Securities Purchase Agreement

EXHIBIT 10.1

UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

Dear Ladies and Gentlemen:

The company set forth on the signature page hereto (the "COMPANY")

intends to issue in a private placement the number of shares of a series of

its preferred stock set forth on Schedule A hereto (the "PREFERRED SHARES")

and a warrant to purchase the number of shares of its common stock set forth

on Schedule A hereto (the "WARRANT" and, together with the Preferred Shares,

the "PURCHASED SECURITIES") and the United States Department of the Treasury

(the "INVESTOR") intends to purchase from the Company the Purchased

Securities.

The purpose of this letter agreement is to confirm the terms and

conditions of the purchase by the Investor of the Purchased Securities. Except

to the extent supplemented or superseded by the terms set forth herein or in

the Schedules hereto, the provisions contained in the Securities Purchase

Agreement - Standard Terms attached hereto as Exhibit A (the "SECURITIES

PURCHASE AGREEMENT") are incorporated by reference herein. Terms that are

defined in the Securities Purchase Agreement are used in this letter agreement

as so defined. In the event of any inconsistency between this letter agreement

and the Securities Purchase Agreement, the terms of this letter agreement

shall govern.

Each of the Company and the Investor hereby confirms its agreement

with the other party with respect to the issuance by the Company of the

Purchased Securities and the purchase by the Investor of the Purchased

Securities pursuant to this letter agreement and the Securities Purchase

Agreement on the terms specified on Schedule A hereto.

This letter agreement (including the Schedules hereto) and the

Securities Purchase Agreement (including the Annexes thereto) and the Warrant

constitute the entire agreement, and supersede all other prior agreements,

understandings, representations and warranties, both written and oral, between

the parties, with respect to the subject matter hereof. This letter agreement

constitutes the "Letter Agreement" referred to in the Securities Purchase

Agreement.

-1-

<PAGE>

This letter agreement may be executed in any number of separate

counterparts, each such counterpart being deemed to be an original instrument,

and all such counterparts will together constitute the same agreement.

Executed signature pages to this letter agreement may be delivered by

facsimile and such facsimiles will be deemed as sufficient as if actual

signature pages had been delivered.

* * *

-2-

<PAGE>

In witness whereof, this letter agreement has been duly executed and

delivered by the duly authorized representatives of the parties hereto as of

the date written below.

UNITED STATES DEPARTMENT OF THE TREASURY

By: /s/ Neel Kashkari

----------------------------------------

Name: Neel Kashkari

Title: Interim Assistant Secretary

For Financial Stability

AMERICAN EXPRESS COMPANY

By: /s/ Kenneth I. Chenault

----------------------------------------

Name: Kenneth I. Chenault

Title: Chairman and Chief Executive

Officer

Date: January 9, 2009

-3-

<PAGE>

EXHIBIT A

================================================================================

SECURITIES PURCHASE AGREEMENT

STANDARD TERMS

================================================================================

<PAGE>

TABLE OF CONTENTS

<TABLE>

<CAPTION>

Page

Article I

Purchase; Closing

<S> <C> <C>

1.1 Purchase........................................................................................1

1.2 Closing.........................................................................................2

1.3 Interpretation..................................................................................4

Article II

Representations and Warranties

2.1 Disclosure......................................................................................4

2.2 Representations and Warranties of the Company...................................................5

Article III

Covenants

3.1 Commercially Reasonable Efforts................................................................13

3.2 Expenses.......................................................................................14

3.3 Sufficiency of Authorized Common Stock; Exchange Listing.......................................14

3.4 Certain Notifications Until Closing............................................................15

3.5 Access, Information and Confidentiality........................................................15

Article IV

Additional Agreements

4.1 Purchase for Investment........................................................................16

4.2 Legends........................................................................................16

4.3 Certain Transactions...........................................................................18

4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the Warrant...18

4.5 Registration Rights............................................................................19

4.6 Voting of Warrant Shares.......................................................................30

4.7 Depositary Shares..............................................................................31

4.8 Restriction on Dividends and Repurchases.......................................................31

4.9 Repurchase of Investor Securities..............................................................32

4.10 Executive Compensation.........................................................................33

4.11 Bank and Thrift Holding Company Status.........................................................33

4.12 Predominantly Financial........................................................................34

Article V

Miscellaneous

5.1 Termination....................................................................................34

5.2 Survival of Representations and Warranties.....................................................35

5.3 Amendment......................................................................................35

5.4 Waiver of Conditions...........................................................................35

5.5 Governing Law: Submission to Jurisdiction, Etc.................................................35

5.6 Notices........................................................................................35

5.7 Definitions....................................................................................36

5.8 Assignment.....................................................................................36

5.9 Severability...................................................................................36

5.10 No Third Party Beneficiaries...................................................................37

</TABLE>

-2-

<PAGE>

LIST OF ANNEXES

ANNEX A: FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

ANNEX B: FORM OF WAIVER

ANNEX C: FORM OF OPINION

ANNEX D: FORM OF WARRANT

-3-

<PAGE>

INDEX OF DEFINED TERMS

Term Location of Definition

Affiliate 5.7(b)

Agreement Recitals

Appraisal Procedure 4.9(c)(i)

Appropriate Federal Banking Agency 2.2(s)

Bank Holding Company 4.11

Bankruptcy Exceptions 2.2(d)

Benefit Plans 1.2(d)(iv)

Board of Directors 2.2(f)

Business Combination 4.4

business day 1.3

Capitalization Date 2.2(b)

Certificate of Designations 1.2(d)(iii)

Charter 1.2(d)(iii)

Closing 1.2(a)

Closing Date 1.2(a)

Code 2.2(n)

Common Stock Recitals

Company Recitals

Company Financial Statements 2.2(h)

Company Material Adverse Effect 2.1(a)

Company Reports 2.2(i)(i)

Company Subsidiary; Company Subsidiaries 2.2(i)(i)

control; controlled by; under common control with 5.7(b)

Controlled Group 2.2(n)

CPP Recitals

EESA 1.2(d)(iv)

ERISA 2.2(n)

Exchange Act 2.1(b)

Fair Market Value 4.9(c)(ii)

Federal Reserve 4.11

GAAP 2.1(a)

Governmental Entities 1.2(c)

Holder 4.5(k)(i)

Holders' Counsel 4.5(k)(ii)

Indemnitee 4.5(g)(i)

Information 3.5(b)

Initial Warrant Shares Recitals

Investor Recitals

Junior Stock 4.8(c)

knowledge of the Company; Company's knowledge 5.7(c)

Last Fiscal Year 2.1(b)

Letter Agreement Recitals

officers 5.7(c)

Parity Stock 4.8(c)

Pending Underwritten Offering 4.5(l)

Permitted Repurchases 4.8(a)(ii)

Piggyback Registration 4.5(a)(iv)

Plan 2.2(n)

Preferred Shares Recitals

Preferred Stock Recitals

Previously Disclosed 2.1(b)

Proprietary Rights 2.2(u)

Purchase Recitals

Purchase Price 1.1

Purchased Securities Recitals

Qualified Equity Offering 4.4

register; registered; registration 4.5(k)(iii)

Registrable Securities 4.5(k)(iv)

Registration Expenses 4.5(k)(v)

Regulatory Agreement 2.2(s)

Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415 4.5(k)(vi)

Savings and Loan Holding Company 4.11

Schedules Recitals

SEC 2.1(b)

Securities Act 2.2(a)

Selling Expenses 4.5(k)(vii)

Senior Executive Officers 4.10

Share Dilution Amount 4.8(a)(ii)

Shelf Registration Statement 4.5(a)(ii)

Signing Date 2.1(a)

Special Registration 4.5(i)

Stockholder Proposals 3.1(b)

subsidiary 5.8(a)

Tax; Taxes 2.2(o)

Transfer 4.4

Warrant Recitals

Warrant Shares 2.2(d)

-------------------------------------------------------------------------------

-4-

<PAGE>

SECURITIES PURCHASE AGREEMENT - STANDARD TERMS

RECITALS:

WHEREAS, the United States Department of the Treasury (the

"INVESTOR") may from time to time agree to purchase shares of preferred stock

and warrants from eligible financial institutions which elect to participate

in the Troubled Asset Relief Program Capital Purchase Program ("CPP");

WHEREAS, an eligible financial institution electing to participate in

the CPP and issue securities to the Investor (referred to herein as the

"COMPANY") shall enter into a letter agreement (the "LETTER AGREEMENT") with

the Investor which incorporates this Securities Purchase Agreement - Standard

Terms;

WHEREAS, the Company agrees to expand the flow of credit to U.S.

consumers and businesses on competitive terms to promote the sustained growth

and vitality of the U.S. economy;

WHEREAS, the Company agrees to work diligently, under existing

programs, to modify the terms of residential mortgages as appropriate to

strengthen the health of the U.S. housing market;

WHEREAS, the Company intends to issue in a private placement the

number of shares of the series of its Preferred Stock ("PREFERRED STOCK") set

forth on SCHEDULE A to the Letter Agreement (the "PREFERRED SHARES") and a

warrant to purchase the number of shares of its Common Stock ("COMMON STOCK")

set forth on SCHEDULE A to the Letter Agreement (the "INITIAL WARRANT SHARES")

(the "WARRANT" and, together with the Preferred Shares, the "PURCHASED

SECURITIES") and the Investor intends to purchase (the "PURCHASE") from the

Company the Purchased Securities; and

WHEREAS, the Purchase will be governed by this Securities Purchase

Agreement - Standard Terms and the Letter Agreement, including the schedules

thereto (the "SCHEDULES"), specifying additional terms of the Purchase. This

Securities Purchase Agreement - Standard Terms (including the Annexes hereto)

and the Letter Agreement (including the Schedules thereto) are together

referred to as this "Agreement". All references in this Securities Purchase

Agreement - Standard Terms to "Schedules" are to the Schedules attached to the

Letter Agreement.

-5-

<PAGE>

NOW, THEREFORE, in consideration of the premises, and of the

representations, warranties, covenants and agreements set forth herein, the

parties agree as follows:

ARTICLE I

PURCHASE; CLOSING

1.1 PURCHASE. On the terms and subject to the conditions set forth in this

Agreement, the Company agrees to sell to the Investor, and the Investor agrees

to purchase from the Company, at the Closing (as hereinafter defined), the

Purchased Securities for the price set forth on SCHEDULE A (the "PURCHASE

PRICE").

1.2 CLOSING.

(a) On the terms and subject to the conditions set forth in this

Agreement, the closing of the Purchase (the "CLOSING") will take

place at the location specified in SCHEDULE A, at the time and on the

date set forth in SCHEDULE A or as soon as practicable thereafter, or

at such other place, time and date as shall be agreed between the

Company and the Investor. The time and date on which the Closing

occurs is referred to in this Agreement as the "CLOSING DATE".

(b) Subject to the fulfillment or waiver of the conditions to the Closing

in this Section 1.2, at the Closing the Company will deliver the

Preferred Shares and the Warrant, in each case as evidenced by one or

more certificates dated the Closing Date and bearing appropriate

legends as hereinafter provided for, in exchange for payment in full

of the Purchase Price by wire transfer of immediately available

United States funds to a bank account designated by the Company on

SCHEDULE A.

(c) The respective obligations of each of the Investor and the Company to

consummate the Purchase are subject to the fulfillment (or waiver by

the Investor and the Company, as applicable) prior to the Closing of

the conditions that (i) any approvals or authorizations of all United

States and other governmental, regulatory or judicial authorities

(collectively, "GOVERNMENTAL Entities") required for the consummation

of the Purchase shall have been obtained or made in form and

substance reasonably satisfactory to each party and shall be in full

force and effect and all waiting periods required by United States

and other applicable law, if any, shall have expired and (ii) no

provision of any applicable United States or other law and no

judgment, injunction, order or decree of any Governmental Entity

shall prohibit the purchase and sale of the Purchased Securities as

contemplated by this Agreement.

-6-

<PAGE>

(d) The obligation of the Investor to consummate the Purchase is also

subject to the fulfillment (or waiver by the Investor) at or prior to

the Closing of each of the following conditions:

(i) (A) the representations and

warranties of the Company set forth in (x)

Section 2.2(g) of this Agreement shall be

true and correct in all respects as though

made on and as of the Closing Date, (y)

Sections 2.2(a) through (f) shall be true and

correct in all material respects as though

made on and as of the Closing Date (other

than representations and warranties that by

their terms speak as of another date, which

representations and warranties shall be true

and correct in all material respects as of

such other date) and (z) Sections 2.2(h)

through (v) (disregarding all qualifications

or limitations set forth in such

representations and warranties as to

"materiality", "Company Material Adverse

Effect" and words of similar import) shall be

true and correct as though made on and as of

the Closing Date (other than representations

and warranties that by their terms speak as

of another date, which representations and

warranties shall be true and correct as of

such other date), except to the extent that

the failure of such representations and

warranties referred to in this Section

1.2(d)(i)(A)(z) to be so true and correct,

individually or in the aggregate, does not

have and would not reasonably be expected to

have a Company Material Adverse Effect and

(B) the Company shall have performed in all

material respects all obligations required to

be performed by it under this Agreement at or

prior to the Closing;

(ii) the Investor shall have

received a certificate signed on behalf of

the Company by a senior executive officer

certifying to the effect that the conditions

set forth in Section 1.2(d)(i) have been

satisfied;

-7-

<PAGE>

(iii) the Company shall have duly

adopted and filed with the Secretary of State

of its jurisdiction of organization or other

applicable Governmental Entity the amendment

to its certificate or articles of

incorporation, articles of association, or

similar organizational document ("CHARTER")

in substantially the form attached hereto as

ANNEX A (the "CERTIFICATE OF DESIGNATIONS")

and such filing shall have been accepted;

(iv) (A) the Company shall have

effected such changes to its compensation,

bonus, incentive and other benefit plans,

arrangements and agreements (including golden

parachute, severance and employment

agreements) (collectively, "BENEFIT PLANS")

with respect to its Senior Executive Officers

(and to the extent necessary for such changes

to be legally enforceable, each of its Senior

Executive Officers shall have duly consented

in writing to such changes), as may be

necessary, during the period that the

Investor owns any debt or equity securities

of the Company acquired pursuant to this

Agreement or the Warrant, in order to comply

with Section 111(b) of the Emergency Economic

Stabilization Act of 2008 ("EESA") as

implemented by guidance or regulation

thereunder that has been issued and is in

effect as of the Closing Date, and (B) the

Investor shall have received a certificate

signed on behalf of the Company by a senior

executive officer certifying to the effect

that the condition set forth in Section

1.2(d)(iv)(A) has been satisfied;

(v) each of the Company's Senior

Executive Officers shall have delivered to

the Investor a written waiver in the form

attached hereto as ANNEX B releasing the

Investor from any claims that such Senior

Executive Officers may otherwise have as a

result of the issuance, on or prior to the

Closing Date, of any regulations which

require the modification of, and the

agreement of the Company hereunder to modify,

-8-

<PAGE>

the terms of any Benefit Plans with respect

to its Senior Executive Officers to eliminate

any provisions of such Benefit Plans that

would not be in compliance with the

requirements of Section 111(b) of the EESA as

implemented by guidance or regulation

thereunder that has been issued and is in

effect as of the Closing Date;

(vi) the Company shall have

delivered to the Investor a written opinion

from counsel to the Company (which may be

internal counsel), addressed to the Investor

and dated as of the Closing Date, in

substantially the form attached hereto as

ANNEX C;

(vii) the Company shall have

delivered certificates in proper form or,

with the prior consent of the Investor,

evidence of shares in book-entry form,

evidencing the Preferred Shares to Investor

or its designee(s); and

(viii) the Company shall have duly

executed the Warrant in substantially the

form attached hereto as ANNEX D and delivered

such executed Warrant to the Investor or its

designee(s).

1.3 INTERPRETATION. When a reference is made in this Agreement to "Recitals,"

"Articles," "Sections," or "Annexes" such reference shall be to a Recital,

Article or Section of, or Annex to, this Securities Purchase Agreement -

Standard Terms, and a reference to "Schedules" shall be to a Schedule to the

Letter Agreement, in each case, unless otherwise indicated. The terms defined

in the singular have a comparable meaning when used in the plural, and vice

versa. References to "herein", "hereof", "hereunder" and the like refer to

this Agreement as a whole and not to any particular section or provision,

unless the context requires otherwise. The table of contents and headings

contained in this Agreement are for reference purposes only and are not part

of this Agreement. Whenever the words "include," "includes" or "including" are

used in this Agreement, they shall be deemed followed by the words "without

-9-

<PAGE>

limitation." No rule of construction against the draftsperson shall be applied

in connection with the interpretation or enforcement of this Agreement, as

this Agreement is the product of negotiation between sophisticated parties

advised by counsel. All references to "$" or "dollars" mean the lawful

currency of the United States of America. Except as expressly stated in this

Agreement, all references to any statute, rule or regulation are to the

statute, rule or regulation as amended, modified, supplemented or replaced

from time to time (and, in the case of statutes, include any rules and

regulations promulgated under the statute) and to any section of any statute,

rule or regulation include any successor to the section. References to a

"BUSINESS DAY" shall mean any day except Saturday, Sunday and any day on which

banking institutions in the State of New York generally are authorized or

required by law or other governmental actions to close.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 DISCLOSURE.

(a) "COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on (i)

the business, results of operation or financial condition of the Company and

its consolidated subsidiaries taken as a whole; PROVIDED, HOWEVER, that

Company Material Adverse Effect shall not be deemed to include the effects of

(A) changes after the date of the Letter Agreement (the "SIGNING DATE") in

general business, economic or market conditions (including changes generally

in prevailing interest rates, credit availability and liquidity, currency

exchange rates and price levels or trading volumes in the United States or

foreign securities or credit markets), or any outbreak or escalation of

hostilities, declared or undeclared acts of war or terrorism, in each case

generally affecting the industries in which the Company and its subsidiaries

operate, (B) changes or proposed changes after the Signing Date in generally

accepted accounting principles in the United States ("GAAP") or regulatory

accounting requirements, or authoritative interpretations thereof, (C) changes

or proposed changes after the Signing Date in securities, banking and other

laws of general applicability or related policies or interpretations of

Governmental Entities (in the case of each of these clauses (A), (B) and (C),

other than changes or occurrences to the extent that such changes or

occurrences have or would reasonably be expected to have a materially

disproportionate adverse effect on the Company and its consolidated

subsidiaries taken as a whole relative to comparable U.S. banking or financial

services organizations), or (D) changes in the market price or trading volume

of the Common Stock or any other equity, equity-related or debt securities of

the Company or its consolidated subsidiaries (it being understood and agreed

that the exception set forth in this clause (D) does not apply to the

underlying reason giving rise to or contributing to any such change); or (ii)

the ability of the Company to consummate the Purchase and the other

transactions contemplated by this Agreement and the Warrant and perform its

obligations hereunder or thereunder on a timely basis.

-10-

<PAGE>

(b) "PREVIOUSLY DISCLOSED" means information set forth or incorporated in the

Company's Annual Report on Form 10-K for the most recently completed fiscal

year of the Company filed with the Securities and Exchange Commission (the

"SEC") prior to the Signing Date (the "LAST FISCAL YEAR") or in its other

reports and forms filed with or furnished to the SEC under Sections 13(a),

14(a) or 15(d) of the Securities Exchange Act of 1934 (the "EXCHANGE ACT") on

or after the last day of the Last Fiscal Year and prior to the Signing Date.

2.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as Previously

Disclosed, the Company represents and warrants to the Investor that as of the

Signing Date and as of the Closing Date (or such other date specified herein):

(a) ORGANIZATION, AUTHORITY AND SIGNIFICANT SUBSIDIARIES. The Company has

been duly incorporated and is validly existing and in good standing

under the laws of its jurisdiction of organization, with the

necessary power and authority to own its properties and conduct its

business in all material respects as currently conducted, and except

as has not, individually or in the aggregate, had and would not

reasonably be expected to have a Company Material Adverse Effect, has

been duly qualified as a foreign corporation for the transaction of

business and is in good standing under the laws of each other

jurisdiction in which it owns or leases properties or conducts any

business so as to require such qualification; each subsidiary of the

Company that is a "significant subsidiary" within the meaning of Rule

1-02(w) of Regulation S-X under the Securities Act of 1933 (the

"SECURITIES ACT") has been duly organized and is validly existing in

good standing under the laws of its jurisdiction of organization. The

Charter and bylaws of the Company, copies of which have been provided

to the Investor prior to the Signing Date, are true, complete and

correct copies of such documents as in full force and effect as of

the Signing Date.

(b) CAPITALIZATION. The authorized capital stock of the Company, and the

outstanding capital stock of the Company (including securities

convertible into, or exercisable or exchangeable for, capital stock

of the Company) as of the most recent fiscal month-end preceding the

Signing Date (the "CAPITALIZATION DATE") is set forth on SCHEDULE B.

The outstanding shares of capital stock of the Company have been duly

authorized and are validly issued and outstanding, fully paid and

nonassessable, and subject to no preemptive rights (and were not

issued in violation of any preemptive rights). Except as provided in

the Warrant, as of the Signing Date, the Company does not have

outstanding any securities or other obligations providing the holder

the right to acquire Common Stock that is not reserved for issuance

as specified on SCHEDULE B, and the Company has not made any other

commitment to authorize, issue or sell any Common Stock. Since the

-11-

<PAGE>

Capitalization Date, the Company has not issued any shares of Common

Stock, other than (i) shares issued upon the exercise of stock

options or delivered under other equity-based awards or other

convertible securities or warrants which were issued and outstanding

on the Capitalization Date and disclosed on SCHEDULE B and (ii)

shares disclosed on SCHEDULE B.

(c) PREFERRED SHARES. The Preferred Shares have been duly and validly

authorized, and, when issued and delivered pursuant to this

Agreement, such Preferred Shares will be duly and validly issued and

fully paid and non-assessable, will not be issued in violation of any

preemptive rights, and will rank PARI PASSU with or senior to all

other series or classes of Preferred Stock, whether or not issued or

outstanding, with respect to the payment of dividends and the

distribution of assets in the event of any dissolution, liquidation

or winding up of the Company.

(d) THE WARRANT AND WARRANT SHARES. The Warrant has been duly authorized

and, when executed and delivered as contemplated hereby, will

constitute a valid and legally binding obligation of the Company

enforceable against the Company in accordance with its terms, except

as the same may be limited by applicable bankruptcy, insolvency,

reorganization, moratorium or similar laws affecting the enforcement

of creditors' rights generally and general equitable principles,

regardless of whether such enforceability is considered in a

proceeding at law or in equity ("BANKRUPTCY EXCEPTIONS"). The shares

of Common Stock issuable upon exercise of the Warrant (the "WARRANT

SHARES") have been duly authorized and reserved for issuance upon

exercise of the Warrant and when so issued in accordance with the

terms of the Warrant will be validly issued, fully paid and

non-assessable, subject, if applicable, to the approvals of its

stockholders set forth on SCHEDULE C.

(e) AUTHORIZATION, ENFORCEABILITY.

(i) The Company has the corporate power and

authority to execute and deliver this Agreement and the

Warrant and, subject, if applicable, to the approvals of its

stockholders set forth on SCHEDULE C, to carry out its

obligations hereunder and thereunder (which includes the

issuance of the Preferred Shares, Warrant and Warrant

Shares). The execution, delivery and performance by the

Company of this Agreement and the Warrant and the

-12-

<PAGE>

consummation of the transactions contemplated hereby and

thereby have been duly authorized by all necessary corporate

action on the part of the Company and its stockholders, and

no further approval or authorization is required on the part

of the Company, subject, in each case, if applicable, to the

approvals of its stockholders set forth on SCHEDULE C. This

Agreement is a valid and binding obligation of the Company

enforceable against the Company in accordance with its

terms, subject to the Bankruptcy Exceptions.

(ii) The execution, delivery and performance by

the Company of this Agreement and the Warrant and the

consummation of the transactions contemplated hereby and

thereby and compliance by the Company with the provisions

hereof and thereof, will not (A) violate, conflict with, or

result in a breach of any provision of, or constitute a

default (or an event which, with notice or lapse of time or

both, would constitute a default) under, or result in the

termination of, or accelerate the performance required by,

or result in a right of termination or acceleration of, or

result in the creation of, any lien, security interest,

charge or encumbrance upon any of the properties or assets

of the Company or any Company Subsidiary under any of the

terms, conditions or provisions of (i) subject, if

applicable, to the approvals of the Company's stockholders

set forth on SCHEDULE C, its organizational documents or

(ii) any note, bond, mortgage, indenture, deed of trust,

license, lease, agreement or other instrument or obligation

to which the Company or any Company Subsidiary is a party or

by which it or any Company Subsidiary may be bound, or to

which the Company or any Company Subsidiary or any of the

properties or assets of the Company or any Company

Subsidiary may be subject, or (B) subject to compliance with

the statutes and regulations referred to in the next

paragraph, violate any statute, rule or regulation or any

judgment, ruling, order, writ, injunction or decree

applicable to the Company or any Company Subsidiary or any

of their respective properties or assets except, in the case

of clauses (A)(ii) and (B), for those occurrences that,

individually or in the aggregate, have not had and would not

reasonably be expected to have a Company Material Adverse

Effect.

-13-

<PAGE>

(iii) Other than the filing of the Certificate of

Designations with the Secretary of State of its jurisdiction

of organization or other applicable Governmental Entity, any

current report on Form 8-K required to be filed with the

SEC, such filings and approvals as are required to be made

or obtained under any state "blue sky" laws, the filing of

any proxy statement contemplated by Section 3.1 and such as

have been made or obtained, no notice to, filing with,

exemption or review by, or authorization, consent or

approval of, any Governmental Entity is required to be made

or obtained by the Company in connection with the

consummation by the Company of the Purchase except for any

such notices, filings, exemptions, reviews, authorizations,

consents and approvals the failure of which to make or

obtain would not, individually or in the aggregate,

reasonably be expected to have a Company Material Adverse

Effect.

(f) ANTI-TAKEOVER PROVISIONS AND RIGHTS PLAN. The Board of Directors of

the Company (the "BOARD OF DIRECTORS") has taken all necessary action

to ensure that the transactions contemplated by this Agreement and

the Warrant and the consummation of the transactions contemplated

hereby and thereby, including the exercise of the Warrant in

accordance with its terms, will be exempt from any anti-takeover or

similar provisions of the Company's Charter and bylaws, and any other

provisions of any applicable "moratorium", "control share", "fair

price", "interested stockholder" or other anti-takeover laws and

regulations of any jurisdiction. The Company has taken all actions

necessary to render any stockholders' rights plan of the Company

inapplicable to this Agreement and the Warrant and the consummation

of the transactions contemplated hereby and thereby, including the

exercise of the Warrant by the Investor in accordance with its terms.

(g) NO COMPANY MATERIAL ADVERSE EFFECT. Since the last day of the last

completed fiscal period for which the Company has filed a Quarterly

Report on Form 10-Q or an Annual Report on Form 10-K with the SEC

prior to the Signing Date, no fact, circumstance, event, change,

occurrence, condition or development has occurred that, individually

or in the aggregate, has had or would reasonably be expected to have

a Company Material Adverse Effect.

-14-

<PAGE>

(h) COMPANY FINANCIAL STATEMENTS. Each of the consolidated financial

statements of the Company and its consolidated subsidiaries

(collectively the "COMPANY FINANCIAL STATEMENTS") included or

incorporated by reference in the Company Reports filed with the SEC

since December 31, 2006, present fairly in all material respects the

consolidated financial position of the Company and its consolidated

subsidiaries as of the dates indicated therein (or if amended prior

to the Signing Date, as of the date of such amendment) and the

consolidated results of their operations for the periods specified

therein; and except as stated therein, such financial statements (A)

were prepared in conformity with GAAP applied on a consistent basis

(except as may be noted therein), (B) have been prepared from, and

are in accordance with, the books and records of the Company and the

Company Subsidiaries and (C) complied as to form, as of their

respective dates of filing with the SEC, in all material respects

with the applicable accounting requirements and with the published

rules and regulations of the SEC with respect thereto.

(i) REPORTS.

(i) Since December 31, 2006, the Company and each

subsidiary of the Company (each a "COMPANY SUBSIDIARY" and,

collectively, the "COMPANY SUBSIDIARIES") has timely filed

all reports, registrations, documents, filings, statements

and submissions, together with any amendments thereto, that

it was required to file with any Governmental Entity (the

foregoing, collectively, the "COMPANY REPORTS") and has paid

all fees and assessments due and payable in connection

therewith, except, in each case, as would not, individually

or in the aggregate, reasonably be expected to have a

Company Material Adverse Effect. As of their respective

dates of filing, the Company Reports complied in all

material respects with all statutes and applicable rules and

regulations of the applicable Governmental Entities. In the

case of each such Company Report filed with or furnished to

the SEC, such Company Report (A) did not, as of its date or

if amended prior to the Signing Date, as of the date of such

amendment, contain an untrue statement of a material fact or

omit to state a material fact necessary in order to make the

statements made therein, in light of the circumstances under

which they were made, not misleading, and (B) complied as to

form in all material respects with the applicable

requirements of the Securities Act and the Exchange Act.

With respect to all other Company Reports, the Company

Reports were complete and accurate in all material respects

as of their respective dates. No executive officer of the

-15-

<PAGE>

Company or any Company Subsidiary has failed in any respect

to make the certifications required of him or her under

Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

(ii) The records, systems, controls, data and

information of the Company and the Company Subsidiaries are

recorded, stored, maintained and operated under means

(including any electronic, mechanical or photographic

process, whether computerized or not) that are under the

exclusive ownership and direct control of the Company or the

Company Subsidiaries or their accountants (including all

means of access thereto and therefrom), except for any

non-exclusive ownership and non-direct control that would

not reasonably be expected to have a material adverse effect

on the system of internal accounting controls described

below in this Section 2.2(i)(ii). The Company (A) has

implemented and maintains disclosure controls and procedures

(as defined in Rule 13a-15(e) of the Exchange Act) to ensure

that material information relating to the Company, including

the consolidated Company Subsidiaries, is made known to the

chief executive officer and the chief financial officer of

the Company by others within those entities, and (B) has

disclosed, based on its most recent evaluation prior to the

Signing Date, to the Company's outside auditors and the

audit committee of the Board of Directors (x) any

significant deficiencies and material weaknesses in the

design or operation of internal controls over financial

reporting (as defined in Rule 13a-15(f) of the Exchange Act)

that are reasonably likely to adversely affect the Company's

ability to record, process, summarize and report financial

information and (y) any fraud, whether or not material, that

involves management or other employees who have a

significant role in the Company's internal controls over

financial reporting.

(j) NO UNDISCLOSED LIABILITIES. Neither the Company nor any of the

Company Subsidiaries has any liabilities or obligations of any nature

(absolute, accrued, contingent or otherwise) which are not properly

reflected or reserved against in the Company Financial Statements to

the extent required to be so reflected or reserved against in

accordance with GAAP, except for (A) liabilities that have arisen

since the last fiscal year end in the ordinary and usual course of

business and consistent with past practice and (B) liabilities that,

individually or in the aggregate, have not had and would not

reasonably be expected to have a Company Material Adverse Effect.

-16-

<PAGE>

(k) OFFERING OF SECURITIES. Neither the Company nor any person acting on

its behalf has taken any action (including any offering of any

securities of the Company under circumstances which would require the

integration of such offering with the offering of any of the

Purchased Securities under the Securities Act, and the rules and

regulations of the SEC promulgated thereunder), which might subject

the offering, issuance or sale of any of the Purchased Securities to

Investor pursuant to this Agreement to the registration requirements

of the Securities Act.

(l) LITIGATION AND OTHER PROCEEDINGS. Except (i) as set forth on SCHEDULE

D or (ii) as would not, individually or in the aggregate, reasonably

be expected to have a Company Material Adverse Effect, there is no

(A) pending or, to the knowledge of the Company, threatened, claim,

action, suit, investigation or proceeding, against the Company or any

Company Subsidiary or to which any of their assets are subject nor is

the Company or any Company Subsidiary subject to any order, judgment

or decree or (B) unresolved violation, criticism or exception by any

Governmental Entity with respect to any report or relating to any

examinations or inspections of the Company or any Company

Subsidiaries.

(m) COMPLIANCE WITH LAWS. Except as would not, individually or in the

aggregate, reasonably be expected to have a Company Material Adverse

Effect, the Company and the Company Subsidiaries have all permits,

licenses, franchises, authorizations, orders and approvals of, and

have made all filings, applications and registrations with,

Governmental Entities that are required in order to permit them to

own or lease their properties and assets and to carry on their

business as presently conducted and that are material to the business

of the Company or such Company Subsidiary. Except as set forth on

SCHEDULE E, the Company and the Company Subsidiaries have complied in

all respects and are not in default or violation of, and none of them

is, to the knowledge of the Company, under investigation with respect

to or, to the knowledge of the Company, have been threatened to be

charged with or given notice of any violation of, any applicable

domestic (federal, state or local) or foreign law, statute,

ordinance, license, rule, regulation, policy or guideline, order,

demand, writ, injunction, decree or judgment of any Governmental

Entity, other than such noncompliance, defaults or violations that

would not, individually or in the aggregate, reasonably be expected

to have a Company Material Adverse Effect. Except for statutory or

regulatory restrictions of general application or as set forth on

SCHEDULE E, no Governmental Entity has placed any restriction on the

business or properties of the Company or any Company Subsidiary that

would, individually or in the aggregate, reasonably be expected to

have a Company Material Adverse Effect.

-17-

<PAGE>

(n) EMPLOYEE BENEFIT MATTERS. Except as would not reasonably be expected

to have, either individually or in the aggregate, a Company Material

Adverse Effect: (A) each "employee benefit plan" (within the meaning

of Section 3(3) of the Employee Retirement Income Security Act of

1974, as amended ("ERISA")) providing benefits to any current or

former employee, officer or director of the Company or any member of

its "CONTROLLED GROUP" (defined as any organization which is a member

of a controlled group of corporations within the meaning of Section

414 of the Internal Revenue Code of 1986, as amended (the "CODE"))

that is sponsored, maintained or contributed to by the Company or any

member of its Controlled Group and for which the Company or any

member of its Controlled Group would have any liability, whether

actual or contingent (each, a "PLAN") has been maintained in

compliance with its terms and with the requirements of all applicable

statutes, rules and regulations, including ERISA and the Code; (B)

with respect to each Plan subject to Title IV of ERISA (including,

for purposes of this clause (B), any plan subject to Title IV of

ERISA that the Company or any member of its Controlled Group

previously maintained or contributed to in the six years prior to the

Signing Date), (1) no "reportable event" (within the meaning of

Section 4043(c) of ERISA), other than a reportable event for which

the notice period referred to in Section 4043(c) of ERISA has been

waived, has occurred in the three years prior to the Signing Date or

is reasonably expected to occur, (2) no "accumulated funding

deficiency" (within the meaning of Section 302 of ERISA or Section

412 of the Code), whether or not waived, has occurred in the three

years prior to the Signing Date or is reasonably expected to occur,

(3) the fair market value of the assets under each Plan exceeds the

present value of all benefits accrued under such Plan (determined

based on the assumptions used to fund such Plan) and (4) neither the

Company nor any member of its Controlled Group has incurred in the

six years prior to the Signing Date, or reasonably expects to incur,

any liability under Title IV of ERISA (other than contributions to

the Plan or premiums to the PBGC in the ordinary course and without

default) in respect of a Plan (including any Plan that is a

"multiemployer plan", within the meaning of Section 4001(c)(3) of

ERISA); and (C) each Plan that is intended to be qualified under

Section 401(a) of the Code has received a favorable determination

letter from the Internal Revenue Service with respect to its

qualified status that has not been revoked, or such a determination

letter has been timely applied for but not received by the Signing

Date, and nothing has occurred, whether by action or by failure to

act, which could reasonably be expected to cause the loss, revocation

or denial of such qualified status or favorable determination letter.

-18-

<PAGE>

(o) TAXES. Except as would not, individually or in the aggregate,

reasonably be expected to have a Company Material Adverse Effect, (i)

the Company and the Company Subsidiaries have filed all federal,

state, local and foreign income and franchise Tax returns required to

be filed through the Signing Date, subject to permitted extensions,

and have paid all Taxes due thereon, and (ii) no Tax deficiency has

been determined adversely to the Company or any of the Company

Subsidiaries, nor does the Company have any knowledge of any Tax

deficiencies. "TAX" or "TAXES" means any federal, state, local or

foreign income, gross receipts, property, sales, use, license,

excise, franchise, employment, payroll, withholding, alternative or

add on minimum, ad valorem, transfer or excise tax, or any other tax,

custom, duty, governmental fee or other like assessment or charge of

any kind whatsoever, together with any interest or penalty, imposed

by any Governmental Entity.

(p) PROPERTIES AND LEASES. Except as would not, individually or in the

aggregate, reasonably be expected to have a Company Material Adverse

Effect, the Company and the Company Subsidiaries have good and

marketable title to all real properties and all other properties and

assets owned by them, in each case free from liens, encumbrances,

claims and defects that would affect the value thereof or interfere

with the use made or to be made thereof by them. Except as would not,

individually or in the aggregate, reasonably be expected to have a

Company Material Adverse Effect, the Company and the Company

Subsidiaries hold all leased real or personal property under valid

and enforceable leases with no exceptions that would interfere with

the use made or to be made thereof by them.

(q) ENVIRONMENTAL LIABILITY. Except as would not, individually or in the

aggregate, reasonably be expected to have a Company Material Adverse

Effect:

(i) there is no legal, administrative, or other

proceeding, claim or action of any nature seeking to impose,

or that would reasonably be expected to result in the

imposition of, on the Company or any Company Subsidiary, any

liability relating to the release of hazardous substances as

defined under any local, state or federal environmental

statute, regulation or ordinance, including the

Comprehensive Environmental Response, Compensation and

Liability Act of 1980, pending or, to the Company's

knowledge, threatened against the Company or any Company

Subsidiary;

-19-

<PAGE>

(ii) to the Company's knowledge, there is no

reasonable basis for any such proceeding, claim or action;

and

(iii) neither the Company nor any Company

Subsidiary is subject to any agreement, order, judgment or

decree by or with any court, Governmental Entity or third

party imposing any such environmental liability.

(r) RISK MANAGEMENT INSTRUMENTS. Except as would not, individually or in

the aggregate, reasonably be expected to have a Company Material

Adverse Effect, all derivative instruments, including, swaps, caps,

floors and option agreements, whether entered into for the Company's

own account, or for the account of one or more of the Company

Subsidiaries or its or their customers, were entered into (i) only in

the ordinary course of business, (ii) in accordance with prudent

practices and in all material respects with all applicable laws,

rules, regulations and regulatory policies and (iii) with

counterparties believed to be financially responsible at the time;

and each of such instruments constitutes the valid and legally

binding obligation of the Company or one of the Company Subsidiaries,

enforceable in accordance with its terms, except as may be limited by

the Bankruptcy Exceptions. Neither the Company or the Company

Subsidiaries, nor, to the knowledge of the Company, any other party

thereto, is in breach of any of its obligations under any such

agreement or arrangement other than such breaches that would not,

individually or in the aggregate, reasonably be expected to have a

Company Material Adverse Effect.

(s) AGREEMENTS WITH REGULATORY AGENCIES. Except as set forth on SCHEDULE

F, neither the Company nor any Company Subsidiary is subject to any

material cease-and-desist or other similar order or enforcement

action issued by, or is a party to any material written agreement,

consent agreement or memorandum of understanding with, or is a party

to any commitment letter or similar undertaking to, or is subject to

any capital directive by, or since December 31, 2006, has adopted any

board resolutions at the request of, any Governmental Entity (other

than the Appropriate Federal Banking Agencies with jurisdiction over

the Company and the Company Subsidiaries) that currently restricts in

any material respect the conduct of its business or that in any

material manner relates to its capital adequacy, its liquidity and

funding policies and practices, its ability to pay dividends, its

credit, risk management or compliance policies or procedures, its

internal controls, its management or its operations or business (each

item in this sentence, a "REGULATORY AGREEMENT"), nor has the Company

-20-

<PAGE>

or any Company Subsidiary been advised since December 31, 2006 by any

such Governmental Entity that it is considering issuing, initiating,

ordering, or requesting any such Regulatory Agreement. The Company

and each Company Subsidiary are in compliance in all material

respects with each Regulatory Agreement to which it is party or

subject, and neither the Company nor any Company Subsidiary has

received any notice from any Governmental Entity indicating that

either the Company or any Company Subsidiary is not in compliance in

all material respects with any such Regulatory Agreement.

"APPROPRIATE FEDERAL BANKING AGENCY" means the "appropriate Federal

banking agency" with respect to the Company or such Company

Subsidiaries, as applicable, as defined in Section 3(q) of the

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

(t) INSURANCE. The Company and the Company Subsidiaries are insured with

reputable insurers against such risks and in such amounts as the

management of the Company reasonably has determined to be prudent and

consistent with industry practice. The Company and the Company

Subsidiaries are in material compliance with their insurance policies

and are not in default under any of the material terms thereof, each

such policy is outstanding and in full force and effect, all premiums

and other payments due under any material policy have been paid, and

all claims thereunder have been filed in due and timely fashion,

except, in each case, as would not, individually or in the aggregate,

reasonably be expected to have a Company Material Adverse Effect.

(u) INTELLECTUAL PROPERTY. Except as would not, individually or in the

aggregate, reasonably be expected to have a Company Material Adverse

Effect, (i) the Company and each Company Subsidiary owns or otherwise

has the right to use, all intellectual property rights, including all

trademarks, trade dress, trade names, service marks, domain names,

patents, inventions, trade secrets, know-how, works of authorship and

copyrights therein, that are used in the conduct of their existing

businesses and all rights relating to the plans, design and

specifications of any of its branch facilities ("PROPRIETARY RIGHTS")

free and clear of all liens and any claims of ownership by current or

former employees, contractors, designers or others and (ii) neither

the Company nor any of the Company Subsidiaries is materially

infringing, diluting, misappropriating or violating, nor has the

Company or any or the Company Subsidiaries received any written (or,

to the knowledge of the Company, oral) communications alleging that

any of them has materially infringed, diluted, misappropriated or

violated, any of the Proprietary Rights owned by any other person.

Except as would not, individually or in the aggregate, reasonably be

-21-

<PAGE>

expected to have a Company Material Adverse Effect, to the Company's

knowledge, no other person is infringing, diluting, misappropriating

or violating, nor has the Company or any or the Company Subsidiaries

sent any written communications since January 1, 2006 alleging that

any person has infringed, diluted, misappropriated or violated, any

of the Proprietary Rights owned by the Company and the Company

Subsidiaries.

(v) BROKERS AND FINDERS. No broker, finder or investment banker is

entitled to any financial advisory, brokerage, finder's or other fee

or commission in connection with this Agreement or the Warrant or the

transactions contemplated hereby or thereby based upon arrangements

made by or on behalf of the Company or any Company Subsidiary for

which the Investor could have any liability.

ARTICLE III

COVENANTS

3.1 COMMERCIALLY REASONABLE EFFORTS.

(a) Subject to the terms and conditions of this Agreement, each of the parties

will use its commercially reasonable efforts in good faith to take, or cause

to be taken, all actions, and to do, or cause to be done, all things

necessary, proper or desirable, or advisable under applicable laws, so as to

permit consummation of the Purchase as promptly as practicable and otherwise

to enable consummation of the transactions contemplated hereby and shall use

commercially reasonable efforts to cooperate with the other party to that end.

(b) If the Company is required to obtain any stockholder approvals set forth

on SCHEDULE C, then the Company shall comply with this Section 3.1(b) and

Section 3.1(c). The Company shall call a special meeting of its stockholders,

as promptly as practicable following the Closing, to vote on proposals

(collectively, the "STOCKHOLDER PROPOSALS") to (i) approve the exercise of the

Warrant for Common Stock for purposes of the rules of the national security

exchange on which the Common Stock is listed and/or (ii) amend the Company's

Charter to increase the number of authorized shares of Common Stock to at

least such number as shall be sufficient to permit the full exercise of the

Warrant for Common Stock and comply with the other provisions of this Section

3.1(b) and Section 3.1(c). The Board of Directors shall recommend to the

Company's stockholders that such stockholders vote in favor of the Stockholder

Proposals. In connection with such meeting, the Company shall prepare (and the

Investor will reasonably cooperate with the Company to prepare) and file with

the SEC as promptly as practicable (but in no event more than ten business

days after the Closing) a preliminary proxy statement, shall use its

reasonable best efforts to respond to any comments of the SEC or its staff

thereon and to cause a definitive proxy statement related to such

-22-

<PAGE>

stockholders' meeting to be mailed to the Company's stockholders not more than

five business days after clearance thereof by the SEC, and