Document:

Exhibit 4.1

    Exhibit 4.1

     

    
 

    
      Form
        of Registration Rights Agreement

       

      This
        Registration Rights Agreement
        (this
“Agreement”)
        is
        made as of December [ ], 2006 between State Bancorp, Inc., a New York
        corporation (the “Company”),
        and
        ___________ (the “Investor”
and,
        collectively with other Persons (as defined below) who have executed a
        Subscription Agreement (as defined below), the “Investors”).

       

      Execution
        and delivery of this Agreement by the parties hereto are conditions to the
        Investor purchasing Shares (as defined below) from the Company under the
        Subscription Agreement (as defined below). Accordingly, the parties hereto
        hereby agree as follows:

       

      Section
        1.  Definitions.
        Unless
        the context otherwise requires, the terms defined in this Section 1 have
        the meanings herein specified for all purposes of this Agreement, applicable
        to
        both the singular and plural forms of such terms:

       

      “Affiliate”
shall
        have the meaning under Rule 501(b) of the Securities Act of 1933, as
        amended.

       

      “Closing
        Date”
has
        the
        meaning given in the Subscription Agreement;
        provided
        that if
        there is more than one Closing Date pursuant to the Subscription Agreement,
        this
        term shall refer to the latest such Closing Date.

       

      “Common
        Stock”
means
        the common stock, $5.00 par value per share, of the Company.

       

      “Commission”
means
        the Securities and Exchange Commission.

       

      “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended.

       

      “Holder”
means
        the record owner of Registrable Securities.

       

      “Person”
means
        any natural person, corporation, trust, association, limited liability company,
        partnership, joint venture or other entity and any government, governmental
        agency, instrumentality or political subdivision.

       

      “Prospectus”
shall
        mean the prospectus included in a Registration Statement, including any
        preliminary prospectus, and any such prospectus as amended or supplemented
        by
        any prospectus supplement, including a prospectus supplement with respect
        to the
        terms of the offering of any portion of the Registrable Securities covered
        by a
        Registration Statement, and by all other amendments and supplements to a
        prospectus, including post-effective amendments to the related Registration
        Statement, and in each case including all documents incorporated by reference
        therein.

       

      “Register,”
        “registered”
and
        “registration”
refer
        to a registration effected by preparing and filing a registration statement
        in
        compliance with the Securities Act, and the declaration or ordering of the
        effectiveness of such registration statement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Registrable
        Securities”
shall
        mean the Shares; provided,
        however, that
        the
        Shares shall cease to be Registrable Securities upon the earlier of (1) a
        Registration Statement with respect to such Shares for the resale thereof
        having
        been declared effective under the Securities Act and such Shares having been
        disposed of pursuant to such Registration Statement, (2) such Shares having
        become eligible to be sold without restriction as contemplated by Rule 144(k)
        under the Securities Act by a person who is not an Affiliate of the Company,
        or
        (3) such Shares having ceased to be outstanding.

       

      “Securities
        Act”
means
        the Securities Act of 1933, as amended.

       

      “Shares”
means
        the shares of Common Stock sold and issued to the Investors pursuant to the
        Subscription Agreement.

       

      “Subscription
        Agreement”
means,
        collectively, Subscription Agreements of even date herewith between the Company
        and the Investor’s thereto relating to the purchase and sale of the
        Shares.

       

      Section
        2.  Registration.

       

      (a)  Subject
        to the receipt of all necessary information from the Investors, the Company
        shall use its reasonable best efforts to (i) prepare and file a “shelf”
registration statement on Form S-3 under the Securities Act covering an
        offering of the Registrable Securities on a continuous basis pursuant to
        Rule
        415 under the Securities Act (the “Registration
        Statement”),
        on or
        before April 1, 2007 (the “Filing
        Date”),
        (ii)
        cause such Registration Statement to become effective as soon as practicable
        after filing, but in no event later than July 1, 2007 (the “Effectiveness
        Date”)
        and
        (iii) cause such Registration Statement to remain effective (including preparing
        and filing with the Commission such amendments and supplements to such
        registration statement and the prospectus contained therein as may be necessary
        to keep such Registration Statement effective) until all of the Registrable
        Securities covered by such Registration Statement have been sold or as otherwise
        set forth in this Section 2. Notwithstanding the foregoing, if
        Form S-3 is not available for use by the Company, then the Company will
        file a registration statement on such form as is then available to effect
        a
        registration of the Registrable Securities.

       

      (b)  The
        Company shall use its reasonable best efforts to maintain the effectiveness
        of
        the Registration Statement under the Securities Act until the earlier of:
        (i) the date that is two (2) years after the Closing Date; and
        (ii) the date on which all of the Registrable Securities have been sold
        pursuant to the Registration Statement or no longer constitute Registrable
        Securities (the “Registration
        Period”).

       

      (c)  Notwithstanding
        the foregoing, the Company’s obligations under Sections 2(a) and 2(b) to file a
        Registration Statement, and to cause such Registration Statement to become
        and
        remain effective, shall be suspended, at the option of the Company, for a
        total
        of not more than ninety (90) days (an “Allowed
        Delay”)
        if the
        Company determines in good faith that an event has occurred or a condition
        exists that results or may result in a Misstatement (as 

       

      
        
          
          

        

        
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      defined
        in Section 11 below), provided,
        however,
        that
        such right may not be exercised more than once in any twelve month
        period.

       

      Section
        3.  Registration
        Procedures.
        If and
        whenever the Company is required by the provisions of Section 2 hereof to
        effect the registration of Registrable Securities under the Securities Act,
        the
        Company will:

       

      (a)  If
        the
        offering is to be underwritten in whole or in part, enter into a customary
        written underwriting agreement in form and substance reasonably satisfactory
        to
        the managing underwriter of the public offering, the Company and the Holders
        of
        a majority of the Registrable Securities participating in such
        offering;

       

      (b)  Furnish
        to the Holders participating in such registration and to the underwriters
        of the
        securities being registered such reasonable number of copies of the registration
        statement and each amendment and supplement thereto, preliminary prospectus,
        final prospectus and such other documents as such underwriters and Holders
        may
        reasonably request in order to facilitate the public offering of such
        securities;

       

      (c)  At
        the
        request of a Holder or an underwriter, use reasonable best efforts to register
        or qualify the securities covered by such registration statement under such
        state securities or blue sky laws of such jurisdictions in the United States
        as
        such participating Holders and underwriters may reasonably request prior
        to the
        effectiveness of such registration statement, provided, however, that in
        no
        event shall the Company be obligated to (i) qualify as a foreign corporation
        or
        dealer in securities in any jurisdiction where it would not otherwise be
        required to so qualify but for this Section 3 or (ii) file any general consent
        to service of process in any jurisdiction where it is not so
        subject;

       

      (d)  Notify
        the Holders participating in such registration, promptly after it receives
        notice thereof, of the date and time when such registration statement and
        each
        post-effective amendment thereto has become effective or a supplement to
        any
        prospectus forming a part of such registration statement has been
        filed;

       

      (e)  Notify
        such Holders promptly of any request by the Commission to amend or supplement
        such registration statement or prospectus or for additional
        information;

       

      (f)  Prepare
        and file with the Commission, promptly upon the request of the Holders of
        at
        least 25% of the Registrable Securities, any amendments or supplements to
        such
        registration statement or prospectus which, in the written opinion
        of
        Sidley
        Austin LLP as designated counsel to the Holders or such other counsel
as
        may be
        appointed by the Holders of a majority of the Registrable Securities,
        which
        opinion shall be reasonably acceptable to counsel for the Company, is required
        under the Securities Act or the rules and regulations of the Commission
        thereunder in connection with the distribution of the Registrable Securities
        by
        such Holders;

       

      
        
          
          

        

        
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      (g)  Prepare
        and file promptly with the Commission, and promptly notify such Holders of
        the
        filing of, such amendments or supplements to such registration statement
        or
        prospectus as may be necessary to correct any statements or omissions if,
        at the
        time when a prospectus relating to such securities is required to be delivered
        under the Securities Act, any event has occurred as the result of which any
        such
        prospectus or any other prospectus as then in effect would include an untrue
        statement of a material fact or omit to state any 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;

       

      (h)  Advise
        such Holders, promptly after it receives notice or obtains knowledge thereof,
        of
        the issuance of any stop order by the Commission suspending the effectiveness
        of
        such registration statement or the initiation or threatening of any proceeding
        for that purpose and promptly use its reasonable best efforts to prevent
        the
        issuance of any stop order or to obtain its withdrawal, rescission or removal
        if
        such stop order should be issued; 

       

      (i)  At
        the
        request of (x) the managing underwriter of the public offering, if the offering
        is to be underwritten in whole or in part, or (y) at the request of the Holders
        of at least a majority of the Registrable Securities covered by such
        registration statement, furnish to such managing underwriter, at the closing
        provided for in the underwriting agreement, in the case of (x) above or to
        each
        Holder on the effective date of the registration statement, in the case of
        (y)
        above, an opinion of the counsel representing the Company for the purposes
        of
        such registration, dated as of the date of closing, addressed to the
        underwriters, if any, and to the Holders, covering such matters with respect
        to
        the registration statement, the prospectus and each amendment or supplement
        thereto, proceedings under state and federal securities laws, other matters
        relating to the Company, the securities being registered and the offer and
        sale
        of such securities as are customarily the subject of opinions of issuer’s
        counsel provided to underwriters in underwritten public offerings;
        and

       

      (j)  Provide
        a
        transfer agent and registrar, which may be a single entity, for the Registrable
        Securities not later than the Effectiveness Date.

       

      Section
        4.  Accuracy
        of Registration Statement.
        Subject
        to the Company’s rights under Section 2(c) and Section 11, any registration
        statement (including any amendments or supplements thereto and prospectuses
        contained therein) filed by the Company covering Registrable Securities will
        not
        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 therein,
        in
        light of the circumstances in which they were made, not misleading. Subject
        to
        the limitations set forth in Section 11, the Company will prepare and file
        with the Commission such amendments (including post-effective amendments)
        and
        supplements to any registration statement and the prospectus used in connection
        with the registration statement as may be necessary to permit sales pursuant
        to
        the registration statement at all times during the Registration Period, and,
        during such period, will comply with the provisions of the Securities Act
        with
        respect to the disposition of all Registrable Securities of the Company covered
        by any registration statement until the termination of the Registration Period,
        or if earlier, until such time as all of such

       

      
        
          
          

        

        
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       Registrable
        Securities have been disposed of in accordance with the intended methods
        of
        disposition by the seller or sellers thereof as set forth in the registration
        statement.

       

      Section
        5.  Additional
        Obligations of the Company.

       

      5.1 Review.
        The
        Company will permit Sidley Austin LLP,
        as
        designated counsel to the Holders, or such other counsel as may be appointed
        by
        the Holders of a majority of the Registrable Securities, to review any
        registration statement covering Registrable Securities and all amendments
        and
        supplements thereto (as well as all requests for acceleration or effectiveness
        thereof) a reasonable period of time prior to their filing with the Commission,
        and will not file any document in a form to which such counsel reasonably
        objects, unless otherwise required by law in the opinion of the Company’s
        counsel. The sections of any such registration statement including information
        with respect to the Investor, the Investor’s beneficial ownership of securities
        of the Company or the Investors’ intended method of disposition of Registrable
        Securities must conform to the information provided to the Company by the
        Investor.

       

      5.2 Expenses.
        With
        respect to the registration effected pursuant to Section 2 hereof, the
        Company will bear all fees, costs and expenses of and incidental to such
        registration and the public offering in connection therewith;
        provided, however,
        that
        the Company shall not be liable for any underwriting discounts and commissions,
        which in all cases shall be borne by the Holders. Such fees, costs and expenses
        of registration to be borne as provided in the preceding sentence, include,
        without limitation, all registration, filing and NASD fees, printing expenses,
        fees and disbursements of counsel and accountants for the Company and all
        expenses of complying with state securities or blue sky laws of any
        jurisdictions in which the securities to be offered are to be registered
        or
        qualified. The Holders will bear all fees and disbursements of one firm of
        counsel for all selling security holders, selected by the Holders of a majority
        of the Registrable Securities to be included in such
        registration.

       

      5.3 Due
        Diligence.
        The
        Company will make available during normal business hours for inspection by
        any
        Investor whose Registrable Securities are being sold pursuant to a registration
        statement and one firm of attorneys retained by the Investors (collectively,
        the
“Inspectors”),
        all
        pertinent financial and other records, pertinent corporate documents and
        properties of the Company (collectively, the “Records”),
        as
        each Inspector reasonably deems necessary to enable the Inspector to exercise
        its due diligence responsibility. The Company will cause its officers, directors
        and employees to supply all information that any Inspector may reasonably
        request for purposes of performing such due diligence. Each Inspector will
        hold
        in confidence, and will not make any disclosure of, any Records or other
        information that the Company determines in good faith to be confidential,
        and of
        which determination the Inspectors are so notified, unless: (i) the
        disclosure of such Records is necessary to avoid or correct a misstatement
        or
        omission in any registration statement; (ii) the release of such Records is
        ordered pursuant to a subpoena or other order from a court or government
        body of
        competent jurisdiction, or (iii) the information in such Records has been
        made generally available to the public other than by disclosure in violation
        of
        this or any other agreement. 

       

      
        
          
          

        

        
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      Notwithstanding
        any of the foregoing, nothing herein shall obligate the Company to provide
        to
        any Investor, or to any advisors or representatives of any Investor, any
        material nonpublic information. The Company shall not disclose material
        nonpublic information to the Investors, or to advisors to or representatives
        of
        the Investors, unless prior to disclosure of such information the Company
        identifies such information as being material nonpublic information and provides
        the Investors, such advisors and representatives with the opportunity to
        accept
        or refuse to accept such material nonpublic information for review and any
        Investor wishing to obtain such information enters into an appropriate
        confidentiality agreement with the Company with respect thereto.

       

      Section
        6.  Indemnification.

       

      (a)  The
        Company will, and does hereby undertake to, indemnify and hold harmless each
        Holder, each of its officers, directors and partners, and each person
        controlling such Holder within the meaning of the Securities Act, with respect
        to which registration, qualification or compliance has been effected pursuant
        to
        this Agreement, and each underwriter, if any, and each person who controls
        any
        underwriter within the meaning of the Securities Act, against all expenses,
        claims, losses, damages and liabilities (or actions in respect thereof),
        including settlement of any litigation, commenced or threatened (such settlement
        to be made in accordance with the terms of Section 6(c) of this Agreement)
        to
        which they may become subject under the Securities Act, the Exchange Act,
        or
        other federal or state law, arising out of or based on compliance with, any
        untrue statement (or alleged untrue statement) of a material fact contained
        in
        any registration statement, prospectus (preliminary or final), offering circular
        or other document or amendments thereto, or arising out of or based on any
        omission (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 in which they were made, not misleading, or arising out of
        or any
        violation by the Company of any federal, state or common law rule or regulation
        applicable to the Company and relating to action or inaction required of
        the
        Company by such rule or regulation in connection with any such registration,
        qualification or compliance, and will reimburse each such Holder, each of
        its
        officers, directors and partners, and each person controlling such Holder,
        each
        such underwriter and each person who controls any such underwriter, for any
        legal and any other expenses reasonably incurred in connection with
        investigating, preparing or defending any such claim, loss, damage, liability
        or
        action; provided,
        that
        the Company will not be liable in any such case to the extent that any such
        claim, loss, damage, liability or expense arises out of or is based on any
        untrue statement or omission or alleged untrue statement or omission, made
        in
        reliance upon and in conformity with written information furnished to the
        Company by an instrument executed by such Holder or underwriter expressly
        for
        use in connection with such registration.

       

      (b)  Each
        Holder will, if Registrable Securities held by such Holder are included in
        the
        securities as to which such registration, qualification or compliance is
        being
        effected, indemnify and hold harmless the Company, each of its directors
        and
        officers, agents and employees, each underwriter, if any, of the Company’s
        securities covered by such a registration statement, each person who controls
        the Company or such underwriter within the

       

      
        
          
          

        

        
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       meaning
        of the Securities Act, and each other such Holder, each of its officers,
        directors and partners and each person controlling such Holder within the
        meaning of the Securities Act, against all claims, losses, damages and
        liabilities (or actions in respect thereof to which they may become subject)
        arising out of or based on any untrue statement (or alleged untrue statement)
        of
        a material fact contained in any such registration statement, prospectus,
        offering circular or other document, or amendments thereto, or any omission
        (or
        alleged omission) to state therein a material fact required to be stated
        therein
        in light of the circumstances in which they were made, or necessary to make
        the
        statements therein, not misleading, and will reimburse the Company, such
        Holders, such directors, officers, persons, underwriters or control persons
        for
        any legal or any other expenses reasonably incurred in connection with
        investigating or defending any such claim, loss, damage, liability or action,
        in
        each case to the extent, but only to the extent, that such untrue statement
        (or
        alleged untrue statement) or omission (or alleged omission) is made in such
        registration statement, prospectus, offering circular or other document in
        reliance upon and in conformity with written information furnished to the
        Company by an instrument executed by such Holder expressly for use in connection
        with such registration; provided, however, that the obligations of such Holders
        hereunder shall be limited to an amount equal to the proceeds to each such
        Holder of Registrable Securities from the sale of such Registrable Securities
        as
        contemplated herein. 

       

      (c)  Each
        party entitled to indemnification under this Section (the “Indemnified
        Party”)
        shall
        give notice to the party required to provide indemnification (the “Indemnifying
        Party”)
        promptly after such Indemnified Party has actual knowledge of any claim as
        to
        which indemnity may be sought, and shall deliver written notice to the
        Indemnifying Party of commencement thereof. The Indemnifying Party, at its
        sole
        option, may participate in or assume the defense of any such claim or any
        litigation resulting therefrom with counsel reasonably satisfactory to the
        Indemnified Party, and the Indemnified Party may participate in such defense
        at
        Indemnified Party’s expense. After notice from the Indemnifying Party to the
        Indemnified Party of its election to assume the defense of such claim or
        action
        and engagement of such counsel, the Indemnifying Party shall not be liable
        to
        the Indemnified Party under this Section 6 for any legal or other expenses
        subsequently incurred by the Indemnified Party in connection with the defense
        thereof other than reasonable costs of investigation. No Indemnifying Party
        shall (i) without the prior written consent of the Indemnified Parties (which
        consent shall not be unreasonably withheld), settle or compromise or consent
        to
        the entry of any judgment with respect to any pending or threatened claim,
        action, suit or proceeding in respect of which indemnification or contribution
        may be sought hereunder (whether or not the Indemnified Parties are actual
        or
        potential parties to such claim or action) unless such settlement, compromise
        or
        consent includes an unconditional release of each Indemnified Party from
        all
        liability arising out of such claim, action, suit or proceeding and does
        not
        include a statement as to or an admission of fault, culpability or a failure
        to
        act by or on behalf of any Indemnified Party or (ii) be liable for any
        settlement of any such action effected without its written consent (which
        consent shall not be unreasonably withheld), but if settled with the consent
        of
        the Indemnifying Party or if there be a final judgment of the plaintiff in
        any
        such action, the Indemnifying Party agrees to indemnify and hold harmless
        any
        Indemnified Party

       

      
        
          
          

        

        
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       from
        and against any loss or liability by reason of such settlement or judgment
        to
        the extent required by this Section 6.

       

      (d)  The
        indemnification provided for under this Agreement will remain in full force
        and
        effect regardless of any investigation made by or on behalf of the Indemnified
        Party or any officer, director or controlling person of such Indemnified
        Party
        and will survive the transfer of Registrable Securities. The failure of any
        Indemnified Party to give notice as provided herein shall not relieve the
        Indemnifying Party of its obligations under this Section except to the extent
        that such failure to give notice shall materially adversely affect the
        Indemnifying Party in the defense of any such litigation. No Indemnifying
        Party,
        in the defense of any such claim or litigation shall, except with the consent
        of
        each Indemnified Party, consent to entry of any judgment or enter into any
        settlement which does not include as an unconditional term a release from
        all
        liability in respect to such claim or litigation by the claimant or plaintiff
        to
        such Indemnified Party.

       

      (e)  If
        the
        indemnification provided for in subsection (a) or (b) of this Section is
        held by
        a court of competent jurisdiction to be unavailable to a party to be indemnified
        with respect to any claims, actions, demands, losses, damages, liabilities,
        costs or expenses referred to therein, then each Indemnifying Party under
        any
        such subsection, in lieu of indemnifying such Indemnified Party thereunder,
        agrees to contribute to the amount paid or payable by such Indemnified Party
        as
        a result of such claims, actions, demands, losses, damages, liabilities,
        costs
        or expenses in such proportion as is appropriate to reflect the relative
        fault
        of the Indemnifying Party on the one hand and of the Indemnified Party on
        the
        other in connection with the statements or omissions which resulted in such
        claims, actions, demands, losses, damages, liabilities, costs or expenses,
        as
        well as any other relevant equitable considerations. The relative fault of
        the
        Indemnifying Party and of the Indemnified Party will
        be
        determined by reference to, among other things, whether the untrue or alleged
        untrue statement of a material fact or the omission or alleged omission to
        state
        a material fact relates to information supplied by the Indemnifying Party
        or by
        the Indemnified Party and the parties’ relative intent, knowledge, access to
        information and opportunity to correct or prevent such statement or omission.
        Notwithstanding the foregoing, the amount any Holder of Registrable Securities
        will be obligated to contribute pursuant to this subsection will be limited
        to
        an amount equal to the per share public offering price (less any underwriting
        discount and commissions) multiplied by the number of shares of Registrable
        Securities sold by such Holder pursuant to the registration statement which
        gives rise to such obligation to contribute (less the aggregate amount of
        any
        damages which such Holder has otherwise been required to pay in respect of
        such
        claim, action, demand, loss, damage, liability, cost or expense or any
        substantially similar claim, action, demand, loss, damage, liability, cost
        or
        expense arising from the sale of such Registrable Securities). No person
        guilty
        of fraudulent misrepresentation (within the meaning of Section 11(f) of the
        Securities Act) will be entitled to contribution hereunder from any person
        who
        was not guilty of such fraudulent misrepresentation.

       

      Section
        7.  Reporting
        Requirements Under Exchange Act.
        The
        Company will maintain the effectiveness of its registration of Common Stock
        under Section 12 of the

       

      
        
          
          

        

        
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       Exchange
        Act and timely file (whether or not it is then required to do so) such
        information, documents and reports as the Commission may require or prescribe
        under Section 15(d) of the Exchange Act. The Company will, forthwith upon
        written request, furnish to any Holder of Registrable Securities a written
        statement by the Company, if true, that it has complied with such reporting
        requirements. In addition, the Company will take such other measures and
        file
        such other information, documents and reports, as may be required of it
        hereafter by the Commission as a condition to the availability of Rule 144
        under the Securities Act (or any similar exemptive provision hereafter in
        effect).

       

      Section
        8.  Participation
        in an Underwritten Registration.
        No
        Holder may participate in an underwritten registration hereunder unless such
        Holder (a) agrees to sell such Holder’s Registrable Securities on the basis
        provided in the underwriting arrangement approved in accordance with the
        provisions of Section 3(a) of this Agreement and (b) completes and executes
        all
        reasonable questionnaires, powers of attorney, indemnities, underwriting
        agreements, lock-up letters and other documents reasonably required under
        the
        terms of such underwriting arrangements.

       

      Section
        9.  Selection
        of Underwriters.
        The
        Holders of Registrable Securities covered by the Registration Statement who
        desire to do so may sell the Shares covered by such Registration in an
        underwritten offering. In any such underwritten offering, the underwriter
        or
        underwriters and manager or managers that will administer the offering will
        be
        selected by the Holders of a majority in aggregate principal amount of the
        Registrable Securities included in such offering; provided, however, that
        such
        underwriters and managers must be reasonably satisfactory to the
        Company.

       

      Section
        10.  Holder
        Information.
        

       

      (a)  The
        rights of each Holder of Registrable Securities to participate in any
        registration to be effected pursuant to this Agreement is subject to such
        Holder
        furnishing the Company with such information with respect to such Holder
        and the
        distribution of such Registrable Securities as the Company may from time
        to time
        reasonably request and as may be required by law or by the Commission in
        connection therewith, and each Holder of Registrable Securities as to which
        any
        registration is to be effected pursuant to this Agreement shall furnish the
        Company with such information by a written instrument executed by such
        Holder.

       

      (b)  Each
        selling Holder shall promptly advise the Company in writing if changes in
        the
        Registration Statement or the Prospectus are required in order that disclosures
        made in the Registration Statement or Prospectus based upon written information
        previously provided or approved by the selling Holder for use in the
        Registration Statement and Prospectus, will not, in the case of the Registration
        Statement, contain an untrue statement of a material fact or omit to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading, and will not, in the case of the Prospectus, include
        an
        untrue statement of a material fact or omit to state a material fact necessary
        in order to make the statements therein, in the light of the circumstances
        under
        which they were made, not misleading.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Section
        11.  Suspension
        of Sales.
        Upon
        receipt of written notice from the Company that a registration statement
        or
        prospectus contains an untrue statement of a material fact or omits to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein not misleading (a “Misstatement”),
        each
        Holder of Registrable Securities shall forthwith discontinue disposition
        of
        Registrable Securities until such Holder has received copies of the supplemented
        or amended prospectus that corrects such Misstatement, or until such Holder
        is
        advised in writing by the Company that the use of the prospectus may be resumed,
        and, if so directed by the Company, such Holder shall deliver to the Company
        (at
        the Company’s expense) all copies, other than permanent file copies then in such
        Holder’s possession, of the prospectus covering such Registrable Securities
        current at the time of receipt of such notice.

       

      Section
        12.  Forms.
        All
        references in this Agreement to particular forms of registration statements
        are
        intended to include, and will be deemed to include, references to all successor
        forms which are intended to replace, or to apply to similar transactions
        as, the
        forms herein referenced.

       

      Section
        13.  Miscellaneous.

       

      13.1  Waivers
        and Amendments.
        With
        the written consent of the Holders of a majority of the Registrable Securities
        then outstanding, the obligations of the Company and the rights of the Holders
        under this Agreement may be waived (either generally or in a particular
        instance, either retroactively or prospectively and either for a specified
        period of time or indefinitely), and with the same consent the Company may
        enter
        into a supplementary agreement for the purpose of adding any provisions to
        or
        changing in any manner or eliminating any of the provisions of this Agreement
        or
        of any supplemental agreement or modifying in any manner the rights and
        obligations hereunder of the
        Holders and the Company;
        provided, however,
        that no
        such waiver or supplemental agreement may reduce the aforesaid proportion
        of
        Registrable Securities, the Holders of which are required to consent to any
        waiver or supplemental agreement, without the consent of the Holders of all
        the
        Registrable Securities; and
        provided further, and
        notwithstanding any provision herein to the contrary, that any such waiver
        amendment or supplement that applies only to a particular registration shall
        require only the written consent of the Holders of a majority of the Registrable
        Securities included in such registration. Upon the effectuation of each such
        waiver, consent or agreement of amendment or modification, the Company will
        give
        prompt written notice thereof to the Holders of the Registrable Securities
        who
        have not previously consented thereto in writing. Neither this Agreement
        nor any
        provision hereof may be changed, waived, discharged or terminated orally
        or by
        course of dealing, except by a statement in writing signed by the party against
        which enforcement of the change, waiver, discharge or termination is sought,
        except to the extent provided in this Section 13.1. Specifically, but
        without limiting the generality of the foregoing, the failure of any Investor
        at
        any time or times to require performance of any provision hereof by the Company
        will not affect the right of any Investor at a later time to enforce the
        same.
        No waiver by any party of the breach of any term or provision contained in
        this
        Agreement, in any one or more instances, will be deemed to be, or

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       construed
        as, a further or continuing waiver of any such breach, or a waiver of the
        breach
        of any other term or covenant contained in this Agreement.

       

      13.2  Effect
        of Waiver or Amendment.
        The
        Investor acknowledges that by operation of Section 13.1 the Holders of a
        majority of the Registrable Securities will, subject to the limitations
        contained in Section 13.1, have the right and power to diminish or
        eliminate certain rights of such Investor under this Agreement.

       

      13.3  Rights
        of Investors Inter Se.
        The
        Investor has the absolute right to exercise or refrain from exercising any
        right
        or rights which the Investor may have by reason of this Agreement or any
        Registrable Security, including, without limitation, the right to consent
        to the
        waiver of any obligation of the Company under this Agreement and to enter
        into
        an agreement with the Company for the purpose of modifying this Agreement
        or any
        agreement effecting any such modification, and the Investor will not incur
        any
        liability to any other Investor or Investors with respect to exercising or
        refraining from exercising any such right or rights.

       

      13.4  Notices.
        All
        notices, requests, consents and other communications required or permitted
        hereunder will be in writing and will be delivered, or mailed first class
        postage prepaid, registered or certified mail,

       

      (a)  If
        to the
        Investor, addressed to the Investor at its address shown on Annex A hereto,
        or
        at such other address as the Investor may specify by written notice to the
        Company; or

       

      (b)  If
        to the
        Company, at 699 Hillside Avenue, New Hyde Park, NY, 11040-2512, Attention:
        Thomas M. O’Brien, President and Chief Operating Officer, or at such other
        address as the Company may specify by written notice to the
        Investors;

       

      and
        each
        such notice, request, consent and other communication will for all purposes
        of
        this Agreement be treated as being effective or having been given when
        delivered, if delivered personally, or, if sent by mail, at the earlier of
        its
        actual receipt or three (3) days after the same has been deposited in a
        regularly maintained receptacle for the deposit of United States mail, addressed
        and postage prepaid as aforesaid.

       

      13.5  Severability.
        If any
        one or more of the provisions of this Agreement or of any agreement entered
        into
        pursuant to this Agreement is determined to be illegal or unenforceable,
        it is
        the intention of the parties hereto that all other provisions of this Agreement
        and of each other agreement entered into pursuant to this Agreement should
        be
        given effect separately from the provision or provisions determined to be
        illegal or unenforceable and not be affected thereby.

       

      13.6  Parties
        in Interest.
        All the
        terms and provisions of this Agreement will be binding upon and inure to
        the
        benefit of and be enforceable by the respective successors and assigns of
        the
        parties hereto, whether so expressed or not and, in particular, will inure
        to
        the 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      benefit
        of and be enforceable by the Holder or Holders at the time of any registration
        of Registrable Securities. Subject to the immediately preceding sentence,
        this
        Agreement will not run to the benefit of or be enforceable by any Person
        other
        than a party to this Agreement and its successors and assigns.

       

      13.7  Headings.
        The
        headings of the sections, subsections and paragraphs of this Agreement have
        been
        inserted for convenience of reference only and do not constitute a part of
        this
        Agreement.

       

      13.8  Entire
        Agreement.
        This
        Agreement constitutes the entire understanding of the parties hereto and
        supersedes all prior understanding among such parties.

       

      13.9  Governing
        Law; Jurisdiction.
        

       

      (a)  This
        Agreement and any and all matters related to or arising under this Agreement
        shall be governed by and construed in accordance with the laws of the State
        of
        New York without regard to conflict of law principles of said jurisdiction
        other
        than Section 5-1401 of the New York General Obligations Law.

       

      (b)  The
        Company and the Holders hereby irrevocably submit to the exclusive jurisdiction
        of the federal and New York state courts located in the city of New York
        in
        connection with any suit, action or proceeding related to this Agreement
        or any
        of the matters contemplated hereby, irrevocably waives any defense of lack
        of
        personal jurisdiction and irrevocably agrees that all claims in respect of
        any
        suit, action or proceeding may be heard and determined in any such courts.
        The
        Company and the Holders irrevocably waive, to the fullest extent it may
        effectively do so under applicable law, any objection which it may now or
        hereafter have to the laying of venue of any such suit, action or proceeding
        brought in any such court and any claim that any such suit, action or proceeding
        brought in any such court has been brought in an inconvenient
        forum.

       

      13.10  Counterparts.
        This
        Agreement may be executed in any number of counterparts and by different
        parties
        hereto in separate counterparts, with the same effect as if all parties had
        signed the same document. All such counterparts will be deemed an original,
        will
        be construed together and will constitute one and the same
        instrument.

       

      13.11  Assignment
        of Registration Rights.
        The
        rights of the Investor hereunder, including the right to have the Company
        register Registrable Securities pursuant to this Agreement, will be
        automatically assigned by the Investor to transferees or assignees of all or any
        portion of the Registrable Securities, but only if: (a) the Investor agrees
        in writing with the transferee or assignee to assign such rights, and a copy
        of
        such agreement is furnished to the Company within a reasonable time after
        such
        assignment; (b) the Company is, within a reasonable time after such transfer
        or
        assignment, furnished with written notice of the name and address of such
        transferee or assignee and the securities with respect to which such
        registration rights are being transferred or assigned; (c) after such
        transfer or assignment the further disposition of such securities by the
        transferee or assignee is restricted under the 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      Securities
        Act and applicable state securities laws; (d) at or before the time the
        Company received the written notice contemplated by clause (b) of this
        sentence, the transferee or assignee agrees in writing with the Company to
        be
        bound by all of the provisions contained herein and (e) such transfer shall
        have
        been made in accordance with the applicable requirements of the Subscription
        Agreement.

       

      (Signature
        page follows)

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      In
        Witness Whereof,
        each of
        the parties hereto has caused this Agreement to be executed personally or
        by a
        duly authorized representative thereof as of the day and year first above
        written.

       

      
        	
                STATE
                  BANCORP, INC.

                 

                 

                 

                By:  

                  
     

                Name: 

                  
   

                Title: 

                  
     

              	
                _______________________________________________

                Printed
                  Name of Investor

                 

                 

                
                  
                    By:  

                      
     

                    Name: 

                      
   

                    Title: 

                      
    

                  

                

              

      

      

       

    

    
      
        
        

      

      
        14Exhibit 4(a)

                         INVESTMENT MANAGEMENT AGREEMENT

      AGREEMENT, dated September 29, 2006, between Merrill Lynch U.S.A.
Government Reserves, a Massachusetts business trust (the "Trust") and BlackRock
Advisors, LLC (the "Advisor"), a Delaware limited liability company.

      WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and

      WHEREAS, the Advisor has agreed to furnish investment advisory services to
the Trust; and

      WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Advisor is willing to furnish such services
upon the terms and conditions herein set forth;

      NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:

      1. In General. The Advisor agrees, all as more fully set forth herein, to
act as investment advisor to the Trust with respect to the investment of the
Trust's assets and to supervise and arrange for the day to day operations of the
Trust and the purchase of securities for and the sale of securities held in the
investment portfolio of the Trust.

      2. Duties and Obligations of the Advisor with Respect to Investment of
Assets of the Trust. Subject to the succeeding provisions of this section and
subject to the direction and control of the Trust's Board of Trustees, the
Advisor shall (i) act as investment advisor for and supervise and manage the
investment and reinvestment of the Trust's assets and in connection therewith
have complete discretion in purchasing and selling securities and other assets
for the Trust and in voting, exercising consents and exercising all other rights
appertaining to such securities and other assets on behalf of the Trust; (ii)
supervise continuously the investment program of the Trust and the composition
of its investment portfolio; (iii) arrange, subject to the provisions of
paragraph 4 hereof, for the purchase and sale of securities and other assets
held in the investment portfolio of the Trust; and (iv) provide investment
research to the Trust.

      3. Duties and Obligations of Advisor with Respect to the Administration of
the Trust. The Advisor also agrees to furnish office facilities and equipment
and clerical, bookkeeping and administrative services (other than such services,
if any, provided by the Trust's Custodian, Transfer Agent and Dividend
Disbursing Agent and other service providers) for the Trust. To the extent
requested by the Trust, the Advisor agrees to provide the following
administrative services:

            (a) Oversee the determination and publication of the Trust's net
asset value in accordance with the Trust's policy as adopted from time to time
by the Board of Trustees;

<PAGE>

            (b) Oversee the maintenance by the Trust's Custodian and Transfer
Agent and Dividend Disbursing Agent of certain books and records of the Trust as
required under Rule 31a1(b)(4) of the 1940 Act and maintain (or oversee
maintenance by such other persons as approved by the Board of Trustees) such
other books and records required by law or for the proper operation of the
Trust;

            (c) Oversee the preparation and filing of the Trust's federal, state
and local income tax returns and any other required tax returns;

            (d) Review the appropriateness of and arrange for payment of the
Trust's expenses;

            (e) Prepare for review and approval by officers of the Trust
financial information for the Trust's semiannual and annual reports, proxy
statements and other communications with shareholders required or otherwise to
be sent to Trust shareholders, and arrange for the printing and dissemination of
such reports and communications to shareholders;

            (f) Prepare for review by an officer of the Trust the Trust's
periodic financial reports required to be filed with the Securities and Exchange
Commission ("SEC") on Form NSAR, Form NCSR, Form NPX, Form NQ, and such other
reports, forms and filings, as may be mutually agreed upon;

            (g) Prepare such reports relating to the business and affairs of the
Trust as may be mutually agreed upon and not otherwise appropriately prepared by
the Trust's custodian, counsel or auditors;

            (h) Make such reports and recommendations to the Board of Trustees
concerning the performance of the independent accountants as the Board of
Trustees may reasonably request or deems appropriate;

            (i) Make such reports and recommendations to the Board of Trustees
concerning the performance and fees of the Trust's Custodian and Transfer and
Dividend Disbursing Agent as the Board of Trustees may reasonably request or
deems appropriate;

            (j) Oversee and review calculations of fees paid to the Trust's
service providers;

            (k) Oversee the Trust's portfolio and perform necessary calculations
as required under Section 18 of the 1940 Act;

            (l) Consult with the Trust's officers, independent accountants,
legal counsel, custodian, accounting agent and transfer and dividend disbursing
agent in establishing the accounting policies of the Trust and monitor financial
and shareholder accounting services;

            (m) Determine the amounts available for distribution as dividends
and distributions to be paid by the Trust to its shareholders; prepare and
arrange for the printing of dividend notices to shareholders; and provide the
Trust's dividend disbursing agent and

                                       2
<PAGE>

custodian with such information as is required for such parties to effect the
payment of dividends and distributions and to implement the Trust's dividend
reinvestment plan;

            (n) Prepare such information and reports as may be required by any
banks from which the Trust borrows funds;

            (o) Provide such assistance to the Custodian and the Trust's counsel
and auditors as generally may be required to properly carry on the business and
operations of the Trust;

            (p) Respond to or refer to the Trust's officers or transfer agent,
shareholder (including any potential shareholder) inquiries relating to the
Trust;

            (q) Supervise any other aspects of the Trust's administration as may
be agreed to by the Trust and the Advisor; and

      All services are to be furnished through the medium of any directors,
officers or employees of the Advisor or its affiliates as the Advisor deems
appropriate in order to fulfill its obligations hereunder.

      The Trust will reimburse the Advisor or its affiliates for all out of
pocket expenses incurred by them in connection with the performance of the
administrative services described in this paragraph 3. The Trust will reimburse
the Advisor and its affiliates for their costs in providing accounting services
to the Trust.

      4. Covenants. (a) In the performance of its duties under this Agreement,
the Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by: (i) the provisions of the 1940 Act and the Investment
Advisers Act of 1940, as amended, and all applicable Rules and Regulations of
the SEC; (ii) any other applicable provision of law; (iii) the provisions of the
Declaration of Trust and By Laws of the Trust, as such documents are amended
from time to time; (iv) the investment objectives and policies of the Trust as
set forth in its Registration Statement on Form N-1A and/or the resolutions of
the Board of Trustees; and (v) any policies and determinations of the Board of
Trustees of the Trust and

            (b) In addition, the Advisor will:

                  (i) place orders either directly with the issuer or with any
broker or dealer. Subject to the other provisions of this paragraph, in placing
orders with brokers and dealers, the Advisor will attempt to obtain the best
price and the most favorable execution of its orders. In placing orders, the
Advisor will consider the experience and skill of the firm's securities traders
as well as the firm's financial responsibility and administrative efficiency.
Consistent with this obligation, the Advisor may select brokers on the basis of
the research, statistical and pricing services they provide to the Trust and
other clients of the Advisor. Information and research received from such
brokers will be in addition to, and not in lieu of, the services required to be
performed by the Advisor hereunder. A commission paid to such brokers may be
higher than that which another qualified broker would have charged for effecting
the same transaction, provided that the Advisor determines in good faith that
such commission is reasonable in terms either of the transaction or the overall
responsibility of the Advisor to the

                                       3
<PAGE>

Trust and its other clients and that the total commissions paid by the Trust
will be reasonable in relation to the benefits to the Trust over the long term.
Subject to the foregoing and the provisions of the 1940 Act, the Securities
Exchange Act of 1934, as amended, and other applicable provisions of law, the
Advisor may select brokers and dealers with which it or the Trust is affiliated;

                  (ii) maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. When the Advisor makes investment recommendations
for the Trust, its investment advisory personnel will not inquire or take into
consideration whether the issuer of securities proposed for purchase or sale for
the Trust's account are customers of the commercial department of its
affiliates; and

                  (iii) treat confidentially and as proprietary information of
the Trust all records and other information relative to the Trust, and the
Trust's prior, current or potential shareholders, and will not use such records
and information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in writing
by the Trust, which approval shall not be unreasonably withheld and may not be
withheld where the Advisor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust.

      5. Services Not Exclusive. Nothing in this Agreement shall prevent the
Advisor or any officer, employee or other affiliate thereof from acting as
investment advisor for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Advisor or any of its officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the Advisor
will undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.

      6. Sub-Advisors. The Advisor may from time to time, in its sole discretion
to the extent permitted by applicable law, appoint one or more sub-advisors,
including, without limitation, affiliates of the Advisor, to perform investment
advisory services with respect to the Trust. The Advisor may terminate any or
all sub-advisors in its sole discretion at any time to the extent permitted by
applicable law.

      7. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any such records upon the Trust's request. The
Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.

      8. Expenses. During the term of this Agreement, the Advisor will bear all
costs and expenses of its employees and any overhead incurred in connection with
its duties hereunder and shall bear the costs of any salaries or trustees' fees
of any officers or trustees of the Trust who are affiliated persons (as defined
in the 1940 Act) of the Advisor; provided that the Board of

                                       4
<PAGE>

Trustees of the Trust may approve reimbursement to the Advisor of the pro rata
portion of the salaries, bonuses, health insurance, retirement benefits and all
similar employment costs for the time spent on Trust operations, (including,
without limitation, compliance matters) (other than the provision of investment
advice and administrative services required to be provided hereunder) of all
personnel employed by the Advisor who devote substantial time to Trust
operations or the operations of other investment companies advised by the
Advisor.

      9. Compensation of the Advisor. (a) The Trust agrees to pay to the Advisor
and the Advisor agrees to accept as full compensation for all services rendered
by the Advisor as such, a monthly fee (the "Investment Advisory Fee") in arrears
at an annual rate equal to the amount set forth in Schedule A hereto of the
average daily value of the Trust's Net Assets. "Net Assets" means the total
assets of the Trust minus the sum of the accrued liabilities. For any period
less than a month during which this Agreement is in effect, the fee shall be
prorated according to the proportion which such period bears to a full month of
28, 29, 30 or 31 days, as the case may be.

            (b) For purposes of this Agreement, the net assets of the Trust
shall be calculated pursuant to the procedures adopted by resolutions of the
Trustees of the Trust for calculating the value of the Trust's assets or
delegating such calculations to third parties.

      10. Indemnity. (a) The Trust may, in the discretion of the Board of
Trustees of the Trust, indemnify the Advisor, and each of the Advisor's
directors, officers, employees, agents, associates and controlling persons and
the directors, partners, members, officers, employees and agents thereof
(including any individual who serves at the Advisor's request as director,
officer, partner, member, trustee or the like of another entity) (each such
person being an "Indemnitee") against any liabilities and expenses, including
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees (all as provided in accordance with applicable state
law) reasonably incurred by such Indemnitee in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
before any court or administrative or investigative body in which such
Indemnitee may be or may have been involved as a party or otherwise or with
which such Indemnitee may be or may have been threatened, while acting in any
capacity set forth herein or thereafter by reason of such Indemnitee having
acted in any such capacity, except with respect to any matter as to which such
Indemnitee shall have been adjudicated not to have acted in good faith in the
reasonable belief that such Indemnitee's action was in the best interest of the
Trust and furthermore, in the case of any criminal proceeding, so long as such
Indemnitee had no reasonable cause to believe that the conduct was unlawful;
provided, however, that (1) no Indemnitee shall be indemnified hereunder against
any liability to the Trust or its shareholders or any expense of such Indemnitee
arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross
negligence or (iv) reckless disregard of the duties involved in the conduct of
such Indemnitee's position (the conduct referred to in such clauses (i) through
(iv) being sometimes referred to herein as "disabling conduct"), (2) as to any
matter disposed of by settlement or a compromise payment by such Indemnitee,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless there has been a
determination that such settlement or compromise is in the best interests of the
Trust and that such Indemnitee appears to have acted in good faith in the
reasonable belief that such Indemnitee's action was in the best interest of the
Trust and did not involve disabling conduct by such Indemnitee and (3) with
respect to any action, suit or other proceeding voluntarily prosecuted by any
Indemnitee as plaintiff,

                                       5
<PAGE>

indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such Indemnitee was authorized by a majority of the full
Board of Trustees of the Trust.

            (b) The Trust may make advance payments in connection with the
expenses of defending any action with respect to which indemnification might be
sought hereunder if the Trust receives a written affirmation of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to reimburse the Trust unless it is
subsequently determined that such Indemnitee is entitled to such indemnification
and if the Trustees of the Trust determine that the facts then known to them
would not preclude indemnification. In addition, at least one of the following
conditions must be met: (A) the Indemnitee shall provide security for such
Indemnitee's undertaking, (B) the Trust shall be insured against losses arising
by reason of any unlawful advance, or (C) a majority of a quorum consisting of
Trustees of the Trust who are neither "interested persons" of the Trust (as
defined in Section 2(a)(19) of the 1940 Act) nor parties to the proceeding
("Disinterested Non Party Trustees") or an independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(as opposed to a full trial type inquiry), that there is reason to believe that
the Indemnitee ultimately will be found entitled to indemnification.

            (c) All determinations with respect to the standards for
indemnification hereunder shall be made (1) by a final decision on the merits by
a court or other body before whom the proceeding was brought that such
Indemnitee is not liable or is not liable by reason of disabling conduct, or (2)
in the absence of such a decision, by (i) a majority vote of a quorum of the
Disinterested Non Party Trustees of the Trust, or (ii) if such a quorum is not
obtainable or, even if obtainable, if a majority vote of such quorum so directs,
independent legal counsel in a written opinion. All determinations that advance
payments in connection with the expense of defending any proceeding shall be
authorized and shall be made in accordance with the immediately preceding clause
(2) above.

      The rights accruing to any Indemnitee under these provisions shall not
exclude any other right to which such Indemnitee may be lawfully entitled.

      11. Limitation on Liability.

            (a) The Advisor will not be liable for any error of judgment or
mistake of law or for any loss suffered by Advisor or by the Trust in connection
with the performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
duties under this Agreement. As used in this Section 11(a), the term "Advisor"
shall include any affiliates of the Advisor performing services for the Trust
contemplated hereby and partners, directors, officers and employees of the
Advisor and of such affiliates.

            (b) Notwithstanding anything to the contrary contained in this
Agreement, the parties hereto acknowledge and agree that, as provided in Section
5.1 of Article V of the Declaration of Trust, this Agreement is executed by the
Trustees and/or officers of the Trust, not individually but as such Trustees
and/or officers of the Trust, and the obligations hereunder are

                                       6
<PAGE>

not binding upon any of the Trustees or shareholders individually but bind only
the estate of the Trust.

      12. Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Trust as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Trust for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Trust's Board of Trustees or the vote of a majority of the outstanding
voting securities of the Trust at the time outstanding and entitled to vote, and
(b) by the vote of a majority of the Trustees who are not parties to this
Agreement or interested persons of any party to this Agreement, cast in person
at a meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Trust at any time,
without the payment of any penalty, upon giving the Advisor 60 days' notice
(which notice may be waived by the Advisor), provided that such termination by
the Trust shall be directed or approved by the vote of a majority of the
Trustees of the Trust in office at the time or by the vote of the holders of a
majority of the voting securities of the Trust at the time outstanding and
entitled to vote, or by the Advisor on 60 days' written notice (which notice may
be waived by the Trust). This Agreement will also immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person" and "assignment" shall have
the same meanings of such terms in the 1940 Act.)

      13. Notices. Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from time to time
for the receipt of such notice and shall be deemed to be received on the earlier
of the date actually received or on the fourth day after the postmark if such
notice is mailed first class postage prepaid.

      14. Amendment of this Agreement. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the Board
of Trustees of the Trust, including a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval and, where
required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of the Trust.

      15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York for contracts to be performed
entirely therein without reference to choice of law principles thereof and in
accordance with the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of New York, or any of the provisions, conflict
with the applicable provisions of the 1940 Act, the latter shall control.

      16. Use of the Name BlackRock. The Advisor has consented to the use by the
Trust of the name or identifying word "BlackRock" in the name of the Trust and
the Trust. Such consent is conditioned upon the employment of the Advisor as the
investment advisor to the Trust. The name or identifying word "BlackRock" may be
used from time to time in other connections and for other purposes by the
Advisor and any of its affiliates. The Advisor may require the Trust and the
Trust to cease using "BlackRock" in the name of the Trust and the Trust

                                       7
<PAGE>

if the Trust ceases to employ, for any reason, the Advisor, any successor
thereto or any affiliate thereof as investment advisor of the Trust.

      17. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.

      18. Counterparts. This Agreement may be executed in counterparts by the
parties hereto, each of which shall constitute an original counterpart, and all
of which, together, shall constitute one Agreement.

                                       8
<PAGE>

           IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all as of the day
and the year first above written.

                                 MERRILL LYNCH U.S.A. GOVERNMENT RESERVES

                                 By:
                                    --------------------------------------------
                                    Name: Donald C. Burke
                                    Title: Vice President

                                 BLACKROCK ADVISORS, LLC

                                 By:
                                    --------------------------------------------
                                    Name: Donald C. Burke
                                    Title: Managing Director

                                       9
<PAGE>

                                   Schedule A

                             Investment Advisory Fee

0.45% of average daily Net Assets of the Trust.

                                       10

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