2-1

EXHIBIT 2.1  -AGREEMENT  AND PLAN OF MERGER WITH BRYAN BANCORP OF GEORGIA,  INC.
DATED FEBRUARY 10, 1998



AGREEMENT AND PLAN OF MERGER

BY AND BETWEEN

THE SAVANNAH BANCORP, INC.

AND

BRYAN BANCORP OF GEORGIA, INC.

Dated as of February 11, 1998



AGREEMENT AND PLAN OF MERGER

                  THIS AGREEMENT AND PLAN OF MERGER (this  "Agreement")  is made
and entered into as of February 11, 1998,  by and between THE SAVANNAH  BANCORP,
INC.  ("Savannah"),  a Georgia corporation;  and BRYAN BANCORP OF GEORGIA,  INC.
("Bryan"), a Georgia corporation.
 Preamble
                  The  respective  Boards of Directors of Bryan and Savannah are
of the opinion that the transactions  described herein are in the best interests
of the  parties  to this  Agreement  and  their  respective  shareholders.  This
Agreement  provides  for the  merger  of Bryan  with and into  Savannah.  At the
effective time of such merger,  the  outstanding  shares of the capital stock of
Bryan shall be converted into the right to receive shares of the common stock of
Savannah (except as provided herein).  As a result,  shareholders of Bryan shall
become  shareholders  of Savannah  and  Savannah  shall  continue to conduct the
business and operations of Bryan. The  transactions  described in this Agreement
are subject to the approvals of the  shareholders of Bryan,  the shareholders of
Savannah,  the Board of Governors of the Federal Reserve  System,  Department of
Banking  and Finance of the State of Georgia,  and the  satisfaction  of certain
other conditions described in this Agreement. It is the intention of the parties
to this  Agreement that the Merger for federal income tax purposes shall qualify
as a  "reorganization"  within the  meaning of  Section  368(a) of the  Internal
Revenue  Code,  and for  accounting  purposes  shall  qualify for treatment as a
pooling of interests.

                  Immediately   after  the   execution   and  delivery  of  this
Agreement, as a condition and inducement to Savannah's willingness to enter into
this  Agreement,  Bryan and Savannah are entering into a stock option  agreement
pursuant to which Bryan is granting to Savannah an option to purchase  shares of
Bryan  Common  Stock.  Immediately  after the  execution  and  delivery  of this
Agreement,  as a condition and  inducement to Bryan's  willingness to enter into
this  Agreement,  Savannah and Bryan are entering into a stock option  agreement
pursuant to which Savannah is granting to Bryan an option to purchase  shares of
Savannah Common Stock.

                  Certain  terms used in this  Agreement  are defined in Section
11.1 of this Agreement.



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


ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER

                  1.1  Merger.  Subject  to the  terms  and  conditions  of this
Agreement,  at the Effective Time,  Bryan shall be merged with and into Savannah
in accordance with the provisions of Section  14-2-1101 of the GBCC and with the
effect provided in Sections  14-2-1106 and 14-2-1107 of the GBCC (the "Merger").
Savannah shall be the Surviving  Corporation resulting from the Merger and shall
continue to be governed by the Laws of the State of Georgia. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved and
adopted by the respective Boards of Directors of Bryan and Savannah.

                  1.2 Time and Place of Closing. The closing of the transactions
contemplated  hereby  (the  "Closing")  will take place at 9:00 A.M. on the date
that  the  Effective  Time  occurs  (or  the  immediately  preceding  day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers,  may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the Parties.

                  1.3  Effective   Time.  The  Merger  and  other   transactions
contemplated  by this  Agreement  shall become  effective on the date and at the
time the Certificate of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Georgia (the "Effective  Time").  Subject
to the terms and conditions  hereof,  unless  otherwise  mutually agreed upon in
writing by the  authorized  officers of each Party,  the Parties shall use their
reasonable  efforts to cause the Effective  Time to occur on or before the fifth
business day following the last to occur of (i) the  effective  date  (including
expiration of any applicable waiting period) of the last required Consent of any
Regulatory  Authority  having  authority  over and  approving or  exempting  the
Merger,  and (ii)  the date on which  the  shareholders  of Bryan  and  Savannah
approve  this  Agreement to the extent such  approval is required by  applicable
Law.

                  1.4 Execution of Stock Option Agreements.[A&B1] Simultaneously
with the execution of this Agreement by the Parties and as a condition  thereto,
Bryan is executing  and  delivering  to Savannah a stock option  agreement  (the
"Bryan Stock Option Agreement"),  in substantially the form of Exhibit 1 hereto,
pursuant to which Bryan is granting to Savannah an option to purchase  shares of
Bryan Common Stock,  and Savannah is executing  and  delivering to Bryan a stock
option agreement (the "Savannah Stock Option  Agreement"),  in substantially the
form of Exhibit 2 hereto,  pursuant  to which  Savannah  is granting to Bryan an
option to purchase shares of Savannah Common Stock.


ARTICLE 2
TERMS OF MERGER

                  2.1  Charter.  The  Articles of  Incorporation  of Savannah in
effect  immediately  prior  to the  Effective  Time  shall  be the  Articles  of
Incorporation of the Surviving Corporation until duly amended or repealed.

                  2.2 Bylaws. The Bylaws of Savannah in effect immediately prior
to the  Effective  Time shall be the Bylaws of the Surviving  Corporation  until
duly amended or repealed.

                  2.3  Directors  and  Officers.  The  directors  of Savannah in
office  immediately prior to the Effective Time,  together with E. James Burnsed
and four other directors of Bryan selected by the Bryan Board of Directors prior
to the  Effective  Time,  shall serve as the initial  directors of the Surviving
Corporation  from and after the Effective Time in accordance  with the Bylaws of
the Surviving Corporation.  The officers of Savannah in office immediately prior
to the Effective Time,  together with such additional  persons as may thereafter
be elected,  shall serve as the officers of the Surviving  Corporation  from and
after  the  Effective  Time in  accordance  with  the  Bylaws  of the  Surviving
Corporation;  provided,  that E. James Burnsed shall be elected Vice Chairman of
the  Surviving  Corporation.  Of the five  directors of Bryan who shall serve as

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directors of the Surviving Corporation, two shall be elected for an initial term
of one year, two shall be elected for an initial term of two years, and E. James
Burnsed shall be elected for an initial term of three years.


ARTICLE 3
MANNER OF CONVERTING SHARES

                  3.1  Conversion of Shares.  Subject to the  provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any action
on the part of Savannah,  Bryan, or the shareholders of either of the foregoing,
the shares of the constituent corporations shall be converted as follows:

                  (a)  Each  share  of  capital  stock of  Savannah  issued  and
outstanding  immediately  prior to the  Effective  Time shall remain  issued and
outstanding from and after the Effective Time.

                  (b) Each share of Bryan Common Stock (excluding shares held by
any Bryan Entity or any Savannah Entity,  in each case other than in a fiduciary
capacity or as a result of debts  previously  contracted,  and excluding  shares
held by shareholders who perfect their statutory  dissenters' rights as provided
in Section 3.4) issued and outstanding  immediately  prior to the Effective Time
shall cease to be outstanding  and shall be converted into and exchanged for the
right to receive 1.85 shares of Savannah Common Stock (the "Exchange Ratio").

                  3.2  Anti-Dilution  Provisions.  In the event Savannah changes
the number of shares of Savannah  Common Stock issued and  outstanding  prior to
the  Effective  Time as a result of a stock split,  stock  dividend,  or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock  dividend) or the effective date thereof (in the case of a stock
split or similar  recapitalization  for which a record date is not  established)
shall  be  prior  to  the   Effective   Time,   the  Exchange   Ratio  shall  be
proportionately adjusted (to the nearest one-thousandth of a share).

                  3.3 Shares  Held by Bryan or  Savannah.  Each of the shares of
Bryan Common Stock held by any Bryan Entity or by any Savannah  Entity,  in each
case  other  than in a  fiduciary  capacity  or as a result of debts  previously
contracted,  shall  be  canceled  and  retired  at  the  Effective  Time  and no
consideration shall be issued in exchange therefor.

                  3.4  Dissenting  Shareholders.  Any  holder of shares of Bryan
Common Stock who  perfects  his  dissenters'  rights in  accordance  with and as
contemplated  by Article 13, Part 2 of Title 14 of the GBCC shall be entitled to
receive  the  value  of  such  shares  in cash as  determined  pursuant  to such
provision of Law; provided, that no such payment shall be made to any dissenting
shareholder  unless and until such dissenting  shareholder has complied with the
applicable  provisions of the GBCC and  surrendered to Bryan the  certificate or
certificates  representing  the shares for which  payment is being made.  In the
event that after the Effective  Time a dissenting  shareholder of Bryan fails to
perfect,  or  effectively  withdraws  or loses,  his right to  appraisal  and of
payment for his shares,  Savannah shall issue and deliver the  consideration  to
which such holder of shares of Bryan Common Stock is entitled under this Article
3  (without  interest)  upon  surrender  by such  holder of the  certificate  or
certificates  representing  shares of Bryan  Common Stock held by him. If and to
the extent  required by  applicable  Law,  Bryan will  establish (or cause to be
established) an escrow account with an amount  sufficient to satisfy the maximum
aggregate  payment that may be required to be paid to  dissenting  shareholders.
Upon  satisfaction  of all  claims of  dissenting  shareholders,  the  remaining
escrowed  amount,  reduced  by payment  of the fees and  expenses  of the escrow
agent, will be returned to the Surviving Corporation.

                  3.5 Fractional Shares.  Notwithstanding any other provision of
this Agreement,  each holder of shares of Bryan Common Stock exchanged  pursuant
to the Merger who would  otherwise have been entitled to receive a fraction of a
share of Savannah  Common  Stock  (after  taking into  account all  certificates
delivered  by such  holder)  shall  receive,  in  lieu  thereof,  cash  (without
interest)  in an amount  equal to such  fractional  part of a share of  Savannah
Common  Stock  multiplied  by the market  value of one share of Savannah  Common
Stock at the Effective  Time.  The market value of one share of Savannah  Common
Stock at the Effective Time shall be the last sale price of such common stock on
the Nasdaq  National  Market (as reported by The Wall Street  Journal or, if not
reported thereby,  any other  authoritative  source selected by Savannah) on the
last trading day preceding  the Effective  Time. No such holder will be entitled
to dividends,  voting rights, or any other rights as a shareholder in respect of
any fractional shares.




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                  3.6      Conversion of Stock Options.

                  (a) At the Effective  Time,  each option or other Equity Right
to purchase  shares of Bryan  Common  Stock  pursuant to stock  options  ("Bryan
Options") granted by Bryan, which are outstanding at the Effective Time, whether
or not  exercisable,  shall be converted  into and become rights with respect to
Savannah  Common  Stock,  and  Savannah  shall  assume  each  Bryan  Option,  in
accordance  with  the  terms  of the  stock  option  agreement  by  which  it is
evidenced,  except that from and after the Effective  Time, (i) Savannah and its
Compensation  Committee  shall be  substituted  for Bryan and the  Committee  of
Bryan's  Board of  Directors  (including,  if  applicable,  the entire  Board of
Directors of Bryan)  administering  such Bryan  Options,  (ii) each Bryan Option
assumed by Savannah may be exercised  solely for shares of Savannah Common Stock
(or cash, if so provided under the terms of such Bryan Option), (iii) the number
of shares of Savannah  Common Stock  subject to such Bryan Option shall be equal
to the number of shares of Bryan  Common  Stock  subject  to such  Bryan  Option
immediately  prior to the Effective Time multiplied by the Exchange  Ratio,  and
(iv) the per share exercise price under each such Bryan Option shall be adjusted
by dividing  the per share  exercise  price under each such Bryan  Option by the
Exchange  Ratio  and  rounding  up to  the  nearest  cent.  Notwithstanding  the
provisions  of clause (iii) of the  preceding  sentence,  Savannah  shall not be
obligated  to issue  any  fraction  of a share of  Savannah  Common  Stock  upon
exercise of Bryan  Options and any fraction of a share of Savannah  Common Stock
that otherwise  would be subject to a converted Bryan Option shall represent the
right to receive a cash payment  upon  exercise of such  converted  Bryan Option
equal to the  product of such  fraction  and the  difference  between the market
value of one share of  Savannah  Common  Stock at the time of  exercise  of such
Option and the per share exercise price of such Option.  The market value of one
share of Savannah Common Stock at the time of exercise of an Option shall be the
last sale price of such common stock on the Nasdaq  National Market (as reported
by The Wall Street Journal or, if not reported thereby,  any other authoritative
source  selected by  Savannah)  on the last  trading day  preceding  the date of
exercise. In addition,  notwithstanding the provisions of clauses (iii) and (iv)
of the first  sentence  of this  Section  3.6,  each  Bryan  Option  which is an
"incentive  stock  option"  shall be  adjusted as required by Section 424 of the
Internal Revenue Code, and the regulations promulgated thereunder,  so as not to
constitute  a  modification,  extension  or  renewal of the  option,  within the
meaning  of  Section  424(h) of the  Internal  Revenue  Code.  Each of Bryan and
Savannah  agrees  to take  all  necessary  steps  to  effectuate  the  foregoing
provisions of this Section 3.6, including using its reasonable efforts to obtain
from each holder of a Bryan  Option any  Consent or Contract  that may be deemed
necessary or advisable in order to effect the transactions  contemplated by this
Section  3.6.  Anything  in  this  Agreement  to the  contrary  notwithstanding,
Savannah  shall  have the right,  in its sole  discretion,  not to  deliver  the
consideration  provided in this Section 3.6 to a former holder of a Bryan Option
who has not delivered such Consent or Contract.

                  (b) As soon as practicable after the Effective Time,  Savannah
shall  deliver to each holder of a Bryan Option an  appropriate  notice  setting
forth such holder's rights pursuant thereto and the grants subject to such Bryan
Option shall continue in effect on the same terms and conditions (subject to the
adjustments required by Section 3.6(a) after giving effect to the Merger). At or
prior to the Effective Time,  Savannah shall take all corporate action necessary
to reserve for issuance  sufficient shares of Savannah Common Stock for delivery
upon  exercise of Bryan Options  assumed by it in  accordance  with this Section
3.6.



ARTICLE 4
EXCHANGE OF SHARES

                  4.1 Exchange  Procedures.  Promptly after the Effective  Time,
Savannah  and Bryan shall cause  Reliance  Trust  Company,  Savannah's  transfer
agent,  acting as the exchange  agent (the  "Exchange  Agent"),  to mail to each
holder of record of a certificate or certificates  which  represented  shares of
Bryan Common Stock immediately prior to the Effective Time (the  "Certificates")
appropriate  transmittal  materials and  instructions  (which shall specify that
delivery  shall be  effected,  and risk of loss and  title to such  Certificates
shall pass,  only upon  proper  delivery of such  Certificates  to the  Exchange
Agent). The Certificate or Certificates of Bryan Common Stock so delivered shall
be duly endorsed as the Exchange  Agent may require.  In the event of a transfer
of ownership of shares of Bryan Common Stock  represented by  Certificates  that
are not registered in the transfer records of Bryan, the consideration  provided

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in Section 3.1 may be issued to a transferee  if the  Certificates  representing
such shares are delivered to the Exchange  Agent,  accompanied  by all documents
required to evidence such transfer and by evidence  satisfactory to the Exchange
Agent  that  any  applicable  stock  transfer  taxes  have  been  paid.  If  any
Certificate shall have been lost, stolen, mislaid or destroyed,  upon receipt of
(i) an affidavit of that fact from the holder  claiming such  Certificate  to be
lost,  mislaid,  stolen or destroyed,  (ii) such bond,  security or indemnity as
Savannah  and the  Exchange  Agent may  reasonably  require  and (iii) any other
documents  necessary to evidence and effect the bona fide exchange thereof,  the
Exchange  Agent  shall  issue to such  holder the  consideration  into which the
shares represented by such lost, stolen,  mislaid or destroyed Certificate shall
have been converted.  The Exchange Agent may establish such other reasonable and
customary  rules and  procedures  in  connection  with its duties as it may deem
appropriate.  After the  Effective  Time,  each holder of shares of Bryan Common
Stock  (other than shares to be canceled  pursuant to Section 3.3 or as to which
statutory  dissenters'  rights have been  perfected  as provided in Section 3.4)
issued and  outstanding at the Effective Time shall surrender the Certificate or
Certificates  representing  such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange  therefor the consideration  provided
in Section 3.1,  together with all  undelivered  dividends or  distributions  in
respect of such shares (without  interest  thereon)  pursuant to Section 4.2. To
the extent  required by Section 3.5, each holder of shares of Bryan Common Stock
issued and outstanding at the Effective Time also shall receive,  upon surrender
of the  Certificate or  Certificates,  cash in lieu of any  fractional  share of
Savannah  Common Stock to which such holder may be otherwise  entitled  (without
interest). Savannah shall not be obligated to deliver the consideration to which
any former  holder of Bryan  Common  Stock is entitled as a result of the Merger
until such holder  surrenders  such holder's  Certificate  or  Certificates  for
exchange as provided in this Section 4.1. Any other  provision of this Agreement
notwithstanding,  neither  Savannah nor the Exchange  Agent shall be liable to a
holder of Bryan Common Stock for any amounts paid or property  delivered in good
faith  to a public  official  pursuant  to any  applicable  abandoned  property,
escheat or similar Law.

                  4.2  Rights of Former  Bryan  Shareholders.  At the  Effective
Time,  the stock  transfer books of Bryan shall be closed as to holders of Bryan
Common Stock  immediately  prior to the Effective  Time and no transfer of Bryan
Common Stock by any such holder shall  thereafter be made or  recognized.  Until
surrendered  for exchange in accordance with the provisions of Section 4.1, each
Certificate  theretofore  representing  shares of Bryan Common Stock (other than
shares to be canceled pursuant to Sections 3.3 and 3.4) shall from and after the
Effective  Time  represent  for all  purposes  only  the  right to  receive  the
consideration  provided in Sections 3.1 and 3.5 in exchange  therefor,  subject,
however, to the Surviving Corporation's  obligation to pay any dividends or make
any other  distributions  with a record date prior to the  Effective  Time which
have been  declared or made by Bryan in respect of such  shares of Bryan  Common
Stock in accordance  with the terms of this Agreement and which remain unpaid at
the  Effective  Time. To the extent  permitted by Law,  former  shareholders  of
record  of Bryan  shall be  entitled  to vote  after the  Effective  Time at any
meeting of Savannah  shareholders  the number of whole shares of Savannah Common
Stock into which their  respective  shares of Bryan Common Stock are  converted,
regardless  of whether  such  holders  have  exchanged  their  Certificates  for
certificates   representing   Savannah  Common  Stock  in  accordance  with  the
provisions  of this  Agreement.  Whenever a dividend  or other  distribution  is
declared by Savannah on the Savannah Common Stock,  the record date for which is
at or after the Effective Time, the declaration shall include dividends or other
distributions  on all shares of Savannah Common Stock issuable  pursuant to this
Agreement,  but no  dividend  or other  distribution  payable to the  holders of
record of Savannah  Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any Certificate until such holder surrenders
such  Certificate  for  exchange  as  provided  in Section  4.1.  However,  upon
surrender  of such  Certificate,  both the  Savannah  Common  Stock  certificate
(together with all such  undelivered  dividends or other  distributions  without
interest) and any  undelivered  dividends and cash  payments  payable  hereunder
(without  interest)  shall be  delivered  and paid with  respect  to each  share
represented by such Certificate.

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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BRYAN

                  Bryan hereby represents and warrants to Savannah as follows:

                  5.1 Organization,  Standing, and Power. Bryan is a corporation
duly  organized,  validly  existing,  and in good standing under the Laws of the
State of Georgia,  and has the  corporate  power and  authority  to carry on its
business as now  conducted  and to own,  lease and operate its material  Assets.
Bryan  is  duly  qualified  or  licensed  to  transact  business  as  a  foreign
corporation  in good  standing  in the States of the United  States and  foreign
jurisdictions  where the character of its Assets or the nature or conduct of its
business  requires  it  to  be  so  qualified  or  licensed,   except  for  such
jurisdictions  in which  the  failure  to be so  qualified  or  licensed  is not
reasonably  likely to have,  individually or in the aggregate,  a Bryan Material
Adverse  Effect.  The minute book and other  organizational  documents for Bryan
have been made available to Savannah for its review and,  except as disclosed in
Section 5.1 of the Bryan  Disclosure  Memorandum,  are true and  complete in all
material  respects as in effect as of the date of this  Agreement and accurately
reflect in all material  respects all amendments  thereto and all proceedings of
the Board of Directors and shareholders thereof.

                  5.2      Authority of Bryan; No Breach By Agreement.

                  (a) Bryan has the corporate  power and authority  necessary to
execute,  deliver,  and  perform its  obligations  under this  Agreement  and to
consummate the transactions  contemplated hereby. The execution,  delivery,  and
performance  of  this  Agreement  and  the   consummation  of  the  transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all  necessary  corporate  action in  respect  thereof  on the part of Bryan,
subject to the approval of this  Agreement by the holders of  two-thirds  of the
outstanding  shares of Bryan Common Stock,  which is the only  shareholder  vote
required for approval of this Agreement and consummation of the Merger by Bryan.
Subject to such requisite  shareholder  approval,  this  Agreement  represents a
legal,  valid,  and binding  obligation of Bryan,  enforceable  against Bryan in
accordance  with its terms  (except in all cases as such  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  receivership,
conservatorship,  moratorium,  or similar  Laws  affecting  the  enforcement  of
creditors'  rights  generally and except that the  availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).

                  (b) Neither the  execution  and delivery of this  Agreement by
Bryan, nor the consummation by Bryan of the  transactions  contemplated  hereby,
nor  compliance by Bryan with any of the  provisions  hereof,  will (i) conflict
with or result in a breach of any provision of Bryan's Articles of Incorporation
or Bylaws or the certificate or articles of incorporation or bylaws of any Bryan
Subsidiary  or  any  resolution  adopted  by  the  board  of  directors  or  the
shareholders of any Bryan Entity,  or (ii) except as disclosed in Section 5.2 of
the Bryan  Disclosure  Memorandum,  constitute or result in a Default under,  or
require any Consent  pursuant  to, or result in the  creation of any Lien on any
Asset of any Bryan Entity  under,  any  Contract or Permit of any Bryan  Entity,
where such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have,  individually  or in the  aggregate,  a Bryan  Material  Adverse
Effect,  or, (iii) subject to receipt of the requisite  Consents  referred to in
Section 9.1(b),  constitute or result in a Default under, or require any Consent
pursuant  to, any Law or Order  applicable  to any Bryan  Entity or any of their
respective  material  Assets  (including any Savannah Entity or any Bryan Entity
becoming  subject to or liable  for the  payment of any Tax or any of the Assets
owned by any Savannah Entity or any Bryan Entity being reassessed or revalued by
any Taxing authority).


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                                       2-7

                  (c) Other than in connection or compliance with the provisions
of the Securities  Laws,  applicable  state  corporate and securities  Laws, and
other than Consents required from Regulatory Authorities, and other than notices
to or filings with the Internal  Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any employee benefit plans, and other than Consents,
filings,  or  notifications  which,  if not obtained or made, are not reasonably
likely to have,  individually  or in the  aggregate,  a Bryan  Material  Adverse
Effect,  no notice to,  filing with, or Consent of, any public body or authority
is  necessary  for the  consummation  by  Bryan  of the  Merger  and  the  other
transactions contemplated in this Agreement.

                5.3      Capital Stock.

                  (a)  The  authorized   capital  stock  of  Bryan  consists  of
10,000,000  shares of Bryan Common Stock,  of which  528,258  shares are issued,
503,008 shares are  outstanding and 25,250 shares are held in treasury as of the
date of this  Agreement.  All of the  issued and  outstanding  shares of capital
stock of Bryan are duly and validly  issued and  outstanding  and are fully paid
and  nonassessable  under the GBCC.  None of the  outstanding  shares of capital
stock of Bryan has been  issued in  violation  of any  preemptive  rights of the
current or past shareholders of Bryan.

                  (b) Except as set forth in Section  5.3(a),  or as provided in
the Bryan Stock Option Agreement, or as disclosed in Section 5.3(b) of the Bryan
Disclosure  Memorandum,  there are no shares of  capital  stock or other  equity
securities of Bryan outstanding and no outstanding Equity Rights relating to the
capital stock of Bryan.

                  5.4 Bryan Subsidiaries.  Bryan has disclosed in Section 5.4 of
the  Bryan  Disclosure  Memorandum  all  of  the  Bryan  Subsidiaries  that  are
corporations  (identifying its jurisdiction of incorporation,  each jurisdiction
in which in which the  character  of its  Assets or the nature or conduct of its
business requires it to be qualified and/or licensed to transact  business,  and
the number of shares owned and percentage ownership interest represented by such
share ownership) and all of the Bryan  Subsidiaries  that are general or limited
partnerships,  limited  liability  companies,  or other  non-corporate  entities
(identifying the Law under which such entity is organized,  each jurisdiction in
which the  character  of its Assets or the  nature or  conduct  of its  business
requires it to be qualified and/or licensed to transact business, and the amount
and nature of the ownership  interest  therein).  Except as disclosed in Section
5.4 of the  Bryan  Disclosure  Memorandum,  Bryan  or  one of its  wholly  owned
Subsidiaries owns all of the issued and outstanding  shares of capital stock (or
other equity  interests)  of each Bryan  Subsidiary.  No capital stock (or other
equity  interest) of any Bryan Subsidiary is or may become required to be issued
(other than to another Bryan Entity) by reason of any Equity  Rights,  and there
are no Contracts by which any Bryan  Subsidiary is bound to issue (other than to
another  Bryan Entity)  additional  shares of its capital stock (or other equity
interests)  or Equity  Rights or by which any Bryan Entity is or may be bound to
transfer  any shares of the capital  stock (or other  equity  interests)  of any
Bryan  Subsidiary  (other than to another Bryan Entity).  There are no Contracts
relating  to the rights of any Bryan  Entity to vote or to dispose of any shares
of the capital stock (or other equity interests) of any Bryan Subsidiary. All of
the shares of capital stock (or other equity interests) of each Bryan Subsidiary
held by a Bryan Entity are fully paid and (except  pursuant to 12 USC Section 55
in the case of national banks and comparable,  applicable  state Law, if any, in
the case of state depository  institutions)  nonassessable  and are owned by the
Bryan  Entity free and clear of any Lien.  Except as disclosed in Section 5.4 of
the Bryan  Disclosure  Memorandum,  each Bryan  Subsidiary is either a bank or a
corporation,  and each such Subsidiary is duly organized,  validly existing, and
(as to  corporations)  in good standing  under the Laws of the  jurisdiction  in
which it is incorporated or organized, and has the corporate power and authority
necessary  for it to own,  lease,  and  operate  its  Assets and to carry on its
business as now conducted.  Each Bryan  Subsidiary is duly qualified or licensed
to transact business as a foreign  corporation in good standing in the States of
the United States and foreign jurisdictions where the character of its Assets or
the  nature  or  conduct  of its  business  requires  it to be so  qualified  or
licensed,  except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably  likely to have, individually or in the aggregate,
a Bryan Material Adverse Effect.  Each Bryan  Subsidiary  that  is  a depository
institution  is an "insured  institution"  as  defined in  the  Federal  Deposit
Insurance  Act and applicable regulations thereunder.


<PAGE>
                                       2-8

                  5.5      SEC Filings; Financial Statements.

                  (a) Bryan has timely filed and made  available to Savannah all
SEC Documents  required to be filed by Bryan since December 31, 1994 (the "Bryan
SEC  Reports").  The Bryan SEC Reports  (i) at the time  filed,  complied in all
material  respects with the applicable  requirements  of the Securities Laws and
other  applicable  Laws and (ii) did not,  at the time they were filed  (or,  if
amended or superseded by a filing prior to the date of this  Agreement,  then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material  fact  required  to be stated in such  Bryan SEC  Reports or
necessary in order to make the statements in such Bryan SEC Reports, in light of
the  circumstances  under  which  they  were  made,  not  misleading.  No  Bryan
Subsidiary is required to file any SEC Documents.

                  (b) Each of the Bryan Financial Statements (including, in each
case, any related notes) contained in the Bryan SEC Reports, including any Bryan
SEC Reports filed after the date of this  Agreement  until the  Effective  Time,
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent  basis  throughout the periods  involved (except as
may be indicated in the notes to such  financial  statements  or, in the case of
unaudited interim statements,  as permitted by Form 10-Q of the SEC), and fairly
presented in all material respects the consolidated  financial position of Bryan
and its Subsidiaries as at the respective dates and the consolidated  results of
operations and cash flows for the periods  indicated,  except that the unaudited
interim  financial  statements  were or are  subject  to  normal  and  recurring
year-end adjustments which were not or are not expected to be material in amount
or effect.

                  5.6 Absence of  Undisclosed  Liabilities.  No Bryan Entity has
any Liabilities of a nature required to be reflected on a balance sheet prepared
in accordance with GAAP that are reasonably  likely to have,  individually or in
the aggregate,  a Bryan Material Adverse Effect,  except  Liabilities  which are
accrued or reserved  against in the  consolidated  balance sheets of Bryan as of
December 31, 1997, included in the Bryan Financial Statements delivered prior to
the date of this  Agreement or reflected in the notes  thereto.  No Bryan Entity
has incurred or paid any  Liability  since  December  31, 1997,  except for such
Liabilities  incurred or paid (i) in the ordinary course of business  consistent
with  past  business  practice  and  which  are not  reasonably  likely to have,
individually  or in the aggregate,  a Bryan  Material  Adverse Effect or (ii) in
connection with the transactions contemplated by this Agreement.

                  5.7 Absence of Certain  Changes or Events.  Since December 31,
1997, except as disclosed in the Bryan Financial  Statements  delivered prior to
the  date  of  this  Agreement  or as  disclosed  in  Section  5.7 of the  Bryan
Disclosure  Memorandum,  (i) there have been no events,  changes, or occurrences
which  have  had,  or are  reasonably  likely  to have,  individually  or in the
aggregate, a Bryan Material Adverse Effect, and (ii) the Bryan Entities have not
taken  any  action,  or  failed  to take any  action,  prior to the date of this
Agreement,  which action or failure,  if taken after the date of this Agreement,
would  represent  or result in a  material  breach  or  violation  of any of the
covenants and agreements of Bryan provided in Article 7.




                  5.8 Tax Matters.

                  (a) All Tax  Returns  required  to be filed by or on behalf of
any of the Bryan Entities have been timely filed or requests for extensions have
been timely filed,  granted, and have not expired for periods ended on or before
December 31, 1996,  and on or before the date of the most recent fiscal year end
immediately  preceding  the Effective  Time,  except to the extent that all such
failures to file,  taken  together,  are not  reasonably  likely to have a Bryan
Material Adverse Effect,  and all Tax Returns filed are complete and accurate in
all  material  respects.  All Taxes shown on filed Tax  Returns  have been paid.
There is no audit examination,  deficiency, or refund Litigation with respect to
any Taxes  that is  reasonably  likely to result in a  determination  that would
have,  individually or in the aggregate, a Bryan Material Adverse Effect, except
as reserved  against in the Bryan  Financial  Statements  delivered prior to the

<PAGE>
                                       2-9

date of this  Agreement or as  disclosed in Section 5.8 of the Bryan  Disclosure
Memorandum. Bryan's federal income Tax Returns have not been audited by the IRS.
All Taxes and other  Liabilities  due with  respect  to  completed  and  settled
examinations  or concluded  Litigation  have been paid.  There are no Liens with
respect to Taxes upon any of the  Assets of the Bryan  Entities,  except for any
such Liens  which are not  reasonably  likely to have a Bryan  Material  Adverse
Effect.

                  (b) None of the Bryan  Entities  has  executed an extension or
waiver of any statute of  limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other  applicable  taxing  authorities)  that is
currently in effect.

                  (c) The  provision  for any Taxes due or to become due for any
of the Bryan  Entities for the period or periods  through and including the date
of the respective Bryan Financial Statements that has been made and is reflected
on such Bryan  Financial  Statements is sufficient to cover all such Taxes.

                  (d) Deferred  Taxes of the Bryan  Entities  have been provided
for in accordance with GAAP.

                  (e) Except for a Tax  Allocation  Agreement  between Bryan and
Bryan Bank & Trust,  none of the Bryan Entities is a party to any Tax allocation
or  sharing  agreement  and none of the Bryan  Entities  has been a member of an
affiliated  group filing a consolidated  federal income Tax Return (other than a
group the common  parent of which was Bryan) or has any  Liability  for Taxes of
any Person (other than Bryan and its  Subsidiaries)  under  Treasury  Regulation
Section 1.1502-6 (or any similar provision of state,  local or foreign Law) as a
transferee  or  successor  or by  Contract or  otherwise.

                  (f) Each of the Bryan Entities is in compliance  with, and its
records contain all information and documents  (including properly completed IRS
Forms W-9) necessary to comply with, all  applicable  information  reporting and
Tax withholding requirements  underfederal,  state, and local Tax Laws, and such
records  identify with  specificity all accounts  subject to backup  withholding
under Section 3406 of the Internal  Revenue Code,  except for such  instances of
noncompliance  and  such  omissions  as  are  not  reasonably  likely  to  have,
individually or in the aggregate, a Bryan Material Adverse Effect.

                  (g) Except as disclosed in Section 5.8 of the Bryan Disclosure
Memorandum,  none of the Bryan  Entities has made any payments,  is obligated to
make any payments,  or is a party to any Contract that could obligate it to make
any  payments  that would be  disallowed  as a deduction  under  Section 280G or
162(m) of the Internal Revenue Code.

                  (h) There has not been an  ownership  change,  as  defined  in
Internal Revenue Code Section 382(g), of the Bryan Entities that occurred during
or after any Taxable Period in which the Bryan Entities incurred a net operating
loss that carries over to any Taxable Period ending after December 31, 1996.

                  5.9  Allowance  for Possible  Loan  Losses.  In the opinion of
management  of Bryan,  the  allowance  for possible  loan or credit  losses (the
"Allowance")  shown on the consolidated  balance sheets of Bryan included in the
most recent Bryan Financial Statements dated prior to the date of this Agreement
was,  and the  Allowance  shown  on the  consolidated  balance  sheets  of Bryan
included  in the  Bryan  Financial  Statements  as of  dates  subsequent  to the
execution of this Agreement will be, as of the dates thereof,  adequate  (within
the meaning of GAAP and  applicable  regulatory  requirements  or guidelines) to
provide for all known or reasonably  anticipated  losses relating to or inherent
in the loan and lease portfolios (including accrued interest receivables) of the
Bryan Entities and other extensions of credit  (including  letters of credit and
commitments  to make  loans or extend  credit) by the Bryan  Entities  as of the
dates  thereof,  except where the failure of such Allowance to be so adequate is
not reasonably likely to have a Bryan Material Adverse Effect.


<PAGE>
                                      2-10


                  5.10     Assets.

                  (a)  Except  as   disclosed  in  Section  5.10  of  the  Bryan
Disclosure Memorandum or as disclosed or reserved against in the Bryan Financial
Statements  delivered  prior to the date of this  Agreement,  the Bryan Entities
have good and  marketable  title,  free and clear of all Liens,  to all of their
respective Assets, except for any such Liens or other defects of title which are
not reasonably  likely to have a Bryan  Material  Adverse  Effect.  All tangible
properties  used in the businesses of the Bryan Entities are in good  condition,
reasonable  wear and tear  excepted,  and are usable in the  ordinary  course of
business consistent with Bryan's past practices.

                  (b) All Assets  which are  material  to Bryan's  business on a
consolidated basis, held under leases or subleases by any of the Bryan Entities,
are held under valid Contracts  enforceable in accordance with their  respective
terms  (except  as  enforceability  may be  limited  by  applicable  bankruptcy,
insolvency, reorganization,  moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the  court  before  which  any  proceedings  may be  brought),  and each such
Contract is in full force and effect.

                  (c) The Bryan Entities currently maintain insurance similar in
amounts,   scope,  and  coverage  to  that  maintained  by  other  peer  banking
organizations. None of the Bryan Entities has received notice from any insurance
carrier  that (i) any policy of  insurance  will be  canceled  or that  coverage
thereunder will be reduced or eliminated,  or (ii) premium costs with respect to
such policies of insurance will be substantially increased.  There are presently
no claims for amounts  exceeding in any  individual  case $10,000  pending under
such  policies of  insurance  and no notices of claims in excess of such amounts
have been given by any Bryan Entity under such policies.

                  (d) The  Assets  of the  Bryan  Entities  include  all  Assets
required to operate the business of the Bryan Entities as presently conducted.

                  5.11  Intellectual  Property.  Each Bryan Entity owns or has a
license to use all of the Intellectual Property used by such Bryan Entity in the
course of its  business.  Each Bryan  Entity is the owner of or has a license to
any Intellectual Property sold or licensed to a third party by such Bryan Entity
in  connection  with such Bryan  Entity's  business  operations,  and such Bryan
Entity has the right to convey by sale or license any  Intellectual  Property so
conveyed.  No Bryan Entity is in Default under any of its Intellectual  Property
licenses.  No  proceedings  have  been  instituted,  or  are  pending  or to the
Knowledge of Bryan  threatened,  which  challenge the rights of any Bryan Entity
with  respect to  Intellectual  Property  used,  sold or  licensed by such Bryan
Entity in the course of its business,  nor has any person claimed or alleged any
rights to such Intellectual  Property.  The conduct of the business of the Bryan
Entities does not infringe any Intellectual Property of any other person. Except
as disclosed in Section 5.11 of the Bryan Disclosure Memorandum, no Bryan Entity
is  obligated to pay any  recurring  royalties to any Person with respect to any
such  Intellectual  Property.  Except as  disclosed in Section 5.11 of the Bryan
Disclosure Memorandum,  no officer,  director or employee of any Bryan Entity is
party to any Contract  which  restricts or prohibits  such officer,  director or
employee from engaging in activities competitive with any Person,  including any
Bryan Entity.

                  5.12     Environmental Matters.

                  (a)  To  the  Knowledge  of  Bryan,  each  Bryan  Entity,  its
Participation  Facilities,  and its Operating  Properties are, and have been, in
compliance  with all  Environmental  Laws,  except for violations  which are not
reasonably  likely to have,  individually or in the aggregate,  a Bryan Material
Adverse Effect.

                  (b) To the Knowledge of Bryan,  there is no Litigation pending
or threatened before any court, governmental agency, or authority or other forum
in which any Bryan Entity or any of its Operating  Properties  or  Participation
Facilities  (or Bryan in respect of such  Operating  Property  or  Participation
Facility) has been or, with respect to threatened Litigation,  may be named as a
defendant (i) for alleged noncompliance  (including by any predecessor) with any
Environmental  Law or (ii)  relating to the  release,  discharge,  spillage,  or
disposal  into  the  environment  of  any  Hazardous  Material,  whether  or not
occurring at, on, under,


<PAGE>
                                       2-11





adjacent to, or affecting (or potentially  affecting) a site owned,  leased,  or
operated by any Bryan Entity or any of its Operating Properties or Participation
Facilities,  except  for  such  Litigation  pending  or  threatened  that is not
reasonably  likely to have,  individually or in the aggregate,  a Bryan Material
Adverse Effect,  nor is there any reasonable  basis for any Litigation of a type
described in this  sentence,  except such as is not  reasonably  likely to have,
individually or in the aggregate, a Bryan Material Adverse Effect.

                  (c) During the period of (i) any Bryan  Entity's  ownership or
operation of any of their respective current properties, (ii) any Bryan Entity's
participation  in the  management of any  Participation  Facility,  or (iii) any
Bryan Entity's  holding of a security  interest in a Operating  Property,  there
have been no releases, discharges, spillages, or disposals of Hazardous Material
in, on,  under,  adjacent  to, or  affecting  (or  potentially  affecting)  such
properties, except such as are not reasonably likely to have, individually or in
the aggregate,  a Bryan Material Adverse Effect.  Prior to the period of (i) any
Bryan  Entity's  ownership  or  operation  of any of  their  respective  current
properties,  (ii) any Bryan  Entity's  participation  in the  management  of any
Participation  Facility,  or (iii)  any Bryan  Entity's  holding  of a  security
interest in a  Operating  Property,  to the  Knowledge  of Bryan,  there were no
releases,  discharges,  spillages,  or disposals  of Hazardous  Material in, on,
under,  or  affecting  any such  property,  Participation  Facility or Operating
Property,  except such as are not reasonably likely to have,  individually or in
the aggregate, a Bryan Material Adverse Effect.

                  5.13 Compliance with Laws.  Bryan is duly registered as a bank
holding  company  under the BHC Act. Each Bryan Entity has in effect all Permits
necessary for it to own,  lease,  or operate its material Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not  reasonably  likely  to  have,  individually  or in the  aggregate,  a Bryan
Material  Adverse  Effect,  and there has  occurred  no  Default  under any such
Permit,   other  than  Defaults  which  are  not  reasonably   likely  to  have,
individually or in the aggregate,  a Bryan Material  Adverse  Effect.  Except as
disclosed in Section 5.13 of the Bryan Disclosure Memorandum,  none of the Bryan
Entities:

                  (a) is in Default under any of the  provisions of its Articles
of Incorporation or Bylaws (or other governing instruments);

                  (b)  is  in  Default  under  any  Laws,   Orders,  or  Permits
applicable  to its business or employees  conducting  its  business,  except for
Defaults  which  are not  reasonably  likely  to  have,  individually  or in the
aggregate, a Bryan Material Adverse Effect; or

                  (c) since January 1, 1993,  has received any  notification  or
communication  from  any  agency  or  department  of  federal,  state,  or local
government or any  Regulatory  Authority or the staff thereof (i) asserting that
any Bryan Entity is not in compliance  with any of the Laws or Orders which such
governmental   authority   or   Regulatory   Authority   enforces,   where  such
noncompliance is reasonably likely to have,  individually or in the aggregate, a
Bryan Material  Adverse  Effect,  (ii)  threatening  to revoke any Permits,  the
revocation  of which  is  reasonably  likely  to  have,  individually  or in the
aggregate,  a Bryan Material Adverse Effect, or (iii) requiring any Bryan Entity
to  enter  into  or  consent  to the  issuance  of a  cease  and  desist  order,
formal agreement, directive,  commitment, or memorandum of understanding,  or to
adopt any Board resolution or similar  undertaking,  which restricts  materially
the conduct of its  business or in any manner  relates to its capital  adequacy,
its credit or reserve policies, its management, or the payment of dividends.

Copies of all  material  reports,  correspondence,  notices and other  documents
relating  to any  inspection,  audit,  monitoring  or other  form of  review  or
enforcement  action  by a  Regulatory  Authority  have been  made  available  to
Savannah.

                  5.14 Labor  Relations.  No Bryan  Entity is the subject of any
Litigation  asserting  that it or any other Bryan Entity has committed an unfair
labor  practice  (within  the meaning of the  National  Labor  Relations  Act or
comparable  state  law) or  seeking  to compel it or any other  Bryan  Entity to
bargain with any labor organization as to wages or conditions of employment, nor
is any Bryan Entity party to any collective bargaining  agreement,  nor is there
any  strike or other  labor  dispute  involving  any Bryan  Entity,  pending  or

<PAGE>
                                      2-12


threatened,  or to the Knowledge of Bryan,  is there any activity  involving any
Bryan  Entity's  employees  seeking to certify a collective  bargaining  unit or
engaging in any other organization activity.

                  5.15     Employee Benefit Plans.

                  (a)  Bryan  has   disclosed  in  Section  5.15  of  the  Bryan
Disclosure Memorandum,  and has delivered or made available to Savannah prior to
the execution of this Agreement copies in each case of, all pension, retirement,
profit-sharing,  deferred compensation,  stock option, employee stock ownership,
severance  pay,  vacation,  bonus,  or other  incentive  plan, all other written
employee programs,  arrangements, or agreements, all medical, vision, dental, or
other health plans,  all life insurance  plans,  and all other employee  benefit
plans or fringe benefit plans,  including  "employee benefit plans" as that term
is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored
in whole or in part by, or contributed to by any Bryan Entity or ERISA Affiliate
thereof for the benefit of employees, retirees, dependents,  spouses, directors,
independent  contractors,  or other  beneficiaries  and under  which  employees,
retirees,  dependents,  spouses,  directors,  independent contractors,  or other
beneficiaries  are eligible to  participate  (collectively,  the "Bryan  Benefit
Plans").  Any of the Bryan Benefit Plans which is an "employee  pension  benefit
plan," as that term is defined in Section  3(2) of ERISA,  is referred to herein
as a "Bryan ERISA Plan." Each Bryan ERISA Plan which is also a "defined  benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein  as a  "Bryan  Pension  Plan."  No  Bryan  Pension  Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.

                  (b)  All  Bryan  Benefit  Plans  are in  compliance  with  the
applicable  terms of ERISA,  the Internal Revenue Code, and any other applicable
Laws  the  breach  or  violation  of  which  are  reasonably   likely  to  have,
individually or in the aggregate,  a Bryan Material  Adverse Effect.  Each Bryan
ERISA  Plan  which is  intended  to be  qualified  under  Section  401(a) of the
Internal  Revenue  Code has received a favorable  determination  letter from the
Internal Revenue Service,  and Bryan is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. No Bryan Entity
has  engaged  in a  transaction  with  respect to any Bryan  Benefit  Plan that,
assuming the taxable period of such  transaction  expired as of the date hereof,
would  subject any Bryan  Entity to a Tax imposed by either  Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are reasonably
likely to have,  individually  or in the  aggregate,  a Bryan  Material  Adverse
Effect.
                  (c)  No  Bryan   Pension  Plan  has  any   "unfunded   current
liability," as that term is defined in Section  302(d)(8)(A) of ERISA,  based on
actuarial assumptions set forth for such plan's most recent actuarial valuation.
Since the date of the most  recent  actuarial  valuation,  there has been (i) no
material  change in the financial  position of any Bryan  Pension Plan,  (ii) no
change in the actuarial  assumptions with respect to any Bryan Pension Plan, and
(iii) no increase in benefits  under any Bryan  Pension Plan as a result of plan
amendments  or changes in  applicable  Law which is  reasonably  likely to have,
individually or in the aggregate,  a Bryan Material Adverse Effect or materially
adversely affect the funding status of any such plan.  Neither any Bryan Pension
Plan nor any  "single-employer  plan," within the meaning of Section 4001(a)(15)
of  ERISA,  currently  or  formerly  maintained  by  any  Bryan  Entity,  or the
single-employer  plan of any entity which is considered  one employer with Bryan
under  Section  4001 of ERISA or Section  414 of the  Internal  Revenue  Code or
Section  302 of ERISA  (whether or not  waived)  (an "ERISA  Affiliate")  has an
"accumulated  funding  deficiency"  within the  meaning  of  Section  412 of the
Internal  Revenue Code or Section 302 of ERISA,  which is  reasonably  likely to
have a Bryan  Material  Adverse  Effect.  No Bryan  Entity has  provided,  or is
required to provide,  security to a Bryan Pension Plan or to any single-employer
plan of an ERISA  Affiliate  pursuant  to  Section  401(a)(29)  of the  Internal
Revenue Code.

                  (d) Within the six-year  period  preceding the Effective Time,
no Liability  under Subtitle C or D of Title IV of ERISA has been or is expected
to be  incurred by any Bryan  Entity with  respect to any  ongoing,  frozen,  or
terminated  single-employer  plan  or the  single-employer  plan  of  any  ERISA
Affiliate, which Liability is reasonably likely to have a Bryan Material Adverse
Effect. No Bryan Entity has incurred any withdrawal  Liability with respect to a
multiemployer  plan under Subtitle B of Title IV of ERISA (regardless of whether


<PAGE>
                                      2-13



based on  contributions  of an ERISA  Affiliate),  which Liability is reasonably
likely to have a Bryan  Material  Adverse  Effect.  No  notice of a  "reportable
event,"  within  the  meaning  of  Section  4043 of ERISA for  which the  30-day
reporting requirement has not been waived, has been required to be filed for any
Bryan Pension Plan or by any ERISA  Affiliate  within the 12-month period ending
on the date hereof.

                  (e)  Except  as   disclosed  in  Section  5.15  of  the  Bryan
Disclosure Memorandum,  no Bryan Entity has any Liability for retiree health and
life benefits under any of the Bryan Benefit Plans and there are no restrictions
on the rights of such Bryan Entity to amend or terminate any such retiree health
or benefit Plan without incurring any Liability  thereunder,  which Liability is
reasonably likely to have a Bryan Material Adverse Effect.

                  (f)  Except  as   disclosed  in  Section  5.15  of  the  Bryan
Disclosure Memorandum,  neither the execution and delivery of this Agreement nor
the consummation of the transactions  contemplated hereby will (i) result in any
payment (including severance,  unemployment  compensation,  golden parachute, or
otherwise) becoming due to any director or any employee of any Bryan Entity from
any Bryan Entity under any Bryan  Benefit Plan or  otherwise,  (ii) increase any
benefits  otherwise payable under any Bryan Benefit Plan, or (iii) result in any
acceleration  of the time of payment or vesting of any such benefit,  where such
payment, increase, or acceleration is reasonably likely to have, individually or
in the aggregate, a Bryan Material Adverse Effect.

                  (g) The  actuarial  present  values  of all  accrued  deferred
compensation   entitlements   (including   entitlements   under  any   executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any Bryan Entity and their respective  beneficiaries,  other
than  entitlements  accrued  pursuant to funded  retirement plans subject to the
provisions of Section 412 of the Internal  Revenue Code or Section 302 of ERISA,
have been  fully  reflected  on the Bryan  Financial  Statements  to the  extent
required by and in accordance with GAAP.

                  5.16 Material  Contracts.  Except as disclosed in Section 5.16
of the Bryan Disclosure Memorandum or otherwise reflected in the Bryan Financial
Statements,  none of the Bryan  Entities,  nor any of their  respective  Assets,
businesses,  or  operations,  is a party  to,  or is bound or  affected  by,  or
receives benefits under, (i) any employment, severance, termination, consulting,
or retirement Contract,  (ii) any Contract relating to the borrowing of money by
any Bryan Entity or the  guarantee  by any Bryan  Entity of any such  obligation
(other than  Contracts  evidencing  deposit  liabilities,  purchases  of federal
funds,  fully-secured repurchase agreements, and Federal Home Loan Bank advances
of depository institution Subsidiaries, trade payables and Contracts relating to
borrowings or  guarantees  made in the ordinary  course of business),  (iii) any
Contract  which  prohibits  or restricts  any Bryan Entity from  engaging in any
business  activities in any  geographic  area,  line of business or otherwise in
competition  with any other  Person,  (iv) any  Contract  between or among Bryan
Entities, (v) any Contract involving Intellectual Property (other than Contracts
entered into in the ordinary  course with customers and  "shrink-wrap"  software
licenses),  (vi) any  Contract  relating to the  provision  of data  processing,
network  communication,  or other technical  services to or by any Bryan Entity,
(vii) any  Contract  relating  to the  purchase or sale of any goods or services
(other than  Contracts  entered  into in the  ordinary  course of  business  and
involving  payments  under any  individual  Contract  not in excess of $25,000),
(viii) any exchange-traded or over-the-counter  swap, forward,  future,  option,
cap, floor, or collar financial Contract,  or any other interest rate or foreign
currency  protection  Contract  not  included  on its  balance  sheet which is a
financial derivative Contract,  and (ix) any other Contract or amendment thereto
that would be required to be filed as an exhibit to a Form 10-KSB filed by Bryan
with the SEC as of the  date of this  Agreement  that  has not been  filed as an
exhibit to Bryan's Form 10-K filed for the fiscal year ended  December 31, 1996,
or in an SEC Document and  identified to Savannah  (together  with all Contracts
referred to in Sections 5.10 and 5.15(a),  the "Bryan Contracts").  With respect
to each Bryan  Contract  and except as  disclosed  in Section  5.16 of the Bryan
Disclosure  Memorandum:  (i) the  Contract is in full force and effect;  (ii) no
Bryan  Entity  is in  Default  thereunder,  other  than  Defaults  which are not
reasonably  likely to have,  individually or in the aggregate,  a Bryan Material
Adverse  Effect;  (iii) no Bryan  Entity has  repudiated  or waived any material
provision of any such Contract; and (iv) no other party to any such Contract is,
to the Knowledge of Bryan, in Default in any respect,  other than Defaults which
are not reasonably  likely to have,  individually  or in the aggregate,  a Bryan

<PAGE>
                                      2-14

Material  AdverseEffect,  or has  repudiated  or waived any  material  provision
thereunder.  All of the  indebtedness  of any Bryan Entity for money borrowed is
prepayable at any time by such Bryan Entity without penalty or premium.

                  5.17 Legal Proceedings.  There is no Litigation  instituted or
pending, or, to the Knowledge of Bryan, threatened (or unasserted but considered
probable of  assertion  and which if asserted  would have at least a  reasonable
probability of an unfavorable  outcome) against any Bryan Entity, or against any
director,  employee or employee benefit plan of any Bryan Entity, or against any
Asset,  interest,  or right of any of them,  that is reasonably  likely to have,
individually or in the aggregate, a Bryan Material Adverse Effect, nor are there
any Orders of any Regulatory  Authorities,  other governmental  authorities,  or
arbitrators  outstanding against any Bryan Entity, that are reasonably likely to
have, individually or in the aggregate, a Bryan Material Adverse Effect. Section
5.17 of the Bryan Disclosure  Memorandum contains a summary of all Litigation as
of the date of this  Agreement  to which any  Bryan  Entity is a party and which
names a Bryan  Entity as a defendant or  cross-defendant  or for which any Bryan
Entity has any potential Liability.

                  5.18   Reports.   Since  January  1,  1993,  or  the  date  of
organization  if later,  each  Bryan  Entity has timely  filed all  reports  and
statements,  together  with any  amendments  required  to be made  with  respect
thereto,  that it was required to file with Regulatory  Authorities  (except, in
the  case of  state  securities  authorities,  failures  to file  which  are not
reasonably  likely to have,  individually or in the aggregate,  a Bryan Material
Adverse  Effect).  As of  their  respective  dates,  each  of such  reports  and
documents, including the financial statements,  exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its respective
date, each such report and document did not, in all material  respects,  contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
required to be stated therein or necessary to make the statements  made therein,
in light of the circumstances under which they were made, not misleading.

                  5.19  Statements  True and  Correct.  None of the  information
supplied  or to be  supplied by any Bryan  Entity or any  Affiliate  thereof for
inclusion in the  Registration  Statement  to be filed by Savannah  with the SEC
will, when the Registration Statement becomes effective,  be false or misleading
with respect to any material  fact, or omit to state any material fact necessary
to make the statements therein not misleading.  None of the information supplied
or to be supplied by any Bryan Entity or any Affiliate  thereof for inclusion in
the  Joint  Proxy  Statement  to be  mailed  to  each  Party's  shareholders  in
connection with the Shareholders'  Meetings, and any other documents to be filed
by a Bryan Entity or any Affiliate  thereof with the SEC or any other Regulatory
Authority in connection with the transactions  contemplated hereby, will, at the
respective  time such  documents are filed,  and with respect to the Joint Proxy
Statement, when first mailed to the shareholders of Bryan and Savannah, be false
or misleading  with respect to any material  fact, or omit to state any material
fact necessary to make the  statements  therein,  in light of the  circumstances
under which they were made, not  misleading,  or, in the case of the Joint Proxy
Statement or any  amendment  thereof or supplement  thereto,  at the time of the
Shareholders'  Meetings,  be false or  misleading  with  respect to any material
fact, or omit to state any material  fact  necessary to correct any statement in
any earlier  communication with respect to the solicitation of any proxy for the
Shareholders'  Meetings.  All  documents  that any Bryan Entity or any Affiliate
thereof is responsible  for filing with any  Regulatory  Authority in connection
with the transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.

                  5.20 Accounting,  Tax and Regulatory  Matters. No Bryan Entity
or any  Affiliate  thereof  has taken or  agreed  to take any  action or has any
Knowledge of any fact or circumstance  that is reasonably  likely to (i) prevent
the Merger from qualifying for pooling-of-interests accounting treatment or as a
reorganization  within the  meaning of Section  368(a) of the  Internal  Revenue
Code, or (ii)  materially  impede or delay receipt of any Consents of Regulatory
Authorities  referred  to in  Section  9.1(b) or result in the  imposition  of a
condition or  restriction  of the type  referred to in the last sentence of such
Section.

                  5.21 State  Takeover  Laws.  Each  Bryan  Entity has taken all
necessary action to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or  applicability  of, any  applicable
"moratorium,"  "fair price," "business  combination,"  "control share," or other
anti-takeover Laws (collectively, "Takeover Laws"), including Sections 14-2-1111
and 14-2-1132 of the GBCC.


<PAGE>
                                      2-15


                  5.22  Charter  Provisions.  Each  Bryan  Entity  has taken all
action so that the entering  into of this  Agreement  and the Bryan Stock Option
Agreement  and  the  consummation  of the  Merger  and  the  other  transactions
contemplated  hereby and thereby,  including the  acquisition of shares pursuant
to, or other exercise of rights under, the Bryan Stock Option Agreement,  do not
and will not result in the grant of any rights to any Person  under the Articles
of Incorporation,  Bylaws or other governing  instruments of any Bryan Entity or
restrict or impair the ability of Savannah or any of its  Subsidiaries  to vote,
or otherwise to exercise the rights of a shareholder  with respect to, shares of
any Bryan Entity that may be directly or  indirectly  acquired or  controlled by
them.

                  5.23  Directors'  Agreements.  Each of the  directors of Bryan
(except Charles Stafford) has executed and delivered to Savannah an agreement in
substantially the form of Exhibit 3 (the "Bryan Directors' Agreements").  In the
event  Savannah  removes,  or fails to re-elect a director to the board of Bryan
Bank during the 24 month period  following the Closing  Date,  Savannah will pay
such  director,  immediately,  an amount equal to the  directors  fees he or she
would have earned during the remainder of such 24 month period.

                  5.24 Board Recommendation. The Board of Directors of Bryan, at
a meeting duly called and held, has by unanimous  vote of the directors  present
(who  constituted  all of the directors then in office) (i) determined that this
Agreement and the transactions  contemplated  hereby,  including the Merger, and
the Bryan Stock Option  Agreement and the Bryan  Directors'  Agreements  and the
transactions  contemplated thereby,  taken together, are fair to and in the best
interests of the shareholders and (ii) resolved to recommend that the holders of
the shares of Bryan Common Stock approve this Agreement.


ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SAVANNAH

                  Savannah hereby represents and warrants to Bryan as follows:

                  6.1  Organization,   Standing,   and  Power.   Savannah  is  a
corporation  duly organized,  validly  existing,  and in good standing under the
Laws of the State of Georgia, and has the corporate power and authority to carry
on its  business as now  conducted  and to own,  lease and operate its  material
Assets. Savannah is duly qualified or licensed to transact business as a foreign
corporation  in good  standing  in the States of the United  States and  foreign
jurisdictions  where the character of its Assets or the nature or conduct of its
business  requires  it  to  be  so  qualified  or  licensed,   except  for  such
jurisdictions  in which  the  failure  to be so  qualified  or  licensed  is not
reasonably likely to have, individually or in the aggregate, a Savannah Material
Adverse Effect. The minute book and other organizational  documents for Savannah
have been made  available  to Bryan for its review and,  except as  disclosed in
Section 6.1 of the Savannah Disclosure Memorandum,  are true and complete in all
material  respects as in effect as of the date of this  Agreement and accurately
reflect in all material  respects all amendments  thereto and all proceedings of
the Board of Directors and shareholders thereof.

                  6.2 Authority; No Breach By Agreement.

                  (a) Savannah has the corporate  power and authority  necessary
to execute,  deliver and perform its  obligations  under this  Agreement  and to
consummate the transactions  contemplated  hereby.  The execution,  delivery and
performance  of  this  Agreement  and  the   consummation  of  the  transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary  corporate  action in respect  thereof on the part of Savannah,
subject to approval  of the  issuance  of the shares of  Savannah  Common  Stock
pursuant  to  the  Merger  by a  majority  of the  votes  cast  at the  Savannah


<PAGE>
                                      2-16



Shareholders'  Meeting, which is the only shareholder vote required for approval
of this Agreement and  consummation  of the Merger by Savannah.  Subject to such
requisite  shareholder  approval,  this Agreement represents a legal, valid, and
binding obligation of Savannah,  enforceable against Savannah in accordance with
its  terms  (except  in all  cases  as such  enforceability  may be  limited  by
applicable     bankruptcy,     insolvency,     reorganization,     receivership,
conservatorship,  moratorium,  or similar  Laws  affecting  the  enforcement  of
creditors'  rights  generally and except that the  availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).

                  (b) Neither the  execution  and delivery of this  Agreement by
Savannah,  nor the  consummation  by Savannah of the  transactions  contemplated
hereby, nor compliance by Savannah with any of the provisions  hereof,  will (i)
conflict with or result in a breach of any  provision of Savannah's  Articles of
Incorporation  or Bylaws or the  certificate  or  articles of  incorporation  or
bylaws of any  Savannah  Subsidiary  or any  resolution  adopted by the board of
directors  or the  shareholders  of any  Savannah  Entity,  or  (ii)  except  as
disclosed in Section 6.2 of the Savannah  Disclosure  Memorandum,  constitute or
result in a Default under, or require any Consent  pursuant to, or result in the
creation of any Lien on any Asset of any Savannah Entity under,  any Contract or
Permit of any Savannah  Entity,  where such  Default or Lien,  or any failure to
obtain  such  Consent,  is  reasonably  likely to have,  individually  or in the
aggregate,  a Savannah Material Adverse Effect,  or, (iii) subject to receipt of
the requisite Consents referred to in Section 9.1(b),  constitute or result in a
Default under, or require any Consent  pursuant to, any Law or Order  applicable
to any Savannah Entity or any of their respective material Assets (including any
Savannah  Entity or any  Bryan  Entity  becoming  subject  to or liable  for the
payment  of any Tax or any of the  Assets  owned by any  Savannah  Entity or any
Bryan Entity being reassessed or revalued by any Taxing authority).

                  (c) Other than in connection or compliance with the provisions
of the Securities  Laws,  applicable  state  corporate and securities  Laws, and
rules of the Nasdaq  National  Market,  and other than  Consents  required  from
Regulatory  Authorities,  and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty  Corporation with respect to any
employee  benefit plans,  and other than  Consents,  filings,  or  notifications
which, if not obtained or made, are not reasonably likely to have,  individually
or in the aggregate,  a Savannah  Material Adverse Effect,  no notice to, filing
with,  or  Consent  of,  any  public  body or  authority  is  necessary  for the
consummation by Savannah of the Merger and the other  transactions  contemplated
in this Agreement.

                  6.3      Capital Stock.

                  (a) The authorized  capital stock of Savannah  consists of (i)
20,000,000  shares of  Savannah  Common  Stock,  of which  1,782,598  shares are
issued,  1,709,548 shares are outstanding and 73,050 shares are held in treasury
as of the date of this Agreement, and (ii) 10,000,000 shares of preferred stock,
none of which are issued  and  outstanding.  All of the  issued and  outstanding
shares of Savannah  Common Stock are,  and all of the shares of Savannah  Common
Stock  to  be  issued  in  exchange  for  shares  of  Bryan  Common  Stock  upon
consummation  of the Merger,  when issued in  accordance  with the terms of this
Agreement,  will be, duly and validly issued and  outstanding and fully paid and
nonassessable  under the GBCC. None of the outstanding shares of Savannah Common
Stock has been, and none of the shares of Savannah  Common Stock to be issued in
exchange for shares of Bryan Common Stock upon  consummation  of the Merger will
be,  issued  in  violation  of any  preemptive  rights  of the  current  or past
shareholders of Savannah.

                  (b) Except as set forth in Section  6.3(a),  or as provided in
the  Savannah  Stock  Option  Agreement,  or as  disclosed in Section 6.3 of the
Savannah  Disclosure  Memorandum,  there are no shares of capital stock or other
equity  securities  of Savannah  outstanding  and no  outstanding  Equity Rights
relating to the capital stock of Savannah

                  6.4 Savannah  Subsidiaries.  Savannah has disclosed in Section
6.4 of the Savannah Disclosure Memorandum all of the Savannah Subsidiaries as of
the date of this Agreement that are  corporations  (identifying its jurisdiction
of incorporation,  each jurisdiction in which the character of its Assets or the
nature or conduct of its business requires it to be qualified and/or licensed to
transact  business,  and the  number of shares  owned and  percentage  ownership
interest   represented  by  such  share  ownership)  and  all  of  the  Savannah
Subsidiaries  that  are  general  or  limited  partnerships,  limited  liability
companies, or other non-corporate entities (identifying the

<PAGE>
                                      2-17


Law  under  which  such  entity is  organized,  each  jurisdiction  in which the
character of its Assets or the nature or conduct of its business  requires it to
be qualified and/or licensed to transact business,  and the amount and nature of
the  ownership  interest  therein).  Except as  disclosed  in Section 6.4 of the
Savannah Disclosure Memorandum, Savannah or one of its wholly owned Subsidiaries
owns all of the issued and outstanding  shares of capital stock (or other equity
interests)  of each  Savannah  Subsidiary.  No  capital  stock (or other  equity
interest) of any  Savannah  Subsidiary  are or may become  required to be issued
(other  than to another  Savannah  Entity) by reason of any Equity  Rights,  and
there are no Contracts by which any Savannah Subsidiary is bound to issue (other
than to another  Savannah  Entity)  additional  shares of its capital  stock (or
other equity  interests) or Equity Rights or by which any Savannah  Entity is or
may be bound to  transfer  any  shares of the  capital  stock  (or other  equity
interests) of any Savannah  Subsidiary  (other than to another Savannah Entity).
There are no Contracts  relating to the rights of any Savannah Entity to vote or
to dispose of any shares of the capital stock (or other equity interests) of any
Savannah  Subsidiary.  All of the  shares of  capital  stock  (or  other  equity
interests) of each Savannah  Subsidiary held by a Savannah Entity are fully paid
and (except  pursuant  to 12 USC  Section 55 in the case of  national  banks and
comparable,  applicable  state  Law,  if any,  in the case of  state  depository
institutions)  nonassessable and are owned by the Savannah Entity free and clear
of any Lien.  Except as  disclosed  in Section  6.4 of the  Savannah  Disclosure
Memorandum, each Savannah Subsidiary is either a bank or a corporation, and each
such Subsidiary is duly organized, validly existing, and (as to corporations) in
good standing under the Laws of the  jurisdiction in which it is incorporated or
organized,  and has the corporate  power and authority  necessary for it to own,
lease and operate its Assets and to carry on its business as now conducted. Each
Savannah  Subsidiary  is duly  qualified  or licensed to transact  business as a
foreign  corporation  in good  standing  in the States of the United  States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business  requires it to be so  qualified  or  licensed,  except for such
jurisdictions  in which  the  failure  to be so  qualified  or  licensed  is not
reasonably likely to have, individually or in the aggregate, a Savannah Material
Adverse Effect. Each Savannah Subsidiary that is a depository  institution is an
"insured  institution"  as  defined in the  Federal  Deposit  Insurance  Act and
applicable regulations thereunder.

                  6.5      SEC Filings; Financial Statements.

                  (a) Savannah has timely filed and made  available to Bryan all
SEC  Documents  required to be filed by Savannah  since  December  31, 1994 (the
"Savannah  SEC  Reports").  The  Savannah  SEC  Reports  (i) at the time  filed,
complied  in all  material  respects  with the  applicable  requirements  of the
Securities  Laws and other  applicable  Laws and (ii) did not,  at the time they
were filed (or, if amended or  superseded  by a filing prior to the date of this
Agreement,  then on the date of such filing)  contain any untrue  statement of a
material  fact or omit to state a material  fact  required  to be stated in such
Savannah  SEC  Reports  or  necessary  in order to make the  statements  in such
Savannah SEC Reports,  in light of the circumstances under which they were made,
not misleading. No Savannah Subsidiary is required to file any SEC Documents.

                  (b) Each of the Savannah Financial Statements  (including,  in
each case, any related notes)  contained in the Savannah SEC Reports,  including
any  Savannah  SEC  Reports  filed  after the date of this  Agreement  until the
Effective Time, complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was prepared in
accordance  with GAAP  applied on a  consistent  basis  throughout  the  periods
involved  (except as may be indicated in the notes to such financial  statements
or, in the case of unaudited  interim  statements,  as permitted by Form 10-Q of
the SEC),  and  fairly  presented  in all  material  respects  the  consolidated
financial position of Savannah and its Subsidiaries as

<PAGE>
                                      2-18

at the  respective  dates and the  consolidated  results of operations  and cash
flows for the periods  indicated,  except that the unaudited  interim  financial
statements  were or are  subject to normal and  recurring  year-end  adjustments
which were not or are not expected to be material in amount or effect.

                  6.6 Absence of Undisclosed Liabilities. No Savannah Entity has
any Liabilities of a nature required to be reflected on a balance sheet prepared
in accordance with GAAP that are reasonably  likely to have,  individually or in
the aggregate,  a Savannah Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Savannah as of
December 31, 1997, included in the Savannah Financial Statements delivered prior
to the date of this  Agreement or reflected  in the notes  thereto.  No Savannah
Entity has incurred or paid any Liability  since  December 31, 1997,  except for
such  Liabilities  incurred  or paid  (i) in the  ordinary  course  of  business
consistent  with past business  practice and which are not reasonably  likely to
have,  individually or in the aggregate,  a Savannah  Material Adverse Effect or
(ii) in connection with the transactions contemplated by this Agreement.

                  6.7 Absence of Certain  Changes or Events.  Since December 31,
1997, except as disclosed in the Savannah Financial  Statements  delivered prior
to the date of this  Agreement  or as  disclosed  in Section 6.7 of the Savannah
Disclosure  Memorandum,  (i) there have been no events,  changes or  occurrences
which  have  had,  or are  reasonably  likely  to have,  individually  or in the
aggregate,  a Savannah  Material Adverse Effect,  and (ii) the Savannah Entities
have not taken any action,  or failed to take any  action,  prior to the date of
this  Agreement,  which  action  or  failure,  if taken  after  the date of this
Agreement, would represent or result in a material breach or violation of any of
the covenants and agreements of Savannah provided in Article 7.

                  6.8      Tax Matters.

                  (a) All Tax  Returns  required  to be filed by or on behalf of
any of the Savannah  Entities have been timely filed or requests for  extensions
have been timely  filed,  granted,  and have not expired for periods ended on or
before  December 31, 1996,  and on or before the date of the most recent  fiscal
year end immediately preceding the Effective Time, except to the extent that all
such  failures to file,  taken  together,  are not  reasonably  likely to have a
Savannah  Material  Adverse  Effect,  and all Tax Returns filed are complete and
accurate in all  material  respects.  All Taxes shown on filed Tax Returns  have
been paid. There is no audit examination,  deficiency, or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination that
would  have,  individually  or in the  aggregate,  a Savannah  Material  Adverse
Effect,  except  as  reserved  against  in  the  Savannah  Financial  Statements
delivered  prior to the date of this Agreement or as disclosed in Section 6.8 of
the Savannah Disclosure  Memorandum.  Savannah's federal income Tax Returns have
not been audited by the IRS. All Taxes and other Liabilities due with respect to
completed and settled examinations or concluded Litigation have been paid. There
are no Liens  with  respect  to Taxes  upon any of the  Assets  of the  Savannah
Entities,  except for any such Liens which are not  reasonably  likely to have a
Savannah Material Adverse Effect.


                  (b) None of the Savannah Entities has executed an extension or
waiver of any statute of  limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other  applicable  taxing  authorities)  that is
currently in effect.

                  (c) The  provision  for any Taxes due or to become due for any
of the Savannah  Entities for the period or periods  through and  including  the
date of the respective  Savannah Financial  Statements that has been made and is
reflected on such Savannah Financial  Statements is sufficient to cover all such
Taxes.

                  (d) Deferred Taxes of the Savannah Entities have been provided
for in accordance with GAAP.

                  (e)  None  of the  Savannah  Entities  is a  party  to any Tax
allocation  or sharing  agreement  and none of the Savannah  Entities has been a
member of an affiliated  group filing a  consolidated  federal income Tax Return
(other  than a group  the  common  parent  of  which  was  Savannah)  or has any
Liability  for Taxes of any Person  (other than  Savannah and its  Subsidiaries)
under Treasury  Regulation  Section 1.1502-6 (or any similar provision of state,
local or foreign Law) as a transferee or successor or by Contract or otherwise.

<PAGE>
                                      2-19



                  (f) Each of the Savannah  Entities is in compliance  with, and
its records contain all information and documents  (including properly completed
IRS Forms W-9) necessary to comply with, all  applicable  information  reporting
and Tax withholding  requirements under federal,  state, and local Tax Laws, and
such  records   identify  with   specificity  all  accounts  subject  to  backup
withholding  under Section 3406 of the Internal  Revenue  Code,  except for such
instances of  noncompliance  and such omissions as are not reasonably  likely to
have, individually or in the aggregate, a Savannah Material Adverse Effect.

                  (g)  Except  as  disclosed  in  Section  6.8 of  the  Savannah
Disclosure  Memorandum,  none of the Savannah Entities has made any payments, is
obligated  to make  any  payments,  or is a party  to any  Contract  that  could
obligate it to make any payments that would be  disallowed as a deduction  under
Section 280G or 162(m) of the Internal Revenue Code.

                  (h) There has not been an  ownership  change,  as  defined  in
Internal  Revenue Code Section  382(g),  of the Savannah  Entities that occurred
during or after any Taxable Period in which the Savannah Entities incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1996.

                  6.9  Allowance  for Possible  Loan  Losses.  In the opinion of
management of Savannah,  the Allowance shown on the consolidated  balance sheets
of Savannah  included in the most recent  Savannah  Financial  Statements  dated
prior  to the  date of  this  Agreement  was,  and the  Allowance  shown  on the
consolidated  balance  sheets of  Savannah  included in the  Savannah  Financial
Statements as of dates subsequent to the execution of this Agreement will be, as
of the dates  thereof,  adequate  (within  the  meaning  of GAAP and  applicable
regulatory  requirements  or  guidelines) to provide for all known or reasonably
anticipated  losses  relating to or  inherent  in the loan and lease  portfolios
(including  accrued  interest  receivables)  of the Savannah  Entities and other
extensions of credit (including  letters of credit and commitments to make loans
or extend credit) by the Savannah Entities as of the dates thereof, except where
the failure of such Allowance to be so adequate is not reasonably likely to have
a Savannah Material Adverse Effect.


                  6.10     Assets.

                  (a)  Except  as  disclosed  in  Section  6.10 of the  Savannah
Disclosure  Memorandum  or as  disclosed  or  reserved  against in the  Savannah
Financial Statements delivered prior to the date of this Agreement, the Savannah
Entities have good and marketable  title, free and clear of all Liens, to all of
their  respective  Assets,  except for any such Liens or other  defects of title
which are not reasonably likely to have a Savannah Material Adverse Effect.  All
tangible  properties used in the businesses of the Savannah Entities are in good
condition,  reasonable  wear and tear  excepted,  and are usable in the ordinary
course of business consistent with Savannah's past practices.

                  (b) All Assets which are material to Savannah's  business on a
consolidated  basis,  held  under  leases or  subleases  by any of the  Savannah
Entities,  are held under valid  Contracts  enforceable in accordance with their
respective  terms  (except  as  enforceability  may  be  limited  by  applicable
bankruptcy, insolvency, reorganization,  moratorium, or other Laws affecting the
enforcement of creditors'  rights  generally and except that the availability of
the equitable remedy of specific  performance or injunctive relief is subject to
the discretion of the court before which any  proceedings  may be brought),  and
each such Contract is in full force and effect.

                  (c) The Savannah Entities currently maintain insurance similar
in  amounts,  scope  and  coverage  to that  maintained  by other  peer  banking
organizations.  None of the  Savannah  Entities  has  received  notice  from any
insurance  carrier  that  (i)any  policy of  insurance  will be canceled or that
coverage  thereunder  will be reduced or eliminated,  or (ii) premium costs with
respect to such policies of insurance will be substantially increased. There are
presently  no claims  pending  under such  policies  of  insurance  for  amounts
exceeding  in any  individual  case  $20,000  pending  under  such  policies  of
insurance  and no notices of claims in excess of such amounts have been given by
any Savannah Entity under such policies.

<PAGE>
                                      2-20



                  (d) The Assets of the  Savannah  Entities  include  all assets
required  to  operate  the  business  of  the  Savannah  Entities  as  presently
conducted.

                  6.11 Intellectual Property. Each Savannah Entity owns or has a
license to use all of the Intellectual  Property used by such Savannah Entity in
the  course  of its  business.  Each  Savannah  Entity  is the owner of or has a
license to any  Intellectual  Property sold or licensed to a third party by such
Savannah Entity in connection with such Savannah Entity's  business  operations,
and  such  Savannah  Entity  has the  right to  convey  by sale or  license  any
Intellectual Property so conveyed. No Savannah Entity is in Default under any of
its Intellectual Property licenses. No proceedings have been instituted,  or are
pending or to the Knowledge of Savannah  threatened,  which challenge the rights
of any  Savannah  Entity with respect to  Intellectual  Property  used,  sold or
licensed  by such  Savannah  Entity in the course of its  business,  nor has any
person claimed or alleged any rights to such Intellectual  Property. The conduct
of the business of the  Savannah  Entities  does not  infringe any  Intellectual
Property  of any  other  person.  Except as  disclosed  in  Section  6.11 of the
Savannah  Disclosure  Memorandum,  no Savannah  Entity is  obligated  to pay any
recurring  royalties  to  any  Person  with  respect  to any  such  Intellectual
Property.  Except  as  disclosed  in  Section  6.11 of the  Savannah  Disclosure
Memorandum,  no officer, director or employee of any Savannah Entity is party to
any Contract  which  restricts or prohibits  such officer,  director or employee
from engaging in activities competitive with any Person,  including any Savannah
Entity.

                  6.12     Environmental Matters.

                  (a) To the Knowledge of Savannah,  each Savannah  Entity,  its
Participation  Facilities,  and its Operating  Properties are, and have been, in
compliance  with all  Environmental  Laws,  except for violations  which are not
reasonably likely to have, individually or in the aggregate, a Savannah Material
Adverse Effect.

                  (b) To the  Knowledge  of  Savannah,  there  is no  Litigation
pending or threatened  before any court,  governmental  agency,  or authority or
other forum in which any Savannah  Entity or any of its Operating  Properties or
Participation  Facilities (or Savannah in respect of such Operating  Property or
Participation Facility) has been or, with respect to threatened Litigation,  may
be  named  as a  defendant  (i)  for  alleged  noncompliance  (including  by any
predecessor)  with  any  Environmental  Law or  (ii)  relating  to the  release,
discharge, spillage, or disposal into the environment of any Hazardous Material,
whether  or  not  occurring  at,  on,  under,  adjacent  to,  or  affecting  (or
potentially  affecting) a site owned, leased, or operated by any Savannah Entity
or any of its Operating Properties or Participation Facilities,  except for such
Litigation  pending  or  threatened  that  is not  reasonably  likely  to  have,
individually or in the aggregate,  a Savannah  Material  Adverse Effect,  nor is
there  any  reasonable  basis for any  Litigation  of a type  described  in this
sentence,  except such as is not reasonably  likely to have,  individually or in
the aggregate, a Savannah Material Adverse Effect.

                  (c) During the period of (i) any Savannah  Entity's  ownership
or operation of any of their respective  current  properties,  (ii) any Savannah
Entity's participation in the management of any Participation Facility, or (iii)
any Savannah  Entity's holding of a security  interest in a Operating  Property,
there have been no releases,  discharges,  spillages,  or disposals of Hazardous
Material in, on,  under,  adjacent to, or affecting (or  potentially  affecting)
such properties,  except such as are not reasonably likely to have, individually
or in the aggregate,  a Savannah Material Adverse Effect. Prior to the period of
(i) any Savannah  Entity's  ownership  or  operation of any of their  respective
current properties,  (ii) any Savannah Entity's  participation in the management
of any  Participation  Facility,  or (iii) any  Savannah  Entity's  holding of a
security interest in a Operating Property,  to the Knowledge of Savannah,  there
were no releases, discharges,  spillages, or disposals of Hazardous Material in,
on, under, or affecting any such property,  Participation  Facility or Operating
Property,  except such as are not reasonably likely to have,  individually or in
the aggregate, a Savannah Material Adverse Effect.

                  6.13  Compliance  with Laws.  Savannah is duly registered as a
bank holding  company under the BHC Act. Each Savannah  Entity has in effect all

<PAGE>
                                      2-21


Permits  necessary  for it to own,  lease or operate its material  Assets and to
carry on its business as now conducted,  except for those Permits the absence of
which are not reasonably  likely to have,  individually  or in the aggregate,  a
Savannah  Material  Adverse Effect,  and there has occurred no Default under any
such  Permit,  other  than  Defaults  which are not  reasonably  likely to have,
individually or in the aggregate,  a Savannah Material Adverse Effect. Except as
disclosed  in Section 6.13 of the Savannah  Disclosure  Memorandum,  none of the
Savannah Entities:

                  (a) is in Default under any of the  provisions of its Articles
of Incorporation or Bylaws (or other governing instruments); or

                  (b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business,  except for Defaults which
are not reasonably likely to have,  individually or in the aggregate, a Savannah
Material Adverse Effect; or

                  (c) since January 1, 1993,  has received any  notification  or
communication  from  any  agency  or  department  of  federal,  state,  or local
government or any  Regulatory  Authority or the staff thereof (i) asserting that
any Savannah  Entity is not in  compliance  with any of the Laws or Orders which
such  governmental  authority  or  Regulatory  Authority  enforces,  where  such
noncompliance is reasonably likely to have,  individually or in the aggregate, a
Savannah  Material Adverse Effect,  (ii) threatening to revoke any Permits,  the
revocation  of which  is  reasonably  likely  to  have,  individually  or in the
aggregate,  a Savannah  Material Adverse Effect, or (iii) requiring any Savannah
Entity to enter  into or consent to the  issuance  of a cease and desist  order,
formal agreement,  directive,  commitment or memorandum of understanding,  or to
adopt any Board resolution or similar  undertaking,  which restricts  materially
the conduct of its business,  or in any manner relates to its capital  adequacy,
its credit or reserve policies, its management, or the payment of dividends.

Copies of all  material  reports,  correspondence,  notices and other  documents
relating  to any  inspection,  audit,  monitoring  or other  form of  review  or
enforcement action by a Regulatory Authority have been made available to Bryan.

                  6.14 Labor Relations. No Savannah Entity is the subject of any
Litigation  asserting  that it or any other  Savannah  Entity has  committed  an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable  state law) or seeking to compel it or any other  Savannah  Entity to
bargain with any labor organization as to wages or conditions of employment, nor
is any Savannah  Entity party to any  collective  bargaining  agreement,  nor is
there any strike or other labor dispute  involving any Savannah Entity,  pending
or threatened,  or to the Knowledge of Savannah, is there any activity involving
any Savannah Entity's employees seeking to certify a collective  bargaining unit
or engaging in any other organization activity.


                  6.15     Employee Benefit Plans.

                  (a)  Savannah  has  disclosed  in Section 6.15 of the Savannah
Disclosure Memorandum, and has delivered or made available to Bryan prior to the
execution  of this  Agreement  copies in each case of all  pension,  retirement,
profit-sharing,  deferred compensation,  stock option, employee stock ownership,
severance  pay,  vacation,  bonus,  or other  incentive  plan, all other written
employee programs,  arrangements, or agreements, all medical, vision, dental, or
other health plans,  all life insurance  plans,  and all other employee  benefit
plans or fringe benefit plans,  including  "employee benefit plans" as that term
is defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored
in  whole or in part by,  or  contributed  to by any  Savannah  Entity  or ERISA
Affiliate thereof for the benefit of employees, retirees,  dependents,  spouses,
directors,  independent  contractors,  or other  beneficiaries  and under  which
employees, retirees, dependents, spouses, directors, independent contractors, or
other  beneficiaries  are eligible to participate  (collectively,  the "Savannah
Benefit Plans"). Any of the Savannah Benefit Plans which is an "employee pension
benefit plan," as that term is defined in Section 3(2) of ERISA,  is referred to
herein as a  "Savannah  ERISA  Plan." Each  Savannah  ERISA Plan which is also a

<PAGE>
                                      2-22



"defined  benefit  plan" (as defined in Section  414(j) of the Internal  Revenue
Code) is referred to herein as a "Savannah  Pension  Plan." No Savannah  Pension
Plan is or has been a multiemployer  plan within the meaning of Section 3(37) of
ERISA.

                  (b) All  Savannah  Benefit  Plans are in  compliance  with the
applicable  terms of ERISA,  the Internal Revenue Code, and any other applicable
Laws  the  breach  or  violation  of  which  are  reasonably   likely  to  have,
individually  or in the aggregate,  a Savannah  Material  Adverse  Effect.  Each
Savannah  ERISA Plan which is intended to be qualified  under Section  401(a) of
the Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service,  and Savannah is not aware of any circumstances likely
to result in revocation of any such favorable  determination letter. No Savannah
Entity has engaged in a  transaction  with respect to any Savannah  Benefit Plan
that,  assuming the taxable  period of such  transaction  expired as of the date
hereof,  would  subject any Savannah  Entity to a Tax imposed by either  Section
4975 of the Internal  Revenue Code or Section  502(i) of ERISA in amounts  which
are reasonably  likely to have,  individually  or in the  aggregate,  a Savannah
Material Adverse Effect.

                  (c)  No  Savannah  Pension  Plan  has  any  "unfunded  current
liability," as that term is defined in Section  302(d)(8)(A) of ERISA,  based on
actuarial assumptions set forth for such plan's most recent actuarial valuation.
Since the date of the most  recent  actuarial  valuation,  there has been (i) no
material  change in the financial  position of a Savannah  Pension Plan, (ii) no
change in the actuarial  assumptions  with respect to any Savannah Pension Plan,
and (iii) no increase in benefits under any Savannah Pension Plan as a result of
plan amendments or changes in applicable Law which is reasonably likely to have,
individually  or in  the  aggregate,  a  Savannah  Material  Adverse  Effect  or
materially  adversely  affect the funding  status of any such plan.  Neither any
Savannah  Pension  Plan nor any  "single-employer  plan,"  within the meaning of
Section  4001(a)(15) of ERISA,  currently or formerly maintained by any Savannah
Entity, or the  single-employer  plan of any ERISA Affiliate has an "accumulated
funding  deficiency"  within the meaning of Section 412 of the Internal  Revenue
Code or  Section  302 of ERISA,  which is  reasonably  likely to have a Savannah
Material  Adverse  Effect.  No Savannah  Entity has provided,  or is required to
provide,  security to a Savannah Pension Plan or to any single-employer  plan of
an ERISA Affiliate pursuant to Section 401(a)(29) of the Internal Revenue Code.

                  (d) Within the six-year  period  preceding the Effective Time,
no Liability  under Subtitle C or D of Title IV of ERISA has been or is expected
to be incurred by any Savannah  Entity with  respect to any  ongoing,  frozen or
terminated  single-employer  plan  or the  single-employer  plan  of  any  ERISA
Affiliate,  which  Liability is  reasonably  likely to have a Savannah  Material
Adverse Effect.  No Savannah  Entity has incurred any withdrawal  Liability with
respect  to  a  multiemployer  plan  under  Subtitle  B of  Title  IV  of  ERISA
(regardless  of whether based on  contributions  of an ERISA  Affiliate),  which
Liability is reasonably  likely to have a Savannah  Material Adverse Effect.  No
notice of a "reportable  event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required to
be filed for any  Savannah  Pension  Plan or by any ERISA  Affiliate  within the
12-month period ending on the date hereof.

                  (e)  Except  as  disclosed  in  Section  6.15 of the  Savannah
Disclosure  Memorandum,  no Savannah Entity has any Liability for retiree health
and life  benefits  under  any of the  Savannah  Benefit  Plans and there are no
restrictions  on the rights of such  Savannah  Entity to amend or terminate  any
such retiree health or benefit Plan without incurring any Liability  thereunder,
which Liability is reasonably likely to have a Savannah Material Adverse Effect.

                  (f)  Except  as  disclosed  in  Section  6.15 of the  Savannah
Disclosure Memorandum,  neither the execution and delivery of this Agreement nor
the consummation of the transactions  contemplated hereby will (i) result in any
payment (including severance,  unemployment  compensation,  golden parachute, or
otherwise)  becoming due to any director or any employee of any Savannah  Entity
from any  Savannah  Entity under any Savannah  Benefit Plan or  otherwise,  (ii)
increase any benefits  otherwise  payable  under any Savannah  Benefit  Plan, or
(iii) result in any  acceleration  of the time of payment or vesting of any such
benefit,  where such payment,  increase, or acceleration is reasonably likely to
have, individually or in the aggregate, a Savannah Material Adverse Effect.


<PAGE>
                                      2-23

                  (g) The  actuarial  present  values  of all  accrued  deferred
compensation   entitlements   (including   entitlements   under  any   executive
compensation, supplemental retirement, or employment agreement) of employees and
former  employees of any  Savannah  Entity and their  respective  beneficiaries,
other than  entitlements  accrued pursuant to funded retirement plans subject to
the  provisions  of Section 412 of the  Internal  Revenue Code or Section 302 of
ERISA,  have been fully  reflected on the Savannah  Financial  Statements to the
extent required by and in accordance with GAAP.

                  6.16 Material  Contracts.  Except as disclosed in Section 6.16
of the Savannah  Disclosure  Memorandum  or otherwise  reflected in the Savannah
Financial Statements, none of the Savannah Entities, nor any of their respective
Assets, businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination,  consulting
or retirement Contract,  (ii) any Contract relating to the borrowing of money by
any  Savannah  Entity  or the  guarantee  by any  Savannah  Entity  of any  such
obligation (other than Contracts  evidencing deposit  liabilities,  purchases of
federal funds,  fully-secured repurchase agreements,  and Federal Home Loan Bank
advances of depository  institution  Subsidiaries,  trade payables and Contracts
relating to borrowings or guarantees  made in the ordinary  course of business),
or (iii) any Contract  which  prohibits or  restricts  any Savannah  Entity from
engaging in any business  activities in any geographic area, line of business or
otherwise in  competition  with any other Person,  (iv) any Contract  between or
among Savannah Entities, (v) any Contract involving Intellectual Property (other
than  Contracts   entered  into  in  the  ordinary  course  with  customers  and
"shrink-wrap" software licenses), (vi) any Contract relating to the provision of
data processing, network communication, or other technical services to or by any
Savannah  Entity,  (vii) any  Contract  relating to the  purchase or sale of any
goods or services  (other than Contracts  entered into in the ordinary course of
business and involving  payments under any individual  Contract not in excess of
$25,000),  (viii) any exchange-traded or over-the-counter swap, forward, future,
option, cap, floor, or collar financial Contract,  or any other interest rate or
foreign currency  protection Contract not included on its balance sheet which is
a  financial  derivative  Contract,  and (ix) any other  Contract  or  amendment
thereto that would be required to be filed as an exhibit to a Form 10-K filed by
Savannah with the SEC as of the date of this  Agreement  that has not been filed
as an exhibit to Savannah's Form 10-KSB filed for the fiscal year ended December
31, 1996,  or in an SEC  Document and  identified  to Bryan  (together  with all
Contracts referred to in Sections 6.10 and 6.15(a),  the "Savannah  Contracts").
With respect to each  Savannah  Contract and except as disclosed in Section 6.16
of the  Savannah  Disclosure  Memorandum:  (i) the Contract is in full force and
effect;  (ii) no Savannah Entity is in Default  thereunder,  other than Defaults
which are not reasonably  likely to have,  individually  or in the aggregate,  a
Savannah  Material  Adverse  Effect;  (iii) no Savannah Entity has repudiated or
waived any material  provision of any such Contract;  and (iv) no other party to
any such Contract is, to the  Knowledge of Savannah,  in Default in any respect,
other than Defaults which are not reasonably likely to have,  individually or in
the aggregate,  a Savannah  Material Adverse Effect, or has repudiated or waived
any  material  provision  thereunder.  All of the  indebtedness  of any Savannah
Entity for money  borrowed is  prepayable  at any time by such  Savannah  Entity
without penalty or premium.

                  6.17 Legal Proceedings.  There is no Litigation  instituted or
pending,  or, to the  Knowledge  of  Savannah,  threatened  (or  unasserted  but
considered  probable of  assertion  and which if asserted  would have at least a
reasonable  probability of an unfavorable  outcome) against any Savannah Entity,
or against  any  director,  employee or employee  benefit  plan of any  Savannah
Entity,  or  against  any  Asset,  interest,  or right  of any of them,  that is
reasonably likely to have, individually or in the aggregate, a Savannah Material
Adverse Effect,  nor are there any Orders of any Regulatory  Authorities,  other
governmental  authorities,  or  arbitrators  outstanding  against  any  Savannah
Entity, that are reasonably likely to have,  individually or in the aggregate, a
Savannah  Material  Adverse  Effect.  Section  6.17 of the  Savannah  Disclosure
Memorandum contains a summary of all Litigation as of the date of this Agreement
to which any Savannah  Entity is a party and which names a Savannah  Entity as a
defendant or  cross-defendant or for which any Savannah Entity has any potential
Liability.

                  6.18   Reports.   Since  January  1,  1993,  or  the  date  of
organization  if later,  each  Savannah  Entity has timely filed all reports and
statements,  together  with any  amendments  required  to be made  with  respect
thereto,  that it was required to file with Regulatory  Authorities  (except, in
the  case of  state  securities  authorities,  failures  to file  which  are not
reasonably likely to have, individually or in the aggregate, a Savannah Material
Adverse  Effect).  As of  their  respective  dates,  each  of such  reports  and

<PAGE>
                                      2-24



documents, including the financial statements,  exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its respective
date, each such report and document did not, in all material  respects,  contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
required to be stated therein or necessary to make the statements  made therein,
in light of the circumstances under which they were made, not misleading.

                  6.19  Statements  True and  Correct.  None of the  information
supplied or to be supplied by any Savannah  Entity or any Affiliate  thereof for
inclusion in the  Registration  Statement to be filed by Savannah  with the SEC,
will, when the Registration Statement becomes effective,  be false or misleading
with respect to any material  fact, or omit to state any material fact necessary
to make the statements therein not misleading.  None of the information supplied
or to be supplied by any Savannah Entity or any Affiliate  thereof for inclusion
in the  Joint  Proxy  Statement  to be mailed to each  Party's  shareholders  in
connection with the Shareholders'  Meetings, and any other documents to be filed
by any  Savannah  Entity  or any  Affiliate  thereof  with the SEC or any  other
Regulatory  Authority in connection with the transactions  contemplated  hereby,
will, at the respective  time such documents are filed,  and with respect to the
Joint  Proxy  Statement,  when  first  mailed to the  shareholders  of Bryan and
Savannah,  be false or misleading  with respect to any material fact, or omit to
state any material fact  necessary to make the statements  therein,  in light of
the circumstances under which they were made, not misleading, or, in the case of
the Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Shareholders'  Meetings,  be false or misleading with respect to any
material  fact,  or omit to state any  material  fact  necessary  to correct any
statement in any earlier  communication  with respect to the solicitation of any
proxy for the Shareholders'  Meetings. All documents that any Savannah Entity or
any Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions  contemplated  hereby will comply as to form in
all material respects with the provisions of applicable Law.

                  6.20  Accounting,  Tax and  Regulatory  Matters.  No  Savannah
Entity or any  Affiliate  thereof  has taken or agreed to take any action or has
any  Knowledge  of any fact or  circumstance  that is  reasonably  likely to (i)
prevent the Merger from qualifying for pooling-of-interests accounting treatment
or as a  reorganization  within the  meaning of Section  368(a) of the  Internal
Revenue  Code,  or (ii)  materially  impede or delay  receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) or result in the imposition
of a condition or  restriction  of the type  referred to in the last sentence of
such Section.

                  6.21 State Takeover Laws.  Each Savannah  Entity has taken all
necessary action to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or  applicability  of, any  applicable
"moratorium,"  "fair price," "business  combination,"  "control share," or other
anti-takeover Laws (collectively, "Takeover Laws"), including Sections 14-2-1111
and 14-2-1132 of the GBCC.


                  6.22 Charter  Provisions.  Each Savannah  Entity has taken all
action so that the entering into of this Agreement and the Savannah Stock Option
Agreement  and  the  consummation  of the  Merger  and  the  other  transactions
contemplated  hereby and thereby,  including the  acquisition of shares pursuant
to, or other exercise of rights under, the Savannah Stock Option  Agreement,  do
not and will not  result in the  grant of any  rights  to any  Person  under the
Articles of Incorporation, Bylaws or other governing instruments of any Savannah
Entity or restrict or impair the  ability of Bryan or any Bryan  shareholder  to
vote,  or  otherwise to exercise  the rights of a  shareholder  with respect to,
shares of Savannah  Common Stock that may be directly or indirectly  acquired or
controlled by them.

                  6.23 Board Recommendation. The Board of Directors of Savannah,
at a meeting  duly  called  and held,  has by  unanimous  vote of the  directors
present (who  constituted  all of the directors  then in office) (i)  determined
that this  Agreement and the  transactions  contemplated  hereby,  including the
Merger,   and  the  Savannah  Stock  Option   Agreement  and  the   transactions
contemplated thereby,  taken together,  are fair to and in the best interests of
the  shareholders  and (ii) resolved to recommend that the holders of the shares
of Savannah Common Stock approve this Agreement.


<PAGE>
                                      2-25


ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION

                  7.1 Affirmative Covenants of Each Party. From the date of this
Agreement  until the earlier of the Effective  Time or the  termination  of this
Agreement,  unless the prior written  consent of the other Party shall have been
obtained,  and except as otherwise  expressly  contemplated  herein,  each Party
shall and shall cause each of its  Subsidiaries to (a) operate its business only
in the usual,  regular,  and ordinary  course,  (b) preserve intact its business
organization and Assets and maintain its rights and franchises,  and (c) take no
action which would (i) materially  adversely  affect the ability of either Party
to obtain any Consents required for the transactions contemplated hereby without
imposition  of a condition or  restriction  of the type  referred to in the last
sentences of Section 9.1(b) or 9.1(c),  or (ii) materially  adversely affect the
ability of either  Party to perform  its  covenants  and  agreements  under this
Agreement.

                  7.2  Negative  Covenants  of  Bryan.  From  the  date  of this
Agreement  until the earlier of the Effective  Time or the  termination  of this
Agreement,  unless  the  prior  written  consent  of  Savannah  shall  have been
obtained,  which  consent  shall not be  unreasonably  withheld,  and  except as
otherwise expressly contemplated herein, Bryan covenants and agrees that it will
not do or agree or  commit to do, or  permit  any of its  Subsidiaries  to do or
agree or commit to do, any of the following:

                  (a)  amend  the  Articles  of  Incorporation,  Bylaws or other
governing instruments of any Bryan Entity, or

                  (b) incur any additional debt  obligation or other  obligation
for borrowed money (other than  indebtedness  of a Bryan Entity to another Bryan
Entity)  in excess of an  aggregate  of  $50,000  (for the Bryan  Entities  on a
consolidated  basis)  except in the  ordinary  course of the  business  of Bryan
Subsidiaries  consistent  with past practices  (which shall  include,  for Bryan
Subsidiaries that are depository institutions,  creation of deposit liabilities,
purchases of federal  funds,  advances from the Federal  Reserve Bank or Federal
Home Loan  Bank,  and entry into  repurchase  agreements  fully  secured by U.S.
government or agency  securities),  or impose, or suffer the imposition,  on any
Asset of any Bryan  Entity of any Lien or permit  any such Lien to exist  (other
than in connection with deposits,  repurchase  agreements,  bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of business,
the  satisfaction  of legal  requirements  in the exercise of trust powers,  and
Liens in effect as of the date hereof that are disclosed in the Bryan Disclosure
Memorandum); or

                  (c)  repurchase,  redeem,  or  otherwise  acquire or  exchange
(other than  exchanges in the ordinary  course under  employee  benefit  plans),
directly or  indirectly,  any shares,  or any  securities  convertible  into any
shares, of the capital stock of any Bryan Entity, or declare or pay any dividend
or make any other  distribution in respect of Bryan's  capital stock;  provided,
that Bryan may (to the extent legally and contractually permitted to do so), but
shall not be obligated to, declare and pay a regular annual cash dividend on the
shares of Bryan  Common  Stock in  accordance  with pas  practice  disclosed  in
Section 7.2(c) of the Bryan  Disclosure  Memorandum,  but not in excess of $1.00
per share of Bryan Common Stock; or

                  (d) except for this Agreement,  or pursuant to the Bryan Stock
Option Agreement, or pursuant to the exercise of stock options outstanding as of
the date  hereof and  pursuant  to the terms  thereof in  existence  on the date
hereof,  or as disclosed in Section 7.2(d) of the Bryan  Disclosure  Memorandum,
issue,  sell,  pledge,  encumber,  authorize  the  issuance  of,  enter into any
Contract to issue,  sell,  pledge,  encumber,  or authorize  the issuance of, or
otherwise permit to become  outstanding,  any additional  shares of Bryan Common
Stock or any other capital stock of any Bryan Entity, or any stock  appreciation
rights, or any option, warrant, or other Equity Right; or

                  (e) adjust,  split,  combine or reclassify any shares of Bryan
Common  Stock or issue or  authorize  the  issuance of any other  securities  in
respect of or in substitution for shares of Bryan Common Stock, or sell,  lease,
mortgage or otherwise dispose of or otherwise encumber (x) any shares of capital
stock of any  Bryan  Subsidiary  (unless  any such  shares  of stock are sold or
otherwise  transferred  to another  Bryan Entity) or (y) any Asset having a book

<PAGE>
                                      2-26



value in excess of $25,000  other than in the  ordinary  course of business  for
reasonable and adequate consideration; or

                  (f) except for  purchases of U.S.  Treasury  securities,  U.S.
Government  agency  securities or  obligations  of the State of Georgia,  or any
subdivisions thereof, which have maturities of seven years or less, purchase any
securities  or make any  material  investment,  either by  purchase  of stock of
securities,  contributions  to  capital,  Asset  transfers,  or  purchase of any
Assets, in any Person other than a wholly owned Bryan  Subsidiary,  or otherwise
acquire  direct or indirect  control over any Person,  other than in  connection
with  (i)  internal   reorganizations   or  consolidations   involving  existing
Subsidiaries,  (ii)  foreclosures  in the  ordinary  course of  business,  (iii)
acquisitions of control by a depository  institution Subsidiary in its fiduciary
capacity,  or (iv)the  creation of new wholly  owned  Subsidiaries  organized to
conduct or continue activities otherwise permitted by this Agreement; or

                  (g) grant any  increase  in  compensation  or  benefits to the
employees  or  officers  of any Bryan  Entity,  except in  accordance  with past
practice  disclosed in Section 7.2(g) of the Bryan  Disclosure  Memorandum or as
required by Law; pay any  severance or  termination  pay or any bonus other than
pursuant to written policies or written  Contracts in effect on the date of this
Agreement and disclosed in Section  7.2(g) of the Bryan  Disclosure  Memorandum;
and enter into or amend any  severance  agreements  with  officers  of any Bryan
Entity;  grant any material  increase in fees or other increases in compensation
or other  benefits to directors of any Bryan Entity  except in  accordance  with
past practice disclosed in Section 7.2(g) of the Bryan Disclosure Memorandum; or
voluntarily  accelerate  the vesting of any stock  options or other  stock-based
compensation or employee benefits or other Equity Rights; or

                  (h) enter into or amend any  employment  Contract  between any
Bryan Entity and any Person  (unless such amendment is required by Law) that the
Bryan  Entity  does not  have  the  unconditional  right  to  terminate  without
Liability (other than Liability for services already  rendered),  at any time on
or after the Effective Time; or

                  (i) adopt any new employee benefit plan of any Bryan Entity or
terminate or withdraw  from, or make any material  change in or to, any existing
employee  benefit  plans of any Bryan  Entity other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or advisable to
maintain the tax qualified  status of any such plan,  or make any  distributions
from such employee  benefit plans,  except as required by Law, the terms of such
plans or consistent with past practice; or

                  (j)  make  any  significant  change  in any Tax or  accounting
methods or systems of internal accounting controls, except as may be appropriate
to conform to changes in Tax Laws or regulatory accounting requirements or GAAP;
or

                  (k) commence any Litigation other than in accordance with past
practice,  or settle any Litigation  involving any Liability of any Bryan Entity
for material  money  damages or  restrictions  upon the  operations of any Bryan
Entity; or

                  (l) except in the  ordinary  course of  business,  enter into,
modify,  amend or terminate any material  Contract  (including any loan Contract
with an unpaid  balance  exceeding  $25,000) or waive,  release,  compromise  or
assign any material rights or claims.

                  7.3  Negative  Covenants  of  Savannah.  From the date of this
Agreement  until the earlier of the Effective  Time or the  termination  of this
Agreement,  unless the prior written  consent of Bryan shall have been obtained,
which  consent  shall not be  unreasonably  withheld,  and  except as  otherwise
expressly contemplated herein, Savannah covenants and agrees that it will not do
or agree or commit to do, or permit  any of its  Subsidiaries  to do or agree or
commit to do, any of the following:

                  (a) amend the Articles of Incorporation or Bylaws of Savannah,
in each case, in any manner adverse to the holders of Bryan Common Stock, or


<PAGE>
                                      2-27



                  (b) incur any additional debt  obligation or other  obligation
for borrowed  money  (other than  indebtedness  of a Savannah  Entity to another
Savannah  Entity)  in excess  of an  aggregate  of  $100,000  (for the  Savannah
Entities on a consolidated  basis) except in the ordinary course of the business
of Savannah  Subsidiaries  consistent with past practices  (which shall include,
for Savannah Subsidiaries that are depository institutions,  creation of deposit
liabilities,  purchases of federal funds, advances from the Federal Reserve Bank
or Federal Home Loan Bank, and entry into repurchase agreements fully secured by
U.S. government or agency securities),  or impose, or suffer the imposition,  on
any Asset of any  Savannah  Entity of any Lien or permit  any such Lien to exist
(other  than  in  connection  with  deposits,  repurchase  agreements,   bankers
acceptances, "treasury tax and loan" accounts established in the ordinary course
of business,  the  satisfaction  of legal  requirements in the exercise of trust
powers,  and Liens in effect as of the date  hereof  that are  disclosed  in the
Savannah Disclosure Memorandum); or

                  (c)  repurchase,  redeem,  or  otherwise  acquire or  exchange
(other than  exchanges in the ordinary  course under  employee  benefit  plans),
directly or  indirectly,  any shares,  or any  securities  convertible  into any
shares,  of the  capital  stock of any  Savannah  Entity,  or declare or pay any
dividend or make any other  distribution in respect of Savannah's capital stock,
provided that Savannah may (to the extent legally and contractually permitted to
do so), but shall not be obligated to,  declare and pay regular  quarterly  cash
dividends  on the  shares  of  Savannah  Common  Stock in  accordance  with past
practice disclosed in Section 7.3(c) of the Savannah Disclosure Memorandum,  but
not in excess of $0.12 per share of Savannah Common Stock; or

                  (d) except for this  Agreement,  or pursuant  to the  Savannah
Stock Option Agreement, or pursuant to the exercise of stock options outstanding
as of the date hereof and pursuant to the terms thereof in existence on the date
hereof, or as disclosed in Section 7.3(d) of the Savannah Disclosure Memorandum,
issue,  sell,  pledge,  encumber,  authorize  the  issuance  of,  enter into any
Contract to issue,  sell,  pledge,  encumber,  or authorize  the issuance of, or
otherwise permit to become outstanding, any additional shares of Savannah Common
Stock  or  any  other  capital  stock  of any  Savannah  Entity,  or  any  stock
appreciation rights, or any option, warrant,  conversion, or other Equity Right;
or

                  (e)  adjust,  split,  combine  or  reclassify  any  shares  of
Savannah Common Stock or issue or authorize the issuance of any other securities
in respect of or in  substitution  for shares of Savannah  Common Stock or sell,
lease,  mortgage or  otherwise  dispose of or  otherwise  encumber any shares of
capital  stock of any Savannah  Subsidiary  (unless any such shares of stock are
sold or otherwise  transferred to another Savannah Entity) or any Asset having a
book value in excess of $25,000  other than in the  ordinary  course of business
for reasonable and adequate consideration; or

                  (f) except for  purchases of U.S.  Treasury  securities,  U.S.
Government  agency  securities or  obligations  of the State of Georgia,  or any
subdivisions thereof, which have maturities of seven years or less, purchase any
securities  or make any  material  investment,  either by  purchase  of stock of
securities,  contributions  to  capital,  Asset  transfers,  or  purchase of any
Assets,  in any  Person  other  than a  wholly  owned  Savannah  Subsidiary,  or
otherwise  acquire  direct or indirect  control  over any Person,  other than in
connection  with  (i)  internal   reorganizations  or  consolidations  involving
existing  Subsidiaries,  (ii)  foreclosures  in the ordinary course of business,
(iii)  acquisitions  of control by a depository  institution  Subsidiary  in its
fiduciary  capacity,  or (iv) the  creation  of new  wholly  owned  Subsidiaries
organized  to  conduct  or  continue  activities  otherwise  permitted  by  this
Agreement; or

                  (g) grant any  increase  in  compensation  or  benefits to the
employees or officers of any Savannah  Entity,  except in  accordance  with past
practice disclosed in Section 7.3(g) of the Savannah Disclosure Memorandum or as
required by Law; pay any  severance or  termination  pay or any bonus other than
pursuant to written policies or written  Contracts in effect on the date of this
Agreement and disclosed in Section 7.3(g) of the Savannah Disclosure  Memorandum
or the  provisions  of any  applicable  program or plan  adopted by its Board of
Directors prior to the date of this Agreement; enter into or amend any severance

<PAGE>
                                      2-28



agreements with officers of any Savannah Entity;  grant any material increase in
fees or other  increases in  compensation  or other benefits to directors of any
Savannah  Entity  except in accordance  with past practice  disclosed in Section
7.3(g) of the Savannah  Disclosure  Memorandum;  or  voluntarily  accelerate the
vesting  of any stock  options or other  stock-based  compensation  or  employee
benefits or other Equity Rights; or

                  (h) enter into or amend any  employment  Contract  between any
Savannah  Entity and any Person  (unless such amendment is required by Law) that
the Savannah Entity does not have the  unconditional  right to terminate without
Liability (other than Liability for services already  rendered),  at any time on
or after the Effective Time;

                  (i) adopt any new employee benefit plan of any Savannah Entity
or  terminate  or  withdraw  from,  or make any  material  change in or to,  any
existing  employee  benefit  plans of any  Savannah  Entity  other than any such
change that is required by Law or that, in the opinion of counsel,  is necessary
or advisable to maintain the tax qualified  status of any such plan, or make any
distributions  from such  employee  benefit plans except as required by Law, the
terms of such plans, or consistent with past practice; or

                  (j)  make  any  significant  change  in any Tax or  accounting
methods or systems of internal accounting controls, except as may be appropriate
to  conform  to  changes  in  applicable  Tax  Laws  or  regulatory   accounting
requirements or GAAP; or

                  (k) commence any Litigation other than in accordance with past
practice,  or settle any  Litigation  involving  any  Liability  of any Savannah
Entity for material  money damages or  restrictions  upon the  operations of any
Savannah Entity; or

                  (l) except in the  ordinary  course of  business,  enter into,
modify,  amend or terminate any material  Contract  (including any loan Contract
with an unpaid  balance  exceeding  $25,000) or waive,  release,  compromise  or
assign any material rights or claims.


                  7.4 Adverse  Changes in  Condition.  Each Party agrees to give
written  noticepromptly to the other Party upon becoming aware of the occurrence
or impending  occurrence of any event or  circumstance  relating to it or any of
its Subsidiaries which (i) is reasonably likely to have,  individually or in the
aggregate,  a Bryan  Material  Adverse  Effect or a  Savannah  Material  Adverse
Effect,  as applicable,  or (ii) would cause or constitute a material  breach of
any of its  representations,  warranties,  or covenants contained herein, and to
use its reasonable efforts to prevent or promptly to remedy the same.

                  7.5 Reports.  Each Party and its  Subsidiaries  shall file all
reports required to be filed by it with Regulatory  Authorities between the date
of this  Agreement and the  Effective  Time and shall deliver to the other Party
copies of all such  reports  promptly  after the same are  filed.  If  financial
statements  are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity, and cash flows for the periods then
ended  in  accordance  with  GAAP  (subject  in the  case of  interim  financial
statements to normal recurring year-end  adjustments that are not material).  As
of their  respective  dates,  such reports filed with the SEC will comply in all
material  respects  with the  Securities  Laws and will not  contain  any untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under which they were made,  not  misleading.  Any financial
statements  contained in any other reports to another Regulatory Authority shall
be prepared in accordance with Laws applicable to such reports.


ARTICLE 8
ADDITIONAL AGREEMENTS

                  8.1  Registration  Statement;  Proxy  Statement;   Shareholder
Approval.  As soon as reasonably  practicable after execution of this Agreement,


<PAGE>
                                      2-29



Savannah  shall prepare and file the  Registration  Statement  with the SEC, and
shall use its reasonable  efforts to cause the Registration  Statement to become
effective  under the 1933 Act and take any action required to be taken under the
applicable  state Blue Sky or securities Laws in connection with the issuance of
the shares of Savannah Common Stock upon consummation of the Merger. Bryan shall
cooperate in the preparation and filing of the Registration  Statement and shall
furnish all  information  concerning  it and the holders of its capital stock as
Savannah may reasonably request in connection with such action. Bryan shall call
a Shareholders'  Meeting, to be held as soon as reasonably practicable after the
Registration  Statement  is declared  effective  by the SEC,  for the purpose of
voting upon  approval of this  Agreement  and such other  related  matters as it
deems appropriate.  Savannah shall call a Shareholders'  Meeting,  to be held as
soon as  reasonably  practicable  after the  Registration  Statement is declared
effective by the SEC, for the purpose of voting upon approval of the issuance of
shares of Savannah  Common Stock  pursuant to the Merger and such other  related
matters as it deems appropriate.  In connection with the Shareholders' Meetings,
(i)  Bryan  and  Savannah  shall  prepare  and file  with the SEC a Joint  Proxy
Statement and mail such Joint Proxy Statement to their respective  shareholders,
(ii) the Parties shall  furnish to each other all  information  concerning  them
that they may reasonably  request in connection with such Joint Proxy Statement,
(iii) the Board of  Directors  of Bryan and  Savannah  shall  recommend to their
respective  shareholders the approval of the matters submitted for approval, and
(iv) the Board of Directors  and officers of Bryan and Savannah  shall use their
reasonable  efforts to obtain such  shareholders'  approval.  Savannah and Bryan
shall make all necessary filings with respect to the Merger under the Securities
Laws.

                  8.2  Exchange  Listing.  Savannah  shall  use  its  reasonable
efforts to list,  prior to the Effective Time, on the Nasdaq National Market the
shares of  Savannah  Common  Stock to be issued to the  holders of Bryan  Common
Stock  pursuant to the Merger,  and Savannah shall give all notices and make all
filings  with  the  Nasdaq  National  Market  required  in  connection  with the
transactions contemplated herein.

                  8.3  Applications.  Savannah shall prepare and file, and Bryan
shall  cooperate  in  the  preparation  and,  where   appropriate,   filing  of,
applications  with  all  Regulatory  Authorities  having  jurisdiction  over the
transactions  contemplated  by this  Agreement  seeking the  requisite  Consents
necessary to consummate the  transactions  contemplated by this  Agreement.  The
Parties  shall deliver to each other copies of all filings,  correspondence  and
orders  to  and  from  all  Regulatory   Authorities  in  connection   with  the
transactions contemplated hereby.

                  8.4 Filings with State Offices.  Upon the terms and subject to
the  conditions  of  this  Agreement,   Savannah  shall  execute  and  file  the
Certificate  of Merger  with the  Secretary  of State of the State of Georgia in
connection with the Closing.

                  8.5  Agreement  as to  Efforts to  Consummate.  Subject to the
terms and conditions of this  Agreement,  each Party agrees to use, and to cause
its  Subsidiaries to use, its reasonable  efforts to take, or cause to be taken,
all actions,  and to do, or cause to be done, all things  necessary,  proper, or
advisable under  applicable  Laws to consummate and make  effective,  as soon as
reasonably  practicable  after  the  date of this  Agreement,  the  transactions
contemplated by this Agreement,  including using its reasonable  efforts to lift
or  rescind  any  Order  adversely  affecting  its  ability  to  consummate  the
transactions  contemplated  herein and to cause to be satisfied  the  conditions
referred to in Article 9; provided,  that nothing  herein shall preclude  either
Party from  exercising its rights under this  Agreement or the respective  Stock
Option  Agreements.   Each  Party  shall  use,  and  shall  cause  each  of  its
Subsidiaries to use, its reasonable  efforts to obtain all Consents necessary or
desirable  for  the  consummation  of  the  transactions  contemplated  by  this
Agreement.

                  8.6      Investigation and Confidentiality.

                  (a) Prior to the  Effective  Time,  each Party  shall keep the
other Party advised of all material developments relevant to its business and to
consummation  of the Merger and shall permit the other Party to make or cause to

<PAGE>
                                      2-30



be  made  such  investigation  of the  business  and  properties  of it and  its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests,  provided that such investigation shall be reasonably
related  to  the  transactions  contemplated  hereby  and  shall  not  interfere
unnecessarily with normal  operations.  No investigation by a Party shall affect
the representations and warranties of the other Party.

                  (b) In addition to the Parties'  respective  obligations under
the  Confidentiality  Agreement,  which is hereby  reaffirmed  and adopted,  and
incorporated by reference  herein each Party shall, and shall cause its advisers
and agents to,  maintain the  confidentiality  of all  confidential  information
furnished  to it by  the  other  Party  concerning  its  and  its  Subsidiaries'
businesses,   operations,  and  financial  positions  and  shall  not  use  such
information   for  any  purpose  except  in  furtherance  of  the   transactions
contemplated  by this  Agreement.  If this Agreement is terminated  prior to the
Effective  Time,  each Party shall promptly return or certify the destruction of
all documents and copies thereof,  and all work papers  containing  confidential
information received from the other Party.

                  (c) Each Party  agrees to give the other Party  notice as soon
as practicable after any determination by it of any fact or occurrence  relating
to  the  other  Party  which  it  has  discovered  through  the  course  of  its
investigation and which represents, or is reasonably likely to represent, either
a material breach of any representation,  warranty, covenant or agreement of the
other Party or which has had or is  reasonably  likely to have a Bryan  Material
Adverse Effect or a Savannah Material Adverse Effect, as applicable.

                  8.7 Press  Releases.  Prior to the Effective  Time,  Bryan and
Savannah shall consult with each other as to the form and substance of any press
release or other public disclosure  materially  related to this Agreement or any
other transaction  contemplated hereby;  provided,  that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any  disclosure  which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.

                  8.8 Certain Actions. Except with respect to this Agreement and
the transactions  contemplated  hereby,  neither Party nor any Affiliate thereof
nor any  Representatives  thereof  retained by either  Party  shall  directly or
indirectly solicit any Acquisition Proposal by any Person. Neither Party nor any
Affiliate or  Representative  thereof shall furnish any  non-public  information
that it is not legally obligated to furnish, negotiate with respect to, or enter
into any Contract  with respect to, any  Acquisition  Proposal,  but a Party may
communicate  information about such an Acquisition  Proposal to its shareholders
if and to the  extent  that it is  required  to do so in  order to  comply  with
obligations  under Section 14 of the 1934 Act. Each Party shall promptly  advise
the other  Party  following  the  receipt of any  Acquisition  Proposal  and the
details thereof,  and advise the other Party of any developments with respect to
such Acquisition Proposal promptly upon the occurrence thereof.

                  8.9  Accounting  and  Tax  Treatment.   Each  of  the  Parties
undertakes and agrees to use its reasonable  efforts to cause the Merger, and to
take no action  which would cause the Merger not, to qualify for  treatment as a
pooling of interests for accounting purposes or as a "reorganization" within the
meaning of Section  368(a) of the Internal  Revenue Code for federal  income tax
purposes.

                  8.10 State  Takeover  Laws.  Each Bryan  Entity shall take all
necessary steps to exempt the transactions  contemplated by this Agreement from,
or if necessary to challenge the validity or  applicability  of, any  applicable
Takeover Law, including Sections 14-2-1111 and 14-2-1132 of the GBCC.


                  8.11  Charter  Provisions.  Each Bryan  Entity  shall take all
necessary  action to ensure that the  entering  into of this  Agreement  and the
Bryan Stock Option  Agreement and the  consummation  of the Merger and the other
transactions  contemplated hereby do not and will not result in the grant of any
rights  to any  Person  under the  Articles  of  Incorporation,  Bylaws or other
governing  instruments  of any Bryan Entity or restrict or impair the ability of
Savannah or any of its Subsidiaries to vote, or otherwise to exercise the rights
of a  shareholder  with  respect  to,  shares  of any Bryan  Entity  that may be
directly or indirectly acquired or controlled by them.


<PAGE>
                                      2-31


                  8.12 Agreement of  Affiliates.  Bryan has disclosed in Section
8.12 of the Bryan Disclosure  Memorandum all Persons whom it reasonably believes
is an  "affiliate"  of Bryan for purposes of Rule 145 under the 1933 Act.  Bryan
shall use its  reasonable  efforts  to cause  each such  Person  to  deliver  to
Savannah  not later  than 30 days  after the date of this  Agreement,  a written
agreement,  substantially  in the form of Exhibit 4,  providing that such Person
will not sell,  pledge,  transfer,  or otherwise  dispose of the shares of Bryan
Common Stock held by such Person except as  contemplated by such agreement or by
this Agreement and will not sell, pledge,  transfer, or otherwise dispose of the
shares of Savannah Common Stock to be received by such Person upon  consummation
of the Merger except in compliance  with  applicable  provisions of the 1933 Act
and the rules and regulations  thereunder and, if the Merger is accounted for by
the  pooling-of-interests  method of  accounting,  until such time as  financial
results  covering at least 30 days of combined  operations of Savannah and Bryan
have  been  published  within  the  meaning  of  Section  201.01  of  the  SEC's
Codification  of Financial  Reporting  Policies.  If the Merger is accounted for
using the pooling-of-interests  method of accounting,  shares of Savannah Common
Stock issued to such  affiliates of Bryan in exchange for shares of Bryan Common
Stock shall not be transferable until such time as financial results covering at
least 30 days of combined  operations of Savannah and Bryan have been  published
within the  meaning of Section  201.01 of the SEC's  Codification  of  Financial
Reporting  Policies,  regardless of whether each such affiliate has provided the
written  agreement  referred  to in this  Section  8.12 (and  Savannah  shall be
entitled to place  restrictive  legends upon certificates for shares of Savannah
Common Stock issued to affiliates of Bryan pursuant to this Agreement to enforce
the provisions of this Section 8.12). Savannah shall not be required to maintain
the  effectiveness  of the  Registration  Statement  under  the 1933 Act for the
purposes of resale of Savannah Common Stock by such affiliates.

                  8.13 Employee Benefits and Contracts.  Following the Effective
Time,  Savannah  shall provide  generally to officers and employees of the Bryan
Entities  employee benefits under employee benefit and welfare plans (other than
stock option or other plans involving the potential  issuance of Savannah Common
Stock),  on terms and conditions  which when taken as a whole are  substantially
similar to those currently  provided by the Savannah Entities to their similarly
situated  officers and  employees.  For purposes of  participation,  vesting and
(except  in the  case  of  Savannah  retirement  plans)  benefit  accrual  under
Savannah's  employee  benefit  plans,  the service of the employees of the Bryan
Entities prior to the Effective Time shall be treated as service with a Savannah
Entity  participating in such employee  benefit plans.  Savannah also shall, and
shall  cause its  Subsidiaries  to,  honor in  accordance  with their  terms all
employment,  severance, consulting and other compensation Contracts disclosed in
Section 8.13 of the Bryan Disclosure Memorandum between any Bryan Entity and any
current or former director, officer, or employee thereof, and all provisions for
vested  benefits or other vested amounts earned or accrued through the Effective
Time under the Bryan Benefit Plans.

                  8.14     Indemnification.

                  (a) For a  period  of six  years  after  the  Effective  Time,
Savannah  shall  indemnify,  defend and hold  harmless  the  present  and former
directors,  officers,  employees  and  agents of the Bryan  Entities  (each,  an
"Indemnified Party") against all Liabilities arising out of actions or omissions
arising  out of the  Indemnified  Party's  service  or  services  as  directors,
officers,  employees  or  agents of Bryan or, at  Bryan's  request,  of  another
corporation,  partnership, joint venture, trust or other enterprise occurring at
or prior to the Effective Time (including the transactions  contemplated by this
Agreement)  to the fullest  extent  permitted  under  Georgia Law and by Bryan's
Articles of Incorporation and Bylaws as in effect on the date hereof,  including
provisions  relating  to  advances  of  expenses  incurred in the defense of any
Litigation  and whether or not any Savannah  Entity is insured  against any such
matter.  Without  limiting the  foregoing,  in any case in which approval by the
Surviving  Corporation  is  required  to  effectuate  any  indemnification,  the
Surviving  Corporation shall direct,  at the election of the Indemnified  Party,
that the determination of any such approval shall be made by independent counsel
mutually agreed upon between Savannah and the Indemnified Party.

                  (b) Savannah shall use its reasonable efforts (and Bryan shall
cooperate  prior to the Effective  Time in these  efforts) to maintain in effect
for a period of three years after the Effective Time Bryan's existing directors'
and officers'  liability insurance policy (provided that Savannah may substitute
therefor (i) policies of at least the same coverage and amounts containing terms

<PAGE>
                                      2-32

and conditions  which are  substantially  no less  advantageous or (ii) with the
consent of Bryan given  prior to the  Effective  Time,  any other  policy)  with
respect to claims  arising  from  facts or events  which  occurred  prior to the
Effective Time and covering persons who are currently covered by such insurance;
provided,  that  the  Surviving  Corporation  shall  not be  obligated  to  make
aggregate  premium payments for such three-year period in respect of such policy
(or coverage  replacing  such policy) which exceed,  for the portion  related to
Bryan's  directors and officers,  150% of the annual premium payments on Bryan's
current  policy  in  effect  as of the  date of  this  Agreement  (the  "Maximum
Amount").  If the amount of the  premiums  necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, Savannah shall use its reasonable
efforts to maintain the most  advantageous  policies of directors' and officers'
liability insurance obtainable for a premium equal to the Maximum Amount.


                  (d) If the Surviving  Corporation or any successors or assigns
shall  consolidate  with or merge  into any  other  Person  and shall not be the
continuing or surviving Person of such consolidation or merger or shall transfer
all or  substantially  all of its assets to any  Person,  then and in each case,
proper  provision  shall  be made so that  the  successors  and  assigns  of the
Surviving  Corporation  shall assume the  obligations  set forth in this Section
8.14.

                  (e) The provisions of this Section 8.14 are intended to be for
the benefit of and shall be  enforceable  by, each  Indemnified  Party and their
respective heirs and representatives.


ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

                  9.1 Conditions to  Obligations  of Each Party.  The respective
obligations  of each Party to perform this  Agreement and  consummate the Merger
and the other transactions  contemplated  hereby are subject to the satisfaction
of the following  conditions,  unless waived by both Parties pursuant to Section
11.6:

                  (a) Shareholder Approval. The shareholders of Bryan shall have
approved this Agreement,  and the consummation of the transactions  contemplated
hereby,  including  the  Merger,  as and to the extent  required  by Law, by the
provisions of any governing instruments,  or by the rules of the Nasdaq National
Market.  The shareholders of Savannah shall have approved the issuance of shares
of Savannah  Common Stock pursuant to the Merger,  as and to the extent required
by Law, by the provisions of any governing  instruments,  or by the rules of the
Nasdaq National Market.

                  (b)  Regulatory  Approvals.   All  Consents  of,  filings  and
registrations  with, and notifications to, all Regulatory  Authorities  required
for  consummation of the Merger shall have been obtained or made and shall be in
full  force and  effect  and all  waiting  periods  required  by Law shall  have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate  the  transactions   contemplated  hereby  shall  be  conditioned  or
restricted  in a manner  (including  requirements  relating  to the  raising  of
additional  capital  or the  disposition  of  Assets)  which  in the  reasonable
judgment of the Board of Directors of either Party would so materially adversely
impact the economic or business  benefits of the  transactions  contemplated  by
this Agreement  that, had such condition or requirement  been known,  such Party
would not, in its reasonable judgment, have entered into this Agreement.

                  (c) Consents and Approvals. Each Party shall have obtained any
and all  Consents  required  for  consummation  of the Merger  (other than those
referred to in Section  9.1(b)) or for the  preventing  of any Default under any
Contract or Permit of such Party which,  if not obtained or made,  is reasonably
likely to have,  individually  or in the  aggregate,  a Bryan  Material  Adverse
Effect or a Savannah  Material  Adverse  Effect,  as  applicable.  No Consent so
obtained which is necessary to consummate the transactions  contemplated  hereby
shall be conditioned or restricted in a manner which in the reasonable  judgment
of the Board of Directors of either Party would so materially  adversely  impact
the  economic or  business  benefits of the  transactions  contemplated  by this
Agreement that, had such condition or requirement  been known,  such Party would
not, in its reasonable judgment, have entered into this Agreement.
<PAGE>
                                      2-33

                  (d) Legal Proceedings.  No court or governmental or regulatory
authority of competent  jurisdiction  shall have enacted,  issued,  promulgated,
enforced  or  entered  any  Law or  Order  (whether  temporary,  preliminary  or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.

                  (e) Registration  Statement.  The Registration Statement shall
be effective under the 1933 Act, no stop orders  suspending the effectiveness of
the Registration  Statement shall have been issued, no action, suit,  proceeding
or investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing,  and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act  relating  to the  issuance  or  trading of the
shares of Savannah Common Stock issuable  pursuant to the Merger shall have been
received.

                  (f)  Exchange  Listing.  The shares of Savannah  Common  Stock
issuable  pursuant  to the Merger  shall have been  approved  for listing on the
Nasdaq National Market.

                  (g) Pooling  Letters.  Each of the Parties shall have received
letters,  dated as of the date of filing of the Registration  Statement with the
SEC and as of the Effective Time,  addressed to Savannah,  in form and substance
reasonably  acceptable to Savannah,  from Arthur Andersen LLP to the effect that
the Merger will qualify for pooling-of-interests  accounting treatment.  Each of
the Parties also shall have received letters,  dated as of the date of filing of
the Registration  Statement with the SEC and as of the Effective Time, addressed
to Savannah,  in form and  substance  reasonably  acceptable  to Savannah,  from
Tiller,  Stewart & Company, LLC to the effect that such firm is not aware of any
matters relating to Bryan and its  Subsidiaries  which would preclude the Merger
from qualifying for pooling-of-interests accounting treatment.

                  (h) Tax  Matters.  Each Party  shall  have  received a written
opinion of counsel from Alston & Bird LLP, in form  reasonably  satisfactory  to
such  Parties  (the "Tax  Opinion"),  to the  effect  that (i) the  Merger  will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code, (ii) the exchange in the Merger of Bryan Common Stock for Savannah
Common  Stock  will not give rise to gain or loss to the  shareholders  of Bryan
with respect to such exchange  (except to the extent of any cash received),  and
(iii) none of Bryan or Savannah will  recognize gain or loss as a consequence of
the Merger (except for amounts  resulting from any required change in accounting
methods  and any  income and  deferred  gain  recognized  pursuant  to  Treasury
regulations  issued  under  Section  1502  of the  Internal  Revenue  Code).  In
rendering  such Tax  Opinion,  such  counsel  shall  be  entitled  to rely  upon
representations  of officers of Bryan and Savannah  reasonably  satisfactory  in
form and substance to such counsel.

<PAGE>
                                      2-34

                  9.2 Conditions to Obligations of Savannah.  The obligations of
Savannah  to perform  this  Agreement  and  consummate  the Merger and the other
transactions  contemplated  hereby  are  subject  to  the  satisfaction  of  the
following conditions, unless waived by Savannah pursuant to Section 11.6(a):

                  (a)  Representations  and  Warranties.  For  purposes  of this
Section 9.2(a), the accuracy of the  representations and warranties of Bryan set
forth in this  Agreement  shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and  warranties  had been made on and as of the Effective  Time  (provided  that
representations  and  warranties  which are  confined to a specified  date shall
speak only as of such date).  The  representations  and  warranties set forth in
Section 5.3 shall be true and  correct  (except  for  inaccuracies  which are de
minimus in amount).  The  representations  and  warranties set forth in Sections
5.20, 5.21, and 5.22 shall be true and correct in all material  respects.  There
shall not exist inaccuracies in the  representations and warranties of Bryan set
forth in this Agreement  (including the representations and warranties set forth
in Sections 5.3, 5.20,  5.21,  and 5.22) such that the aggregate  effect of such
inaccuracies  has, or is  reasonably  likely to have, a Bryan  Material  Adverse
Effect; provided that, for purposes of this sentence only, those representations
and  warranties  which are  qualified by  references  to "material" or "Material
Adverse  Effect"  or to the  "Knowledge"  of any  Person  shall be deemed not to
include such qualifications.

                  (b)  Performance of Agreements and Covenants.  Each and all of
the agreements and covenants of Bryan to be performed and complied with pursuant
to this  Agreement  and the other  agreements  contemplated  hereby prior to the
Effective  Time shall have been duly performed and complied with in all material
respects.

                  (c) Certificates. Bryan shall have delivered to Savannah (i) a
certificate,  dated as of the  Effective  Time and  signed on its  behalf by its
chief executive officer and its chief financial officer,  to the effect that the
conditions  set forth in Section  9.1 as relates to Bryan and in Section  9.2(a)
and 9.2(b) have been satisfied,  and (ii) certified  copies of resolutions  duly
adopted by Bryan's Board of Directors and shareholders  evidencing the taking of
all  corporate  action  necessary  to  authorize  the  execution,  delivery  and
performance  of  this  Agreement,  and  the  consummation  of  the  transactions
contemplated  hereby,  all in such reasonable detail as Savannah and its counsel
shall request.


                  (d) Affiliates  Agreements.  Savannah shall have received from
each  affiliate of Bryan the affiliates  letter  referred to in Section 8.12, to
the extent  necessary to assure in the reasonable  judgment of Savannah that the
transactions   contemplated   hereby  will   qualify  for   pooling-of-interests
accounting treatment.

                  9.3  Conditions to Obligations  of Bryan.  The  obligations of
Bryan to  perform  this  Agreement  and  consummate  the  Merger  and the  other
transactions  contemplated  hereby  are  subject  to  the  satisfaction  of  the
following conditions, unless waived by Bryan pursuant to Section 11.6(b):

                  (a)  Representations  and  Warranties.  For  purposes  of this
Section 9.3(a), the accuracy of the  representations  and warranties of Savannah
set forth in this  Agreement  shall be assessed as of the date of this Agreement
and  as of  the  Effective  Time  with  the  same  effect  as  though  all  such
representations  and  warranties  had been made on and as of the Effective  Time
(provided that  representations and warranties which are confined to a specified
date shall speak only as of such date).  The  representations  and warranties of
Savannah  set  forth  in  Section  6.3  shall be true and  correct  (except  for
inaccuracies which are de minimus in amount). The representations and warranties
of Savannah  set forth in Section 6.20 shall be true and correct in all material
respects.  There  shall  not  exist  inaccuracies  in  the  representations  and
warranties   of   Savannah   set  forth  in  this   Agreement   (including   the
representations and warranties set forth in Sections 6.3 and 6.20) such that the
aggregate effect of such  inaccuracies  has, or is reasonably  likely to have, a
Savannah  Material Adverse Effect;  provided that, for purposes of this sentence
only, those  representations and warranties which are qualified by references to
"material"  or "Material  Adverse  Effect" or to the  "Knowledge"  of any Person
shall be deemed not to include such qualifications.

<PAGE>
                                      2-35


                  (b)  Performance of Agreements and Covenants.  Each and all of
the  agreements  and  covenants  of Savannah to be performed  and complied  with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the  Effective  Time shall have been duly  performed  and  complied  with in all
material respects.

                  (c) Certificates. Savannah shall have delivered to Bryan (i) a
certificate,  dated as of the  Effective  Time and  signed on its  behalf by its
chief executive officer and its chief financial officer,  to the effect that the
conditions set forth in Section 9.1 as relates to Savannah and in Section 9.3(a)
and 9.3(b) have been satisfied,  and (ii) certified  copies of resolutions  duly
adopted by Savannah's Board of Directors and shareholders  evidencing the taking
of all  corporate  action  necessary to authorize  the  execution,  delivery and
performance  of  this  Agreement,  and  the  consummation  of  the  transactions
contemplated  hereby,  all in such  reasonable  detail as Bryan and its  counsel
shall request.

                  (d) Employment  Agreements.  Savannah has executed  employment
agreements  with E. James  Burnsed  and  George  Michael  Odom,  Jr. in the form
attached hereto as Exhibit 9.3(d).



ARTICLE 10
TERMINATION



                  10.1 Termination.  Notwithstanding any other provision of this
Agreement,   and   notwithstanding   the  approval  of  this  Agreement  by  the
shareholders of Bryan and Savannah or both, this Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time:

                  (a)      By mutual consent of Savannah and Bryan; or

                  (b) By either Party  (provided that the  terminating  Party is
not then in material breach of any representation,  warranty, covenant, or other
agreement  contained in this Agreement) in the event of a material breach by the
other Party of any  representation or warranty contained in this Agreement which
cannot be or has not been  cured  within 30 days  after  the  giving of  written
notice to the  breaching  Party of such  breach and which  breach is  reasonably
likely, in the opinion of the non-breaching  Party, to have,  individually or in
the aggregate,  a Bryan Material  Adverse Effect or a Savannah  Material Adverse
Effect, as applicable, on the breaching Party; or

                  (c) By either Party  (provided that the  terminating  Party is
not then in material breach of any representation,  warranty, covenant, or other
agreement  contained in this Agreement) in the event of a material breach by the
other Party of any  covenant or  agreement  contained  in this  Agreement  which
cannot be or has not been  cured  within 30 days  after  the  giving of  written
notice to the breaching Party of such breach; or

                  (d) By either Party  (provided that the  terminating  Party is
not then in material breach of any representation,  warranty, covenant, or other
agreement  contained  in this  Agreement)  in the event (i) any  Consent  of any
Regulatory  Authority  required  for  consummation  of the  Merger and the other
transactions  contemplated  hereby shall have been denied by final nonappealable
action  of such  authority  or if any  action  taken  by such  authority  is not
appealed within the time limit for appeal,  or (ii) the shareholders of Bryan or
Savannah fail to vote their  approval of the matters  relating to this Agreement
and the transactions  contemplated  hereby at the  Shareholders'  Meetings where
such matters were presented to such shareholders for approval and voted upon; or

                  (e) By either  Party in the event  that the  Merger  shall not
have been  consummated  by September 30, 1998, if the failure to consummate  the
transactions  contemplated  hereby on or before  such date is not  caused by any
breach of this  Agreement by the Party  electing to  terminate  pursuant to this
Section 10.1(e); or


<PAGE>
                                      2-36


                  (f) By either Party  (provided that the  terminating  Party is
not then in material breach of any representation,  warranty, covenant, or other
agreement  contained in this  Agreement) in the event that any of the conditions
precedent to the  obligations  of such Party to consummate  the Merger cannot be
satisfied or fulfilled by the date specified in Section 10.1(e).

                  10.2 Effect of  Termination.  In the event of the  termination
and abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect,  except that (i) the  provisions of this Section
10.2 and Article 11 and Section  8.6(b) shall survive any such  termination  and
abandonment,  and (ii) a termination  pursuant to Sections  10.1(b),  10.1(c) or
10.1(f)  shall not relieve the  breaching  Party from  Liability  for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such  termination.  The Stock Option  Agreements shall be governed by its own
terms as to its termination.

                  10.3  Non-Survival  of  Representations  and  Covenants.   The
respective representations,  warranties,  obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.12, 8.13 and 8.14.


ARTICLE 11
MISCELLANEOUS

                  11.1     Definitions.

                  (a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:

                  "1933 Act" shall mean the Securities Act of 1933, as amended.
                  "1934 Act" shall mean the Securities  Exchange Act of 1934, as
amended.
                  "Acquisition Proposal" with respect to a Party shall mean any
tender offer or   exchange  offer or any proposal for a merger,  acquisition  of
all of the  stock or assets  of, or other  business  combination  involving  the
acquisition  of such Party or any of its  Subsidiaries  or the  acquisition of a
substantial equity interest in, or a substantial  portion of the assets of, such
Party or any of its  Subsidiaries.

                  "Affiliate"  of a Person  shall  mean:  (i) any  other  Person
directly,  or  indirectly  through  one  or  more  intermediaries,  controlling,
controlled  by or under  common  control  with such  Person;  (ii) any  officer,
director,  partner,  employer, or direct or indirect beneficial owner of any 10%
or greater equity or voting  interest of such Person;  or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
                  "Agreement"  shall  mean this  Agreement  and Plan of  Merger,
including the Exhibits  delivered  pursuant  hereto and  incorporated  herein by
reference.
                  "Assets" of a Person shall mean all of the assets, properties,
businesses  and  rights of such  Person of every  kind,  nature,  character  and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent,  or  otherwise  relating to or utilized in such  Person's  business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person,  and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
                  "BHC Act" shall mean the federal Bank  Holding  Company Act of
1956, as amended.
                  "Bryan  Common  Stock"  shall mean the $1.00 par value  common
stock of Bryan.
                  "Bryan   Disclosure   Memorandum"   shall  mean  the   written
information  entitled  "Bryan Bancorp of Georgia,  Inc.  Disclosure  Memorandum"
delivered  prior  to the  date of  this  Agreement  to  Savannah  describing  in
reasonable  detail the  matters  contained  therein  and,  with  respect to each
disclosure made therein, specifically referencing each Section of this Agreement
under which such disclosure is being made. Information disclosed with respect to
one  Section  shall not be  deemed to be  disclosed  for  purposes  of any other
Section not specifically referenced with respect thereto.

<PAGE>
                                      2-37

                  "Bryan Entities" shall mean, collectively, Bryan and all Bryan
Subsidiaries.
                  "Bryan Financial  Statements"  shall mean (i) the consolidated
balance sheets  (including  related notes and schedules,  if any) of Bryan as of
December 31, 1996 and 1995,  and the related  statements  of income,  changes in
shareholders' equity, and cash flows (including related notes and schedules,  if
any) for each of the three fiscal years ended December 31, 1996,  1995 and 1994,
as filed  by  Bryan in SEC  Documents,  (ii)  the  consolidated  balance  sheets
(including related notes and schedules, if any) of Bryan as of December 31, 1997
and 1996, and the related statements of income, changes in shareholders' equity,
and cash flows (including  related notes and schedules,  if any) for each of the
three fiscal years ended December 31, 1997, 1996 and 1995, as delivered by Bryan
to Savannah  prior to execution of this  Agreement,  and (iii) the  consolidated
balance  sheets of Bryan  (including  related notes and  schedules,  if any) and
related  statements of income,  changes in shareholders'  equity, and cash flows
(including  related  notes and  schedules,  if any)  included  in SEC  Documents
(including financial statements covering the periods in clause (ii) above) filed
with respect to periods ended subsequent to September 30, 1997.
                  "Bryan Material Adverse Effect" shall mean an event, change or
occurrence  which,  individually  or together  with any other  event,  change or
occurrence,  has a  material  adverse  impact  on (i)  the  financial  position,
business,  or results of  operations of Bryan and its  Subsidiaries,  taken as a
whole,  or (ii) the  ability  of Bryan to  perform  its  obligations  under this
Agreement or to consummate the Merger or the other transactions  contemplated by
this Agreement,  provided that "Material  Adverse Effect" shall not be deemed to
include  the  impact of (a)  changes  in  banking  and  similar  Laws of general
applicability or interpretations thereof by courts or governmental  authorities,
(b) changes in generally accepted accounting principles or regulatory accounting
principles  generally  applicable  to banks and  their  holding  companies,  (c)
actions and omissions of Bryan (or any of its Subsidiaries) taken with the prior
informed  written  Consent of  Savannah  in  contemplation  of the  transactions
contemplated  hereby,  and  (d) the  direct  effects  of  compliance  with  this
Agreement on the operating performance of Bryan,  including expenses incurred by
Bryan in consummating the transactions contemplated by this Agreement.
                  "Bryan  Subsidiaries"  shall mean the  Subsidiaries  of Bryan,
which shall  include  the Bryan  Subsidiaries  described  in Section 5.4 and any
corporation,  bank, savings  association,  or other  organization  acquired as a
Subsidiary  of Bryan in the  future  and  held as a  Subsidiary  by Bryan at the
Effective Time.
                  "Certificate  of Merger" shall mean the  Certificate of Merger
to be executed by Savannah and filed with the Secretary of State of the State of
Georgia relating to the Merger as contemplated by Section 1.1.
                  "Closing Date"shall mean the date on which the Closing occurs.
                  "Confidentiality    Agreement"   shall   mean   that   certain
Confidentiality Agreement, dated January 30, 1998, between Bryan and Savannah.
                  "Consent"  shall mean any  consent,  approval,  authorization,
clearance,  exemption,  waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
                  "Contract"   shall  mean  any   written  or  oral   agreement,
arrangement, authorization,  commitment, contract, indenture, instrument, lease,
obligation, plan, practice,  restriction,  understanding,  or undertaking of any
kind or character,  or other  document to which any Person is a party or that is
binding on any Person or its capital stock, Assets or business.
                  "Default"  shall mean (i) any breach or violation of,  default
under,  contravention of, or conflict with, any Contract, Law, Order, or Permit,
(ii) any  occurrence of any event that with the passage of time or the giving of
notice  or both  would  constitute  a breach or  violation  of,  default  under,
contravention  of, or conflict with, any Contract,  Law,  Order,  or Permit,  or
(iii) any  occurrence  of any event that with or without  the passage of time or
the giving of notice  would give rise to a right of any Person to  exercise  any
remedy or obtain any relief  under,  terminate or revoke,  suspend,  cancel,  or
modify or change the current  terms of, or  renegotiate,  or to  accelerate  the
maturity or performance  of, or to increase or impose any Liability  under,  any
Contract, Law, Order, or Permit.
                  "Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water,  ground  water,  land  surface,  or  subsurface  strata)  and  which  are
administered,  interpreted,  or  enforced  by the  United  States  Environmental
Protection  Agency and state and local  agencies  with  jurisdiction  over,  and
including  common law in respect of, pollution or protection of the environment,
including the Comprehensive  Environmental  Response  Compensation and Liability
Act, as amended, 42 U.S.C. 9601 et seq.  ("CERCLA"),  the Resource  Conservation
and Recovery Act, as amended,  42 U.S.C. 6901 et seq.  ("RCRA"),  and other Laws
relating to  emissions,  discharges,  releases,  or  threatened  releases of any
Hazardous  Material,  or  otherwise  relating  to the  manufacture,  processing,
distribution,  use, treatment,  storage, disposal, transport, or handling of any
Hazardous Material.

<PAGE>
                                      2-38


                  "Equity   Rights"   shall   mean  all   arrangements,   calls,
commitments,  Contracts, options, rights to subscribe to, scrip, understandings,
warrants,  or other binding obligations of any character whatsoever relating to,
or securities or rights  convertible  into or  exchangeable  for,  shares of the
capital  stock  of a Person  or by  which a  Person  is or may be bound to issue
additional shares of its capital stock or other Equity Rights.
                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
                  "Exhibits" 1 through 4, inclusive,  shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof,  and may be referred to
in this  Agreement  and any other related  instrument or document  without being
attached hereto.
                  "GAAP" shall mean generally  accepted  accounting  principles,
consistently applied during the periods involved.
                  "GBCC" shall mean the Georgia Business Corporation Code.
                  "Hazardous  Material" shall mean (i) any hazardous  substance,
hazardous material, hazardous waste, regulated substance, or toxic substance (as
those  terms are  defined  by any  applicable  Environmental  Laws) and (ii) any
chemicals, pollutants, contaminants,  petroleum, petroleum products, or oil (and
specifically   shall  include  asbestos   requiring   abatement,   removal,   or
encapsulation  pursuant to the requirements of governmental  authorities and any
polychlorinated biphenyls).
                  "Intellectual   Property"  shall  mean  copyrights,   patents,
trademarks,  service marks, service names, trade names,  applications  therefor,
technology  rights and  licenses,  computer  software  (including  any source or
object  codes  therefor  or  documentation  relating  thereto),  trade  secrets,
franchises, know-how, inventions, and other intellectual property rights.
                  "Internal  Revenue Code" shall mean the Internal  Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder.
                  "Joint Proxy Statement" shall mean the proxy statement used by
Bryan and Savannah to solicit the approval of their  respective  shareholders of
the  transactions  contemplated  by this  Agreement,  which  shall  include  the
prospectus of Savannah  relating to the issuance of the Savannah Common Stock to
holders of Bryan Common Stock.
                  "Knowledge"  as  used  with  respect  to a  Person  (including
references  to such Person  being aware of a particular  matter)  shall mean the
personal knowledge after due inquiry of the chairman, president, chief financial
officer,  chief  accounting  officer,  chief  operating  officer,  chief  credit
officer,  general  counsel,  any  assistant or deputy  general  counsel,  or any
senior,  executive or other vice  president of such Person and the  knowledge of
any such persons  obtained or which would have been  obtained  from a reasonable
investigation.
                  "Law"  shall  mean  any  code,  law  (including  common  law),
ordinance,  regulation,  reporting or licensing  requirement,  rule,  or statute
applicable to a Person or its Assets, Liabilities, or business,  including those
promulgated, interpreted or enforced by any Regulatory Authority.
                  "Liability"  shall  mean any  direct or  indirect,  primary or
secondary,  liability,  indebtedness,   obligation,  penalty,  cost  or  expense
(including costs of investigation,  collection and defense),  claim, deficiency,
guaranty or endorsement of or by any Person (other than  endorsements  of notes,
bills,  checks,  and drafts  presented for collection or deposit in the ordinary
course of  business)  of any type,  whether  accrued,  absolute  or  contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
                  "Lien" shall mean any conditional  sale agreement,  default of
title, easement, encroachment, encumbrance,  hypothecation,  infringement, lien,
mortgage, pledge, reservation,  restriction,  security interest, title retention
or other  security  arrangement,  or any adverse right or interest,  charge,  or
claim of any nature  whatsoever  of,  on, or with  respect  to any  property  or
property  interest,  other than (i) Liens for current property Taxes not yet due
and payable, (ii) for depository institution Subsidiaries of a Party, pledges to
secure  deposits and other Liens incurred in the ordinary  course of the banking
business,  and (iii) Liens which do not materially impair the use of or title to
the Assets subject to such Lien.
                  "Litigation"  shall  mean any  action,  arbitration,  cause of
action,  claim,   complaint,   criminal   prosecution,   governmental  or  other
examination  or  investigation,  hearing,  administrative  or  other  proceeding
relating to or affecting a Party, its business,  its Assets (including Contracts
related to it), or the  transactions  contemplated by this Agreement,  but shall
not include regular,  periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.

<PAGE>
                                      2-39


                  "Material" for purposes of this Agreement  shall be determined
in light of the facts and circumstances of the matter in question; provided that
any  specific   monetary   amount  stated  in  this  Agreement  shall  determine
materiality in that instance.
                  "Nasdaq National Market" shall mean the National Market System
of The Nasdaq Stock Market, Inc.
                  "Operating Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in which such
Party or Subsidiary  holds a security  interest or other interest  (including an
interest in a fiduciary capacity),  and, where required by the context, includes
the owner or operator of such property, but only with respect to such property.
                  "Order"  shall  mean any  administrative  decision  or  award,
decree, injunction,  judgment, order,  quasi-judicial decision or award, ruling,
or writ of any  federal,  state,  local or foreign or other  court,  arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
                  "Participation  Facility"  shall mean any facility or property
in which the Party in question or any of its  Subsidiaries  participates  in the
management  and,  where  required by the  context,  said term means the owner or
operator of such facility or property, but only with respect to such facility or
property.
                  "Party"  shall mean either  Bryan or Savannah,  and  "Parties"
shall mean both Bryan and Savannah.
                  "Permit"  shall mean any federal,  state,  local,  and foreign
governmental approval, authorization,  certificate, easement, filing, franchise,
license,  notice,  permit, or right to which any Person is a party or that is or
may be binding  upon or inure to the  benefit  of any Person or its  securities,
Assets, or business.
                  "Person" shall mean a natural person or any legal,  commercial
or  governmental  entity,  such as, but not limited to, a  corporation,  general
partnership,  joint venture,  limited  partnership,  limited liability  company,
trust, business association,  group acting in concert, or any person acting in a
representative capacity.
                  "Registration Statement" shall mean the Registration Statement
on  Form  S-4,  or  other  appropriate  form,  including  any  pre-effective  or
post-effective amendments or supplements thereto, filed with the SEC by Savannah
under the 1933 Act with  respect to the shares of  Savannah  Common  Stock to be
issued  to the  shareholders  of  Bryan  in  connection  with  the  transactions
contemplated by this Agreement.
                  "Regulatory  Authorities" shall mean,  collectively,  the SEC,
the Nasdaq  National  Market the Federal  Trade  Commission,  the United  States
Department of Justice, the Board of the Governors of the Federal Reserve System,
the Office of the  Comptroller of the Currency,  the Federal  Deposit  Insurance
Corporation,  the Department of Banking and Finance of the State of Georgia, and
all other federal,  state,  county,  local or other  governmental  or regulatory
agencies,      authorities     (including     self-regulatory      authorities),
instrumentalities,  commissions,  boards or bodies having  jurisdiction over the
Parties and their respective Subsidiaries.
                  "Representative"  shall mean any investment banker,  financial
advisor, attorney, accountant,  consultant, or other representative engaged by a
Person.
                  "Savannah  Common Stock" shall mean the $1.00 par value common
stock of Savannah.
                  "Savannah  Disclosure   Memorandum"  shall  mean  the  written
information  entitled  "The  Savannah  Bancorp,   Inc.  Disclosure   Memorandum"
delivered prior to the date of this Agreement to Bryan  describing in reasonable
detail the matters  contained  therein and, with respect to each disclosure made
therein,  specifically  referencing  each Section of this Agreement  under which
such disclosure is being made. Information disclosed with respect to one Section
shall  not be deemed to be  disclosed  for  purposes  of any other  Section  not
specifically referenced with respect thereto.
                  "Savannah Entities" shall mean, collectively, Savannah and all
Savannah Subsidiaries.
                  "Savannah   Financial   Statements"   shall   mean   (i)   the
consolidated  balance sheets (including related notes and schedules,  if any) of
Savannah as of December 31, 1996 and 1995, and the related statements of income,
changes in shareholders' equity, and cash flows (including

<PAGE>
                                      2-40


related  notes and  schedules,  if any) for each of the three fiscal years ended
December 31, 1996,  1995 and 1994, as filed by Savannah in SEC  Documents,  (ii)
the consolidated balance sheets (including related notes and schedules,  if any)
of Savannah as of December  31,  1997 and 1996,  and the related  statements  of
income, changes in shareholders' equity, and cash flows (including related notes
and  schedules,  if any) for each of the three fiscal  years ended  December 31,
1997,  1996 and 1995,  as  delivered  by Savannah to Bryan prior to execution of
this Agreement, and (iii) the consolidated balance sheets of Savannah (including
related notes and schedules,  if any) and related statements of income,  changes
in shareholders'  equity, and cash flows (including related notes and schedules,
if any) included in SEC Documents  (including  financial statements covering the
periods in clause (ii) above) filed with respect to periods ended  subsequent to
September 30, 1997.
                  "Savannah Material Adverse Effect" shall mean an event, change
or occurrence  which,  individually or together with any other event,  change or
occurrence,  has a  material  adverse  impact  on (i)  the  financial  position,
business, or results of operations of Savannah and its Subsidiaries,  taken as a
whole,  or (ii) the ability of Savannah  to perform its  obligations  under this
Agreement or to consummate the Merger or the other transactions  contemplated by
this Agreement,  provided that "Material  Adverse Effect" shall not be deemed to
include  the  impact of (a)  changes  in  banking  and  similar  Laws of general
applicability or interpretations thereof by courts or governmental  authorities,
(b) changes in generally accepted accounting principles or regulatory accounting
principles  generally  applicable  to banks and  their  holding  companies,  (c)
actions and  omissions of Savannah (or any of its  Subsidiaries)  taken with the
prior informed  written Consent of Bryan in  contemplation  of the  transactions
contemplated  hereby,  and  (d) the  direct  effects  of  compliance  with  this
Agreement on the operating performance of Savannah,  including expenses incurred
by Savannah in consummating the transactions contemplated by this Agreement.
                  "Savannah   Subsidiaries"   shall  mean  the  Subsidiaries  of
Savannah, which shall include the Savannah Subsidiaries described in Section 6.4
and any corporation,  bank, savings association,  or other organization acquired
as a Subsidiary  of Savannah in the future and held as a Subsidiary  by Savannah
at the Effective Time.
                  "SEC  Documents"  shall  mean  all  forms,  proxy  statements,
registration  statements,  reports,  schedules,  and other  documents  filed, or
required to be filed, by a Party or any of its Subsidiaries  with any Regulatory
Authority pursuant to the Securities Laws.
                  "Securities  Laws" shall mean the 1933 Act,  the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended,  the Trust  Indenture  Act of 1939,  as  amended,  and the rules and
regulations of any Regulatory Authority promulgated thereunder.
                  "Shareholders' Meetings" shall mean the respective meetings of
the  shareholders  of Bryan and  Savannah to be held  pursuant  to Section  8.1,
including any adjournment or adjournments thereof.
                  "Subsidiaries"    shall    mean   all   those    corporations,
associations,  or other business entities of which the entity in question either
(i) owns or controls 50% or more of the  outstanding  equity  securities  either
directly  or through an  unbroken  chain of  entities as to each of which 50% or
more of the outstanding equity securities is owned directly or indirectly by its
parent  (provided,  there  shall not be  included  any such  entity  the  equity
securities of which are owned or controlled  in a fiduciary  capacity),  (ii) in
the  case  of   partnerships,  serves  as  a  general partner, (iii) in the case
of a limited liability  company,  serves as a managing member, or (iv) otherwise
has the  ability to elect a majority  of the  directors,  trustees  or  managing
members thereof.
                  "Surviving  Corporation"  shall mean Savannah as the surviving
corporation resulting from the Merger.
                  "Tax  Return"  shall  mean  any  report,  return,  information
return,  or other  information  required to be supplied to a taxing authority in
connection  with Taxes,  including  any return of an  affiliated  or combined or
unitary group that includes a Party or its Subsidiaries.
                  "Tax" or "Taxes" shall mean any federal, state, county, local,
or foreign taxes, charges, fees, levies, imposts,  duties, or other assessments,
including income,  gross receipts,  excise,  employment,  sales, use,  transfer,
license, payroll,  franchise,  severance,  stamp, occupation,  windfall profits,
environmental,  federal highway use,  commercial rent,  customs duties,  capital
stock, paid-up capital, profits,  withholding,  Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum,  estimated, or other tax or
governmental fee of any kind  whatsoever,  imposes or required to be withheld by
the  United  States  or any  state,  county,  local  or  foreign  government  or
subdivision or agency thereof, including any interest,  penalties, and additions
imposed thereon or with respect thereto.


<PAGE>
                                      2-41

                  (b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:



Allowance                          Section 5.9
Bryan Benefit Plans                Section 5.15
Bryan Contracts                    Section 5.16
Bryan ERISA Plan                   Section 5.15
Bryan Options                      Section 3.6
Bryan Pension Plan                 Section 5.15
Bryan SEC Reports                  Section 5.5(a)
Bryan Stock Option Agreement       Section 1.4
Closing                            Section 1.2
Directors' Agreements              Section 5.23
Effective Time                     Section 1.3
ERISA Affiliate                    Section 5.15(b)
Exchange Agent                     Section 4.1
Exchange Ratio                     Section 3.1(c)
Maximum Amount                     Section 8.14
Merger                             Section 1.1
Savannah Benefit Plans             Section 6.15
Savannah Contracts                 Section 6.16
Savannah ERISA Plan                Section 6.15
Savannah Pension Plan              Section 6.15
Savannah SEC Reports               Section 6.5(a)
Savannah Stock Option Agreement    Section 1.4
Takeover Laws                      Section 5.21
Tax Opinion                        Section 9.1(h)


                  (c) Any  singular  term in this  Agreement  shall be deemed to
include  the  plural,  and any  plural  term the  singular.  Whenever  the words
"include,"  "includes" or "including" are used in this Agreement,  they shall be
deemed followed by the words "without limitation."

                  11.2     Expenses.

                  (a) Except as otherwise provided in this Section 11.2, each of
the Parties  shall bear and pay all direct costs and expenses  incurred by it or
on its  behalf  in  connection  with the  transactions  contemplated  hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses  of  its  own  financial  or  other  consultants,  investment  bankers,
accountants,  and  counsel,  except that each of the Parties  shall bear and pay
one-half  of the  filing  fees  payable  in  connection  with  the  Registration
Statement  and  the  Joint  Proxy  Statement  and  printing  costs  incurred  in
connection with the printing of the  Registration  Statement and the Joint Proxy
Statement.
                  (b) Notwithstanding the foregoing,

                  (i) if this  Agreement is terminated  by Savannah  pursuant to
any of Sections 10.1(b), 10.1(c), 10.1(d)(ii) (as relates to approval of Bryan's
shareholders)  or  10.1(f)  (but  only on the basis of the  failure  of Bryan to
satisfy any of the conditions enumerated in Section 9.2), or

                  (ii) if the  Merger  is not  consummated  as a  result  of the
failure of Bryan to satisfy any of the conditions set forth in Section 9.2,

then Bryan shall promptly pay Savannah all the out-of-pocket  costs and expenses
of Savannah,  including  costs of counsel,  investment  bankers,  actuaries  and
accountants up to but not exceeding an additional $100,000, excluding percentage
based fees payable to a consultant or broker retained by Savannah.

                           (c)      Notwithstanding the foregoing,

                  (i) if this  Agreement  is  terminated  by Bryan  pursuant  to
either of  Sections  10.1(b),  10.1(c),  10.1(d)(ii)  (as relates to approval of
Savannah's  shareholders),  or 10.1(f)  (but only on the basis of the failure of

<PAGE>
                                      2-42



Savannah to satisfy any of the conditions enumerated in Section 9.3), or

                  (ii) if the  Merger  is not  consummated  as a  result  of the
failure of Savannah to satisfy any of the conditions set forth in Section 9.3,

then Savannah shall promptly pay Bryan all the out-of-pocket  costs and expenses
of  Bryan,  including  costs  of  counsel,  investment  bankers,  actuaries  and
accountants up to but not exceeding an additional $100,000, excluding percentage
based fees payable to a consultant or broker retained by Bryan.

                  (d) In addition to the  foregoing,  if, after the date of this
Agreement and within twelve (12) months following

                           (i) any termination of this Agreement

                  (1) by Savannah pursuant to Sections 10.1(b), 10.1(c), 10.1(f)
(but only on the basis of the failure of Bryan to satisfy any of the  conditions
enumerated in Section 9.2), or

                  (2) by either  Party  pursuant  to Section  10.1(d)(ii)  (with
respect to approval of the shareholders of Bryan), or

                  (ii) failure to consummate the Merger by reason of any failure
of Bryan to satisfy  the  conditions  enumerated  in  Section  9.2 or in Section
9.1(a) (as such section relates to approval by the shareholders of Bryan),

any third-party shall acquire,  merge with, combine with, purchase a significant
amount of Assets  of, or engage  in any  other  business  combination  with,  or
purchase any equity  securities  involving an  acquisition of 20% or more of the
voting  stock of,  Bryan,  or enter into any binding  agreement to do any of the
foregoing (collectively,  a "Business Combination"),  such third-party that is a
party to the Business Combination shall pay to Savannah, prior to the earlier of
consummation of the Business Combination or execution of any letter of intent or
definitive agreement with Bryan relating to such Business Combination, an amount
in cash equal to the sum of

                  (x) the direct costs and expenses or portion thereof  referred
to in  subsection  (a) above  incurred by or on behalf of Savannah in connection
with the transactions contemplated by this Agreement, plus

                  (y) 5% of the aggregate fair market value of the consideration
received by the shareholders of Bryan in such Business Combination, less

                  (z) any amounts  previously paid by Bryan to Savannah pursuant
to subsection (b) of this Section 11.2,

which sum represents  additional  compensation for Savannah's loss as the result
of the transactions contemplated by this Agreement not being consummated. In the
event  such  third-party  shall  refuse to pay such  amounts  within ten days of
demand  therefor by Savannah,  the amounts  shall be an  obligation of Bryan and
shall be paid by Bryan promptly upon notice to Bryan by Savannah.

                  (e) In addition to the  foregoing,  if, after the date of this
Agreement and within twelve (12) months following

                           (i) any termination of this Agreement
                  (1) by Bryan pursuant to Sections  10.1(b),  10.1(c),  10.1(f)
(but  only on the  basis  of the  failure  of  Savannah  to  satisfy  any of the
conditions enumerated in Section 9.3), or

<PAGE>
                                      2-43


                  (2) by either  Party  pursuant  to Section  10.1(d)(ii)  (with
respect to approval of the shareholders of Savannah), or

                  (ii) failure to consummate the Merger by reason of any failure
of Savannah to satisfy the  conditions  enumerated  in Section 9.3 or in Section
9.1(a) (as such section relates to approval by the shareholders of Savannah),

any third-party shall acquire,  merge with, combine with, purchase a significant
amount of Assets  of, or engage  in any  other  business  combination  with,  or
purchase any equity  securities  involving an  acquisition of 20% or more of the
voting stock of, Savannah,  or enter into any binding agreement to do any of the
foregoing (collectively,  a "Business Combination"),  such third-party that is a
party to the Business  Combination  shall pay to Bryan,  prior to the earlier of
consummation of the Business Combination or execution of any letter of intent or
definitive  agreement with Savannah  relating to such Business  Combination,  an
amount in cash equal to the sum of

                  (x) the direct costs and expenses or portion thereof  referred
to in subsection (a) above incurred by or on behalf of Bryan in connection  with
the transactions contemplated by this Agreement, plus

                  (y) 5% of the aggregate fair market value of the consideration
received by the shareholders of Savannah in such Business Combination, less

                  (z) any amounts  previously paid by Savannah to Bryan pursuant
to subsection (c) of this Section 11.2,

which sum represents  additional  compensation for Bryan's loss as the result of
the transactions  contemplated by this Agreement not being  consummated.  In the
event  such  third-party  shall  refuse to pay such  amounts  within ten days of
demand  therefor by Bryan,  the amounts  shall be an  obligation of Savannah and
shall be paid by Savannah promptly upon notice to Savannah by Bryan.

                  (f) The  Parties  acknowledge  that the loss to  either  Party
resulting  from breach of this  Agreement by the other Party or other failure of
the  Merger to be  consummated  is not  susceptible  of ready  measurement  and,
therefore,  that the payments  provided in this Section 11.2 are intended by the
Parties to constitute  liquidated damages for any breach by a Party of the terms
of this Agreement, and not a penalty.

                  11.3  Brokers and  Finders.  Except for T.  Stephen  Johnson &
Associates,  Inc. as to Savannah,  each of the Parties  represents  and warrants
that neither it nor any of its officers, directors, employees, or Affiliates has
employed  any  broker or finder or  incurred  any  Liability  for any  financial
advisory  fees,  investment  bankers'  fees,  brokerage  fees,  commissions,  or
finders' fees in connection with this Agreement or the transactions contemplated
hereby.  In the event of a claim by any  broker or finder  based upon his or its
representing or being retained by or allegedly representing or being retained by
Bryan or by Savannah,  each of Bryan and Savannah, as the case may be, agrees to
indemnify and hold the other Party harmless of and from any Liability in respect
of any such claim.

                  11.4 Entire Agreement.  Except as otherwise expressly provided
herein,  this  Agreement  (including the documents and  instruments  referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions  contemplated  hereunder and supersedes all prior  arrangements  or
understandings  with respect  thereto,  written or oral  (except,  as to Section
8.6(b), for the Confidentiality Agreement).  Nothing in this Agreement expressed
or implied,  is  intended  to confer upon any Person,  other than the Parties or
their respective successors, any rights, remedies,  obligations,  or liabilities
under or by reason of this Agreement, other than as provided in Section 8.14.

                  11.5  Amendments.   To  the  extent  permitted  by  Law,  this
Agreement may be amended by a subsequent  writing  signed by each of the Parties
upon the approval of each of the Parties,  whether  before or after  shareholder

<PAGE>
                                      2-44



approval of this  Agreement  has been  obtained;  provided,  that after any such
approval by the holders of Bryan Common Stock,  there shall be made no amendment
that pursuant to Section 14-2-1106 of the GBCC requires further approval by such
shareholders  without the further  approval  of such  shareholders;  and further
provided,  that after any such approval by the holders of Savannah Common Stock,
the provisions of this Agreement relating to the manner or basis in which shares
of Bryan  Common  Stock will be  exchanged  for shares of Savannah  Common Stock
shall  not be  amended  after the  Savannah  Shareholders'  Meeting  in a manner
adverse to the holders of Savannah  Common Stock without any requisite  approval
of the holders of the issued and  outstanding  shares of Savannah  Common  Stock
entitled to vote thereon.

                  11.6     Waivers.

                  (a)  Prior  to or at  the  Effective  Time,  Savannah,  acting
through its Board of  Directors,  chief  executive  officer or other  authorized
officer,  shall have the right to waive any  Default in the  performance  of any
term of this Agreement by Bryan,  to waive or extend the time for the compliance
or fulfillment by Bryan of any and all of its obligations  under this Agreement,
and to  waive  any or all of the  conditions  precedent  to the  obligations  of
Savannah under this  Agreement,  except any condition  which,  if not satisfied,
would  result in the  violation  of any Law. No such waiver  shall be  effective
unless in writing signed by a duly authorized officer of Savannah.

                  (b) Prior to or at the Effective Time,  Bryan,  acting through
its Board of Directors,  chief executive  officer or other  authorized  officer,
shall have the right to waive any Default in the performance of any term of this
Agreement  by  Savannah,  to waive or  extend  the  time for the  compliance  or
fulfillment by Savannah of any and all of its obligations  under this Agreement,
and to waive any or all of the conditions  precedent to the obligations of Bryan
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of Bryan.

                  (c) The  failure  of any Party at any time or times to require
performance of any provision  hereof shall in no manner affect the right of such
Party  at a later  time to  enforce  the  same or any  other  provision  of this
Agreement.  No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances  shall be deemed to be or construed as a
further  or  continuing  waiver of such  condition  or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.

                  11.7  Assignment.  Except as  expressly  contemplated  hereby,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written  consent of the other Party.  Subject to the preceding
sentence,  this Agreement  will be binding upon,  inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.

                  11.8 Notices.  All notices or other  communications  which are
required or permitted  hereunder shall be in writing and sufficient if delivered
by hand, by facsimile  transmission,  by registered or certified  mail,  postage
pre-paid,  or by courier or overnight  carrier,  to the persons at the addresses
set forth  below (or at such other  address as may be provided  hereunder),  and
shall be deemed to have been delivered as of the date so delivered:

         Bryan:   Bryan Bancorp of Georgia, Inc.
9971 Ford Avenue
Richmond Hill, Georgia  31324
Telecopy Number:  (912) 756-4617

Attention: E. James Burnsed

         With a copy to:   Martin, Snow, Grant & Napier, LLP
240 Third Street
P.O. Box 1606
Macon, Georgia 31202
Telecopy Number:  (912) 743-4204

Attention: Edward J. Harrell

<PAGE>
                                      2-45




         Savannah:         The Savannah Bancorp, Inc.
25 Bull Street
Savannah, Georgia  31401
Telecopy Number:  (912) 651-4141

Attention:        Archie H. Davis,
                           President and Chief Executive Officer

     With copies to:   Ellis, Painter, Ratterree & Bart, LLP
Two East Bryan Street
Tenth Floor
Savannah, Georgia 31401
Telecopy Number:  (912) 233-2281

Attention:        J. Wiley Ellis

                  Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia  30309-3424
Telecopy Number:  (404) 881-4777

Attention: David E. Brown, Jr.

                  11.9 Governing  Law. This  Agreement  shall be governed by and
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws.

                  11.10  Counterparts.  This Agreement may be executed in two or
more counterparts,  each of which shall be deemed to be an original,  but all of
which together shall constitute one and the same instrument.

                  11.11 Captions;  Articles and Sections. The captions contained
in this  Agreement  are for  reference  purposes  only  and are not part of this
Agreement.  Unless otherwise indicated, all references to particular Articles or
Sections  shall mean and refer to the  referenced  Articles and Sections of this
Agreement.

                  11.12   Interpretations.   Neither  this   Agreement  nor  any
uncertainty  or ambiguity  herein  shall be  construed  or resolved  against any
party,  whether under any rule of  construction  or otherwise.  No party to this
Agreement shall be considered the draftsman.  The parties  acknowledge and agree
that this Agreement has been reviewed,  negotiated,  and accepted by all parties
and their  attorneys  and shall be construed  and  interpreted  according to the
ordinary  meaning of the words used so as fairly to accomplish  the purposes and
intentions of all parties hereto.

                  11.13 Enforcement of Agreement.  The Parties hereto agree that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  was not  performed  in  accordance  with  its  specific  terms or was
otherwise breached.  It is accordingly agreed that the Parties shall be entitled
to an injunction or  injunctions  to prevent  breaches of this  Agreement and to
enforce  specifically the terms and provisions hereof in any court of the United
States or any state  having  jurisdiction,  this being in  addition to any other
remedy to which they are entitled at law or in equity.

<PAGE>
                                      2-46



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

                  IN  WITNESS  WHEREOF,  each of the  Parties  has  caused  this
Agreement to be executed on its behalf by its duly authorized officers as of the
day and year first above written.

         THE SAVANNAH BANCORP, INC.


         By: /S/ ARCHIE H. DAVIS
         -----------------------

                       President


         BRYAN BANCORP OF GEORGIA, INC.


         By: /S/ E. JAMES BURNSED
         ------------------------

                       President




TABLE OF CONTENTS
Page
PARTIES                                                                        1
PREAMBLE                                                                       1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER                                   1
1.1               Merger                                                       1
1.2               Time and Place of Closing                                    2
1.3               Effective Time                                               2
1.4               Execution of Stock Option Agreements                         2
ARTICLE 2 - TERMS OF MERGER                                                    2
2.1               Charter                                                      2
2.2               Bylaws                                                       2
2.3               Directors and Officers                                       2
ARTICLE 3 - MANNER OF CONVERTING SHARES                                        3
3.1               Conversion of Shares                                         3
3.2               Anti-Dilution Provisions                                     3
3.3               Shares Held by Bryan or Savannah                             3
3.4               Dissenting Shareholders                                      4
3.5               Fractional Shares                                            4
3.6               Conversion of Stock Options                                  4
ARTICLE 4 - EXCHANGE OF SHARES                                                 5
4.1               Exchange Procedures                                          5
4.2               Rights of Former Bryan Shareholders                          6
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF BRYAN                            7
5.1               Organization, Standing, and Power                            7
5.2               Authority of Bryan; No Breach By Agreement                   7
5.3               Capital Stock                                                8
5.4               Bryan Subsidiaries                                           9
5.5               SEC Filings; Financial Statements                            9
5.6               Absence of Undisclosed Liabilities                          10
5.7               Absence of Certain Changes or Events                        10
5.8               Tax Matters                                                 10

<PAGE>
                                      2-47


5.9               Allowance for Possible Loan Losses                          12
5.10              Assets                                                      12
5.11              Intellectual Property                                       13
5.12              Environmental Matters                                       13
5.13              Compliance with Laws                                        14
5.14              Labor Relations                                             14
5.15              Employee Benefit Plans                                      15
5.16              Material Contracts                                          16
5.17              Legal Proceedings                                           17
5.18              Reports                                                     18
5.19              Statements True and Correct                                 18
5.20              Accounting, Tax and Regulatory Matters                      18
5.21              State Takeover Laws                                         18
5.22              Charter Provisions                                          19
5.23              Directors' Agreements                                       19
5.24              Board Recommendation                                        19
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF SAVANNAH                        19
6.1               Organization, Standing, and Power                           19
6.2               Authority; No Breach By Agreement                           20
6.3               Capital Stock                                               21
6.4               Savannah Subsidiaries                                       21
6.5               SEC Filings; Financial Statements                           22
6.6               Absence of Undisclosed Liabilities                          22
6.7               Absence of Certain Changes or Events                        23
6.8               Tax Matters                                                 23
6.9               Allowance for Possible Loan Losses                          24
6.10              Assets                                                      24
6.11              Intellectual Property                                       25
6.12              Environmental Matters                                       25
6.13              Compliance With Laws                                        26
6.14              Labor Relations                                             27
6.15              Employee Benefit Plans                                      27
6.16              Material Contracts                                          29
6.17              Legal Proceedings                                           30
6.18              Reports                                                     30
6.19              Statements True and Correct                                 30
6.20              Accounting, Tax and Regulatory Matters                      31
6.21              State Takeover Laws                                         31
6.22              Charter Provisions                                          31
6.23              Board Recommendation                                        31
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION                          32
7.1               Affirmative Covenants of Each Party                         32
7.2               Negative Covenants of Bryan                                 32
7.3               Negative Covenants of Savannah                              34
7.4               Adverse Changes in Condition                                36
7.5               Reports                                                     36
ARTICLE 8 - ADDITIONAL AGREEMENTS                                             37
8.1               Registration Statement;Proxy Statement;Shareholder Approval 37
8.2               Exchange Listing                                            37
8.3               Applications                                                38
8.4               Filings with State Offices                                  38
8.5               Agreement as to Efforts to Consummate                       38
8.6               Investigation and Confidentiality                           38
8.7               Press Releases                                              39
8.8               Certain Actions                                             39
8.9               Accounting and Tax Treatment                                39

<PAGE>
                                      2-48


8.10              State Takeover Laws                                         39
8.11              Charter Provisions                                          39
8.12              Agreements of Affiliates                                    40
8.13              Employee Benefits and Contracts                             40
8.14              Indemnification                                             40
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE                 42
9.1               Conditions to Obligations of Each Party                     42
9.2               Conditions to Obligations of Savannah                       44
9.3               Conditions to Obligations of Bryan                          44
ARTICLE 10 - TERMINATION                                                      45
10.1              Termination                                                 45
10.2              Effect of Termination                                       46
10.3              Non-Survival of Representations and Covenants               47
ARTICLE 11 - MISCELLANEOUS                                                    47
11.1              Definitions                                                 47
11.2              Expenses                                                    55
11.3              Brokers and Finders                                         58
11.4              Entire Agreement                                            58
11.5              Amendments                                                  58
11.6              Waivers                                                     59
11.7              Assignment                                                  59
11.8              Notices                                                     59
11.9              Governing Law                                               60
1.10    Counterparts                                                         60
11.11    Captions; Articles and Sections                                      60
11.12    Interpretations                                                      61
11.13    Enforcement of Agreement                                             61
11.14    Severability                                                         61
SIGNATURES                                                                    61


LIST OF EXHIBITS


Exhibit Number             Description

         1.       Form of Bryan Stock Option Agreement.  (SS 1.4).

         2.       Form of Savannah Stock Option Agreement.  (SS 1.4).

         3.       Form of Directors' Agreement.  (SS 5.23).

         4.       Form of agreement of affiliates of Bryan.  (SS 8.12, 9.2(d)).

         5.       Form of  Employment  Agreements  with E. James  Burnsed and
George Michael Odom, Jr.




Page: 2
[A&B1]Sections  1.4, 6.8 and 11.2(b)  through (d) of this  Agreement  illustrate
various  "lock-up"  or  "bust-up"  techniques,  including  a  "lock-up"  option,
"no-shop" covenant and termination provision,  and expense reimbursement.  These
may be thought of as a "Chinese  menu" and there should be no  implication  that
all (or any) of these should (or may prudently) be used on a single transaction.
This is an area that requires careful  consideration.  Where decision is made to
use a "lock-up"  provision,  current  interpretation of Delaware law requires an
express  "fiduciary  out"  for  directors  to  respond  to  alternative  offers,
including  (in the view of some) an express  right to terminate the Agreement to
go with another transaction. Termination in order to go with another transaction
may entitle AC to compensation. See Section 11.2(d).




- 3 -
AD980300.210



<PAGE>
                                      2-49


EXHIBIT 1

STOCK OPTION AGREEMENT


         THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of February  11,  1998,  by and between  Bryan  Bancorp of Georgia,  Inc.,  a
Georgia  corporation  ("Issuer"),  and The  Savannah  Bancorp,  Inc.,  a Georgia
corporation ("Grantee").

         WHEREAS,  Grantee and Issuer have entered  into that certain  Agreement
and Plan of Merger,  dated as of  February  11, 1998 (the  "Merger  Agreement"),
providing for,  among other things,  the merger of Issuer with and into Grantee,
with Grantee as the surviving entity; and

         WHEREAS,  as a condition and  inducement to Grantee's  execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has agreed,
to grant Grantee the Option (as defined below);

         NOW,  THEREFORE,  in consideration  of the respective  representations,
warranties,  covenants  and  agreements  set  forth  herein  and in  the  Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:

          1.  Defined  Terms.  Capitalized  terms which are used but not defined
herein shall have the meanings  ascribed to such terms in the Merger  Agreement.

          2. Grant of  Option.  Subject  to the terms and  conditions  set forth
herein,  Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase  up to 100,098  shares (as  adjusted as set forth  herein,  the "Option
Shares,"  which shall include the Option Shares before and after any transfer of
such Option Shares) of common stock,  $1.00 par value per share ("Issuer  Common
Stock"),  of Issuer at a purchase  price per Option Share (subject to adjustment
as set forth herein,  the "Purchase Price") equal to the product of 1.85 and the
closing  price per share of the common stock of Grantee on February 11, 1998, as
reported on Nasdaq.

          3. Exercise of Option.

                  (a)  Provided  that (i)  Grantee  or  Holder  (as  hereinafter
defined),  as applicable,  shall not be in material  breach of its agreements or
covenants  contained  in this  Agreement  or the Merger  Agreement,  and (ii) no
preliminary  or  permanent  injunction  or other order  against the  delivery of
shares  covered by the Option issued by any court of competent  jurisdiction  in
the United States shall be in effect,  Holder may exercise the Option,  in whole
or in part,  at any time and from time to time  following  the  occurrence  of a
Purchase  Event;  provided that the Option shall  terminate and be of no further
force and effect  upon the  earliest  to occur of (A) the  Effective  Time,  (B)
termination of the Merger  Agreement in accordance  with the terms thereof prior
to the  occurrence of a Purchase  Event or a Preliminary  Purchase  Event (other
than a  termination  of the  Merger  Agreement  by Grantee  pursuant  to Section
10.1(b)  (but  only if such  termination  was a result  of a  willful  breach by
Issuer) or Section  10.1(c) thereof or by Grantee and Issuer pursuant to Section
10.1(a)  thereof if Grantee  shall at that time have been  entitled to terminate
the Merger  Agreement  pursuant to Section 10.1(b) (but only if such termination
was a result of a willful breach by Issuer) or Section  10.1(c)  thereof (each a
"Default  Termination")),  (C) 12 months after a Default Termination  (provided,
that if,  within 12 months after such  termination  of the Merger  Agreement,  a
Purchase Event or a Preliminary Purchase Event shall occur, then notwithstanding
anything  to the  contrary  contained  herein  (including  clause  (D)  of  this
sentence),  this Option shall terminate 12 months after the first  occurrence of
such an event),  and (D) 12 months after any termination of the Merger Agreement
(other than a Default Termination)  following the occurrence of a Purchase Event
or a Preliminary Purchase Event;  provided further,  that any purchase of shares
upon exercise of the Option shall be subject to compliance  with applicable law.
The term  "Holder"  shall mean the holder or holders of the Option  from time to
time,  and which  initially  is the  Grantee.  The rights set forth in Section 8


<PAGE>
                                      2-50


shall terminate when the right to exercise the Option  terminates (other than as
a result of a complete exercise of the Option) as set forth herein.

                  (b) As  used  herein,  a  "Purchase  Event"  means  any of the
following events subsequent to the date of this Agreement:

                  (i) without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an intention to
authorize,  recommend or propose,  or entered into an agreement  with any person
(other than  Grantee or any  Subsidiary  of  Grantee)  to effect an  Acquisition
Transaction (as defined below). As used herein, the term Acquisition Transaction
shall mean (A) a merger,  consolidation or similar transaction  involving Issuer
or any of its  Subsidiaries  (other than  transactions  solely between  Issuer's
Subsidiaries),  (B) except as  permitted  pursuant  to Section 7.1 of the Merger
Agreement, the disposition,  by sale, lease, exchange or otherwise, of Assets of
Issuer or any of its Subsidiaries representing in either case 25% or more of the
consolidated assets of Issuer and its Subsidiaries, or (C) the issuance, sale or
other disposition of (including by way of merger, consolidation,  share exchange
or any similar  transaction)  securities  representing 25% or more of the voting
power  of  Issuer  or  any  of  its  Subsidiaries  (any  of  the  foregoing,  an
"Acquisition Transaction"); or

                  (ii) any  person  (other  than  Grantee or any  Subsidiary  of
Grantee)  shall have acquired  beneficial  ownership (as such term is defined in
Rule  13d-3  promulgated  under the  Exchange  Act) of or the  right to  acquire
beneficial  ownership  of, or any  "group"  (as such term is  defined  under the
Exchange Act), other than a group of which Grantee or any of its Subsidiaries of
Grantee is a member,  shall have been formed which  beneficially owns or has the
right to acquire  beneficial  ownership of, 25% or more of the  then-outstanding
shares of Issuer Common Stock.

                  (c) As used herein, a "Preliminary  Purchase Event"  means any
of the following events:

                  (i) any  person  (other  than  Grantee  or any  Subsidiary  of
Grantee)  shall have  commenced (as such term is defined in Rule 14d-2 under the
Exchange Act), or shall have filed a registration statement under the Securities
Act with respect to, a tender offer or exchange  offer to purchase any shares of
Issuer  Common Stock such that,  upon  consummation  of such offer,  such person
would own or control 25% or more of the then-outstanding shares of Issuer Common
Stock  (such an offer  being  referred  to  herein  as a  "Tender  Offer"  or an
"Exchange Offer," respectively); or

                  (ii)  the  holders  of  Issuer  Common  Stock  shall  not have
approved the Merger Agreement at the meeting of such  shareholders  held for the
purpose of voting on the Merger Agreement, such meeting shall not have been held
or shall have been canceled  prior to termination  of the Merger  Agreement,  or
Issuer's Board of Directors shall have withdrawn or modified in a manner adverse
to Grantee the recommendation of Issuer's Board of Directors with respect to the
Merger  Agreement,  in each case after any  person  (other  than  Grantee or any
Subsidiary of Grantee) shall have (A) made, or disclosed an intention to make, a
proposal to engage in an Acquisition  Transaction,  (B) commenced a Tender Offer
or filed a  registration  statement  under the Securities Act with respect to an
Exchange  Offer,  or (C) filed an  application  (or given a notice),  whether in
draft or final form, under any federal or state statute or regulation (including
a notice  filed  under  the HSR  Act)  seeking  the  Consent  to an  Acquisition
Transaction  from any federal or state  governmental or regulatory  authority or
agency.

As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.

                  (d) In the event  Holder  wishes to exercise  the  Option,  it
shall send to Issuer a written  notice (the date of which being herein  referred
to as the "Notice  Date")  specifying  (i) the total number of Option  Shares it
intends to  purchase  pursuant  to such  exercise  and (ii) a place and date not
earlier than three business days nor later than 15 business days from the Notice
Date for the closing (the "Closing") of such purchase (the "Closing  Date").  If
prior Consent of any governmental or regulatory  agency or authority is required

<PAGE>
                                      2-51


in connection  with such  purchase,  Issuer shall  cooperate  with Holder in the
filing of the required  notice or application for such Consent and the obtaining
of such Consent and the Closing  shall occur  immediately  following  receipt of
such Consents (and expiration of any mandatory waiting periods).

                  (e)  Notwithstanding  any other provision of this Agreement to
the contrary, in no event shall:

                  (i) Holder's  (taking into  account all other  Holders)  Total
Profit (as defined below) exceed  $2,000,000  and, if it otherwise  would exceed
such amount, Holder, at its sole election, shall either (A) reduce the number of
shares of Issuer Common Stock  subject to the Option,  (B) deliver to Issuer for
cancellation without consideration Option Shares previously purchased by Holder,
(C) pay  cash  to  Issuer,  or (D) any  combination  of the  foregoing,  so that
Holder's actually realized Total Profit (together with the Total Profit realized
by all other Holders) shall not exceed  $2,000,000 after taking into account the
foregoing actions; and

                  (ii) the Option be exercised  for a number of shares of Issuer
Common Stock as would,  as of the date of exercise,  result in Holder's  (taking
into account all other Holders) Notional Total Profit (as defined below) of more
than $2,000,000;  provided,  that nothing in this clause (ii) shall restrict any
exercise of the Option permitted hereby on any subsequent date.

         As used in this  Agreement,  the term  "Total  Profit"  shall  mean the
aggregate sum (prior to the payment of taxes) of the  following:  (i) the amount
received by Holder pursuant to Issuer's repurchase of the Option (or any portion
thereof)  pursuant to Section 8; (ii) (x) the amount received by Holder pursuant
to Issuer's repurchase of Option Shares pursuant to Section 8, less (y) Holder's
purchase price for such Option Shares;  (iii) (x) the net cash amounts  received
by Holder  pursuant to the sale of Option Shares (or any other  securities  into
which such Option Shares shall be converted or  exchanged)  to any  unaffiliated
person,  less (y) Holder's  purchase price of such Option  Shares;  and (iv) any
amounts  received  by Grantee  on the  transfer  of the  Option (or any  portion
thereof) to any unaffiliated person.

         As used in this  Agreement,  the  term  "Notional  Total  Profit"  with
respect to any number of shares of Issuer  Common  Stock as to which  Holder may
propose to exercise the Option shall be the Total  Profit  determined  as of the
date of such proposed exercise,  assuming that the Option were exercised on such
date for such number of shares and assuming that such shares,  together with all
other Option Shares held by Holder and its affiliates as of such date, were sold
for cash at the closing sale price per share of Issuer Common Stock as quoted on
the Nasdaq National Market (or, if Issuer Common Stock is not then quoted on the
Nasdaq  National  Market,  the  highest  bid  price  per  share as quoted on the
principal trading market or securities  exchange on which such shares are traded
as reported by a recognized source chosen by Holder) as of the close of business
on the preceding trading day (less customary brokerage commissions).

         The  provisions  of this  Section  3(e) shall  apply to any  Substitute
Option (as defined below).

         4.       Payment and Delivery of Certificates.

                  (a) On each Closing Date,  Holder shall (i) pay to Issuer,  in
immediately  available  funds by wire  transfer to a bank account  designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer  specified in Section 12(f)
hereof.

                  (b) At each  Closing,  simultaneously  with  the  delivery  of
immediately  available  funds and  surrender  of this  Agreement  as provided in
Section  4(a),  (i)  Issuer  shall  deliver  to  Holder  (A)  a  certificate  or
certificates  representing  the Option  Shares to be purchased at such  Closing,
which Option  Shares shall be free and clear of all liens,  claims,  charges and
encumbrances  of any kind whatsoever and subject to no pre-emptive  rights,  and
(B) if the Option is exercised in part only, an executed new agreement  with the
same terms as this Agreement evidencing the right to purchase the balance of the
shares of Issuer  Common  Stock  purchasable  hereunder,  and (ii) Holder  shall

<PAGE>
                                      2-52


deliver  to  Issuer a letter  agreeing  that  Holder  shall not offer to sell or
otherwise  dispose of such Option Shares in violation of applicable  federal and
state law or of the provisions of this Agreement.

                  (c) In  addition  to any  other  legend  that is  required  by
applicable  law,  certificates  for the Option Shares  delivered at each Closing
shall be endorsed with a restrictive  legend which shall read  substantially  as
follows:

THE  TRANSFER  OF THE  STOCK  REPRESENTED  BY THIS  CERTIFICATE  IS  SUBJECT  TO
RESTRICTIONS  ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION  AGREEMENT  DATED AS OF FEBRUARY __, 1998. A COPY
OF SUCH  AGREEMENT  WILL BE PROVIDED TO THE HOLDER  HEREOF  WITHOUT  CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.

It is  understood  and agreed that the above legend shall be removed by delivery
of substitute  certificate(s) without such legend if Holder shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably  satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act.

         5.  Representations and Warranties of Issuer.  Issuer hereby represents
and warrants to Grantee as follows:

         (a) Issuer has all  requisite  corporate  power and  authority to enter
into this  Agreement  and,  subject to any  approvals  referred  to  herein,  to
consummate the transactions  contemplated  hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly  authorized by all necessary  corporate  action on the part of Issuer.
This Agreement has been duly executed and delivered by Issuer.

         (b)  Issuer  has  taken all  necessary  corporate  and other  action to
authorize and reserve and to permit it to issue, and, at all times from the date
hereof until the  obligation to deliver Issuer Common Stock upon the exercise of
the Option  terminates,  will have reserved for  issuance,  upon exercise of the
Option,  the number of shares of Issuer  Common  Stock  necessary  for Holder to
exercise  the Option,  and Issuer will take all  necessary  corporate  action to
authorize and reserve for issuance all additional  shares of Issuer Common Stock
or other  securities  which may be issued pursuant to Section 7 upon exercise of
the Option.  The shares of Issuer Common Stock to be issued upon due exercise of
the Option,  including  all  additional  shares of Issuer  Common Stock or other
securities which may be issuable  pursuant to Section 7, upon issuance  pursuant
hereto,  shall be duly and validly issued,  fully paid, and  nonassessable,  and
shall  be  delivered  free  and  clear  of  all  liens,  claims,   charges,  and
encumbrances of any kind or nature  whatsoever,  including any preemptive rights
of any stockholder of Issuer.

         6.  Representations and Warrants of Grantee.  Grantee hereby represents
and warrants to Issuer that:

         (a) Grantee has all  requisite  corporate  power and authority to enter
into this  Agreement  and,  subject to any  approvals  or  consents  referred to
herein, to consummate the transactions  contemplated  hereby.  The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary  corporate  action on the part
of Grantee. This Agreement has been duly executed and delivered by Grantee.

         (b) This Option is not being, and any Option Shares or other securities
acquired by Grantee  upon  exercise of the Option will not be,  acquired  with a
view to the public distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration under
the Securities Laws.

         7.       Adjustment upon Changes in Capitalization, etc.

                  (a) In the  event of any  change  in  Issuer  Common  Stock by

<PAGE>
                                      2-53


reason  of  a  stock   dividend,   stock  split,   split-up,   recapitalization,
combination,  exchange of shares or similar transaction,  the type and number of
shares or securities  subject to the Option,  and the Purchase  Price  therefor,
shall be  adjusted  appropriately,  and  proper  provision  shall be made in the
agreements  governing  such  transaction  so that  Holder  shall  receive,  upon
exercise of the Option,  the number and class of shares or other  securities  or
property  that Holder would have  received in respect of Issuer  Common Stock if
the Option had been  exercised  immediately  prior to such event,  or the record
date therefor,  as applicable.  If any additional  shares of Issuer Common Stock
are issued  after the date of this  Agreement  (other than  pursuant to an event
described in the first sentence of this Section  7(a)),  the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so that,  after such
issuance,  it, together with any shares of Issuer Common Stock previously issued
pursuant  hereto,  equals  19.9% of the number of shares of Issuer  Common Stock
then issued and  outstanding,  without giving effect to any shares subject to or
issued pursuant to the Option.

                  (b) In the event that Issuer  shall  enter into an  agreement:
(i) to consolidate  with or merge into any person,  other than Grantee or one of
its  Subsidiaries,  and shall not be the continuing or surviving  corporation of
such consolidation or merger;  (ii) to permit any person,  other than Grantee or
one of its Subsidiaries, to merge into Issuer and Issuer shall be the continuing
or  surviving  corporation,  but,  in  connection  with  such  merger,  the then
outstanding shares of Issuer Common Stock shall be changed into or exchanged for
stock or other  securities  of Issuer  or any other  person or cash or any other
property or the outstanding  shares of Issuer Common Stock  immediately prior to
such merger shall after such merger  represent less than 50% of the  outstanding
shares  and  share  equivalents  of the  merged  company;  or  (iii)  to sell or
otherwise  transfer all or substantially all of its Assets to any person,  other
than  Grantee  or one of its  Subsidiaries,  then,  and in each such  case,  the
agreement  governing such transaction  shall make proper  provisions so that the
Option shall,  upon the  consummation of any such transaction and upon the terms
and conditions set forth herein,  be converted into, or exchanged for, an option
(the  "Substitute  Option"),  at the  election  of  Holder,  of  either  (x) the
Acquiring  Corporation  (as defined  below),  (y) any person that  controls  the
Acquiring Corporation,  or (z) in the case of a merger described in clause (ii),
the Issuer (in each case,  such  person  being  referred  to as the  "Substitute
Option Issuer").

                  (c) The  Substitute  Option  shall  have the same terms as the
Option,  provided that, if the terms of the Substitute Option cannot,  for legal
reasons,  be the same as the Option,  such terms shall be as similar as possible
and in no event less advantageous to Holder.  The Substitute Option Issuer shall
also  enter  into an  agreement  with each  Holder of the  Substitute  Option in
substantially the same form as this Agreement,  which shall be applicable to the
Substitute Option.

                  (d) The Substitute Option shall be exercisable for such number
of shares of the Substitute Common Stock (as hereinafter defined) as is equal to
the Assigned Value (as hereinafter  defined)  multiplied by the number of shares
of the Issuer  Common  Stock for which the Option was  theretofore  exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of the
Substitute  Option per share of the  Substitute  Common  Stock (the  "Substitute
Purchase  Price")  shall then be equal to the  Purchase  Price  multiplied  by a
fraction  in which the  numerator  is the number of shares of the Issuer  Common
Stock for which the Option was  theretofore  exercisable  and the denominator is
the number of shares for which the Substitute Option is exercisable.

                  (e) The following terms have the meanings indicated:

                  (i) "Acquiring  Corporation"  shall mean (x) the continuing or
surviving  corporation of a  consolidation  or merger with Issuer (if other than
Issuer),  (y) Issuer in a merger in which Issuer is the  continuing or surviving
person,  and (z) the transferee of all or any  substantial  part of the Issuer's
assets (or the Assets of its Subsidiaries).

                  (ii)  "Substitute  Common  Stock"  shall mean the common stock
having the greatest  voting rights to be issued by the Substitute  Option Issuer
upon exercise of the Substitute Option.

                  (iii) "Assigned Value" shall mean the highest of (x) the price

<PAGE>
                                      2-54


per share of the Issuer  Common Stock at which a Tender Offer or Exchange  Offer
therefor has been made by any person  (other than Grantee or any  Subsidiary  of
Grantee),  (y) the price per share of the Issuer  Common Stock to be paid by any
person  (other  than  Grantee  or any  Subsidiary  of  Grantee)  pursuant  to an
agreement  with  Issuer,  and (z) the highest  closing  sales price per share of
Issuer  Common Stock quoted on the Nasdaq  National  Market (or if Issuer Common
Stock is not quoted on the Nasdaq  National  Market,  the  highest bid price per
share  on any day as  quoted  on the  principal  trading  market  or  securities
exchange  on which such shares are traded as  reported  by a  recognized  source
chosen  by  Holder)  within  the  six-month  period  immediately  preceding  the
agreement;  provided,  that in the event of a sale of less than all of  Issuer's
assets,  the Assigned  Value shall be the sum of the price paid in such sale for
such assets and the current  market value of the  remaining  assets of Issuer as
determined by a nationally recognized investment banking firm selected by Holder
(or by a majority  in  interest  of the  Holders if there shall be more than one
Holder (a  "Holder  Majority")),  divided  by the number of shares of the Issuer
Common Stock outstanding at the time of such sale. In the event that an exchange
offer is made for the Issuer  Common Stock or an agreement is entered into for a
merger or consolidation  involving  consideration  other than cash, the value of
the  securities or other  property  issuable or  deliverable in exchange for the
Issuer Common Stock shall be determined  by a nationally  recognized  investment
banking firm mutually selected by Holder and Issuer (or if applicable, Acquiring
Corporation),  provided  that if a mutual  selection  cannot  be made as to such
investment banking firm, it shall be selected by Holder. (If there shall be more
than one Holder, any such selection shall be made by a Holder Majority.)

                  (iv) "Average Price" shall mean the average closing price of a
share of the Substitute Common Stock for the one year immediately  preceding the
consolidation,  merger  or sale in  question,  but in no event  higher  than the
closing price of the shares of the Substitute  Common Stock on the day preceding
such consolidation, merger or sale; provided that if Issuer is the issuer of the
Substitute  Option,  the Average Price shall be computed with respect to a share
of common  stock  issued by Issuer,  the person  merging  into  Issuer or by any
company which  controls or is controlled  by such merger  person,  as Holder may
elect.

                  (f) In no event  pursuant to any of the  foregoing  paragraphs
shall the Substitute  Option be exercisable for more than 19.9% of the aggregate
of the shares of the Substitute  Common Stock  outstanding  prior to exercise of
the  Substitute  Option.  In the  event  that  the  Substitute  Option  would be
exercisable  for more than 19.9% of the  aggregate  of the shares of  Substitute
Common Stock but for this clause (f), the Substitute  Option Issuer shall make a
cash  payment to Holder  equal to the excess of (i) the value of the  Substitute
Option  without giving effect to the limitation in this clause (f) over (ii) the
value of the  Substitute  Option after giving  effect to the  limitation in this
clause  (f).  This  difference  in value  shall be  determined  by a  nationally
recognized investment banking firm selected by Holder (or a Holder Majority).

                  (g) Issuer shall not enter into any  transaction  described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer  hereunder  and take all other  actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation,  any action that may be necessary  so that the shares of  Substitute
Common Stock are in no way  distinguishable  from or have lesser  economic value
than other shares of common stock issued by the Substitute Option Issuer).

                  (h) The  provisions of Sections 8, 9 and 10 shall apply,  with
appropriate  adjustments,  to  any  securities  for  which  the  Option  becomes
exercisable  pursuant to this Section 7 and, as  applicable,  references in such
sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock" shall
be deemed to be references to "Substitute Option Issuer,"  "Substitute  Option,"
"Substitute Purchase Price" and "Substitute Common Stock," respectively.

         8.       Repurchase at the Option of Holder.

                  (a) Subject to Section  3(e) and the last  sentence of Section
3(a), at the request of Holder at any time commencing upon the first  occurrence

<PAGE>
                                      2-55


of a Purchase Event and ending 12 months  immediately  thereafter,  Issuer shall
repurchase  from  Holder  the  Option  and all  shares  of Issuer  Common  Stock
purchased  by Holder  pursuant  hereto  with  respect to which  Holder  then has
beneficial  ownership.  The date on which Holder exercises its rights under this
Section 8 is referred to as the "Request Date." Such  repurchase  shall be at an
aggregate price (the "Section 8 Repurchase Consideration") equal to the sum of:

                  (i) the aggregate Purchase Price paid by Holder for any shares
of Issuer Common Stock acquired by Holder pursuant to the Option with respect to
which Holder then has beneficial ownership;

                  (ii) the  excess,  if any,  of (x) the  Applicable  Price  (as
defined below) for each share of Issuer Common Stock over (y) the Purchase Price
(subject  to  adjustment  pursuant to Section  7),  multiplied  by the number of
shares of Issuer  Common  Stock  with  respect  to which the Option has not been
exercised; and

                  (iii) the  excess,  if any, of the  Applicable  Price over the
Purchase  Price  (subject to adjustment  pursuant to Section 7) paid (or, in the
case of Option  Shares with respect to which the Option has been  exercised  but
the Closing Date has not  occurred,  payable) by Holder for each share of Issuer
Common  Stock  with  respect to which the  Option  has been  exercised  and with
respect to which Holder then has beneficial ownership,  multiplied by the number
of such shares.

                  (b) If Holder  exercises  its  rights  under  this  Section 8,
Issuer shall, within ten business days after the Request Date, pay the Section 8
Repurchase   Consideration  to  Holder  in  immediately   available  funds,  and
contemporaneously  with such payment Holder shall surrender to Issuer the Option
and the  certificates  evidencing  the shares of Issuer  Common Stock  purchased
thereunder  with  respect to which  Holder then has  beneficial  ownership,  and
Holder shall  warrant that it has sole record and  beneficial  ownership of such
shares and that the same are then free and clear of all liens,  claims,  charges
and encumbrances of any kind whatsoever.  Notwithstanding the foregoing,  to the
extent that prior  notification to or Consent of any  governmental or regulatory
agency or  authority  is required in  connection  with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for  repurchase  pursuant to Section 8, in whole or
in part, or to require that Issuer deliver from time to time that portion of the
Section 8 Repurchase Consideration that it is not then so prohibited from paying
and  promptly  file  the  required   notice  or  application   for  Consent  and
expeditiously process the same (and each party shall cooperate with the other in
the  filing of any such  notice or  application  and the  obtaining  of any such
Consent).  If any governmental or regulatory agency or authority  disapproves of
any part of Issuer's  proposed  repurchase  pursuant  to this  Section 8, Issuer
shall  promptly  give  notice of such fact to  Holder.  If any  governmental  or
regulatory  agency or  authority  prohibits  the  repurchase  in part but not in
whole, then Holder shall have the right (i) to revoke the repurchase  request or
(ii) to the extent permitted by such agency or authority,  determine whether the
repurchase should apply to the Option and/or Option Shares and to what extent to
each, and Holder shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the Request Date
less the sum of the  number of shares  covered by the Option in respect of which
payment  has been made  pursuant  to Section  8(a)(ii)  and the number of shares
covered by the portion of the Option (if any) that has been repurchased.  Holder
shall notify Issuer of its  determination  under the preceding  sentence  within
five business days of receipt of notice of disapproval of the repurchase.

                  (c) For purposes of this  Agreement,  the  "Applicable  Price"
means the highest of (i) the highest price per share of Issuer Common Stock paid
for any such share by the person or groups  described in Section  8(d)(i),  (ii)
the price per share of Issuer Common Stock  received by holders of Issuer Common
Stock in connection  with any merger or other business  combination  transaction
described  in Section  7(b)(i),  7(b)(ii)  or  7(b)(iii),  or (iii) the  highest
closing  sales  price per  share of Issuer  Common  Stock  quoted on the  Nasdaq
National  Market (or if Issuer Common Stock is not quoted on the Nasdaq National
Market,  the  highest  bid price per  share as quoted on the  principal  trading
market or  securities  exchange on which such shares are traded as reported by a
recognized  source chosen by Holder)  during the 60 business days  preceding the

<PAGE>
                                      2-56


Request Date; provided, however, that in the event of a sale of less than all of
Issuer's Assets, the Applicable Price shall be the sum of the price paid in such
sale for such assets and the current  market  value of the  remaining  assets of
Issuer as determined by an independent  nationally recognized investment banking
firm selected by Holder and reasonably acceptable to Issuer (which determination
shall be conclusive for all purposes of this  Agreement),  divided by the number
of shares of the Issuer  Common Stock  outstanding  at the time of such sale. If
the  consideration  to be offered,  paid or  received  pursuant to either of the
foregoing  clauses  (i) or (ii) shall be other  than in cash,  the value of such
consideration  shall be  determined in good faith by an  independent  nationally
recognized  investment banking firm selected by Holder and reasonably acceptable
to Issuer,  which  determination  shall be  conclusive  for all purposes of this
Agreement.

         9.       Registration Rights.

                  (a)  Following  termination  of the Merger  Agreement,  Issuer
shall,  subject to the conditions of subparagraph (c) below, if requested by any
Holder,  including Grantee and any permitted transferee  ("Selling Holder"),  as
expeditiously  as possible  prepare and file a registration  statement under the
Securities Laws if necessary in order to permit the sale or other disposition of
any or all  shares of Issuer  Common  Stock or other  securities  that have been
acquired  by or are  issuable to Selling  Holder upon  exercise of the Option in
accordance  with the  intended  method  of sale or other  disposition  stated by
Holder in such request,  including,  without limitation,  a "shelf" registration
statement  under Rule 415 under the Securities  Act or any successor  provision,
and Issuer shall use its best efforts to qualify such shares or other securities
for sale under any applicable state securities laws.

                  (b) If Issuer at any time  after the  exercise  of the  Option
proposes to register any shares of Issuer Common Stock under the Securities Laws
in connection with an underwritten  public offering of such Issuer Common Stock,
Issuer will  promptly  give written  notice to Holder of its  intention to do so
and,  upon the written  request of Holder given within 30 days after  receipt of
any such  notice  (which  request  shall  specify the number of shares of Issuer
Common Stock  intended to be included in such  underwritten  public  offering by
Selling Holder),  Issuer will cause all such shares,  the holders of which shall
have  requested  participation  in such  registration,  to be so registered  and
included in such underwritten public offering;  provided,  that Issuer may elect
to not cause any such shares to be so registered (i) if the underwriters in good
faith object for valid business  reasons,  or (ii) in the case of a registration
solely to implement a dividend reinvestment or similar plan, an employee benefit
plan  or  a  registration  filed  on  Form  S-4  or  any  successor  form,  or a
registration  filed on a form which does not permit  registrations  of  resales;
provided,  further,  that such election  pursuant to clause (i) may only be made
two times.  If some but not all the shares of Issuer Common Stock,  with respect
to which Issuer shall have received  requests for registration  pursuant to this
subparagraph  (b), shall be excluded from such  registration,  Issuer shall make
appropriate  allocation of shares to be registered among Selling Holders and any
other person  (other than Issuer or any person  exercising  demand  registration
rights  in  connection  with such  registration)  who or which is  permitted  to
register   their  shares  of  Issuer  Common  Stock  in  connection   with  such
registration  pro rata in the proportion that the number of shares  requested to
be  registered  by each  Selling  Holder  bears to the  total  number  of shares
requested to be  registered  by all persons then  desiring to have Issuer Common
Stock registered for sale.

                  (c)  Issuer  shall use all  reasonable  efforts  to cause each
registration statement referred to in subparagraph (a) above to become effective
and to obtain  all  consents  or  waivers of other  parties  which are  required
therefor  and to keep such  registration  statement  effective,  provided,  that
Issuer  may delay  any  registration  of  Option  Shares  required  pursuant  to
subparagraph  (a) above for a period not exceeding 90 days provided Issuer shall
in good faith determine that any such  registration  would  adversely  affect an
offering or  contemplated  offering of other  securities  by Issuer,  and Issuer
shall not be  required to  register  Option  Shares  under the  Securities  Laws
pursuant to subparagraph (a) above:

                  (i) prior to the  earliest  of (a)  termination  of the Merger
Agreement pursuant to Section 10.1 thereof,  (b) failure to obtain the requisite
stockholder approval pursuant to Section 9.1(a) of the Merger Agreement, and (c)
a Purchase Event or a Preliminary Purchase Event;

                  (ii)     on more than two occasions;

<PAGE>
                                      2-57


                  (iii) more than once during any calendar year;

                  (iv) within 90 days after the effective date of a registration
referred to in  subparagraph  (b) above  pursuant  to which the Selling  Holders
concerned  were  afforded  the  opportunity  to register  such shares  under the
Securities Laws and such shares were registered as requested; and

                  (v)  unless a request  therefor  is made to Issuer by  Selling
Holders  holding at least 25% or more of the  aggregate  number of Option Shares
then outstanding.

                       In  addition  to  the  foregoing,  Issuer  shall  not  be
required to maintain the  effectiveness of any registration  statement after the
expiration  of  nine  months  from  the  effective  date  of  such  registration
statement. Issuer shall use all reasonable efforts to make any filings, and take
all steps, under all applicable state securities laws to the extent necessary to
permit the sale or other  disposition  of the  Option  Shares so  registered  in
accordance with the intended method of distribution  for such shares,  provided,
that Issuer shall not be required to consent to general  jurisdiction or qualify
to do business in any state where it is not otherwise  required to so consent to
such jurisdiction or to so qualify to do business.

                  (d) Except where applicable state law prohibits such payments,
Issuer will pay all expenses  (including without  limitation  registration fees,
qualification  fees, blue sky fees and xpenses  (including the fees and expenses
of counsel),  accounting expenses,  legal expenses including the reasonable fees
and expenses of one counsel to the Selling Holders, printing expenses,  expenses
of  underwriters,  excluding  discounts and commissions but including  liability
insurance  if  Issuer  so  desires  or the  underwriters  so  require,  and  the
reasonable  fees and expenses of any  necessary  special  experts) in connection
with each registration  pursuant to subparagraph (a) or (b) above (including the
related  offerings and sales by Selling  Holders) and all other  qualifications,
notifications  or  exemptions   pursuant  to  subparagraph  (a)  or  (b)  above.
Underwriting  discounts  and  commissions  relating to Option  Shares,  fees and
disbursements of counsel to the Selling Holders and any other expenses  incurred
by such Selling Holders in connection with any such registration  shall be borne
by such Selling Holders.

                  (e) In connection with any registration under subparagraph (a)
or (b) above Issuer hereby indemnifies the Selling Holders, and each underwriter
thereof,  including each person, if any, who controls such holder or underwriter
within the meaning of Section 15 of the  Securities  Act,  against all expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged untrue,
statement  of a  material  fact  contained  in  any  registration  statement  or
prospectus or  notification  or offering  circular  (including any amendments or
supplements thereto) or any preliminary  prospectus,  or caused by any omission,
or alleged  omission,  to state  therein a material  fact  required to be stated
therein or  necessary  to make the  statements  therein not  misleading,  except
insofar  as such  expenses,  losses,  claims,  damages  or  liabilities  of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration  statement or prospectus or
notification  or offering  circular  (including  any  amendments or  supplements
thereto) in reliance  upon and in  conformity  with,  information  furnished  in
writing to Issuer by such  indemnified  party  expressly  for use  therein,  and
Issuer and each  officer,  director  and  controlling  person of Issuer shall be
indemnified by such Selling Holder, or by such underwriter,  as the case may be,
for all such expenses,  losses,  claims,  damages and liabilities  caused by any
untrue,  or alleged untrue,  statement,  that was included by Issuer in any such
registration  statement  or  prospectus  or  notification  or offering  circular
(including  any  amendments or  supplements  thereto) in reliance  upon,  and in
conformity  with,  information  furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.

                       Promptly upon receipt by a party  indemnified  under this
subparagraph  (e) of notice  of the  commencement  of any  action  against  such
indemnified  party in respect of which indemnity or reimbursement  may be sought
against any  indemnifying  party under this  subparagraph  (e), such indemnified
party shall notify the indemnifying party in writing of the commencement of such
action, but the failure so to notify the indemnifying party shall not relieve it

<PAGE>
                                      2-58


of any liability which it may otherwise have to any indemnified party under this
subparagraph  (e). In case notice of  commencement  of any such action  shall be
given to the indemnifying party as above provided,  the indemnifying party shall
be entitled to participate  in and, to the extent it may wish,  jointly with any
other  indemnifying  party  similarly  notified,  to assume the  defense of such
action at its own expense,  with counsel chosen by it and  satisfactory  to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof,  but the fees
and  expenses of such counsel  (other than  reasonable  costs of  investigation)
shall be paid by the indemnified party unless (i) the indemnifying  party either
agrees to pay the same, (ii) the indemnifying  party falls to assume the defense
of such action with counsel' satisfactory to the indemnified party, or (iii) the
indemnified  party has been advised by counsel  that one or more legal  defenses
may be available to the indemnifying  party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and  expenses of such  counsel.  No  indemnifying  party shall be liable for any
settlement  entered  into  without  its  consent,   which  consent  may  not  be
unreasonably withheld.

                       If the indemnification  provided for in this subparagraph
(e) is unavailable to a party otherwise entitled to be indemnified in respect of
any expenses,  losses,  claims,  damages or liabilities referred to herein, then
the indemnifying party, in lieu of indemnifying such party otherwise entitled to
be indemnified,  shall contribute to the amount paid or payable by such party to
be  indemnified  as a  result  of such  expenses,  losses,  claims,  damages  or
liabilities  in such  proportion  as is  appropriate  to  reflect  the  relative
benefits received by Issuer, all selling  shareholders and the underwriters from
the  offering  of the  securities  and also the  relative  fault of Issuer,  all
selling  shareholders  and the underwriters in connection with the statements or
omissions  which  resulted  in  such  expenses,   losses,   claims,  damages  or
liabilities, as well as any other relevant equitable considerations.  The amount
paid or payable by a party as a result of the expenses,  losses, claims, damages
and liabilities  referred to above shall be deemed to include any legal or other
fees  or  expenses   reasonably  incurred  by  such  party  in  connection  with
investigating or defending any action or claim; provided,  that in no case shall
any Selling Holder be responsible, in the aggregate, for any amount in excess of
the net offering  proceeds  attributable  to its Option  Shares  included in the
offering. 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.  Any
obligation by any holder to indemnify  shall be several and not joint with other
holders.

                       In   connection   with  any   registration   pursuant  to
subparagraph  (a) or (b)  above,  Issuer and each  Selling  Holder  (other  than
Grantee) shall enter into an agreement containing the indemnification provisions
of this subparagraph (e).

                  (f) Issuer shall comply with all  reporting  requirements  and
will do all such other things as may be necessary to permit the expeditious sale
at any time of any Option Shares by Holder in accordance  with and to the extent
permitted by any rule or  regulation  promulgated  by the SEC from time to time,
including,  without limitation,  Rules 144 and 144A. Issuer shall at its expense
provide Holder with any information  necessary in connection with the completion
and  filing  of any  reports  or forms  required  to be filed by them  under the
Securities Laws, or required  pursuant to any state securities laws or the rules
of any stock exchange.

                  (g) Issuer  will pay all stamp  taxes in  connection  with the
issuance and the sale of the Option Shares and in  connection  with the exercise
of the Option,  and will save Holder  harmless,  without  limitation as to time,
against any and all liabilities, with respect to all such taxes.

         10. Quotation;  Listing. If Issuer Common Stock or any other securities
to be acquired upon exercise of the Option are then  authorized for quotation or
trading  or  listing  on the  Nasdaq  National  Market or any  other  securities
exchange or any automated  quotations  system  maintained  by a  self-regulatory
organization,  Issuer,  upon  the  request  of  Holder,  will  promptly  file an
application,  if required,  to authorize for quotation or trading or listing the
shares of Issuer  Common Stock or other  securities to be acquired upon exercise
of the Option on the Nasdaq National Market or any other securities  exchange or
any automated quotations system maintained by a self-regulatory organization and
will use its best efforts to obtain approval,  if required, of such quotation or
listing as soon as practicable.


<PAGE>
                                      2-59


         11. Division of Option.  This Agreement (and the Option granted hereby)
are exchangeable,  without expense,  at the option of Holder,  upon presentation
and  surrender  of this  Agreement at the  principal  office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the  aggregate the same number of shares of Issuer Common
Stock purchasable  hereunder.  The terms "Agreement" and "Option" as used herein
include any other  Agreements and related  Options for which this Agreement (and
the Option granted hereby) may be exchanged.  Upon receipt by Issuer of evidence
reasonably  satisfactory to it of the loss, theft,  destruction or mutilation of
this  Agreement,  and (in the case of loss,  theft or destruction) of reasonably
satisfactory  indemnification,  and  upon  surrender  and  cancellation  of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement  executed and delivered shall  constitute
an additional  contractual  obligation on the part of Issuer, whether or not the
Agreement  so  lost,  stolen,  destroyed  or  mutilated  shall  at any  time  be
enforceable by anyone.

         12.      Miscellaneous.

                  (a) Expenses. Except as otherwise provided in Section 10, each
of the parties  hereto shall bear and pay all costs and expenses  incurred by it
or on its behalf in connection  with the  transactions  contemplated  hereunder,
including  fees  and  expenses  of its  own  financial  consultants,  investment
bankers, accountants and counsel.

                  (b) Waiver and Amendment.  Any provision of this Agreement may
be waived at any time by the party  that is  entitled  to the  benefits  of such
provision. This Agreement may not be modified,  amended, altered or supplemented
except upon the  execution and delivery of a written  agreement  executed by the
parties hereto.

(c) Entire Agreement; No Third-Party Beneficiary;  Severability. This Agreement,
together  with the Merger  Agreement  and the other  documents  and  instruments
referred to herein and therein,  between  Grantee and Issuer (a) constitutes the
entire  agreement and supersedes all prior agreements and  understandings,  both
written and oral,  between the parties with respect to the subject matter hereof
and (b) is not intended to confer upon any person other than the parties  hereto
(other than any transferees of the Option Shares or any permitted  transferee of
this Agreement pursuant to Section 12(h)) any rights or remedies  hereunder.  If
any term,  provision,  covenant or  restriction  of this  Agreement is held by a
court of competent jurisdiction or a federal or state governmental or regulatory
agency or authority to be invalid,  void or unenforceable,  the remainder of the
terms, provisions,  covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,  impaired or invalidated.
If for any reason such court or  regulatory  agency  determines  that the Option
does not permit Holder to acquire, or does not require Issuer to repurchase, the
full number of shares of Issuer Common Stock as provided in Sections 3 and 8 (as
adjusted  pursuant to Section 7), it is the express intention of Issuer to allow
Holder to acquire or to  require  Issuer to  repurchase  such  lesser  number of
shares as may be permissible without any amendment or modification hereof.

                  (d)  Governing  Law.  This  Agreement  shall be  governed  and
construed in accordance  with the laws of the State of Georgia without regard to
any applicable conflicts of law rules.

                  (e) Descriptive  Headings.  The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.

                  (f) Notices.  All notices and other  communications  hereunder
shall  be in  writing  and  shall  be  deemed  given  if  delivered  personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt  requested)  to the  parties  at the  addresses  set forth in the Merger
Agreement(or  at such other  address for a party as shall be  specified  by like
notice).

                  (g) Counterparts. This Agreement and any amendments hereto may
be executed in two  counterparts,  each of which shall be considered one and the

<PAGE>
                                      2-60


same  agreement  and shall become  effective  when both  counterparts  have been
signed,   it  being  understood  that  both  parties  need  not  sign  the  same
counterpart.

                  (h) Assignment.  Neither this Agreement nor any of the rights,
interests or obligations  hereunder or under the Option shall be assigned by any
of the parties  hereto  (whether by operation of law or  otherwise)  without the
prior  written  consent of the other party,  except that Grantee may assign this
Agreement  to a wholly  owned  Subsidiary  of Grantee and Grantee may assign its
rights  hereunder in whole or in part after the occurrence of a Purchase  Event.
Subject to the preceding  sentence,  this Agreement shall be binding upon, inure
to the  benefit  of and be  enforceable  by the  parties  and  their  respective
successors and assigns.

                  (i) Further  Assurances.  In the event of any  exercise of the
Option by  Holder,  Issuer  and  Holder  shall  execute  and  deliver  all other
documents  and  instruments  and take all other  action  that may be  reasonably
necessary in order to consummate the transactions provided for by such exercise.

                  (j) Specific  Performance.  The parties hereto agree that this
Agreement  may  be  enforced  by  either  party  through  specific  performance,
injunctive  relief and other  equitable  relief.  Both parties  further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such  equitable  relief and that this  provision is without
prejudice to any other  rights that the parties  hereto may have for any failure
to perform this Agreement.


         IN WITNESS  WHEREOF,  Issuer and Grantee  have caused this Stock Option
Agreement to be signed by their respective  officers  thereunto duly authorized,
all as of the day and year first written above.

ATTEST:           BRYAN BANCORP OF GEORGIA, INC.



By:.____________________            By: ___________________________


[CORPORATE SEAL]


ATTEST:           THE SAVANNAH BANCORP, INC.



By:.____________________            By: ___________________________


[CORPORATE SEAL]


- 6 -
AD980400.314

<PAGE>
                                      2-61


EXHIBIT 2

STOCK OPTION AGREEMENT


         THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into
as of February 11, 1998,  by and between The Savannah  Bancorp,  Inc., a Georgia
corporation   ("Issuer"),   and  Bryan  Bancorp  of  Georgia,  Inc.,  a  Georgia
corporation ("Grantee").

         WHEREAS,  Grantee and Issuer have entered  into that certain  Agreement
and Plan of Merger,  dated as of  February  11, 1998 (the  "Merger  Agreement"),
providing for,  among other things,  the merger of Grantee with and into Issuer,
with Issuer as the surviving entity; and

         WHEREAS,  as a condition and  inducement to Grantee's  execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has agreed,
to grant Grantee the Option (as defined below);

         NOW,  THEREFORE,  in consideration  of the respective  representations,
warranties,  covenants  and  agreements  set  forth  herein  and in  the  Merger
Agreement, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:

         1.  Defined  Terms.  Capitalized terms which  are used  but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.

         2.  Grant of  Option.  Subject  to the terms and  conditions  set forth
herein,  Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase  up to 340,200  shares (as  adjusted as set forth  herein,  the "Option
Shares,"  which shall include the Option Shares before and after any transfer of
such Option Shares) of common stock,  $1.00 par value per share ("Issuer  Common
Stock"),  of Issuer at a purchase  price per Option Share (subject to adjustment
as set forth herein,  the "Purchase Price") equal to the closing price per share
of the common stock of Grantee on February 11, 1998, as reported on Nasdaq.

         3.       Exercise of Option.

                  (a)  Provided  that (i)  Grantee  or  Holder  (as  hereinafter
defined),  as applicable,  shall not be in material  breach of its agreements or
covenants  contained  in this  Agreement  or the Merger  Agreement,  and (ii) no
preliminary  or  permanent  injunction  or other order  against the  delivery of
shares  covered by the Option issued by any court of competent  jurisdiction  in
the United States shall be in effect,  Holder may exercise the Option,  in whole
or in part,  at any time and from time to time  following  the  occurrence  of a
Purchase  Event;  provided that the Option shall  terminate and be of no further
force and effect  upon the  earliest  to occur of (A) the  Effective  Time,  (B)
termination of the Merger  Agreement in accordance  with the terms thereof prior
to the  occurrence of a Purchase  Event or a Preliminary  Purchase  Event (other
than a  termination  of the  Merger  Agreement  by Grantee  pursuant  to Section
10.1(b)  (but  only if such  termination  was a result  of a  willful  breach by
Issuer)   or   Section   10.1  (c)  thereof  or  by  Grantee and Issuer pursuant
to Section  10.1(a)  thereof if Grantee shall at that time have been entitled to
terminate  the Merger  Agreement  pursuant to Section  10.1(b) (but only if such
termination  was a result of a willful  breach by  Issuer)  or  Section  10.1(c)
thereof  (each  a  "Default  Termination")),  (C)  12  months  after  a  Default
Termination  (provided,  that if, within 12 months after such termination of the
Merger Agreement,  a Purchase Event or a Preliminary Purchase Event shall occur,
then notwithstanding anything to the contrary contained herein (including clause
(D) of this  sentence),  this Option  shall  terminate 12 months after the first
occurrence  of such an event),  and (D) 12 months after any  termination  of the
Merger Agreement (other than a Default Termination)  following the occurrence of
a Purchase Event or a Preliminary  Purchase Event;  provided  further,  that any
purchase of shares upon  exercise of the Option  shall be subject to  compliance
with  applicable  law. The term "Holder" shall mean the holder or holders of the
Option from time to time,  and which  initially is the  Grantee.  The rights set
forth in  Section  8 shall  terminate  when the  right to  exercise  the  Option

<PAGE>
                                      2-62


terminates  (other than as a result of a complete exercise of the Option) as set
forth herein.

                  (b) As  used  herein,  a  "Purchase  Event"  means  any of the
following events subsequent to the date of this Agreement:

                  (i) without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an intention to
authorize,  recommend or propose,  or entered into an agreement  with any person
(other than  Grantee or any  Subsidiary  of  Grantee)  to effect an  Acquisition
Transaction (as defined below). As used herein, the term Acquisition Transaction
shall mean (A) a merger,  consolidation or similar transaction  involving Issuer
or any of its  Subsidiaries  (other than  transactions  solely between  Issuer's
Subsidiaries),  (B) except as  permitted  pursuant  to Section 7.1 of the Merger
Agreement, the disposition,  by sale, lease, exchange or otherwise, of Assets of
Issuer or any of its Subsidiaries representing in either case 25% or more of the
consolidated assets of Issuer and its Subsidiaries, or (C) the issuance, sale or
other disposition of (including by way of merger, consolidation,  share exchange
or any similar  transaction)  securities  representing 25% or more of the voting
power  of  Issuer  or  any  of  its  Subsidiaries  (any  of  the  foregoing,  an
"Acquisition Transaction"); or

                  (ii) any  person  (other  than  Grantee or any  Subsidiary  of
Grantee)  shall have acquired  beneficial  ownership (as such term is defined in
Rule  13d-3  promulgated  under the  Exchange  Act) of or the  right to  acquire
beneficial  ownership  of, or any  "group"  (as such term is  defined  under the
Exchange Act), other than a group of which Grantee or any of its Subsidiaries of
Grantee is a member,  shall have been formed which  beneficially owns or has the
right to acquire  beneficial  ownership of, 25% or more of the  then-outstanding
shares of Issuer Common Stock.

                  (c)  As used herein, a "Preliminary Purchase Event"  means any
of the following events:

     (i) any person (other than Grantee or any Subsidiary of Grantee) shall have
commenced  (as such term is defined in Rule 14d-2 under the  Exchange  Act),  or
shall have filed a registration  statement under the Securities Act with respect
to, a tender  offer or exchange  offer to purchase  any shares of Issuer  Common
Stock such that,  upon  consummation  of such offer,  such  person  would own or
control 25% or more of the then-outstanding  shares of Issuer Common Stock (such
an offer being  referred to herein as a "Tender  Offer" or an "Exchange  Offer,"
respectively); or

                  (ii)  the  holders  of  Issuer  Common  Stock  shall  not have
approved the Merger Agreement at the meeting of such  shareholders  held for the
purpose of voting on the Merger Agreement, such meeting shall not have been held
or shall have been canceled  prior to termination  of the Merger  Agreement,  or
Issuer's Board of Directors shall have withdrawn or modified in a manner adverse
to Grantee the recommendation of Issuer's Board of Directors with respect to the
Merger  Agreement,  in each case after any  person  (other  than  Grantee or any
Subsidiary of Grantee) shall have (A) made, or disclosed an intention to make, a
proposal to engage in an Acquisition  Transaction,  (B) commenced a Tender Offer
or filed a  registration  statement  under the Securities Act with respect to an
Exchange  Offer,  or (C) filed an  application  (or given a notice),  whether in
draft or final form, under any federal or state statute or regulation (including
a notice  filed  under  the HSR  Act)  seeking  the  Consent  to an  Acquisition
Transaction  from any federal or state  governmental or regulatory  authority or
agency.

As used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.

                  (d) In the event  Holder  wishes to exercise  the  Option,  it
shall send to Issuer a written  notice (the date of which being herein  referred
to as the "Notice  Date")  specifying  (i) the total number of Option  Shares it
intends to  purchase  pursuant  to such  exercise  and (ii) a place and date not
earlier than three business days nor later than 15 business days from the Notice
Date for the closing (the "Closing") of such purchase (the "Closing  Date").  If
prior Consent of any governmental or regulatory  agency or authority is required
in connection  with such  purchase,  Issuer shall  cooperate  with Holder in the

<PAGE>
                                      2-63


filing of the required  notice or application for such Consent and the obtaining
of such Consent and the Closing  shall occur  immediately  following  receipt of
such Consents (and expiration of any mandatory waiting periods).

                  (e)  Notwithstanding  any other provision of this Agreement to
the contrary, in no event shall:

                  (i) Holder's  (taking into  account all other  Holders)  Total
Profit (as defined below) exceed  $2,000,000  and, if it otherwise  would exceed
such amount, Holder, at its sole election, shall either (A) reduce the number of
shares of Issuer Common Stock  subject to the Option,  (B) deliver to Issuer for
cancellation without consideration Option Shares previously purchased by Holder,
(C) pay  cash  to  Issuer,  or (D) any  combination  of the  foregoing,  so that
Holder's actually realized Total Profit (together with the Total Profit realized
by all other Holders) shall not exceed  $2,000,000 after taking into account the
foregoing actions; and

     (ii) the Option be exercised  for a number of shares of Issuer Common Stock
as would,  as of the date of exercise,  result in Holder's  (taking into account
all  other  Holders)  Notional  Total  Profit  (as  defined  below) of more than
$2,000,000;  provided,  that  nothing  in this lause  (ii)  shall  restrict  any
exercise of the Option permitted hereby on any subsequent date.

         As used in this  Agreement,  the term  "Total  Profit"  shall  mean the
aggregate sum (prior to the payment of taxes) of the  following:  (i) the amount
received by Holder pursuant to Issuer's repurchase of the Option (or any portion
thereof)  pursuant to Section 8; (ii) (x) the amount received by Holder pursuant
to Issuer's repurchase of Option Shares pursuant to Section 8, less (y) Holder's
purchase price for such Option Shares;  (iii) (x) the net cash amounts  received
by Holder  pursuant to the sale of Option Shares (or any other  securities  into
which such Option Shares shall be converted or  exchanged)  to any  unaffiliated
person,  less (y) Holder's  purchase price of such Option  Shares;  and (iv) any
amounts  received  by Grantee  on the  transfer  of the  Option (or any  portion
thereof) to any unaffiliated person.

         As used in this  Agreement,  the  term  "Notional  Total  Profit"  with
respect to any number of shares of Issuer  Common  Stock as to which  Holder may
propose to exercise the Option shall be the Total  Profit  determined  as of the
date of such proposed exercise,  assuming that the Option were exercised on such
date for such number of shares and assuming that such shares,  together with all
other Option Shares held by Holder and its affiliates as of such date, were sold
for cash at the closing sale price per share of Issuer Common Stock as quoted on
the Nasdaq National Market (or, if Issuer Common Stock is not then quoted on the
Nasdaq  National  Market,  the  highest  bid  price  per  share as quoted on the
principal trading market or securities  exchange on which such shares are traded
as reported by a recognized source chosen by Holder) as of the close of business
on the preceding trading day (less customary brokerage commissions).

         The  provisions  of this  Section  3(e) shall  apply to any  Substitute
Option (as defined below).

         4.       Payment and Delivery of Certificates.

                  (a) On each Closing Date,  Holder shall (i) pay to Issuer,  in
immediately  available  funds by wire  transfer to a bank account  designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer  specified in Section 12(f)
hereof.

                  (b) At each  Closing,  simultaneously  with  the  delivery  of
immediately  available  funds and  surrender  of this  Agreement  as provided in
Section  4(a),  (i)  Issuer  shall  deliver  to  Holder  (A)  a  certificate  or
certificates  representing  the Option  Shares to be purchased at such  Closing,
which Option  Shares shall be free and clear of all liens,  claims,  charges and
encumbrances  of any kind whatsoever and subject to no pre-emptive  rights,  and
(B) if the Option is exercised in part only, an executed new agreement  with the
same terms as this Agreement evidencing the right to purchase the balance of the
shares of Issuer  Common  Stock  purchasable  hereunder,  and (ii) Holder  shall

<PAGE>
                                      2-64


deliver  to  Issuer a letter  agreeing  that  Holder  shall not offer to sell or
otherwise  dispose of such Option Shares in violation of applicable  federal and
state law or of the provisions of this Agreement.

                  (c) In  addition  to any  other  legend  that is  required  by
applicable  law,  certificates  for the Option Shares  delivered at each Closing
shall be endorsed with a restrictive  legend which shall read  substantially  as
follows:

THE  TRANSFER  OF THE  STOCK  REPRESENTED  BY THIS  CERTIFICATE  IS  SUBJECT  TO
RESTRICTIONS  ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION  AGREEMENT  DATED AS OF FEBRUARY __, 1998. A COPY
OF SUCH  AGREEMENT  WILL BE PROVIDED TO THE HOLDER  HEREOF  WITHOUT  CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.

It is  understood  and agreed that the above legend shall be removed by delivery
of substitute  certificate(s) without such legend if Holder shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably  satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act.

         5.       Representations  and  Warranties  o  Issuer.  Issuer  hereby
represents and warrants to Grantee as follows:

         (a) Issuer has all  requisite  corporate  power and  authority to enter
into this  Agreement  and,  subject to any  approvals  referred  to  herein,  to
consummate the transactions  contemplated  hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly  authorized by all necessary  corporate  action on the part of Issuer.
This Agreement has been duly executed and delivered by Issuer.

         (b)  Issuer  has  taken all  necessary  corporate  and other  action to
authorize and reserve and to permit it to issue, and, at all times from the date
hereof until the  obligation to deliver Issuer Common Stock upon the exercise of
the Option  terminates,  will have reserved for  issuance,  upon exercise of the
Option,  the number of shares of Issuer  Common  Stock  necessary  for Holder to
exercise  the Option,  and Issuer will take all  necessary  corporate  action to
authorize and reserve for issuance all additional  shares of Issuer Common Stock
or other  securities  which may be issued pursuant to Section 7 upon exercise of
the Option.  The shares of Issuer Common Stock to be issued upon due exercise of
the Option,  including  all  additional  shares of Issuer  Common Stock or other
securities which may be issuable  pursuant to Section 7, upon issuance  pursuant
hereto,  shall be duly and validly issued,  fully paid, and  nonassessable,  and
shall  be  delivered  free  and  clear  of  all  liens,  claims,   charges,  and
encumbrances of any kind or nature  whatsoever,  including any preemptive rights
of any stockholder of Issuer.

         6.  Representations and Warrants of Grantee.  Grantee hereby represents
and warrants to Issuer that:

         (a) Grantee has all  requisite  corporate  power and authority to enter
into this  Agreement  and,  subject to any  approvals  or  consents  referred to
herein, to consummate the transactions  contemplated  hereby.  The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary  corporate  action on the part
of Grantee. This Agreement has been duly executed and delivered by Grantee.

         (b) This Option is not being, and any Option Shares or other securities
acquired by Grantee  upon  exercise of the Option will not be,  acquired  with a
view to the public distribution thereof and will not be transferred or otherwise
disposed of except in a transaction registered or exempt from registration under
the Securities Laws.

         7.       Adjustment upon Changes in Capitalization, etc.

                  (a) In the  event of any  change  in  Issuer  Common  Stock by

<PAGE>
                                      2-65


reason  of  a  stock   dividend,   stock  split,   split-up,   recapitalization,
combination,  exchange of shares or similar transaction,  the type and number of
shares or securities  subject to the Option,  and the Purchase  Price  therefor,
shall be  adjusted  appropriately,  and  proper  provision  shall be made in the
agreements  governing  such  transaction  so that  Holder  shall  receive,  upon
exercise of the Option,  the number and class of shares or other  securities  or
property  that Holder would have  received in respect of Issuer  Common Stock if
the Option had been  exercised  immediately  prior to such event,  or the record
date therefor,  as applicable.  If any additional  shares of Issuer Common Stock
are issued  after the date of this  Agreement  (other than  pursuant to an event
described in the first sentence of this Section  7(a)),  the number of shares of
Issuer Common Stock subject to the Option shall be adjusted so that,  after such
issuance,  it, together with any shares of Issuer Common Stock previously issued
pursuant  hereto,  equals  19.9% of the number of shares of Issuer  Common Stock
then issued and  outstanding,  without giving effect to any shares subject to or
issued pursuant to the Option.

                  (b) In the event that Issuer  shall  enter into an  agreement:
(i) to consolidate  with or merge into any person,  other than Grantee or one of
its  Subsidiaries,  and shall not be the continuing or surviving  corporation of
such consolidation or merger;  (ii) to permit any person,  other than Grantee or
one of its Subsidiaries, to merge into Issuer and Issuer shall be the continuing
or  surviving  corporation,  but,  in  connection  with  such  merger,  the then
outstanding shares of Issuer Common Stock shall be changed into or exchanged for
stock or other  securities  of Issuer  or any other  person or cash or any other
property or the outstanding  shares of Issuer Common Stock  immediately prior to
such merger shall after such merger  represent less than 50% of the  outstanding
shares  and  share  equivalents  of the  merged  company;  or  (iii)  to sell or
otherwise  transfer all or substantially all of its Assets to any person,  other
than  Grantee  or one of its  Subsidiaries,  then,  and in each such  case,  the
agreement  governing such transaction  shall make proper  provisions so that the
Option shall,  upon the  consummation of any such transaction and upon the terms
and conditions set forth herein,  be converted into, or exchanged for, an option
(the  "Substitute  Option"),  at the  election  of  Holder,  of  either  (x) the
Acquiring  Corporation  (as defined  below),  (y) any person that  controls  the
Acquiring Corporation,  or (z) in the case of a merger described in clause (ii),
the Issuer (in each case,  such  person  being  referred  to as the  "Substitute
Option Issuer").

                  (c) The  Substitute  Option  shall  have the same terms as the
Option,  provided that, if the terms of the Substitute Option cannot,  for legal
reasons,  be the same as the Option,  such terms shall be as similar as possible
and in no event less advantageous to Holder.  The Substitute Option Issuer shall
also  enter  into an  agreement  with each  Holder of the  Substitute  Option in
substantially the same form as this Agreement,  which shall be applicable to the
Substitute Option.

                  (d) The Substitute Option shall be exercisable for such number
of shares of the Substitute Common Stock (as hereinafter defined) as is equal to
the Assigned Value (as hereinafter  defined)  multiplied by the number of shares
of the Issuer  Common  Stock for which the Option was  theretofore  exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of the
Substitute  Option per share of the  Substitute  Common  Stock (the  "Substitute
Purchase  Price")  shall then be equal to the  Purchase  Price  multiplied  by a
fraction  in which the  numerator  is the number of shares of the Issuer  Common
Stock for which the Option was  theretofore  exercisable  and the denominator is
the number of shares for which the Substitute Option is exercisable.

                  (e) The following terms have the meanings indicated:

                  (i) "Acquiring  Corporation"  shall mean (x) the continuing or
surviving  corporation of a  consolidation  or merger with Issuer (if other than
Issuer),  (y) Issuer in a merger in which Issuer is the  continuing or surviving
person,  and (z) the transferee of all or any  substantial  part of the Issuer's
assets (or the Assets of its Subsidiaries).

                  (ii)  "Substitute  Common  Stock"  shall mean the common stock
having the greatest  voting rights to be issued by the Substitute  Option Issuer
upon exercise of the Substitute Option.

                  (iii) "Assigned Value" shall mean the highest of (x) the price

<PAGE>
                                      2-66


per share of the Issuer  Common Stock at which a Tender Offer or Exchange  Offer
therefor has been made by any person  (other than Grantee or any  Subsidiary  of
Grantee),  (y) the price per share of the Issuer  Common Stock to be paid by any
person  (other  than  Grantee  or any  Subsidiary  of  Grantee)  pursuant  to an
agreement  with  Issuer,  and (z) the highest  closing  sales price per share of
Issuer  Common Stock quoted on the Nasdaq  National  Market (or if Issuer Common
Stock is not quoted on the Nasdaq  National  Market,  the  highest bid price per
share  on any day as  quoted  on the  principal  trading  market  or  securities
exchange  on which such shares are traded as  reported  by a  recognized  source
chosen  by  Holder)  within  the  six-month  period  immediately  preceding  the
agreement;  provided,  that in the event of a sale of less than all of  Issuer's
assets,  the Assigned  Value shall be the sum of the price paid in such sale for
such assets and the current  market value of the  remaining  assets of Issuer as
determined by a nationally recognized investment banking firm selected by Holder
(or by a majority  in  interest  of the  Holders if there shall be more than one
Holder (a  "Holder  Majority")),  divided  by the number of shares of the Issuer
Common Stock outstanding at the time of such sale. In the event that an exchange
offer is made for the Issuer  Common Stock or an agreement is entered into for a
merger or consolidation  involving  consideration  other than cash, the value of
the  securities or other  property  issuable or  deliverable in exchange for the
Issuer Common Stock shall be determined  by a nationally  recognized  investment
banking firm mutually selected by Holder and Issuer (or if applicable, Acquiring
Corporation),  provided  that if a mutual  selection  cannot  be made as to such
investment banking firm, it shall be selected by Holder. (If there shall be more
than one Holder, any such selection shall be made by a Holder Majority.)

                  (iv) "Average Price" shall mean the average closing price of a
share of the Substitute Common Stock for the one year immediately  preceding the
consolidation,  merger  or sale in  question,  but in no event  higher  than the
closing price of the shares of the Substitute  Common Stock on the day preceding
such consolidation, merger or sale; provided that if Issuer is the issuer of the
Substitute  Option,  the Average Price shall be computed with respect to a share
of common  stock  issued by Issuer,  the person  merging  into  Issuer or by any
company which  controls or is controlled  by such merger  person,  as Holder may
elect.

                  (f) In no event  pursuant to any of the  foregoing  paragraphs
shall the Substitute  Option be exercisable for more than 19.9% of the aggregate
of the shares of the Substitute  Common Stock  outstanding  prior to exercise of
the  Substitute  Option.  In the  event  that  the  Substitute  Option  would be
exercisable  for more than 19.9% of the  aggregate  of the shares of  Substitute
Common Stock but for this clause (f), the Substitute  Option Issuer shall make a
cash  payment to Holder  equal to the excess of (i) the value of the  Substitute
Option  without giving effect to the limitation in this clause (f) over (ii) the
value of the  Substitute  Option after giving  effect to the  limitation in this
clause  (f).  This  difference  in value  shall be  determined  by a  nationally
recognized investment banking firm selected by Holder (or a Holder Majority).

                  (g) Issuer shall not enter into any  transaction  described in
subsection (b) of this Section 7 unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
Issuer  hereunder  and take all other  actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation,  any action that may be necessary  so that the shares of  Substitute
Common Stock are in no way  distinguishable  from or have lesser  economic value
than other shares of common stock issued by the Substitute Option Issuer).

                  (h) The  provisions of Sections 8, 9 and 10 shall apply,  with
appropriate  adjustments,  to  any  securities  for  which  the  Option  becomes
exercisable  pursuant to this Section 7 and, as  applicable,  references in such
sections to "Issuer," "Option," "Purchase Price" and "Issuer Common Stock" shall
be deemed to be references to "Substitute Option Issuer,"  "Substitute  Option,"
"Substitute Purchase Price" and "Substitute Common Stock," respectively.

         8.       Repurchase at the Option of Holder.

                  (a) Subject to Section  3(e) and the last  sentence of Section
3(a), at the request of Holder at any time commencing upon the first  occurrence

<PAGE>
                                      2-67


of a Purchase Event and ending 12 months  immediately  thereafter,  Issuer shall
repurchase  from  Holder  the  Option  and all  shares  of Issuer  Common  Stock
purchased  by Holder  pursuant  hereto  with  respect to which  Holder  then has
beneficial  ownership.  The date on which Holder exercises its rights under this
Section 8 is referred to as the "Request Date." Such  repurchase  shall be at an
aggregate price (the "Section 8 Repurchase Consideration") equal to the sum of:

                  (i) the aggregate Purchase Price paid by Holder for any shares
of Issuer Common Stock acquired by Holder pursuant to the Option with respect to
which Holder then has beneficial ownership;

                  (ii) the  excess,  if any,  of (x) the  Applicable  Price  (as
defined below) for each share of Issuer Common Stock over (y) the Purchase Price
(subject  to  adjustment  pursuant to Section  7),  multiplied  by the number of
shares of Issuer  Common  Stock  with  respect  to which the Option has not been
exercised; and

                  (iii) the  excess,  if any, of the  Applicable  Price over the
Purchase  Price  (subject to adjustment  pursuant to Section 7) paid (or, in the
case of Option  Shares with respect to which the Option has been  exercised  but
the Closing Date has not  occurred,  payable) by Holder for each share of Issuer
Common  Stock  with  respect to which the  Option  has been  exercised  and with
respect to which Holder then has beneficial ownership,  multiplied by the number
of such shares.

                  (b) If Holder  exercises  its  rights  under  this  Section 8,
Issuer shall, within ten business days after the Request Date, pay the Section 8
Repurchase   Consideration  to  Holder  in  immediately   available  funds,  and
contemporaneously  with such payment Holder shall surrender to Issuer the Option
and the  certificates  evidencing  the shares of Issuer  Common Stock  purchased
thereunder  with  respect to which  Holder then has  beneficial  ownership,  and
Holder shall  warrant that it has sole record and  beneficial  ownership of such
shares and that the same are then free and clear of all liens,  claims,  charges
and encumbrances of any kind whatsoever.  Notwithstanding the foregoing,  to the
extent that prior  notification to or Consent of any  governmental or regulatory
agency or  authority  is required in  connection  with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for  repurchase  pursuant to Section 8, in whole or
in part, or to require that Issuer deliver from time to time that portion of the
Section 8 Repurchase Consideration that it is not then so prohibited from paying
and  promptly  file  the  required   notice  or  application   for  Consent  and
expeditiously process the same (and each party shall cooperate with the other in
the  filing of any such  notice or  application  and the  obtaining  of any such
Consent).  If any governmental or regulatory agency or authority  disapproves of
any part of Issuer's  proposed  repurchase  pursuant  to this  Section 8, Issuer
shall  promptly  give  notice of such fact to  Holder.  If any  governmental  or
regulatory  agency or  authority  prohibits  the  repurchase  in part but not in
whole, then Holder shall have the right (i) to revoke the repurchase  request or
(ii) to the extent permitted by such agency or authority,  determine whether the
repurchase should apply to the Option and/or Option Shares and to what extent to
each, and Holder shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the Request Date
less the sum of the  number of shares  covered by the Option in respect of which
payment  has been made  pursuant  to Section  8(a)(ii)  and the number of shares
covered by the portion of the Option (if any) that has been repurchased.  Holder
shall notify Issuer of its  determination  under the preceding  sentence  within
five business days of receipt of notice of disapproval of the repurchase.

                  (c) For purposes of this  Agreement , the  "Applicable  Price"
means the highest of (i) the highest price per share of Issuer Common Stock paid
for any such share by the person or groups  described in Section  8(d)(i),  (ii)
the price per share of Issuer Common Stock  received by holders of Issuer Common
Stock in connection  with any merger or other business  combination  transaction
described  in Section  7(b)(i),  7(b)(ii)  or  7(b)(iii),  or (iii) the  highest
closing  sales  price per  share of Issuer  Common  Stock  quoted on the  Nasdaq
National  Market (or if Issuer Common Stock is not quoted on the Nasdaq National
Market,  the  highest  bid price per  share as quoted on the  principal  trading
market or  securities  exchange on which such shares are traded as reported by a
recognized  source chosen by Holder)  during the 60 business days  preceding the

<PAGE>
                                      2-68


Request Date; provided, however, that in the event of a sale of less than all of
Issuer's Assets, the Applicable Price shall be the sum of the price paid in such
sale for such assets and the current  market  value of the  remaining  assets of
Issuer as determined by an independent  nationally recognized investment banking
firm selected by Holder and reasonably acceptable to Issuer (which determination
shall be conclusive for all purposes of this  Agreement),  divided by the number
of shares of the Issuer  Common Stock  outstanding  at the time of such sale. If
the  consideration  to be offered,  paid or  received  pursuant to either of the
foregoing  clauses  (i) or (ii) shall be other  than in cash,  the value of such
consideration  shall be  determined in good faith by an  independent  nationally
recognized  investment banking firm selected by Holder and reasonably acceptable
to Issuer,  which  determination  shall be  conclusive  for all purposes of this
Agreement.

         9.       Registration Rights.

                  (a)  Following  termination  of the Merger  Agreement,  Issuer
shall,  subject to the conditions of subparagraph (c) below, if requested by any
Holder,  including Grantee and any permitted transferee  ("Selling Holder"),  as
expeditiously  as possible  prepare and file a registration  statement under the
Securities Laws if necessary in order to permit the sale or other disposition of
any or all  shares of Issuer  Common  Stock or other  securities  that have been
acquired  by or are  issuable to Selling  Holder upon  exercise of the Option in
accordance  with the  intended  method  of sale or other  disposition  stated by
Holder in such request,  including,  without limitation,  a "shelf" registration
statement  under Rule 415 under the Securities  Act or any successor  provision,
and Issuer shall use its best efforts to qualify such shares or other securities
for sale under any applicable state securities laws.

                  (b) If Issuer at any time  after the  exercise  of the  Option
proposes to register any shares of Issuer Common Stock under the Securities Laws
in connection with an underwritten  public offering of such Issuer Common Stock,
Issuer will  promptly  give written  notice to Holder of its  intention to do so
and,  upon the written  request of Holder given within 30 days after  receipt of
any such  notice  (which  request  shall  specify the number of shares of Issuer
Common Stock  intended to be included in such  underwritten  public  offering by
Selling Holder),  Issuer will cause all such shares,  the holders of which shall
have  requested  participation  in such  registration,  to be so registered  and
included in such underwritten public offering;  provided,  that Issuer may elect
to not cause any such shares to be so registered (i) if the underwriters in good
faith object for valid business  reasons,  or (ii) in the case of a registration
solely to implement a dividend reinvestment or similar plan, an employee benefit
plan  or  a  registration  filed  on  Form  S-4  or  any  successor  form,  or a
registration  filed on a form which does not permit  registrations  of  resales;
provided,  further,  that such election  pursuant to clause (i) may only be made
two times.  If some but not all the shares of Issuer Common Stock,  with respect
to which Issuer shall have received  requests for registration  pursuant to this
subparagraph  (b), shall be excluded from such  registration,  Issuer shall make
appropriate  allocation of shares to be registered among Selling Holders and any
other person  (other than Issuer or any person  exercising  demand  registration
rights  in  connection  with such  registration)  who or which is  permitted  to
register   their  shares  of  Issuer  Common  Stock  in  connection   with  such
registration  pro rata in the proportion that the number of shares  requested to
be  registered  by each  Selling  Holder  bears to the  total  number  of shares
requested to be  registered  by all persons then  desiring to have Issuer Common
Stock registered for sale.

                  (c)  Issuer  shall use all  reasonable  efforts  to cause each
registration statement referred to in subparagraph (a) above to become effective
and to obtain  all  consents  or  waivers of other  parties  which are  required
therefor  and to keep such  registration  statement  effective,  provided,  that
Issuer  may delay  any  registration  of  Option  Shares  required  pursuant  to
subparagraph  (a) above for a period not exceeding 90 days provided Issuer shall
in good faith determine that any such  registration  would  adversely  affect an
offering or  contemplated  offering of other  securities  by Issuer,  and Issuer
shall not be  required to  register  Option  Shares  under the  Securities  Laws
pursuant to subparagraph (a) above:

                  (i) prior to the  earliest  of (a)  termination  of the Merger
Agreement pursuant to Section 10.1 thereof,  (b) failure to obtain the requisite
stockholder approval pursuant to Section 9.1(a) of the Merger Agreement, and (c)
a Purchase Event or a Preliminary Purchase Event;

                  (ii)     on more than two occasions;

<PAGE>
                                      2-69


                  (iii) more than once during any calendar year;

                  (iv) within 90 days after the effective date of a registration
referred to in  subparagraph  (b) above  pursuant  to which the Selling  Holders
concerned  were  afforded  the  opportunity  to register  such shares  under the
Securities Laws and such shares were registered as requested; and

                  (v)  unless a request  therefor  is made to Issuer by  Selling
Holders  holding at least 25% or more of the  aggregate  number of Option Shares
then outstanding.

                       In  addition  to  the  foregoing,  Issuer  shall  not  be
required to maintain the  effectiveness of any registration  statement after the
expiration  of  nine  months  from  the  effective  date  of  such  registration
statement. Issuer shall use all reasonable efforts to make any filings, and take
all steps, under all applicable state securities laws to the extent necessary to
permit the sale or other  disposition  of the  Option  Shares so  registered  in
accordance with the intended method of distribution  for such shares,  provided,
that Issuer shall not be required to consent to general  jurisdiction or qualify
to do business in any state where it is not otherwise  required to so consent to
such jurisdiction or to so qualify to do business.

                  (d) Except where applicable state law prohibits such payments,
Issuer will pay all expenses  (including without  limitation  registration fees,
qualification  fees, blue sky fees and xpenses  (including the fees and expenses
of counsel),  accounting expenses,  legal expenses including the reasonable fees
and expenses of one counsel to the Selling Holders, printing expenses,  expenses
of  underwriters,  excluding  discounts and commissions but including  liability
insurance  if  Issuer  so  desires  or the  underwriters  so  require,  and  the
reasonable  fees and expenses of any  necessary  special  experts) in connection
with each registration  pursuant to subparagraph (a) or (b) above (including the
related  offerings and sales by Selling  Holders) and all other  qualifications,
notifications  or  exemptions   pursuant  to  subparagraph  (a)  or  (b)  above.
Underwriting  discounts  and  commissions  relating to Option  Shares,  fees and
disbursements of counsel to the Selling Holders and any other expenses  incurred
by such Selling Holders in connection with any such registration  shall be borne
by such Selling Holders.

                  (e) In connection with any registration under subparagraph (a)
or (b) above Issuer hereby indemnifies the Selling Holders, and each underwriter
thereof,  including each person, if any, who controls such holder or underwriter
within the meaning of Section 15 of the  Securities  Act,  against all expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged untrue,
statement  of a  material  fact  contained  in  any  registration  statement  or
prospectus or  notification  or offering  circular  (including any amendments or
supplements thereto) or any preliminary  prospectus,  or caused by any omission,
or alleged  omission,  to state  therein a material  fact  required to be stated
therein or  necessary  to make the  statements  therein not  misleading,  except
insofar  as such  expenses,  losses,  claims,  damages  or  liabilities  of such
indemnified party are caused by any untrue statement or alleged untrue statement
that was included by Issuer in any such registration  statement or prospectus or
notification  or offering  circular  (including  any  amendments or  supplements
thereto) in reliance  upon and in  conformity  with,  information  furnished  in
writing to Issuer by such  indemnified  party  expressly  for use  therein,  and
Issuer and each  officer,  director  and  controlling  person of Issuer shall be
indemnified by such Selling Holder, or by such underwriter,  as the case may be,
for all such expenses,  losses,  claims,  damages and liabilities  caused by any
untrue,  or alleged untrue,  statement,  that was included by Issuer in any such
registration  statement  or  prospectus  or  notification  or offering  circular
(including  any  amendments or  supplements  thereto) in reliance  upon,  and in
conformity  with,  information  furnished in writing to Issuer by such holder or
such underwriter, as the case may be, expressly for such use.

                      Promptly  upon receipt by a party  indemnified  under this
subparagraph  (e) of notice  of the  commencement  of any  action  against  such
indemnified  party in respect of which indemnity or reimbursement  may be sought
against any  indemnifying  party under this  subparagraph  (e), such indemnified
party shall notify the indemnifying party in writing of the commencement of such
action, but the failure so to notify the indemnifying party shall not relieve it
of any liability which it may otherwise have to any indemnified party under this
subparagraph  (e). In case notice of  commencement  of any such action  shall be

<PAGE>
                                      2-70

given to the indemnifying party as above provided,  the indemnifying party shall
be entitled to participate  in and, to the extent it may wish,  jointly with any
other  indemnifying  party  similarly  notified,  to assume the  defense of such
action at its own expense,  with counsel chosen by it and  satisfactory  to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof,  but the fees
and  expenses of such counsel  (other than  reasonable  costs of  investigation)
shall be paid by the indemnified  party unless (i) the indemnifying  arty either
agrees to pay the same, (ii) the indemnifying  party falls to assume the defense
of such action with counsel' satisfactory to the indemnified party, or (iii) the
indemnified  party has been advised by counsel  that one or more legal  defenses
may be available to the indemnifying  party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and  expenses of such  counsel.  No  indemnifying  party shall be liable for any
settlement  entered  into  without  its  consent,   which  consent  may  not  be
unreasonably withheld.

                      If the  indemnification  provided for in this subparagraph
(e) is unavailable to a party otherwise entitled to be indemnified in respect of
any expenses,  losses,  claims,  damages or liabilities referred to herein, then
the indemnifying party, in lieu of indemnifying such party otherwise entitled to
be indemnified,  shall contribute to the amount paid or payable by such party to
be  indemnified  as a  result  of such  expenses,  losses,  claims,  damages  or
liabilities  in such  proportion  as is  appropriate  to  reflect  the  relative
benefits received by Issuer, all selling  shareholders and the underwriters from
the  offering  of the  securities  and also the  relative  fault of Issuer,  all
selling  shareholders  and the underwriters in connection with the statements or
omissions  which  resulted  in  such  expenses,   losses,   claims,  damages  or
liabilities, as well as any other relevant equitable considerations.  The amount
paid or payable by a party as a result of the expenses,  losses, claims, damages
and liabilities  referred to above shall be deemed to include any legal or other
fees  or  expenses   reasonably  incurred  by  such  party  in  connection  with
investigating or defending any action or claim; provided,  that in no case shall
any Selling Holder be responsible, in the aggregate, for any amount in excess of
the net offering  proceeds  attributable  to its Option  Shares  included in the
offering. 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.  Any
obligation by any holder to indemnify  shall be several and not joint with other
holders.

                      In   connection   with  any   registration   pursuant   to
subparagraph  (a) or (b)  above,  Issuer and each  Selling  Holder  (other  than
Grantee) shall enter into an agreement containing the indemnification provisions
of this subparagraph (e).

                  (f) Issuer shall comply with all  reporting  requirements  and
will do all such other things as may be necessary to permit the expeditious sale
at any time of any Option Shares by Holder in accordance  with and to the extent
permitted by any rule or  regulation  promulgated  by the SEC from time to time,
including,  without limitation,  Rules 144 and 144A. Issuer shall at its expense
provide Holder with any information  necessary in connection with the completion
and  filing  of any  reports  or forms  required  to be filed by them  under the
Securities Laws, or required  pursuant to any state securities laws or the rules
of any stock exchange.

                  (g) Issuer  will pay all stamp  taxes in  connection  with the
issuance and the sale of the Option Shares and in  connection  with the exercise
of the Option,  and will save Holder  harmless,  without  limitation as to time,
against any and all liabilities, with respect to all such taxes.

                  10.  Quotation;  Listing.  If Issuer Common Stock or any other
securities to be acquired upon  exercise of the Option are then  authorized  for
quotation  or trading or  listing  on the  Nasdaq  National  Market or any other
securities  exchange  or  any  automated   quotations  system  maintained  by  a
self-regulatory organization,  Issuer, upon the request of Holder, will promptly
file an  application,  if  required,  to authorize  for  quotation or trading or
listing the shares of Issuer  Common  Stock or other  securities  to be acquired
upon  exercise  of the  Option  on  the  Nasdaq  National  Market  or any  other
securities  exchange  or  any  automated   quotations  system  maintained  by  a
self-regulatory  organization  and will use its best efforts to obtain approval,
if required, of such quotation or listing as soon as practicable.

<PAGE>
                                      2-71



         11. Division of Option.  This Agreement (and the Option granted hereby)
are exchangeable,  without expense,  at the option of Holder,  upon presentation
and  surrender  of this  Agreement at the  principal  office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the  aggregate the same number of shares of Issuer Common
Stock purchasable  hereunder.  The terms "Agreement" and "Option" as used herein
include any other  Agreements and related  Options for which this Agreement (and
the Option granted hereby) may be exchanged.  Upon receipt by Issuer of evidence
reasonably  satisfactory to it of the loss, theft,  destruction or mutilation of
this  Agreement,  and (in the case of loss,  theft or destruction) of reasonably
satisfactory  indemnification,  and  upon  surrender  and  cancellation  of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement  executed and delivered shall  constitute
an additional  contractual  obligation on the part of Issuer, whether or not the
Agreement  so  lost,  stolen,  destroyed  or  mutilated  shall  at any  time  be
enforceable by anyone.

         12.      Miscellaneous.

                  (a) Expenses. Except as otherwise provided in Section 10, each
of the parties  hereto shall bear and pay all costs and expenses  incurred by it
or on its behalf in connection  with the  transactions  contemplated  hereunder,
including  fees  and  expenses  of its  own  financial  consultants,  investment
bankers, accountants and counsel.

                  (b) Waiver and Amendment.  Any provision of this Agreement may
be waived at any time by the party  that is  entitled  to the  benefits  of such
provision. This Agreement may not be modified,  amended, altered or supplemented
except upon the  execution and delivery of a written  agreement  executed by the
parties hereto.

                  (c)   Entire    Agreement;    No   Third-Party    Beneficiary;
Severability.  This Agreement,  together with the Merger Agreement and the other
documents and  instruments  referred to herein and therein,  between Grantee and
Issuer (a) constitutes the entire  agreement and supersedes all prior agreements
and  understandings,  both written and oral, between the parties with respect to
the  subject  matter  hereof and (b) is not  intended  to confer upon any person
other than the parties  hereto (other than any  transferees of the Option Shares
or any permitted  transferee of this  Agreement  pursuant to Section  12(h)) any
rights or remedies hereunder. If any term, provision, covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  or a federal or
state  governmental  or  regulatory  agency or authority to be invalid,  void or
unenforceable,   the   remainder  of  the  terms,   provisions,   covenants  and
restrictions  of this Agreement  shall remain in full force and effect and shall
in no way be affected,  impaired or invalidated. If for any reason such court or
regulatory  agency determines that the Option does not permit Holder to acquire,
or does not require  Issuer to  repurchase,  the full number of shares of Issuer
Common  Stock as provided in Sections 3 and 8 (as  adjusted  pursuant to Section
7), it is the  express  intention  of Issuer to allow  Holder to  acquire  or to
require Issuer to repurchase  such lesser number of shares as may be permissible
without any amendment or modification hereof.

                  (d)  Governing  Law.  This  Agreement  shall be  governed  and
construed in accordance  with the laws of the State of Georgia without regard to
any applicable conflicts of law rules.

                  (e) Descriptive  Headings.  The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.

                  (f) Notices.  All notices and other  communications  hereunder
shall  be in  writing  and  shall  be  deemed  given  if  delivered  personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt  requested)  to the  parties  at the  addresses  set forth in the Merger
Agreement(or  at such other  address for a party as shall be  specified  by like
notice).

                  (g) Counterparts. This Agreement and any amendments hereto may
be executed in two  counterparts,  each of which shall be considered one and the

<PAGE>
                                      2-72


same  agreement  and shall become  effective  when both  counterparts  have been
signed,   it  being  understood  that  both  parties  need  not  sign  the  same
counterpart.

                  (h) Assignment.  Neither this Agreement nor any of the rights,
interests or obligations  hereunder or under the Option shall be assigned by any
of the parties  hereto  (whether by operation of law or  otherwise)  without the
prior  written  consent of the other party,  except that Grantee may assign this
Agreement  to a wholly  owned  Subsidiary  of Grantee and Grantee may assign its
rights  hereunder in whole or in part after the occurrence of a Purchase  Event.
Subject to the preceding  sentence,  this Agreement shall be binding upon, inure
to the  benefit  of and be  enforceable  by the  parties  and  their  respective
successors and assigns.

                  (i) Further  Assurances.  In the event of any  exercise of the
Option by  Holder,  Issuer  and  Holder  shall  execute  and  deliver  all other
documents  and  instruments  and take all other  action  that may be  reasonably
necessary in order to consummate the transactions provided for by such exercise.

                  (j) Specific  Performance.  The parties hereto agree that this
Agreement  may  be  enforced  by  either  party  through  specific  performance,
injunctive  relief and other  equitable  relief.  Both parties  further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such  equitable  relief and that this  provision is without
prejudice to any other  rights that the parties  hereto may have for any failure
to perform this Agreement.



         IN WITNESS  WHEREOF,  Issuer and Grantee  have caused this Stock Option
Agreement to be signed by their respective  officers  thereunto duly authorized,
all as of the day and year first written above.
ATTEST:           THE SAVANNAH BANCORP, INC.



By:.____________________            By: ___________________________


[CORPORATE SEAL]


ATTEST:           BRYAN BANCORP OF GEORGIA, INC.



By:.____________________            By: ___________________________


[CORPORATE SEAL]


- 6 -
AD980410.274

<PAGE>
                                      2-73


EXHIBIT 3


DIRECTOR'S AGREEMENT


                  THIS DIRECTOR'S  AGREEMENT  ("Agreement")  is made and entered
into as of the 11th day of  February,  1998,  by and  between  the  undersigned,
______________,  a resident of __________,  Georgia,  and The Savannah  Bancorp,
Inc.,  a  corporation  organized  and  existing  under  the laws of the State of
Georgia ("Savannah").

                  On even date herewith,  Savannah and Bryan Bancorp of Georgia,
Inc.,  a  corporation  organized  and  existing  under  the laws of the State of
Georgia  ("Bryan"),  have  entered  into an  Agreement  and Plan of Merger  (the
"Merger  Agreement").  The Merger Agreement generally provides for the merger of
Bryan with and into Savannah  ("Merger"),  and the  conversion of the issued and
outstanding  shares of the $1.00 par value common stock of Bryan ("Bryan  Common
Stock")  into  shares  of the  $1.00 par value  common  stock of  Savannah.  The
transactions contemplated by the Merger Agreement are subject to the affirmative
vote of the  shareholders of Bryan,  the affirmative vote of the shareholders of
Savannah,  the receipt of certain  regulatory  approvals and the satisfaction of
other conditions.

                  The undersigned is a member of the Board of Directors of Bryan
and is the owner of  _________  shares of Bryan  Common  Stock and has rights by
option or otherwise to acquire _________ additional shares of Bryan Common Stock
("Shares").  In order to induce Savannah to enter into the Merger Agreement, the
undersigned  is entering into this  Agreement with Savannah to set forth certain
terms and conditions  governing the actions to be taken by the undersigned  with
respect to the Shares until consummation of the Merger.

                  NOW,   THEREFORE,   in   consideration   of  the  transactions
contemplated  by the Merger  Agreement  and the mutual  promises  and  covenants
contained herein, the parties agree as follows:

                  1.  Without  the  prior  written  consent  of  Savannah,   the
undersigned  shall not  transfer,  sell,  assign,  convey or encumber any of the
Shares  during the term of this  Agreement  except to  Savannah  pursuant to the
terms of the Merger Agreement. Without limiting the generality of the foregoing,
the undersigned shall not grant to any party any option or right to purchase the
Shares or any interest therein.  Further, except with respect to the Merger, the
undersigned  shall not approve or ratify any  agreement or contract  pursuant to
which  the  Shares  would be  transferred  to any  other  party as a result of a
consolidation, merger, reorganization or acquisition.

                  2. The  undersigned  intends  to,  and  will,  vote all of the
Shares  beneficially  owned by him (and with respect to which he has sole voting
power) in favor of the Merger.  The  undersigned  will also  recommend  that the
shareholders  of Bryan  approve  the Merger  when the same is  presented  to the
shareholders  for  consideration in properly  prepared proxy materials,  subject
only to the undersigned's legal obligations (if any) as a director of Bryan, and
will use his or her best  efforts to effect  consummation  of the Merger and the
other  transactions   contemplated  by  the  Merger  Agreement  .  Further,  the
undersigned  intends to, and will,  surrender the  certificate  or  certificates
representing  his or her Shares  which are  beneficially  owned by him (and with
respect to which he has sole dispositive power) to Savannah upon consummation of
the Merger as described in the Merger Agreement.

                  3. The undersigned covenants and agrees with Savannah that for
a period of two years after the effective  time of the Merger,  the  undersigned
shall not, without the prior written consent of Savannah, directly or indirectly
serve as a consultant  to, serve as a management  official of, or be or become a
major shareholder of any financial institution having an office in Bryan County,
Georgia  or  Chatham  County,  Georgia.  It is  expressly  understood  that  the
covenants  contained  in  this  paragraph  4 do not  apply  to  (i)  "management
official"  positions  which the  undersigned  holds with financial  institutions
other  than  Bryan and its  subsidiary  as of the date of this  Agreement,  (ii)
securities holdings which cause the undersigned to be deemed a major shareholder

<PAGE>
                                      2-74


of a financial institution,  other than Bryan and its subsidiary, as of the date
of this Agreement,  or (iii) advisory relationships with a financial institution
which the undersigned has as of the date of this Agreement or may have after the
date hereof  solely in the  capacity as legal  counsel.  For the purposes of the
covenants  contained  in this  paragraph 4, the  following  terms shall have the
following respective meanings:

                  (a) The term  "management  official" shall refer to service of
any type which gives the undersigned  the authority to participate,  directly or
indirectly,  in  policy-making  functions  of the  financial  institution.  This
includes, but is not limited to, service as an organizer,  officer, director, or
advisory director of the financial institution.  It is expressly understood that
the  undersigned   may  be  deemed  a  management   official  of  the  financial
institution,  whether  or not he  holds  any  official,  elected,  or  appointed
position with such financial institution.

                  (b) The term "financial  institution"  shall refer to any bank
or savings  association  which engages in the business of accepting  deposits or
which owns or controls a company  which  engages in the  business  of  accepting
deposits.

                  (c) The term "major shareholder" shall refer to the beneficial
ownership of 2% or more of any class of voting securities of such company or the
ownership  of  2%  of  the  total  equity  interest  in  such  company,  however
denominated.

In the case of an undersigned who is as of the date of this Agreement an officer
or director of Bryan,  the provisions of this paragraph 3 shall be of no further
force and effect if the  undersigned is not offered  employment as an officer or
director of Savannah or any of its  subsidiaries  at the  effective  time of the
Merger or, if the undersigned is so employed,  the  undersigned's  employment is
involuntarily  terminated  by Savannah  after the  effective  time of the Merger
other than for cause.

                  4. The undersigned acknowledges and agrees that Savannah could
not be made  whole  by  monetary  damages  in the  event of any  default  by the
undersigned  of the terms and  conditions  set  forth in this  Agreement.  It is
accordingly  agreed and understood that Savannah in addition to any other remedy
which it may have at law or in equity,  shall be  entitled to an  injunction  or
injunctions to prevent  breaches of this Agreement and  specifically  to enforce
the terms and  provisions  hereof in any action  instituted  in any court of the
United States or in any state having appropriate jurisdiction.

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

                  6. Except with respect to the covenants contained in paragraph
3, which shall be governed by the terms set forth therein and shall be effective
only upon consummation of the Merger, the covenants and obligations set forth in
this  Agreement  shall expire and be of no further force and effect on the later
of September  30,  1998,  or the date upon which the Board of Directors of Bryan
shall have the right to  terminate  the Merger  Agreement  and the  transactions
contemplated thereby if the Merger is not consummated by such date.

                  IN WITNESS  WHEREOF,  this  Agreement  has been duly  executed
under seal and delivered by the  undersigned  as of the day and year first above
written.

As to the Undersigned, signed in the presence of:

________________________                   _______________________________(SEAL)

      Name:__________________________
             (Please print or type)
<PAGE>
                                      2-75


ATTEST:           THE SAVANNAH BANCORP, INC.


By:______________________               By:_____________________________________
     Secretary                             President and Chief Executive Officer

[CORPORATE SEAL]



- 3 -
AD980330.100


<PAGE>
                                      2-76


EXHIBIT 4


AFFILIATE AGREEMENT


The Savannah Bancorp, Inc.
25 Bull Street
Savannah, Georgia  31401

Attention:        Archie H. Davis
                  President and Chief Executive Officer

Gentlemen:

         The  undersigned  is a shareholder  of Bryan  Bancorp of Georgia,  Inc.
("Bryan"),  a corporation  organized and existing under the laws of the State of
Georgia,   and  will  become  a  shareholder  of  The  Savannah  Bancorp,   Inc.
("Savannah"),  a corporation  organized and existing under the laws of the State
of Georgia,  pursuant to the transactions described in the Agreement and Plan of
Merger, dated as of February 11, 1998 (the "Agreement"), by and between Savannah
and Bryan. Under the terms of the Agreement,  Bryan will be merged into and with
Savannah (the  "Merger"),  and the shares of the $1.00 par value common stock of
Bryan ("Bryan  Common Stock") will be converted into and exchanged for shares of
the $1.00 par value common stock of Savannah  ("Savannah  Common  Stock").  This
Affiliate Agreement represents an agreement between the undersigned and Savannah
regarding  certain rights and  obligations of the undersigned in connection with
the shares of  Savannah to be  received  by the  undersigned  as a result of the
Merger.

         In  consideration  of the  Merger and the  mutual  covenants  contained
herein, the undersigned and Savannah hereby agree as follows:

         1. Affiliate Status. The undersigned  understands and agrees that as to
Bryan he is an "affiliate" under Rule 145(c) as defined in Rule 405 of the Rules
and  Regulations  of the Securities  and Exchange  Commission  ("SEC") under the
Securities Act of 1933, as amended ("1933 Act"), and the undersigned anticipates
that he will be such an "affiliate" at the time of the Merger.

         2. Initial  Restriction on Disposition.  The undersigned agrees that he
will not sell, transfer, or otherwise dispose of his interests in, or reduce his
risk  relative  to, any of the shares of  Savannah  Common  Stock into which his
shares of Bryan Common Stock are converted upon consummation of the Merger until
such time as Savannah  notifies the  undersigned  that the  requirements  of SEC
Accounting  Series  Release  Nos. 130 and 135 ("ASR 130 and 135") have been met.
The  undersigned  understands  that ASR 130 and 135  relate  to  publication  of
financial  results of  post-Merger  combined  operations  of Savannah and Bryan.
Savannah  agrees that it will publish such results  within 45 days after the end
of the first  fiscal  quarter of  Savannah  containing  the  required  period of
post-Merger combined operations and that it will notify the undersigned promptly
following such publication.

         3.  Covenants and Warranties of Undersigned.The undersigned represents,
warrants and agrees that:

         (a) The Savannah  Common Stock received by the  undersigned as a result
of the Merger will be taken for his own account and not for others,  directly or
indirectly, in whole or in part.

         (b) Savannah has informed the undersigned  that any distribution by the
undersigned of Savannah Common Stock has not been registered  under the 1933 Act
and that shares of Savannah  Common  Stock  received  pursuant to the Merger can
only be sold by the undersigned (1) following  registration  under the 1933 Act,
or (2) in  conformity  with the volume  and other  requirements  of Rule  145(d)
promulgated by the SEC as the same now exist or may hereafter be amended, or (3)

<PAGE>
                                      2-77


to the extent some other exemption from registration under the 1933 Act might be
available.  The undersigned  understands that Savannah is under no obligation to
file a  registration  statement  with the SEC  covering the  disposition  of the
undersigned's  shares  of  Savannah  Common  Stock or to take any  other  action
necessary to make compliance with an exemption from such registration available.

         (c) The  undersigned  will,  and will cause  each of the other  parties
whose shares are deemed to be beneficially owned by the undersigned  pursuant to
Section 8 hereof to, have all shares of Bryan Common Stock beneficially owned by
the undersigned  registered in the name of the  undersigned or such parties,  as
applicable, prior to the effective date of the Merger and not in the name of any
bank, broker-dealer, nominee or clearinghouse.

         (d) During the 30 days immediately  preceding the Effective Time of the
Merger,  the undersigned will not sell,  transfer,  or otherwise  dispose of his
interests  in, or reduce his risk relative to, any of the shares of Bryan Common
Stock  beneficially  owned  by  the  undersigned  as  of  the  record  date  for
determination of shareholders  entitled to vote at the Shareholders'  Meeting of
Bryan held to approve the Merger.

         4.  Restrictions on Transfer.  The  undersigned  understands and agrees
that stop transfer  instructions  with respect to the shares of Savannah  Common
Stock  received  by the  undersigned  pursuant  to the  Merger  will be given to
Savannah's  Transfer Agent and that there will be placed on the certificates for
such shares,  or shares  issued in  substitution  thereof,  a legend  stating in
substance:

"The shares  represented by this  certificate were issued pursuant to a business
combination  which is accounted for as a "pooling of  interests"  and may not be
sold, nor may the owner thereof  reduce his risks  relative  thereto in any way,
until such time as The Savannah  Bancorp,  Inc.  ("Savannah")  has published the
financial  results  covering at least 30 days of combined  operations  after the
effective  date  of the  merger  through  which  the  business  combination  was
effected.  In addition,  the shares  represented by this  certificate may not be
sold,  transferred  or otherwise  disposed of except or unless (1) covered by an
effective  registration  statement under the Securities Act of 1933, as amended,
(2) in  accordance  with (i) Rule  145(d)  (in the case of  shares  issued to an
individual who is not an affiliate of Savannah) or (ii) Rule 144 (in the case of
shares issued to an individual who is an affiliate of Savannah) of the Rules and
Regulations of such Act, or (3) in accordance with a legal opinion  satisfactory
to counsel for Savannah that such sale or transfer is otherwise  exempt from the
registration requirements of such Act."

Such  legend  will  also be  placed  on any  certificate  representing  Savannah
securities  issued  subsequent to the original  issuance of the Savannah  Common
Stock  pursuant to the Merger as a result of any  transfer of such shares or any
stock dividend,  stock split, or other  recapitalization as long as the Savannah
Common  Stock  issued to the  undersigned  pursuant  to the  Merger has not been
transferred in such manner to justify the removal of the legend therefrom.  Upon
the  request  of  the   undersigned,   Savannah  shall  cause  the  certificates
representing  the shares of Savannah  Common Stock issued to the  undersigned in
connection  with the  Merger  to be  reissued  free of any  legend  relating  to
restrictions  on  transfer  by virtue of ASR 130 and 135 as soon as  practicable
after the  requirements  of ASR 130 and 135 have been met. In  addition,  if the
provisions of Rules 144 and 145 are amended to eliminate restrictions applicable
to the Savannah Common Stock received by the undersigned pursuant to the Merger,
or at the  expiration  of the  restrictive  period  set  forth  in Rule  145(d),
Savannah,  upon the  request of the  undersigned,  will  cause the  certificates
representing  the shares of Savannah  Common Stock issued to the  undersigned in
connection  with the Merger to be  reissued  free of any legend  relating to the
restrictions  set forth in Rules 144 and 145(d)  upon  receipt by Savannah of an
opinion of its counsel to the effect that such legend may be removed.

         5.  Understanding of Restrictions on Dispositions.  The undersigned has
carefully  read the Agreement and this Affiliate  Agreement and discussed  their
requirements and impact upon his ability to sell, transfer, or otherwise dispose
of the shares of  Savannah  Common  Stock  received by the  undersigned,  to the
extent he believes necessary, with his counsel or counsel for Bryan.

         6.  Filing of Reports by  Savannah.  Savannah  agrees,  for a period of

<PAGE>
                                      2-78


three years after the  effective  date of the Merger,  to file on a timely basis
all reports  required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended,  so that the public information  provisions of
Rule 145(d)  promulgated  by the SEC as the same are presently in effect will be
available to the  undersigned in the event the  undersigned  desires to transfer
any shares of Savannah  Common Stock issued to the  undersigned  pursuant to the
Merger.

         7. Transfer Under Rule 145(d).  If the  undersigned  desires to sell or
otherwise  transfer  the shares of  Savannah  Common  Stock  received  by him in
connection with the Merger at any time during the  restrictive  period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for Savannah  Common Stock  together with such  additional
information as the transfer agent may reasonably  request. If Savannah's counsel
concludes that such proposed sale or transfer  complies with the requirements of
Rule 145(d),  Savannah  shall cause such counsel to provide such opinions as may
be necessary to Savannah's  Transfer Agent so that the  undersigned may complete
the proposed sale or transfer.

         8.  Acknowledgments.  The  undersigned  recognizes  and agrees that the
foregoing  provisions also apply to all shares of the capital stock of Bryan and
Savannah that are deemed to be beneficially owned by the undersigned pursuant to
applicable  federal  securities laws, which the undersigned  agrees may include,
without  limitation,  shares owned or held in the name of (i) the  undersigned's
spouse, (ii) any relative of the undersigned or of the undersigned's  spouse who
has the same  home as the  undersigned,  (iii)  any trust or estate in which the
undersigned, the undersigned's spouse, and any such relative collectively own at
least a 10%  beneficial  interest  or of which  any of the  foregoing  serves as
trustee, executor, or in any similar capacity, and (iv) any corporation or other
organization in which the  undersigned,  the  undersigned's  spouse and any such
relative  collectively own at least 10% of any class of equity  securities or of
the equity interest.  The undersigned further recognizes that, in the event that
the  undersigned  is a director  or officer of Savannah or becomes a director or
officer of Savannah upon  consummation  of the Merger,  among other things,  any
sale of Savannah  Common Stock by the  undersigned  within a period of less than
six  months  following  the  effective  time  of  the  Merger  may  subject  the
undersigned to liability  pursuant to Section 16(b) of the  Securities  Exchange
Act of 1934, as amended.

         9.  Miscellaneous.  This Affiliate  Agreement is the complete agreement
between Savannah and the undersigned  concerning the subject matter hereof.  Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt  requested,  using the addresses set forth herein
or such other  address as shall be  furnished  in writing by the  parties.  This
Affiliate   Agreement   shall  be   governed   by  the  laws  of  the  State  of
Georgia/Georgia.

         This  Affiliate  Agreement  is executed as of the ____ day of February,
1998.

Very truly yours,

---------------------------
Signature

---------------------------
Print Name

---------------------------
---------------------------
---------------------------
Address

[add below the signatures of all registered owners
of shares deemed beneficially owned by the affiliate]

---------------------------
Name:


<PAGE>
                                      2-79


---------------------------
Name:



---------------------------
Name:

AGREED TO AND ACCEPTED as of
February __, 1998

THE SAVANNAH BANCORP, INC.


By:_________________________




- 5 -
AD980330.104
<PAGE>
                                      2-80


"Executive"



                       EMPLOYMENT AGREEMENT


     THIS   EMPLOYMENT   AGREEMENT   (the   "Agreement")   is  effective  as  of
____________________,  1998, by and between BRYAN BANK & TRUST,  a Georgia state
Bank (the "Bank") and SAVANNAH  BANCORP,  INC.  ("Savannah")  (Bank and Savannah
collectively  referred to as "Employers"),  and E. JAMES BURNSED,  a resident of
the State of Georgia (the "Executive").

     WHEREAS,  Savannah, a Georgia  corporation,  has acquired all of the equity
interest of Bank by means of a merger (the  "Merger")  pursuant to an  Agreement
and Plan of Merger between Savannah and Bryan Bancorp, Inc. dated as of February
___, 1998 (the "Merger Agreement");

     WHEREAS, the Executive was the President and Chief Executive Officer of the
Bank and desires to continue as the  President of the Bank and Vice  Chairman of
the Board of Directors of Savannah;

     WHEREAS, the Employers desire that the Executive serve in such
capacities; and

     WHEREAS, the Employers and the Executive,  in conjunction with and pursuant
to the terms of the Merger  Agreement,  desire to set forth in writing the terms
and conditions of the Executive's Employment.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreements contained herein, and other good and valuable consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereby
agree as follows:

     1.   Employment and Duties.

      (a)The Employers hereby agree to employ the Executive and Executive agrees
to serve as the President of the Bank and Vice Chairman of the Board of Savannah
and to act in accordance with the terms and conditions set forth herein.  During
the term of this  Agreement,  the  Executive  agrees that he will serve the Bank
faithfully  and to the  best of his  ability  and that he will  devote  his full
business  time,  attention  and skills to the  operation  of the business of the
Employers,  subject to reasonable absences for vacation and illness, and that he
will perform such duties,  unctions and responsibilities in connection with such
position and consistent with the foregoing as are from time to time delegated to
the Executive by the Boards of Directors of the Employers  (the "Boards") or the
CEO of Savannah;  provided,  however,  that the foregoing shall not be deemed to
restrict the Executive  from devoting a reasonable  amount of time and attention
to the  management  of his  personal  affairs and  investments,  so long as such
activities do not interfere with the responsible  performance of the Executive's
duties hereunder. The Executive shall provide the Boards and the CEO of Savannah
with periodic  reports on, and keep it informed on a current  basis  concerning,
the business and affairs of the Bank.
<PAGE>
                                      2-81


      (b)The Bank shall provide the Executive with a private office, secretarial
and administrative assistance,  office equipment,  supplies and other facilities
and  services  suitable to the  Executive's  position to be located at 9971 Ford
Avenue,  Richmond Hill, Georgia or at a comparable location within Bryan County,
Georgia.

      2.Term.  The term ("Term") of this  Agreement  shall  commence on the date
hereof and shall continue until the first  anniversary of the date hereof unless
earlier terminated pursuant to Section 4 hereof.

      3.Compensation.  In  consideration  of the  services to be rendered by the
Executive  to the  Employers  hereunder,  the  Employers  hereby agree to pay or
otherwise  provide the  Executive the following  compensation  and benefits,  it
being  understood  that the Bank  shall have the right to deduct  therefrom  all
taxes which may be required to be deducted or withheld  under any  provision  of
applicable law (including,  without limitation, Social Security payments, income
tax withholding and other required  deductions now in effect or which may become
effective by law any time during the Term):

      (a)Salary. The Executive shall receive an annual salary of ("Salary") from
the Bank of $90,000.00 to be paid in equal  installments  in accordance with the
Bank's salary  payment  practices in effect from time to time for  executives of
the Bank.  The Bank may consider and declare from time to time  increases in the
Salary.

      (b)Compensation Pursuant to Plans. During the Term, the Executive shall be
included as a participant in all present and future employee benefit, retirement
and compensation plans generally available to employees of the Bank,  consistent
with his Salary and his position with the Employers.

      (c)Expenses.  The Executive shall be entitled to receive reimbursement for
all reasonable  expenses  incurred by him in connection  with the fulfillment of
his duties hereunder.  Upon receipt of appropriate  vouchers therefor,  provided
that the  Executive  has complied with all  reasonable  policies and  procedures
relating to the  reimbursement of such expenses as shall,  from time to time, be
established by the Bank.

      (d)Vacation and  Perquisites.  For so long as the Executive is employed by
the Bank hereunder,  the Executive shall be entitled to such paid vacation, sick
leave and such  perquisites  as are  provided  to other  executive  officers  of
Savannah's banking subsidiaries.

      (e)Change in Control  Agreement.  Employers,  by executing this Agreement,
assume the  obligations  of Bryan Bancorp of Georgia,  Inc.  under the Change in
Control Agreement with Executive dated May 22, 1996 ("Agreement"). Executive, by
executing  this  Agreement,  agrees to waive any rights  under the  Agreement to
payments  resulting  from the  merger  between  Savannah  and Bryan  Bancorp  of
Georgia,  Inc.  and  agrees to accept the  benefits  of this  Agreement  in full
payment in lieu of rights under the  Agreement,  except in the event of a Change
in Control of Savannah.

<PAGE>
                                      2-82


      (f)Stock Options.  To the extent not exercised,  Savannah agrees to assume
the Stock Option  Agreement  granting options to purchase 16,000 shares of Bryan
Bancorp  stock to E.  James  Burnsed  at a price of $9.93  per  share  for 4,000
shares,  $10.66 per share for 4,000  shares,  $11.75 per share for 4,000 shares,
and  $10.65  per share for 4,000  shares,  pursuant  to the terms of the  Merger
Agreement  between Savannah and Bryan Bancorp of Georgia,  Inc. Savannah further
agrees to grant to  Executive  pursuant to the Savannah  Incentive  Stock Option
Plan options to purchase  10,000 shares of Savannah stock at market price on the
same terms and conditions as other Savannah executives.

      (g)Life  Insurance.   Employers  agrees  to  provide  for  Executive  life
insurance  in  addition  to  life  insurance  provided  in the  benefit  package
described in paragraph (b) above  necessary to increase the total life insurance
provided by  Employers  to total  $575,000;  provided  however,  the  additional
premium to increase  theinsurance  above that otherwise provided in the standard
employee benefit package shall not exceed $2,000.

      (h)Automobile. Executive, during his employment, shall have the use of the
vehicle now in his possession and all expenses  relating to the operation of the
vehicle until  December 31, 2000 and thereafter  shall have the same  automobile
privileges  as  other  executives  of  Savannah's  banking  subsidiaries  and on
December 31, 2000, Executive shall have the right to purchase the vehicle now in
his  possession at the  depreciated  book value that the vehicle is shown on the
books of Bryan Bank & Trust on said date.

      (i)Cash Incentive Plan. Savannah agrees for the term of this Agreement and
for any  extended  term of  this  Agreement  to  provide  Executive  with a cash
incentive  payable  under the same terms and  conditions  as were payable  under
Bryan  Bank & Trust  Officer's  Cash  Incentive  Plan in  effect  at the time of
execution of the definitive agreement.

     4.   Termination.

      (a)This  Agreement  shall  terminate on the earliest to occur of the first
anniversary of the date hereof or the occurrence of any of the following events:
(i) the mutual  agreement of the Employees and the Executive;  (ii) the death or
Disability (as  hereinafter  defined) of the Executive or Executive's  voluntary
retirement; or (iii) immediate upon either of Employers giving written notice to
the Executive of termination for Cause (as defined herein).

      (b)The Bank may terminate the Executive's  employment under this Agreement
at any time for Cause.  The termination  shall be evidenced by written notice to
the  Executive,  which shall  specify the cause for  termination.  "Cause" shall
exist if: (i) the Executive is convicted of (from which no appeal may be taken),
or pleads guilty to, any act of fraud,  misappropriation or embezzlement, or any
felony;  (ii) in the reasonable  determination  of the Boards of Employers,  the
Executive has engaged in conduct or activity materially damaging to the business
of the Employers  (it being  understood  however,  that  unintentional  physical
damage to any property of the Employers by the  Executive  shall not be a ground
for such a  determination  by the  Board);  or (iii) the  Executive  has failed,

<PAGE>
                                      2-83


without  reasonable  cause, to devote his full business time and best efforts to
the business of the Bank as provided in Section 1(a) hereof and,  after  written
notice from the Bank of such failure, the Executive at any time thereafter again
so fails.

      (c)The  Executive may terminate his employment under this Agreement at any
time for Good Reason.  For purposes of this Agreement,  "Good Reason" shall mean
(i) the  assignment  to the  Executive of duties or  responsibilities  which are
materially  inconsistent  with  the  responsibilities  of an  executive  officer
holding the office of the Executive;  (ii) a material  breach by the Bank of any
of the material  provisions of this  Agreement;  (iii)  reduction of Executive's
salary or benefits; or (iv) Employers requiring the Executive to be based at any
place  outside a fifty mile  radius  from  Richmond  Hill,  Georgia,  except for
reasonably required travel on the Employers' business.

      (d)In the event that the  Executive's  employment  hereunder is terminated
during the initial term or any extended term of this  Agreement by Executive for
reason of Good Cause or by the  Employers  other than for Cause,  the  Executive
shall be entitled to receive the Salary,  health  insurance  benefits,  and life
insurance  benefits provided under this Agreement for a period of one year after
the date of such termination. For purposes of this Agreement, "Disability" shall
mean the absence of the Executive  from the  Executive's  duties  hereunder on a
full-time  basis for 120  consecutive  business days (or such shorter  period as
will suffice for the Executive to qualify for full disability benefits under the
applicable disability insurance policy or policies of the Employers) as a result
of incapacity due to mental or physical  illness which is determined to be total
and  permanent  by a physician  selected by the  Employers  or its  insurers and
reasonably acceptable to the Executive or the Executive's legal representative.

     5.   Representations and Warranties.

      (a)The Executive represents and warrants to the Employers that: (i) he has
the full power and authority to execute,  deliver and perform this Agreement and
that he has taken all  actions  necessary  to secure all  approvals  required in
connection herewith; (ii) this Agreement has been duly authorized,  executed and
delivered by him and  constitutes his valid and binding  agreement,  enforceable
against him in accordance with its terms; and (iii) the execution,  delivery and
performance  of  this  Agreement  and  the   consummation  of  the  transactions
contemplated hereby  will not,  with the passage of time or the giving of notice
or both, violate  or  conflict  with,  constitute  a breach of or default under,
result in the loss of any material  benefit under, or permit the acceleration of
or entitle any party to  accelerate  any  obligation  under or pursuant  to, any
material  mortgage,  lien, leases,  agreement,  instrument,  order,  arbitration
award,  judgment  or  decree to which he is a party or by which he or any of his
assets are bound.

      (b)the  Employers  hereby represent and warrant to the Executive that: (i)
this  Agreement  has been duly  authorized,  executed  and  delivered  by it and
constitutes  the valid and binding  agreement of it,  enforceable  against it in
accordance with its terms;  (ii) it has the full power and authority to execute,
deliver and perform this Agreement and has taken all necessary  action to secure
all approvals required in connection herewith; and (iii) the execution, delivery
and  performance  of this  Agreement and the  consummation  of the  transactions
contemplated  hereby will not,  with the passage of time or the giving of notice
or both,  violate or conflict  with,  constitute  a breach of or default  under,
result in the loss of any material  benefit under, or permit the acceleration of

<PAGE>
                                      2-84


or entitle any party to  accelerate  any  obligation  under or pursuant  to, its
charter or bylaws or any material mortgage, lien, lease, agreement,  instrument,
order,  arbitration award, judgment or decree to which it is a party or by which
it or any of its assets are bound.

      6.Notices.  Any notice or other communication  required or permitted to be
given hereunder shall be in writing and deemed to have been given when delivered
in person or when  dispatched  by  telegram  or  electronic  facsimile  transfer
(confirmed  in  writing  by  mail,  registered  or  certified,   return  receipt
requested,   postage  prepaid,   simultaneously  dispatched)  to  the  addresses
specified below.

      If to the Executive:E. James Burnsed
     Bryan Bank & Trust
     9971 Ford Avenue
     Richmond Hill, GA 31224
     Facsimile No.: (912) 756-4617

      If to the EmployersSavannah Bancorp, Inc.
     25 Bull Street
     Savannah, GA 31401
     Facsimile No.: (912) 651-4141
     Attention:  President



or to such other  address  or fax  number as either  party may from time to time
designate in writing to the other.

      7.Entire  Agreement.  This  Agreement  constitutes  the  entire  agreement
between the parties hereto relating to the subject matter hereof, and supersedes
all prior agreements and understandings,  whether oral or written,  with respect
to  the  same.  No  modification,  alteration,  amendment  or  rescission  of or
supplement to this Agreement  shall be valid or effective  unless the same is in
writing and signed by both parties hereto.

      8.Governing  Law. This  Agreement and the rights and duties of the parties
hereunder shall be governed by,  construed under and enforced in accordance with
the laws of the State of Georgia.

      9.Assignment.  This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective  heirs,  personal  representatives,
successors and permitted assigns. The rights,  duties and obligations under this
Agreement are assignable by the Employers to a successor of all or substantially
all of the  business  or  assets  of  the  Employers.  The  rights,  duties  and
obligations of the Executive under this Agreement shall not be assignable.

     IN WITNESS  WHEREOF,  the Bank has caused this Agreement to be executed and
delivered,  and the Executive has executed and delivered this Agreement,  all as
of the day and year first above written.

     SAVANNAH BANCORP, INC.

     BY:/S/ Archie H. Davis

     Its: President & CEO


     BRYAN BANK & TRUST

     BY:/S/ E. James Burnsed

     Its: President & CEO


<PAGE>
                                      2-85


                       EMPLOYMENT AGREEMENT


     THIS   EMPLOYMENT   AGREEMENT   (the   "Agreement")   is  effective  as  of
____________________,  1998, by and between BRYAN BANK & TRUST,  a Georgia state
Bank (the  "Bank") and SAVANNAH  BANCORP,  INC.  ("Savannah)  (Bank and Savannah
collectively  referred  to as  "Employers"),  and GEORGE  MICHAEL  ODOM,  JR., a
resident of the State of Georgia (the "Executive").

     WHEREAS,  Savannah, a Georgia  corporation,  has acquired all of the equity
interest of Bank by means of a merger (the  "Merger")  pursuant to an  Agreement
and Plan of Merger between Savannah and Bryan Bancorp, Inc. dated as of February
___, 1998 (the "Merger Agreement");

     WHEREAS,  the Executive was the  Executive  Vice  President of the Bank and
desires to continue as the Executive Vice President of the Bank;

     WHEREAS, the Employers desire that the Executive serve in such
capacities; and

     WHEREAS, the Employers and the Executive,  in conjunction with and pursuant
to the terms of the Merger  Agreement,  desire to set forth in writing the terms
and conditions of the Executive's Employment.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
and agreements contained herein, and other good and valuable consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereby
agree as follows:

     1.   Employment and Duties.

      (a)The Employers hereby agree to employ the Executive and Executive agrees
to serve as the  Executive  Vice  President of the Bank and to act in accordance
with  the  terms  and  conditions  set  forth  herein.  During  the term of this
Agreement,  the Executive  agrees that he will serve the Bank  faithfully and to
the  best of his  ability  and  that he will  devote  his  full  business  time,
attention and skills to the operation of the business of the Employers,  subject
to reasonable  absences for vacation and illness,  and that he will perform such
duties,  functions and  responsibilities  in  connection  with such position and
consistent  with  the  foregoing  as are  from  time  to time  delegated  to the
Executive by the Boards of Directors of the Employers  (the "Boards") or the CEO
of the  Bank;  provided,  however,  that the  foregoing  shall  not be deemed to
restrict the Executive  from devoting a reasonable  amount of time and attention
to the  management  of his  personal  affairs and  investments,  so long as such
activities do not interfere with the responsible  performance of the Executive's
duties hereunder. The Executive shall provide the Boards and the CEO of the Bank
with periodic  reports on, and keep it informed on a current  basis  concerning,
the business and affairs of the Bank.

<PAGE>
                                      2-86


      (b)The Bank shall provide the Executive with a private office, secretarial
and administrative assistance,  office equipment,  supplies and other facilities
and  services  suitable to the  Executive's  position to be located at 9971 Ford
Avenue,  Richmond Hill, Georgia or at a comparable location within Bryan County,
Georgia.

      2.Term.  The term ("Term") of this  Agreement  shall  commence on the date
hereof and shall continue until the first  anniversary of the date hereof unless
earlier terminated pursuant to Section 4 hereof.

      3.Compensation.  In  consideration  of the  services to be rendered by the
Executive  to the  Employers  hereunder,  the  Employers  hereby agree to pay or
otherwise  provide the  Executive the following  compensation  and benefits,  it
being  understood  that the Bank  shall have the right to deduct  therefrom  all
taxes which may be required to be deducted or withheld  under any  provision  of
applicable law (including,  without limitation, Social Security payments, income
tax withholding and other required  deductions now in effect or which may become
effective by law any time during the Term):

      (a)Salary. The Executive shall receive an annual salary of ("Salary") from
the Bank of $80,000.00 to be paid in equal  installments  in accordance with the
Bank's salary  payment  practices in effect from time to time for  executives of
the Bank.  The Bank may consider and declare from time to time  increases in the
Salary.

      (b)Compensation Pursuant to Plans. During the Term, the Executive shall be
included  as a  participant  in all  present and future  employee  benefit,  and
retirement plans generally  available to employees of the Bank,  consistent with
his Salary and his position with the Employers.

      (c)Expenses.  The Executive shall be entitled to receive reimbursement for
all reasonable  expenses  incurred by him in connection  with the fulfillment of
his duties hereunder.  Upon receipt of appropriate  vouchers therefor,  provided
that the  Executive  has complied with all  reasonable  policies and  procedures
relating to the  reimbursement of such expenses as shall,  from time to time, be
established by the Bank.

      (d)Vacation and  Perquisites.  For so long as the Executive is employed by
the Bank hereunder,  the Executive shall be entitled to such paid vacation, sick
leave and such  perquisites  as are  provided  to other  executive  officers  of
Savannah's banking subsidiaries.

      (e)Change in Control  Agreement.  Employers,  by executing this Agreement,
assume the  obligations  of Bryan Bancorp of Georgia,  Inc.  under the Change in
Control Agreement with Executive dated May 22, 1996 ("Agreement"). Executive, by
executing  this  Agreement,  agrees to waive any rights  under the  Agreement to
payments  resulting  from the  merger  between  Savannah  and Bryan  Bancorp  of
Georgia,  Inc.  and  agrees to accept the  benefits  of this  Agreement  in full
payment in lieu of rights under the  Agreement,  except in the event of a Change
in Control of Savannah.


<PAGE>
                                      2-87


      (f)Stock  Options.  Savannah  agrees to assume the Stock Option  Agreement
granting  options to  purchase  5,000  shares of Bryan  Bancorp  stock to George
Michael Odom,  Jr. at a price of $19.00 a share under the 1997  Incentive  Stock
Option  Plan of Bryan  Bancorp of  Georgia,  Inc.,  pursuant to the terms of the
Merger Agreement  between Savannah and Bryan Bancorp of Georgia,  Inc.  Savannah
further  agrees  to assume  the Stock  Option  Agreement  pursuant  to the Bryan
Bancorp of Georgia,  Inc. 1997  Incentive  Stock Option Plan dated  February 10,
1998  granting to  Executive  the option to purchase  2,500 shares at a price of
$47.17 per share.

      (g)Life  Insurance.   Employers  agrees  to  provide  for  Executive  life
insurance  in  addition  to  life  insurance  provided  in the  benefit  package
described in paragraph (b) above  necessary to increase the total life insurance
provided by  Employers  to total  $450,000;  provided  however,  the  additional
premium to increase the insurance above  that otherwise provided in the standard
employee benefit package shall not exceed $1,500.

      (h)Automobile. Executive, during his employment, shall have the use of the
Ford Explorer  vehicle now in his  possession  and all expenses  relating to the
operation of the vehicle until December 31, 2000 and  thereafter  shall have the
same   automobile   privileges  as  other   executives  of  Savannah's   banking
subsidiaries  and on  December  31,  2000,  Executive  shall  have the  right to
purchase  the Ford  Explorer at the  depreciated  book value that the vehicle is
shown on the books of Bryan Bank & Trust on said date.

      (i)Cash Incentive Plan. Savannah agrees for the term of this Agreement and
for any  extended  term of  this  Agreement  to  provide  Executive  with a cash
incentive  payable  under the same terms and  conditions  as were payable  under
Bryan  Bank & Trust  Officer's  Cash  Incentive  Plan in  effect  at the time of
execution of the definitive agreement.

     4.   Termination.

      (a)This  Agreement  shall  terminate on the earliest to occur of the first
anniversary of the date hereof or the occurrence of any of the following events:
(i) the mutual  agreement of the Employees and the Executive;  (ii) the death or
Disability (as  hereinafter  defined) of the Executive or Executive's  voluntary
retirement; or (iii) immediate upon either of Employers giving written notice to
the Executive of termination for Cause (as defined herein).

      (b)The Bank may terminate the Executive's  employment under this Agreement
at any time for Cause.  The termination  shall be evidenced by written notice to
the  Executive,  which shall  specify the cause for  termination.  "Cause" shall
exist if: (i) the Executive is convicted of (from which no appeal may be taken),
or pleads guilty to, any act of fraud,  misappropriation or embezzlement, or any
felony;  (ii) in the reasonable  determination  of the Boards of Employers,  the
Executive has engaged in conduct or activity materially damaging to the business
of the Employers  (it being  understood  however,  that  unintentional  physical
damage to any property of the Employers by the  Executive  shall not be a ground
for such a  determination  by the  Board);  or (iii) the  Executive  has failed,
without  reasonable  cause, to devote his full business time and best efforts to
the business of the Bank as provided in Section 1(a) hereof and,  after  written
notice from the Bank of such failure, the Executive at any time thereafter again
so fails.

<PAGE>
                                      2-88


      (c)The  Executive may terminate his employment under this Agreement at any
time for Good Reason.  For purposes of this Agreement,  "Good Reason" shall mean
(i) the  assignment  to the  Executive of duties or  responsibilities  which are
materially  inconsistent  with  the  responsibilities  of an  executive  officer
holding the office of the Executive;  (ii) a material  breach by the Bank of any
of the material  provisions of this  Agreement;  (iii)  reduction of Executive's
salary or benefits; or (iv) Employers requiring the Executive to be based at any
place  outside a fifty mile  radius  from  Richmond  Hill,  Georgia,  except for
reasonably required travel on the Employers' business.

      (d)In the event that the  Executive's  employment  hereunder is terminated
during the initial term or any extended term of this  Agreement by Executive for
reason of Good Cause or by the  Employers  other than for Cause,  the  Executive
shall be entitled to receive the Salary,  health  insurance  benefits,  and life
insurance  benefits provided under this Agreement for a period of one year after
the date of such termination. For purposes of this Agreement, "Disability" shall
mean the absence of the Executive  from the  Executive's  duties  hereunder on a
full-time  basis for 120  consecutive  business days (or such shorter  period as
will suffice for the Executive to qualify for full disability benefits under the
applicable disability insurance policy or policies of the Employers) as a result
of incapacity due to mental or physical  illness which is determined to be total
and  permanent  by a physician  selected by the  Employers  or its  insurers and
reasonably acceptable to the Executive or the Executive's legal representative.


     5.   Representations and Warranties.

      (a)The Executive represents and warrants to the Employers that: (i) he has
the full power and authority to execute,  deliver and perform this Agreement and
that he has taken all  actions  necessary  to secure all  approvals  required in
connection herewith; (ii) this Agreement has been duly authorized,  executed and
delivered by him and  constitutes his valid and binding  agreement,  enforceable
against him in accordance with its terms; and (iii) the execution,  delivery and
performance  of  this  Agreement  and  the   consummation  of  the  transactions
contemplated  hereby will not,  with the passage of time or the giving of notice
or both,  violate or conflict  with,  constitute  a breach of or default  under,
result in the loss of any material  benefit under, or permit the acceleration of
or entitle any party to  accelerate  any  obligation  under or pursuant  to, any
material  mortgage,  lien, leases,  agreement,  instrument,  order,  arbitration
award,  judgment  or  decree to which he is a party or by which he or any of his
assets are bound.

      (b)the  Employers  hereby represent and warrant to the Executive that: (i)
this  Agreement  has been duly  authorized,  executed  and  delivered  by it and
constitutes  the valid and binding  agreement of it,  enforceable  against it in
accordance with its terms;  (ii) it has the full power and authority to execute,
deliver and perform this Agreement and has taken all necessary  action to secure
all approvals required in connection herewith; and (iii) the execution, delivery
and  performance  of this  Agreement and the  consummation  of the  transactions
contemplated  hereby will not,  with the passage of time or the giving of notice
or both,  violate or conflict  with,  constitute  a breach of or default  under,
result in the loss of any material  benefit under, or permit the acceleration of
or entitle any party to  accelerate  any  obligation  under or pursuant  to, its
charter or bylaws or any material mortgage, lien, lease, agreement,  instrument,
order,  arbitration award, judgment or decree to which it is a party or by which
it or any of its assets are bound.
<PAGE>
                                      2-89


      6.Notices.  Any notice or other communication  required or permitted to be
given hereunder shall be in writing and deemed to have been given when delivered
in person or when  dispatched  by  telegram  or  electronic  facsimile  transfer
(confirmed  in  writing  by  mail,  registered  or  certified,   return  receipt
requested,   postage  prepaid,   simultaneously  dispatched)  to  the  addresses
specified below.






      If to the Executive:George Michael Odom, Jr.
     Bryan Bank & Trust
     9971 Ford Avenue
     Richmond Hill, GA 31224
     Facsimile No.: (912) 756-4617

       If to the EmployersSavannah Bancorp, Inc.
     25 Bull Street
     Savannah, GA 31401
     Facsimile No.: (912) 651-4141
     Attention:  President

or to such other  address  or fax  number as either  party may from time to time
designate in writing to the other.

      7.Entire  Agreement.  This  Agreement  constitutes  the  entire  agreement
between the parties hereto relating to the subject matter hereof, and supersedes
all prior agreements and understandings,  whether oral or written,  with respect
to  the  same.  No  modification,  alteration,  amendment  or  rescission  of or
supplement to this Agreement  shall be valid or effective  unless the same is in
writing and signed by both parties hereto.

      8.Governing  Law. This  Agreement and the rights and duties of the parties
hereunder shall be governed by,  construed under and enforced in accordance with
the laws of the State of Georgia.

      9.Assignment.  This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective  heirs,  personal  representatives,
successors and permitted assigns. The rights,  duties and obligations under this
Agreement are assignable by the Employers to a successor of all or substantially
all of the  business  or  assets  of  the  Employers.  The  rights,  duties  and
obligations of the Executive under this Agreement shall not be assignable.

     IN WITNESS  WHEREOF,  the Bank has caused this Agreement to be executed and
delivered,  and the Executive has executed and delivered this Agreement,  all as
of the day and year first above written.

     SAVANNAH BANCORP, INC.

     BY: /S/ Archie H. Davis

     Its: President & CEO


     BRYAN BANK & TRUST

     BY:/S/ George Michael Odum, Jr.

     Its:Executive Vice President


<PAGE>