsidiaries in effect from time to time and in compliance
with Section 409A of the United States Internal Revenue Code of 1986, as
amended (the “Code”).  Nothing in this
Section 5 shall confer upon the Executive any right to a minimum annual bonus.

          6.
EMPLOYEE BENEFIT PROGRAMS.

          During
the term of the Executive’s employment under this Agreement, the Executive
shall be entitled to participate in all employee retirement, pension, welfare
and benefit programs of the Company as are in effect from time to time and in
which similarly situated senior executives of the Company are eligible to
participate.

          7.
BUSINESS EXPENSE REIMBURSEMENT AND FRINGE BENEFITS.

          During
the term of the Executive’s employment under this Agreement, the Executive
shall be entitled to participate in the Company’s travel and entertainment
expense reimbursement programs and its executive fringe benefit plans and
arrangements, all in accordance with the terms and conditions of such programs,
plans and arrangements as in effect from time to time as applied to the
Company’s similarly situated executives.

-2-

          8.
TERMINATION OF EMPLOYMENT.

          (a)
Termination due to Death.  In the
event the Executive dies during the term of employment hereunder, the
Executive’s spouse, if the spouse survives the Executive, (or, if the
Executive’s spouse does not survive him, the estate or other legal representative
of the Executive) shall be entitled to receive the Base Salary as provided in
Section 4, above, at the rate in effect at the time of Executive’s death, to be
paid in accordance with the Company’s regular payroll practices, through the
end of the sixth month after the month in which the Executive dies. In addition
to the above, the estate or other legal representative of the Executive shall
be entitled to:

	
 

	
 

	
 

	
          (i)
  any annual bonus awarded in accordance with the Company’s bonus program but
  not yet paid under Section 5, above, to be paid at the time such bonus would
  otherwise be due under the applicable program, and reimbursement of business
  expenses incurred prior to death in accordance with Section 7(a) above,

	
 

	
 

	
 

	
          (ii)
  within 45 days after the date of death, a pro rata bonus for the year of
  death in an amount determined by the Compensation Committee, but in no event less
  than a pro rata portion of the Executive’s average annual bonus for the
  immediately preceding three years (or the period of the Executive’s
  employment with the Company, if less),

	
 

	
 

	
 

	
          (iii)
  the rights under any options to purchase equity securities of the Company or
  other rights with respect to equity securities of the Company, including any
  restricted stock or other securities, held by the Executive determined in accordance
  with the terms thereof,

	
 

	
 

	
 

	
          (iv)
  for a period of six months following the Executive’s death, continued medical
  benefit plan coverage (including dental and vision benefits if provided under
  the applicable plans) for the Executive’s dependents, if any, under the
  Company’s medical benefit plans upon substantially the same terms and
  conditions (including cost of coverage to the dependents) as is then in
  existence for other executives during the coverage period; provided, that,
  if the Executive’s dependents cannot continue to participate in the Company
  plans providing such benefits, the Company shall otherwise provide such
  benefits on substantially the same after-tax basis as if continued
  participation had been permitted, and

	
 

	
 

	
 

	
          (v)
  the vested accrued benefits, if any, under the employee benefit programs of
  the Company, as provided in Section 6, above, determined in accordance
  with the applicable terms and provisions of such programs.

          (b)
Termination due to Disability. In the event the Executive’s employment
hereunder is terminated due to his disability, as determined under the
Company’s long-term disability plan, the Executive shall be entitled to:

	
 

	
 

	
 

	
          (i)
  the Base Salary as provided in Section 4, above, through the end of the sixth
  month after the month in which the Executive’s employment terminates 

-3-

	
 

	
 

	
 

	
due to
  disability, to be paid in accordance with the Company’s regular payroll
  practices,

	
 

	
 

	
 

	
          (ii)
  any annual bonus awarded in accordance with the Company’s bonus program but
  not yet paid under Section 5, to be paid at the time such bonus would
  otherwise be due under the applicable program, and reimbursement of business
  expenses incurred prior to termination of employment in accordance with
  Section 7(a) above,

	
 

	
 

	
 

	
          (iii)
  within 45 days after the date of termination, a pro rata bonus for the year
  of termination in an amount determined by the Compensation Committee, but in
  no event less than a pro rata portion of the Executive’s average annual bonus
  for the immediately preceding three years (or the period of the Executive’s
  employment with the Company, if less),

	
 

	
 

	
 

	
          (iv)
  the rights under any options to purchase equity securities of the Company or
  other rights with respect to equity securities of the Company, including any
  restricted stock or other securities, held by the Executive, determined in accordance
  with the terms thereof,

	
 

	
 

	
 

	
          (v)
  for a period of six months following the termination of the Executive’s
  employment, continued medical benefit plan coverage (including dental and
  vision benefits if provided under the applicable plans) for the Executive
  (and the Executive’s dependents, if any) under the Company’s medical benefit
  plans upon substantially the same terms and conditions (including cost of
  coverage to the Executive) as is then in existence for other executives
  during the coverage period; provided, that, if the Executive
  cannot continue to participate in the Company plans providing such benefits,
  the Company shall otherwise provide such benefits on substantially the same
  after-tax basis as if continued participation had been permitted; provided
  further, however, that, in the event the Executive becomes
  reemployed with another employer and becomes eligible to receive medical
  benefits from such employer, the medical benefits described herein shall immediately
  cease, and

	
 

	
 

	
 

	
          (vi)
  the vested accrued benefits, if any, under the employee benefit programs of
  the Company, as provided in Section 6 above, determined in accordance with
  the applicable terms and provisions of such programs.

          (c)
TERMINATION FOR CAUSE.

	
 

	
 

	
 

	
          (i)
  The employment of the Executive under this Agreement may be terminated by the
  Company for Cause, such termination to be effective upon the Company giving
  the Executive written notice of termination in accordance with the provisions
  of this Agreement. For this purpose, “Cause” shall mean:

	
 

	
 

	
 

	
 

	
(A)

	

  conviction of the Executive of a felony involving moral turpitude, dishonesty
  or laws to which the Company or its Affiliates are subject in connection with
  the conduct of its or their business;

-4-

	
 

	
 

	
 

	
 

	
(B)

	
the Executive, in carrying out his duties for the Company under this
  Agreement, has been guilty of (1) willful misconduct or (2) substantial and
  continual refusal by the Executive to perform the duties assigned to the Executive
  pursuant to the terms hereof; provided, however, that any act
  or failure to act by the Executive shall not constitute Cause for purposes of
  this Section 8(c)(i)(B) if such act or failure to act was committed, or
  omitted, by the Executive in good faith and in a manner he reasonably believed
  to be in the overall best interests of the Company, as the case may be. The
  determination of whether the Executive acted in good faith and that he
  reasonably believed his action to be in the Company’s overall best interest,
  as the case may be, will be in the reasonable and good faith judgment of the
  Compensation Committee and/or the Audit Committee; or

	
 

	
 

	
 

	
(C)

	
the Executive’s continued willful refusal to obey any lawful policy or requirement
  duly adopted by the Company Board and the continuance of such refusal after
  receipt of written notice.

	
 

	
 

	
 

	
          (ii)
  In the event of a termination for Cause under Section 8(c)(i), above, the
  Executive shall be entitled only to:

	
 

	
 

	
 

	
 

	
(A)

	
Base Salary
  as provided in Section 4, above, at the rate in effect at the time of his
  termination of employment for Cause, through the date on which termination
  for Cause occurs, to be paid in accordance with the Company’s regular payroll
  practices,

	
 

	
 

	
 

	
 

	
(B)

	
the rights
  under any options to purchase equity securities of the Company or other
  rights with respect to equity securities of the Company, including any
  restricted stock or other securities, held by the Executive, determined in
  accordance with the terms thereof, and

	
 

	
 

	
 

	
 

	
(C)

	
the vested
  accrued benefits, if any, under employee benefit programs of the Company, as
  provided in Section 6, above, and re-imbursement of properly incurred
  unreimbursed business expenses under the business expense reimbursement
  program as described in Section 7, above, determined in accordance with the
  applicable terms and provisions of such employee benefit and expense
  reimbursement programs; provided that the Executive shall not be
  entitled to any such benefits unless the terms and provisions of such
  programs expressly state that the Executive shall be entitled thereto in the
  event his employment is terminated for Cause (as defined in this Agreement or
  otherwise).

	
 

	
 

	
 

	
(d)
  TERMINATION WITHOUT CAUSE.

	
 

	
 

	
 

	
          (i)
  Anything in this Agreement to the contrary notwithstanding, the Executive’s
  employment may be terminated by the Company without Cause as provided in this
  Section 8(d). A termination due to death or disability, as described in
  Section 8(a) or (b), above, or a termination for Cause, as described in Section
  

-5-

	
 

	
 

	
 

	
8(c), above,
  shall not be deemed a termination without Cause under this Section 8(d).  For the avoidance of doubt, if a notice of
  non-renewal of this Agreement pursuant to Section 2 is issued by the Company
  and, within three (3) months thereafter, a written notice is issued (x) by
  the Company to the Executive of its intention to terminate the employment
  relationship with Executive at the end of the Term or (y) by the Executive to
  the Company of Executive’s intention to terminate the employment relationship
  with the Company at the end of the Term, the termination of the Executive’s
  employment at the end of the Term shall be considered a termination by the
  Company without Cause hereunder.

	
 

	
 

	
 

	
          (ii) In the
  event the Executive’s employment is terminated by the Company without Cause
  (x) prior to a Change in Control (other than as provided in the last
  paragraph of Section 8(d)(iii), in which case the provisions of Section
  8(d)(iii) shall apply in lieu of this Section 8(d)(ii)) or (y) following the
  Post-Change Period (as hereinafter defined), the Executive shall be entitled
  to:

	
 

	
 

	
 

	
 

	
(A)

	
Base Salary
  as provided in Section 4, above, at the rate in effect at the time of his
  termination of employment without Cause, through the date on which
  termination without Cause occurs, to be paid in accordance with the Company’s
  regular payroll practices,

	
 

	
 

	
 

	
 

	
(B)

	
provided the
  Executive executes and does not revoke a reasonable general release of
  employment liability claims against the Company and its affiliates in form
  and substance satisfactory to the Company, a cash lump sum payment made
  within 30 days after termination of employment equal to (x) two times the
  Executive’s annual Base Salary, at the annual rate in effect in accordance
  with Section 4, above, immediately prior to such termination and (y) one
  times the higher of the targeted annual bonus for the year of such
  termination, if any, or the average of the Executive’s annual bonus payable
  by the Company or its subsidiaries for the three years immediately preceding
  the year of termination (or such shorter period during which the Executive
  has been employed by any of such entities),

	
 

	
 

	
 

	
 

	
(C)

	
any annual
  bonus awarded in accordance with the Company’s bonus program but not yet paid
  under Section 5, above, to be paid at the time such bonus would otherwise be
  due under the applicable program, and reimbursement of business expenses
  incurred prior to termination of employment in accordance with Section 7(a)
  above,

	
 

	
 

	
 

	
 

	
(D)

	
the rights
  under any options to purchase equity securities of the Company or other
  rights with respect to equity securities of the Company, including any
  restricted stock or other securities or other long-term cash incentives, held
  by the Executive, determined in accordance with the terms thereof,

	
 

	
 

	
 

	
 

	
(E)

	
for a period
  of twenty-four months following the termination of the Executive’s
  employment, continued medical benefit plan coverage (including dental and
  vision benefits if provided under the applicable plans) for the 

-6-

	
 

	
 

	
 

	
 

	
 

	
Executive
  (and the Executive’s dependents, if any) under the Company’s medical benefit
  plans upon substantially the same terms and conditions (including cost of
  coverage to the Executive) as is then in existence for other executives during
  the coverage period; provided, that, if the Executive cannot continue
  to participate in the Company plans providing such benefits, the Company
  shall otherwise provide such benefits on substantially the same after-tax
  basis as if continued participation had been permitted; provided, however,
  that, in the event the Executive becomes reemployed with another employer and
  becomes eligible to receive medical benefits from such employer, the medical
  benefits described herein shall immediately cease, and

	
 

	
 

	
 

	
 

	
(F)

	
the vested
  accrued benefits, if any, under the employee benefit programs of the Company,
  as provided in Section 6 above, determined in accordance with the applicable
  terms and provisions of such programs.

	
 

	
 

	
 

	
          (iii)
  In the event the Executive’s employment is terminated by (x) the Company
  without Cause within the twenty-four month period following a Change in
  Control (as defined in Exhibit A hereto) (the “Post-Change Period”)
  or (y) the Executive terminates his employment for “Good Reason” (as
  defined in Exhibit B hereto) during the Post-Change Period, the
  Executive shall be entitled to the following, paid in the case of amounts set
  forth in (A), (B), (C) and (D) below within 30 days after termination of employment:

	
 

	
 

	
 

	
 

	
(A)

	
Base Salary
  as provided in Section 4, above, at the rate in effect at the time of his
  termination of employment, through the date on which termination occurs,

	
 

	
 

	
 

	
 

	
(B)

	
a cash lump
  sum payment equal to two times the Executive’s annual Base Salary, at the rate
  in effect in accordance with Section 4, above, or immediately prior to such
  termination or Change in Control, whichever is greater,

	
 

	
 

	
 

	
 

	
(C)

	
a cash lump
  sum payment equal to two times the higher of (i) the average annual
  bonus awarded to the Executive by the Company or its subsidiaries in the
  three years prior to the year in which the Change in Control occurs (or
  shorter period during which the Executive had been employed by any of such
  entities), or (ii) the Executive’s target annual bonus, if any, for the
  year of such termination,

	
 

	
 

	
 

	
 

	
(D)

	
an amount
  equal to (i) the higher of (x) the bonus actually awarded to the Executive by
  the Company for the year immediately preceding the year in which the Change
  in Control occurs or (y) the targeted amount of bonus, if any, that would
  have been awarded to the Executive in respect of the year in which the
  termination of employment occurs, multiplied by (ii) a fraction, the numerator
  of which is the number of months or fraction thereof

-7-

	
 

	
 

	
 

	
 

	
 

	
 in which the Executive
  was employed by the Company in the year of termination of employment, and the
  denominator of which is 12,

	
 

	
 

	
 

	
 

	
(E)

	
options to
  purchase equity securities of the Company or other rights with respect to
  equity securities of the Company held by the Executive shall immediately vest
  in full and shall continue to be exercisable for three years from the date of
  termination of employment, notwithstanding the Executive’s termination of
  employment, or the original full term of the option or other right, if
  shorter,

	
 

	
 

	
 

	
 

	
(F)

	
for a period
  of twenty-four months following the termination of the Executive’s
  employment, continued medical benefit plan coverage (including dental and
  vision benefits if provided under the applicable plans) for the Executive
  (and the Executive’s dependents, if any) under the Company’s medical benefit
  plans upon substantially the same terms and conditions (including cost of
  coverage to the Executive) as is then in existence for other executives
  during the coverage period; provided, that, if the Executive
  cannot continue to participate in the Company plans providing such benefits,
  the Company shall otherwise provide such benefits on substantially the same
  after-tax basis as if continued participation had been permitted; provided,
  however, that, in the event the Executive becomes reemployed with
  another employer and becomes eligible to receive medical benefits from such
  employer, the medical benefits described herein shall immediately cease, and

	
 

	
 

	
 

	
 

	
(G)

	
full and
  immediate vesting under the Company’s retirement plans as of the date of
  termination, to the extent permitted by applicable law; provided, however,
  that if such full and immediate vesting cannot be provided under a retirement
  plan under applicable law, then economically equivalent benefits shall be
  provided through arrangements outside the applicable retirement plan.

          Anything
in this Agreement to the contrary notwithstanding, the Executive shall be
entitled to the benefits described in (A)-(G) above, if the Executive’s
employment with the Company is terminated by the Company (other than for Cause)
within one year prior to the date on which a Change in Control occurs, and it
is reasonably demonstrated that such termination (i) was at the request of a
third party who has taken steps reasonably calculated or intended to effect the
Change in Control or (ii) otherwise arose in connection with or anticipation of
the Change in Control; provided, however, that in such event,
amounts will be payable hereunder only following the Change in Control (and
within 10 days thereafter).

	
 

	
 

	
 

	
          (iv)
  If, in situations where Section 8(d)(iii) does not apply, at any time during
  the term of the Executive’s employment hereunder, duties are assigned to the
  Executive that are materially inconsistent with his position, or the Company
  does not cure any other material breach by it of any provision of Sections 3
  through 7, 14 and 17 of this Agreement within 30 calendar days following 

-8-

	
 

	
 

	
 

	
written
  notice of same by the Executive (which written notice must be given within 30
  calendar days after such breach), the Executive shall have the right to
  terminate his employment within 30 calendar days of the Company’s failure to
  rescind such assignment in accordance with the proviso below or of such
  failure to cure a breach, as the case may be, and such termination shall be
  deemed a termination by the Company without Cause under Section 8(d)(ii),
  above, provided, in the case of assignment of inconsistent duties, the
  Executive shall have given the Company written notice of his decision within
  30 calendar days of such assignment and shall not, within 30 calendar days
  thereafter, have had the assignment of inconsistent duties rescinded.

          (e)
VOLUNTARY TERMINATION BY THE EXECUTIVE.
The Executive may voluntarily terminate his employment prior to the
expiration of the term of this Agreement upon at least three months’ prior
written notice to the Company, provided such termination shall constitute a
voluntary termination and, except as provided in Section 8(d)(iii) or Section
8(d)(iv), above, in such event the Executive shall be limited to the same
rights and benefits as applicable to a termination by the Company for Cause as
provided in Section 8(c), above. A voluntary termination in accordance with
this Section 8(e) shall not be deemed a breach of this Agreement. A termination
of the Executive’s employment due to disability or death as described in
Section 8(b) or 8(a), above, a termination by the Executive which the Executive
is entitled to treat as a termination by the Company pursuant to Section 8(d),
above, or a termination by the Executive under Section 8(d)(iv), above, shall
not be deemed a voluntary termination within the meaning of this Section
8(e).  For the avoidance of doubt, a
notice of non-renewal of the Agreement pursuant to Section 2 above issued
by the Executive shall not be considered a voluntary termination within the
meaning of this Section 8(e).

          9.
EXCISE TAX PAYMENTS.

          (a)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that (i) any payment or distribution made, or benefit
provided (including, without limitation, the acceleration of any payment,
distribution or benefit or accelerated vesting or exercisability of any award)
by the Company to or for the benefit of the Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 9) (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provision or similar
excise tax), or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the “Excise Tax”),
(ii) the aggregate amount of the Executive’s Parachute Payments (as defined in
Section 280G(b)(2)(A) of the Code) is less than 3.25 times the Executive’s Base
Amount (as defined in Section 280G(b)(3)(A) of the Code), and (iii) no such
Payment would be subject to the Excise Tax if the payments set forth in Section
8(d)(iii)(B) and (C) hereof were each reduced by up to 20 percent, then the
payments set forth in Section 8(d)(iii)(B) and (C) will each be reduced to the
smallest extent possible (and in no event by more than 20 percent in the aggregate)
such that no Payment is subject to the Excise Tax.

-9-

          (b)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that (i) the aggregate amount of the Executive’s Parachute
Payments equals or exceeds 3.25 times the Executive’s Base Amount, (ii) the
aggregate amount of the Executive’s Parachute Payments is less than 3.25 times
the Base Amount but one or more Payments would be subject to the Excise Tax
even if the payments set forth in Section 8(d)(iii)(B) and (C) hereof were each
reduced by 20 percent, or (iii) notwithstanding a reduction in payments pursuant
to Section 9(a) above, an Excise Tax is payable by the Executive on one or more
Payments, then, in any such case, Payments shall not be reduced and the
Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”)
in an amount such that after payment by the Executive of all taxes (including
any income or Excise Tax) imposed upon the Gross-Up Payment and any interest or
penalties imposed with respect to such taxes, the Executive retains from the
Gross-Up Payment an amount equal to the Excise Tax imposed upon the Payments.

          (c)
Subject to the provisions of Section 9(d), all determinations required to be
made under this Section 9, including determination of whether a Gross-Up
Payment is required and of the amount of any such Gross-Up Payment, shall be
made by a nationally recognized public accounting firm selected by the Company
(the “Accounting Firm”) which shall provide detailed supporting calculations
both to the Company and the Executive within 15 business days of the date of
termination of the Executive’s employment, if applicable, or such earlier time
as is reasonably requested. The initial Gross-Up Payment, if any, as determined
pursuant to this Section 9(c), shall be paid to the Executive within five
business days of the receipt of the Accounting Firm’s determination. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall
furnish the Executive with a written opinion that he has substantial authority
not to report any Excise Tax on his Federal income tax return. Any
determination by the Accounting Firm meeting the requirements of this Section
9(c) shall be binding upon the Company and the Executive, subject only to
payments pursuant to the following sentence based on a determination that
additional Gross-Up Payments should have been made, consistent with the
calculations required to be made hereunder (the amount of such additional
payments are referred to herein as the “Gross-Up Underpayment”). In the
event that the Company exhausts its remedies pursuant to Section 9(d) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Gross-Up Underpayment that
has occurred and any such Gross-Up Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive. The fees and disbursements of
the Accounting Firm shall be paid by the Company.

          (d)
The Executive shall notify the Company in writing of any claim by the United
States Internal Revenue Service that, if successful, would require the payment
by the Executive of any Excise Tax and, therefore, the payment by the Company
of a Gross-Up Payment. Such notification shall be given as soon as practicable
but not later than 30 business days after the Executive receives written notice
of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which he gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such
period that it desires, in good faith, to contest such claim (which notice
shall set forth the bases for such contest) and that it will bear the costs and
provide the indemnification as required by this sentence, the Executive shall,
in good faith:

-10-

	
 

	
 

	
 

	
          (i)
  give the Company any information reasonably requested by the Company relating
  to such claim,

	
 

	
 

	
 

	
          (ii)
  take such action in connection with contesting such claim as the Company
  shall, in good faith, reasonably request in writing from time to time, including,
  without limitation, accepting legal representation with respect to such claim
  by an attorney selected by the Company and reasonably acceptable to the
  Executive,

	
 

	
 

	
 

	
          (iii)
  cooperate with the Company in good faith in order effectively to contest such
  claim, and

	
 

	
 

	
 

	
          (iv)
  permit the Company to participate, in good faith, in any proceedings relating
  to such claim;

provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis to the
Executive, for any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such representation and payment of
all costs and expenses.

          Without
limitation on the foregoing provisions of this Section 9(d), the Company shall,
exercising good faith, control all proceedings taken in connection with such
contest and, at its sole option (but in good faith), may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option (but in
good faith), either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that
if the Company directs the Executive to pay such claim and sue for a refund,
the Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis to the Executive, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to the
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority. If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(d), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the
Company’s complying with the requirements of Section 9(d)) promptly pay to the
Company, as the case may be, the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(d), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive

-11-

in writing of its
intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then any obligation of the Executive to repay such advance
shall be forgiven and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

          Notwithstanding
any provision herein to the contrary, the Executive’s failure to strictly
comply with the notice provisions set forth in this Section 9, so long as such
failure does not prevent the Company from contesting an excise tax claim, shall
not adversely affect the Executive’s rights under this Section 9.

          10.
NO MITIGATION; NO OFFSET.

          In
the event of any termination of employment under Section 8, above, the Executive
shall be under no obligation to mitigate damages or seek other employment, and,
except as expressly set forth herein, there shall be no offset against amounts
due the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain.

          11.
NONCOMPETITION AND NONSOLICITATION.

          The
Executive represents and warrants that, to the best of his knowledge, he is not
using the confidential or proprietary information of any other person in
violation of any agreement or rights of others known to him. The Executive
agrees that the products of the Company and its Affiliates shall constitute the
exclusive property of the Company and its Affiliates.

          For
the avoidance of doubt, all trademarks, policy language or forms, products or
services (including products and services under development), trade names,
trade secrets, service marks, designs, computer programs and software, utility
models, copyrights, know-how and confidential information, applications for
registration of any of the foregoing and the right to apply for them in any
part of the world (whether any of the foregoing shall be registered or
unregistered) created or discovered or participated in by the Executive during
the course of his employment (whether or not pursuant to the terms of this
Agreement) or under the instructions of the Company or its Affiliates are and
shall be the absolute property of the Company and its Affiliates, as
appropriate. Without limiting the foregoing, the Executive hereby assigns to
the Company any and all of the Executive’s right, title and interest, if any,
pertaining to the financial products insurance and reinsurance (including,
without limitation, finite insurance and reinsurance), risk assumption, risk management,
brokerage, financial and other products or services developed or improved upon
by the Executive (including, without limitation, any related “know-how”) while
employed by the Company or its Affiliates, including any patent, trademark,
trade name, copyright, ownership or other right that may pertain thereto.

          Since
Executive has obtained and is likely to obtain in the course of Executive’s
employment with the Company and its Affiliates knowledge of trade names, trade
secrets, know-how, products and services (including products and services under
development), techniques, methods, lists, computer programs and software and
other confidential information relating to the Company and its Affiliates, and
their employees, clients, business or business opportunities, Executive hereby
undertakes that:

-12-

	
 

	
 

	
 

	
          (i)
  Executive will not (either alone or jointly with or on behalf of others and
  whether directly or indirectly) encourage, entice, solicit or endeavor to
  encourage, entice or solicit away from employment with the Company or its
  Affiliates, or hire or cause to be hired, any officer or employee of the
  Company or its Affiliates (or any individual who was within the prior twelve
  months an officer or employee of the Company or its Affiliates), or
  encourage, entice, solicit or endeavor to encourage, entice or solicit any
  individual to violate the terms of any employment agreement or arrangement
  between such individual and the Company or any of its Affiliates;

	
 

	
 

	
 

	
          (ii)
  Executive will not (either alone or jointly with or on behalf of others and
  whether directly or indirectly) interfere with or disrupt or seek to
  interfere with or disrupt (A) the relationships between the Company and its
  Affiliates, on the one hand, and any customer or client of the Company and
  its Affiliates, on the other hand, (including any reinsured party) who during
  the period of twenty-four months immediately preceding such termination shall
  have been such a customer or client, or (B) the supply to the Company and its
  Affiliates of any services by any supplier or agent or broker who during the
  period of twenty-four months immediately preceding such termination shall
  have supplied services to any such person, nor will Executive interfere or
  seek to interfere with the terms on which such supply or agency or brokering
  services during such period as aforesaid have been made or provided; and

	
 

	
 

	
 

	
          (iii)
  Executive will not (either alone or jointly with or on behalf of others and
  whether directly or indirectly) whether as an employee, consultant, partner,
  principal, agent, distributor, representative or stockholder (except solely
  as a less than one percent stockholder of a publicly traded company), engage
  in any activities in Bermuda, the United Kingdom or the United States if such
  activities are competitive with the businesses that (i) are then being
  conducted by the Company or its Affiliates and (ii) during the period of the
  Executive’s employment were either being conducted by the Company or its
  Affiliates or actively being developed by the Company or its Affiliates.

          The
provisions of the immediately preceding sentence shall continue as long as the
Executive is employed by the Company or its Affiliates and such provisions
shall continue in effect after such employment is terminated for any reason
under Section 8 until the first anniversary of such termination, provided that
if such employment is terminated by the Company under Section 8(d)(iii) or by
the Executive under Section 8(d)(iii), the provisions of clauses (ii) and (iii)
shall automatically terminate upon such termination of employment, unless the
Company elects, in writing, upon such termination to continue the provisions of
clauses (ii) and (iii) in effect through the six-month anniversary of such
termination of employment, in which case the Company shall be obligated to pay
the Executive, in addition to any of the Executive’s rights under Section
8(d)(iii), a lump sum payment equal to the sum of (x) six months of his
Base Salary and (y) one half of the Executive’s average annual bonus
payable by the Company or its subsidiaries for the three years (or shorter
period of employment by any of such entities) immediately preceding the year of
termination, and such lump sum payment shall be made within 30 days following
termination of employment.

-13-

          For
purposes of this Agreement, an “Affiliate” of the Company means any
person, directly or indirectly, through one or more intermediaries, controlled
by the Company, and such term shall specifically include, without limitation,
the Company’s majority-owned subsidiaries.

          The
limitations on the Executive set forth in this Section shall also apply to any
agent or other representative acting on behalf of Executive.

          While
the restrictions aforesaid are stated to be reasonable in all the circumstances
it is also recognized that restrictions of the nature in question may fail for
reasons unforeseen and accordingly it is hereby declared and agreed that if any
of such restrictions or the geographic or other scope thereof shall be adjudged
to be void as going beyond what is reasonable in the circumstances for the
protection of the interests of the Company and its Affiliates but would be
valid if part of the wording thereof were deleted and/or the periods (if any)
thereof reduced and/or geographic or other area dealt with thereby reduced in
scope then said restrictions shall apply with such modifications as may be
necessary to make them valid and effective.

          Nothing
contained in this Section 11 shall limit in any manner any additional
obligations to which Executive may be bound pursuant to any other agreement or
any applicable law, rule or regulation and Section 11 shall apply, subject to
its terms, after employment has terminated for any reason.

          12.
CONFIDENTIAL INFORMATION.

          The
Executive covenants that he shall not, without the prior written consent of the
Company, use for the Executive’s own benefit or the benefit of any other person
or entity other than the Company and its Affiliates or disclose to any person,
other than an employee of the Company or other person to whom disclosure is
necessary to the performance by the Executive of his duties in the employ of
the Company, any confidential, proprietary, secret, or privileged information
about the Company or its Affiliates or their business or operations, including,
but not limited to, information concerning trade secrets, know-how, software,
data processing systems, policy language and forms, inventions, designs,
processes, formulae, notations, improvements, financial information, business
plans, prospects, referral sources, lists of suppliers and customers, legal
advice and other information with respect to the affairs, business, clients,
customers, agents or other business relationships of the Company or its
Affiliates. Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret, confidential proprietary or privileged information or data
relating to the Company or any of its Affiliates or predecessor companies, and
their respective businesses, which shall have been obtained by Executive during
his employment, unless and until such information has become known to the
public generally (other than as a result of unauthorized disclosure by the
Executive) or unless he is required to disclose such information by a court or
by a governmental body with apparent authority to require such disclosure. The
foregoing covenant by the Executive shall be without limitation as to time and
geographic application and this Section 12 shall apply in accordance with its
terms after employment has terminated for any reason. The Executive
acknowledges and agrees that he shall have no authority to waive any
attorney-client or other privilege without the express prior written consent of
the Compensation Committee as evidenced by the signature of the Company’s
General Counsel.

-14-

          13.
WITHHOLDING.

          Anything
in this Agreement to the contrary notwithstanding, all payments required to be
made by the Company hereunder to the Executive shall be subject to withholding
of such amounts relating to taxes as the Company may reasonably determine
should be withheld pursuant to any applicable law or regulation. In lieu of
withholding such amounts, in whole or in part, the Company may, in its sole
discretion, accept other provision for payment of taxes as required by law,
provided it is satisfied that all requirements of law affecting its responsibilities
to withhold such taxes have been satisfied.

          14.
SUBSIDIARY SERVICES AND GUARANTEE.

          (a)
Each of SCA Holdings US Inc and XL Financial Assurance Ltd (together, the
“Guarantors”) hereby agrees to be jointly and severally liable, together with
the Company, for the performance of all obligations and duties, and the payment
of all amounts, due to the Executive under this Agreement.

          (b)
All of the terms and provisions of this Agreement relating to the Executive’s
employment by the Company shall likewise apply mutatis mutandis to the Executive’s
employment by any of its subsidiaries, it being understood that if the
Executive’s employment with the Company is terminated, his employment with its
subsidiaries shall also be terminated and the Executive shall be required to
resign immediately from all directorships and other positions held by the
Executive in the Company and its subsidiaries or in any other entities in
respect of which the Executive was acting as a representative or designee of
the Company or its subsidiaries in connection with his employment.

          15.
ENTIRE AGREEMENT.

          This
Agreement, together with the Exhibits, contains the entire agreement between
the Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Company and the Executive with respect thereto.

          16.
ASSIGNABILITY; BINDING NATURE.

          This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors, heirs and assigns. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his right to compensation and benefits hereunder, which may be
transferred by will or operation of law subject to the limitations of this Agreement.
No rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation or amalgamation
or scheme of arrangement in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the successor to all or substantially
all of the assets of the Company and such assignee or transferee assumes by
operation of law or in writing duly executed by the assignee or transferee all
of the liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law.

-15-

          17.
INDEMNIFICATION.

          The
Executive shall be provided indemnification by the Company to the maximum
extent permitted by applicable law and its charter documents. In addition, he
shall be covered by a directors’ and officers’ liability policy with coverage
for all directors and officers of the Company in an amount equal to at least
US$25,000,000. Such directors’ and officers’ liability insurance shall be maintained
in effect for a period of six years following termination of the Executive’s employment
for any reason other than pursuant to Section 8(c) or Section 8(e) hereof.

          18.
SETTLEMENT OF DISPUTES.

          (a)
Any dispute between the Parties arising from or relating to the terms of this
Agreement or the Executive’s employment with the Company or its Affiliates
shall, except as provided in Section 18(b) or Section 18(c), be resolved by
binding arbitration held in New York City in accordance with the rules of the
American Arbitration Association.

          (b)
Executive acknowledges that the Company and its Affiliates will suffer
irreparable injury, not readily susceptible of valuation in monetary damages,
if Executive breaches his obligations under Section 11 or 12. Accordingly,
Executive agrees that the Company and its Affiliates will be entitled, in
addition to any other available remedies, to obtain injunctive relief against
any breach or prospective breach by Executive of his obligations under Section
11 or 12 in any Federal or state court sitting in the City and State of New
York or court sitting in Bermuda or the United Kingdom, or, at the Company’s or
any Affiliate’s election, in any other jurisdiction in which Executive
maintains his residence or his principal place of business. Executive hereby
submits to the non-exclusive jurisdiction of all those courts for the purposes
of any actions or proceedings instituted by the Company or its Affiliates to
obtain such injunctive relief, and Executive agrees that process in any or all
of those actions or proceedings may be served by registered mail or delivery,
addressed to the last address of Executive known to the Company or its
Affiliates, or in any other manner authorized by law. Executive further agrees
that, in addition to any other remedies available to the Company or its
Affiliates by operation of law or otherwise, because of any breach by Executive
of his obligations under Section 11 or 12 he will forfeit any and all bonus and
rights to any payments to which he might otherwise then be entitled by virtue
hereof and such payments may be suspended so long as any good faith dispute
with respect thereto is continuing; provided, however, that
payments, benefits and other rights and privileges of the Executive under this
Agreement following termination of the Executive’s employment during a Post
Change Period shall not be forfeited, suspended, offset, diminished or
otherwise altered in any way on account of any breach or prospective breach of
Section 11, Section 12 or any other provision of this Agreement alleged by the
Company.

          (c)
Notwithstanding any other provision of this Agreement, the Executive may elect
to resolve any dispute involving a breach or alleged breach of this Agreement
following termination of the Executive’s employment during a Post-Change Period
in any Federal or State court sitting in the City and State of New York or
court sitting in Bermuda or the United Kingdom. The Company hereby submits to
the non-exclusive jurisdiction of all those courts for the purposes of any such
actions or proceedings instituted by the Executive, and the

-16-

Company agrees
that process in any or all of such actions or proceedings may be served by
registered mail or delivery, addressed to the Company as set forth in Section
20, or in any other manner authorized by law. The Company shall pay all costs
associated with any court proceeding under this Section 18(c) without regard to
the outcome of such proceeding, including all legal fees and expenses of the
Executive, who shall be reimbursed for all such costs promptly upon written
demand therefor by the Executive.

          (d)
Each Party shall bear its own costs incurred in connection with any proceeding
under Sections 18(a) or 18(b) hereof, including all legal fees and expenses; provided,
however, that the Company shall bear all such costs of the Executive (to
the extent such costs are reasonable) if the Executive substantially prevails
in the proceeding. The Executive shall be reimbursed by the Company for all
such reasonable costs promptly upon written demand therefor by the Executive
which is made within a reasonable time following the proceeding and is supported
by documentation of such costs.

          19.
AMENDMENT OR WAIVER.

          No
provision in this Agreement may be amended unless such amendment is agreed to
in writing, signed by the Executive and by a duly authorized officer of the
Company. No waiver by any Party of any breach by the other Party of any
condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same or any prior or subsequent time.
Except as set forth in Exhibit B, any waiver must be in writing and
signed by the Executive or a duly authorized officer of the Company, as the
case may be.

          20.
NOTICES.

          Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
sent by courier, or by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently by
similar process give notice of:

	
 

	
 

	
 

	
If to the
  Company:

	
 

	
 

	
 

	
Security
  Capital Assurance Ltd

	
 

	
One
  Bermudiana Road

	
 

	
Hamilton
  HM11, Bermuda

	
 

	
Att’n:  Chief Executive Officer

	
 

	
 

	
 

	
If to the
  Executive:

	
 

	
 

	
 

	
To the last
  address delivered to

	
 

	
the Company
  by the Executive in

	
 

	
the manner
  set forth herein.

-17-

          21.
IPO CONTINGENCY.

          For
the avoidance of doubt, the effectiveness of this Agreement is contingent upon
the consummation of the IPO, and if the IPO is not consummated by December 1,
2006 this Agreement shall be null and void.

          22.
SEVERABILITY.

          In
the event that any provision or portion of this Agreement shall be determined
to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

          23.
SURVIVORSHIP.

          The
respective rights and obligations of the Parties shall survive any termination
of this Agreement to the extent necessary to the intended preservation of such
rights and obligations.

          24.
REFERENCE.

          In
the event of the Executive’s death or a judicial determination of his
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his estate or other legal representative.

          25.
GOVERNING LAW.

          This
Agreement shall be governed by and construed and interpreted in accordance with
the laws of the State of New York without reference to the principles of
conflict of laws.

          26.
SECTION 409A.  

          It
is intended that this Agreement will comply with Section 409A of the Code (and
any regulations and guidelines issued thereunder) to the extent the Agreement
is subject thereto, and the Agreement shall be interpreted on a basis
consistent with such intent.  If an
amendment of the Agreement is necessary in order for it to comply with Section
409A, the parties hereto will negotiate in good faith to amend the Agreement in
a manner that preserves the original intent of the parties to the extent
reasonably possible.

          27.
HEADINGS.

          The
heading of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.

          28.
COUNTERPARTS.

          This
Agreement may be executed in one or more counterparts.

-18-

          IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

	
 

	
 

	
 

	
 

	
SECURITY
  CAPITAL ASSURANCE LTD

	
 

	
 

	
 

	
 

	
By:

	
/s/ Paul S.
  Giordano

	
 

	
 

	

	
 

	
 

	
 

	
 

	
DAVID P.
  SHEA

	
 

	
 

	
 

	
 

	
/s/ David P.
  Shea

	
 

	
 

	
 

	
 

	
GUARANTORS:

	
 

	
 

	
 

	
 

	
SCA HOLDINGS
  US INC

	
 

	
 

	
 

	
 

	
By: /s/ Paul
  S. Giordano_

	
 

	
 

	
 

	
 

	
XL FINANCIAL
  ASSURANCE LTD

	
 

	
 

	
 

	
 

	
By: /s/ Paul
  S. Giordano

EXHIBIT A

CHANGE IN CONTROL

          For
purposes of this Agreement, “Change in Control” shall mean:

          (i)
the acquisition
by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange
Act (a “Person”), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) of 30% or more of either (1) the then outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or (2) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”);provided, however, that the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition by the Company or any of its Subsidiaries; (ii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its Subsidiaries; (iii) any acquisition by any corporation with
respect to which, following such acquisition, more than 60% of, respectively,
the then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be
(unless a Person’s ownership of the acquiring corporation results in that
Person directly or indirectly owning 30% or more of the Outstanding Company
Common Stock or Outstanding Company Voting Securities); or (iv) any acquisition
by XL Capital Ltd or its wholly-owned subsidiaries unless, at any time after
the Effective Date and prior to such acquisition, XL Capital Ltd and its
subsidiaries own less than 30% of the Outstanding Company Voting Securities;

          (ii)
during any period of two consecutive years, individuals who, as of the beginning
of such period, constitute the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the beginning of such
period whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act);

          (iii)
consummation of a reorganization, scheme of arrangement, merger, consolidation
or similar transaction (collectively, a “Transaction”), in each case, with
respect to which all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and outstanding Company Voting Securities immediately prior to such
Transaction, do not, following such Transaction, beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Transaction in substantially the
same proportions as their ownership, immediately prior to such Transaction, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be;

          (iv)
consummation of a sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation with respect to which
following such sale or other disposition, more than 60% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such sale or other disposition in substantially the same proportions
as their ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or

          (v)
approval by the shareholders of the Company of a complete liquidation or
dissolution (or similar transaction) of the Company.

-2-

EXHIBIT B

GOOD REASON

          For
purposes of this Agreement, “Good Reason” shall mean any of the
following, unless done with the prior express written consent of the Executive:

	
 

	
 

	
 

	
     (i)
  (A) The assignment to Executive of duties inconsistent with Executive’s
  position (including duties, responsibilities, status, titles or offices as
  set forth in Section 3 hereof); or (B) any elimination, diminution or
  reduction of Executive’s duties or responsibilities except in connection with
  the termination of Executive’s employment for Cause, disability or as a
  result of Executive’s death or by Executive other than for Good Reason; and
  for purposes for this clause (i), the determination of whether there has been
  a reduction of duties or responsibilities or an assignment of duties
  inconsistent with the Executive’s position shall take into account the Executive’s
  duties, responsibilities and position with the ultimate parent of the
  parent/subsidiary group as a whole which includes the Company;

	
 

	
 

	
 

	
     (ii)
  The (A) reduction in Executive’s Base Salary from the level in effect immediately
  prior to the Change in Control, or (B) payment of an annual bonus in an
  amount less than the lesser of (x) the most recent annual bonus paid prior to
  the Change in Control or (y) the greater of (I) the most recent target bonus,
  if any, established prior to the Change in Control or (II) the annual average
  bonus paid for the preceding three complete years prior to the Change in
  Control (or such lesser number of complete years as the Executive shall have
  been employed by the Company);

	
 

	
 

	
 

	
     (iii)
  The failure by the Company to obtain the specific written assumption of this
  Agreement by any successor or assign of the Company or any person acquiring substantially
  all of the Company’s assets;

	
 

	
 

	
 

	
     (iv)
  Any breach by the Company of any provision of this Agreement or any
  agreements entered into pursuant thereto that remains uncured for 20 calendar
  days following written notice of same by the Executive;

	
 

	
 

	
 

	
     (v)
  Notwithstanding the provisions of Section 3(b) of this Agreement, requiring
  the Executive to be based at any office or location that is greater than 35
  miles from the office or location at which the Executive was principally
  located immediately prior to the Change in Control;

	
 

	
 

	
 

	
     (vi)
  During the Post Change Period, (A) the failure to continue in effect any
  compensation or incentive plan in which Executive participates immediately
  prior to the time of the Change in Control unless an equitable arrangement
  (embodied in an ongoing substitute or alternative plan providing Executive
  with at least the same aggregate economic opportunity on an after-tax basis
  available to the Executive immediately prior to the Change in Control) has
  been made with respect to such plan in connection with the Change in Control,
  or the failure to continue Executive’s participation therein on substantially
  

	
 

	
 

	
 

	
the same
  basis both in terms of the amount of benefits provided and the level of his
  participation relative to other participants, as existed at the time of the
  Change in Control; or (B) the failure to continue to provide Executive with
  benefits and coverage at least as favorable in the aggregate as those enjoyed
  by him under the Company’s pension, life insurance, medical, health and
  accident, disability, deferred compensation or savings plans in which he was
  participating at the time of the Change in Control; or

	
 

	
 

	
 

	
     
  (vii) The failure by the Company to pay within 7 calendar days of the due
  date any amounts due under any benefit or compensation plan, including any
  deferred compensation plan. 

Notwithstanding
any provision in this Agreement to the contrary, the Executive must give
written notice of his intention to terminate his employment for Good Reason
within sixty (60) days after the act or omission which constitutes Good Reason,
and any failure to give such written notice within such period will result in a
waiver by the Executive of his right to terminate for Good Reason as a result
of such act or omission.

-2-

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