Document:

Exhibit 10.1   Employment Contract - Thomas J. Tobin, Dated January 1, 2001

                           BRIDGEHAMPTON NATIONAL BANK

                              EMPLOYMENT AGREEMENT

     This Employment Agreement  ("Agreement") is made effective as of January 1,
2001, by and among Bridgehampton  National Bank (the "Bank"), with its principal
administrative  office at 2200 Montauk Highway,  Bridgehampton,  New York 11932,
Bridge Bancorp, Inc. the holding company for the Bank (the "Company") and Thomas
J. Tobin ("Executive").

     WHEREAS,  Executive  is  currently  serving  as  the  President  and  Chief
Executive  Officer of the Bank and the  Company  under an  employment  agreement
dated as of January 1, 1997 (the "Prior Agreement");

     WHEREAS,  the parties  desire to enter into this Agreement to set forth the
terms and conditions for the employment  relationship of Executive with the Bank
and the  Company  and to  replace  and  supersede  the  Prior  Agreement  in its
entirety;

     WHEREAS,  the Bank and the Company wish to continue to assure themselves of
the services of Executive for the period provided in this Agreement; and

     WHEREAS,  Executive  is willing to  continue  to serve in the employ of the
Bank on a full-time basis for said period

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

     1. POSITION AND RESPONSIBILITIES.

     During the period of  employment  hereunder,  Executive  agrees to serve as
President  and Chief  Executive  Officer of the Bank and the Company.  Executive
shall render  administrative and management services to the Bank and the Company
such as are  customarily  performed by persons  situated in a similar  executive
capacity.  During said period, Executive also agrees to serve, if elected, as an
officer  and  director  of the  Company  and any  subsidiary  of the Bank or the
Company.

     2. TERM AND DUTIES.

     (a) The period of  Executive's  employment  under this  Agreement  shall be
deemed to have  commenced as of the date first written and shall  continue for a
period of five (5) years from the effective date of this Agreement. The board of
directors  of the Bank (the  "Board")  or a  committee  of the Board will review
Executive's performance annually for purposes of determining whether to continue
to extend the Agreement and the rationale and results  thereof shall be included
in the minutes of the Board's or Committee's  meeting.  Commencing on January 1,
2002 and each year  thereafter  the Board shall  provide  written  notice to the
Executive as to whether the Board has extended the term of this Agreement for an
additional  year.  The Board shall give notice to  Executive as soon as possible
after  such  review.  The  Executive  may elect  not to extend  the term of this
Agreement  by  giving  written  notice  in  accordance  with  Section  8 of this
Agreement.  In no event  shall  the term of this  Agreement  extend  beyond  the
Executive's 65th birthday.

     (b)  As  Chief  Executive  Officer,  Executive  shall  be  responsible  for
implementing the policies of the Board and shall report to the Board,  except as
otherwise  determined  by the  Board.  All  other  officers  of the Bank and the
Company  shall report  directly to  Executive,  except as Executive or the Board
shall  otherwise  determine,  and except that the internal  auditor shall report
directly to the Board.

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     (c) During  the  period of  Executive's  employment  hereunder,  except for
periods of absence  occasioned  by illness,  reasonable  vacation  periods,  and
reasonable  leaves of absence,  Executive  shall  devote  substantially  all his
business time, attention,  skill, and efforts to the faithful performance of his
duties hereunder including  activities and services related to the organization,
operation and  management of the Bank and  participation  in community and civic
organizations;  provided,  however,  that,  with  the  approval  of  the  Board,
Executive  may serve,  or continue to serve,  on the boards of directors of, and
hold any other offices or positions in, companies or organizations, which in the
Bank's  judgment,  will not present any conflict of interest  with the Bank,  or
materially  affect  the  performance  of  Executive's  duties  pursuant  to this
Agreement.

     (d) Notwithstanding anything herein to the contrary, Executive's employment
with the Bank may be terminated by the Bank or Executive during the term of this
Agreement, subject to the terms and conditions of this Agreement.

     3. COMPENSATION; BENEFITS AND REIMBURSEMENT.

     (a) The Bank shall pay Executive as  compensation a salary of not less than
$  230,000.00  per  year  ("Base  Salary").  Base  Salary  shall be  payable  in
approximately equal installments in accordance with the Bank's customary payroll
practices  and may be increased but may not be decreased at any time without the
prior  written  consent  of  Executive.  During  the  period of this  Agreement,
Executive's  Base Salary  shall be reviewed  at least  annually;  the first such
review will be made no later than one year from the date of this Agreement. Such
review  shall be  conducted  by the  Board  or by the  committee  of the  Board,
delegated  such  responsibility  by the Board and the committee or the Board may
increase  Executive's Base Salary at any time. Any increase in Base Salary shall
become the new "Base Salary" for purposes of this Agreement.  In addition to the
Base Salary provided in this Section 3(a), the Bank shall also provide Executive
with all such other benefits as are provided uniformly to full-time employees of
the Bank.

     (b)  Executive  shall be entitled to  participate  in any employee  benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement,  and the Bank will not,  without
Executive's prior written consent, make any changes in such plans, arrangements,
or perquisites  which would materially  adversely affect  Executive's  rights or
benefits  thereunder;  except to the extent such changes are made  applicable to
all  Bank  employees  on  a  non-discriminatory   basis.  Without  limiting  the
generality of the foregoing  provisions of this Subsection (b),  Executive shall
be entitled to  participate in or receive  benefits  under any employee  benefit
plans, including, but not limited to, retirement plans,  supplemental retirement
plans, management incentive plans, pension plans, profit-sharing plans, stock or
option plans,  health-and-accident plans, medical coverage or any other employee
benefit  plan or  arrangement  made  available  by the Bank in the future to its
senior  executives  and  key  management  employees,  subject  to and on a basis
consistent with the terms,  conditions and overall  administration of such plans
and  arrangements.  Executive  shall be entitled to incentive  compensation  and
bonuses as  provided  in any plan or  arrangement  of the Bank or the Company in
which  Executive is eligible to participate  or as may be separately  determined
and awarded to Executive by the Board.  Nothing paid to Executive under any such
plan or arrangement will be deemed to be in lieu of other  compensation to which
Executive is entitled under this Agreement.

     (c) In addition to the Base Salary  provided for by Subsection  (a) of this
Section 3 and other compensation  provided for by Subsection (b) of this Section
3,  the  Bank  shall  pay or  reimburse  Executive  for all  reasonable  travel,
including  the  provision  of  an  automobile  and  other  reasonable  expenses,
including membership in clubs or organizations as mutually agreed to between the
Board and Executive and  reasonable  expenses for attending  annual and periodic
meetings of trade associations, incurred by Executive performing his obligations
under this Agreement and may provide such  additional  compensation in such form
and such amounts as the Board may from time to time  determine.  Executive shall
also be entitled to receive fees in addition to his  compensation  hereunder for
serving as a director of the Company, the Bank, or any subsidiary.

     (d) In addition to the compensation and benefits  enumerated above,  during
the term of this  Agreement  Executive  shall be entitled  to the  benefits of a
special   disability  income  policy  (Guardian  Policy  No.  G718042)  and  the
supplemental retirement income plan with a preretirement death benefit (Guardian
Policy No.

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3505768)   purchased  by  and  at  the  expense  of  the  Company  or  the  Bank
(collectively the "Policies").  Executive shall be the owner of the Policies and
shall be entitled to designate the beneficiary or beneficiaries of the Policies.
All  costs and  expenses  of the Bank and the  Company  in  connection  with the
Policies in excess of those that are excludable  from  Executive's  income under
applicable  law  shall be  reported  as  compensation  income to  Executive  and
Executive  shall be responsible  for the payment of any and all taxes related to
such amounts.

     (e)  Executive  shall  be  entitled,  without  loss  of pay,  to be  absent
voluntarily  for reasonable  periods of time from the  performance of the duties
and  responsibilities  under this Agreement.  All such voluntary  absences shall
count as paid vacation  time,  unless the Board  otherwise  approves.  Executive
shall be entitled to an annual paid vacation in accordance with Bank policy.

     (f) Executive shall  participate in the supplemental  executive  retirement
plan  adopted  by the Board for which  the Board has  approved  the  Executive's
eligibility to participate.

     4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION; DEATH OR DISABILITY.

     (a) Upon the  occurrence  of an Event of  Termination  (as herein  defined)
during  Executive's term of employment  under this Agreement,  the provisions of
this Section 4 shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:  (i) the termination by
the Bank or the Company of Executive's  full-time  employment  hereunder for any
reason  other  than  a  termination   governed  by  Subsection  5(a)  hereof  or
Termination  for  Cause,  as  defined  in  Section  7 hereof;  (ii)  Executive's
resignation  from the Bank's employ upon any: (A) failure to elect or reelect or
to appoint or reappoint  Executive as President and Chief  Executive  Officer or
failure to  nominate  or  re-nominate  Executive  as a  Director  of the Bank or
Company to the extent  Executive  was serving as a Director as of the  effective
date of this  Agreement,  unless  Executive  consents  to any  such  event,  (B)
material change in Executive's  function,  duties,  or  responsibilities,  which
change would cause Executive's position to become one of lesser  responsibility,
importance,  or scope from the  position  and  attributes  thereof  described in
Section  1,  above,  unless  consented  to  by  Executive,   (C)  relocation  of
Executive's principal place of employment to an office other than one located in
Southhampton,  East Hampton,  Shelter Island,  Southhold or Riverhead,  New York
unless consented to by Executive,  (D) reduction in the benefits and perquisites
to  Executive  from  those  being  provided  as of the  effective  date  of this
Agreement (other than discretionary bonus and stock based  compensation)  unless
consented  to by  Executive,  (E)  liquidation  or  dissolution  of the  Bank or
Company,  or (F) material breach of this Agreement by the Bank or Company.  Upon
the occurrence of any event described in clauses (A), (B), (C), (D), (E) or (F),
above, Executive shall have the right to elect to terminate his employment under
this  Agreement  by  resignation  upon not less than six (6) days prior  written
notice given  within  ninety (90) days after the event giving rise to said right
to elect.

     (b)  Upon  the  occurrence  of an  Event  of  Termination,  on the  Date of
Termination,  as defined in Subsection  8(b), the Bank shall be obligated to pay
Executive,  or,  in the  event  of his  subsequent  death,  his  beneficiary  or
beneficiaries,  or his estate, as the case may be an amount equal to the sum of:
(i) the amount of the remaining salary payments that Executive would have earned
if he had continued his  employment  with the Bank during the remaining  term of
this Agreement or for a thirty-six (36) month period,  whichever is longer based
on Executive's Base Salary at the Date of Termination; and (ii) the amount equal
to the annual contributions or payments that would have been made on Executive's
behalf  to any  employee  benefit  plans of the Bank or the  Company,  including
deferred  compensation  plans or programs  which may have been  established  for
Executive  or for any benefit or  perquisite  which would have been  provided to
Executive  during the remaining term of this Agreement or for a thirty-six  (36)
month period,  whichever is longer (which benefit or perquisite is discontinued)
based on contributions or payments made (on an annualized  basis) at the Date of
Termination. At the election of Executive, which election is to be made prior to
an Event of  Termination,  such  payments  shall be made (A) in a lump sum as of
Executive's Date of Termination, (B) on a bi-weekly basis in approximately equal
installments  during the remaining  term of the  Agreement,  or (C) on an annual
basis in  approximately  equal  installments  during the remaining  term of this
Agreement.

     (c) Upon the  occurrence  of an Event  of  Termination,  Executive  will be
entitled  to  receive  benefits  due  him  on a  fully  vested  basis  under  or
contributed by the Bank or the Company on his behalf pursuant to

<PAGE>

any  retirement,  incentive,  profit  sharing,  bonus,  performance,  option  or
restricted stock program,  or other employee benefit plan maintained by the Bank
or the  Company  on  Executive's  behalf to the  extent  such  benefits  are not
otherwise paid to Executive under a separate provision of this Agreement. To the
extent any payment  pursuant to this  Subsection  would violate any terms of any
plan or program or any law, rules or regulations applicable thereto, the Bank or
the Company  shall provide the economic  equivalent of such benefit  directly to
Executive,  as soon as  practicable on or after the date an Event of Termination
occurs.  The  provisions of this  Subsection  4(c) shall not cause  Executive to
receive either duplicate benefit payments or contributions which may be provided
under any other provision of this Agreement.

     (d) To the extent that the Bank or the Company continues to offer any life,
medical,  health,  disability or dental  insurance  plan or arrangement in which
Executive  participates  in on the  last  day of his  employment  (each  being a
"Welfare  Plan"),  after an Event of  Termination,  Executive and his dependents
shall continue  participating in such Welfare Plans, subject to the same premium
contributions on the part of Executive as were required immediately prior to the
Event of Termination until the earliest of (i) his death, (ii) his employment by
another  employer other than one of which he is a majority owner or (iii) either
the  longer  of  three  (3)  years  or the  end of the  remaining  term  of this
Agreement.  If the Bank or the Company  does not offer a Welfare  Plan after the
Event of  Termination,  then the  provisions of  Subsection  4(b) above shall be
applicable.  Neither  the Bank nor the  Company  shall be  required  to  provide
benefits  under any Welfare Plan to the extent that the  Executive has the right
to receive substantially similar benefits by reason of Executive's employment by
another employer following the termination of Executive's employment hereunder.

     (e) In the event of  Executive's  death  during the term of this  Agreement
prior to Executive's termination of employment,  his estate shall be entitled to
receive his accrued and unpaid  salary and prorated  bonus,  through the date of
his death.  This  Agreement  shall  thereupon  terminate  except that any vested
rights of Executive shall then be exercised by his estate.

     (f) In the event  that  during  the term of this  Agreement,  Executive  is
unable to perform his duties hereunder because he is disabled within the meaning
of any policy of disability  insurance maintained or provided by the Bank or the
Company  under which he is entitled to benefits  or, if there is no such policy,
within the meaning of Section  22(e) of the Internal  Revenue  Code of 1986,  as
amended (the "Code") (a  "Disability"),  Executive shall be entitled to continue
to receive (i) his Base  Salary then in effect  under  Subsection  3(a)  hereof,
reduced by any benefits payable to Executive under any such policy of disability
insurance,  and (ii) his benefits then in effect as described in Subsection 3(b)
hereof, for a period of two (2) years following the occurrence of the Disability
(or  until he ceases to be  disabled,  if  earlier),  and this  Agreement  shall
terminate at the end of such two (2) year period  (unless  Executive  shall have
returned to employment hereunder before that date).

     (g) Except as set forth in Subsection  4(d) above,  no payments  under this
Section 4 shall be  reduced  in the event  Executive  obtains  other  employment
following termination of employment. Executive shall not be required to mitigate
amounts payable pursuant to this Section.

     5. CHANGE IN CONTROL.

     (a) For  purposes of this  Agreement,  a "Change in Control" of the Bank or
Company  shall  mean an event of a nature  that:  (i)  would be  required  to be
reported in  response to Item 1 of the current  report on Form 8-K, as in effect
on the date hereof,  pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  as amended (the  "Exchange  Act");  or (ii) results in a Change in
Control of the Bank or the Company  based on the fact that a person has received
all required approvals of applicable  regulatory  authorities to acquire control
of the Company or the Bank; or (iii) without limitation such a Change in Control
shall be deemed to have  occurred at such time as (A) any  "person" (as the term
is used in  Sections  13(d) and 14(d) of the  Exchange  Act) is or  becomes  the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or  indirectly,  of voting  securities  of the Bank or the Company  representing
thirty (30%) percent or more of the Bank's or the Company's  outstanding  voting
securities or right to acquire such securities  except for any voting securities
of the Bank purchased by the Company and any voting securities  purchased by any
employee  benefit  plan  of the  Bank or the  Company,  or (B)  individuals  who
constitute  the Board on the date hereof (the  "Incumbent  Board") cease for any
reason to  constitute  at least a  majority  thereof,  provided  that any person
becoming a director subsequent to the date hereof whose

<PAGE>

election  was  approved by a vote of at least  three-quarters  of the  directors
comprising  the  Incumbent  Board,  or  whose  nomination  for  election  by the
Company's  stockholders  was approved by the same nominating  committee  serving
under an Incumbent Board, shall be, for purposes of this clause (b),  considered
as  though  he  were  a  member  of  the  Incumbent  Board,  or  (C) a  plan  of
reorganization,  merger,  consolidation,  sale of all or  substantially  all the
assets of the Bank or the  Company  or similar  transaction  occurs in which the
Bank/ Company is not the  resulting  entity,  or (D) a proxy  statement has been
distributed  soliciting  proxies from  stockholders  of the Company,  by someone
other than the current management of the Company,  seeking stockholder  approval
of a plan of  reorganization,  merger or consolidation of the Company or Bank or
similar  transaction  with one or more  corporations  as a result  of which  the
outstanding  shares  of the class of  securities  then  subject  to such plan or
transaction  are exchanged for or converted  into cash or property or securities
not issued by the Bank or the  Company or (E) a tender  offer is made for thirty
(30%)  percent or more of the  voting  securities  of the Bank or  Company  then
outstanding  as a  result  of which  thirty  (30%)  percent  or more of the then
outstanding voting securities of the Bank or Company are acquired.

     (b) If a Change in Control has occurred pursuant to Subsection 5(a), or the
Board has determined  that a Change in Control has occurred,  Executive shall be
entitled to the benefits  provided in Subsections  (c), (d), (e) and (f) of this
Section  5 and  Section  6 upon  his  termination  of  employment  (unless  such
termination is because of his death, disability, or Termination for Cause) on or
after the date a Change in Control  occurs during the term of this Agreement due
to: (1) Executive's dismissal, (2) Executive's voluntary resignation on the date
a Change in  Control  occurs or within the  ninety  (90) day period  immediately
following  the date a Change in Control  occurs  provided that the acquiror is a
private investor, a group of private investors,  or a private company controlled
by  either  a  private  investor  or a group  of  private  investors  or (3) any
demotion,  loss of title,  office or  significant  authority or  responsibility,
reduction in annual  compensation  or benefits or  relocation  of his  principal
place of  employment to an office other than one located in  Southhampton,  East
Hampton,  Shelter Island,  Southhold, or Riverhead, New York, occurs at any time
during the three (3) year period immediately following a Change in Control.

     (c) Upon Executive's  entitlement to benefits  pursuant to Subsection 5(b),
the Bank  shall pay  Executive,  or in the event of his  subsequent  death,  his
beneficiary or beneficiaries,  or his estate, as the case may be, a sum equal to
three and one-quarter (3.25) times Executive's annual  compensation as described
below for the last taxable  year  immediately  preceding  the Change in Control.
Such annual compensation shall include Base Salary and any other taxable income,
including  but  not  limited  to  commissions,   bonuses,   severance  payments,
retirement  payments,  and  directors  or  committee  fees.  At the  election of
Executive,  which  election  is to be made  prior to a Change in  Control,  such
payment shall be made: (a) in a lump sum as of Executive's  Date of Termination,
(b) on a bi-weekly basis in approximately  equal  installments  over a period of
thirty-nine (39) months following Executive's  termination,  or (c) on an annual
basis in  approximately  equal  installments  over a period of thirty-nine  (39)
months following Executive's  termination (with the last installment to be for a
three (3) month period).

     (d) Upon the occurrence of a Change in Control,  Executive will be entitled
to receive  benefits due him on a fully vested basis under or contributed by the
Bank or the Company on his behalf pursuant to any retirement,  incentive, profit
sharing,  bonus,  performance,  option or  restricted  stock  program,  or other
employee  benefit  plan  maintained  by the Bank or the  Company on  Executive's
behalf to the extent such benefits are not otherwise  paid to Executive  under a
separate provision of this Agreement. To the extent any payment pursuant to this
Subsection  would violate any terms of any plan or program or any law,  rules or
regulations  applicable  thereto,  the Bank or the  Company  shall  provide  the
economic  equivalent  of  such  benefit  directly  to  Executive,   as  soon  as
practicable on or after the date a Change in Control occurs.

     (e) Upon the  occurrence  of a Change in Control  followed  by  Executive's
termination of employment,  the Bank will cause Executive's participation in any
Welfare  Plans to be  continued  with  coverage  substantially  identical to the
coverage  maintained  by the Bank or the  Company for  Executive  and any of his
dependents  covered  under  such  plans  prior to the  Change in  Control.  Such
coverage and payments shall cease upon the  expiration of thirty-nine  (39) full
calendar months  following the Date of  Termination.  If the Bank or the Company
does not offer a Welfare  Plan after the Change in Control  then the Bank or the
Company shall provide  Executive with a payment upon the  discontinuance  of any
Welfare Plan equal to the value of the provision of such benefit through the end
of the thirty-nine (39) month period.

<PAGE>

     (f) The use or provision of any  membership,  license,  automobile  use, or
other  perquisites  shall be continued during the thirty-nine (39) full calendar
months  following  the Date of  Termination  on the  same  financial  terms  and
obligations as were in place immediately prior to the Change in Control.  To the
extent that any item referred to in this Subsection (f) will after the date of a
Change in Control, no longer be available to Executive,  the Bank or the Company
shall provide the economic equivalent to Executive.

     (g) No payment  under this Section 5 or Section 6 below shall be reduced in
the  event  Executive   obtains  other  employment   following   termination  of
employment. Executive shall not be required to mitigate amounts payable pursuant
to this Section.

     6. CHANGE OF CONTROL RELATED PROVISIONS.

     (a)  Notwithstanding  any provision to the contrary in Section 5 hereof for
any taxable year in which Executive shall be liable, as determined by the Bank's
independent  accountants  for the payment of an excise tax under Section 4999 of
the Code (or any successor  provision  thereto),  with respect to any payment in
the nature of the  compensation  made by the Bank or the  Company to (or for the
benefit of)  Executive,  the Bank shall pay to  Executive  an amount  determined
under the following formula:

     An amount equal to: X

     WHERE:

                    X = E x P
                    1- [(FI x (1 - SLI)) + SLI + E + M + PO]

     E = the rate at which the excise tax is assessed  under Section 4999 of the
     Code;

     P =  the amount with  respect to which such  excise tax is  assessed,
     determined without regard to this Section 6;

     FI = the highest  marginal  rate of federal  income,  employment  and
     other  taxes  (other than taxes  imposed  under  Section  4999 of the Code)
     applicable to Executive for the taxable year in question;

     SLI = the sum of the highest  marginal  rates of income and  payroll  taxes
     applicable  to  Executive  under  applicable  state and local  laws for the
     taxable year in question;

     M = highest marginal rate of medicare; and

     PO = adjustment for phase out or loss of deduction,  personal  exemption or
     other similar items.

With  respect to any payment in the nature of  compensation  that is made to (or
for the benefit of) Executive under the terms of this Agreement or otherwise and
on which an excise  tax under  Section  4999 of the Code will be  assessed,  the
payment  determined  under  this  Section  6 shall be made to  Executive  on the
earliest of (i) the date the Bank or the  Company is  required to withhold  such
tax,  (ii) the date the tax is required to be paid by  Executive or (iii) at the
time of the Change in  Control.  It is the  intention  of the  parties  that the
Company  and the Bank  provide  Executive  with a full tax  gross-up  under  the
provisions of this  Section,  so that on a net  after-tax  basis,  the result to
Executive  shall be the same as if the  excise  tax under  Section  4999 (or any
successor  provisions) of the Code had not been imposed. The tax gross-up may be
adjusted if alternative minimum tax rules are applicable to Executive.

     7. TERMINATION FOR CAUSE.

     The term  "Termination  for Cause"  shall mean  termination  because of: 1)
Executive's  personal dishonesty,  willful misconduct,  breach of fiduciary duty
involving personal profit, willful violation of any law, rule, regulation (other
than traffic  violations or similar  offenses),  final cease and desist order or
material  breach of any provision of this Agreement  which results in a material
loss to the Bank or the Company, or 2) Executive's conviction of a crime

<PAGE>

or act involving moral  turpitude which is no longer subject to appeal.  For the
purposes of this Section 7, no act, or the failure to act, on  Executive's  part
shall be  "willful"  unless done,  or omitted to be done,  not in good faith and
without  reasonable belief that the action or omission was in the best interests
of the Bank,  the Company or their  affiliates.  Notwithstanding  the foregoing,
Executive shall not be deemed to have been Terminated for Cause unless and until
there  shall have been  delivered  to him a Notice of  Termination  which  shall
include a copy of a resolution duly adopted by the affirmative  vote of not less
than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after  reasonable  notice to Executive and an opportunity
for him, together with counsel,  to be heard before the Board),  finding that in
the good faith opinion of the Board,  Executive was guilty of conduct justifying
Termination  for  Cause  and  specifying  the  particulars  thereof  in  detail.
Executive shall not have the right to receive compensation or other benefits for
any period after the date of Termination for Cause.  During the period beginning
on the date of the Notice of Termination  for Cause pursuant to Section 8 hereof
through  the date of  Termination  for Cause,  any  unvested  awards  granted to
Executive  under  any  stock  benefit  plan  of the  Bank,  the  Company  or any
subsidiary or affiliate  thereof shall not vest. At the date of Termination  for
Cause,  such unvested stock options and related  limited rights and any unvested
awards shall become null and void and shall not be  exercisable  by or delivered
to Executive at any time subsequent to such Termination for Cause.

     8. NOTICE.

     (a)  Any  purported  termination  by the  Bank  or by  Executive  shall  be
communicated by Notice of Termination to the other party hereto. For purposes of
this  Agreement,  a "Notice of  Termination"  shall mean a written  notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances  claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

     (b) "Date of  Termination"  shall mean the date  specified in the Notice of
Termination  (which,  in the case of a Termination for Cause,  shall not be less
than  thirty  (30) days from the date such  Notice  of  Termination  is  given);
provided,  however,  that if a dispute  regarding  the  Executive's  termination
exists, the "Date of Termination" shall be determined in accordance with Section
8(c) of this Agreement.

     (c) If, within thirty (30) days after any Notice of  Termination  is given,
the party  receiving such Notice of Termination  notifies the other party that a
dispute exists  concerning the termination,  the Date of Termination shall be on
the date on which the dispute is finally  determined,  either by mutual  written
agreement  of  the  parties,  by a  binding  arbitration  award,  or by a  final
judgment,  order or decree of a court of  competent  jurisdiction  (the time for
appeal  therefrom  having  expired  and no appeal  having been  perfected)  and,
provided further,  that the Date of Termination shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  in the event  Executive is
terminated for reasons other than  Termination for Cause, the Bank will continue
to pay  Executive  his Base Salary in effect when the notice  giving rise to the
dispute  was given until the  earlier  of: 1) the  resolution  of the dispute in
accordance  with this  Agreement or 2) the  expiration of the remaining  term of
this Agreement as determined as of the Date of  Termination.  Amounts paid under
this Section are in addition to all other  amounts due under this  Agreement and
shall not be  offset  against  or  reduce  any  other  amounts  due  under  this
Agreement.

     (d) All notices or other  communications  required or  permitted  hereunder
shall be made in  writing  and  shall  be  deemed  to have  been  duly  given if
delivered  by hand or  delivered  by a  recognized  delivery  service or mailed,
postage  prepaid,  by express,  certified or  registered  mail,  return  receipt
requested,  and addressed to the Bank, the Company or Executive,  as applicable,
at the address set forth above for the Bank and the Company,  and to Executive's
address contained in the Bank's files.

     9. POST-TERMINATION OBLIGATIONS.

     All  payments  and  benefits to  Executive  under this  Agreement  shall be
subject to  Executive's  compliance  with this Section 9,  Subsection  10(a) and
Subsection 10(b). Executive shall, upon reasonable notice, furnish such

<PAGE>

information and assistance to the Bank as may reasonably be required by the Bank
in  connection  with any  litigation in which it or any of its  subsidiaries  or
affiliates is, or may become, a party.

     10. NON-COMPETITION AND NON-DISCLOSURE.

     (a) Upon any termination of Executive's  employment  hereunder  pursuant to
Section 4 hereof or Subsection  5(b)(2) hereof,  Executive agrees not to compete
with  the  Bank  for a  period  of two (2)  years  following  such  termination.
Executive agrees that during such period Executive shall not work for or advise,
consult  or  otherwise  serve  with,  directly  or  indirectly,  a  "Significant
Competitor" of the Bank or the Company.  "Significant Competitor" shall mean any
commercial bank,  savings bank,  savings and loan association,  mortgage banking
company or other financial institution, or a holding company affiliate of any of
the foregoing,  that at the date of its employment of Executive has an office in
Southampton,  East Hampton, Shelter Island, Southhold or Riverhead, New York. If
any court or other  tribunal  having  jurisdiction  to determine the validity or
enforceability of this Subsection determines that, strictly applied, it would be
invalid or unenforceable,  the definition of Significant Competitor and the time
provisions  used shall be deemed  modified to the extent  necessary (but only to
that  extent)  so  that  the  restrictions,  as  modified,  will  be  valid  and
enforceable without further action required by the parties.  The parties hereto,
recognizing  that  irreparable  injury will result to the Bank, its business and
property in the event of Executive's  breach of this Subsection 10(a) agree that
in the event of any such breach by  Executive,  the Bank,  will be entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain  the  violation  hereof by  Executive,  Executive's  partners,  agents,
servants,  employees  and all  persons  acting  for or under  the  direction  of
Executive.  Nothing  herein  will be  construed  as  prohibiting  the Bank  from
pursuing any other remedies  available to the Bank for such breach or threatened
breach, including the recovery of damages from Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
business  activities and plans for business  activities of the Bank, the Company
and  affiliates  thereof,  as it may  exist  from time to time,  is a  valuable,
special and unique asset of the business of the Bank and the Company.  Executive
will not, during or after the term of his employment,  disclose any knowledge of
the past,  present,  planned or considered  business activities of the Bank, the
Company or affiliates thereof to any person, firm, corporation,  or other entity
for any reason or purpose whatsoever.  Notwithstanding the foregoing,  Executive
may disclose any knowledge of banking,  financial  and/or  economic  principles,
concepts or ideas which are not solely and exclusively derived form the business
plans and activities of the Bank.  Further,  Executive may disclose  information
regarding  the  business  activities  of the  Bank to  supervising  governmental
authorities pursuant to a formal regulatory request.  Executive acknowledges and
agrees that, because  relationships with customers and prospective customers are
expected to constitute a large  portion of the goodwill of the Bank's  business,
it is of great  importance  to the Bank that  Executive  not  solicit the Bank's
customers and  prospective  customers  (other than on behalf of the Bank) during
the period of  employment,  and that  Executive  not solicit such  customers and
prospective  customers  during  a two  (2)  year  period  after  termination  of
Executive's employment,  with respect to business, or contracts for any products
or services of the type  provided,  developed or under  development  by the Bank
during  Executive's  employment by the Bank.  Executive  agrees that,  while the
Executive  is employed by the Bank and for a period of two (2) years  commencing
on the date of termination of Executive's  employment  with the Bank,  Executive
shall not,  within the area  referred to in Subsection  10(a) above,  and in any
other town in which Executive performed material services for the Bank, directly
or indirectly  solicit  (other than on behalf of the Bank) business or contracts
for  any  products  or  services  of  the  type  provided,  developed  or  under
development by the Bank during Executive's  employment by the Bank, from or with
(i) any person or entity  that was a customer  of the Bank for such  products or
services as of, or within one year before, Executive's termination,  or (ii) any
prospective  customer that the Bank was actively soliciting as of, or within one
(1) year before Executive's termination.  In the event of a breach or threatened
breach by  Executive  of the  provisions  of this  Subsection,  the Bank will be
entitled to an injunction restraining Executive from disclosing,  in whole or in
part,  the  knowledge  of the past,  present,  planned  or  considered  business
activities of the Bank or affiliates  thereof, or from rendering any services to
any person, firm, corporation,  other entity to whom such knowledge, in whole or
in part, has been  disclosed,  or is threatened to be disclosed.  Nothing herein
will be  construed as  prohibiting  the Bank from  pursuing  any other  remedies
available  to the Bank for such  breach  or  threatened  breach,  including  the
recovery of damages from Executive.

     11. SOURCE OF PAYMENTS.

<PAGE>

     All  payments  provided in this  Agreement  shall be timely paid in cash or
check from the general funds of the Bank. The Company, however,  unconditionally
guarantees  payment and  provision of all amounts and benefits due  hereunder to
Executive  and, if such  amounts and  benefits  due from the Bank are not timely
paid or  provided  by the  Bank,  such  amounts  and  benefits  shall be paid or
provided  by the  Company.  In the event any amount  becomes  vested and payable
under more than one provision of this Agreement, Executive shall not be entitled
to  receive a  duplicate  payment  of any such  amount  nor shall  Executive  be
entitled to receive duplicate payments from both the Bank and Company.

     12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes  any prior  employment  agreement or change in control  agreement
between the Bank or any predecessor of the Bank and Executive,  except that this
Agreement  shall not affect or operate  to reduce  any  benefit or  compensation
inuring to Executive of a kind elsewhere provided. The Prior Agreement is hereby
terminated.  Except for termination of the Prior Agreement, no provision of this
Agreement  shall be  interpreted  to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.

     13. NO ATTACHMENT.

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement shall be subject to  anticipation,  communication,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of,
Executive, the Bank, the Company and their respective successors and assigns.

     14. MODIFICATION AND WAIVER.

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

     15. REQUIRED PROVISIONS.

     Notwithstanding any other provision in this Agreement,  (i) the Bank or the
Company may  terminate  or suspend  this  Agreement  and the  employment  of the
Executive  hereunder,  as if such termination were a Termination for Cause under
Section 7 hereof  to the  extent  required  by the laws of the State of New York
related to banking,  by applicable  federal law relating to deposit insurance or
bank  holding  companies  or by  regulations  or orders  issued  by the  Banking
Commissioner of the State of New York, the Federal Deposit Insurance Corporation
or the Board of  Governors  of the  Federal  Reserve  System and (ii) no payment
shall be required to be made to  Executive  under this  Agreement  to the extent
such payment is  prohibited by  applicable  law  regulation or order issued by a
banking agency or a court of competent jurisdiction;  provided, that it shall be
the  Bank's  or the  Company's  burden  to prove  that any  such  action  was so
required.

     16. SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid,

<PAGE>

and each  such  other  provision  and  part  thereof  shall  to the full  extent
consistent with law continue in full force and effect.

     17. HEADINGS FOR REFERENCE ONLY.

     The headings and sections  and  paragraphs  herein are included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

     18. GOVERNING LAW.

     The validity, interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of New York.

     19. ARBITRATION.

     Any dispute or  controversy  arising or in connection  with this  Agreement
shall be settled  exclusively by arbitration,  conducted before a panel of three
arbitrators  sitting in a location selected by Executive within fifty (50) miles
from the  location of the Bank,  in  accordance  with the rules of the  American
Arbitration  Association  then  in  effect.  Judgment  may  be  entered  on  the
arbitrator's award in any court having  jurisdiction;  provided,  however,  that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

     20. PAYMENT OF COSTS AND LEGAL FEES.

     In the event any dispute or controversy arising under or in connection with
Executive's  termination  is  resolved  in favor of the  Executive,  whether  by
judgment, arbitration or settlement,  Executive shall be entitled to the payment
of: (1) all legal fees and costs incurred by Executive in resolving such dispute
or  controversy  which  shall be advanced to  Executive  as incurred  during the
pendency of the  controversy  provided  Executive signs an undertaking to return
the advancements in the event his position is not substantially  upheld, and (2)
any back-pay, including salary, bonuses and any other cash compensation, fringe,
benefits and any  compensation  and benefits due Executive  under this Agreement
plus  interest  on such  amounts at the prime rate  (defined as the base rate on
corporate loans at large U.S. money center  commercial banks as published by The
Wall  Street  Journal),  compounded  monthly,  for the period  from the date the
payment is due until the payment is made. Such  reimbursement and interest shall
be in addition to all rights that Executive is otherwise  entitled to under this
Agreement.

     21. INDEMNIFICATION.

     The Bank  shall  provide  Executive  (including  his heirs,  executors  and
administrators)   with  coverage  under  a  standard  directors'  and  officers'
liability insurance policy at its expense and shall indemnify Executive (and his
heirs,  executors and  administrators) to the fullest extent permitted and until
the  expiration  of any period of  limitations  under New York law  against  all
expenses  and  liabilities  reasonably  incurred  by him in  connection  with or
arising out of any  action,  suit or  proceeding  in which he may be involved by
reason of his having been a director  or officer of the Bank  (whether or not he
continues to be a director or officer at the time of incurring  such expenses or
liabilities),  such expenses and liabilities to include,  but not be limited to,
judgments, court costs and advancement of attorneys' fees and cost of reasonable
settlements.

     22. SUCCESSOR TO THE BANK.

     The Bank  shall  require  any  successor  or  assignee,  whether  direct or
indirect,  by  purchase,   merger,   consolidation  or  otherwise,   to  all  or
substantially  all the business or assets of the Bank or the Company,  expressly
and  unconditionally  to assume to  perform  the Bank's  obligations  under this
Agreement, in the same manner and to

<PAGE>

the same extent that the Bank would be required to perform if no such succession
or  assignment  had taken  place.  Failure of the Bank to obtain such  agreement
prior to the  effectiveness  of a succession shall be a breach of this Agreement
and shall  entitle  Executive to payments and benefits  from the Bank or Company
and such  successor  in the  same  amount  and on the same  terms as he would be
entitled  pursuant to Sections 5 and 6 above.  For purposes of implementing  the
foregoing,  the date on which any such  succession  becomes  effective  shall be
deemed the Date of Termination.

The remainder of this page is intentionally left blank.

<PAGE>

     IN WITNESS WHEREOF,  Bridgehampton  National Bank and Bridge Bancorp,  Inc.
have caused this Agreement to be executed by their duly authorized  officers and
directors,  and  Executive  has signed this  Agreement,  on the 16th day of July
2001.

ATTEST:                                           BRIDGEHAMPTION NATIONAL BANK

/s/ Marcia Z. Hefter                              By:   /s/ Raymond Wesnofske
Name:  Marcia Z. Hefter                           Name:  Raymond Wesnofske
Title:  Director                                  Title:  Chairman of the Board

ATTEST:                                           BRIDGE BANCORP, INC.

/s/ Marcia Z. Hefter                              By: /s/ Raymond Wesnofske
Name:  Marcia Z. Hefter                           Name:  Raymond Wesnofske
Title:  Director                                  Title:  Chairman of the Board

Witness:

/s/ Marcia Z. Hefter                              /s/ Thomas J. Tobin
Name:  Marcia Z. Hefter                               Thomas J. TobinExhibit 10.9 to Form 10-Q

	

EXHIBIT 10.9 

CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT PURSUANT TO 17
C.F.R.ss.ss.200.80(b)(4), 200.83, 230.406 and 240.24b-2.  

     THIS
TERMINATION AGREEMENT(the “Agreement”), dated as of September 21, 2001 (the
“Effective Date”), is hereby entered into by and between BIOCRYST PHARMACEUTICALS, INC.,
a Delaware corporation having its principal place of business at 2190 Parkway Lake Drive,
Birmingham, Alabama 35244 (hereinafter referred to as “BIOCRYST”) and ORTHO-McNEIL
PHARMACEUTICAL, INC., a Delaware corporation having its principal office at U.S. Route
202, Raritan, NJ 08869 and THE R. W. JOHNSON PHARMACEUTICAL RESEARCH INSTITUTE, a
division of ORTHO-McNEIL PHARMACEUTICAL, INC., having its principal place of business at
U.S. Route 202, Raritan, NJ 08869 (hereinafter collectively referred to as “ORTHO”).
BIOCRYST and ORTHO are sometimes referred to herein individually as a “Party” and
collectively as the “Parties” and all references to BIOCRYST and ORTHO shall include
their respective Affiliates (hereinafter defined), where appropriate under the terms of
this Agreement.  

W I T N E S S E T H 

     WHEREAS,
BIOCRYST and ORTHO previously entered into a license agreement dated September 14, 1998
(the “License Agreement”);  

     WHEREAS,
On April 27, 2001 pursuant to Section 12.1 of the License Agreement, ORTHO provided
notice to BIOCRYST of its election to terminate the License Agreement, with such
termination effective as of the August 27, 2001, and the parties, by letter agreement,
subsequently extended the effective date of termination until the Effective Date; and,  

     WHEREAS,
the Parties desire to clarify the rights and responsibilities of each Party in respect of
such termination in order to facilitate and expedite the transfer to BIOCRYST of all
activities under the License Agreement related to the development, manufacture and
marketing of a Neuraminidase Inhibitor Product (collectively, the “Development Program”).  

     NOW,
THEREFORE, in consideration of the foregoing premises, and the mutual promises, covenants
and agreement hereinafter set forth, the receipt and sufficiency of which is hereby
acknowledged, both Parties to this Agreement hereby mutually agree as follows:  

SECTION 1.
DEFINITIONS 

     Capitalized
terms used in this Agreement shall have the meanings set forth in the License Agreement
unless otherwise defined in this Agreement or unless the context clearly indicates to the
contrary:  

     1.1      
“Agreement” shall mean this Termination Agreement.  

     1.2      “Clinical and Clinical
Support Studies” shall mean any and all scientific
evaluations of neuraminidase inhibitors, including Neuraminidase
Inhibitor Products, performed in connection with the Development
Program, and all related contracts, data and materials arising in
connection therewith, including but not limited to the clinical
trials, clinical support studies and the other items set forth on
Schedule A, attached hereto. 

     1.3      “Contracts”
shall mean the contracts set forth on Schedule B, attached hereto.  

20  

	

     1.4      
“Data” shall mean all data, notes, databases and information in any tangible or
intangible form, including but not limited to paper, electronic and magnetic media,
arising out of or related to the Development Program, including but not limited to that
(i) arising out of or related to Clinical and Clinical Support Studies, (ii) underlying
or supporting the Regulatory Filings; (iii) required in order to maintain the integrity
of New Drug Application files as required by law, rule or regulation, and (iv) which is
set forth on Schedule D, attached hereto.   

     1.5      “Domain
Names” shall mean the Internet domain names set forth in the Trademark Assignment
Agreement, attached hereto as Schedule F.   

     1.6      “Drug
Substance” shall mean the approximately [***](1) of GMP grade neuraminidase
inhibitor drug substance (manufactured and maintained in accordance with GMP
requirements), approximately [***] of which has been manufactured according to the final
synthesis method, all of which has been manufactured by ORTHO during the term of the
License Agreement and which is being stored at ORTHO’s facilities in Spring House,
Pennsylvania as of the Effective Date.   

     1.7     “Drug
Tablets” shall mean the drug tablets specified in Schedule C, attached hereto,
including both placebos and tablets comprised of the neuraminidase inhibitor manufactured
by ORTHO or its Affiliates.   

     1.8     “License
Agreement Effective Date” shall mean the effective date of the License Agreement,
September 14, 1998.   

     1.9     “Materials” shall
mean those tangible materials generated by, purchased by or allocated to the Development
Program by ORTHO, its contractors and agents as set forth on Schedule C.   

     1.10
"Purchase Order" shall have the meaning set forth in Section 9.2.  

     1.11     “Regulatory
Filings” shall mean all filings with regulatory agencies, departments,
bureaus or other government entities, made in connection with the Development
Program by ORTHO, its agent and contractors in order to allow ORTHO to market or
sell a Neuraminidase Inhibitor Product anywhere in the world, including but not
limited to those regulatory filings set forth on Schedule E, attached hereto.  

     1.12     “Trademarks” shall mean the trademarks set forth in the Trademark Assignment
Agreement, attached hereto as Schedule F.   

SECTION 2.
TERMINATION OF LICENSE AGREEMENT 

     2.1     The
Parties hereby confirm that the License Agreement is hereby terminated in its entirety
pursuant to Section 12.1 of the License Agreement, with such termination effective as of
the Effective Date.   

     2.2     The
Parties hereby confirm and agree that all provisions, rights and obligations which
survive termination of the License Agreement pursuant to the terms of the License
Agreement shall continue to survive, except for Article 26 of the License Agreement which
the Parties hereby agree shall not survive. All surviving provisions in the License
Agreement are hereby supplemented by the terms of this Agreement.   

(1)*** Information omitted
and filed separately with the Commission pursuant to 17 C.F.R. §§ 200.80(b)(4), 200.83,
230.406, and 240.24b-2.  

21  

	

SECTION 3.
PATENTS AND INVENTIONS 

     3.1     
ORTHO hereby acknowledges and agrees that (i) all of its rights to the Existing Know-How,
Improvements, Existing Patents, and Improvement Patents which arose by virtue of the
License Agreement are terminated; and (ii) BIOCRYST is and shall be the exclusive owner
of all right, title and interest in and to the Existing Know-How, Improvements, Existing
Patents, and Improvement Patents. To the extent necessary to effectuate the foregoing,
ORTHO hereby assigns to BIOCRYST any and all right, title and interest throughout the
world that ORTHO may have in and to the Existing Know-How, Improvements, Existing
Patents, and Improvement Patents.  

     3.2     
ORTHO hereby acknowledges and agrees that (i) all of its rights to the Joint Inventions
and Joint Patents by virtue of the License Agreement are terminated; and (ii) BIOCRYST is
and shall be the exclusive owner of all right, title and interest in and to the Joint
Inventions and Joint Patents. To the extent necessary to effectuate the foregoing, ORTHO
hereby assigns to BIOCRYST all of ORTHO’s right, title and interest throughout the world
in and to the Joint Inventions and the Joint Patents, including but not limited to the
Joint Inventions and Joint Patents set forth on Schedule G, attached hereto.  

     3.3     
BIOCRYST hereby grants to ORTHO a royalty-free, perpetual, non-sublicenseable,
non-transferable, fully paid-up limited license to use the manufacturing process claimed
in the patent application PCT/US00/15969, all national filings thereof, and any
continuations or divisionals reissues or re-examinations of the foregoing, solely for
ORTHO’s internal business purposes. For purposes of clarity, internal business purposes
shall not include performance of such processes for any third party or supply of the
product of the process to any third party; however, internal purposes shall include sale
of ORTHO products which are derived from the use of the processes, but which are
materially changed from the product of the process.  

SECTION 4. TRADEMARKS,
DOMAIN NAMES AND GENERIC NAME 

     4.1     
The Parties hereby acknowledge that as of the Effective Date and pursuant to the
assignment agreement attached hereto as Schedule F (the “Trademark Assignment”), ORTHO
has assigned to BIOCRYST, at BIOCRYST’s expense, all right, title and interest in and to
the Trademarks and Domain Names and the applications or registrations therefor, together
with the goodwill of the business symbolized by the Trademarks and Domain Names. The
Trademark Assignment includes the right to sue and recover damages for past and future
infringements of ORTHO’s rights in the Trademarks and the Domain Names and to bring any
proceeding in the United States Patent and Trademark Office or any equivalent agency in
any other country for cancellation or opposition or other proceeding in connection with
the Trademarks and the Domain Names. The right, title and interest is to be held and
enjoyed by BIOCRYST and BIOCRYST’s successors and assigns as fully and exclusively as it
would have been held and enjoyed by ORTHO had this assignment not been made.  

     4.2     
The Parties acknowledge that the USAN Council has adopted [***](1) as
the United States Adopted Name for the neuraminidase inhibitor RWJ-270201 for publication
in the USP Dictionary of USAN and International Nonproprietary Names. ORTHO agrees to
provide BIOCRYST with reasonable assistance in updating such publication, or as other
otherwise reasonably requested by BIOCRYST in relation to the use and maintenance of
[***] as a nonproprietary name. BIOCRYST agrees to bear ORTHO’s reasonable and
actual out-of-pocket costs related thereto.   

(1)*** Information omitted
and filed separately with the Commission pursuant to 17 C.F.R. §§ 200.80(b)(4), 200.83,
230.406 and 240.24b-2.  

22  

	

SECTION 5.
CONTRACTS 

     Excepting
only the Excluded Contract Liabilities (defined below), ORTHO hereby assigns and
transfers to BIOCRYST all of ORTHO’s right, title and interest in and to, and obligations
under, the Contracts. BIOCRYST hereby assumes all of the obligations of ORTHO under the
Contracts arising from and after the Effective Date, and agrees to make any payments,
perform all covenants, stipulations, agreements, and obligations under the Contracts
accruing after the Effective Date. In no event, however, shall BIOCRYST be deemed to have
assumed, with respect to the Contracts, (i) any obligation to perform which accrued prior
to the Effective Date, (ii) any financial obligations, including obligations to make
payments or reimburse expenses, which accrued prior to the Effective Date; (iii) any
liabilities arising out of the actions or inactions of ORTHO, its agents and contractors;
or (iv) any liability or obligation attributable to ORTHO’s (or its agents’ or
contractors’) breach of any provision of the Contracts or any other agreements with any
third parties, ((i) through (iv) shall be collectively referred to as the “Excluded
Contract Liabilities”).  

SECTION 6. CLINICAL
AND CLINICAL SUPPORT STUDIES, DATA AND MATERIALS 

     Excepting
only the Excluded Development Program Liabilities (defined below), ORTHO hereby assigns
to BIOCRYST any and all right, title and interest throughout the world that ORTHO may
have in and to the Clinical and Clinical Support Studies, Data and Materials. In no
event, however, shall BIOCRYST be deemed to have assumed, with respect to the Clinical
and Clinical Support Studies, Data and Materials, (i) any obligation to perform which
accrued prior to the Effective Date, (ii) any financial obligations, including
obligations to make payments or reimburse expenses, which accrued prior to the Effective
Date; (iii) any liabilities arising out of the actions or inactions of ORTHO its agents
and contractors or arising out of the infringement of any third party intellectual
property rights by ORTHO, its agents and contractors; or (iv) any liability or obligation
attributable to ORTHO’s (or its agents’ or contractors’) breach of any agreements with
any third parties, ((i) through (iv) shall be collectively referred to as the “Excluded
Development Program Liabilities”).  

SECTION 7.
REGULATORY FILINGS 

     Excepting
only the Excluded Regulatory Liabilities (defined below), ORTHO hereby assigns to
BIOCRYST any and all right, title and interest throughout the world that ORTHO may have
in and to the Regulatory Filings. In no event, however, shall BIOCRYST be deemed to have
assumed, with respect to the Regulatory Filings, (i) any obligation to perform which
accrued prior to the Effective Date, (ii) any financial obligations, including
obligations to make payments or reimburse expenses, which accrued prior to the Effective
Date; (iii) any liabilities arising out of the actions or in actions of ORTHO, its agents
and contractors or arising out of the infringement of any third party intellectual
property rights by ORTHO, its agents and contractors; or (iv) any liability or obligation
attributable to ORTHO’s (or its agents’ or contractors’) breach of any agreements with
any third parties; or (v) any liabilities attributable to any failure of ORTHO (or its
agents or contractors) to comply with any applicable laws, regulations or rules,
(collectively, the “Excluded Regulatory Liabilities”).  

SECTION 8. CONFIDENTIALITY 

      8.1      
The Confidentiality provisions set forth in Article 6 of the License Agreement are hereby
incorporated into this Agreement by reference as if fully set forth herein, and are
hereby extended to cover all information transmitted by either Party to the other in
furtherance of either Party’s obligations under this Agreement. The parties hereby agree
that for confidential information transmitted pursuant to this Agreement the Parties’
confidentiality obligations shall remain in effect for five (5) years from the date of
each such transmission.  

23  

	

      8.2      
The Parties hereby understand and agree that ORTHO may keep copies of the Data, Materials
and Regulatory Filings and such items reasonably related thereto, solely for archival and
regulatory or legal compliance purposes.   

SECTION 9.
DRUG SUBSTANCE 

      9.1      ORTHO
hereby agrees to maintain the Drug Substance, as specified in Schedule C, and to sell to
BIOCRYST or its agents or designee(s) (BIOCRYST, its agents and designees shall be
collectively referred to in this Section 9 as “BIOCRYST”) Drug Substance as requested by
BIOCRYST upon the terms and conditions set forth herein. The provisions of this Section 9
shall apply until the earlier of (i) such time that all Drug Substance has been purchased
from ORTHO or (ii) August 31, 2002. ORTHO shall not otherwise use the Drug Substance for
itself or on behalf of a Third Party, nor shall it sell the Drug Substance to any Third
Party.  

      9.2      
ORTHO agrees to supply BIOCRYST with such quantities of Drug Substance as BIOCRYST may
order by issuing a “Purchase Order” to ORTHO. ORTHO shall comply with the terms set forth
on each Purchase Order. Each Purchase Order will be substantially in the form of Schedule
H, attached hereto, which further sets forth the terms and conditions that shall govern
the purchases of Drug Substance. In the event of a conflict between the terms of the
Purchase Order and the terms of this Agreement, this Agreement shall prevail. Purchase
Orders shall be delivered to ORTHO via fax, electronically or by any other mutually
agreeable method. ORTHO hereby agrees to fully cooperate with BIOCRYST in supplying such
Drug Substance to BIOCRYST, and agrees to promptly notify BIOCRYST of any deficiencies in
a Purchase Order and of any and all events that would prevent ORTHO from timely or
completely fulfilling any Purchase Order.  

      9.3      
Until the earlier of (a) such time that all Drug Substance has been purchased from ORTHO
or (b) August 31, 2002, ORTHO agrees to store the Drug Substance in its facilities
located in Springhouse, PA in a controlled environment (with respect to temperature,
humidity and otherwise) so as to prevent degradation and contamination of the Drug
Substance to the fullest extent possible and as otherwise required by the FDA or other
law, rule, regulation or standards.  

      9.4      
BIOCRYST shall pay to ORTHO [***](1) per kilogram of Drug Substance delivered by ORTHO
pursuant to a Purchase Order. ORTHO’s right to payment for delivery of Drug Substance
pursuant to a Purchase Order shall accrue upon delivery of the Drug Substance, however,
BIOCRYST shall not be required to make payment in respect of such delivered Drug
Substance unless and until BIOCRYST enters into an agreement with a third party for such
third party to develop and market a Neuraminidase Inhibitor Product, at which time all
accrued amounts shall become due and payable within 60 days. Thereafter, accrued payments
shall be due and payable within thirty (30) days of receipt by BIOCRYST of a correct and
undisputed invoice from ORTHO. BIOCRYST agrees to provide ORTHO with prompt notice of its
entering into an agreement with a third party for such third party to develop and market
a Neuraminidase Inhibitor Product.  

(1)*** Information omitted
and filed separately with the Commission pursuant to 17 C.F.R. §§ 200.80(b)(4), 200.83,
230.406 and 240.24b-2.  

24  

	

      9.5      
BIOCRYST shall have the right to credit its out-of-pocket expenses related to testing of
the Drug Substance transferred or to be transferred to BIOCRYST pursuant to this
Agreement against the amounts payable to ORTHO pursuant to Section 9.4, above.  

      9.6      
BIOCRYST agrees to bear the reasonable costs of shipping Drug Substance from storage to
BIOCRYST. BIOCRYST agrees to pay any sales tax or other state, city or Federal taxes
related to the purchase of Drug Substance, other than taxes based on the income or real
property of ORTHO. Such shipping costs and taxes shall be set forth on each invoice and
shall be due and payable as set forth in Section 9.4, above.  

      9.7      
Notwithstanding anything to the Contrary in this Agreement, ORTHO agrees to provide
BIOCRYST, free of charge and promptly upon BIOCRYST’s request with:  

      (a)      
such amounts of Drug Substance as BIOCRYST deems reasonably necessary in order to
complete the clinical studies with the designations PHI 026, PHI 030, and TX003 and such
amounts of the Drug Substance for carcinogenicity studies, animal studies and QA as
referred to in item number 19 of Schedule C-5: and, 

      (b)      reasonable amount of Drug
Substance for BIOCRYST’S own use as laboratory reference material and for BIOCRYST’S
internal research purposes.  

SECTION 10.
PAYMENT PROVISIONS 

     The
parties acknowledge and agree that as of the Effective Date, each Party is in complete
satisfaction of all of its financial obligations to the other in connection with the
termination of the License Agreement and the transfer to BIOCRYST of the Development
Program. Except as explicitly provided for in this Agreement, neither Party shall be
entitled to seek any further fees, expenses or reimbursements from the other in
connection with the termination of the License Agreement and the transfer to BIOCRYST of
the Development Program including, but not limited to, all inventions, patents,
trademarks, clinical trials and support studies, data, materials, contracts and
regulatory filings.  

SECTION 11. REPRESENTATIONS
AND WARRANTIES 

      11.1      
Each Party hereby represents and warrants that it is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware and has
full organizational power and authority to enter into and perform this Agreement, and to
carry out the transactions contemplated under this Agreement.  

      11.2      
ORTHO hereby represents and warrants that (i) the execution, delivery and performance by
ORTHO of this Agreement, and the consummation by ORTHO of the transactions contemplated
herein, have been duly authorized by all requisite organizational action; (ii) this
Agreement and all of the obligations entered into and undertaken in connection with the
transactions contemplated herein to which ORTHO is a party constitute, or will constitute
upon the execution of such agreements, the valid and binding obligations of ORTHO
enforceable in accordance with their respective terms, and (iii) the execution of and
performance of the transactions contemplated by this Agreement and compliance with its
provisions by ORTHO will not violate any provision of applicable law and will not
conflict with or result in any breach of any of the terms, conditions or provisions of,
or constitute a default under, or require a consent or waiver under, ORTHO’s
organizational documents or any indenture, lease, agreement or other instrument to which
ORTHO is a party or by which it or any of its properties is bound, or any decree,
judgment, order, statute, rule or regulation applicable to ORTHO.  

25  

	

      11.3      
ORTHO hereby represents and warrants that: (i) it has made diligent efforts to transfer
to BIOCRYST (and will in the future) all Regulatory Filings, Clinical and Clinical
Support Studies, Data and Materials, according to the time schedules set forth in
Schedules E, A, D and C, respectively and should additional items related to the
foregoing be discovered by ORTHO or otherwise, ORTHO will use diligent efforts to
transfer such items to BIOCRYST and otherwise assist BIOCRYST in connection therewith;
(ii) it has filed all letters and other documents with the FDA (and all foreign
equivalents) in order to effect a transfer of the Regulatory Filings to BIOCRYST; (iii)
the Regulatory Filings, Clinical and Clinical Support Studies, Data and Materials
transferred to BIOCRYST include all Regulatory Filings, Clinical and Clinical Support
Studies, Data and Materials initiated, conducted or generated in the Development Program;
and, (iv) it has or will otherwise fully comply with Article 14 of the License Agreement
together with all related time schedules set forth in this Agreement and the Schedules
hereto.  

      11.4      
ORTHO hereby represents and warrants that it has the full power and authority to assign
to BIOCRYST all right title and interest in and to, and obligations under, the Regulatory
Filings, Clinical and Clinical Support Studies, Data and Materials.  

      11.5      
ORTHO hereby represents and warrants that, to the best of its knowledge, and except for
the interests of BIOCRYST, it has the full power and authority to assign to BIOCRYST all
right title and interest in and to the Joint Inventions, Joint Patents, Existing
Know-How, Existing Patents, Improvements and Improvement Patents free and clear of all
liens, claims and encumbrances of any nature. ORTHO further represents and warrants that
it has not granted and will not grant any right to any Third Party in or to the Joint
Inventions, Joint Patents, Existing Know-How, Existing Patents, Improvements and
Improvement Patents.  

      11.6      
ORTHO hereby represents and warrants (i) that it has the full power and authority to
assign to BIOCRYST all right, title and interest in and to, and obligations under, the
Contracts, (ii) that it has satisfied all financial obligations under, and all
liabilities arising out of, the Contracts which accrued prior to the Effective Date, and
(iii) that it is not in breach of any of the Contracts.  

      11.7      
ORTHO hereby represents and warrants that it has complied and in the future will continue
to comply with all applicable laws, rules and regulations in connection with its, or its
agents and contractors, conduct of the Development Program.  

      11.8      
ORTHO hereby represents and warrants that there is no threatened or pending litigation
related to the Development Program including but not limited to the Licensed Products,
the Contracts and the Clinical and Clinical Support Studies.  

      11.9      
ORTHO hereby represents that all Drug Substance and other drug materials transferred to
BIOCRYST hereunder and in connection with the termination of the License Agreement and
the transfer to BIOCRYST of the Development Program at the time of transfer to BIOCRYST
that are labeled for use in human clinical trials, pursuant to Schedule C, and not
labeled for laboratory use or otherwise shipped under quarantine pursuant to Schedule C,
met (or will meet) all applicable FDA requirements and were approved to be administered
to humans in connection with clinical trials. However, it is understood that, pursuant to
Schedule C some Drug Substance may be shipped to BIOCRYST in quarantine status.  

      11.10      
THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS ARTICLE 11 ARE IN LIEU OF ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION,
THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  

26  

	

     SECTION
12. INDEMNIFICATION  

      12.1      
BIOCRYST agrees to indemnify, defend and hold ORTHO and its directors, officers,
employees and agents (the “ORTHO Indemnitees”) harmless from and against any losses,
costs, claims, damages, liabilities or expenses (including without limitation, fees and
disbursements of counsel incurred by ORTHO Indemnitees in any action or proceeding
between ORTHO and ORTHO Indemnitees and ORTHO Indemnitees and any third party or
otherwise) (collectively, “Liabilities”) arising out of, or in connection with Third
Party claims relating to: (i) any breach by BIOCRYST of the confidentiality provisions of
this Agreement, (ii) personal injury or other liability, which occurs after the Effective
Date, to a participant in any clinical trial conducted by BIOCRYST of a neuraminidase
inhibitor which was the subject of the Development Program; (iii) Liabilities, accruing
after the Effective Date based upon BIOCRYST’S or its agents or contractor’s, use, sale,
distribution or marketing of any neuraminidase inhibitor which was the subject of the
Development Program; (iv) BIOCRYST’s failure to comply with any law, regulation or rule;
and, (v) the gross negligence or intentional misconduct of BIOCRYST.  

      12.2      
ORTHO agrees to indemnify, defend and hold BIOCRYST and its directors, officers,
employees and agents (the “BIOCRYST Indemnitees”) harmless from and against any losses,
costs, claims, damages, liabilities or expense (including without limitation, fees and
disbursements of counsel incurred by BIOCRYST Indemnitees in any action or proceeding
between ORTHO and BIOCRYST Indemnitees and BIOCRYST Indemnitees and any third party or
otherwise) (collectively, “Liabilities”) arising out of, or in connection with Third
Party claims relating to: (i) the Development Program prior to the Effective Date; (ii)
any breach by ORTHO of its representations and warranties under this Agreement; (iii) any
breach by ORTHO of the confidentiality provisions of this Agreement, (iv) any breach by
ORTHO in the performance or observation of any covenant, agreement, obligation or
provision in any of the Contracts to be performed or observed by ORTHO, (v) the Clinical
and Clinical Support Studies prior to the Effective Date, (vi) ORTHO’s failure to comply
with any law, regulation or rule, (vii) the administration of Drug Tablets, Drug
Substance or any other drug tablets manufactured by ORTHO from Drug Substance, to humans,
to the extent that such Liabilities are attributable to any failure of ORTHO in properly
manufacturing or storing the foregoing, or any failure of ORTHO to meet any and all
requirements of the FDA with respect to manufacture or storage of the foregoing, and
(viii) the negligence or intentional misconduct of ORTHO.  

      12.3      
An indemnitee that intends to claim indemnification under this Agreement shall promptly
notify indemnifying party of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification, and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so desires, to
assume sole control of the defense thereof with counsel selected by the indemnifying
party; provided, however, that the Indemnitee shall have the absolute right to retain its
own counsel, with the fees and expenses to be paid by the Indemnitee. The indemnity
obligations under this Agreement shall not apply to amounts paid in settlement of any
loss, claim, damage, liability or action if such settlement is effected without the
consent of the indemnifying party, which consent shall not be unreasonably withheld or
delayed. The Indemnitee, its employees and agents, shall cooperate fully with the
indemnifying party and its legal representatives in the investigation of any action,
claim or liability covered by an indemnification from the indemnifying party. The
Indemnifying party shall not, without the prior written consent of the Indemnitee, effect
any settlement of any pending or threatened action, suit or proceeding in respect of
which any Indemnitee is or could have been a party and indemnity could have been sought
hereunder by such Indemnitee, unless such settlement includes an unconditional release of
such Indemnitee from all liability on claims that are the subject matter of such action,
suit or proceeding.  

27  

	

SECTION 13. FURTHER
ASSURANCES 

      13.1      
In addition to the actions specifically provided for elsewhere in this Agreement, from
and after the Effective Date, each of the parties hereto shall take, or cause to be
taken, all actions, and to do, or cause to be done, all things reasonably necessary,
proper or advisable under applicable laws, regulations and agreements to consummate and
make effective the transactions contemplated by this Agreement and to reasonably aid
BIOCRYST in its assumption and continuation of the Development Program, including the
execution and delivery of instruments of conveyance, assignment and transfer, cooperation
in all filings with, and to obtain all consents, approvals or authorizations of, any
governmental authority or any other person under any permit, license, agreement,
indenture or other instrument, at the expense of the requesting party.  

      13.2      
In the event that following the Effective Date ORTHO discovers any document, data,
contract, invention, patent, or any other item related to the Development Program, which
has not been transferred to BIOCRYST but which ORTHO is obligated to transfer and/or
assign to BIOCRYST pursuant to the License Agreement, or makes any invention that would
be characterized as a Joint Invention under the License Agreement, ORTHO shall promptly
notify BIOCRYST and assign and transfer the foregoing to BIOCRYST.  

      13.3      
In the event that ORTHO is contacted by any third party (including for example, the FDA),
in any fashion regarding the subject matter of the Development Program, ORTHO shall
promptly notify BIOCRYST of the of the nature and substance of such contact or inquiry
and shall comply with its confidentiality obligations set forth herein.  

SECTION 14.
INTERPRETATION 

     The
construction, validity and performance of this Agreement shall be governed in all
respects by the laws of the State of New York, without giving effect to principles of
conflict of laws.  

SECTION 15. DISPUTE
RESOLUTION 

     The
Dispute Resolution provisions set forth in Article 19 of the License Agreement are hereby
incorporated into this Agreement by reference, and shall apply to this Agreement as if
fully set forth herein.  

SECTION 16.
NOTICES 

      16.1      
Any notice required or permitted to be given under this Agreement shall be mailed by
registered or certified mail, postage prepaid, addressed to the Party to be notified at
its address stated below, or at such other address as may hereafter be furnished in
writing to the notifying Party or by telefax (with confirmation sent by mail) to the
numbers set forth below or to such changed telefax numbers as may thereafter be furnished.  

	 	If
to BIOCRYST: 

	 	BIOCRYST
Pharmaceuticals, Inc.
2190 Parkway Lake Drive
Birmingham, Alabama 35244
Telefax No.:
(205) 444-4640
Attention: Chief Executive Officer 

	

28  

	

	 	If
to ORTHO: 

	 	President

ORTHO-McNeil Pharmaceutical, Inc.
U.S. Route 202 South
Raritan, NJ 08869-0602
Telefax
No.: (908) 218-1416 

	

Any such notice shall be
deemed to have been received when it has been delivered in the ordinary course
of post or received by telefax.  

SECTION 17.
WAIVER 

     The
failure on the part of BIOCRYST or ORTHO to exercise or enforce any rights conferred upon
it hereunder shall not be deemed to be a waiver of any such rights nor operate to bar the
exercise or enforcement thereof at any time or times thereafter.  

SECTION 18. ENTIRE
AGREEMENT 

     This
Agreement constitutes the entire agreement between the Parties hereto concerning the
subject matter hereof and any representation, promise or condition in connection
therewith, not incorporated herein, shall not be binding upon either Party.  

SECTION 19.
ASSIGNMENT 

     This
Agreement, and all rights and obligations hereunder, is personal to ORTHO and shall not
be assigned in whole or in part by ORTHO to any other person or company (other than
Affiliates of ORTHO) without the prior written consent of BIOCRYST. When assigned as
permitted herein this Agreement shall be binding on each Party’s successors and assigns.  

SECTION 20. TITLES 

     It is
agreed that the marginal headings appearing at the beginning of the numbered Articles
hereof have been inserted for convenience only and do not constitute any part of this
Agreement.  

SECTION 21. UNENFORCEABLE
PROVISIONS 

     Any
provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or affecting the
validity or enforceability of such provisions in any other jurisdiction.  

SECTION 22.
OTHERS 

     As
used in this Agreement, singular includes the plural and plural includes the singular,
wherever so required by fact or context.  

29  

	

SECTION 23. EXECUTION 

     This
Agreement shall be executed in two (2) counterparts each of which shall for all purposes
be deemed an original.  

     IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their
respective duly authorized officers or representatives as of the day and year first above
written.  

	 	 	 	BIOCRYST PHARMACEUTICALS, INC. 
	 
	WITNESS 	              	 	By: 	
                
                
                
                
 
	  	 	 	Title: 	
                
                
                
                
 
	  	 	 	Date: 	
                
                
                
                
 

	 	 	 	ORTHO-McNEIL PHARMACEUTICAL, INC. 
	 
	WITNESS 	              	 	By: 	
                
                
                
                
 
	  	 	 	Title: 	
                
                
                
                
 
	  	 	 	Date: 	
                
                
                
                
 

	 	 	 	
R.W. JOHNSON PHARMACEUTICAL RESEARCH INSTITUTE, DIVISION
OF ORTHO-McNEIL PHARMACEUTICAL, INC. 
	 
	WITNESS 	              	 	By: 	
                
                
                
                
 
	  	 	 	Title: 	
                
                
                
                
 
	  	 	 	Date: 	
                
                
                
                
 

	

30

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