Exhibit
      10.1

    


    SUBSCRIPTION
      AGREEMENT

     

    for

     

    SMITHTOWN
      BANCORP, INC.

    A
      NEW YORK CORPORATION

     

    COMMON
      SHARES, PAR VALUE $0.01 PER SHARE

     

    THE
      COMMON SHARES (“COMMON SHARES”) REFERRED TO HEREIN HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), AND ARE BEING
      OFFERED AND SOLD IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT. THE OFFERING OF COMMON SHARES HAS NOT BEEN
      REVIEWED OR APPROVED BY ANY FEDERAL OR STATE REGULATORY AUTHORITIES AND IS
      NOT
      REGISTERED UNDER APPLICABLE FEDERAL OR STATE SECURITIES LAWS.

     

    A
      PURCHASER OF THE COMMON SHARES MUST BE PREPARED TO BEAR THE ECONOMIC RISKS
      OF
      THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE SHARES HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT AND ARE RESTRICTED AS TO
      TRANSFERABILITY.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      	 	 	 	
              Page

            
	 	 	 	 
	 	
              Article
                I

            	 	 
	 	 	 	 
	 	
              Purchase;
                Closing

            	 	 
	 	 	 	 
	
              1.1

            	
              Purchase

            	 	
              1

            
	
              1.2

            	
              Closing

            	 	
              3

            
	 	 	 	 
	 	
              Article
                II

            	 	 
	 	 	 	 
	 	
              Representations
                and Warranties

            	 	 
	 	 	 	 
	
              2.1

            	
              Disclosure

            	 	
              5

            
	
              2.2

            	
              Representations
                and Warranties of the Company

            	 	
              5

            
	
              2.3

            	
              Representations
                and Warranties of the Investor

            	 	
              10

            
	 	 	 	 
	 	
              Article
                III

            	 	 
	 	 	 	 
	 	
              Covenants

            	 	 
	 	 	 	 
	
              3.1

            	
              Commercially
                Reasonable Efforts

            	 	
              13

            
	
              3.2

            	
              Expenses

            	 	
              13

            
	
              3.3

            	
              Publicity

            	 	
              13

            
	
              3.4

            	
              Further
                Assurances

            	 	
              14

            
	 	 	 	 
	 	
              Article
                IV

            	 	 
	 	 	 	 
	 	
              Additional
                Agreements of the Investor

            	 	 
	 	 	 	 
	
              4.1

            	
              Transfer
                Restrictions

            	 	
              14

            
	
              4.2

            	
              Legend

            	 	
              15

            
	
              4.3

            	
              Registration
                Rights

            	 	
              16

            
	 	 	 	 
	 	
              Article
                V

            	 	 
	 	 	 	 
	 	
              Miscellaneous

            	 	 
	 	 	 	 
	
              5.1

            	
              Survival

            	 	
              25

            
	
              5.2

            	
              Indemnification
                Generally

            	 	
              25

            
	
              5.3

            	
              Interpretation

            	 	
              26

            
	
              5.4

            	
              Amendment

            	 	
              26

            
	
              5.5

            	
              Waiver
                of Conditions

            	 	
              26

            
	
              5.6

            	
              Counterparts
                and Facsimile

            	 	
              26

            
	
              5.7

            	
              Governing
                Law; Submission to Jurisdiction, Etc

            	 	
              26

            
	
              5.8

            	
              Notices

            	 	
              27

            
	
              5.9

            	
              Entire
                Agreement, Etc

            	 	
              27

            
	
              5.10

            	
              Definitions
                of “Subsidiary” and “Affiliate”

            	 	
              28

            
	
              5.11

            	
              Severability

            	 	
              28

            
	
              5.12

            	
              No
                Third Party Beneficiaries

            	 	
              28

            


    

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

    LIST
      OF ANNEXES

     

    
      	
              Annex A

            	
              Form
                of Opinion of Sullivan & Cromwell LLP

            
	 	 
	
              Annex B

            	
              Category
                of Accredited Investor

            
	 	 
	
              Annex C

            	
              Federal
                Income Tax Backup Withholding

            
	 	 
	
              Annex D

            	
              Individual
                Investor Questionnaire

            


    

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    INDEX
      OF DEFINED TERMS

     

    
      	
              Term

            	 	
              Location of

              Definition

            
	 	 	 
	
              Affiliate

            	 	
              5.10(b)

            
	
              Agreement

            	 	
              Preamble

            
	
              Applicable
                Time

            	 	
              4.4(g)(1)

            
	
              Bankruptcy
                Exceptions

            	 	
              2.2(d)(1)

            
	
              BHC
                Act

            	 	
              2.2(h)(1)

            
	
              Closing

            	 	
              1.2(a)

            
	
              Closing
                Date

            	 	
              1.2(a)

            
	
              Code

            	 	
              2.3(g)

            
	
              Common
                Shares

            	 	
              Recital
                A

            
	
              Company

            	 	
              Preamble

            
	
              Company
                Indemnitee

            	 	
              4.4(g)(2)

            
	
              Effectiveness
                Deadline

            	 	
              4.3(a)(4)

            
	
              ERISA

            	 	
              2.3(g)

            
	
              Exchange
                Act

            	 	
              2.1(b)

            
	
              FDIC

            	 	
              2.2(a)

            
	
              Federal
                Reserve

            	 	
              2.2(i)(2)

            
	
              Filing
                Deadline

            	 	
              4.3(a)(4)

            
	
              GAAP

            	 	
              2.1(a)

            
	
              Governmental
                Entities

            	 	
              2.1(a)

            
	
              Hedging
                Transaction

            	 	
              4.1(a)

            
	
              Indemnitee

            	 	
              4.4(g)(3)

            
	
              Investor

            	 	
              Preamble

            
	
              Investor
                Indemnitee

            	 	
              4.4(g)(1)

            
	
              Investor
                Material Adverse Effect

            	 	
              2.3(b)(2)

            
	
              Knowledge

            	 	
              1.3

            
	
              Material
                Adverse Effect

            	 	
              2.1(a)

            
	
              Memorandum

            	 	
              Recital
                B

            
	
              Non-ERISA
                Arrangement

            	 	
              2.3(g)

            
	
              Offering

            	 	
              Recital
                B

            
	
              Payment

            	 	
              1.1(b)

            
	
              Pending
                Offering

            	 	
              4.3(k)

            
	
              Permitted
                Transferee

            	 	
              4.1(b)(1)

            
	
              Plan

            	 	
              2.3(g)

            
	
              Plan
                Asset Entity

            	 	
              2.3(g)

            
	
              Previously
                Disclosed

            	 	
              2.1(b)

            
	
              Purchase

            	 	
              1.1

            
	
              Purchased
                Securities

            	 	
              Recital
                B

            
	
              Register

            	 	
              4.4(j)

            
	
              Registrable
                Securities

            	 	
              4.4(j)

            
	
              Registration
                Expenses

            	 	
              4.4(j)

            
	
              Representatives

            	 	
              5.2

            


    

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

    
      	
              Rights

            	 	
              2.2(b)(1)

            
	
              Rights
                Agreement

            	 	
              2.2(b)(1)

            
	
              SEC

            	 	
              2.1(b)

            
	
              SEC
                Reports

            	 	
              2.1(b)

            
	
              Securities
                Act

            	 	
              2.2(a)

            
	
              Selling
                Expenses

            	 	
              4.4(j)

            
	
              Shelf
                Registration Statement

            	 	
              4.3(a)(2)

            
	
              Significant
                Subsidiaries

            	 	
              2.2(a)

            
	
              Significant
                Subsidiary

            	 	
              2.2(a)

            
	
              Similar
                Laws

            	 	
              2.3(g)

            
	
              Subscription
                Date

            	 	
              1.1(d)

            
	
              Subsidiary

            	 	
              5.10(a)

            
	
              Transaction
                Documents

            	 	
              Recital
                B

            
	
              Transfer

            	 	
              4.1(a)

            


    

     

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

     

    Subscription
      Agreement,
      dated
      September 26, 2008 (together with any attachments, annexes or exhibits hereto,
      collectively, this “Agreement”),
      between Smithtown Bancorp, Inc., a corporation organized under the laws of
      the
      State of New York (the “Company”),
      and
      the Investor listed on the signature page hereof (the “Investor”).

     

    Recitals:

     

    A. The
      Company.
      As of
      the date hereof, the Company has (i) 20,000,000 authorized Common Shares,
      par value $0.01 per share (the “Common
      Shares”),
      of
      which 9,834,477 shares are outstanding, and (ii) 100,000 authorized
      Preferred Shares, par value $0.01 per share, of which no shares are
      outstanding.

     

    B. The
      Issuance.
      The
      Company intends to issue Common Shares in a private placement (the “Offering”),
      and
      the Investor intends to purchase from the Company the number of Common Shares
      indicated on the signature page hereof (collectively, the “Purchased
      Securities”).
      For
      purposes of this Agreement, the term “Transaction
      Documents”
refers
      collectively to this Agreement and any other documents, agreements and
      instruments delivered in connection herewith (including prior to the date
      hereof), in each case, as amended, modified or supplemented from time to time
      in
      accordance with their respective terms, including the Private Placement
      Memorandum, dated September 26, 2008, provided to the Investor (the
“Memorandum”).

     

    NOW,
      THEREFORE,
      in
      consideration of the premises, and of the representations, warranties, covenants
      and agreements set forth herein, the parties agree as follows:

     

    Article
      I

     

    Purchase;
      Closing

     

    1.1 Purchase. 

     

    (a) Subscription.
      The
      Investor hereby irrevocably subscribes to purchase the number of Purchased
      Securities indicated on the signature page hereof for a period of 30 days from
      the Subscription Date (as hereinafter defined), in accordance with the terms
      of
      this Subscription Agreement (the “Purchase”).
      To
      effect such subscription, the Investor shall deliver an executed counterpart
      of
      this Agreement, including all Annexes hereto, to the Company or its authorized
      representative. 

     

    (b) Payment.
      Together with delivery of an executed counterpart of this Agreement, including
      all Annexes hereto, the Investor shall deliver and pay in full the aggregate
      purchase price for the Purchased Securities specified on the signature page
      hereof (the “Payment”)
      in
      United States funds, to Wilmington Trust Company, the Company’s escrow agent, in
      the form of (1) a certified or bank cashier’s check, in immediately
      available funds, made payable to “Wilmington Trust Company, as Escrow Agent for
      Smithtown Bancorp, Inc., Account #089834-000, Attention David Young” or
      (2) an immediately available wire transfer to the following account:
      Wilmington Trust Company, ABA #031100092, Credit: Smithtown Bancorp, Inc.,
      Escrow Account #089834-000, Attention David Young.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Acceptance.
      This
      Agreement shall be effective immediately upon acceptance by the Company of
      the
      Investor’s executed counterpart of this Agreement and shall thereupon be binding
      upon the Company. Such acceptance by the Company shall be evidenced only by
      counter-execution and delivery of this Agreement by the Company, and the Company
      shall have no obligation hereunder until the Company shall have executed and
      delivered to the Investor an executed counterpart of this Agreement. The
      Investor acknowledges and agrees that the Company, in its sole discretion,
      reserves the right to accept or reject the Purchase, in whole or in part;
provided,
      however,
      that if
      the Company rejects the Purchase by notice to the Investor, such rejection
      shall
      serve as a termination of this Agreement, and the Investor shall have no further
      rights or obligations under this Agreement (but any other Transaction Document
      that expires by its terms as of a different date shall remain in full force
      and
      effect).

     

    (d) Termination.

     

    
      	 	
              (1)

            	
              This
                Agreement may not be terminated by the Company unless, before the
                Closing
                occurs, the Company determines in good faith that the conditions
                to the
                Closing set forth in Section 1.2(d) will not be satisfied within 10
                days of the date of the Company’s acceptance of the Investor’s
                subscription by counter-execution and delivery of this Agreement
                by the
                Company. The Company shall deliver notice of such termination to
                the
                Investor promptly upon making such determination, and such termination
                shall have the effect of terminating this Agreement, effective as
                of the
                date such notice is received by the Investor in accordance with
                Section 5.8. Subject to the foregoing, the Company agrees to use its
                commercially reasonable efforts to consummate the Closing on the
                Closing
                Date (as hereinafter defined) or as soon as practicable thereafter.
                

            


    

     

    
      	 	
              (2)

            	
              This
                Agreement may not be terminated by the Investor at any time following
                the
                Investor’s delivery of an executed counterpart of this Agreement to the
                Company (even if the Company has not yet accepted or rejected the
                Purchase); provided,
                however, that,
                before the Closing has occurred, the Investor may withdraw its
                subscription by delivering notice of such withdrawal to the Company
                after
                a period of 15 days after the date (the “Subscription
                Date”)
                that is the later of (x) the first date the Investor delivers an
                executed counterpart of this Agreement, including all Annexes hereto,
                to
                the Company or its authorized representative and (y) the first date
                the Investor delivers the Payment in accordance with Section 1.1(b).
                Such withdrawal shall have the effect of terminating this Agreement,
                effective as of the date such notice is received by the Company in
                accordance with Section 5.8.

            


    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (3)

            	
              Notwithstanding
                the foregoing, this Agreement may be terminated by either the Company
                or
                the Investor upon written notice to the other if the Closing shall
                not
                have occurred on or before October 3,
                2008.

            


    

     

    
      	 	
              (4)

            	
              In
                the event of termination of this Agreement as provided in this
                Section 1.1(d), (A) this Agreement shall forthwith become void,
                and there shall be no liability on the part of either party hereto,
                except
                that nothing herein shall relieve either party from liability for
                any
                willful breach of this Agreement, and (B) the Company shall promptly
                instruct its escrow agent to return any previously delivered Payment
                to
                the Investor, without interest.

            


    

     

    1.2 Closing. 

     

    (a) On
      the
      terms and subject to the conditions set forth in this Agreement, the closing
      of
      the Purchase (the “Closing”)
      will
      take place at the offices of Sullivan & Cromwell LLP, 125 Broad Street, New
      York, New York 10004, at 10:00 a.m., New York City time, on September 29, 2008
      or as soon as practicable thereafter, or at such other place, time and date
      as
      shall be agreed between the Company and the Investor. The time and date on
      which
      the Closing occurs is referred to in this Agreement as the “Closing
      Date.”

     

    (b) At
      the
      Closing, the Company will deliver to the Investor the Purchased Securities,
      as
      evidenced by one or more certificates dated the Closing Date and bearing
      appropriate legends as hereinafter provided for, registered on the books and
      records of the Company in such Investor’s name.

     

    (c) The
      obligation of the Investor to consummate the Closing is also subject to the
      fulfillment (or waiver by the Investor) at or prior to the Closing of each
      of
      the following conditions:

     

    
      	 	
              (1)

            	
              (A) the
                representations and warranties of the Company set forth in this Agreement
                shall be true and correct as though made on and as of the Closing
                Date
                (other than representations and warranties that by their terms speak
                as of
                another date, which representations and warranties shall be true
                and
                correct as of such date), except to the extent that the failure of
                such
                representations and warranties to be so true and correct (without
                giving
                effect to any qualifiers or exceptions relating to materiality or
                Material
                Adverse Effect (as hereinafter defined)), individually or in the
                aggregate, does not have and would not reasonably be expected to
                have a
                Material Adverse Effect and (B) the Company shall have performed in
                all material respects all obligations required to be performed by
                it under
                this Agreement at or prior to the
                Closing;

            


    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (2)

            	
              the
                Investor shall have received from Sullivan & Cromwell LLP a legal
                opinion in the form attached hereto as Annex A,
                addressed to the Investor, dated as of the Closing Date;
                and

            


    

     

    
      	 	
              (3)

            	
              the
                Investor shall have received a certificate dated as of the Closing
                Date
                signed on behalf of the Company by a senior officer of the Company
                certifying compliance with
                Section 1.2(c)(1).

            


    

     

    (d) The
      obligation of the Company to consummate the Closing is also subject to the
      fulfillment (or waiver by the Company) at or prior to the Closing of each of
      the
      following conditions:

     

    
      	 	
              (1)

            	
              (A) the
                representations and warranties of the Investor set forth in this
                Agreement
                shall be true and correct as though made on and as of the Closing
                Date
                (other than representations and warranties that by their terms speak
                as of
                another date, which representations and warranties shall be true
                and
                correct as of such date), except to the extent that the failure of
                such
                representations and warranties to be so true and correct (without
                giving
                effect to any qualifiers or exceptions relating to materiality or
                Material
                Adverse Effect (as hereinafter defined)), individually or in the
                aggregate, does not have and would not reasonably be expected to
                have a
                Material Adverse Effect and (B) the Investor shall have performed in
                all material respects all obligations required to be performed by
                it under
                this Agreement at or prior to the
                Closing;

            


    

     

    
      	 	
              (2)

            	
              the
                Company shall have received from Sullivan & Cromwell LLP a legal
                opinion substantially in the form attached hereto as Annex A,
                addressed to the Company, dated as of the Closing Date;
                and

            


    

     

    
      	 	
              (3)

            	
              the
                Company shall have received a certificate dated as of the Closing
                Date
                signed by the Investor or an authorized representative of the Investor
                certifying compliance with
                Section 1.2(d)(1).

            


    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    Article
      II

     

    Representations
      and Warranties

     

    2.1 Disclosure.

     

    (a) “Material
      Adverse Effect”
means
      a
      material adverse effect on (1) the business, results of operation or
      financial condition of the Company and its subsidiaries taken as a whole;
provided
      that
      Material Adverse Effect shall not be deemed to include the effects of
      (A) any facts, circumstances, events, changes or occurrences generally
      affecting businesses and industries in which the Company operates, companies
      engaged in such businesses or industries or the economy, or the financial or
      securities markets and credit markets in the United States or elsewhere in
      the
      world, including effects on such businesses, industries, economy or markets
      resulting from any regulatory or political conditions or developments, or any
      outbreak or escalation of hostilities, declared or undeclared acts of war,
      terrorism, or work stoppages, (B) changes or proposed changes in generally
      accepted accounting principles in the United States (“GAAP”)
      or
      regulatory accounting requirements applicable to depository institutions and
      their holding companies generally (or authoritative interpretations thereof),
      (C) changes or proposed changes in banking and other laws of general
      applicability or related policies or interpretations of all United States
      governmental or regulatory authorities (collectively, “Governmental
      Entities”),
      or
      (D) changes in the market price or trading volume of Common Shares (it
      being understood and agreed that the exception set forth in this clause (D)
      does not apply to the underlying reason giving rise to or contributing to any
      such change), or (2) the ability of the Company timely to consummate the
      Purchase and the other transactions contemplated by the Transaction
      Documents.

     

    (b) “Previously
      Disclosed”
means
      (1) information contained in the Company’s Annual Report on Form 10-K
      for the fiscal year ended December 31, 2007, or its other reports and forms
      filed with the Securities and Exchange Commission (the “SEC”)
      under
      Sections 13(a), 14(a) or 15(d) of the Securities Exchange Act of 1934 (the
“Exchange
      Act”)
      on or
      after January 1, 2008 (the “SEC
      Reports”)
      and
      prior to the execution and delivery of this Agreement, and (2) information
      contained in the Memorandum.

     

    (c) Each
      party acknowledges that it is not relying upon any representation or warranty
      not set forth in the Transaction Documents. The Investor acknowledges that
      it
      has conducted a review and analysis of the business, assets, condition,
      operations and prospects of the Company and its subsidiaries, together with
      the
      representations and warranties of the Company set forth in the Transaction
      Documents, that the Investor considers sufficient for purposes of the
      Purchase.

     

    2.2 Representations
      and Warranties of the Company.
      Except
      as Previously Disclosed, the Company represents and warrants to the Investor
      that as of the date hereof and the Closing Date (or such other date specified
      herein):

     

    (a) Organization,
      Authority and Significant Subsidiaries.
      The
      Company has been duly incorporated and is validly existing as a corporation
      in
      good standing under the laws of the State of New York, with corporate power
      and
      authority to own its properties and conduct its business in all material
      respects as currently conducted, and, except as has not had or would not
      reasonably be expected to have a Material Adverse Effect, has been duly
      qualified as a foreign corporation for the transaction of business and is in
      good standing under the laws of each other jurisdiction in which it owns or
      leases properties or conducts any business so as to require such qualification;
      and each Subsidiary (as defined in Section 5.10(a)) of the Company that is
      a “significant subsidiary” within the meaning of Rule 1-01(w) of
      Regulation S-X under the Securities Act of 1933, as amended (the
“Securities
      Act”)
      (each,
      a “Significant
      Subsidiary”
and,
      collectively, the “Significant
      Subsidiaries”)
      has
      been duly organized and is validly existing in good standing under the laws
      of
      its jurisdiction of organization. The Company’s principal depository institution
      Subsidiary is duly organized and validly existing as a New York State chartered
      bank, and its deposit accounts are insured up to applicable limits by the
      Federal Deposit Insurance Corporation (the “FDIC”).

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    (b) Capitalization.
      

     

    
      	 	
              (1)

            	
              As
                of the date hereof, the authorized and outstanding capital stock
                of the
                Company is as set forth in Recital
                A.

            


    

     

    
      	 	
              (2)

            	
              All
                of the outstanding shares of capital stock of the Company have been
                duly
                and validly authorized and issued and are fully paid and non-assessable
                and were not issued in violation of any preemptive rights, resale
                rights,
                rights of first refusal or similar
                rights.

            


    

     

    
      	 	
              (3)

            	
              All
                of the outstanding shares of capital stock of each Significant Subsidiary
                have been duly and validly authorized and issued, are fully paid
                and
                non-assessable and were not issued in violation of any preemptive
                rights,
                resale rights, rights of first refusal or similar rights, and are
                owned
                directly or indirectly by the Company, free and clear of all security
                interests, liens, encumbrances, equities or
                claims.

            


    

     

    
      	 	
              (4)

            	
              Except
                for the Rights (as hereinafter defined) issued pursuant to the Rights
                Agreement (as hereinafter defined) and awards of restricted Common
                Shares
                pursuant to the Company’s equity compensation and/or employee stock
                purchase plans, there are no options, warrants or other rights,
                agreements, arrangements or commitments to which the Company is a
                party or
                by which the Company is bound relating to the issued or unissued
                Common
                Shares of the Company. For purposes of this Agreement, “Rights”
                means the rights to purchase Common Shares of the Company issued
                pursuant
                to the Rights Agreement, and “Rights
                Agreement”
                means the Shareholder Protection Rights Agreement, dated as of September
                23, 1997 and last amended as of February 6, 2008, by and between
                the
                Company and Mellon Investor Services LLC, setting forth the rights of
                the holders of Rights.

            


    

     

    (c) The
      Purchased Securities.
      The
      Purchased Securities will be, as of the Closing Date, duly authorized by all
      necessary corporate action on the part of the Company and, when issued and
      delivered as provided in this Agreement, will be duly and validly issued, fully
      paid and non-assessable, and the issuance thereof will not be subject to any
      preemptive or similar rights.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    (d) Authorization
      and Enforceability of Transaction Documents.
      

     

    
      	 	
              (1)

            	
              The
                Company has the corporate power and authority to execute and deliver
                the
                Transaction Documents to which it is a party and to carry out its
                obligations hereunder and thereunder (which includes the issuance
                of the
                Purchased Securities). The execution, delivery and performance by
                the
                Company of the Transaction Documents to which it is a party and the
                consummation of the transactions contemplated hereby and thereby
                have been
                duly authorized by all necessary corporate action on the part of
                the
                Company and its shareholders, and no further approval or authorization
                is
                required on the part of the Company or its shareholders. The Transaction
                Documents to which the Company is a party are or will be valid and
                binding
                obligations of the Company enforceable against the Company in accordance
                with their respective terms, except as the same may be limited by
                applicable bankruptcy, insolvency, reorganization, moratorium or
                similar
                laws affecting the enforcement of creditors’ rights generally and general
                equitable principles, regardless of whether such enforceability is
                considered in a proceeding at law or in equity (“Bankruptcy
                Exceptions”).

            


    

     

    
      	 	
              (2)

            	
              The
                execution, delivery and performance by the Company of the Transaction
                Documents to which it is a party, the consummation of the transactions
                contemplated hereby and thereby and compliance by the Company with
                any of
                the provisions hereof and thereof, will not violate, conflict with,
                or
                result in a breach of any provision of, or constitute a default (or
                an
                event which, with notice or lapse of time or both, would constitute
                a
                default) under, result in the termination of or accelerate the performance
                required by, or result in a right of termination or acceleration
                of, or
                result in the creation of, any lien, security interest, charge or
                encumbrance upon any of the properties or assets of the Company or
                any
                Significant Subsidiary under any of the terms, conditions or provisions
                of
                (A) the certificate of incorporation, by-laws or other organizational
                document of the Company or any Significant Subsidiary or (B) any
                note, bond, mortgage, indenture, deed of trust, license, lease, agreement
                or other instrument or obligation to which the Company or any Significant
                Subsidiary is a party or by which it or any Significant Subsidiary
                may be
                bound, or to which the Company or any Significant Subsidiary or any
                of the
                properties or assets of the Company or any Significant Subsidiary
                may be
                subject, or (C) subject to compliance with the statutes and
                regulations referred to in Section 2.2(d)(3), violate any statute,
                rule or regulation or any judgment, ruling, order, writ, injunction
                or
                decree applicable to the Company or any Significant Subsidiary or
                any of
                their respective properties or assets except, in the case of
                clauses (B) and (C), for those occurrences that, individually or in
                the aggregate, have not had and would not reasonably be expected
                to have a
                Material Adverse Effect.

            


    

     

    
      	 	
              (3)

            	
              Other
                than in connection or in compliance with the provisions of the Securities
                Act and the securities or “blue sky” laws of the various states, to the
                Company’s Knowledge without inquiry, no notice to, filing with, exemption
                or review by, or authorization, consent or approval of, any Governmental
                Entity is required to be made or obtained by the Company in connection
                with the Purchase and the other transactions contemplated by the
                Transaction Documents.

            


    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    (e) Company
      Financial Statements.
      The
      consolidated financial statements of the Company and its subsidiaries (including
      the related notes and supporting schedules) contained in the SEC Reports present
      fairly in all material respects the consolidated financial position of the
      Company and its consolidated subsidiaries as of the dates indicated therein
      and
      the consolidated results of their operations for the periods specified therein;
      and except as stated therein, such financial statements were prepared in
      conformity with GAAP applied on a consistent basis.

     

    (f) No
      Material Adverse Effect.
      Since
      June 30, 2008, no fact, circumstance, event, change, occurrence, condition
      or
      development has occurred that, individually or in the aggregate, has had or
      would reasonably be expected to have a Material Adverse Effect.

     

    (g) Proceedings.
      As of
      the date of this Agreement, there is no litigation or similar proceeding or
      governmental proceeding pending or, to the Company’s Knowledge, threatened to
      which the Company or any of its subsidiaries is a party or of which any property
      of the Company or any of its subsidiaries is the subject that the Company’s
      management believes, individually or in the aggregate, has had or would
      reasonably be expected to have a Material Adverse Effect.

     

    (h) Compliance
      with Laws; Permits.
      

     

    
      	 	
              (1)

            	
              The
                Company is a bank holding company registered under the Bank Holding
                Company Act of 1956 (the “BHC
                Act”);
                the Company and each of its subsidiaries have conducted their businesses
                in compliance with all applicable federal, state and foreign laws,
                orders,
                judgments, decrees, rules, regulations and applicable stock exchange
                requirements, including all laws and regulations restricting activities
                of
                bank holding companies and banking organizations, except for any
                noncompliance that, individually or in the aggregate, has not had
                and
                would not be reasonably expected to have a Material Adverse
                Effect.

            


    

     

    
      	 	
              (2)

            	
              The
                Company and each Subsidiary have all permits, licenses, authorizations,
                orders and approvals of, and have made all filings, applications
                and
                registrations with, any Governmental Entities that are required in
                order
                to carry on their business as presently conducted, except where the
                failure to have such permits, licenses, authorizations, orders and
                approvals or the failure to make such filings, applications and
                registrations, individually or in the aggregate, have not had and
                would
                not reasonably be expected to have a Material Adverse Effect; and
                all such
                permits, licenses, certificates of authority, orders and approvals
                are in
                full force and effect and, to the Knowledge of the Company without
                inquiry, no suspension or cancellation of any of them is threatened,
                and
                all such filings, applications and registrations are current, except
                where
                such absences, suspensions or cancellations, individually or in the
                aggregate, have not had or would not reasonably be expected to have
                a
                Material Adverse Effect.

            


    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (i) Reports.
      

     

    
      	 	
              (1)

            	
              Since
                December 31, 2006, the Company has timely filed all documents
                required to be filed with the SEC pursuant to Sections 13(a), 14(a)
                and 15(d) of the Exchange Act.

            


    

     

    
      	 	
              (2)

            	
              Since
                December 31, 2006, the Company and each Subsidiary have filed all
                material reports, registrations and statements, together with any
                required
                amendments thereto, that it was required to file with the Board of
                Governors of the Federal Reserve System (the “Federal
                Reserve”),
                the FDIC, the New York State Banking Department and any other applicable
                federal or state securities or banking authorities, except where
                the
                failure to file any such report, registration or statement, individually
                or in the aggregate, has not had and would not reasonably be expected
                to
                have a Material Adverse Effect. As of their respective dates, each
                of the
                foregoing reports complied with all applicable rules and regulations
                promulgated by the Federal Reserve, the FDIC, the New York State
                Banking
                Department and any other applicable foreign, federal or state securities
                or banking authorities, as the case may be, except for any failures
                that,
                individually or in the aggregate, have not had and would not reasonably
                be
                expected to have a Material Adverse
                Effect.

            


    

     

    (j) Memorandum.
      The
      Memorandum does not contain an untrue statement of a material fact or omit
      to
      state a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made,
      not misleading.

     

    (k) No
      General Solicitation or General Advertising.
      Neither
      the Company nor any person acting on its behalf has engaged or will engage
      in
      any form of general solicitation or general advertising (within the meaning
      of
      Regulation D under the Securities Act) in connection with any offer or sale
      of the Purchased Securities.

     

    (l) No
      Integration.
      The
      Company has not, directly or indirectly, solicited any offer to buy or offer
      to
      sell any Common Shares in a manner that would require the registration of the
      Purchased Securities pursuant to the Securities Act and has no present intention
      to solicit any offer to buy or offer to sell any Purchased Securities or any
      other securities of the Company other than pursuant to (1) this form of
      Subscription Agreement, (2) pursuant to a registered public offering of the
      Purchased Securities and other Common Shares offered and sold in the Offering
      as
      contemplated by this form of Subscription Agreement or (3) pursuant to the
      Company’s equity compensation and/or employee stock purchase plans.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    2.3 Representations
      and Warranties of the Investor.
      The
      Investor hereby represents and warrants to the Company that as of the date
      hereof and the Closing Date:

     

    (a) Organization
      and Authority.
      The
      Investor (1) has been duly organized and is validly existing in good
      standing under the laws of the jurisdiction of its organization, with the
      requisite power and authority to own its properties and conduct its business
      as
      currently conducted or (2) is a natural person.

     

    (b) Authorization
      and Enforceability of Transaction Documents.
      

     

    
      	 	
              (1)

            	
              The
                Investor has the requisite power and authority to execute and deliver
                the
                Transaction Documents to which it is a party and to carry out its
                obligations hereunder and thereunder. The execution, delivery and
                performance by the Investor of the Transaction Documents to which
                it is a
                party and the consummation of the transactions contemplated hereby
                and
                thereby have been duly authorized by all necessary action on the
                part of
                the Investor, and no further approval or authorization is required
                on the
                part of the Investor. The Transaction Documents to which the Investor
                is a
                party are or will be valid and binding obligations of the Investor
                enforceable against the Investor in accordance with their respective
                terms, except as the same may be limited by Bankruptcy
                Exceptions.

            


    

     

    
      	 	
              (2)

            	
              The
                execution, delivery and performance by the Investor of the Transaction
                Documents to which it is a party, the consummation of the transactions
                contemplated hereby and thereby and compliance by the Investor with
                any of
                the provisions hereof and thereof, will not (A) violate, conflict
                with, or result in a breach of any provision of or constitute a default
                (or an event which, with notice or lapse of time or both, would constitute
                a default) under, or result in the termination of, accelerate the
                performance required by, result in a right of termination or acceleration
                of or result in the creation of, any lien, security interest, charge
                or
                encumbrance upon any of the properties or assets of such Investor
                under
                any of the terms, conditions or provisions of (i) its organizational
                documents or (ii) any note, bond, mortgage, indenture, deed of trust,
                license, lease, agreement or other instrument or obligation to which
                the
                Investor is a party or by which it may be bound, or to which the
                Investor
                or any of the properties or assets of the Investor may be subject,
                or
                (B) subject to compliance with the statutes and regulations referred
                to in Section 2.3(b)(3), violate any statute, rule or regulation or
                any judgment, ruling, order, writ, injunction or decree applicable
                to the
                Investor or any of its properties or assets except, in the case of
                clauses (A)(ii) and (B), for those occurrences that, individually or
                in the aggregate, have not had and would not reasonably be expected
                to
                have an Investor Material Adverse Effect. “Investor
                Material Adverse Effect”
                means a material adverse effect on the ability of the Investor timely
                to
                consummate the Purchase and the other transactions contemplated by
                this
                Agreement.

            


    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (3)

            	
              Other
                than in connection or in compliance with the provisions of the Securities
                Act and the securities or “blue sky” laws of the various states, to the
                Investor’s Knowledge without inquiry, no notice to, filing with, exemption
                or review by, or authorization, consent or approval of, any Governmental
                Entity is required to be made or obtained by the Investor in connection
                with the consummation by the Investor of the Purchase and the other
                transactions contemplated by the Transaction
                Documents.

            


    

     

    (c) Ownership.
      Giving
      effect to the Purchase, as of the Closing Date, the Investor and all of its
      Affiliates on an aggregate basis will not beneficially own, control or have
      the
      power to vote 10% or more of the outstanding Common Shares. The Investor does
      not have any agreement, arrangement or understanding with any person (other
      than
      the Company and any Permitted Transferee (as defined in Section 4.1(b)(1)))
      to acquire, dispose of or vote any securities of the Company.

     

    (d) No
      Registration; Purchase for Investment; Accredited Investor;
      Sophistication.
      The
      Investor:

     

    
      	 	
              (1)

            	
              understands
                that the Purchased Securities have not been registered under the
                Securities Act and, therefore, cannot be resold unless they are registered
                under the Securities Act or (without limitation on the restrictions
                set
                forth in Article IV) unless an exemption from registration is
                available;

            


    

     

    
      	 	
              (2)

            	
              understands
                that the Purchased Securities have not been registered under any
                United
                States state securities laws;

            


    

     

    
      	 	
              (3)

            	
              is
                acquiring the Purchased Securities pursuant to an exemption from
                registration under the Securities Act solely for investment and not
                with a
                view to any resale or transfer of any of the Purchased Securities
                to any
                person; 

            


    

     

    
      	 	
              (4)

            	
              confirms
                that it is aware of the transfer restrictions on the Purchased Securities
                described in Article IV and in the Memorandum and will not sell or
                otherwise dispose of any of the Purchased Securities, except in compliance
                with the registration requirements of the Securities Act and any
                applicable United States state securities laws or in compliance with
                all
                of the requirements of
                Section 4.1;

            


    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (5)

            	
              confirms
                that all information that the Investor has provided to the Company
                concerning the Investor in this Agreement or otherwise is correct
                and
                complete;

            


    

     

    
      	 	
              (6)

            	
              is
                an Accredited Investor (as that term is defined in Rule 501 under the
                Securities Act) and has certified to the Company the basis for qualifying
                as an Accredited Investor on Annex B;

            


    

     

    
      	 	
              (7)

            	
              in
                the ordinary course of its business, regularly makes investments
                of this
                type, and has such knowledge and experience in financial and business
                matters and in investments of this type that it is capable of
                (A) evaluating the merits and risks of the Purchase and of making an
                informed investment decision and (B) bearing the financial risks of
                an investment in the Purchased Securities for an indefinite period
                of
                time; 

            


    

     

    
      	 	
              (8)

            	
              has
                conducted a review of the business and affairs of the Company that
                it
                considers sufficient and reasonable for purposes of making the
                Purchase;

            


    

     

    
      	 	
              (9)

            	
              has
                been provided the opportunity to ask questions of and receive answers
                from
                representatives of the Company concerning the terms and conditions
                of the
                Purchase and to obtain any additional information that the Company
                possesses or can acquire without unreasonable effort or expense that
                is
                necessary to verify the accuracy of the information contained in
                the
                Memorandum;

            


    

     

    
      	 	
              (10)

            	
              has
                received the Memorandum, has read the Memorandum carefully, is fully
                familiar with and understands the contents of the Memorandum;
                

            


    

     

    
      	 	
              (11)

            	
              has
                read the SEC Reports carefully, is fully familiar with and understands
                the
                contents of the SEC Reports; and

            


    

     

    
      	 	
              (12)

            	
              has
                not relied on any representation or warranty in connection with the
                Purchase other than those contained in the Transaction Documents.
                

            


    

     

    (e) Financial
      Capability.
      The
      Investor has or will have available funds to make the Purchase on the terms
      and
      conditions contemplated by this Agreement.

     

    (f) No
      Legal, Tax, Accounting or Business Advice. The Investor understands that
      neither the Company nor any of its agents has given any legal, tax, accounting
      or business advice regarding the consequences of the Purchase, and the Investor
      has consulted the Investor’s own legal, tax, accounting and business advisors
      with respect to the Purchase.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

     

    (g) ERISA.
      Either
      (1) the Investor is not a Plan, a Plan Asset Entity or a Non-ERISA Arrangement
      and is not purchasing the Purchased Securities on behalf of or with the assets
      of any Plan, a Plan Asset Entity or Non-ERISA Arrangement, or (2) the purchase
      and holding of the Purchased Securities will not constitute a non-exempt
      prohibited transaction or a similar violation under any applicable Similar
      Laws.
      The term “Plan”
means
      a
      pension, profit-sharing or other employee benefit plan subject to the U.S.
      Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
      an
      individual retirement account, a Keogh plan or any other plan that is subject
      to
      Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”);
      “Plan
      Asset Entity”
means
      an entity whose underlying assets include “plan assets” by reason of any Plan’s
      investment in the entity; “Non-ERISA
      Arrangement”
means
      an employee benefit plan that is a governmental plan (as defined in Section
      3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA)
      and
      non-U.S. plans (as described in Section 4(b)(4) of ERISA); and “Similar
      Laws”
means
      applicable federal, state, local, non-U.S or other laws that impose requirements
      similar to those of Section 406 of ERISA or Section 4975 of the
      Code.

     

    (h) No
      General Solicitation or General Advertising.
      Neither
      the Investor, any of its Affiliates (as defined in Section 5.10(b)) nor any
      person acting on its or their behalf, has made or will make offers or sales
      of
      the Purchased Securities by means of any form of general solicitation or general
      advertising (within the meaning of Regulation D under the Securities
      Act).

     

    Article
      III

     

    Covenants

     

    3.1 Commercially
      Reasonable Efforts.
      Subject
      to the terms and conditions of this Agreement, each of the parties will use
      its
      commercially reasonable efforts in good faith to take, or cause to be taken,
      all
      actions, and to do, or cause to be done, all things necessary, proper or
      desirable, or advisable under applicable laws, so as to permit consummation
      of
      the Purchase as promptly as practicable and otherwise to enable consummation
      of
      the transactions contemplated hereby and shall cooperate fully with the other
      party to that end, including cooperating in seeking to obtain any consent,
      authorization or approval that might be required from Governmental
      Entities.

     

    3.2 Expenses.
      Except
      to the extent otherwise provided in any Transaction Document executed by the
      Company and the Investor, each of the parties hereto will bear and pay all
      costs
      and expenses incurred by it or on its behalf in connection with the transactions
      contemplated under the Transaction Documents, including fees and expenses of
      its
      own financial or other consultants, investment bankers, accountants and
      counsel.

     

    3.3 Publicity.
      No
      public release or announcement concerning the transactions contemplated hereby
      shall be issued by the Investor without the prior consent of the
      Company.
      The
      Company shall use commercially reasonable efforts to file with the SEC, as
      promptly as practicable after counter-execution and delivery of this Agreement
      by the Company, but no later than the time required by SEC Form 8-K, (a) the
      material terms of this Agreement and the Offering and (b) all information
      previously provided to the Investor in connection with its evaluation of the
      Offering, if any, that constitutes material non-public information with respect
      to the Company within the meaning of United States federal securities
      laws.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    3.4 Further
      Assurances.
      Within
      three days of receipt of a written request from the Company, the Investor agrees
      to provide such information relevant to the Purchase and to execute and deliver
      such documents as the Company determines in good faith to be necessary or
      advisable to comply with any and all laws, regulations and ordinances to which
      the Company is subject.

     

    Article
      IV

     

    Additional
      Agreements of the Investor

     

    4.1 Transfer
      Restrictions. 

     

    (a) Restrictions
      on Transfer.
      The
      Investor shall not, directly or indirectly, transfer, sell, assign, pledge,
      convey, hypothecate or otherwise encumber or dispose of, or engage in a Hedging
      Transaction (as hereinafter defined) with respect to (collectively,
“Transfer”),
      any
      of the Purchased Securities. For purposes of this Agreement, “Hedging
      Transaction”
means
      any short sale (whether or not against the box) or any purchase, sale or grant
      of any right (including any put or call option) with respect to any security
      (other than a broad-based market basket or index) that includes, relates to
      or
      derives any significant part of its value from the Purchased
      Securities.

     

    (b) Permitted
      Transfers.
      Notwithstanding Section 4.1(a), the Investor and Permitted Transferees (as
      hereinafter defined) shall be permitted to Transfer any Purchased
      Securities:

     

    
      	 	
              (1)

            	
              in
                the case of an Investor that is an institution, at any time to any
                direct
                or indirect wholly owned Subsidiary of the Investor or any mutual
                fund
                that is managed by the Investor (each, a “Permitted
                Transferee”),
                but only if the transferee agrees in writing for the benefit of the
                Company to be bound by the terms of this Agreement; provided
                that such Permitted Transferee shall be permitted to own such Purchased
                Securities only so long as such Permitted Transferee shall remain
                a direct
                or indirect wholly owned Subsidiary of the Investor or a mutual fund
                managed by the Investor; and provided, further,
                that no such Transfer shall relieve such Investor of its obligations
                under
                this Agreement;
                

            


    

     

    
      	 	
              (2)

            	
              at
                any time a Shelf Registration Statement (as defined in
                Section 4.3(a)(2)) shall be effective and in compliance with the
                Securities Act and usable for resale of the Purchased Securities,
                including entering into a Hedging Transaction in accordance with
                applicable law, as permitted by and subject to the limitations set
                forth
                in Section 4.3; and

            


    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    


    
      	 	
              (3)

            	
              at
                times or under circumstances not contemplated by clause (1) or (2)
                of this
                Section 4.1(b) in compliance with Rule 144A or
                Rule 144 under the Securities Act; provided
                that, if the Investor is an Affiliate of the Company or has been
                an
                Affiliate of the Company during the three months preceding the date
                of
                such Transfer, any such Transfer shall be subject to approval by
                the
                Company in its sole discretion, which approval may be conditioned
                on the
                receipt by the Company or its agents or representatives of such
                information, documentation, opinions or assurances or other agreements
                as
                the Company may determine in its sole discretion to be necessary
                or
                advisable.

            


    

     

    4.2 Legend.
      The
      Investor agrees that all certificates or other instruments representing
      Purchased Securities will bear a legend substantially to the following
      effect:

     

    “THE
      SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
      MAY
      NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
      STATEMENT
      RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
      LAWS OR AS PERMITTED BY, AND IN ACCORDANCE WITH, A SUBSCRIPTION AGREEMENT,
      DATED
      SEPTEMBER 26, 2008, BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
      REFERRED TO THEREIN, IN A TRANSACTION COMPLYING WITH RULE 144A OR
      RULE
      144 UNDER SUCH ACT AND AN EXEMPTION UNDER SUCH LAWS. THIS INSTRUMENT IS ISSUED
      PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
      OF
      THE SUBSCRIPTION AGREEMENT, A COPY OF WHICH IS ON FILE WITH
      THE
      ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
      OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
      OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    


    4.3 Registration
      Rights. 

     

    
      	
            	(a)	
              Registration.

            


    

     

    
      	 	
              (1)

            	
              Subject
                to the terms and conditions of this Agreement, the Company covenants
                and
                agrees to use commercially reasonable efforts to (A) prepare and file
                with the SEC a Shelf Registration Statement (as hereinafter defined)
                covering all Registrable Securities no later than October 7, 2008,
                (B) cause such Shelf Registration Statement to become effective no
                later than December 7, 2008, and (C) keep such Shelf Registration
                Statement continuously effective and in compliance with the Securities
                Act
                and usable for resale of such Registrable Securities (including by
                filing
                post-effective amendments to such Shelf Registration Statement (or
                a new
                Shelf Registration Statement if the initial Shelf Registration Statement
                expires)) for a period from the date of its initial effectiveness
                until
                the earlier of (x) the second anniversary of the Closing Date and
                (y) such time as there are no Registrable Securities
                remaining.

            


    

     

    
      	 	
              (2)

            	
              Any
                registration pursuant to this Section 4.3(a) shall be effected by
                means of a shelf registration under the Securities Act (a “Shelf
                Registration Statement”),
                and any such registration (including a resale of Registrable Securities
                from an effective Shelf Registration Statement) shall be effected
                in
                accordance with the methods of distribution set forth in the Shelf
                Registration Statement and Rule 415 under the Securities
                Act.

            


    

     

    
      	 	
              (3)

            	
              The
                Company shall not be required to effect a registration (including
                a resale
                of Registrable Securities from an effective Shelf Registration Statement)
                pursuant to this Section 4.3(a): (A) with respect to securities
                that are not Registrable Securities; or (B) if the Company has
                notified the Investor that in the good faith judgment of the Chief
                Executive Officer of the Company, it would be materially detrimental
                to
                the Company or its securityholders for such registration to be effected
                at
                such time until the Chief Executive Officer of the Company shall
                have
                withdrawn such determination; provided
                that the Company may not exercise its right pursuant to this clause
                (B) for a continuous period of more than 45 days or for more than 90
                days in any calendar year.

            


    

     

    
      	 	
              (4)

            	
              If
                (A) the Shelf Registration Statement is not filed by the Company with
                the SEC on or prior to October 7, 2008 (the “Filing
                Deadline”),
                or (B) the Shelf Registration Statement has not become effective on
                or prior to the date that is 90 days after the filing of such Shelf
                Registration Statement with the SEC (the “Effectiveness
                Deadline”),
                then for each day following the Filing Deadline or the Effective
                Deadline,
                as applicable, until but excluding the date the Shelf Registration
                Statement is filed or becomes effective, respectively, the Company
                shall,
                for each such day, pay the Investor, as liquidated damages and not
                as a
                penalty, an amount equal to 0.05% of the aggregate purchase price
                paid by
                the Investor for the Registrable Securities pursuant to this Agreement.
                Any such payment shall be made in cash no later than five business
                days
                following the first day of the calendar month after the day with
                respect
                to which such payment is due. Notwithstanding the foregoing, in no
                event
                shall the Company be obligated to pay any liquidated damages to the
                Investor pursuant to this paragraph (A) in respect of the same Registrable
                Securities for the same period of time or (B) in an aggregate amount
                that
                exceeds 6.0% of the aggregate purchase price paid by the Investor
                for the
                Registrable Securities pursuant to this
                Agreement.

            


    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    


    (b) Expenses
      of Registration.
      All
      Registration Expenses incurred in connection with any registration,
      qualification or compliance under this Section 4.3 shall be borne by the
      Company. All Selling Expenses incurred in connection with any registrations
      hereunder, shall be borne by the Investor and any Permitted Transferees
pro rata
      on the
      basis of the aggregate offering or sale price of the securities so
      registered.

     

    (c) Obligations
      of the Company.
      Whenever required to effect the registration of any Registrable Securities
      or
      facilitate the resale of Registrable Securities from an effective Shelf
      Registration Statement, the Company shall, as expeditiously as reasonably
      practicable, use commercially reasonable efforts to:

     

    
      	 	
              (1)

            	
              (A) Prepare
                and file with the SEC a prospectus supplement with respect to a proposed
                offering of Registrable Securities pursuant to an effective Shelf
                Registration Statement and (B) subject to this Section 4.3(c),
                keep such Shelf Registration Statement effective or such prospectus
                supplement current for the period reasonably required to complete
                the
                distribution of such Registrable
                Securities.

            


    

     

    
      	 	
              (2)

            	
              Prepare
                and file with the SEC such amendments and supplements to the applicable
                Shelf Registration Statement and the prospectus or prospectus supplement
                used in connection with such Shelf Registration Statement as may
                be
                necessary to comply with the provisions of the Securities Act with
                respect
                to the disposition of all of such Registrable
                Securities.

            


    

     

    
      	 	
              (3)

            	
              Furnish
                to the Investor or a Permitted Transferee and any underwriters such
                number
                of copies of the applicable Shelf Registration Statement and each
                such
                amendment or supplement thereto (including in each case all exhibits)
                and
                of a prospectus, including any preliminary prospectus, in conformity
                with
                the requirements of the Securities Act, and such other documents
                as they
                may reasonably request in order to facilitate the disposition of
                Registrable Securities to be resold by
                them.

            


    

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    


    
      	 	
              (4)

            	
              Register
                and qualify the securities covered by such Shelf Registration Statement
                under such other securities or Blue Sky laws of such jurisdictions
                in the
                United States as shall be reasonably requested by the Investor, a
                Permitted Transferee or any managing underwriter, to keep such
                registration or qualification in effect for so long as such Shelf
                Registration Statement remains in effect, and to take any other action
                which may be reasonably necessary to enable such seller to consummate
                the
                disposition in such jurisdictions of the securities owned by the
                Investor;
                provided
                that the Company shall not be required in connection therewith or
                as a
                condition thereto to qualify to do business or to file a general
                consent
                to service of process in any such states or
                jurisdictions.

            


    

     

    
      	 	
              (5)

            	
              Notify
                the Investor at any time when a prospectus relating to any Registrable
                Securities is required to be delivered under the Securities Act of
                the
                happening of any event as a result of which the applicable prospectus,
                as
                then in effect, includes an untrue statement of a material fact or
                omits
                to state a material fact required to be stated therein or necessary
                to
                make the statements therein not misleading in light of the circumstances
                then existing.

            


    

     

    
      	 	
              (6)

            	
              Give
                prompt written notice to the
                Investor:

            


    

     

    
      	 	
              (A)

            	
              when
                any Shelf Registration Statement filed pursuant to Section 4.3(a) or
                any amendment thereto has been filed with the SEC and when such Shelf
                Registration Statement or any post-effective amendment thereto has
                become
                effective;

            


    

     

    
      	 	
              (B)

            	
              of
                any request by the SEC for amendments or supplements to any Shelf
                Registration Statement or the prospectus included therein or for
                additional information;

            


    

     

    
      	 	
              (C)

            	
              of
                the issuance by the SEC of any stop order suspending the effectiveness
                of
                any Shelf Registration Statement or the initiation of any proceedings
                for
                that purpose;

            


    

     

    
      	 	
              (D)

            	
              of
                the receipt by the Company or its legal counsel of any notification
                with
                respect to the suspension of the qualification of the Common Shares
                for
                sale in any jurisdiction or the initiation or threatening of any
                proceeding for such purpose;

            


    

     

    
      	 	
              (E)

            	
              of
                the happening of any event that requires the Company to make changes
                in
                any effective registration statement or the prospectus related to
                such
                registration statement in order to make the statements therein not
                misleading (which notice shall be accompanied by an instruction to
                suspend
                the use of the prospectus until the requisite changes have been made);
                or

            


    

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    


    
      	 	
              (F)

            	
              if
                at any time the representations and warranties of the Company contained
                in
                any underwriting agreement relating to Registrable Securities cease
                to be
                true and correct.

            


    

     

    
      	 	
              (7)

            	
              Use
                its commercially reasonable efforts to prevent the issuance or obtain
                the
                withdrawal of any order suspending the effectiveness of any Shelf
                Registration Statement referred to in Section 4.3(c)(6)(C) at the
                earliest practicable time.

            


    

     

    
      	 	
              (8)

            	
              Except
                under the circumstances described in clause (A), (B) or (C) of
                Section 4.3(a)(3), upon the occurrence of any event contemplated by
                Section 4.3(c)(5) or 4.3(c)(6)(E), prepare and furnish to the
                Investor, as soon as reasonably practicable, a reasonable number
                of copies
                of a prospectus supplemented or amended so that such prospectus shall
                conform in all material respects to the applicable requirements of
                the
                Securities Act and the rules and regulations of the SEC thereunder
                and
                shall not include an untrue statement of a material fact or omit
                to state
                a material fact required to be stated therein or necessary to make
                the
                statements therein not misleading in light of the circumstances then
                existing.

            


    

     

    
      	 	
              (9)

            	
              Procure
                the cooperation of the Company’s transfer agent in settling any offering
                or sale of Registrable Securities.

            


    

     

    
      	 	
              (10)

            	
              Cause
                all such Registrable Securities to be listed on each securities exchange,
                if any, on which Common Shares of the Company are then
                listed.

            


    

     

    
      	 	
              (11)

            	
              If
                requested by the Investor, a Permitted Transferee or the managing
                underwriter, if any, of an underwritten distribution of the Registrable
                Securities, include in a prospectus supplement or amendment such
                information as the Investor or managing underwriter, if any, may
                reasonably request in order to permit the intended method of distribution
                of such securities and make all required filings of such prospectus
                supplement or such amendment as soon as practicable after the Company
                has
                received such request.

            


    

     

    
      	 	
              (12)

            	
              Timely
                provide to its securityholders earning statements satisfying the
                provisions of Section 11(a) of the Securities Act (which the Company
                may do by complying with Rule 158 under the Securities
                Act).

            


    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    


    (d) Suspension
      of Sales.
      Upon
      receipt of written notice from the Company that a registration statement,
      prospectus or prospectus supplement contains or may contain an untrue statement
      of a material fact or omits to state a material fact required to be stated
      therein or necessary to make the statements therein not misleading or that
      circumstances exist that make use of such registration statement, prospectus
      or
      prospectus supplement inadvisable, the Investor and any Permitted Transferee
      shall discontinue disposition of Registrable Securities until the Investor
      has
      received copies of a supplemented or amended prospectus or prospectus
      supplement, or until the Investor is advised in writing by the Company that
      the
      use of the prospectus and, if applicable, prospectus supplement may be resumed,
      and, if so directed by the Company, the Investor and any Permitted Transferee
      shall deliver to the Company (at the Company’s expense) all copies, other than
      permanent file copies then in the Investor’s or such Permitted Transferee’s
      possession, of the prospectus and, if applicable, prospectus supplement covering
      such Registrable Securities current at the time of receipt of such notice.
      

     

    (e) The
      Investor’s registration rights as to any securities held by the Investor (and
      its Affiliates, partners, members and former members) shall not be available
      unless such securities are Registrable Securities.

     

    (f) Furnishing
      Information.
      

     

    
      	 	
              (1)

            	
              Neither
                the Investor nor any Permitted Transferees shall use any free writing
                prospectus (as defined in Rule 405 under the Securities Act) in
                connection with the sale of Registrable Securities without the prior
                written consent of the Company.

            


    

     

    
      	 	
              (2)

            	
              It
                shall be a condition precedent to the obligations of the Company
                to take
                any action pursuant to Section 4.3 (including the payment of
                liquidated damages pursuant to Section 4.3(a)(4)) that the Investor,
                any Permitted Transferees and their underwriters, if any, shall furnish
                to
                the Company a reasonable time before the Company’s proposed filing date
                for the Shelf Registration Statement such information regarding
                themselves, the Registrable Securities held by them and the intended
                method of disposition of such securities as shall be required to
                effect
                the registered offering of their Registrable
                Securities.

            


    

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    


    (g) Indemnification
      Related to Registration.
      

     

    
      	 	
              (1)

            	
              If
                the Investor or any Permitted Transferee has any Registrable Securities
                included in a Shelf Registration Statement, the Company shall indemnify
                the Investor, any such Permitted Transferee, each person who participates
                as a sales or placement agent or as an underwriter and each person,
                if
                any, that controls the Investor or such Permitted Transferee, sales
                or
                placement agent or underwriter within the meaning of the Securities
                Act
                (each, an “Investor
                Indemnitee”),
                against any losses, claims, damages or liabilities, joint or several,
                to
                which such Investor Indemnitee may become subject under the Securities
                Act
                or otherwise, insofar as such losses, claims, damages or liabilities
                (or
                actions in respect thereof) arise out of or are based upon an untrue
                statement or alleged untrue statement of a material fact contained
                in such
                Shelf Registration Statement or any preliminary, final or summary
                prospectus contained therein or furnished by the Company to any such
                Investor Indemnitee, or any amendment or supplement thereto, or arise
                out
                of or are based upon the omission or alleged omission to state therein
                a
                material fact necessary to make the statements therein not misleading,
                and
                will reimburse such Investor Indemnitee for any legal or other expenses
                reasonably incurred by them in connection with investigating or defending
                any such loss, claim, damage, liability or action; provided that
                the Company shall not be liable in any such case to the extent that
                any
                such loss, claim, damage or liability arises out of or is based upon
                an
                untrue statement or alleged untrue statement or omission or alleged
                omission made in any of such documents in reliance upon and in conformity
                with written information furnished to the Company by such Investor
                Indemnitee expressly for use therein;
                and provided,
                further,
                that the foregoing indemnity agreement contained in this
                Section 4.3(g)(1) with respect to such Shelf Registration Statement
                or any preliminary, final or summary prospectus contained therein
                or
                furnished by the Company, or any amendment or supplement thereto,
                shall
                not inure to the benefit of any Investor Indemnitee from whom the
                person
                asserting any such losses, claims, damages or liabilities purchased
                Registrable Securities, where (A) prior to the written confirmation
                of the
                sale of Registrable Securities to such person (the “Applicable
                Time”),
                the Company shall have notified such Investor Indemnitee that such
                Shelf
                Registration Statement or prospectus contains an untrue statement
                of a
                material fact or omits to state therein a material fact necessary
                in order
                to make the statements therein not misleading, (B) such untrue statement
                or omission of a material fact was corrected in a further amendment
                or
                supplement to such Shelf Registration Statement or prospectus and
                such
                Shelf Registration Statement or prospectus was provided to such Investor
                Indemnitee prior to the Applicable Time, (C) such corrected Shelf
                Registration Statement or prospectus (excluding any document incorporated
                by reference therein) was not conveyed to such person at or prior
                to the
                contract for sale of the Registrable Securities to such person and
                (D)
                such loss, claim, damage or liability would not have occurred had
                such
                corrected Shelf Registration Statement or prospectus, or any amendment
                or
                supplement thereto (excluding any document incorporated by reference
                therein) been conveyed to such person as provided for in clause (C)
                above.

            


    

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    


    
      	 	
              (2)

            	
              The
                Investor and each Permitted Transferee agree to, and the Company
                may
                require, as a condition to including any Registrable Securities in
                any
                Shelf Registration Statement filed pursuant to Section 4.3(a) or to
                entering into any underwriting agreement with respect thereto, that
                the
                Company shall have received an undertaking reasonably satisfactory
                to it
                from each underwriter named in any such underwriting agreement, severally
                and not jointly, to (A) indemnify and hold harmless the Company, each
                of its directors, each of its officers who have signed any Shelf
                Registration Statement and each person, if any, who controls the
                Company
                within the meaning of the Securities Act and all other holders of
                Registrable Securities (each, a “Company
                Indemnitee”),
                against any and all losses, claims, damages or liabilities to which
                any
                Company Indemnitee may become subject, under the Securities Act or
                otherwise, insofar as such losses, claims, damages or liabilities
                (or
                actions in respect thereof) arise out of or are based upon an untrue
                statement or alleged untrue statement of a material fact contained
                in such
                Shelf Registration Statement, or any preliminary, final or summary
                prospectus contained therein or furnished by the Company to the Investor
                or such Permitted Transferee or its agent or underwriter, or any
                amendment
                or supplement thereto, or arise out of or are based upon the omission
                or
                alleged omission to state therein a material fact necessary to make
                the
                statements therein not misleading, in each case to the extent, but
                only to
                the extent, that such untrue statement or alleged untrue statement
                or
                omission or alleged omission was made in reliance upon and in conformity
                with written information furnished to the Company by the Investor,
                such
                Permitted Transferee or such agent or underwriter expressly for use
                therein, and (B) reimburse such Company Indemnitee for any legal or
                other expenses reasonably incurred by such Company Indemnitee in
                connection with investigating or defending any such loss, claim,
                damage,
                liability or action.

            


    

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    


    
      	 	
              (3)

            	
              If
                the indemnification provided for in Section 4.3(g)(1) or 4.3(g)(2) is
                unavailable to an Investor Indemnitee or Company Indemnitee (each,
                an
                “Indemnitee”)
                with respect to any losses, claims, damages, actions, liabilities,
                costs
                or expenses referred to therein or is insufficient to hold such Indemnitee
                harmless as contemplated therein, then each indemnifying party shall
                contribute to the amount paid or payable by such Indemnitee as a
                result of
                such losses, claims, damages, actions, liabilities, costs or expenses
                (or
                actions in respect thereof) in such proportion as is appropriate
                to
                reflect the relative fault of the indemnifying party and the Indemnitee
                in
                connection with the statements or omissions that resulted in such
                losses,
                claims, damages, actions, liabilities, costs or expenses (or actions
                in
                respect thereof), as well as any other relevant equitable considerations.
                The relative fault of such indemnifying party and Indemnitee shall
                be
                determined by reference to, among other things, whether the untrue
                or
                alleged untrue statement of a material fact or omission or alleged
                omission to state a material fact relates to information supplied
                by such
                indemnifying party or by such Indemnitee, and the parties’ relative
                intent, knowledge, access to information and opportunity to correct
                or
                prevent such statement or omission. The parties hereto agree that
                it would
                not be just and equitable if contributions pursuant to this
                Section 4.3(g)(3) were determined by pro
                rata
                allocation (even if the indemnifying party or any agents or underwriters
                or all of them were treated as one entity for such purpose) or by
                any
                other method of allocation that does not take account of the equitable
                considerations referred to in this Section 4.3(g)(3). The amount paid
                or payable by an indemnified party as a result of the losses, claims,
                damages, actions, liabilities, costs or expenses (or actions in respect
                thereof) referred to above shall be deemed to include any legal or
                other
                fees or expenses reasonably incurred by such Indemnitee in connection
                with
                investigating or defending any such action or claim. Notwithstanding
                the
                provisions of this Section 4.3(g)(3), neither the Investor or any
                Permitted Transferee nor the Company shall be required to contribute
                any
                amount in excess of the amount by which the dollar amount of the
                proceeds
                received by it from the sale of any Registrable Securities (after
                deducting any fees, discounts and commissions applicable thereto)
                exceeds
                the amount of any damages which it has otherwise been required to
                pay by
                reason of such untrue or alleged untrue statement or omission or
                alleged
                omission, and no underwriter shall be required to contribute any
                amount in
                excess of the amount by which the total price at which the Registrable
                Securities underwritten and distributed by it exceeds the amount
                of any
                damages which such underwriter has otherwise been required to pay
                by
                reason of such untrue or alleged untrue statement or omission or
                alleged
                omission. No person guilty of fraudulent misrepresentation (within
                the
                meaning of Section 11(f) of the Securities Act) shall be entitled to
                contribution from any person who was not guilty of such fraudulent
                misrepresentation. The Investor’s, any Permitted Transferee’s, the
                Company’s and any underwriters’ obligations in this Section 4.3(g)(3)
                to contribute shall be several in proportion to the principal amount
                of
                Registrable Securities registered or underwritten, as the case may
                be, by
                or on behalf of them and not joint.

            


    

     

    (h) [Intentionally
      Omitted].
      

     

    (i) Rule 144
      Reporting.
      With a
      view to making available to the Investor or a Permitted Transferee the benefits
      of certain rules and regulations of the SEC which may permit the sale of the
      Registrable Securities to the public without registration, the Company agrees
      to
      use commercially reasonable efforts to:

     

    
      	 	
              (1)

            	
              remain
                in compliance with the reporting obligations under the Exchange Act;
                and

            


    

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    


    
      	 	
              (2)

            	
              so
                long as the Investor or such Permitted Transferee owns any Registrable
                Securities, furnish to the Investor or such Permitted Transferee
                promptly
                upon request a written statement by the Company as to its compliance
                with
                the reporting requirements under Exchange
                Act.

            


    

     

    (j) As
      used
      in this Section 4.3, the following terms shall have the following
      respective meanings:

     

    “Register,”
      “registered”
and
      “registration”
shall
      refer to a registration effected by preparing and (1) filing a registration
      statement in compliance with the Securities Act and applicable rules and
      regulations thereunder, and the declaration or ordering of effectiveness of
      such
      registration statement, or (2) filing a prospectus and/or prospectus
      supplement in respect of an appropriate effective registration statement on
      Form S-3.

     

    “Registrable
      Securities”
means
      the Purchased Securities (and any Common Shares issued or issuable to the
      Investor with respect to such Purchased Securities by way of stock dividends
      or
      stock splits or in connection with a combination of shares, recapitalization,
      merger or other reorganization); provided
      that
      the
      Investor is not an Affiliate of the Company and has not been an Affiliate for
      a
      period of at least three months; and provided,
      further,
      that,
      once issued, such Purchased Securities will not be Registrable Securities when
      (1) they are sold pursuant to an effective registration statement under the
      Securities Act, (2) they may be sold pursuant to Rule 144 under the
      Securities Act, (3) they shall have ceased to be outstanding or
      (4) they have been sold in a private transaction in which the transferor’s
      rights under this Agreement are not assigned to the transferee of the
      securities. No Registrable Securities may be registered under more than one
      registration statement at any one time.

     

    “Registration
      Expenses”
means
      all expenses incurred by the Company in effecting any registration pursuant
      to
      this Agreement (whether or not any registration or prospectus becomes effective
      or final) or otherwise complying with its obligations under this
      Section 4.3, including all registration, filing and listing fees, printing
      expenses, fees and disbursements of counsel for the Company, blue sky fees
      and
      expenses, expenses incurred in connection with any “road show” and expenses of
      the Company’s independent accountants in connection with any regular or special
      reviews or audits incident to or required by any such registration, but shall
      not include Selling Expenses and the compensation of regular employees of the
      Company, which shall be paid in any event by the Company.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    


    “Selling
      Expenses”
means
      all discounts, selling commissions, stock transfer taxes and fees and
      disbursements of counsel for the Investor and any Permitted Transferee
      applicable to the sale of Registrable Securities.

     

    (k) At
      any
      time, the Investor may elect to forfeit its rights set forth in this
      Section 4.3 from that date forward; provided
      that the
      Investor forfeiting such rights shall nonetheless (1) be obligated under
      Section 4.3(h)(1) with respect to any Pending Offering (as hereinafter
      defined) to the same extent that the Investor would have been obligated if
      the
      Investor had not withdrawn; and provided,
      further,
      that no
      such forfeiture shall terminate the Investor’s rights or obligations under
      Section 4.3(f) with respect to any prior registration or Pending Offering.
“Pending
      Offering”
means,
      with respect to the Investor forfeiting its rights pursuant to this
      Section 4.3(k), (x) any registered sale described in
      Section 4.3(h)(1) that has an effective date prior to the date of the
      Investor’s forfeiture, and (y) any other underwritten offering of
      Registrable Securities (including an underwritten offering pursuant to a Shelf
      Registration Statement) in which the Investor has advised the Company of its
      intent to register its Registrable Securities pursuant to Section 4.3(a)(2)
      prior to the date of the Investor’s forfeiture.

     

    Article
      V

     

    Miscellaneous

     

    5.1 Survival.
      The
      representations and warranties of the Company contained in this Agreement shall
      survive until the date two years after the Closing Date, at which time such
      representations and warranties shall expire; provided
      that the
      representations and warranties made in Sections 2.2(a), (b), (c) and (d)
      shall survive until the expiration of the applicable statute of limitations.
      The
      representations and warranties of the Investor contained in this Agreement
      shall
      survive until the date two years after the Closing Date, at which time such
      representations and warranties shall expire; provided
      that the
      representations and warranties made in Sections 2.3(a) and (b) shall
      survive the Closing until the expiration of the applicable statute of
      limitations.

     

    5.2 Indemnification
      Generally.
      The
      Investor agrees (a) to indemnify and hold harmless the Company and its
      affiliates, directors, controlling persons, agents, attorneys, accountants
      and
      employees (collectively, “Representatives”),
      from
      and against all losses, claims, damages, liabilities or actions that the Company
      and/or its Representatives may incur by reason of (1) the Investor’s
      failure to fulfill any of the terms or conditions of this Agreement,
      (2) any breach of the representations and warranties made by the Investor
      herein or in any document provided by the Investor to the Company and/or its
      Representatives relating in any way to the Investor and/or the Purchase and/or
      (3) any disposition of the Purchased Securities contrary to the
      restrictions set forth in Article IV and (b) to reimburse the Company and
      its Representatives for any legal or other expenses reasonably incurred in
      connection with investigating or defending any such loss, claim, damage,
      liability or action. 

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    


    5.3 Interpretation.
      When
      a
      reference is made in this Agreement to “Recitals,” “Articles,” “Sections” or
“Annexes,” such reference shall be to a Recital, Article or Section of, or Annex
      to, this Agreement unless otherwise indicated. The terms defined in the singular
      have a comparable meaning when used in the plural, and vice versa. The table
      of
      contents and headings contained in this Agreement are for reference purposes
      only and are not part of this Agreement. Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed to be
      followed by the words “without limitation.” The words “contained in” shall be
      deemed to mean “set forth in or incorporated by reference into,” and the words
“contain” and “contains” shall have corresponding meanings. No rule of
      construction against the draftsperson shall be applied in connection with the
      interpretation or enforcement of this Agreement, as this Agreement is the
      product of negotiation between sophisticated parties advised by counsel. All
      references to “$” or “dollars” mean the lawful currency of the United States of
      America. Except as expressly stated in this Agreement, all references to any
      statute, rule or regulation are to the statute, rule or regulation as amended,
      modified, supplemented or replaced from time to time (and, in the case of
      statutes, include any rules and regulations promulgated under the statute)
      and
      to any section of any statute, rule or regulation including any successor to
      the
      section. All references to the “Knowledge”
      of the
      Company mean the actual knowledge of the Chief Executive Officer or Chief
      Financial Officer of the Company; all references to the “Knowledge”
of
      the
      Investor mean the actual knowledge of the “executive officers” (as defined in
      Rule 3b-7 under the Exchange Act) of the Investor (or, if the Investor is a
      natural person, the Investor himself or herself). For the avoidance of doubt,
      at
      any time when this Agreement requires a calculation of the number or percentage
      of shares of Common Shares owned or controlled by a person, the number of shares
      of Common Shares underlying any convertible or exchangeable securities
      beneficially owned or controlled by such person are to be included as if such
      securities were fully converted in the hands of such person as of that
      time.

     

    5.4 Amendment.
      No
      amendment of any provision of this Agreement will be effective unless made
      in
      writing and signed by an officer of a duly authorized representative of each
      party.

     

    5.5 Waiver
      of Conditions.
      The
      conditions to the Company’s obligation to consummate the Purchase are for the
      sole benefit of the Company and may be waived by the Company in whole or in
      part
      to the extent permitted by applicable law. No waiver will be effective unless
      it
      is in a writing signed by a duly authorized officer of the Company that makes
      express reference to the provision or provisions subject to such
      waiver.

     

    5.6 Counterparts
      and Facsimile.
      This
      Agreement may be executed in any number of separate counterparts, each such
      counterpart being deemed to be an original instrument, and all such counterparts
      will together constitute the same agreement. Executed signature pages to this
      Agreement may be delivered by facsimile, and such facsimiles will be deemed
      as
      sufficient as if actual signature pages had been delivered.

     

    5.7 Governing
      Law; Submission to Jurisdiction, Etc.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York applicable to contracts made and to be performed entirely
      within such State. In connection with any dispute, controversy or claim arising
      out of or relating to the Transaction Documents, or the validity,
      interpretation, breach or termination of any such Transaction Documents,
      including claims seeking redress or asserting rights under any law, each of
      the
      parties hereto agrees (a) to submit to the personal jurisdiction of the
      State or Federal courts in the Borough of Manhattan, The City of New York,
      (b) that exclusive jurisdiction and venue shall lie in the State or Federal
      courts in the State of New York and (c) that notice may be served upon such
      party at the address and in the manner set forth for such party in
      Section 5.8.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    


    5.8 Notices.
      All
      notices, requests, claims, demands, waivers and other communications hereunder
      shall be in writing and shall be deemed to have been duly given when delivered
      by hand, if delivered personally or by courier, or three days after being
      deposited in the mail (registered or certified mail, postage prepaid, return
      receipt requested). All notices hereunder shall be delivered as set forth below,
      or pursuant to such other instructions as may be designated in writing by the
      party to receive such notice.

     

    
      	 	
              (A)

            	
              If
                to the Investor, to the person and the address indicated on the signature
                page to this Agreement.

            


    

     

    
      	
            	(B)	
              If
                to the Company: 

            


    

    

      Smithtown
        Bancorp, Inc.

      100
        Motor
        Parkway, Suite 160

      Hauppauge,
        New York 11788

      Attention:    
        Chief Financial Officer

      Facsimile:
        631-360-9399

      


      with
        a
        copy to: 

       

      Sullivan
        & Cromwell LLP

      125
        Broad
        Street

      New
        York,
        New York 10004

      Attention:    
        Mark
        J.
        Menting

                           Ann
        B. Fisher

      Facsimile:
        212-558-3588

       

    

    5.9 Entire
      Agreement, Etc.
      (a) This Agreement, the other Transaction Documents executed and delivered
      on the date hereof and the confidentiality letter agreement, as amended, and
      entered into between the Company and the Investor, constitute the entire
      agreement, and supersede all other prior agreements, understandings,
      representations and warranties, both written and oral, between the parties,
      with
      respect to the subject matter hereof, and (b) this Agreement will not be
      assignable by any party without the prior written consent of the other party
      (any attempted assignment in contravention hereof being null and void
ab initio).
      The
      Investor agrees to treat all confidential information provided by the Company
      in
      connection with the transactions contemplated by the Transaction Documents
      as
      Proprietary Information under the confidentiality provisions of the
      aforementioned confidentiality letter agreement.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    


    5.10 Definitions
      of “Subsidiary” and “Affiliate”. 

     

    (a) When
      a
      reference is made in this Agreement to a Subsidiary of a person, the term
“Subsidiary”
means
      those corporations, banks, savings banks, associations and other entities of
      which such person owns or controls more than 50% of the outstanding equity
      securities either directly or through an unbroken chain of entities as to each
      of which more than 50% of the outstanding equity securities is owned directly
      or
      indirectly by its parent.

     

    (b) The
      term
“Affiliate”
means,
      with respect to any person, any person directly or indirectly controlling,
      controlled by or under common control with, such other person. For purposes
      of
      this definition, “control” when used with respect to any person, means the
      possession, directly or indirectly, of the power to cause the direction of
      management and/or policies of such person, whether through the ownership of
      voting securities, by contract or otherwise.

     

    5.11 Severability.
      If any
      provision of this Agreement or a Transaction Document, or the application
      thereof to any person or circumstance, is determined by a court of competent
      jurisdiction to be invalid, void or unenforceable, the remaining provisions
      hereof, or the application of such provision to persons or circumstances other
      than those as to which it has been held invalid or unenforceable, will remain
      in
      full force and effect and shall in no way be affected, impaired or invalidated
      thereby, so long as the economic or legal substance of the transactions
      contemplated hereby is not affected in any manner materially adverse to any
      party. Upon such determination, the parties shall negotiate in good faith in
      an
      effort to agree upon a suitable and equitable substitute provision to effect
      the
      original intent of the parties.

     

    5.12 No
      Third Party Beneficiaries.
      Nothing
      contained in this Agreement, expressed or implied, is intended to confer upon
      any person or entity other than the Company and the Investor, any benefits,
      rights, or remedies.

     

    [The
      next page is the signature page.]

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    


    In
      Witness Whereof,
      this
      Agreement has been duly executed and delivered by the duly authorized officers
      of the parties hereto as of the date first herein above written.

     

    
      
        
          	 	
                  SMITHTOWN
                    BANCORP, INC.

                
	 	 
	 	
                  By:
                    

                	 
	 	 	
                  Name:

                
	 	 	
                  Title:

                
	 	 	 
	
                  INVESTOR:

                	 	 
	
                  Address:

                	 
	 	 
	
                  By:
                    

                	 	 
	 	
                  Name:

                	 
	 	
                  Title:

                	 
	 	 
	
                  Common
                    Shares Subscribed For:

                	 	 
	 	 	 
	
                  Aggregate
                    Purchase Price Delivered Herewith: