Document:

Subscription and Registration Rights Agreement

    
    

    Exhibit
      10.1

    
       

      SUBSCRIPTION
        AND REGISTRATION RIGHTS AGREEMENT

       

      THE
        SAVANNAH BANCORP, INC.

       

       

      Private
        Offering

      of
        up to 400,000 Shares of

      Common
        Stock

       

       

                 
        This Subscription and Registration Rights Agreement (this "Agreement"),
        made as of the date set forth below by and between The Savannah Bancorp,
        Inc., a
        Georgia corporation (the "Company"), and the undersigned (the
        "Subscriber"), is intended to set forth certain representations,
        covenants and agreements between the Company and the Subscriber, with respect
        to
        the offering (the "Offering") for sale by the Company of shares (the
        "Shares") of the Company's common stock, par value $1.00 per share (the
        "Common Stock"), as described in the Company's Private Placement
        Memorandum dated August 12, 2005 (the "Memorandum"), a copy of which has
        been delivered to the Subscriber.  The Shares are being offered by
        the
        Company through Sterne, Agee & Leach, Inc., as placement agent (the
        "Placement Agent").

       

          1.     Subscription.
        Subject
        to the terms and conditions hereof, the Subscriber hereby irrevocably subscribes
        for and agrees to purchase from the Company the number of Shares set forth
        under
        the Subscriber's name on the signature page hereto at a purchase price of
        $30.50
        per Share (the "Offering
        Price"),
        and
        the Company agrees to sell such Shares to the Subscriber at the Offering
        Price,
        subject to the Company's right to sell to the Subscriber such lesser number
        of
        Shares as the Company may, in its sole discretion, deem necessary or
        desirable.

       

          2.     Delivery
        of Subscription Amount; Acceptance of Subscription; Delivery of
        Shares.
        The
        Subscriber understands and agrees that this subscription is made subject
        to the
        following terms and conditions:

       

          (a)     The
        Subscriber understands that separate Subscription and Registration Rights
        Agreements will be executed with other subscribers for up to 400,000 Shares
        to
        be sold in the Offering;

       

          (b)     Contemporaneously
        with the completion, execution and delivery of this Agreement, the Subscriber
        shall complete, execute and deliver the Certificate of Accredited Investor
        Status attached as Exhibit
        B
        hereto,
        and shall submit to the Company payment in the form of either a wire of
        immediately available United States funds or a check, each in the amount
        equal
        to the Offering Price multiplied by the number of Shares for which the
        Subscriber has subscribed (the "Subscription
        Amount")
        in
        accordance with the Subscription Instructions set forth on Exhibit
        A
        hereto;

      
        
          
          

        

        
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          (c)     The
        subscription for Shares shall be deemed to be accepted only when this Agreement
        has been signed by an authorized officer of the Company, and the deposit
        of the
        Subscription Amount for clearance will not be deemed an acceptance of this
        Agreement; 

       

          (d)     The
        Company
        shall have the right to reject this subscription, in whole or in part, and
        shall
        have the right to allocate Shares among subscribers in any manner it may
        desire;

       

          (e)     The
        payment
        representing the Subscription Amount (or, in the case of rejection of a portion
        of the Subscriber's subscription, the part of the payment relating to such
        rejected portion) will be returned promptly to the Subscriber, without interest,
        if the Subscriber's subscription is rejected in whole or in part or if the
        Offering is withdrawn or canceled; 

       

          (f)     The
        Placement
        Agent and the Company may conduct one or more closings of the Offering (each
        a
        "Closing")
        until
        all 400,000 Shares offered for sale in the Offering are sold; 

       

          (g)     The
        Company
        may, in its sole discretion, terminate the Offering at any time and accept
        any
        subscriptions then in its receipt;

       

          (h)     Certificates
        representing the Shares purchased will be issued in the name of each Subscriber
        within 14 days following each Closing;

       

           (i)     The
        minimum Subscription Amount is $50,000, provided, however, that the Company
        reserves the right, in its sole discretion, to accept subscriptions for less
        than the minimum Subscription Amount;

       

          (j)     The
        Offering
        is being conducted on a "best efforts" basis, and the Company is not required
        to
        accept any minimum number of subscriptions before conducting a Closing;
        and

       

          (k)     The
        representations and warranties of the Company and the Subscriber set forth
        herein shall be true and correct as of the date that the Company accepts
        this
        subscription.

       

          3.     Terms
        of
        Subscription.

       

          (a)     The
        subscription period will begin as of August 12, 2005, and will continue until
        such time as the Company terminates it in its sole discretion.

       

          (b)     The
        Placement Agent will receive a placement management fee equal to five percent
        (5.0%) of the total gross proceeds resulting from the placement of Shares
        by the
        Placement Agent (under the terms of the agreement between the Company and
        the
        Placement Agent, the Placement Agent is assured that it may place not less
        than
        two-thirds of the Shares to be sold) and one percent (1%) of the total gross
        proceeds resulting from the placement of Shares by the Company. The Company
        shall also reimburse the Placement Agent for its out-of-pocket expenses,
        including the fees and expenses of the Placement Agent's legal counsel, up
        to a
        maximum (without the consent of the Company) of $45,000.

      
        
          
          

        

        
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          (c)     If
        the
        Subscriber is not a United States person, the Subscriber hereby represents
        that
        it has satisfied itself as to the full observance of the laws of its
        jurisdiction in connection with any invitation to subscribe for the Shares
        or
        any use of this Agreement, including, without limitation, (i) the legal
        requirements within its jurisdiction for the purchase of the Shares, (ii)
        any
        foreign exchange restrictions applicable to such purchase, (iii) any
        governmental or other consents that may need to be obtained, and (iv) the
        income
        tax and other tax consequences, if any, that may be relevant to the purchase,
        holding, redemption, sale or transfer of the Shares. The Subscriber represents
        and warrants that the Subscriber's subscription and payment for, and the
        Subscriber's continued beneficial ownership of, the Shares will not violate
        any
        applicable securities or other laws of the Subscriber's
        jurisdiction.

       

          4.     Registration
        Rights.

       

          (a)     The
        Subscriber acknowledges that it is acquiring the Shares for its own account
        and
        for the purpose of investment and not with a view to any distribution or
        resale
        thereof within the meaning of the Securities Act of 1933, as amended (the
        "Securities
        Act").
        The
        Subscriber further agrees that it will not sell, assign or transfer the Shares
        at any time in violation of the Securities Act and acknowledges that, in
        taking
        unregistered securities, it must continue to bear the economic risk of its
        investment for an indefinite period of time because of the fact that the
        Shares
        have not been registered under the Securities Act, and further realizes that
        the
        Shares cannot be sold unless subsequently registered under the Securities
        Act or
        an exemption from such registration is available. The Subscriber also
        acknowledges that appropriate legends reflecting the status of the Shares
        under
        the Securities Act may be placed on the face of the certificates for such
        Shares
        at the time of their transfer and delivery to the holder thereof.

       

          (b)     The
        Shares
        may not be transferred except in a transaction that is in compliance with
        the
        Securities Act. Except as provided hereafter with respect to registration
        of the
        Shares, it shall be a condition to any such transfer that the Company shall
        be
        furnished with an opinion of counsel to the holder of such Shares, reasonably
        satisfactory to the Company, to the effect that the proposed transfer would
        be
        in compliance with the Securities Act.

       

          (c)     Within
        90
        days following the last Closing, as may be extended by such additional number
        of
        days as are solely and directly attributable to any delay caused by any act
        or
        failure to act by any of the purchasers of the Shares or their counsel, the
        Company shall prepare and file with the Securities and Exchange Commission
        (the
        "SEC"),
        a
        registration statement on Form S-3 and such other documents as may be necessary
        in the opinion of counsel for the Company, and use its best efforts to have
        such
        registration statement declared effective as soon as reasonably practicable
        after such filing (including responding to comments of the SEC within 15
        business days following the Company's receipt thereof, unless otherwise directed
        or agreed to by a majority of the holders of Shares or their counsel, or
        unless
        a delay in so responding is caused by any act or failure to act by any of
        the
        holders of Shares or their counsel) in order to comply with the provisions
        of
        the Securities Act, so as to permit the registered resale of the Shares for
        a
        period of two (2) years following the last sale of Shares in the Offering
        by
        each and every holder of Shares, except for those holders who designate on
        the
        signature page hereto that they do not wish to have their Shares included
        in the
        registration statement. The Shares that are registered for resale under such
        registration statement are referred to herein as the "Offering Shares,"
        and the Subscribers who are eligible to sell their Offering Shares under
        such

      
        
          
          

        

        
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        registration
          statement, together with theiraffiliates, are hereafter referred to as
          "Offering Holders." The Company will include in such registration
          statement (i) the information required under the Securities Act to be so
          included concerning the Offering Holders, as provided by the Offering Holders
          on
          the signature pages to this Agreement and the other Subscription and
          Registration Rights Agreements entered into in connection with the Offering,
          including any changes in such information that may be provided by the Offering
          Holders in writing to the Company from time to time, and (ii) a section
          entitled
          "Plan of Distribution," substantially in the form of Exhibit
          C
          hereto,
          that describes the various procedures that may be used by the Offering
          Holders
          in the resale of their Offering Shares.

      

       

          (d)     In
        the event
        that the Company does not file a registration statement to register the Offering
        Shares with the SEC within the time period specified in Section 4(c), the
        Company will be required to pay a penalty to each Offering Holder equal to
        one
        percent (1%) of such Offering Holder's purchase price for the Offering Shares,
        and an additional one percent (1%) for each additional 30-day period during
        which such registration statement is not filed.

       

          (e)     Notwithstanding
        the
        foregoing provisions of this Section 4, the Company may voluntarily suspend
        the
        effectiveness of any such registration statement for a limited time, which
        in no
        event shall be longer than 60 days in any three‐month period and no longer than
        120 days in any twelve-month period, if the Company has been advised in writing
        by counsel or underwriters to the Company that the offering of any Offering
        Shares pursuant to the registration statement would materially adversely
        affect,
        or would be improper in view of (or improper without disclosure in a
        prospectus), a proposed financing, reorganization, recapitalization, merger,
        consolidation, or similar transaction involving the Company. The Company
        shall
        notify all Offering Holders to such effect, and, upon receipt of such notice,
        each such Offering Holder shall immediately discontinue any sales of Offering
        Shares pursuant to such registration statement until such Offering Holder
        has
        received copies of a supplemented or amended prospectus or until such Offering
        Holder is advised in writing by the Company that the then current prospectus
        may
        be used and has received copies of any additional or supplemental filings
        that
        are incorporated or deemed incorporated by reference in such
        prospectus.

       

          (f)     If
        any
        event occurs that would cause any such registration statement to contain
        a
        material misstatement or omission or not to be effective and usable during
        the
        period that such registration statement is required to be effective and usable,
        the Company shall promptly notify the Offering Holders of such event and,
        if
        requested, the Offering Holders shall immediately cease making offers of
        Offering Shares and return all prospectuses to the Company. The Company shall
        promptly file an amendment to the registration statement to correct such
        misstatement or omission and use its best efforts to cause such amendment
        to be
        declared effective as soon as reasonably practicable thereafter. The Company
        shall promptly provide the Offering Holders with revised prospectuses and,
        following receipt of the revised prospectuses, the Offering Holders shall
        be
        free to resume making offers of the Offering Shares.

       

          (g)     Notwithstanding
        any
        provision contained herein to the contrary, the Company's obligation to include,
        or continue to include, Offering Shares in any such registration statement
        under
        this Section 4 shall terminate to the extent such Offering Shares are eligible
        for resale under Rule 144(k) promulgated under the Securities Act.

      
        
          
          

        

        
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          (h)     If
        and
        whenever the Company is required by the provisions of this Agreement to use
        its
        best efforts to effect the registration of the Offering Shares under the
        Securities Act for the account of an Offering Holder, the Company will, as
        promptly as possible:

       

      
            (i)     prepare
          and
          file with the SEC a registration statement, on Form S-3, complying with
          applicable requirements under the Securities Act, with respect to such
          securities and use its best efforts to cause such registration statement
          to
          become and remain effective for a period of two (2) years following the
          last
          sale of Shares in the Offering; 

         

            (ii)     prepare
          and
          file with the SEC such amendments and supplements to such registration
          statement
          and the prospectus used in connection therewith as may be necessary to
          keep such
          registration statement effective and to comply with the requirements of
          the
          Securities Act and the rules and regulations promulgated by the SEC thereunder
          relating to the sale or other disposition of the securities covered by
          such
          registration statement; and 

         

            (iii)     furnish
          to
          each Offering Holder such numbers of copies of a prospectus, including
          a
          preliminary prospectus, complying with the requirements of the Securities
          Act,
          and such other documents as such Offering Holder may reasonably request
          in order
          to facilitate the public sale or other disposition of the Offering Shares
          owned
          by such Offering Holder, but such Offering Holder shall not be entitled
          to use
          any selling materials other than a prospectus and such other materials
          as may be
          approved by the Company, which approval will not be unreasonably
          withheld.

         

      

                 
        (i)         Except
        as provided below in
        this Section 4, the expenses incurred by the Company in connection
        with
        action taken by the Company to comply with this Section 4, including,
        without limitation, all registration and filing fees, printing and delivery
        expenses, accounting fees, fees and disbursements of counsel to the Company,
        consultant and expert fees, premiums for liability insurance, if the Company
        chooses to obtain such insurance, obtained in connection with a registration
        statement filed to effect such compliance and all expenses, including counsel
        fees, of complying with any state securities laws, shall be paid by the
        Company.  All fees and disbursements of any counsel, experts, or
        consultants employed by any Offering Holder shall be borne by such Offering
        Holder.  The Company shall not be obligated in any way in connection
        with
        any registration pursuant to this Section 4 for any selling commissions
        or
        discounts payable by any Offering Holder to any underwriter or broker of
        securities to be sold by such Offering Holder.  The Subscriber agrees
        that
        any such selling commissions or discounts shall be borne by such Offering
        Holder.

       

                 
        (j)         In the
        event of any
        registration of Shares pursuant to this Section 4, the Company will
        indemnify and hold harmless each Offering Holder, its officers, directors,
        attorneys, partners, agents, employees and consultants and each underwriter
        of
        such securities, and any person who controls such Offering Holder or underwriter
        within the meaning of Section 15 of the Securities Act (collectively,
        the
        "Indemnified Parties"), against all claims, actions, losses, damages,
        liabilities and expenses, joint or several, to which any of such Indemnified
        Parties may become subject under the Securities Act or otherwise, insofar
        as
        such losses, claims, damages, liabilities or actions arise out of or are
        based
        upon any actual or alleged untrue statement of any material fact contained
        in
        any registration statement under which such

       

      
        
          
          

        

        
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      securities were registered
        under the Securities Act, any preliminary prospectus or final prospectus
        contained therein, or any amendment or supplement thereof, or arise out of
        or
        are based upon the actual or alleged omission to state therein a material
        fact
        required to be stated therein or necessary to make the statements therein,
        in
        light of the circumstances under which they were made, not misleading, and
        will
        reimburse each of such Indemnified Parties for any legal and any other expenses
        reasonably incurred by such Indemnified Party in connection with investigating
        or defending any such loss, claim, damage, liability, or action; provided,
        however, that the Company will not be liable in any such case to the extent
        that
        any such loss, claim, damage, liability or action arises directly out of
        or is
        based primarily upon an untrue statement or omission of a material fact made
        in
        said registration statement, said preliminary prospectus or said prospectus,
        or
        said amendment or supplement in reliance upon and in conformity with written
        information furnished to the Company by such Offering Holder or such underwriter
        specifically for use in the preparation thereof; and provided further, however,
        that the Company will not be liable in any such case to the extent that any
        such
        loss, claim, damage or liability or action arises directly out of or is based
        primarily upon an untrue statement or omission of a material fact made in
        any
        preliminary prospectus or final prospectus if (i) such Offering Holder failed
        to
        send or deliver the copy of the final prospectus or prospectus supplement
        which
        such Offering Holder shall have been previously provided by the Company,
        with or
        prior to the delivery of written confirmation of the sale of the Offering
        Shares, and (ii) the final prospectus or prospectus supplement would have
        corrected such untrue statement or omission.

       

                 
        (k)        At any time when
        a prospectus
        relating to the Offering is required to be delivered under the Securities
        Act,
        the Company will notify the Offering Holder of the happening of any event,
        upon
        the notification or awareness of such event by an executive officer of the
        Company, as a result of which the prospectus included in such registration
        statement, as then in effect, includes an untrue statement of material fact
        or
        omits to state a material fact required to be stated therein or necessary
        to
        make the statements therein not misleading in light of the circumstances
        then
        existing.

       

                 
        (l)         In the
        event of any
        registration of any securities under the Securities Act pursuant to this
        Section 4, the Subscriber agrees to indemnify and hold harmless the
        Company, its officers, directors, attorneys, partners, agents, employees
        and
        consultants and any person who controls the Company within the meaning of
        Section 15 of the Securities Act (collectively, the "Indemnified Persons"),
        against any losses, claims, damages, liabilities, or actions, joint or several,
        to which any of such Indemnified Persons may become subject under the Securities
        Act or otherwise, insofar as such losses, claims, damages, liabilities, or
        actions arise out of or are based upon any actual or alleged untrue statement
        of
        any material fact contained in any registration statement under which such
        securities were registered under the Securities Act, any preliminary prospectus
        or final prospectus contained therein, or any amendment or supplement thereto,
        or arise out of or are based upon the actual or alleged omission to state
        therein a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading, in each case to the extent and only to
        the
        extent that any such loss, claim, damage, liability, or action arises out
        of or
        is based upon an untrue statement or omission of a material fact made in
        said
        registration statement, said preliminary prospectus or said prospectus or
        said
        amendment or supplement in reliance upon 

      and in conformity with
        written information furnished to the Company by the Subscriber or any affiliate
        (as defined in the Securities Act) of the Subscriber specifically for use
        in the
        preparation thereof.

       

      
        
          
          

        

        
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        (m)       Any party entitled to
        indemnification
        hereunder will (i) give prompt written notice to the indemnifying
        party of
        any claim with respect to which it seeks indemnification and (ii) unless
        in
        such indemnified party's reasonable judgment a conflict of interest between
        such
        indemnified and indemnifying parties may exist with respect to such claim,
        permit such indemnifying party to assume the defense of such claim with counsel
        reasonably satisfactory to the indemnified party.  If such defense
        is
        assumed, the indemnifying party will not be subject to any liability for
        any
        settlement made by the indemnified party without its consent (which consent
        may
        not be unreasonably withheld).  An indemnifying party who is not entitled
        to, or elects not to, assume the defense of a claim will not be obligated
        to pay
        the fees and expenses of more than one counsel for all parties indemnified
        by
        such indemnifying party with respect to such claim, unless in the reasonable
        judgment of any indemnified party a conflict of interest may exist between
        such
        indemnified party and any other of such indemnified parties with respect
        to such
        claim.

       

                 
        (n)        With a view to
        making available to
        the Offering Holder the benefits of Rule 144 promulgated under the
        Securities Act, the Company agrees that it will use its best efforts to maintain
        registration of its Common Stock under Section 12 or 15 of the Securities
        and Exchange Act of 1934, as amended (the "Exchange Act"), and to file
        with the SEC in a timely manner all reports and other documents required
        to be
        filed by an issuer of securities registered under the Exchange Act so as
        to
        maintain the availability of Rule 144.  Upon the request of
        any record
        owner, the Company will deliver to such owner a written statement as to whether
        it has complied with the reporting requirements of Rule 144.

       

          5.     Representations
        and Warranties of the Subscriber.
        The
        Subscriber hereby represents and warrants to the Company and the Placement
        Agent
        as follows:

       

          (a)     The
        Subscriber is acquiring the Shares for its own account, for investment and
        not
        with a view to, or for resale in connection with, any distribution or public
        offering thereof within the meaning of the Securities Act, and applicable
        state
        securities laws. The Subscriber understands that (A) the Shares (1) have
        not
        been registered under the Securities Act or any state securities laws, (2)
        will
        be issued in reliance upon an exemption from the registration and prospectus
        delivery requirements of the Securities Act pursuant to Section 4(2) and/or
        Regulation D thereof, and (3) will be issued in reliance upon exemptions
        from
        the registration and prospectus delivery requirements of state securities
        laws
        which relate to private offerings, and (B) the Subscriber must therefore
        bear
        the economic risk of such investment indefinitely unless a subsequent
        disposition thereof is registered under the Securities Act and applicable
        state
        securities laws or is exempt therefrom. The Subscriber further understands
        that
        such exemptions depend upon, among other things, the bona fide nature of
        the
        investment intent of the Subscriber expressed herein. Pursuant to the foregoing,
        the Subscriber acknowledges that the certificates representing the Shares
        acquired by the Subscriber shall bear a restrictive legend substantially
        as
        follows:

       

      "THE SHARES REPRESENTED BY THIS CERTIFICATE
        ARE
        SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS

       

      
        
          
          

        

        
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      AMENDED, AND STATE SECURITIES LAWS, AND MAY
        NOT
        BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
        OF UNLESS (I) REGISTERED UNDER THE APPLICABLE SECURITIES LAWS OR (II) AN
        OPINION
        OF COUNSEL, WHICH OPINION AND COUNSEL ARE BOTH REASONABLY SATISFACTORY TO
        THE
        COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT THE
        SHARES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION."

       

          (b)     The
        Subscriber has knowledge, skill and experience in financial, business and
        investment matters relating to an investment of this type and is capable
        of
        evaluating the merits and risks of such investment and protecting the
        Subscriber's interest in connection with the acquisition of the Shares. The
        Subscriber understands that the acquisition of the Shares is a speculative
        investment and involves substantial risks and that the Subscriber could lose
        the
        Subscriber's entire investment in the Shares. Further, the Subscriber has
        carefully read and considered the matters set forth under the section entitled
        "Risk Factors" in the Memorandum, and has taken full cognizance of and
        understands all of the risks related to the purchase of the Shares. To the
        extent deemed necessary by the Subscriber, the Subscriber has retained, at
        its
        own expense, and relied upon, appropriate professional advice regarding the
        investment, tax and legal merits and consequences of purchasing and owning
        the
        Shares. The Subscriber has the ability to bear the economic risks of the
        Subscriber's investment in the Company, including a complete loss of the
        investment, and the Subscriber has no need for liquidity in such
        investment.

       

          (c)     The
        Subscriber has been furnished by the Company all information (or provided
        access
        to all information) regarding the business and financial condition of the
        Company, its expected plans for future business activities, the attributes
        of
        the Shares and the merits and risks of an investment in the Shares which
        the
        Subscriber has requested or otherwise believes that the Subscriber needs
        to
        evaluate the investment in the Company.

       

          (d)     The
        Subscriber is in receipt of and has carefully read and understands the following
        items:

      
        
        
                     
        

      ·        
        Confidential Private Placement Memorandum, dated August 12, 2005, and the
        appendices attached thereto (Appendices A-G);

      ·        
        Annual Report Amendment on Form 10-K/A for fiscal year ended December 31,
        2004,
        filed by the Company with the SEC on August 8, 2005;

      ·        
        Annual Report on Form 10-K for fiscal year ended December 31, 2004, filed
        by the
        Company with the SEC on March 30, 2005;

      ·        
        Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, filed
        by the
        Company with the SEC on May 13, 2005; 

      ·        
        Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, filed
        by the
        Company with the SEC on August 8, 2005; 

       

      
        
          
          

        

        
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      ·        
        Definitive Proxy Statement on Schedule DEF 14A, filed by the Company with
        the
        SEC on March 25, 2005; and

      ·        
        Current Report on Form 8-K, dated July 7, 2005, filed by the Company with
        the
        SEC on July 8, 2005. 

       

       

          (e)     In
        making
        the Subscriber's investment decision, the Subscriber is relying solely on
        investigations made by the Subscriber and the Subscriber's representative(s),
        if
        any. The offer to sell the Shares was communicated to the Subscriber in such
        a
        manner that the Subscriber was able to ask questions of and receive answers
        from
        the management of the Company concerning the terms and conditions of the
        proposed transaction. At no time was the Subscriber presented with or solicited
        by or through any advertisement, article, leaflet, public promotional meeting,
        notice or other communication published in any newspaper, magazine or similar
        media or broadcast over television or radio or presented at any seminar or
        meeting or any other form of general or public advertising or
        solicitation.

       

          (f)     The
        Subscriber acknowledges that the Subscriber has been advised that:

       

      
                (i)     The
          Shares
          offered hereby have not been approved or disapproved by the SEC or any
          state
          securities commission nor has the SEC or any state securities commission
          passed
          upon the accuracy or adequacy of any representations by the Company. Any
          representation to the contrary is a criminal offense. 

         

                (ii)     In
          making an
          investment decision, the Subscriber must rely on its own examination of
          the
          Company and the terms of the Offering, including the merits and risks involved.
          The Shares have not been recommended by any federal or state securities
          commission or other regulatory authority. Furthermore, the foregoing authorities
          have not confirmed the accuracy or determined the adequacy of any representation
          by the Company. Any representation to the contrary is a criminal offense.
          

        

                  (iii)     The
            Shares
            will be "restricted securities" within the meaning of Rule 144 under
            the
            Securities Act, are subject to restrictions on transferability and resale
            and
            may not be transferred or resold except as permitted under the Securities
            Act
            and applicable state securities laws, pursuant to registration or exemption
            therefrom. The Subscriber is aware that the Subscriber may be required
            to bear
            the financial risks of this investment for an indefinite period of
            time.

        

        
               

        

      

          (g)     The
        Subscriber acknowledges and is aware that there has never been any
        representation, guarantee or warranty made by the Company or any officer,
        director, employee or agent or representative of the Company, expressly or
        by
        implication, as to (i) the approximate or exact length of time that the
        Subscriber will be required to remain an owner of the Shares; (ii) the
        percentage of profit and/or amount of or type of consideration, profit or
        loss
        to be realized, if any, as a result of this investment; or (iii) that the
        limited past performance (if any) or experience on the part of the Company,
        or
        any future expectations regarding the Company's business or operations, will
        in
        any way indicate the predictable results of the ownership of Shares or of
        the
        overall financial performance of the Company.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

          (h)     The
        Subscriber agrees to furnish the Company such other information as the Company
        may reasonably request in order to verify the accuracy of the information
        contained herein and agrees to notify the Company immediately of any material
        change in the information provided herein that occurs prior to the Company's
        acceptance of this Agreement.

       

          (i)     The
        Subscriber further represents and warrants that the Subscriber is an "accredited
        investor" within the meaning of Rule 501 of Regulation D under the Securities
        Act, and the Subscriber has executed the Certificate of Accredited Investor
        Status, attached hereto as Exhibit
        B.

       

          (j)     If
        the
        Subscriber is a natural person, the Subscriber has reached the age of majority
        in the state in which the Subscriber resides, has adequate means of providing
        for the Subscriber's current financial needs and contingencies, is able to
        bear
        the substantial economic risks of an investment in the Shares for an indefinite
        period of time, has no need for liquidity in such investment and, at the
        present
        time, could afford a complete loss of such investment.

       

          (k)     If
        this
        Agreement is executed and delivered on behalf of a partnership, corporation,
        trust, estate or other entity (an "Entity"):
        (i)
        such Entity has the full legal right and power and all authority and approval
        required (a) to execute and deliver, or authorize execution and delivery
        of,
        this Agreement and all other instruments executed and delivered by or on
        behalf
        of such Entity in connection with the purchase of the Shares, (b) to delegate
        authority pursuant to power of attorney and (c) to purchase and hold such
        Shares, (ii) the signature of the party signing on behalf of such Entity
        is
        binding upon such Entity; and (iii) such Entity has not been formed for the
        specific purpose of acquiring such Shares, unless each beneficial owner of
        such
        Entity is qualified as an accredited investor within the meaning of Rule
        501(a)
        of Regulation D promulgated under the Securities Act and has submitted
        information substantiating such individual qualification.

       

          (l)     If
        the
        Subscriber is a retirement plan or is investing on behalf of a retirement
        plan,
        the Subscriber acknowledges that an investment in the Common Stock poses
        additional risks, including, without limitation, the inability to use losses
        generated by an investment in the Common Stock to offset taxable income.
        

       

          (m)     The
        Subscriber represents and warrants that it is not a broker-dealer or an
        affiliate of a broker-dealer, except as follows:
        _______________________________________________
        _____________________________________________________________________________.
        If the Subscriber is a broker-dealer, the Subscriber acknowledges that the
        Subscriber will be deemed to be an underwriter with respect to the resale
        of its
        Shares. If the Subscriber is an affiliate of a broker-dealer, the Subscriber
        acknowledges that the Subscriber will be deemed to be an underwriter with
        respect to the resale of its Shares to the extent that such Shares are sold
        through its affiliated broker-dealer. To the extent that the Subscriber is
        affiliated in any manner with a broker-dealer, the Subscriber further represents
        and warrants that it is purchasing the Shares in the ordinary course of its
        business and that as of the date hereof it has no agreements or understandings,
        directly or indirectly, with any person to distribute the Shares.

      
        
          
          

        

        
          -10-

          
            

          

        

        The foregoing representations and warranties and undertakings
          are
          made by the Subscriber with the intent that they be relied upon by the
          Company
          and the Placement Agent in determining the Subscriber's suitability as
          an
          investor, and the Subscriber hereby agrees that such representations and
          warranties shall survive the Subscriber's purchase of the Shares.

      

       

      6.     Representations
        and Warranties of the Company.
        The
        Company hereby represents and warrants to the Subscriber as follows:

          (a)     The
        Company
        is duly incorporated, validly existing and in good standing under the laws
        of
        the State of Georgia, and is duly qualified to do business as a foreign
        corporation in all jurisdictions in which the failure to be so qualified
        would
        materially and adversely affect the business or financial condition, properties
        or operations of the Company.

       

          (b)     The
        Company
        has duly authorized the issuance and sale of the Shares in accordance with
        the
        terms of this Agreement (as described herein) by all requisite corporate
        action,
        including the authorization of the Company's Board of Directors of the issuance
        and sale of the Shares in accordance herewith, and the execution, delivery
        and
        performance of any other agreements and instruments executed in connection
        herewith. This Agreement constitutes a valid and legally binding obligation
        of
        the Company, enforceable in accordance with its terms, except (i) as limited
        by
        applicable bankruptcy, insolvency, reorganization, moratorium, and other
        laws of
        general application affecting enforcement of creditors' rights generally,
        (ii)
        as limited by laws relating to the availability of specific performance,
        injunctive relief, or other equitable remedies, and (iii) to the extent the
        indemnification provisions contained herein may be limited by applicable
        federal
        or state securities laws.

       

          (c)     The
        Memorandum, as of its date and as of the date of this Agreement, does not
        contain any untrue statement of a material fact or omit to state any material
        fact required to be stated therein or necessary in order to make the statements
        therein, in the light of the circumstances under which they were made, not
        misleading.

       

          (d)     The
        documents incorporated by reference or included with the Memorandum, at the
        time
        they were filed with the SEC, complied in all material respects with the
        requirements of the Exchange Act, and, when read together and with the other
        information in the Memorandum, did not contain, at the time they were filed
        with
        the SEC, 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 the light of the circumstances under which they were made, not
        misleading.

       

          7.     Understandings.
        The
        Subscriber understands, acknowledges and agrees with the Company as
        follows:

       

          (a)     This
        Subscription may be rejected, in whole or in part, by the Company in its
        sole
        and absolute discretion, at any time before the Closing, notwithstanding
        prior
        receipt by the undersigned of notice of acceptance of the undersigned's
        Subscription. The Company may terminate this Offering at any time in its
        sole
        discretion. Neither the execution of this Agreement nor the solicitation
        of the
        investment contemplated hereby shall create any obligation of the Company
        to
        accept any subscription or complete the Offering. The Company is not required
        to
        accept any minimum number of subscriptions before conducting a
        Closing.

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

          (b)     The
        Subscriber hereby acknowledges and agrees that the subscription hereunder
        is
        irrevocable by the Subscriber, that, except as required by law, the Subscriber
        is not entitled to cancel, terminate or revoke this Agreement or any agreements
        of the Subscriber hereunder and that this Agreement and such other agreements
        shall survive the death or disability of the Subscriber and shall be binding
        upon and inure to the benefit of the parties and their heirs, executors,
        administrators, successors, legal representatives and permitted assigns.
        If the
        Subscriber is more than one person, the obligations of the Subscriber hereunder
        shall be joint and several and the agreements, representations, warranties
        and
        acknowledgments herein contained shall be deemed to be made by and be binding
        upon each such person and his/her heirs, executors, administrators, successors,
        legal representatives and permitted assigns.

       

          (c)     No
        federal or
        state agency has made any finding or determination as to the accuracy or
        adequacy of the Memorandum or as to the suitability of the Offering for
        investment nor any recommendation or endorsement of the Shares.

       

          (d)     The
        Offering
        is intended to be exempt from registration under the Securities Act by virtue
        of
        Section 4(2) of the Securities Act and the provisions of Regulation D
        thereunder, which is in part dependent upon the truth, completeness and accuracy
        of the statements made by the Subscriber herein.

       

          (e)     There
        can be
        no assurance that the Subscriber will be able to sell or dispose of the Shares.
        It is understood that in order not to jeopardize the Offering's exempt status
        under Section 4(2) of the Securities Act and Regulation D, any transferee
        will,
        at a minimum, be required to fulfill the investor suitability requirements
        thereunder.

       

          (f)     The
        Subscriber acknowledges that the information contained in the Memorandum
        is
        confidential and non-public and agrees that all such information shall be
        kept
        in confidence by the Subscriber and neither used for the Subscriber's personal
        benefit (other than in connection with this subscription) nor disclosed to
        any
        third party for any reason; provided, however, that this confidentiality
        obligation shall not apply to any such information that (i) is part of the
        public knowledge or literature, (ii) becomes part of the public knowledge
        or
        literature (except as a result of a breach of this provision) or (iii) is
        received from third parties (except third parties who disclose such information
        in violation of any confidentiality agreements or obligations, including,
        without limitation, any subscription agreement entered into with the Company).
        In addition, the Subscriber may disclose any information as may be required
        by
        law or applicable legal process; provided, however, to the extent permitted
        by
        law or applicable legal process, the Subscriber shall provide the Company
        at
        least five business days prior written notice before making any such
        disclosure.

       

          (g)     The
        representations, warranties and agreements of the Subscriber contained herein
        and in any other writing delivered in connection with the transactions
        contemplated hereby shall be true and correct in all respects on and as of
        the
        date of the Closing of the sale of the Shares as if made on and as of such
        date
        and shall survive the execution and delivery of this Agreement and the purchase
        of the Shares.

       

           8.     Survival;
        Indemnification.
        All
        representations, warranties and covenants contained in this Agreement and
        the
        indemnification obligations contained in this Section 8 shall survive (i)
        the
        acceptance of this 

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      Agreement
        by the Company, (ii) changes in the transactions, documents and instruments
        described herein which are not material or which are to the benefit of the
        Subscriber, and (iii) the death or disability of the Subscriber. The Subscriber
        understands the meaning and legal consequences of the representations,
        warranties and covenants contained in this Agreement and that the Company
        and
        the Placement Agent have relied upon such representations, warranties and
        covenants in determining the Subscriber's qualification and suitability to
        purchase the Shares. The Subscriber hereby agrees to indemnify, defend and
        hold
        harmless the Company, the Placement Agent and their respective officers,
        directors, employees, agents and controlling persons, from and against any
        and
        all losses, claims, damages, liabilities, expenses (including attorneys'
        fees
        and disburse­ments), judgments or amounts paid in settlement of actions
        arising out of or resulting from the untruth of any representation of the
        Subscriber herein or the breach of any warranty or covenant herein by the
        Subscriber. Notwithstanding the foregoing, however, no representation, warranty,
        covenant or acknowledgment made herein by the Subscriber shall in any manner
        be
        deemed to constitute a waiver of any rights granted to it under the Securities
        Act or state securities laws.

       

          9.     Notices.
        All
        notices and other communications provided for herein shall be in writing
        and
        shall be deemed to have been duly given if delivered personally or sent by
        registered or certified mail, return receipt requested, postage prepaid,
        or sent
        by reputable overnight courier, charges prepaid:

       

          (a)     if
        to the
        Company, to the following address:

      The
        Savannah Bancorp, Inc.

      25
        Bull
        Street

      Savannah,
        Georgia 31401

      Attn: 
        G. Mike Odom, Jr.

      Telephone: 
        (912) 629-6500

       

          (b)     if
        to the
        Subscriber, to the address set forth on the signature page hereto; or
        at
        such other address as any party shall have specified by notice in writing
        to the
        other.

       

          10.     Notification
        of Changes.
        The
        Subscriber agrees and covenants to notify the Company immediately upon the
        occurrence of any event prior to the consummation of the Offering that would
        cause any representation, warranty, covenant or other statement contained
        in
        this Agreement to be false or incorrect or of any change in any statement
        made
        herein occurring prior to the consummation of the Offering.

       

          11.     Assignability;
        Modification.
        This
        Agreement is not assignable by the Subscriber, and may not be modified, waived
        or terminated except by an instrument in writing signed by the party against
        whom enforcement of such modification, waiver or termination is
        sought.

       

          12.     Binding
        Effect.
        Except
        as otherwise provided herein, this Agreement shall be binding upon and inure
        to
        the benefit of the parties and their heirs, executors, administrators,
        successors, legal representatives and permitted assigns, and the agreements,
        representations, warranties and acknowledgments contained herein shall be
        deemed
        to be 

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      made
        by
        and be binding upon such heirs, executors, administrators, successors, legal
        representatives and permitted assigns.
            

      

          13.     Obligations
        Irrevocable.
        The
        obligations of the Subscriber shall be irrevocable, except with the written
        consent of the Company, until the consummation or termination of the
        Offering.

       

          14.     Entire
        Agreement.
        This
        Agreement constitutes the entire agreement of the Subscriber and the Company
        relating to the matters contained herein, superseding all prior contracts
        or
        agreements, whether oral or written.

       

          15.     Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of GEORGIA, without regard to the principles of conflicts of law thereof
        that would require the application of the laws of any jurisdiction other
        than
        GEORGIA.

       

          16.     Severability.
        If any
        provision of this Agreement or the application thereof to the Subscriber
        or any
        circumstance shall be held invalid or unenforceable to any extent, the remainder
        of this Agreement and the application of such provision to other subscriptions
        or circumstances shall not be affected thereby and shall be enforced to the
        greatest extent permitted by law.

       

          17.     Headings.
        The
        headings in this Agreement are inserted for convenience and identification
        only
        and are not intended to describe, interpret, define, or limit the scope,
        extent
        or intent of this Agreement or any provision hereof.

       

          18.     Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed and delivered shall be deemed to be an original and all of which
        together shall be deemed to be one and the same agreement.

       

          19.     Counsel.
        The Subscriber hereby acknowledges that the Company and its counsel represent
        the interests of the Company and not those of the Subscriber in any agreement
        (including this Agreement) to which the Company is a party.

       

      [SIGNATURES
        TO FOLLOW]

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

                 
        IN WITNESS WHEREOF, the Subscriber has executed this Subscription and
        Registration Rights Agreement as of ____________ ___, 2005.

                                       
SUBSCRIBER

       

       

       

      ____________________________________
        

       

      Number of Shares:
        ____________________

      Offering Price per
        Share: $  30.50________

      Subscription
        Amount:  $________________ 

       

       

      By: 
        ________________________________ 

      Name:______________________________
        

      Title:_______________________________
        

      Address: 
        ___________________________ 

      ____________________________________
        

      ____________________________________
        

       

      Please designate name and social security
        or tax identification number in which stock certificate(s) representing Shares
        purchased are to be registered.

       

      ____________________________________

      Name

       

      ____________________________________

      Social Security
        or Tax
        I.D. Number

       

      Please designate address for delivery
        of
        stock certificate(s) representing Shares purchased (if different from
        above).

       

      ____________________________________

      ____________________________________

      ____________________________________

       

       

       

       

      
        
          
          

        

        
          -15-

          
            

          

        

        
          
          

        

      

       

      Please designate the individual to whom
        all
        correspondence concerning the Subscriber's subscription for Shares should
        be
        sent, along with such individual's requested contact information.

       

      Name:______________________________

      Address:_____________________________

      ___________________________________

      Telephone: (____)_____________________

      Facsimile: (____) _____________________
        

      E-mail:_ _____________________________

       

       

      The name(s) of the natural
        person(s) who will have voting and investment power over the Shares purchased
        are as follows (please print legibly, as the name(s) must be disclosed in
        the
        registration statement):  ____________________________________________

       

      Please indicate the number
        of shares of the Common Stock currently owned by the Subscriber in addition
        to
        those being subscribed for in this Agreement (this must also be disclosed
        in the
        registration statement).  __________________ 

       

                                                                          
        

      The
        Company hereby accepts the foregoing subscription subject to the terms and
        conditions hereof as of ____________ ___, 2005.

       

      THE SAVANNAH BANCORP,
        INC.,

      a Georgia
        corporation

       

       

       

      By:_________________________________
                   

           
        Name:

           
        Title:

       

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

    

    

    
      Exhibit
        A

       

      HOW
        TO
        SUBSCRIBE

       

                 
        (1)        If you are subscribing
        for the
        purchase of Shares, please complete, date and sign the signature page to
        this
        Subscription and Registration Rights Agreement in the applicable spaces. 
        Please signify the amount of Shares for which you are subscribing by inserting
        such amount in the space provided for on the signature page to the
        Agreement.  

       

                 
        (2)        Complete, date
        and sign the
        "Certificate of Accredited Investor Status" attached to this Agreement as
        Exhibit B.

       

                 
        (3)        Send all signed,
        completed
        documents to:

       

                                         
        The Savannah Bancorp, Inc.

                                         
        25 Bull Street

                                         
        Savannah, Georgia 31401

                                         
        Attn:  G. Mike Odom, Jr.

                                         
        Telephone:  (912) 629-6500

                                         
        Facsimile:  (912) 629-6487

       

                 
        (4)        Fax all signed,
        completed
        documents to:

       

                             
        Sterne, Agee & Leach, Inc.

                             
        Attn:   Charles I. Miller

                             
        Facsimile:  (205) 949-3626

                             
        Telephone:  (205) 949-3575

       

      (5)       
        Either (a) make your check payable (in an amount equal to the number of Shares
        for which you are subscribing multiplied by the Offering Price) to The
        Savannah Bancorp, Inc. (noting "Subscription Funds" in the memo line on the
        check) and deliver to the address provided in (3) above or (b) transmit funds
        (in an amount equal to the number of Shares for which you are subscribing
        multiplied by the Offering Price) via wire to the following account of The
        Savannah Bancorp, Inc.: 

       

      Domestic and International
        Transfers

      Bank
        Name:                       
        The Bankers Bank, Atlanta, GA

      ABA
        #                               
        061003415

      Beneficiary:                       
        The Savannah Bank, N.A. (A/C #
        10061204654)         

      For
        Further Credit to:        
        The Savannah
        Bancorp, Inc.  (A/C #6037080)   

      Special
        Instructions:          
        Please
        advise Nancy Aldrich       

       

      ATTENTION
        SUBSCRIBERS:  NO SUBSCRIPTION WILL BE ACCEPTED UNLESS ALL DOCUMENTATION
        PRESCRIBED HEREIN IS FULLY COMPLETED AND EXECUTED.  ANY MATERIALS
        RECEIVED
        THAT ARE INCOMPLETE IN ANY RESPECT WILL BE RETURNED BY THE
        COMPANY.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

     

    CERTIFICATE
      OF ACCREDITED INVESTOR STATUS

     

               
      The undersigned is an "accredited investor," as that term is defined in
      Regulation D under the Securities Act of 1933, as amended (the "Securities
      Act").  The undersigned has checked the box below indicating the basis
      on which the undersigned is representing the undersigned's status as an
      "accredited investor":

    	
             a
          bank as
          defined in Section 3(a)(2) of the Securities Act, or any savings and loan
          association or other institution as defined in Section 3(a)(5)(A) of the
          Securities Act whether acting in its individual or fiduciary capacity;
          a
          broker or dealer registered pursuant to Section 15 of the Securities Exchange
          Act of 1934, as amended; an insurance company as defined in Section 2(13)
          of
          the Securities Act; an investment company registered under the Investment
          Company Act of 1940 or a business development company as defined in Section
          2(a)(48) of that Act; a small business investment company licensed by the
          U.S.
          Small Business Administration under Section 301(c) or (d) of the Small
          Business Investment Act of 1958; a plan established and maintained by a
          state,
          its political subdivisions, or any agency or instrumentality of a state
          or its
          political subdivisions, for the benefit of its employees, and such plan
          has
          total assets in excess of $5,000,000; an employee benefit plan within the
          meaning of the Employee Retirement Income Security Act of 1974, if the
          investment decision is made by a plan fiduciary, as defined in Section
          3(21)
          of such Act, which is either a bank, savings and loan association, insurance
          company, or registered investment adviser, or if the employee benefit plan
          has
          total assets in excess of $5,000,000 or, if a self-directed plan, with
          investment decisions made solely by persons that are "accredited
          investors";

      

    	
            a
          private
          business development company as defined in Section
          202(a) (22) of  the Investment
          Advisers Act of
          1940;

      

    
    

    	
        
          
          
    an organization
          described in Section 501(c)(3) of the Internal Revenue Code, corporation,
          Massachusetts or similar business trust, or partnership, not formed for
          the
          specific purpose of acquiring the securities offered, with total assets
          in
          excess of $5,000,000;

      

    
    

    	
            a
          natural
          person whose individual net worth, or joint net worth with the undersigned's
          spouse, at the time of this purchase exceeds $1,000,000;

      

    	
            a
          natural
          person whose individual net worth, or joint net worth with the undersigned's
          spouse, at the time of this purchase exceeds $1,000,000;

      

    	
            a
          natural
          person who had an individual income in excess of $200,000 in each of the
          two
          most recent years or joint income with the undersigned's spouse in excess
          of
          $300,000 in each of those years and has a reasonable expectation of reaching
          the same income level in the current year;

      

    	    a
        trust with total assets in excess of $5,000,000, not formed for the specific
        purpose of  acquiring the securities
        offered,
        whose purchase is directed by a person who has 

    
      
        -1-

        
          

        

      

      
        
        

      

    

          offered,
      whose purchase is
      directed by a person who has such knowledge and
      experience in financial and business matters that he is capable
      of
      evaluating the merits and risks of the prospective investment;

     

    	         an
        entity in which
        all of the equity holders are "accredited investors" by virtue of their
        meeting one or more of the above standards; or 

     

    	     an
        individual
        who is a director or executive officer of The Savannah Bancorp, Inc. 

     

     

     

    IN
      WITNESS WHEREOF, the undersigned has executed this Certificate of Accredited
      Investor Status effective as of the ___ day of ____________, 2005.

                                                                           
      

                                                                                       
      

                                                                           
                             
                                         
      

                                                                                       
      Name of Subscriber

     

                                                                                       
      By: ________________________

                                                                                       
      Name: ______________________

                                                                                       
      Title: _______________________

     

     

     

     

     

     

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Exhibit
      C

     

    PLAN
      OF DISTRIBUTION

        As
      of the date of
      this prospectus, we have not been advised by the selling stockholders as to
      any
      plan of distribution.  Shares owned by the selling stockholders, or
      by
      their partners, pledgees, donees (including charitable organizations),
      transferees or other successors in interest, may from time to time be offered
      for sale either directly by such individual, or through underwriters, dealers
      or
      agents or on any exchange on which the shares may from time to time be traded,
      in the over-the-counter market, or in independently negotiated transactions
      or
      otherwise.  The methods by which the shares may be sold include:

    ·        a
      block trade (which may involve crosses) in which the broker or dealer so engaged
      will attempt to sell the securities as agent but may position and resell a
      portion of the block as principal to facilitate the transaction; 

    ·        purchases
      by a broker or dealer as principal and resale by such broker or dealer for
      its
      own account pursuant to this prospectus;

    ·        exchange
      distributions and/or secondary distributions;

    ·        sales
      in the over-the-counter market;

    ·        underwritten
      transactions;

    ·         ordinary
      brokerage transactions and transactions in which the broker solicits purchasers;
      and 

    ·         privately
      negotiated transactions.

        Such
      transactions may
      be effected by the selling stockholders at market prices prevailing at the
      time
      of sale or at negotiated prices.  The selling stockholders may effect
      such
      transactions by selling the common stock to underwriters or to or through
      broker-dealers, and such underwriters or broker-dealers may receive
      compensations in the form of discounts or commissions from the selling
      stockholders and may receive commissions from the purchasers of the common
      stock
      for whom they may act as agent.  The selling stockholders may agree
      to
      indemnify any underwriter, broker-dealer or agent that participates in
      transactions involving sales of the shares against certain liabilities,
      including liabilities arising under the Securities Act.  We have agreed
      to
      register the shares for sale under the Securities Act and to indemnify the
      selling stockholders, certain representatives of the selling stockholders and
      each person who participates as an underwriter in the offering of the shares
      against certain civil liabilities, including certain liabilities under the
      Securities Act.

        In
      connection with
      sales of the common stock under this prospectus, the selling stockholders may
      enter into hedging transactions with broker-dealers, who may in turn engage
      in
      short sales of the common stock in the course of hedging the positions they
      assume.  The selling stockholders also may sell shares of common stock
      short and deliver them

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     to
      close
      out the short positions, or loan or pledge the shares of common stock to
      broker-dealers that in turn may sell them.

        The
      selling
      stockholders and any underwriters, dealers or agents that participate in
      distribution of the shares may be deemed to be underwriters, and any profit
      on
      sale of the shares by them and any discounts, commissions or concessions
      received by any underwriter, dealer or agent may be deemed to be underwriting
      discounts and commissions under the Securities Act. 

        There
      can be no
      assurances that the selling stockholders will sell any or all of the shares
      offered under this prospectus.

             

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    -2-Amendment to Subscription Agreement (for affiliated investors only)

    
      Exhibit
        10.2

       

      AMENDMENT
        TO

      SUBSCRIPTION
        AND REGISTRATION RIGHTS AGREEMENT

       

      THE
        SAVANNAH BANCORP, INC.

       

      Private
        Offering

      of
        up to 400,000 Shares of

      Common
        Stock

       

      WHEREAS,
        the undersigned Subscriber has previously executed a Subscription and
        Registration Rights Agreement (the “Agreement”) with The Savannah Bancorp, Inc.
        (the “Company”) for the purchase of shares of common stock, par value of $1.00
        per share, (the “Shares”) pursuant to that certain Confidential Private
        Placement Memorandum dated August 12, 2005 (the “Memorandum”); and

       

      WHEREAS,
        the Company has determined that it cannot accept the Subscriber’s Agreement at
        the Offering Price as such term is defined in the Agreement due to the
        prohibition by NASDAQ rules of the sale of Shares to officers, directors,
        employees and consultants at a price less than market value;
        and

       

      WHEREAS,
        the Company wishes to supplement the Memorandum to be consistent with the
        NASDAQ
        requirements such that the Shares are sold to officers, directors,
        employees  and consultants at the closing bid price of the Company’s common
        stock as quoted on the NASDAQ National Market on the day prior to acceptance
        of
        this amendment (the “Amended Offering Price”).

       

      WHEREAS,
        the Subscriber wishes to purchase the number of Shares as stated herein at
        the
        Amended Offering Price, in accordance with the terms and conditions hereof.

       

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

       

      1.      
        The Subscriber hereby subscribes for and agrees to purchase from the Company
        _________ Shares at the Amended Offering Price as set forth above, which
        is
        $33.16 per share, for a total purchase price of $_____________.

       

      2.       
        The Subscriber hereby ratifies and confirms as of the date of this Amendment
        all
        of the Representations and Warranties of the Subscriber, the Understandings
        of
        the Subscriber, the Certificate of Accredited Investor Status, the Plan of
        Distribution set forth in the Agreement, as well as all of the other terms
        and
        conditions of the Agreement effective as 

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

         of
        the date of this
        Amendment, in each case except as modified hereby.

    

    IN
      WITNESS WHEREOF, the Subscriber has executed this Amendment to the Subscription
      and Registration Rights Agreement as of August ___, 2005.

     

    SUBSCRIBER

     

     

    ________________________________

     

     

    The
      Company hereby accepts the foregoing subscription subject to the terms and
      conditions hereof as of August ___, 2005.

     

     

    THE
      SAVANNAH BANCORP, INC.,

           
      a  Georgia corporation

     

     

    By:
      ____________________________

      
Name:
      G. Mike Odom,
      Jr.

                                         Title:
      Chief
      Executive Officer

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    -2-

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