TRUST COMPANY AGREEMENT AND PLAN OF MERGER
by and between
The Canandaigua National Bank and Trust Company
and
Five Star Bank
Dated as of March 25, 2006

1

TRUST COMPANY AGREEMENT AND PLAN OF MERGER

THIS TRUST COMPANY AGREEMENT AND PLAN OF MERGER, dated as of March 25, 2006
(this “Agreement”), is made by and between Five Star Bank, a New York State
chartered banking association (“Seller”), and The Canandaigua National Bank and
Trust Company, a national banking association (“Purchaser”).

Recitals

WHEREAS, Seller is a wholly owned subsidiary of Financial Institutions, Inc.
(“FI”), a bank holding company organized under the laws of the State of New
York;

WHEREAS, as soon as practicable following the date hereof, Seller will make
application to the Department of Banking of the State of New York (the “Banking
Department”) to organize Five Star New York Trust Company, a trust company
(“Trust Company”) to be chartered under the laws of the State of New York as a
wholly-owned subsidiary of Seller and, following the organization of Trust
Company, Seller will petition the Supreme Court of the State of New York, New
York County, to have Trust Company substituted in every fiduciary capacity in
place of Seller as the trustee and fiduciary with respect to all of the Trust
Accounts (as defined herein) pursuant to Section 154 of the New York Banking
Law;

WHEREAS, the parties intend that, as soon as practicable following entry of the
court order pursuant to Section 154, Trust Company will, subject to the terms
and conditions set forth herein, merge (the “Merger”) with and into Purchaser
(Trust Company and Purchaser are sometimes collectively referred to herein as
the “Constituent Corporations”);

WHEREAS, the Boards of Directors of Purchaser and Seller have determined that it
is in the best interests of their respective companies and their shareholders to
consummate the transactions provided for herein; and

WHEREAS, the parties desire to make certain representations, warranties and
agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.

Agreements

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, and intending to be legally bound
hereby, the parties agree as follows:

ARTICLE I
CERTAIN DEFINITIONS

For purposes of this Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires, the terms defined in this Article I shall
have the meanings assigned to them in this Article I and shall include the
plural as well as the singular.

Affiliate – With respect to any Person, any Person directly or indirectly
controlling, controlled by, or under common control with such other Person, and
any Subsidiary of such Person. For purposes of this definition, “control”
(including with correlative meaning, the terms “controlled by” and “under common
control with”) as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.

Agreement – As defined in the Introduction hereof, including all written
disclosures pursuant hereto, amendments hereof and supplements thereof.

Bank Act – As defined in Section 2.1.

Banking Department – As defined in the Recitals.

Burdensome Condition – As defined in Section 8.2(c).

Business Day – Any day except a Saturday, Sunday or any day which is a legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other government action to close. All time
periods in this Agreement based on a number of days shall be deemed to refer to
calendar days unless the term Business Day is specifically used.

Closing – As defined in Section 10.1(a).

Closing Adjustment Documents – As defined in Section 2.7(a).

Closing Date – As defined in Section 10.1.

Closing Date – As defined in Section 2.6(a).

Constituent Corporations – As defined in the Recitals.

Disagreement – As defined in Section 2.7(b).

Effective Time – As defined in Section 2.2.

Encumbrance – Any lien, pledge, security interest, claim, charge, easement,
limitation, commitment, restriction or encumbrance of any kind or nature
whatsoever.

Equity Value – The amount of Seller’s initial cash, or cash equivalent, equity
investment in Trust Company, as invested by Seller as part of the formation of
Trust Company.

Estimated Merger Consideration – Means (i) 2.01% of the aggregate Fair Market
Value of the Trust Assets transferred in this transaction as of the close of
business three (3) Business Days prior to the Closing Date, plus (ii) the Equity
Value.

Fair Market Value – (a) As to any Securities which are listed or admitted to
trading on any national securities exchange, on any Business Day, the amount
equal to (i) the last sale price of such Securities, regular way, on such date
or, if no such sale takes place on such date, the average of the closing bid and
asked prices thereof on such date, in each case as officially reported on the
principal national securities exchange on which such Securities are then listed
or admitted to trading, or (ii) as to Securities which are not then listed or
admitted to trading on any national securities exchange but are reported through
the automated quotation system of a registered securities association, the last
trading price of such Securities on such date, or if there shall have been no
trading on such date, the average of the closing bid and asked prices of such
Securities on such date as shown by such automated quotation system, and (b) as
to any other property on any date, the price which could be negotiated in an
arm’s-length, free market transaction, for cash, between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction.

Federal Funds Rate – For any period, the rate per annum (expressed on a basis of
calculation of actual days in a year) equal to the average during such period of
the average of the daily high and low rates on overnight federal funds
transactions on each day (or for any day that is not a Business Day, for the
immediately preceding Business Day) during such period, as published by the
Federal Reserve Bank of New York.

Fees – With respect to any Trust Account, all fees which Seller is entitled to
receive with respect to such Trust Account pursuant to the Governing Agreements,
including, without limitation, all account administration fees (whether payable
annually, quarterly, monthly or otherwise) and any asset administration fees.

GAAP – With respect to any financial statement, generally accepted accounting
principles as used in the United States of America as in effect at the time such
financial statement was prepared.

Governing Agreements – All trusts, wills, contracts, resolutions, agreements and
other written documentation pursuant to which the Trust Accounts have been
established and/or are governed, including any amendments thereto.

Governmental Entity – 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 or any
other nation, whether federal, state or local.

Indemnified Party – As defined in Section 7.2(a).

Indemnifying Party – As defined in Section 7.2(a).

Independent Accounting Firm- Freed Maxick & Battaglia, P.C.

Injunction – As defined in Section 8.1(b).

Knowledge – A person shall be deemed to have knowledge of a fact, circumstance
or event when it is actually known, without a duty of investigation, to such
person.

Losses – Any and all after-tax costs, losses, taxes, liabilities, obligations,
damages, lawsuits, claims, demands and expenses (including Third-Party Claims),
including reasonable attorney’s fees and all amounts paid in investigation,
defense or settlement of any of the foregoing. Notwithstanding anything in this
Agreement to the contrary, no party hereto shall be required to indemnify or
hold harmless any other party hereto or otherwise compensate any other party
hereto for Losses with respect to exemplary, consequential, special, indirect or
punitive damages, including any loss theories based on a multiple of purchase
price or lost profits.

Material Adverse Effect — A material adverse effect on the assets, business,
condition (financial or otherwise), or results of operations of the entity with
respect to which the effect occurs, other than any effect relating to (a) the
general business, economic, political, social or regulatory conditions, or the
financial, banking or securities markets, in the localities, or regions where
Seller operates, (b) the industry in which Seller operates in general and not
specifically relating to Seller, (c) the announcement of this Agreement or of
the intention to sell the Trust Company, or (d) the transactions contemplated by
this Agreement.

Merger – As defined in the Recitals.

Merger Consideration –An amount equal to (i) 2.01% of the aggregate Fair Market
Value of the Trust Assets transferred in this transaction as of the close of
business in the Business Day immediately preceding the Closing Date, plus
(ii) the Equity Value.

Non-objecting Trust Account – Any Trust Account with respect to which the Trust
Company is named the successor trustee pursuant to the Section 154 Order.

Notice Date – As defined in Section 2.6(b).

Notice of Disagreement – As defined in Section 2.7(b).

NYBL – The New York Banking Law.

OCC – As defined in Section 2.2.

Person – Any individual, corporation, company, limited liability company,
partnership (limited or general), joint venture, association, trust or other
entity.

Purchaser – As defined in the Introduction.

Records – All Governing Agreements and all records (in whatever form or media)
and original documents in Seller’s or Trust Company’s possession or under their
control which pertain to and/or are or have at any time been utilized by Seller
or Trust Company to administer, reflect, monitor, evidence or record information
(including, but not limited to, information regarding transactions in or with
respect to, and federal and state income tax returns for, such Trust Accounts
and Trust Asset Portfolio) respecting the Trust Accounts and the Trust Asset
Portfolio and all such records and original documents respecting the
Non-objecting Trust Accounts.

Requisite Regulatory Approvals – As defined in Section 8.1(a).

Section 154 Order – The order of the Supreme Court entered in connection with
the Section 154 Petition substituting Trust Company for Seller in every
fiduciary capacity designated therein with respect to the Non-objecting Trust
Accounts.

Section 154 Petition – The petition to the Supreme Court to be filed by Seller
and Trust Company in accordance with Section 154 of the NYBL, pursuant to which
Trust Company will be substituted in every existing fiduciary capacity for
Seller with respect to all Non-objecting Trust Accounts.

Securities – Any (a) privately or publicly issued capital stock, bonds, notes,
debentures, commercial paper, bank acceptances, trade acceptances, trust
receipts and other obligations, partnership interests, instruments or evidences
of indebtedness commonly referred to as securities, warrants, options, including
puts and calls or any combination thereof and the writing of such options and
(b) commodities and commodity futures contracts or options, foreign exchange and
foreign exchange futures contracts or options, other futures contracts or
options of any kind whatsoever, including any such contract relating to a
financial or other index of any kind, rights with respect to any of the
foregoing, and any other arrangements for investment of financial instruments
that may from time to time be available to the public or to any individual.

Seller – As defined in the Introduction.

Subsidiary – With respect to any Person, any corporation, partnership or other
entity or organization, whether incorporated or unincorporated, which is
required by GAAP to be consolidated with such Person for financial reporting
purposes.

Supplemental Settlement – As defined in Section 2.8.

Supplemental Settlement Date – As defined in Section 2.8.

Supreme Court – The Supreme Court of the State of New York, Monroe County.

Surviving Bank – As defined in Section 2.1.

Systems Records – All accounting information, reports, books, records,
statements and data regularly maintained on microfiche, electronic information
systems or electronic storage media, separately specifying or accounting for
each Trust Account.

Third Party Claim – As defined in Section 7.2(a).

Trust Account – Any of the trust or fiduciary accounts or relationships
disclosed pursuant to Section 3.10(c) for which Seller acts as a fiduciary and
any additional such accounts or relationships as Purchaser agrees in writing to
be included as additional Trust Accounts in accordance with Section 6.5.

Trust Assets – With respect to any Trust Account, the cash, properties, assets,
deposits, funds, investments, agreements, bills, notes, Securities, instruments,
demands, contracts and rights that are administered, utilized, or held for
payment to or other benefit of other persons (whether or not constituting all or
a portion of the corpus of any trust) by Seller as fiduciary, custodian or
trustee, pursuant to or in connection with such Trust Account.

Trust Asset Portfolio – All Securities and other Trust Assets held in the
Non-objecting Trust Accounts.

Trust Company – As defined in the Recitals.

Trust Company Common Stock – As defined in Section 2.4.

Trust Party – As defined in Section 6.8.

ARTICLE II

THE MERGER

2.1 The Merger.

Subject to the terms and conditions of this Agreement, in accordance with the
provisions of the National Bank Act, 12 U.S.C. 215a, as amended, (the “Bank
Act”), at the Effective Time, Trust Company shall merge with and into Purchaser.
Purchaser shall be the surviving bank (hereinafter sometimes called the
“Surviving Bank”) in the Merger, and shall continue its corporate existence
under the laws of the United States. The name of the Surviving Bank shall
continue to be The Canandaigua National Bank and Trust Company. At the Effective
Time, the separate corporate existence of Trust Company shall terminate and all
its assets shall rest in Purchaser without any conveyance or transfer, and
Purchaser shall be responsible for all the liabilities of each of the
Constituent Corporations existing as of the Effective Time.

2.2 Effective Time.

The Merger shall become effective on the effective date specified in the
official certification of the Office of the Comptroller of the Currency (“OCC”)
authorizing the Merger, which shall be no earlier than, and as soon as
practicable after, the effective date and time of the Section 154 Order. The
term “Effective Time” shall be the date and, if any, the time set forth in this
official certification.

2.3 Effects of the Merger.

At and after the Effective Time, the Merger shall have the effects set forth in
the Bank Act.

2.4 Conversion of Trust Company Common Stock.

At the Effective Time, the 2,000 shares of common stock, $1,000 par value, of
Trust Company (the “Trust Company Common Stock”) issued and outstanding
immediately prior to the Effective Time shall, by virtue of this Agreement and
without any action on the part of the holder thereof, be converted into and
exchangeable for the right to receive the Merger Consideration. All of the
shares of Trust Company Common Stock converted into the right to receive the
Merger Consideration pursuant to this Article II shall no longer be outstanding
and shall automatically be cancelled and shall cease to exist, and the
certificate previously representing such shares of Trust Company Common Stock
shall thereafter only represent the right to receive the Merger Consideration
into which the shares of Trust Company Common Stock represented by such
certificate have been converted pursuant to this Section 2.4.

2.5 Merger Consideration.

As consideration for its efforts and expenses incurred in establishing the Trust
Company, and for its agreement hereunder to use reasonable efforts to transfer
the Non-objecting Trust Accounts to the Trust Company prior to the Closing Date,
to not compete with Purchaser following the Closing as provided in Section 6.8
hereof, and to otherwise assist in the transfer of the Non-objecting Trust
Accounts from Trust Company to Purchaser, Purchaser shall pay Seller the Merger
Consideration. The parties intend that the Merger be treated as an asset
purchase for federal income tax purposes. The parties shall use their best
efforts to agree as soon as practicable, but in no event more than sixty
(60) days after the Closing Date, to an allocation of the Merger Consideration
in accordance with Section 1060 of the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations promulgated thereunder. Such allocation
shall be reflected on a schedule or certificate to be executed by each of the
parties and delivered in accordance with this Section 2.5 hereof. The parties
shall file all applicable tax returns and other documents, including IRS
Form 8594, in accordance with the agreed allocation and will not adopt or
otherwise assert tax positions inconsistent therewith (unless required to do so
under applicable law). Purchaser shall deliver to Seller a copy of a completed
IRS Form 8594 as soon as practicable following the Closing Date but in no event
more than 90 days thereafter.

2.6 Payment of Estimated Merger Consideration and Equity Value at Closing.

(a) At the Closing, Purchaser shall deliver, or cause to be delivered to Seller
(by wire transfer to such account as Seller shall designate in writing at least
three (3) Business Days prior to the Closing Date) an amount equal to (i) 90% of
the Estimated Merger Consideration (other than the Equity Value), plus (ii) 100%
of the Equity Value (clauses (i) and (ii), collectively, the “Closing Date
Payment”).

(b) At least two (2) Business Days prior to the Closing Date (the “Notice
Date”), the Seller shall prepare and deliver to the Purchaser:

  (i)   a list of the Non-objecting Trust Accounts, which list shall set forth
(A) with respect to each such account, (1) each Security held in such account as
of the Notice Date, (2) the Fair Market Value as of the Notice Date of each such
Security, (3) each Trust Asset which is not a Security held in each such account
and (4) the Fair Market Value as of the Notice Date of each such Trust Asset and
(B) the aggregate Fair Market Value of the Trust Asset Portfolio as of the
Notice Date;

(ii) the location(s) of all non-liquid assets included in the Trust Accounts;
and

(iii) a pro forma estimated balance sheet for Trust Company as of the Notice
Date prepared in accordance with GAAP (reflecting the Trust Company after giving
effect to the transfer of the Trust Accounts to the Trust Company).

The materials to be delivered pursuant to this Section 2.6(b) and pursuant to
Section 2.7(a) reflecting the Non-Objecting Trust Accounts, the fees with
respect thereto, the Trust Assets held in such accounts and the Fair Market
Value of each such asset shall be substantially in the form of the disclosure
made pursuant to Section 3.10(c) hereof.

2.7 Closing Adjustment Documents.

(a) As soon as reasonably practicable following the Closing Date, and in no
event more than 30 days, thereafter, Purchaser shall prepare and deliver to
Seller:

(i) a list of the Non-objecting Trust Accounts, which list shall set forth
(A) with respect to each such account, (1) each Security held in such account as
of the Closing Date, (2) the Fair Market Value as of the Closing Date of each
such Security, (3) each Trust Asset which is not a Security held in each such
account, and (4) the Fair Market Value as of the Closing Date of each such Trust
Asset and (B) the aggregate Fair Market Value of the Trust Asset Portfolio as of
the Closing Date; and

(ii) a calculation setting forth in reasonable detail the calculation of the
Merger Consideration; and

(iii) a document setting forth in reasonable detail the calculations
contemplated by Section 2.8 below ((i) – (iii), collectively the “Closing
Adjustment Documents”).

The parties shall cooperate in the preparation of the Closing Adjustment
Documents in accordance with this Section 2.7 and Section 2.8 hereof, including
such additional documents as may be necessary to calculate the Merger
Consideration. Without limiting the generality of the foregoing, each party
shall provide the other party and its designees with reasonable access to its
records, personnel and representatives which relate to the Trust Asset Portfolio
and such other information as the other party may require in connection with the
preparation or review, as the case may be, of the Closing Adjustment Documents
and with respect to the resolution of any Disagreement (as defined below).

(b) Within twenty days after delivery of the Closing Adjustment Documents to
Seller, Seller may dispute all or any portion of the Closing Adjustment
Documents by giving written notice (a ’’Notice of Disagreement”) to Purchaser
setting forth in reasonable detail the basis for any such dispute (any such
dispute being hereinafter called a “Disagreement”). The parties shall promptly
commence good faith negotiations with a view to resolving all such
Disagreements. If Seller does not give a Notice of a Disagreement in accordance
with the provisions of the first sentence of this paragraph (b) within the
twenty-day period set forth therein, Seller shall be deemed to have irrevocably
accepted the Closing Adjustment Documents in the form delivered to Seller by
Purchaser.

(c) If Seller shall deliver a Notice of Disagreement and Purchaser shall not
dispute all or any portion of such Notice of Disagreement by giving written
notice to Seller setting forth in reasonable detail the basis for such dispute
within twenty days following the delivery of such Notice of Disagreement,
Purchaser shall be deemed to have irrevocably accepted the Closing Adjustment
Documents as modified in the manner described in the Notice of Disagreement. If
Purchaser disputes all or any portion of the Notice of Disagreement within the
twenty-day period described in the previous sentence, and within twenty days
following the delivery to Seller of the notice of such dispute Seller and
Purchaser do not resolve the Disagreement (as evidenced by a written agreement
between them), such Disagreement shall be referred to the Independent Accounting
Firm for resolution of such Disagreement in accordance with the terms of this
Agreement. If Seller and Purchaser do not promptly agree on the selection of an
Independent Accounting Firm, their respective independent public accountants
shall select such firm. The determinations made by the Independent Accounting
Firm with respect to any Disagreement shall be final and binding upon the
parties and the amount so determined shall be used to complete the final Closing
Adjustment Documents. Seller and Purchaser shall use their best efforts to cause
the Independent Accounting Firm to render its determination as soon as
practicable after referral of the Disagreement to such firm, and each shall
cooperate with such firm and provide such firm with reasonable access to the
books, records, personnel and representatives of it and its Subsidiaries and
such other information as such firm may require in order to render its
determination. All of the fees and expenses of any Independent Accounting Firm
retained pursuant to this paragraph (c) shall be paid one-half by Seller and
one-half by Purchaser.

2.8 Supplemental Settlement; Additional Merger Consideration.

Promptly after the Closing Adjustment Documents have been finally determined in
accordance with Section 2.7 hereof, but in no event later than five Business
Days following such final determination (the “Supplemental Settlement Date”),
the parties hereto shall effect a supplemental settlement (the “Supplemental
Settlement”), either by telephone or in person at a mutually convenient
location. If the Merger Consideration as reflected in the Closing Adjustment
Documents is greater than the Closing Date Payment, Purchaser shall wire
transfer in immediately available funds to an account specified by Seller on the
Supplemental Settlement Date an amount equal to the difference between the Final
Merger Consideration and the Closing Date Payment. If the Merger Consideration
as reflected in the Closing Adjustment Documents is less than the Closing Date
Payment, Seller shall wire transfer in immediately available funds to an account
designated by Purchaser on the Supplemental Settlement Date an amount equal to
the difference between the Closing Date Payment and the Final Merger
Consideration.

2.09 Purchaser Bank Common Stock.

The shares of common stock, par value $20.00 per share, of Purchaser issued and
outstanding immediately prior to the Effective Time shall remain issued,
outstanding and unchanged after the Merger.

2.10 Articles of Association.

At the Effective Time, the Articles of Association of Purchaser, as in effect at
the Effective Time, shall be the Articles of Association of the Surviving Bank.

2.11 By-Laws.

At the Effective Time, the By-Laws of Purchaser, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Bank until
thereafter amended in accordance with applicable law.

2.12 Directors and Officers.

The directors and officers of Purchaser immediately prior to the Effective Time
shall be the directors and officers of the Surviving Bank, each to hold office
in accordance with the By-Laws of the Surviving Bank until their respective
successors are duly elected or appointed and qualified.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

      Seller hereby represents and warrants to Purchaser as follows:

 
   
3.1
  Corporate Organization.

(a) Seller is a New York banking association duly organized, validly existing
and in good standing under the laws of the State of New York. Seller has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted, and is duly licensed
or qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
material adverse effect on the conduct of Seller’s business with respect to the
Trust Accounts.

(b) Upon its formation, Trust Company will be a trust company duly organized,
validly existing and in good standing under the laws of the State of New York,
with its principal office located in East Rochester, New York. Upon its
formation, Trust Company will have the corporate power and authority to be
substituted in every fiduciary capacity in place of Seller with respect to the
Trust Accounts, to act in such capacity thereafter and to conduct the business
with respect to the Trust Accounts as currently conducted by Seller.

(c) The minute books of Trust Company will contain true, complete and accurate
records of all meetings and other corporate actions held or taken by the sole
stockholder and the Board of Directors of Trust Company.

3.2 Capitalization.

Upon its formation, the authorized capital stock of Trust Company will consist
of 2,000 shares of Trust Company Common Stock, $1,000 par value per share, and
no shares of preferred stock. Upon its formation, Trust Company will issue 2,000
shares of Trust Company Common Stock to Seller. As of the Closing Date, all of
the issued and outstanding shares of Trust Company Common Stock will have been
duly authorized and validly issued and will be fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof, except as provided in Section 114 of the NYBL. As of the Closing Date,
all of the outstanding shares of Trust Company Common Stock will be owned by
Seller, free and clear of all Encumbrances, contracts, rights, options and
assignments whatsoever. As of the Closing Date, no shares of Trust Company
Common Stock will be reserved for issuance, and Trust Company will not have and
will not be bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of Trust Company Common Stock or any other equity security of
Trust Company or any securities representing the right to purchase or otherwise
receive any shares of Trust Company Common Stock or any other equity security of
Trust Company.

3.3 Assets and Trust Assets.

(a) At the Closing, Trust Company will have no assets, liabilities (whether
absolute, contingent, accrued or otherwise), properties, contracts, rights,
obligations, or debts, other than cash or short-term cash equivalents
constituting Trust Company’s capitalization, and such other rights and
obligations as may exist pursuant to the Governing Agreements in respect of the
Non-objecting Trust Accounts.

(b) At the Closing, Trust Company will hold no Trust Assets other than the Trust
Assets of the Non-objecting Trust Accounts, and the Trust Assets delivered to
Purchaser hereunder with respect to each Non-objecting Trust Account will
constitute all of the Trust Assets required by the Governing Agreements to be
held in such Non-objecting Trust Accounts.

(c) At the Closing, Trust Company shall have engaged in no operations other than
those related to its organization and capitalization.

3.4 Authority; No Violation.

(a) Seller has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by all necessary
corporate action on the part of Seller, and no other corporate proceedings on
the part of Seller are necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Seller and (assuming due authorization, execution and
delivery of this Agreement by Purchaser) constitutes a valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except as enforcement may be limited by general principles of equity whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors’ rights and remedies generally.

(b) Upon its formation, Trust Company will have full power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Trust Company of this
Agreement and the consummation of the transactions contemplated hereby will be
duly and validly approved by the Board of Directors of Trust Company and by
Seller as sole stockholder of Trust Company, and, upon such approvals, no other
corporate proceedings on the part of Trust Company will be necessary to
consummate the transactions contemplated hereby. This Agreement will be duly and
validly executed and delivered by Trust Company and (assuming due authorization,
execution and delivery of this Agreement by Purchaser) will constitute a valid
and binding obligation of Trust Company, enforceable against Trust Company in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors’ rights and
remedies generally.

(c) Neither the execution and delivery of this Agreement by either Seller or
Trust Company, nor the consummation by either Seller or Trust Company of the
transactions contemplated hereby, nor compliance by Seller or Trust Company with
any of the terms or provisions hereof, will (i) conflict with or result in a
breach of any provision of the organization certificate or by-laws of Seller or
Trust Company, or (ii) assuming that the consents, permits, authorizations,
approvals, filings and registrations referred to in Section 3.6 and Section 4.3
hereof are duly obtained, (x) violate any standard of common law applicable to
Seller or Trust Company, or any material statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Seller or
Trust Company or any of their respective properties or assets, or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in a right of termination or
acceleration under or the creation of any Encumbrance upon any of the respective
properties or assets of Seller or Trust Company under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement (including, without limitation, any Governing
Agreement) or other instrument or obligation to which Seller or Trust Company is
a party, or by which they or any of their respective properties or assets may be
bound or affected, except in the case of the clause (y), for such violations,
conflicts, breaches or defaults (other than those with respect to any Governing
Agreement) which, either individually or in the aggregate, would not have a
Material Adverse Effect on the Non-objecting Trust Accounts (considered in the
aggregate) or on Seller’s or Trust Company’s (a) rights under or with respect to
any such Governing Agreements or (b) ability to consummate the transactions
contemplated hereby.

3.5 Good Standing and Compliance Under Governing Agreements.

(a) As of the date hereof, Seller has been validly appointed and is the duly
acting trustee with respect to each of the Trust Accounts and in such capacity
has valid legal title to the Trust Assets. Seller has not taken any action, nor
has Seller omitted to take any action, which would cause it to be subject to
disqualification or removal from any capacity that it now occupies with respect
to any of the Trust Accounts, nor has Seller been so disqualified or removed
from any such capacity.

(b) Seller has made available to Purchaser true (to Seller’s knowledge) copies
of all Governing Agreements in the possession of Seller. All of the various
Governing Agreements to which Seller is a party were duly executed and delivered
by it. All of the Governing Agreements constitute valid and binding obligations
of Seller and, to Seller’s knowledge, each of the other parties thereto,
enforceable against Seller and, to Seller’s knowledge, each such other party in
accordance with their respective terms, except as may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency, and similar laws affecting creditors’ rights and
remedies generally. No party under any Governing Agreement with respect to a
Non-objecting Trust Account will have any right to remove or replace Purchaser
as trustee, or to appoint any co-trustee, with respect to any Trust Account
solely as a result of the Merger and the other transactions contemplated hereby.

(c) Seller has performed, in all material respects, all duties and obligations,
made all determinations and complied, in all material respects, with all
administrative procedures required to be performed or made by it under each of
the Governing Agreements with respect to the Trust Accounts.

3.6 Consents and Approvals.

(a) Except for (i) the filing of an application by Seller with the Banking
Department requesting approval to organize Trust Company under the NYBL (and, if
so required by the Banking Department, a separate application to expand Seller’s
parent bank holding company), and approval of such applications, (ii) the
required notices to, or consents or approvals from, the Governmental Entities
listed on Schedule 3.6(a), including the FDIC, if applicable, and (iii) the
filing with the Supreme Court of the Section 154 Petition and the issuance by
the Supreme Court of the Section 154 Order, no consents, permits, approvals,
authorizations or orders of or filings or registrations with any Governmental
Entity or with any third party (including, without limitation, any party to any
Governing Agreement) are required to be obtained or made by or on behalf of
Seller or Trust Company in connection with (1) the execution and delivery by
Seller and Trust Company of this Agreement and (2) the consummation by Seller or
Trust Company of the Merger and the other transactions contemplated hereby
(including without limitation the succession by Trust Company to all of the
rights and obligations of Seller as fiduciary with respect to the Non-objecting
Trust Accounts).

(b) As of the date hereof, Seller is not aware of any reasons relating to Seller
or Trust Company why all consents and approvals (including the approval of the
Banking Department with respect to the organization of the Trust Company, the
entry by the Supreme Court of the Section 154 Order (except for any objections
that may be received from the New York Attorney General or any trust
beneficiaries) and the consents listed on Schedule 3.6(a)) will not be procured
from all Governmental Entities having jurisdiction over the transactions
contemplated by this Agreement as shall be necessary for consummation of the
Merger and the other transactions contemplated by this Agreement (including
without limitation the succession by Trust Company to all of the rights and
obligations of Seller as fiduciary with respect to the Non-objecting Trust
Accounts).

3.7 Regulatory Reports; Examinations.

At Closing, Trust Company will have timely filed all reports, registrations and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with any Governmental Entity and will have
paid all fees and assessments due and payable in connection therewith. The most
recent Banking Department examination rating of Seller’s trust operations have
been not less than “satisfactory”. No Governmental Entity has initiated any
proceeding or, to the knowledge of Seller, investigation into the business or
operations of Trust Company or the business and operations of Seller with
respect to the Trust Accounts. There is no unresolved violation, criticism or
exception asserted by any Governmental Entity with respect to any report or
statement relating to any examinations of Seller or Trust Company with respect
to the Trust Accounts or the operations of Seller or Trust Company related
thereto.

3.8 Broker’s Fees.

Except for the engagement by Seller of DWQ Associates, Ltd., neither Seller nor
Trust Company nor any of their respective officers or directors has employed any
broker or finder or incurred any liability for any broker’s fees, commissions or
finder’s fees in connection with any of the transactions contemplated by this
Agreement.

3.9 Legal Proceedings.

(a) Neither Seller nor Trust Company is a party to any, and there are no pending
or, to Seller’s knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against Trust Company or Seller (which proceedings, claims, actions or
investigations, in the case of Seller, involve or relate in any manner to the
Trust Accounts, other than accounting proceedings), or challenging the validity
or propriety of the transactions contemplated by this Agreement.

(b) There is no injunction, order, judgment, decree or regulatory restriction
imposed upon Trust Company or Seller (which, in the case of Seller, involves or
relates in any manner to the Trust Accounts).

(c) Seller has delivered to Purchaser a list of all pending accounting
proceedings known to it relating to the Trust Accounts, if any, setting forth
account name, account number, amount of Trust Assets involved and (if known) the
attorneys representing Seller.

3.10 Administration of the Trust Accounts.

(a) Seller and Trust Company have properly administered in all material respects
all of the Trust Accounts in accordance with the terms of the Governing
Agreements, applicable state and federal statutory laws and regulations and
applicable common law fiduciary standards (including standards with respect to
conflicts of interest and self-dealing). To Seller’s knowledge, neither Seller
nor Trust Company nor any of their respective directors, officers or employees
has committed any breach of trust with respect to any of the Trust Accounts.

(b) Seller has disclosed to Purchaser on Schedule 3.10(b) any arrangements it
has put in place for certain of its employees in connection with the Merger.

(c) Seller has provided Purchaser a true, correct and complete listing, as of
February 28, 2006, of all of the Trust Accounts, the Trust Assets and the Fair
Market Value of the Trust Assets held in such Trust Accounts together with the
account number, the Fair Market Value of the assets under management as of such
date, the Fees paid and accrued year-to-date with respect to each Trust Account
as of such date. That listing accurately presents, and the updates of same
delivered in accordance with Section 6.5 hereof will accurately present, as of
the dates thereof, the foregoing information.

(d) To Seller’s knowledge, there is no default existing under any Governing
Agreement and there is no event of default (as defined in any such Governing
Agreement) or event, which with the lapse of time or giving of notice, or both,
would constitute an event of default under any Governing Agreement.

3.11 Compliance with Applicable Law.

Each of Seller and Trust Company holds all licenses, franchises, permits and
authorizations necessary for the lawful conduct of its business and operations
with respect to the Trust Accounts under and pursuant to all, and in the conduct
of such business and operations has complied in all material respects with and
has been and is not in violation or default in any material respect under any,
applicable law, statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity, and Seller has not received written notice of, any
violations of any of the above.

3.12 Records.

The Records and the Systems Records relating to the Trust Accounts (a) have been
maintained in all material respects in accordance with Seller’s policies and
procedures in effect on the date hereof, applied on a consistent basis, (b) are
accurate and complete in all material respects, and (c) provide in all material
respects an accurate and complete separate record for each Trust Account’s Trust
Assets.

3.13 Files.

Seller’s files relating to the Trust Accounts contain copies of all Governing
Agreements that are in Seller’s possession or under its control and all other
material documentation within its possession or under its control regarding
Seller’s performance of and compliance with its duties and obligations under the
Governing Agreements, including, without limitation, all material correspondence
within Seller’s possession or under its control between Seller and other persons
relating to any of the Trust Accounts.

3.14 Fees.

Seller’s fee arrangements in effect as of the date of this Agreement with
respect to the Trust Accounts are enforceable in accordance with the terms of
the applicable Governing Agreements, except as may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency, and similar laws affecting creditors’ rights and
remedies generally. There shall be no Fees or administrative charges associated
with the actions described in Section 6.1(c) and there shall be no Fees or other
charges associated with the post-Closing transfer of Trust Account assets to
accounts designated by Purchaser.

3.15 Financial Information.

(a) All written financial and accounting information previously furnished or to
be furnished by Seller to Purchaser in connection with the transactions
contemplated by this Agreement is and will be accurate and complete in all
material respects as of the dates and for the periods specified therein.

(b) The books of account of Seller with respect to the Trust Accounts have been,
and are being, maintained in all material respects in accordance with applicable
legal and accounting requirements and reflect only actual transactions.

(c) At the Effective Time, Trust Company will have no liabilities, absolute or
contingent, of any kind, other than those contingent liabilities relating to its
ownership of the Trust Assets and administration of the Trust Accounts.

3.16 Full Disclosure.

This Agreement and the written disclosures delivered by or on behalf of Seller
hereunder are true, correct and complete in all material respects. No
representation or warranty of Seller contained in this Agreement or such written
disclosures hereto contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER

      Purchaser hereby represents and warrants to Seller as follows:

 
   
4.1
  Organization.

Purchaser is a national banking association duly organized, validly existing and
in good standing under the laws of the United States. Purchaser has the
corporate power and authority to own or lease all of its properties and assets
and to carry on its business as it is now being conducted, and is duly licensed
or qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
Material Adverse Effect on the ability of Purchaser to consummate the Merger and
to provide trust services to the Trust Accounts.

4.2 Authority; No Violation.

(a) Purchaser has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by all necessary
corporate action on the part of Purchaser, and no other corporate proceedings on
the part of Purchaser are necessary to approve this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and (assuming due authorization, execution
and delivery of this Agreement by Seller) constitutes a valid and binding
agreement of Purchaser enforceable against Purchaser in accordance with its
terms, except as enforcement may be limited by general principles of equity
whether applied in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors’ rights and remedies generally.

(b) Neither the execution and delivery of this Agreement by Purchaser, nor the
consummation by Purchaser of the transactions contemplated hereby, nor
compliance by Purchaser with any of the terms or provisions hereof, will
(i) conflict with or result in a breach of any provision of the Articles of
Association or by-laws of Purchaser or (ii) assuming the consents, permits,
authorization, approvals, filings and registrations set forth in Section 4.3 are
obtained or made, (A) violate any standard of common law applicable to Purchaser
or any statute, code, ordinance, rule, regulation, judgment, order, writ, decree
or injunction applicable to Purchaser or any of its properties or assets or
(B) violate, conflict with, result in a breach of any provisions of, constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration
under or the creation of any Encumbrance upon any of the properties or assets of
Purchaser under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Purchaser is a party, or by which its
properties or assets may be bound or affected, except, in the case of clause
(B), for such violations, conflicts, breaches or defaults which, either
individually or in the aggregate, would not have a Material Adverse Effect on
Purchaser’s ability to consummate the transactions contemplated hereby.

4.3 Consents and Approvals.

(a) Except for (i) the filing of an application with the OCC and, if applicable,
the FDIC in connection with the Merger and the approval of such applications,
and (ii) the consents and approvals from Governmental Entities listed on
Schedule 4.3(a), no consents, permits, authorizations, approvals or orders of,
or filings or registrations with, any Governmental Entity or with any third
party are required to be obtained or made by or on behalf of Purchaser in
connection with (1) the execution and delivery by Purchaser of this Agreement or
(2) the consummation of the Merger and the other transactions contemplated
hereby.

(b) As of the date hereof, Purchaser is not aware of any reasons relating to
Purchaser why all consents and approvals (including the approval of the OCC and,
if applicable, the FDIC, with respect to the Merger application and the consents
and approvals listed on Schedule 4.3(a)) will not be procured from all
Governmental Entities having jurisdiction over the transactions contemplated by
this Agreement as shall be necessary for the consummation of the Merger and the
other transactions contemplated by this Agreement.

4.4 Financing.

On or prior to the Closing Date, Purchaser will have sufficient funds to enable
Purchaser to consummate the transactions contemplated hereby.

4.5 Broker’s Fees.

Neither Purchaser nor any of its officers or directors has employed any broker
or finder or incurred any liability for any broker’s fees, commissions or
finders’ fees in connection with any of the transactions contemplated by this
Agreement.

ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS

5.1 Covenants of Seller.

(a) During the period from the date of this Agreement and continuing until the
Effective Time, except as expressly contemplated or permitted by this Agreement
or with the prior written consent of Purchaser, Seller (and, following the entry
by the Supreme Court of the Section 154 Order, Trust Company) shall carry on its
business and operations with respect to the Trust Accounts in the ordinary
course consistent with past practice in compliance with all applicable law and
regulations and in compliance with the Governing Agreements and shall not modify
its Fee schedule or increase the individual Fees applicable to any of the Trust
Accounts. Seller (and, following the entry by the Supreme Court of the
Section 154 Order, Trust Company with respect to the Non-objecting Trust
Accounts) will use its reasonable best efforts to (x) preserve its business with
respect to the Trust Accounts intact and (y) preserve for itself the goodwill of
all Persons with whom fiduciary and business relationships exist under the Trust
Accounts, provided that the filing of an objection with respect to any Trust
Account during the Section 154 proceedings shall not in itself be deemed to
constitute a breach of the covenants contained in this Section 5.1.

(b) Without limiting the generality of the foregoing, except as otherwise
contemplated by this Agreement or consented to in writing by Purchaser, during
the period from the date of this Agreement through the Effective Time, Seller
shall not, and shall not permit Trust Company to (i) reduce or agree to reduce
any Fees or other compensation payable with respect to any Trust Account unless
such reduction is required under the Governing Agreements or (ii) otherwise
amend any Governing Agreement unless such amendment is requested by a
beneficiary of the Trust Account or a party to the Governing Agreement other
than Seller and otherwise is permitted under the Governing Agreement.

5.2 Covenants of Trust Company.

Prior to the Effective Time, Trust Company shall take no action other than as
contemplated by this Agreement or as shall be necessary to effect the
transactions contemplated by this Agreement or to carry on the business with
respect to the Trust Accounts in the ordinary course consistent with the past
practice of Seller with respect to such accounts. All cash money accounts and
securities accounts of the Trust Accounts will be in balance as of the Closing
Date, except for overdrafts incurred in the ordinary course of Seller’s personal
trust business.

ARTICLE VI
ADDITIONAL AGREEMENTS

6.1 Commercial Efforts.

(a) Subject to the terms and conditions hereof, each of the parties shall use
its respective reasonable best efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the Section 154 Order, the Merger and the other
transactions contemplated by this Agreement.

(b) In case at any time after the Closing Date, any further action is necessary
or desirable to carry out the purposes of this Agreement, to validly appoint
Purchaser as trustee of the Trust Accounts, to vest Purchaser with valid legal
title to any of the Trust Assets or to otherwise enable Purchaser to lawfully
administer the Non-objecting Trust Accounts, Seller and Trust Company shall
reasonably cooperate with Purchaser and shall take all such lawful and necessary
action as may be reasonably required. Seller and Trust Company shall promptly
provide such information and reasonable assistance as may be requested by
Purchaser in connection with the foregoing.

(c) Seller agrees to assist Purchaser in the orderly transfer of trust
administration business and conversion of the related data files and Records
associated with the business and acknowledges that Purchaser may use a trust
administration operating system different from its own. To the extent its
Records allow, Seller agrees to provide reasonable assistance and information to
Purchaser’s authorized agents and to provide reasonable assistance in trial runs
of Purchaser’s operating system. In the event that the parties mutually agree
that it would be desirable to effect the Merger prior to the time when Purchaser
has concluded that a safe and sound conversion of the trust Accounts to
administrative systems selected by Purchaser can be effected, the parties agree
to negotiate in good faith a transitional services agreement whereby Seller will
continue to provide administrative services (but not perform fiduciary duties)
with respect to the Trust Accounts until such time as set forth in the
transitional services agreement.

6.2 Regulatory and Other Matters.

(a) The parties hereto shall cooperate with each other and use their reasonable
best efforts to promptly prepare and file all necessary documentation, to effect
all applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals, authorizations and orders of all
third parties and Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this Agreement. Seller shall be
responsible for obtaining all such permits, consents, approvals, authorizations
and orders in connection with the organization of Trust Company and the
substitution of Trust Company as fiduciary with respect to the Trust Accounts,
including but not limited to, (i) the approval of the Banking Department with
respect to the organization of Trust Company, (ii) the entry by the Supreme
Court of the Section 154 Order and (iii) the consents listed on Schedule 3.6(a).
Purchaser shall be responsible for obtaining all such permits, consents,
approvals, authorizations and orders that are required by it in connection with
the Merger, including but not limited to (i) the approval of the OCC and, if
applicable, the FDIC of the Merger and (ii) the issuance by the OCC of a
certificate authorizing the Merger, and all costs and expenses associated
therewith shall be borne by Purchaser. Purchaser and Seller shall have the right
to review in advance, and to the extent practicable each will consult with the
other on, in each case subject to applicable laws relating to the exchange of
information, all the information relating to Purchaser, Seller or Trust Company,
as the case may be, which appear in any filing, application or petition made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement;
provided, however, that nothing contained herein shall be deemed to provide
Seller with a right to review any information provided by Purchaser, or
Purchaser with a right to review any information provided by Seller, to any
Governmental Entity on a confidential basis in connection with the transactions
contemplated hereby. The parties hereto agree that they will consult with each
other with respect to the obtaining of all permits, consents, approvals,
authorizations and orders of all third parties and Governmental Entities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other apprised of the status of matters
relating to completion of the transactions contemplated herein. Purchaser shall
have the right to review and to approve all written materials to be used by
Seller in connection with obtaining all consents, approvals, authorizations and
orders necessary to consummate the transactions contemplated by this Agreement
(including, without limitation, the application to the Banking Department in
connection with the organization of Trust Company, the Section 154 Petition and
any notices mailed or published in accordance with Section 154 of the NYBL).
Seller shall have the right to review and to approve all written materials to be
used by Purchaser in connection with obtaining all consents, approvals,
authorizations and orders necessary to consummate the transactions contemplated
by this Agreement (including, without limitation, the application to the OCC for
approval of the Merger). In exercising the foregoing rights and obligations,
each of the parties hereto shall act reasonably and as promptly as practicable.

(b) Purchaser and Seller shall, upon request, furnish each other with all
reasonable information concerning themselves, their respective Subsidiaries,
directors, officers and stockholders, and such other matters as may be
reasonably necessary or advisable in connection with any statement, filing,
notice or application made by or on behalf of Purchaser, Seller, Trust Company
or any of their respective Subsidiaries to any Governmental Entity in connection
with the transactions contemplated by this Agreement; provided, however, that
nothing contained herein shall be deemed to provide Seller with a right to any
information provided by Purchaser, or Purchaser with a right to any information
provided by Seller, to any Governmental Entity on a confidential basis in
connection with the transactions contemplated hereby.

(c) Purchaser and Seller shall promptly advise each other upon receiving (i) any
communication from any Governmental Entity whose consent, authorization or
approval is required for consummation of the transactions contemplated by this
Agreement that relates to such consent, authorization or approval or (ii) any
communication from any third party made in connection with any such consent,
authorization or approval (including, in the case of Seller or Trust Company,
any written objection with respect to the Section 154 Petition).

6.3 Access to Information.

(a) During the period from the date hereof to the Closing Date, subject to
applicable laws relating to the exchange of information, Seller shall, and shall
cause Trust Company to, authorize and permit Purchaser and its representatives,
accountants and counsel to have reasonable access to the Records, and, to the
extent reasonably necessary, shall make available Seller’s representatives to
respond to questions regarding the Records. In connection with such examination
and access, Purchaser agrees to observe any confidentiality agreements known to
it between Seller and third parties related to such information. The information
and access contemplated by this Section 6.3(a) shall be provided during normal
business hours, upon reasonable written or oral notice and in such manner as
will not unreasonably interfere with the conduct of Seller’s or its
Subsidiaries’ businesses.

(b) For purposes of Purchaser’s investigation pursuant to this Section 6.3(b),
Seller upon reasonable written or oral notice shall use its reasonable efforts
to attempt to cause any third party under contract to Seller to furnish to
Purchaser, and to its authorized representatives, reasonable access to such
party’s books, records and properties, including, without limitation, all
investment, regulatory, financial, accounting, and tax records and files
relating to the administration of the Trust Accounts, and all files, computer
records and account information necessary for the conversion after the Closing
Date of the Trust Accounts, from the operating systems of Seller to such systems
as Purchaser may designate. To the extent necessary, Seller shall use its
reasonable efforts to attempt to cause any third party servicer or other third
party to provide access to such party’s premises and adequate space and
facilities and the cooperation of its personnel, including, without limitation,
copying facilities, to the end that such examination shall be completed
expeditiously, completely and accurately. Any such investigation or examination
pursuant to this Section 6.3(b) shall be at Purchaser’s expense. Without
limiting any of the foregoing, Purchaser and its authorized representatives
shall be specifically entitled to conduct (and Seller shall use its reasonable
efforts to attempt to enable it to conduct) tests of any matters as they deem
reasonably appropriate.

(c) Any information furnished by Seller or any third party service provider to
Purchaser and its representatives pursuant hereto shall be treated as the sole
property of Seller and, if the Merger shall not occur, Purchaser and its
representatives shall return to Seller all of such written information and all
documents, notes, summaries or other materials containing, reflecting or
referring to, or derived from, such information. Purchaser shall, and shall use
its reasonable best efforts to cause its representatives to, keep confidential
all such information, and shall not directly or indirectly use such information
for any competitive or other commercial purpose. The obligation to keep such
information confidential shall continue for five years from the date the
proposed Merger is abandoned and shall not apply to (i) any information which
(a) was already in Purchaser’s possession prior to the disclosure thereof by
Seller; or (b) was then generally known to the public or (c) was disclosed to
Purchaser by a third party not known by Purchaser to be bound by an obligation
of confidentiality that was known or should have been known by Purchaser; or
(ii) disclosures made as required by law. It is further agreed that, if in the
absence of a protective order or the receipt of a waiver hereunder, Purchaser is
nonetheless compelled to disclose information concerning Seller to any
Governmental Entity or else stand liable for contempt or suffer other censure or
penalty, Purchaser may following written notice to Purchaser disclose such
information to such Governmental Entity without liability hereunder. Purchaser
shall promptly notify Seller in writing of any request by any Governmental
Entity for disclosure of any information required to be kept confidential
hereunder.

(d) No investigation by Purchaser shall affect the representation, warranties,
covenants or indemnification obligations of Seller which are contained herein
and each such provision shall survive investigation.

6.4 Legal Conditions to Transaction.

Subject to the terms and conditions of this Agreement, each of Purchaser and
Seller shall, and Seller shall cause Trust Company to, use its reasonable best
efforts: (a) to take, or cause to be taken, all actions necessary, proper or
advisable to comply promptly with all legal requirements which may be imposed on
such parties or their respective Subsidiaries with respect to the transactions
contemplated by this Agreement and, subject to the conditions set forth in
Article VIII hereof, to consummate the transactions contemplated by this
Agreement and (b) to obtain (and to cooperate with the other party to obtain)
any consent, authorization, order or approval of, or any exemption by, any
Governmental Entity and any other third party which is required to be obtained
by Purchaser, Seller or Trust Company, or any of their respective Subsidiaries,
in connection with the transactions contemplated by this Agreement, provided,
however, that neither Seller nor Purchaser shall be required to take any action
pursuant to the foregoing if the taking of such action or such compliance or the
obtaining of such consent, authorization, order or approval or exemption is
likely, in the reasonable, good faith opinion of such party’s Board of
Directors, to result in the imposition of a Burdensome Condition.

6.5 Current Information.

During the period from the date of this Agreement to the Closing Date, Seller
will cause one or more of its designated representatives to confer periodically
with representatives of Purchaser and to report the general status of its
ongoing business and operations with respect to the Trust Accounts. Seller will
provide Purchaser within five Business Days of the end of each month after the
date of this Agreement and prior to the Closing Date, an updated listing of the
Trust Accounts and will promptly notify Purchaser of any material change in the
Trust Accounts and of any complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the institution
or the threat of any litigation involving or relating to any of the Trust
Accounts, and will keep Purchaser fully informed of such events.

6.6 Publicity.

Except as may be required by applicable law or by the rules or regulations of
any Government Entity or securities exchange, neither Seller nor Purchaser
shall, directly or indirectly, make or cause to be made any public announcement
or disclosure, or issue any notice, with respect to any of the transactions
contemplated hereby without the prior review of the other party. In any event,
prior to any such announcement or disclosure, the party intending to make such
disclosure will consult with the other party concerning such disclosure. Without
limiting the generality of the foregoing, each party shall submit to the other
copies of any proposed notice or announcement with respect to the transactions
contemplated hereby or Seller’s activities relating to the Trust Accounts at
least two Business Days prior to its first use and provide the other an
opportunity to comment on any such notice or announcement before its first use.
Both Seller and Purchaser will limit the distribution of information relative to
this transaction to those persons who need to be aware of the Agreement for the
performance of their duties and will consult with each other before issuing any
press releases or making any public statement to any rating agency with respect
to the transactions contemplated hereby.

6.7 Seller’s Expenses.

None of the expenses incurred or to be incurred by Seller in connection with
this Agreement and the consummation of the transactions contemplated hereby
(including all fees and expenses for services rendered by any attorneys,
accountants, investment bankers and other advisors and agents of Seller, if any,
in connection with the transactions contemplated hereby) or otherwise shall be
expensed, accrued or otherwise reflected on the books and records of Trust
Company.

6.8 Non-competition.

(a) For a period of five years following the Closing Date, neither Seller nor
any of its Affiliates, will (i) seek to persuade any testator, grantor, settlor,
administrator, trustee, beneficiary or remainderman of any Non-objecting Trust
Account (each, a “Trust Party”) to terminate its trust relationship with
Purchaser, (ii) assist any Trust Party in internalizing a trust service
previously provided by Seller, or (iii) solicit to provide to any testator,
grantor, or settlor of any Non-objecting Trust Account trust services of the
type provided to such party by Seller prior to the Merger. Notwithstanding the
foregoing, nothing contained herein shall prohibit Seller from providing any
other banking services to any Trust Party. Also, advertising and other forms of
general solicitation that do not specifically relate to trust services of the
type provided by Seller prior to the Merger and that are not specifically
targeted to a testator, grantor, or settlor of a Non-objecting Trust Account
shall not be prohibited by this Section 6.8(a).

(b) If any of the restrictions set forth in Section 6.8(a) should, for any
reason whatsoever, be declared invalid by a court of competent jurisdiction, the
validity or enforcement of the remainder of such restrictions and covenants
shall not thereby be adversely affected. Seller agrees that, if any provision of
Section 6.8(a) should be adjudicated to be invalid or unenforceable, then to the
extent any such provision may be made valid and enforceable by limitations on
the scope of the activities, geographical area or time period covered, such
provision instead shall be deemed limited to the extent, and only to the extent,
necessary to make such provision enforceable to the fullest extent permissible.

(c) Seller’s obligations under this Section 6.8 are of a special and unique
character, which gives them a peculiar value, and are supported by valuable
consideration. The parties agree that Purchaser cannot be reasonably or
adequately compensated in damages in an action at law in the event that Seller
breaches such obligations. Therefore, Seller expressly agrees that Purchaser
shall be entitled to injunctive and other equitable relief without bond or other
security in the event of a breach by Seller of any of its obligations or
agreements in this Section 6.8 in addition to any other rights or remedies which
Purchaser may possess. Furthermore, the obligations of Seller and the rights and
remedies of Purchaser under this Agreement are cumulative, and not in lieu of,
any obligations, rights, or remedies created by applicable law.

6.9 Trust Company.

Seller shall use commercially reasonable efforts to cause Trust Company to be
duly organized promptly following the execution of this Agreement. Promptly
following the organization of Trust Company, Seller shall cause this Agreement
to be approved on behalf of Trust Company and shall cause Trust Company to
execute and deliver to Purchaser this Agreement, to deliver to Purchaser true,
complete and correct copies of the organization certificate and bylaws of Trust
Company, to promptly file the Section 154 Petition as contemplated by
Section 6.2, and to take all other action necessary to consummate the
transactions contemplated hereby, subject to the terms and conditions hereof.

  6.10   Accountings.

(a) To the extent that necessary Records are within its control or possession,
Seller shall (or, following the entry by the Supreme Court of the Section 154
Order, shall cause Trust Company to) make all accountings required under any
Governing Agreement to be performed with respect to the Trust Accounts and Trust
Asset Portfolio through the Closing Date. From and after the date of this
Agreement, Seller shall send Purchaser copies of (i) all documents filed by it,
(ii) all documents filed or served by any other person, and (iii) any orders,
judgments or notices issued by any court, in each case in connection with such
accountings.

(b) After the Closing Date, if Seller elects to conduct intermediate accountings
with respect to any Non-objecting Trust Accounts, Purchaser will, if required,
join therein as co-petitioner, and in any event shall cooperate in providing
Seller information reasonably needed by Seller in connection with such
accountings, so long as such cooperation does not interfere with the normal
operation of Purchaser’s trust administration business. Without limiting the
generality of the foregoing, the parties shall permit each other’s staffs,
during regular business hours, reasonable access to the systems and Records
relating to the Non-objecting Trust Accounts for the period covered by any such
accountings. Seller shall bear or reimburse Purchaser’s out-of-pocket expenses
associated with such accountings, including without limitation reasonable
attorney’s fees, to the extent such expenses relate to accounting proceedings
for periods prior to the Closing Date.

(c) After the Closing Date, Seller shall join as co-petitioner and cooperate
with Purchaser in providing all information reasonably needed for Purchaser to
prepare and deliver any accountings (other than those which Seller elects to
conduct) with respect to the Non-objecting Trust Accounts which cover any period
prior to the Closing Date.

(d) Seller and Purchaser agree that, to facilitate Purchaser’s preparation of
future accountings with respect to the Non-objecting Trust Accounts, Seller
shall cause to be delivered to Purchaser within twenty-four (24) months after
the Closing duplicate copies of all Records in Seller’s possession of the
Non-objecting Trust Accounts. In the interim from the Closing until such
delivery, the Records shall not be relocated without Purchaser’s written
consent, Purchaser shall be the owner of the Records and Seller shall act as
custodian thereof.

  6.11   Tax Returns.

Purchaser (with the direct and ongoing assistance of Seller’s fiduciary tax
staff and its outside tax consultants, at Seller’s expense) shall prepare and
file all tax returns related to the Trust Accounts (“Tax Returns”) for 2006 and
Seller shall cooperate with Purchaser in providing all information needed by
Purchaser in connection therewith. To the extent permitted by law, tax
preparation Fees will be charged to the Trust Accounts.

6.12 Pro-ration of Fees; Termination Fees.

To the extent that Fees are paid in advance in respect of any Non-objecting
Trust Account for the period during which the Closing Date occurs, Seller shall
on the Closing Date make a payment to Purchaser, with respect to each such
Non-Objecting Trust Account, equal to the amount determined by multiplying
(i) the total amount of such fee paid for such period in respect of such
Non-objecting Trust Account times (ii) a fraction, the numerator of which is the
number of days remaining in such period after the Closing Date and the
denominator of which is the total number of days in the period. To the extent
that fees are paid in arrears in respect of any Non-objecting Trust Account for
the period during which the Closing Date occurs, Purchaser shall make a payment
to Seller equal to the amount determined by multiplying (i) the total amount of
such fee paid for such period times (ii) a fraction, the numerator of which is
the number of days elapsed in such period (through and including the Closing
Date) and the denominator of which is the total number of days in the period.
Any such payments shall be made to Seller by the end of the month in which the
fees are received by Purchaser. Any “tax letter fee” received in respect of the
Non-objecting Trust Accounts shall be fully allocated to the party that prepares
and files the tax returns for the fiscal year to which the fee relates, provided
that such party shall also provide all of the services that are covered by such
tax letter fee. Termination fees generated after the Closing Date from Trust
Accounts with respect to which, prior to the Closing Date, a petition has been
filed with the Surrogate’s Court with respect to termination of the trust or
where a valid receipt and release has been mailed to interested parties will be
divided evenly between the parties, and Purchaser shall account to Seller for
such fees as and when such fees are collected.

6.13 Employee Matters.

No employees of Seller or Trust Company will be transferred to, or shall become
employees or contractors of, Purchaser or any of Purchaser’s Affiliates in
connection with or as a result of the transactions contemplated by this
Agreement. Seller will be responsible for any severance payments due to such
employees of Seller or Trust Company. In the event that Purchaser or any of
Purchaser’s Affiliates employ or engage any such persons at any time within
twelve months following the Closing Date, Purchaser shall pay to Seller an
amount equal to all severance payments paid by Seller to such persons. Such
severance payments shall be limited to severance payments that are due under
contracts or policies that existed prior to the date of this Agreement or that
are approved in advance by Purchaser.

6.14 Referral Arrangement.

Prior to the Closing Date the parties shall enter into a mutually satisfactory
arrangement pursuant to which Seller may refer the administration of trusts with
assets consistent with the profile of the Trust Accounts subject to this
Agreement to Purchaser and receive from Purchaser a reasonable fee to be agreed
upon for such referrals.

6.15 Preservation of Records.

The parties agree that each of them shall preserve and keep the Records held by
them relating to administration of the Trust Accounts after the Closing Date and
shall make such Records and appropriate personnel available to the other as may
be reasonably required by such party. In the event either party wishes to
destroy (or permit to be destroyed) such Records after that time, such party
shall first give ninety (90) days’ prior written notice to the other and such
other party shall have the right at its option and expense, upon prior written
notice given to such party within that ninety (90) day period, to take
possession of the Records within one hundred and eighty (180) days after the
date of such notice.

ARTICLE VII
INDEMNIFICATION

7.1 Indemnification.

(a) Seller shall indemnify and hold harmless Purchaser and its Affiliates, each
of their respective officers, directors, employees and agents from and against
any and all Losses which it or they suffer, incur or sustain arising out of or
attributable to (whether or not arising out of third party claims): (i) any
inaccuracy in or breach of any representation or warranty made by Seller in this
Agreement; (ii) any breach or nonperformance of any covenant to be performed by
Seller or Trust Company pursuant to this Agreement; (iii) the failure by Seller
to obtain all of the waivers, consents, authorizations, orders and approvals of
any interested party with respect to any Governing Agreements with respect to
any Non-objecting Trust Accounts, if any, required in order to consummate the
Merger and the other transactions contemplated by this Agreement, (iv) any
actions or omissions of Seller or Trust Company with respect to, the
Non-objecting Trust Accounts at any time prior to the Effective Time; (v) the
administration of the Non-objecting Trust Accounts prior to the Effective Time;
or (vi) Seller’s failure to deliver any Governing Agreement with respect to any
Non-objecting Trust Account. For purposes of establishing whether any matter is
indemnifiable pursuant to Section 7.1(a)(i) hereof, the accuracy of
representations and warranties made by Seller in this Agreement shall be
determined without giving effect to any qualifications to such representations
concerning “knowledge”: and “materiality”. The indemnifications provided in this
Article VII shall be exclusive remedies and the parties shall not be entitled to
any additional remedies available to them.

(b) From and after the Closing Date, subject to the terms and conditions of this
Agreement, Purchaser shall indemnify and hold harmless Seller and its
Affiliates, each of their respective officers, directors, employees and agents
from and against any and all Losses which it or they suffer, incur, or sustain
arising out of or attributable to (whether or not arising out of third party
claims) (i) any inaccuracy in or breach of any representation or warranty made
by Purchaser in this Agreement, (ii) any breach or nonperformance of any
covenant to be performed by Purchaser pursuant to this Agreement, and (iii) the
business or operations of Purchaser with respect to the Non-objecting Trust
Accounts arising from actions or omissions of Purchaser after the Closing Date.

(c) Without limiting the generality of the foregoing provisions of this
Section 7.1, as between Seller and Purchaser, the parties agree that with
respect to Losses relating to Non-objecting Trust Accounts arising from a breach
by Seller or Purchaser, as the case may be, of its fiduciary duty with respect
to the management or administration of the Non-objecting Trust Accounts:

(i) Seller shall be solely responsible for any Losses with respect to claims of
third parties arising from a breach by Seller of its fiduciary duty on or before
the Closing Date (“Seller Matter”), except to the extent Losses which accrue
subsequent to the Closing Date are attributable to Purchaser’s breach of
fiduciary duty subsequent to the Closing Date;

(ii) Purchaser shall be solely responsible for any Losses with respect to claims
of third parties arising from a breach by Purchaser of its fiduciary duty after
the Closing Date (“Purchaser Matter”);

(iii) Seller shall indemnify and hold harmless Purchaser and its Affiliates for
any Losses with respect to a Seller Matter, except to the extent Losses which
accrue subsequent to the Closing Date are attributable to Purchaser’s breach of
fiduciary duty subsequent to the Closing Date; and

(iv) Purchaser shall indemnify Seller and its Affiliates for any Losses with
respect to a Purchaser Matter.

(d) Notwithstanding any other provision in this Agreement to the contrary,
neither Seller nor Purchaser shall be charged with any obligation under the
foregoing indemnity (i) unless the aggregate amount of Losses exceeds $20,000
(it being understood that once the aggregate amount of Losses exceeds $20,000,
the indemnifying party shall be liable for all Losses (i.e., Losses back to the
first dollar)).

(e) The obligations to indemnify and hold harmless a party pursuant to this
Section 7.1, other than indemnification obligations provided in
Sections 7.1(a)(iv), 7.1(b)(iii) and 7.1(c) hereof, shall terminate on the
twelve month anniversary of the Closing Date; provided, however, that such
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the person to be indemnified shall have previously made a
claim within the appropriate time by delivering a notice (stating in reasonable
detail the basis of such claim) to the party to be providing the
indemnification; and provided, further that all covenants to be performed prior
to the Closing shall terminate at the Closing.

(f) The amount of any Losses claimed by any Seller Indemnified Party hereunder
shall be net of any insurance, indemnity, contribution or other payments or
recoveries of a like nature with respect thereto.

(g) An Indemnified Party shall not be entitled to multiple recovery for the same
Losses.

(h) In determining the amount of indemnification due under this Article VI, all
payments shall be reduced by any tax benefit actually realized by the
Indemnified Party on account of the underlying claim.

7.2 Procedure.

(a) Any party entitled to be indemnified under this Agreement (an “Indemnified
Party”) seeking indemnification for any Loss or potential Loss arising from a
claim asserted by a third party against the Indemnified Party (a “Third Party
Claim”) shall give prompt written notice to the other party hereunder (the
“Indemnifying Party”). Written notice to the Indemnifying Party of the existence
of a Third Party Claim shall be given by the Indemnified Party within 45 days
after its receipt of a written assertion of liability from the third party;
provided, however, that the Indemnified Party shall not be foreclosed from
seeking indemnification pursuant to this Article VII by any failure to provide
timely notice of the existence of a Third Party Claim to the Indemnifying Party
except and only to the extent that the Indemnifying Party actually incurs an
out-of-pocket expense or otherwise has been damaged or prejudiced as a result of
such delay.

(b) Except as otherwise provided herein, the Indemnifying Party may elect to
compromise or defend, at such Indemnifying Party’s own expense and by such
Indemnifying Party’s own counsel (which counsel shall be reasonably satisfactory
to the Indemnified Party), any Third Party Claim. If the Indemnifying Party
elects to compromise or defend such Third Party Claim, it shall, within 45 days
after receiving notice of the Third Party Claim, notify the Indemnified Party of
its intent to do so, and the Indemnified Party shall cooperate, at the expense
of the Indemnifying Party, in the compromise of, or defense against, such Third
Party Claim. If the Indemnifying Party elects to defend against any such Third
Party Claim, the Indemnifying Party shall not have any liability to the
Indemnified Party for Losses under Section 7.1(a), (b) or (c) until such time as
it has been finally determined that the Indemnifying Party is liable for such
Third Party Claim. Without limiting the foregoing, in defending itself against
any Third Party Claim (or direct indemnity claim by Purchaser against Seller)
arising under Section 7.1(a)(iv), (v) or Section 7.1(c), the Indemnifying Party
may assert as part of its defense that its alleged actions or omissions giving
rise to such claim were in accordance with: (x) the terms of any Governing
Agreements, (y) applicable state and federal statutory laws and regulations,
and/or (z) applicable common law fiduciary standards (including standards with
respect to conflicts of interest and self-dealing). If the Indemnifying Party
elects not to compromise or defend against the Third Party Claim, or fails to
notify the Indemnified Party of its election to do so as herein provided, or
otherwise abandons the defense of such Third Party Claim, (i) the Indemnified
Party may pay (without prejudice of any of its rights as against the
Indemnifying Party), compromise or defend such Third Party Claim and (ii) the
costs and expenses of the Indemnified Party incurred in connection therewith
shall be indemnifiable by the Indemnifying Party pursuant to the terms of this
Agreement. Notwithstanding anything to the contrary contained herein, in
connection with any Third Party Claim in which the Indemnified Party shall
reasonably conclude, based upon the advice of its counsel, that (x) there is a
conflict of interest between the Indemnifying Party and the Indemnified Party in
the conduct of the defense of such Third Party Claim or (y) there are specific
defenses available to the Indemnified Party which are different from or
additional to those available to the Indemnifying Party and which could be
materially adverse to the Indemnifying Party, then the Indemnified Party shall
have the right to assume and direct the defense and compromise of such Third
Party Claim. In such an event, the Indemnifying Party shall pay the fees and
disbursements of counsel to each of the Indemnifying Party and the Indemnified
Party. Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnified Party may settle or compromise any claim (unless the sole relief
payable to a third party in respect of such Third Party Claim is monetary
damages that are paid in full by the party settling or compromising such claim)
over the objection of the other, provided, however, that consent to settlement
or compromise shall not be unreasonably withheld. In any event, except as
otherwise provided herein, the Indemnified Party and the Indemnifying Party may
each participate, at its own expense, in the defense of such Third Party Claim.
If the Indemnifying Party chooses to defend any claim, the Indemnified Party
shall make available to the Indemnifying Party any personnel or any books,
records or other documents within its control that are reasonably necessary or
appropriate for such defense, subject to the receipt of appropriate
confidentiality agreements. Notwithstanding anything to the contrary contained
in this paragraph (b), in the event prompt action is required with respect to
the defense of a Third Party Claim, the Indemnified Party shall, subject to the
terms and conditions of this Article VII, have the right to assume the defense
of such Third Party Claim; provided, however, that in the event that the
Indemnifying Party subsequently elects to assume the defense of such Third Party
Claim, then the provisions set forth in this paragraph (b) shall be applicable
and the Indemnifying Party shall, subject to the terms and conditions of this
Article VII, reimburse the Indemnified Party for any costs and expenses incurred
by the Indemnified Party prior to the date the Indemnifying Party assumes
control of such Third Party Claim.

(c) Notwithstanding the foregoing, if an offer of settlement or compromise is
made by a third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party’s willingness to accept
the settlement offer and pay the amount called for by such offer, and the
Indemnified Party declines to accept such offer, the Indemnified Party may
continue to contest such claim, free of any participation by the Indemnifying
Party, and the amount of any ultimate liability with respect to such
indemnifiable claim that the Indemnifying Party has an obligation to pay
hereunder shall be limited to the lesser of (A) the amount of the settlement
offer that the Indemnified Party declined to accept plus the costs and expenses
of the Indemnified Party prior to the date the Indemnifying Party notifies the
Indemnified Party of the Indemnifying Party’s willingness to settle or
compromise such Third Party Claim and (B) the aggregate Losses of the
Indemnified Party with respect to such claim.

(d) Any claim on account of a Loss which does not involve a Third Party Claim
shall be asserted by written notice given by the Indemnified Party to the
Indemnifying Party. The Indemnifying Party shall have a period of 45 days within
which to respond thereto. If the Indemnifying Party does not respond within such
45-day period, it shall be deemed to have accepted responsibility to make
payment, subject to the provisions hereof, and shall have no further right to
contest the validity of such claim. If the Indemnifying Party does respond
within such 45-day period and rejects such claim in whole or in part, the
Indemnified Party shall be free to pursue such remedies as may be available to
such party by applicable law.

ARTICLE VIII
CONDITIONS

8.1 Conditions to Each Party’s Obligations Under This Agreement.

The respective obligations of each of the parties hereto to consummate the
transactions contemplated hereby shall be subject to the satisfaction on or
prior to the Closing Date of the following conditions:

(a) All approvals and orders of Governmental Entities (including without
limitation the approvals of the Banking Department, the OCC, and, if applicable,
the FDIC, and the Section 154 Order) required to be obtained in connection with
the transactions contemplated by this Agreement shall have been obtained, all
notices required to be filed with any Governmental Entity in connection with the
transactions contemplated by this Agreement shall have been filed, all such
regulatory approvals shall be in full force and effect, and all notice periods
and waiting periods required by law or regulation in respect thereof or
otherwise applicable to the transactions contemplated by this Agreement shall
have expired or been terminated (all such approvals and the expiration of all
such waiting periods being referred to herein as the “Requisite Regulatory
Approvals”).

(b) No order, injunction or decree issued by any court or agency of competent
jurisdiction or other legal restraint or prohibition (an “Injunction”)
preventing the consummation of the Merger or any of the other transactions
contemplated by this Agreement shall be in effect. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Entity that prevents the consummation of the Merger
or the transactions contemplated hereby or that could have a Material Adverse
Effect on the ability of the Purchaser to conduct a trust administration
business with respect to the Trust Accounts in substantially the same manner as
the Seller heretofore conducted such business with respect to the Trust
Accounts.

8.2 Additional Conditions to Seller’s Obligations Under This Agreement.

The obligations of Seller to consummate the transactions contemplated hereby
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions unless waived by Seller pursuant to Section 9.4 hereof:

(a) The obligations of Purchaser required to be performed by Purchaser on or
prior to the Closing Date pursuant to the terms of this Agreement shall have
been duly performed and complied with in all material respects, the
representations and warranties of Purchaser set forth in this Agreement shall be
true and correct as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (except as to any representation or
warranty which speaks as of an earlier date), and Seller shall have received a
certificate of an executive officer of Purchaser to such effect,

(b) No proceeding initiated by any Governmental Entity seeking an injunction
shall be pending, and

(c) None of the Requisite Regulatory Approvals shall contain any condition or
requirement (a “Burdensome Condition”) relating to Seller, any of Seller’s
Affiliates, or Trust Company which would or would reasonably be expected to so
materially and adversely impact the economic or business benefits of the
transactions contemplated hereby so as to render inadvisable, in the reasonable,
good faith judgment of the Board of Directors of Seller, the consummation of
such transactions.

8.3 Additional Conditions to Purchaser’s Obligations Under This Agreement.

The obligations of Purchaser to consummate the transactions contemplated hereby
shall be subject to the satisfaction on or prior to the Closing Date of each of
the following conditions unless waived by Purchaser pursuant to Section 9.4
hereof:

(a) The obligations of Seller required to be performed by Seller on or prior to
the Closing Date pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects, the representations and
warranties of Seller set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date (except as to any
representation or warranty which speaks to an earlier date); and Purchaser shall
have received a certificate of an executive officer of Seller to such effect,
and

(b) The consent, approval or waiver (other than the Requisite Regulatory
Approvals) of each Person whose consent or approval shall be required in
connection with the consummation of the Merger and the other transactions
contemplated hereby shall have been obtained in writing in a form reasonably
acceptable to Purchaser; and

(c) No proceeding initiated by any Governmental Entity seeking an Injunction
shall be pending; and

(d) No event shall have occurred and no condition shall exist which has or is
reasonably likely to have a Material Adverse Effect on the Trust Accounts or the
trust administration business being acquired by Purchaser; and

(d) None of the Requisite Regulatory Approvals shall contain any Burdensome
Condition relating to Purchaser, any of Purchaser’s Affiliates or Trust Company
which would or would reasonably be expected to so materially and adversely
impact the economic or business benefits of the transactions contemplated hereby
so as to render inadvisable, in the reasonable, good faith judgment of the
Special Committee of the Board of Directors of Purchaser, the consummation of
such transactions.

ARTICLE IX
TERMINATION AND AMENDMENT

9.1 Termination.

This Agreement may be terminated at any time prior to the Effective Time:

(a) by mutual written consent of Purchaser and Seller;

(b) by either Seller or Purchaser, upon written notice to the other party
(i) 30 days after the date on which any request or application for a Requisite
Regulatory Approval shall have been denied or withdrawn at the request or
recommendation of the Governmental Entity which must grant such Requisite
Regulatory Approval, unless within the 30-day period following such denial or
withdrawal a petition for rehearing or an amended petition or application has
been filed with the applicable Governmental Entity, provided, however, that no
party shall have the right to terminate this Agreement pursuant to this
Section 9.1(b)(i) if such denial or request or recommendation for withdrawal
shall be due to the failure of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such party set forth herein,
or (ii) if any Governmental Entity of competent jurisdiction shall have issued a
final nonappealable order enjoining or otherwise prohibiting the consummation of
any of the transactions contemplated by this Agreement;

(c) by either Seller or Purchaser, if the Merger shall not have been consummated
on or before December 31, 2006, unless the failure of the Closing to occur by
such date shall be due to the failure of the party seeking to terminate this
Agreement to perform or observe the covenants and agreements of such party set
forth herein;

(d) by either Seller or Purchaser (provided that the terminating party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material breach of any of
the representations or warranties set forth in this Agreement on the part of the
other party, which breach is not cured within 30 days following written notice
to the party committing such breach, or which breach, by its nature, cannot be
cured prior to the Closing; provided, however, that neither party shall have the
right to terminate this Agreement pursuant to this Section 9.1(d) unless the
breach of any representation or warranty, together with all other such breaches,
would entitle the party receiving such representation or warranty not to
consummate the transactions contemplated hereby under Section 8.2(a) (in the
case of a breach of a representation or warranty by Purchaser) or Section 8.3(a)
(in the case of a breach of a representation or warranty by Seller); or

(e) by either Seller or Purchaser (provided that the terminating party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material breach of any of
the covenants or agreements set forth in this Agreement on the part of the other
party, which breach shall not have been cured within 30 days following receipt
by the breaching party of written notice of such breach from the other party
hereto.

9.2 Effect of Termination.

In the event of termination of this Agreement by either Seller or Purchaser as
provided in Section 9.1, this Agreement shall forthwith become void and have no
effect except that (i) Sections 9.2 and 10.2 shall survive any termination of
this Agreement and (ii) notwithstanding anything to the contrary contained in
this Agreement, no party shall be relieved or released from any liabilities or
damages arising out of its willful breach of any provision of this Agreement.

9.3 Amendment.

Subject to compliance with applicable law, this Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.

9.4 Extension; Waiver.

At any time prior to the Effective Time, the parties hereto, by action taken or
authorized by their respective Boards of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party, but such extension or waiver or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.

ARTICLE X
GENERAL PROVISIONS

10.1 Closing; Deliveries of Seller at Closing.

(a) Subject to the terms and conditions of this Agreement, the closing of the
Merger (the “Closing”) will take place at 10:00 a.m. on the first Business Day
immediately following the effective date of the Section 154 Order, or the first
Business Day thereafter on which all of the conditions set forth in Article VIII
(other than those conditions which relate to actions to be taken at the Closing)
shall have been satisfied (or, where permissible, waived) (the “Closing Date”),
at the offices of Boylan, Brown, Code, Vigdor & Wilson, LLP, 2400 Chase Square,
Rochester, NY 14604, unless another time, date or place is agreed to in writing
by the parties hereto.

(b) At the Closing, Trust Company shall deliver to Purchaser possession of all
Trust Assets held on behalf of the Non-objecting Trust Accounts of the kinds and
in the amounts required by the related Governing Agreements, free of any liens
or encumbrances other than those expressly provided under the applicable
Governing Agreements. Until possession of each of such Trust Assets related to a
Non-objecting Trust Account is so delivered, Trust Company (or Seller to the
extent still in possession of any such Trust Asset) shall hold the same as
custodian for the benefit of Purchaser.

(c) At the Closing, Seller shall (or shall cause Trust Company to) transfer to
Purchaser, at the times and in the manner set forth in writing by Purchaser,
custody of all files, papers, books, Records, Systems Records, documents,
microfilm, certificate inventory and similar property which are necessary for
the ongoing administration and servicing of the Non-objecting Trust Accounts and
the Trust Asset Portfolio.

(d) At the Closing, Seller shall (or shall cause Trust Company to) deliver to
Purchaser such other instruments of transfer as shall be necessary to transfer
to and vest in Purchaser all of the right, title and interest of Seller and
Trust Company in and to such Non-objecting Trust Accounts and the Trust Assets
held therein.

10.2 Expenses.

All costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense, provided, however, that nothing contained herein shall limit either
party’s rights to recover any liabilities or damages arising out of the other
party’s breach of any provision of this Agreement. subject to Article VII.

10.3 Notices.

All notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (with confirmation), mailed by
registered or certified mail (return receipt requested) or delivered by an
express courier (with confirmation) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):

(a) if to Purchaser, to:

The Canandaigua National Bank and Trust Company
72 South Main Street
Canandaigua, New York 14424
Attention: Lawrence A. Heilbronner, SVP and CFO

and a copy to:

Boylan, Brown, Code, Vigdor & Wilson, LLP
2400 Chase Square
Rochester, New York 14604
Attention: Robert F. Mechur, Esq.

(b) if to Seller, to:

Five Star Bank
c/o Financial Institutions, Inc.
200 Liberty Street
Warsaw, New York
Attention: James Rudgers

with a copy to:

Edwards Angell Palmer & Dodge, LLP
2800 Financial Plaza
Providence, Rhode Island 02903
Attn: V. Duncan Johnson, Esq.

10.4 Interpretation.

When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

10.5 Counterparts; Facsimiles; pdf.

This Agreement may be executed in counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart (provided that
notwithstanding the foregoing, this Agreement shall become effective with
respect to Purchaser and Seller when counterparts have been signed by each of
them and delivered to the other). Executed documents transmitted by facsimile or
pdf shall be deemed originals.

10.6 Entire Agreement.

This Agreement (including the documents and the instruments referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof

10.7 Governing Law; Venue.

This Agreement shall be governed and construed in accordance with the laws of
the State of New York, without regard to any applicable conflicts of law. Any
legal disputes hereunder shall be brought exclusively in the state or federal
courts of New York.

10.8 Severability.

Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.

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10.9 Assignment; No Third Party Beneficiaries.

Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. Except as otherwise expressly provided herein, this Agreement
(including the documents and instruments referred to herein) is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.

[Signatures appear on following pages]

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The parties hereto have executed this Agreement as of the date set forth above.

THE CANANDAIGUA NATIONAL BANK AND TRUST COMPANY

By: George W. Hamlin, IV
Name: George W. Hamlin, IV
Title: President and CEO

FIVE STAR BANK

By: James T. Rudgers
Name: James T. Rudgers
Title: E.V.P.

Schedule 3.6(a)

to
TRUST COMPANY AGREEMENT AND PLAN OF MERGER
The Canandaigua National Bank and Trust Company
and
Five Star Bank

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

1. Approval by the Charities Bureau of the New York Attorney General’s Office.

4

         
Schedule 3.10 (a)

 
NONE
 

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              Schedule 3.10 (b)                     Termination Date of    
Employee Name   Type of Arrangement   Arrangement   Extension Term
Graham, Brandi
  Stay Bonus   3/31/2006   180 days
 
           
Kasprzyk, Nicole
  Stay Bonus   3/31/2006   180 days
 
           
McKenna, Kevin
  Stay Bonus   3/31/2006   180 days
 
           
Tucker, Matthew
  Stay Bonus   3/31/2006   180 days
 
           
Wells, Robert
  Stay Bonus   3/31/2006   180 days
 
           

6

Schedule 4.3(a)

to
TRUST COMPANY AGREEMENT AND PLAN OF MERGER
The Canandaigua National Bank and Trust Company
and
Five Star Bank

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

None.

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