Document:

EXHIBIT 10.4
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                         EXECUTIVE EMPLOYMENT AGREEMENT
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         THIS AGREEMENT, made and entered into as of October 1, 2003 (the
"Effective Date"), by and among PrivateBancorp, Inc. (hereinafter referred to as
"PrivateBancorp"), The PrivateBank (St. Louis) (the "Bank" and together with
PrivateBancorp, hereinafter the "Employer"), and Richard C. Jensen (hereinafter
called the "Executive").

                          W I T N E S S E T H  T H A T:
                          - - - - - - - - - -  - - - -

         WHEREAS, the Employer desires to continue to employ the Executive as
Chairman and Chief Executive Officer of the Bank, and the Executive desires to
continue in such employment;

         NOW, THEREFORE, in consideration of the mutual promises herein
contained and subject to the conditions precedent set forth herein, the parties
agree as follows:

         1. Employment and Term.

                  (a) Employment. PrivateBancorp shall cause the Bank to employ,
and the Bank shall employ, the Executive as the Chairman and Chief Executive
Officer of the Bank, and the Executive shall so serve, for the term set forth in
Paragraph 1(b).

                  (b) Term. The Executive's employment under this Agreement
shall commence on the Effective Date and extend through September 30, 2004,
subject to the extension of such term as hereinafter provided and subject to
earlier termination as provided in Paragraph 7. The term of this Agreement shall
automatically be extended for an additional year as of October 1, 2004 and each
anniversary date thereof unless, no later than ninety (90) days prior to any
such renewal date, either the board of directors of PrivateBancorp (the
"Board"), or a duly authorized committee thereof, on behalf of the Employer, or
the Executive gives written notice to the other, in accordance with Paragraph
15, that the term of this Agreement shall not be so extended. Anything in this
Agreement to the contrary, if at any time during the Executive's period of
employment under this Agreement there is a Change in Control (as defined in
Paragraph 7), the term of this Agreement shall automatically extend to a date
which is two (2) years from the date of the Change in Control (and shall be
further extended pursuant to the foregoing provisions of this Paragraph 1(b),
unless written notice to the contrary is given in accordance with this Paragraph
1(b)).

         2. Duties and Responsibilities.

                  (a) The duties and responsibilities of the Executive shall be
of an executive nature as shall be required by the Employer in the conduct of
its business. The Executive's powers and authority shall be as prescribed by the
by-laws of the Employer, if applicable, and shall include all those presently
delegated to the Executive, together with the performance of such other duties
and responsibilities as the Chief Executive Officer of the Employer may from
time to time assign to the Executive not inconsistent with the Executive's
position(s) with the Employer. The Executive recognizes, that during the period
of the Executive's employment hereunder, the Executive owes an undivided duty of
loyalty to the Employer, and agrees to

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devote the Executive's entire business time and attention to the performance of
said duties and responsibilities and to use the Executive's best efforts to
promote and develop the business of the Employer. Recognizing and acknowledging
that it is essential for the protection and enhancement of the name and business
of the Employer and the goodwill pertaining thereto, the Executive shall perform
his duties under this Agreement professionally, in accordance with the
applicable laws, rules and regulations and such standards, policies and
procedures established by the Employer and the industry from time to time,
including the Employee's Corporate Code of Ethics. The Executive will not
perform any duties for any other business without the prior written consent of
the Employer, but may engage in charitable, civic or community activities,
provided that such duties or activities do not materially interfere with the
proper performance of the Executive's duties under this Agreement. During the
period of employment, the Executive agrees to serve as a director on the Board
of Directors of the Employer and/or the board of directors or managers, as
applicable, of any of its subsidiaries and affiliates, as well as to serve as a
member of any committee of any said boards, to which the Executive may be
elected or appointed.

                  (b) Notwithstanding that this Agreement provides for the
employment of the Executive in the Executive's capacity as the Chairman and
Chief Executive Officer of the Bank, nothing herein contained shall assure the
Executive of, nor in any manner shall be construed to constitute an agreement by
the Employer to the, continued employment of the Executive after the expiration
or termination of this Agreement in such capacity or in any other capacity.

         3. Base Salary. For services performed by the Executive for the
Employer pursuant to this Agreement during the period of employment as provided
in Paragraph 1(b) hereof, the Employer shall pay the Executive a base salary at
the rate of one hundred eighty two thousand dollars ($182,000) per year, payable
in substantially equal installments in accordance with the Employer's regular
payroll practices. The Executive's base salary (with any increases under this
Paragraph 3) shall not be subject to reduction without the Executive's written
consent. Any compensation which may be paid to the Executive under any
additional compensation or incentive plan of the Employer or which may be
otherwise authorized from time to time by the Board (or an appropriate committee
thereof) shall be in addition to the base salary to which the Executive shall be
entitled under this Agreement. Executive's base salary shall be subject to
review from time to time, and the Employer may (but is not required to) increase
the base salary as the Board, in its discretion, may determine.

         4. Annual Bonuses. For each fiscal year during the term of employment,
the Executive shall be eligible to receive a bonus in the amount, if any, as may
be determined from time to time by the Board in its discretion.

         5. Equity Incentive Compensation. During the term of employment
hereunder, the Executive shall be eligible to participate in the PrivateBancorp,
Inc. Incentive Compensation Plan, and in any other equity-based incentive
compensation plan or program adopted by the Employer, including (but not by way
of limitation) any plan providing for the granting of (a) options to purchase
stock, (b) restricted stock or (c) similar equity-based units or interests to
officers of the Employer.

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         6. Other Benefits. In addition to the compensation described in
Paragraphs 3, 4 and 5, above, the Executive shall also be entitled to the
following:

                  (a) Participation in Benefit Plans. The Executive shall be
entitled to participate in such life insurance, disability, medical, dental,
pension, profit sharing and retirement plans and other programs as may be made
generally available from time to time by the Employer for the benefit of
executives of the Executive's level or its employees generally.

                  (b) Vacation. The Executive shall be entitled to such number
of days of vacation with pay during each calendar year during the period of
employment in accordance with the Employer's applicable personnel policy as in
effect from time to time.

                  (c) Executive Perquisites. The Employer shall furnish
Executive with such perquisites as are provided from time to time by the
Employer to its officers generally and are suitable to the Executive's position,
adequate for the performance of the Executive's duties hereunder, and reasonable
in the circumstances. Without limitation of the foregoing, Employer shall pay
the cost of Executive's membership in one downtown club and shall reimburse
Executive for the cost of annual country club dues at one country club of which
Executive is a member, in each case subject to Employer approval of the club.

                  (d) Expense Reimbursement. The Employer shall reimburse the
Executive for all reasonable expenses incurred by the Executive in performing
services hereunder, which are incurred and accounted for in accordance with the
Employer's policies and procedures applicable thereto.

         7. Termination. Unless earlier terminated in accordance with the
following provisions of this Paragraph 7, the Employer shall continue to employ
the Executive and the Executive shall remain employed by the Employer during the
entire term of this Agreement as set forth in Paragraph 1(b). Paragraph 8 hereof
sets forth certain obligations of the Employer in the event that the Executive's
employment hereunder is terminated. Certain capitalized terms used in this
Paragraph 7 and in Paragraph 8 hereof are defined in Paragraph 7(d), below. In
the event of termination of the Executive's employment with the Employer for any
reason, or if the Executive is required by the Board, the Executive agrees to
resign, and shall automatically be deemed to have resigned, from any offices
(including any directorship) the Executive holds with the Employer and/or any of
its affiliates effective as of the termination date of the Executive's
employment hereunder, or, if applicable, effective as of a date selected by the
Board; provided, however, that the foregoing resignation shall not prejudice or
otherwise affect the Executive's rights and obligations, if any, under this
Agreement.

                  (a) Death or Disability. Except to the extent otherwise
provided in Paragraphs 8, 12 and 13 with respect to death benefits and certain
post-Date of Termination obligations of the parties, this Agreement shall
terminate immediately as of the Date of Termination in the event of the
Executive's death or in the event that the Executive becomes Disabled (as
hereinafter defined). The Board shall promptly give the Executive written notice
of any such determination of the Executive's Disability and of any decision of
the Board to terminate the Executive's employment by reason thereof. In the
event of Disability, until the Date of Termination, the base salary payable to
the Executive under Paragraph 3 hereof shall be

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reduced dollar-for-dollar by the amount of disability benefits, if any, paid to
the Executive in accordance with any disability policy or program of the
Employer.

                  (b) Discharge for Cause. In accordance with the procedures
hereinafter set forth, the Board may discharge the Executive from the
Executive's employment hereunder for Cause (as hereinafter defined). Except to
the extent otherwise provided in Paragraphs 8, 12 and 13 with respect to certain
post-Date of Termination obligations of the parties, this Agreement shall
terminate immediately as of the Date of Termination in the event the Executive
is discharged for Cause. Any discharge of the Executive for Cause shall be
communicated by a Notice of Termination to the Executive given in accordance
with Paragraph 15 of this Agreement.

                  (c) Termination for Other Reasons. The Employer may discharge
the Executive without Cause by giving written notice to the Executive in
accordance with Paragraph 15. The Executive may resign from the Executive's
employment with or without Good Reason, without liability to the Employer, by
giving written notice to the Employer in accordance with Paragraph 15 at least
thirty (30) days prior to the Date of Termination; provided, however, that no
resignation shall be treated as a resignation for Good Reason unless the written
notice thereof is given within sixty (60) days after the occurrence which
constitutes "Good Reason" or during the ninety (90) day period described in the
final sentence of Paragraph 7(d)(vi); provided, further, that the Employer
retains the right after proper notice of the Executive's voluntary termination
to require the Executive to cease the Executive's employment immediately. Except
to the extent otherwise provided in Paragraphs 8, 12 and 13 with respect to
certain post-Date of Termination obligations of the parties, this Agreement
shall terminate immediately as of the Date of Termination in the event the
Executive is discharged without Cause or resigns for any reason or no reason.

                  (d) Definitions. For purposes of this Agreement, the following
capitalized terms shall have the meanings set forth below:

                           (i) "Accrued Obligations" shall mean, as of the Date
         of Termination, the sum of (A) the Executive's base salary under
         Paragraph 3 through the Date of Termination to the extent not
         theretofore paid, (B) the amount of any deferred compensation and other
         cash compensation accrued by the Executive as of the Date of
         Termination to the extent not theretofore paid, (C) any vacation pay,
         expense reimbursements and other cash entitlements accrued by the
         Executive as of the Date of Termination to the extent not theretofore
         paid, (D) any grants and awards vested or accrued under any
         equity-based incentive compensation plan or program and (E) all other
         benefits which have accrued as of the Date of Termination. For the
         purpose of this Paragraph 7(d)(i), except as provided in the applicable
         plan, program or policy, amounts shall be deemed to accrue ratably over
         the period during which they are earned, but no discretionary
         compensation shall be deemed earned or accrued until it is specifically
         approved by the Board in accordance with the applicable plan, program
         or policy.

                           (ii) "Cause" shall mean (A) the Executive's willful
         and continued (for a period of not less than ten (10) business days
         after written notice thereof) failure to perform substantially the
         duties of his employment (other than as a result of physical or

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         mental incapacity, or while on vacation); or (B) the Executive's
         willful engaging in illegal conduct or gross misconduct which is
         materially and demonstrably injurious to the Employer; or (C) the
         Executive's conviction of a felony involving moral turpitude, but
         specifically excluding any conviction based entirely on vicarious
         liability (with "vicarious liability" meaning liability based on acts
         of the Employer for which the Executive is charged solely as a result
         of his offices with the Employer and in which he was not directly
         involved and did not have prior knowledge of such actions or intended
         actions); provided, however, that no act or failure to act, on the part
         of the Executive, shall be considered "willful" unless it is done, or
         omitted to be done, by the Executive in bad faith or without reasonable
         belief that the Executive's action or omission was in the best
         interests of the Employer; and provided further that no act or omission
         by the Executive shall constitute Cause hereunder unless the Employer
         has given detailed written notice thereof to the Executive, and the
         Executive has failed to remedy such act or omission.

                           (iii)    "Change in Control" shall mean the
         occurrence of any one of the following events:

                                    (A) Any "person" (as such term is used in
                  Sections 13(d) and 14(d) of the Securities Exchange Act of
                  1934, as amended), other than (i) a trustee or other fiduciary
                  holding securities under an employee benefit plan of
                  PrivateBancorp or any of its subsidiaries, or (ii) a
                  corporation owned directly or indirectly by the stockholders
                  of PrivateBancorp in substantially the same proportions as
                  their ownership of stock of PrivateBancorp, is or becomes the
                  "beneficial owner" (as defined in Rule 13d-3 under said Act),
                  directly or indirectly, of securities of PrivateBancorp
                  representing 20% or more of the total voting power of the then
                  outstanding shares of capital stock of PrivateBancorp entitled
                  to vote generally in the election of directors (the "Voting
                  Stock"), provided, however, that the following shall not
                  constitute a change in control: (1) such person becomes a
                  beneficial owner of 20% or more of the Voting Stock as the
                  result of an acquisition of such Voting Stock directly from
                  PrivateBancorp, or (2) such person becomes a beneficial owner
                  of 20% or more of the Voting Stock as a result of the decrease
                  in the number of outstanding shares of Voting Stock caused by
                  the repurchase of shares by PrivateBancorp; provided, further,
                  that in the event a person described in clause (1) or (2)
                  shall thereafter increase (other than in circumstances
                  described in clause (1) or (2)) beneficial ownership of stock
                  representing more than 1% of the Voting Stock, such person
                  shall be deemed to become a beneficial owner of 20% or more of
                  the Voting Stock for purposes of this Paragraph (A), provided
                  such person continues to beneficially own 20% or more of the
                  Voting Stock after such subsequent increase in beneficial
                  ownership, or

                                    (B) During any period of two consecutive
                  years, individuals (the "Incumbent Board"), who at the
                  beginning of such period constitute the Board, and any new
                  director, whose election by the Board or nomination for
                  election by PrivateBancorp's stockholders was approved by a
                  vote of at least two-thirds (2/3) of the directors then still
                  in office who either were directors at the

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                  beginning of the period or whose election or nomination for
                  election was previously so approved, cease for any reason to
                  constitute a majority thereof, or

                                    (C) Consummation of a reorganization, merger
                  or consolidation or the sale or other disposition of all or
                  substantially all of the assets of PrivateBancorp (a "Business
                  Combination"), in each case, unless (1) all or substantially
                  all of the individuals and entities who were the beneficial
                  owners, respectively, of the Voting Stock immediately prior to
                  such Business Combination beneficially own, directly or
                  indirectly, more than 50% of the total voting power
                  represented by the voting securities entitled to vote
                  generally in the election of directors of the corporation
                  resulting from the Business Combination (including, without
                  limitation, a corporation which as a result of the Business
                  Combination owns PrivateBancorp or all or substantially all of
                  PrivateBancorp's assets either directly or through one or more
                  subsidiaries) in substantially the same proportions as their
                  ownership, immediately prior to the Business Combination of
                  the Voting Stock of PrivateBancorp, and (2) at least a
                  majority of the members of the board of directors of the
                  corporation resulting from the Business Combination were
                  members of the Incumbent Board at the time of the execution of
                  the initial agreement, or action of the Incumbent Board,
                  providing for such Business Combination; or

                                    (D) Approval by the stockholders of
                  PrivateBancorp of a plan of complete liquidation or
                  dissolution of PrivateBancorp.

         The Board has final authority to construe and interpret the provisions
         of the foregoing Paragraphs (A), (B), (C) and (D) and to determine the
         exact date on which a Change in Control has been deemed to have
         occurred thereunder.

                           (iv) "Date of Termination" shall mean (A) in the
         event of a discharge of the Executive for or without Cause, the date
         the Executive receives a Notice of Termination, or any later date
         specified in such Notice of Termination, as the case may be, (B) in the
         event of a resignation by the Executive, the date specified in the
         written notice to the Employer, which date shall be no less than thirty
         (30) days from the date of such written notice (or such earlier date as
         the Employer may elect in its sole discretion), (C) in the event of the
         Executive's death, the date of the Executive's death, and (D) in the
         event of termination of the Executive's employment by reason of
         Disability pursuant to Paragraph 7(a), the date the Executive receives
         written notice of such termination.

                           (v) "Disabled" and "Disability" shall mean that the
         Executive will be deemed to be disabled upon the earlier of (i) the end
         of a six (6) consecutive month period, or an aggregate period of nine
         (9) months out of any consecutive twelve (12) months, during which, by
         reason of physical or mental injury or disease, the Executive has been
         unable to perform substantially all of the Executive's usual and
         customary duties under this Agreement or (ii) the date that a reputable
         physician selected by the Board, and as to whom the Executive has no
         reasonable objection, determines in writing that the Executive will, by
         reason of physical or mental injury or disease, be unable to perform
         substantially all of the Executive's usual and customary duties under

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         this Agreement for a period of at least six (6) consecutive months. If
         any question arises as to whether the Executive is Disabled, upon
         reasonable request therefore by the Board, the Executive shall submit
         to a reasonable medical examination for the purpose of determining the
         existence, nature and extent of any such disability.

                           (vi) "Good Reason" shall mean the occurrence, other
         than in connection with a discharge, of any of the following without
         the Executive's consent: (A) the Executive is not re-elected or is
         removed from the positions with the Employer set forth in Paragraph
         1(a), other than as a result of the Executive's election or appointment
         to positions of equal or superior scope and responsibility; or (B) the
         Executive shall fail to be vested by the Employer with the power and
         authority of any of said positions, excluding for this purpose any
         isolated action not taken in bad faith and which is remedied by the
         Employer promptly after receipt of written notice thereof given by the
         Executive in accordance with Paragraph 15; or (C) any failure by the
         Employer to materially comply with any of the provisions of this
         Agreement, other than any isolated, insubstantial and inadvertent
         failure not occurring in bad faith and which is remedied by the
         Employer promptly after receipt of written notice thereof given by the
         Executive in accordance with Paragraph 15; (D) the Employer giving
         notice to the Executive pursuant to Paragraph 1(b) that the term of
         this Agreement shall not be extended upon the expiration of the
         then-current term; or (E) the Employer requiring the Executive to be
         based at an office or location which is more than 50 miles from the
         Executive's office as of the Effective Date or any renewal date of the
         extended term of this Agreement. In addition, any termination by the
         Executive during the ninety (90) day period beginning on the first
         anniversary of the date of a Change in Control shall be deemed to be
         for "Good Reason."

                           (vii) "Notice of Termination" shall mean a written
         notice which (A) indicates the specific termination provision in this
         Agreement relied upon, (B) sets forth in reasonable detail the facts
         and circumstances claimed to provide a basis for termination of the
         Executive's employment under the provision so indicated and (C) if the
         Date of Termination is to be other than the date of receipt of such
         notice or the date otherwise specified under this Agreement, specifies
         the termination date.

         8. Obligations of the Employer Upon Termination. The following
provisions describe the obligations of the Employer to the Executive under this
Agreement upon termination of employment. However, except as explicitly provided
in this Agreement, nothing in this Agreement shall limit or otherwise adversely
affect any rights which the Executive may have under applicable law, under any
other agreement with the Employer or any of its affiliates or subsidiaries, or
under any compensation or benefit plan, program, policy or practice of the
Employer or any of its affiliates or subsidiaries.

                  (a) Death, Disability, Discharge for Cause, or Resignation
without Good Reason. In the event this Agreement terminates pursuant to
Paragraph 7(a) by reason of the death or Disability of the Executive, pursuant
to Paragraph 7(b) by reason of the discharge of the Executive by the Employer
for Cause, or pursuant to Paragraph 7(c) by reason of the resignation of the
Executive other than for Good Reason, the Employer shall pay to the Executive,
or the Executive's heirs or estate in the event of the Executive's death, all
Accrued Obligations in a

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lump sum in cash within thirty (30) days after the Date of Termination;
provided, however, that any portion of the Accrued Obligations which consists of
bonus, deferred compensation, incentive compensation, insurance benefits or
other employee benefits shall be determined and paid in accordance with the
terms of the relevant plan or policy as applicable to the Executive. In
addition, in the event this Agreement terminates pursuant to Paragraph 7(a) by
reason of death of the Executive, the Employer shall pay to the Executive's
heirs or estate death benefits in a lump sum amount equal to six (6) months of
the Executive's then-current annual base salary.

                  (b) Discharge without Cause or Resignation with Good Reason.
In the event that this Agreement terminates pursuant to Paragraph 7(c) by reason
of the discharge of the Executive by the Employer other than for Cause, death or
Disability or by reason of the resignation of the Executive for Good Reason:

                           (i) The Employer shall pay all Accrued Obligations to
         the Executive in a lump sum in cash within thirty (30) days after the
         Date of Termination; provided, however, that any portion of the Accrued
         Obligations which consists of bonus, deferred compensation, incentive
         compensation, insurance benefits or other employee benefits shall be
         determined and paid in accordance with the terms of the relevant plan
         or policy as applicable to the Executive;

                           (ii) Within thirty (30) days after the Date of
         Termination, the Employer shall pay to the Executive a bonus for the
         year during which termination occurs, calculated as a prorata portion
         of the Executive's prior year's bonus amount (if any) based on the
         number of days elapsed during the year through the Date of Termination;

                           (iii) Severance payments equal to one hundred percent
         (100%) of the sum of (A) the Executive's then-current annual base
         salary, plus (B) the average of the sum of the bonus amounts earned by
         the Executive with respect to the three (3) calendar years (or such
         fewer number of years as Executive has been employed) immediately
         preceding the calendar year in which the Executive's Date of
         Termination occurs, payable in substantially equal monthly installments
         for a period of twelve (12) months (the "Severance Period") in
         accordance with the Employer's regular payroll practices; and

                           (iv) Continuation for the Severance Period of the
         Executive's right to maintain COBRA continuation coverage under the
         applicable plans at premium rates on the same "cost-sharing" basis as
         the applicable premiums paid for such coverage by active employees as
         of the Date of Termination.

In the event that upon the expiration of the Severance Period, Executive is not
employed or otherwise providing compensated services of any type, and has not
done so during the final ninety (90) days of the Severance Period, the Employer
may, in its sole discretion (which discretion need not be applied in a
consistent manner from one executive to another), agree to extend the Severance
Period for up to an additional six (6) months (the "Extended Severance Period").
The payments to Executive described in subParagraph (iii) above and the reduced
COBRA continuation premium described in subParagraph (iv) above shall continue
during the

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Extended Severance Period, subject to earlier termination effective as of the
first day of the month following the date on which the Executive becomes
employed or provides compensated services of any type (including
self-employment).

         The Executive shall provide such information as the Employer may
reasonably request to determine Executive's continued eligibility for the
payments and benefits provided by this Paragraph 8(b).

                  (c) Effect of Change in Control. In the event that a Change in
Control occurs and this Agreement thereafter terminates pursuant to Paragraph
7(c) by reason of the discharge of the Executive by the Employer other than for
Cause, death or Disability, or by reason of the resignation of the Executive for
Good Reason:

                           (i) The Employer shall pay all Accrued Obligations to
         the Executive in a lump sum in cash within thirty (30) days after the
         Date of Termination; provided, however, that any portion of the Accrued
         Obligations which consists of bonus, deferred compensation, incentive
         compensation, insurance benefits or other employee benefits shall be
         determined and paid in accordance with the terms of the relevant plan
         or policy as applicable to the Executive;

                           (ii) Within thirty (30) days after the Date of
         Termination, the Employer shall pay to the Executive a bonus for the
         year during which termination occurs, calculated as a prorata portion
         of the Executive's prior year's bonus amount (if any) based on the
         number of days elapsed during the year through the Date of Termination;

                           (iii) The Employer shall pay the Executive a lump sum
         payment within thirty (30) days after such termination of employment in
         the amount of two (2) times the sum of the following:

                                    (A) the amount of the Executive's annual
                  base salary determined as of the Date of Termination, or the
                  date immediately preceding the date of the Change in Control,
                  whichever is greater; plus

                                    (B) the greater of (A) the Executive's bonus
                  amount, if any, for the calendar year immediately preceding
                  that in which the Date of Termination occurs, or (B) the
                  average of the sum of the bonus amounts earned by the
                  Executive with respect to the three (3) calendar years (or
                  such fewer number of years as Executive has been employed)
                  immediately preceding the calendar year in which the
                  Executive's Date of Termination occurs, or if such sum would
                  be greater, with respect to the three (3) calendar years
                  immediately preceding the calendar year of the date of the
                  Change in Control; plus

                                    (C) the sum of:

                                            (I) the annual value of the
                           contributions that would have been expected to be
                           made or credited by the Employer to, and benefits
                           expected to be accrued under, the qualified and
                           non-qualified

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                           employee profit sharing, 401(k), pension and any
                           other benefit plans maintained by the Employer to or
                           for the benefit of the Executive; plus

                                            (II) the annual value of the Other
                           Benefits described in Paragraph 6(a) and (c) above.

         For purposes of subParagraph (C)(I) above, the annual value of the
contributions and accruals to or under the employee benefit plans shall be
determined on the basis of the actual rate of contributions or accruals, as
applicable, and the provisions of the plans as in effect during the calendar
year immediately preceding the date of the Change in Control, or if the value so
determined would be greater, during the calendar year immediately preceding the
Date of Termination. The "annual value" of the executive perquisites described
in Paragraph 6(c) for purposes of subParagraph (C)(II) above shall be deemed to
equal 7.5% of the annual base salary amount applicable under clause (iii)(A)
above.

         The Executive shall also be entitled to outplacement services for a
reasonable period of time as agreed between the Executive and the Employer.

         Notwithstanding the foregoing, if a Change in Control occurs and this
Agreement is terminated prior to the Change in Control pursuant to Paragraph
7(c) by reason of the discharge of the Executive by the Employer other than for
Cause, death or Disability or by reason of the resignation of the Executive for
Good Reason, then the Executive shall be deemed for purposes of this Paragraph
8(c) to have so terminated pursuant to Paragraph 7(c) immediately following the
date the Change in Control occurs if it is reasonably demonstrated by the
Executive that such earlier termination was (i) at the request of a third party
who had taken steps reasonably calculated to effect the Change in Control, or
(ii) otherwise arose, or the circumstances that precipitated the termination
otherwise arose, in connection with or in anticipation of the Change in Control.

                  (d) Effect on Other Amounts. The payments provided for in this
Paragraph 8 shall be in addition to all other sums then payable and owing to the
Executive, shall be subject to applicable federal and state income and other
withholding taxes and shall be in full settlement and satisfaction of all of the
Executive's claims and demands. Upon such termination of this Agreement, the
Employer shall have no rights or obligations under this Agreement, other than
its obligations under this Paragraph 8, and the Executive shall have no rights
and obligations under this Agreement, other than the Executive's obligations
under Paragraphs 12 and 13 hereof (to the extent applicable); provided, however,
termination of this Agreement shall not terminate the obligation of the
Executive to pay to the Employer any amounts for which the Executive may be
liable to the Employer under any provision of the Sarbanes-Oxley Act of 2002
(including, without limitation, Section 304 of such Act), or any rules and
regulations promulgated thereunder, as amended from time to time.

                  (e) Conditions. Any payments or benefits made or provided
pursuant to this Paragraph 8 are subject to the Executive's:

                           (i)      compliance with the provisions of Paragraphs
         12 and 13 hereof (to the extent applicable);

                                       10

<PAGE>

                           (ii) delivery to the Employer of an executed Release
         and Severance Agreement, which shall be substantially in the form
         attached hereto as Exhibit A, with such changes therein or additions
         thereto as needed under then applicable law to give effect to its
         intent and purpose; and

                           (iii) delivery to the Employer of a resignation from
         all offices, directorships and fiduciary positions with the Employer,
         its affiliates and employee benefit plans.

Notwithstanding the due date of any post-employment payments, any amounts due
under this Paragraph 8 shall not be due until after the expiration of any
revocation period applicable to the Release and Severance Agreement.

         9. Certain Additional Payments by the Employer.

                  (a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Employer to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Paragraph 9) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended,
(the "Code") or if any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, being hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.

                  (b) Subject to the provisions of Paragraph (c), below, all
determinations required to be made under this Paragraph 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the independent public accountants then regularly retained by the Employer
(the "Accounting Firm") in consultation with counsel acceptable to Executive,
which shall provide detailed supporting calculations both to the Employer and
the Executive within fifteen (15) business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time as is
requested by the Employer. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a Change in
Control, the Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder) in consultation with
counsel acceptable to Executive. All fees and expenses of the Accounting Firm
and such counsel shall be borne solely by the Employer. Any Gross-Up Payment, as
determined pursuant to this Paragraph 9, shall be paid by the Employer to the
Executive within five (5) days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion that
failure to report the Excise

                                       11

<PAGE>

Tax on the Executive's applicable federal income tax return would not result in
the imposition of a negligence or similar penalty. Any good faith determination
by the Accounting Firm shall be binding upon the Employer and the Executive. As
a result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Employer
should have been made ("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that the Employer exhausts its
remedies pursuant to Paragraph (c), below, and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Employer to or for the benefit of the
Executive.

                  (c) The Executive shall notify the Employer in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Employer of a Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than fifteen (15) business days after the
Executive is informed in writing of such claim and shall apprise the Employer of
the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
thirty (30)-day period following the date on which Executive gives such notice
to the Employer (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Employer notifies the Executive
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:

                           (i) Give the Employer any information reasonably
         requested by the Employer relating to such claim,

                           (ii) Take such action in connection with contesting
         such claim as the Employer shall reasonably request in writing from
         time to time, including, without limitation, accepting legal
         representation with respect to such claim by an attorney reasonably
         selected by the Employer,

                           (iii) Cooperate with the Employer in good faith in
         order effectively to contest such claim, and

                           (iv) Permit the Employer to participate in any
         proceedings relating to such claim;

provided, however, that the Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Paragraph (c), the Employer shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner; and the Executive agrees to prosecute such contest

                                       12

<PAGE>

to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Employer shall
determine; provided, however, that if the Employer directs the Executive to pay
such claim and sue for a refund, the Employer shall advance the amount of such
payment to the Executive on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Employer's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                  (d) If, after the receipt by the Executive of an amount
advanced by the Employer pursuant to Paragraph (c), above, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Employer's complying with the requirements of said Paragraph
(c)) promptly pay to the Employer the amount of such refund (together with any
interest paid or credited thereon, after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Employer pursuant to
said Paragraph (c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Employer does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid; and the amount
of such advance shall offset, to the extent thereof, the amount of the Gross-Up
Payment required to be paid.

         10. Dispute Resolution. In the event any dispute arises and the parties
after good faith efforts are unable to agree as to the calculation of the
amounts payable under this Agreement, it shall be settled in accordance with the
majority opinion of a committee consisting of an accountant chosen by the
Employer, an accountant chosen by the Executive and an independent accountant
acceptable to both the Executive and the Employer, as the case may be. The
committee's determination shall be binding and conclusive on the parties hereto.
The Employer shall pay all fees and expenses of the dispute resolution.

         11. Enforcement. In the event the Employer shall fail to pay any
amounts due to the Executive under this Agreement as they come due, the Employer
agrees to pay interest on such amounts at a rate equal to the prime rate plus
four percent (4%) per annum (as from time to time published in The Wall Street
Journal (Midwest Edition)). The Employer agrees that Executive and any successor
shall be entitled to recover all costs of successfully enforcing any provision
of this Agreement, including reasonable attorneys fees and costs of litigation,
if Executive is the prevailing party.

         12. Confidential Information.

                  The Executive shall not at any time during or following the
Executive's employment with the Employer, directly or indirectly, disclose or
use on the Executive's behalf or another's behalf, publish or communicate,
except in the course of the Executive's employment

                                       13

<PAGE>

and in the pursuit of the business of the Employer or any of its subsidiaries or
affiliates, any proprietary information or data of the Employer or any of its
subsidiaries or affiliates, which is not generally known to the public or which
could not be recreated through public means and which the Employer may
reasonably regard as confidential and proprietary. The Executive recognizes and
acknowledges that all knowledge and information which the Executive has or may
acquire in the course of the Executive's employment, such as, but not limited to
the business, developments, procedures, techniques, activities or services of
the Employer or the business affairs and activities of any customer, prospective
customer, individual firm or entity doing business with the Employer are its
sole valuable property, and shall be held by Executive in confidence and in
trust for their sole benefit. All records of every nature and description which
come into the Executive's possession, whether prepared by the Executive, or
otherwise, shall remain the sole property of the Employer and upon termination
of the Executive's employment for any reason, said records shall be left with
the Employer as part of its property.

         13. Non-Competition; Non-Solicitation. The Executive acknowledges that
the Employer and its affiliates and subsidiaries by nature of their respective
businesses have a legitimate and protectable interest in their clients,
customers and employees with whom they have established significant
relationships as a result of a substantial investment of time and money, and but
for the Executive's employment hereunder, the Executive would not have had
contact with such clients, customers and employees. The Executive agrees that
during the period of the Executive's employment with the Employer and for a
period of one (1) year after termination of the Executive's employment for any
reason (the "Non-Compete Period"), the Executive will not (except in the
Executive's capacity as an employee of the Employer) directly or indirectly, for
the Executive's own account, or as an agent, employee, director, owner, partner,
or consultant of any corporation, firm, partnership, joint venture, syndicate,
sole proprietorship or other entity which has a place of business (whether as a
principal, division, subsidiary, affiliate, related entity, or otherwise)
located within the Market Area (as hereinafter defined):

                  (a) engage, directly or indirectly, in any business that
provides banking products or services or that otherwise competes in any way with
the Employer or any of its subsidiaries or affiliates;

                  (b) solicit or induce, or attempt to solicit or induce any
client or customer of the Employer or any of its subsidiaries or affiliates not
to do business with the Employer or any of its subsidiaries or affiliates; or

                  (c) solicit or induce, or attempt to solicit or induce, any
employee or agent of the Employer or any of its subsidiaries or affiliates to
terminate his or her relationship with the Employer or any of its subsidiaries
or affiliates.

         For purposes of this Agreement, "Market Area" shall be an area
encompassed within a fifty (50) mile radius surrounding Executive's office as of
the Date of Termination of employment.

         The foregoing provisions shall not be deemed to prohibit (i) the
Executive's ownership, not to exceed five percent (5%) of the outstanding
shares, of capital stock of any corporation whose securities are publicly traded
on a national or regional securities exchange or in the over-

                                       14

<PAGE>

the-counter market or (ii) the Executive serving as a director of other
corporations and entities to the extent these directorships do not inhibit the
performance of the Executive's duties hereunder or conflict with the business of
the Employer.

         14. Remedies.

                  (a) The Executive acknowledges that the restraints and
agreements herein provided are fair and reasonable, that enforcement of the
provisions of Paragraphs 12 and 13 will not cause the Executive undue hardship
and that said provisions are reasonably necessary and commensurate with the need
to protect the Employer and its legitimate and proprietary business interests
and property from irreparable harm. The Executive acknowledges and agrees that
(a) a breach of any of the covenants and provisions contained in Paragraphs 12
or 13 above, will result in irreparable harm to the business of the Employer,
(b) a remedy at law in the form of monetary damages for any breach by the
Executive of any of the covenants and provisions contained in Paragraphs 12 and
13 is inadequate, (c) in addition to any remedy at law or equity for such
breach, the Employer shall be entitled to institute and maintain appropriate
proceedings in equity, including a suit for injunction to enforce the specific
performance by Executive of the obligations hereunder and to enjoin Executive
from engaging in any activity in violation hereof and (d) the covenants on the
Executive's part contained in Paragraphs 12 and 13, shall be construed as
agreements independent of any other provisions in this Agreement, and the
existence of any claim, setoff or cause of action by the Executive against the
Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense or bar to the specific enforcement by the Employer of said
covenants. In the event of a breach or a violation by the Executive of any of
the covenants and provisions of this Agreement, the running of the Non-Compete
Period (but not of Executive's obligation thereunder) shall be tolled during the
period of the continuance of any actual breach or violation.

                  (b) The parties hereto agree that the covenants set forth in
Paragraphs 12 and 13 are reasonable with respect to their duration, geographical
area and scope. If the final judgment of a court of competent jurisdiction
declares that any term or provision of Paragraph 12 or 13 is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.

         15. Notices. Any notice or other communication required or permitted to
be given hereunder shall be determined to have been duly given to any party (a)
upon delivery to the address of such party specified below if delivered
personally or by courier; (b) upon dispatch if transmitted by telecopy or other
means of facsimile, provided a copy thereof is also sent by regular mail or
courier; (c) within forty-eight (48) hours after deposit thereof in the U.S.
mail, postage prepaid, for delivery as certified mail, return receipt requested;
or (d) within twenty-four (24) hours after deposit thereof with a reputable
overnight courier (charges prepaid), addressed, in any case to the party at the
following address(es) or telecopy numbers:

                                       15

<PAGE>

                  (a) If to Executive, at the address set forth on the signature
page hereof.

                  (b) If to the Employer:

                           PrivateBancorp, Inc.
                           The PrivateBank (St. Louis)
                           Ten North Dearborn Street
                           Suite 900
                           Chicago, IL  60602
                           Attn: Chief Executive Officer
                           Telecopy No.:  (312) 683-7111

                           with a copy to:

                           Vedder, Price, Kaufman & Kammholz
                           222 North LaSalle Street
                           Chicago, Illinois  60601-1003
                           Attn:  Ms. Jennifer R. Evans
                           Telecopy No.:  (312) 609-5005

or to such other address(es) or telecopy number(s) as any party may designate by
written notice in the aforesaid manner.

         16.      Indemnification.

                  (a) In the event that legal action is instituted against the
Executive during or after the term hereof by a third party (or parties) based on
the performance or nonperformance by the Executive of the Executive's duties
hereunder, the Employer will assume the defense of such action by its attorneys
or attorneys selected by the Executive reasonably satisfactory to the Employer
and advance the costs and expenses thereof (including reasonable attorneys'
fees) without prejudice to or waiver by the Employer of its rights and remedies
against the Executive. In the event that there is a final judgment entered
against the Executive in any such litigation, and Executive is obligated, in
accordance with its charter, by-laws, or insurance, to reimburse such entities,
the Executive shall be liable to the Employer for all such costs and expenses
paid or incurred by them in the defense of any such litigation (the
"Reimbursement Amount"). The Reimbursement Amount shall be paid by the Executive
within thirty (30) days after rendition of the final judgment. The Employer
shall be entitled to set off the reimbursement amount against all sums which may
be owed or payable by the Employer to the Executive hereunder or otherwise. The
parties shall cooperate in the defense of any asserted claim, demand or
liability against the Executive or the Employer or its subsidiaries or
affiliates. The term "final judgment" as used herein shall be defined to mean
the decision of a court of competent jurisdiction, and in the event of an
appeal, then the decision of the appellate court, after petition for rehearing
has been denied, or the time for filing the same (or the filing of further
appeal) has expired.

                  (b) The rights to indemnification under this Section 16 shall
be in addition to any rights which the Executive may now or hereafter have under
the charter or By-laws of the Employer or any of its affiliates or subsidiaries,
under any insurance contract maintained by the

                                       16

<PAGE>

Employer or any of its affiliates or subsidiaries, or any agreement between the
Executive and the Employer or any of its affiliates or subsidiaries.

         17. Full Settlement; No Mitigation. The Employer's obligation to make
the payments and provide the benefits provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Employer may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or
not the Executive obtains other employment.

         18. Payment in the Event of Death. In the event payment is due and
owing by the Employer to the Executive under this Agreement upon the death of
the Executive, payment shall be made to such beneficiary as the Executive may
designate in writing, or failing such designation, then the executor of the
Executive's estate, in full settlement and satisfaction of all claims and
demands on behalf of the Executive, shall be entitled to receive all amounts
owing to the Executive at the time of the Executive's death under this
Agreement. Such payments shall be in addition to any other death benefits of the
Employer and in full settlement and satisfaction of all severance benefit
payments provided for in this Agreement.

         19. Entire Understanding. This Agreement constitutes the entire
understanding between the parties relating to Executive's employment hereunder
and supersedes and cancels all prior written and oral understandings and
agreements with respect to such matters and except for the terms and provisions
of any employee benefit or other compensation plans (or any agreements or awards
thereunder), referred to in this Agreement, or as otherwise expressly
contemplated by this Agreement.

         20. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the heirs and representatives of the Executive and the successors
and assigns of the Employer. The Employer shall require any successor (whether
direct or indirect, by purchase, merger, reorganization, consolidation,
acquisition of property or stock, liquidation, or otherwise) to all or a
substantial portion of its assets, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Employer would be
required to perform this Agreement if no such succession had taken place.
Regardless of whether such an agreement is executed, this Agreement shall be
binding upon any successor of the Employer in accordance with the operation of
law, and such successor shall be deemed the "Employer" for purposes of this
Agreement.

         21. Tax Withholding. The Employer shall provide for the withholding of
any taxes required to be withheld by federal, state, or local law with respect
to any payment in cash, shares of stock and/or other property made by or on
behalf of the Employer to or for the benefit of the Executive under this
Agreement or otherwise. The Employer may, at its option: (a) withhold such taxes
from any cash payments owing from the Employer to the Executive, (b) require the
Executive to pay to the Employer in cash such amount as may be required to
satisfy such

                                       17

<PAGE>

withholding obligations and/or (c) make other satisfactory arrangements with the
Executive to satisfy such withholding obligations.

         22. No Assignment. Except as otherwise expressly provided herein, this
Agreement is not assignable by any party and no payment to be made hereunder
shall be subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or other charge.

         23. Execution in Counterparts. This Agreement may be executed by the
parties hereto in two (2) or more counterparts, each of which shall be deemed to
be an original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

         24. Jurisdiction and Governing Law. Except as provided in Paragraph 10,
jurisdiction over disputes with regard to this Agreement shall be exclusively in
the courts of the State of Illinois, and this Agreement shall be construed,
interpreted and enforced in accordance with and governed by the laws of the
State of Illinois, without regard to the choice of laws provisions of such
State.

         25. Severability. If any provision of this Agreement shall be adjudged
by any court of competent jurisdiction to be invalid or unenforceable for any
reason, such judgment shall not affect, impair or invalidate the remainder of
this Agreement. Furthermore, if the scope of any restriction or requirement
contained in this Agreement is too broad to permit enforcement of such
restriction or requirement to its full extent, then such restriction or
requirement shall be enforced to the maximum extent permitted by law, and the
Executive consents and agrees that any court of competent jurisdiction may so
modify such scope in any proceeding brought to enforce such restriction or
requirement.

         26. Survival. Provisions of this Agreement shall survive the
termination of the Executive's employment with the Employer to the extent
provided herein.

         27. Waiver. The waiver of any party hereto of a breach of any provision
of this Agreement by any other party shall not operate or be construed as a
waiver of any subsequent breach.

         28. Amendment. No change, alteration or modification hereof may be made
except in a writing, signed by each of the parties hereto.

         29. Construction. The language used in this Agreement will be deemed to
be the language chosen by Employer and the Executive to express their mutual
intent and no rule of strict construction shall be applied against any person.
Wherever from the context it appears appropriate, each term stated in either the
singular of plural shall include the singular and the plural, and the pronouns
stated in either the masculine, the feminine or the neuter gender shall include
the masculine, feminine or neuter. The headings of the Paragraphs of this
Agreement are for reference purposes only and do not define or limit, and shall
not be used to interpret or construe the contents of this Agreement.

         30. No Duplication. Notwithstanding anything herein to the contrary, to
the extent that any compensation or benefits are paid to or received by the
Executive from the Bank,

                                       18
<PAGE>

PrivateBancorp or any other subsidiary of PrivateBancorp or the Bank, such
compensation or benefits shall be subtracted from any amounts simultaneously due
hereunder from PrivateBancorp and/or the Bank, as the case may be.

                            [Signature Page Follows]

                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

                                       PRIVATEBANCORP, INC.

                                       By: /s/ Ralph B. Mandell
                                           -------------------------------------
                                       Title: Chief Executive Officer
                                              ----------------------------------

                                       THE PRIVATEBANK (ST. LOUIS)

                                       By: /s/ Richard C. Jensen
                                           -------------------------------------
                                       Title: Chairman and Chief Executive
                                               Officer

                                       EXECUTIVE

Address: __________________________    /s/ Richard C. Jensen
___________________________________    -----------------------------------------
___________________________________    Name:  Richard C. Jensen
Telecopy No.:______________________

                                       20
<PAGE>
                                               EXHIBIT A TO EMPLOYMENT AGREEMENT
                                               ---------------------------------

                         RELEASE AND SEVERANCE AGREEMENT
                         -------------------------------

         THIS RELEASE AND SEVERANCE AGREEMENT is made and entered into this ____
day of _________, _____ by and between PrivateBancorp, Inc. and its subsidiaries
and affiliates (including, without limitation, The PrivateBank (St. Louis))
(collectively, "PBI") and Richard C. Jensen (hereinafter "EXECUTIVE").

         EXECUTIVE'S employment with PBI terminated on __________, ______; and
EXECUTIVE has voluntarily agreed to the terms of this RELEASE AND SEVERANCE
AGREEMENT in exchange for severance benefits under the Employment Agreement
("Employment Agreement") to which EXECUTIVE otherwise would not be entitled.

         NOW THEREFORE, in consideration for severance benefits provided under
the Employment Agreement, EXECUTIVE on behalf of EXECUTIVE and EXECUTIVE'S
spouse, heirs, executors, administrators, children, and assigns does hereby
fully release and discharge PBI, its officers, directors, employees, agents,
subsidiaries and divisions, benefit plans and their administrators, fiduciaries
and insurers, successors, and assigns from any and all claims or demands for
wages, back pay, front pay, attorneys' fees and other sums of money, insurance,
benefits, contracts, controversies, agreements, promises, damages, costs,
actions or causes of action and liabilities of any kind or character whatsoever,
whether known or unknown, from the beginning of time to the date of these
presents, relating to EXECUTIVE'S employment or termination of employment from
PBI, including but not limited to any claims, actions or causes of action
arising under the statutory, common law or other rules, orders or regulations of
the United States or any State or political subdivision thereof including the
Age Discrimination in Employment Act and the Older Workers Benefit Protection
Act.

         EXECUTIVE acknowledges that EXECUTIVE'S obligations pursuant to
Paragraphs 12 and 13, of the Employment Agreement relating to the use or
disclosure of confidential information and non-solicitation of customers and
employees shall continue to apply to EXECUTIVE.

         This Release and Settlement Agreement supersedes any and all other
agreements between EXECUTIVE and PBI except agreements relating to proprietary
or confidential information belonging to PBI, and any other agreements, promises
or representations relating to severance pay or other terms and conditions of
employment are null and void.

         This release does not affect EXECUTIVE'S right to any benefits to which
EXECUTIVE may be entitled under any employee benefit plan, program or
arrangement sponsored or provided by PBI, including but not limited to the
Employment Agreement and the plans, programs and arrangements referred to
therein.

         EXECUTIVE and PBI acknowledge that it is their mutual intent that the
Age Discrimination in Employment Act waiver contained herein fully comply with
the Older Workers Benefit Protection Act. Accordingly, EXECUTIVE acknowledges
and agrees that:

                                      A-1

<PAGE>

                  (a) The severance benefits exceed the nature and scope of that
         to which EXECUTIVE would otherwise have been legally entitled to
         receive.

                  (b) Execution of this Agreement and the Age Discrimination in
         Employment Act waiver herein is EXECUTIVE'S knowing and voluntary act;

                  (c) EXECUTIVE has been advised by PBI to consult with
         EXECUTIVE'S personal attorney regarding the terms of this Agreement,
         including the aforementioned waiver;

                  (d) EXECUTIVE has had at least twenty-one (21) calendar days
         within which to consider this Agreement;

                  (e) EXECUTIVE has the right to revoke this Agreement in full
         within seven (7) calendar days of execution and that none of the terms
         and provisions of this Agreement shall become effective or be
         enforceable until such revocation period has expired;

                  (f) EXECUTIVE has read and fully understands the terms of this
         Agreement; and

                  (g) Nothing contained in this Agreement purports to release
         any of EXECUTIVE'S rights or claims under the Age Discrimination in
         Employment Act that may arise after the date of execution.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date indicated above.

PRIVATEBANCORP, INC.,                        EXECUTIVE
     for itself and its
     Subsidiaries and Affiliates

By:___________________________________       _________________________________
Its:__________________________________       Richard C. Jensen

                                      A-2Exhibit 10.1

                        STEWARDSHIP FINANCIAL CORPORATION

                            7,000 Capital Securities

                     Fixed/Floating Rate Capital Securities
               (Liquidation Amount $1,000.00 per Capital Security)

                               PLACEMENT AGREEMENT

                              ____________________

                                                               September 9, 2003

FTN Financial Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee  38117

Keefe, Bruyette & Woods, Inc.
787 7th Avenue
4th Floor
New York, New York  10019

Ladies and Gentlemen:

     Stewardship   Financial   Corporation,   a  New  Jersey   corporation  (the
"Company"),  and its  financing  subsidiary,  Stewardship  Statutory  Trust I, a
Connecticut  statutory  trust (the  "Trust," and  hereinafter  together with the
Company, the "Offerors"), hereby confirm their agreement (this "Agreement") with
you as placement agents (the "Placement Agents"), as follows:

Section 1. Issuance and Sale of Securities.
           -------------------------------

     1.1. Introduction.
          -------------

     The  Offerors  propose  to issue and sell at the  Closing  (as  defined  in
Section  2.3.1  hereof)  7,000  of  the  Trust's   Fixed/Floating  Rate  Capital
Securities,  with a liquidation  amount of $1,000.00  per capital  security (the
"Capital  Securities"),  to Preferred  Term  Securities XI, Ltd., a company with
limited  liability  established  under  the  laws  of the  Cayman  Islands  (the
"Purchaser") pursuant to the terms of a Subscription  Agreement entered into, or
to be entered into on or prior to the Closing Date (as defined in Section  2.3.1
hereof), between the Offerors and the Purchaser (the "Subscription  Agreement"),
the form of which is  attached  hereto as Exhibit A and  incorporated  herein by
this reference.

     1.2. Operative  Agreements.
          ---------------------

     The Capital Securities shall be fully and  unconditionally  guaranteed on a
subordinated  basis by the Company  with  respect to  distributions  and amounts
payable upon liquidation, redemption or repayment (the "Guarantee") pursuant and
subject to the Guarantee Agreement (the "Guarantee  Agreement"),  to be dated as
of the Closing  Date and executed  and  delivered  by the Company and U.S.  Bank
National  Association ("U.S. Bank"), as trustee (the "Guarantee  Trustee"),  for

<PAGE>

the  benefit  from time to time of the holders of the  Capital  Securities.  The
entire  proceeds  from  the  sale by the  Trust to the  holders  of the  Capital
Securities shall be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"),  and shall be
used  by  the  Trust  to  purchase  $7,217,000.00  in  principal  amount  of the
Fixed/Floating  Rate Junior  Subordinated  Deferrable  Interest  Debentures (the
"Debentures") of the Company.  The Capital  Securities and the Common Securities
for the Trust shall be issued pursuant to an Amended and Restated Declaration of
Trust among U.S. Bank, as institutional  trustee (the "Institutional  Trustee"),
the Administrators named therein, and the Company, to be dated as of the Closing
Date and in substantially the form heretofore  delivered to the Placement Agents
(the "Trust Agreement"). The Debentures shall be issued pursuant to an Indenture
(the  "Indenture"),  to be dated as of the Closing Date, between the Company and
U.S.  Bank,  as  indenture  trustee (the  "Indenture  Trustee").  The  documents
identified  in this Section 1.2 and in Section 1.1 are referred to herein as the
"Operative Documents."

     1.3. Rights of Purchaser.
          --------------------

     The Capital  Securities  shall be offered and sold by the Trust directly to
the  Purchaser  without  registration  of  any of the  Capital  Securities,  the
Debentures or the Guarantee  under the  Securities  Act of 1933, as amended (the
"Securities  Act"),  or any other  applicable  securities  laws in reliance upon
exemptions  from the  registration  requirements of the Securities Act and other
applicable  securities  laws. The Offerors  agree that this  Agreement  shall be
incorporated  by reference  into the  Subscription  Agreement  and the Purchaser
shall be  entitled  to each of the  benefits  of the  Placement  Agents  and the
Purchaser  under this Agreement and shall be entitled to enforce  obligations of
the Offerors  under this  Agreement as fully as if the Purchaser were a party to
this  Agreement.  The Offerors and the  Placement  Agents have entered into this
Agreement to set forth their  understanding  as to their  relationship and their
respective rights, duties and obligations.

     1.4. Legends.
          --------

     Upon  original  issuance  thereof,  and  until  such time as the same is no
longer  required under the applicable  requirements  of the Securities  Act, the
Capital  Securities and Debentures  certificates  shall each contain a legend as
required pursuant to any of the Operative Documents.

Section 2. Purchase of Capital Securities.
           -------------------------------

     2.1. Exclusive Rights; Purchase Price.
          --------------------------------

     From the date hereof  until the Closing Date (which date may be extended by
mutual agreement of the Offerors and the Placement Agents),  the Offerors hereby
grant to the Placement Agents the exclusive right to arrange for the sale of the
Capital Securities to the Purchaser at a purchase price of $1,000.00 per Capital
Security.

     2.2. Subscription Agreement.
          ---------------------

     The Offerors hereby agree to evidence their  acceptance of the subscription
by countersigning a copy of the Subscription Agreement and returning the same to
the Placement Agents.

     2.3. Closing and Delivery of Payment.
          --------------------------------

     2.3.1. Closing; Closing Date.
            ----------------------

     The sale and  purchase of the  Capital  Securities  by the  Offerors to the
Purchaser shall take place at a closing (the "Closing") at the offices of Lewis,
Rice & Fingersh,  L.C., at 10:00 a.m. (St. Louis time) on September 17, 2003, or

                                       2
<PAGE>

such other  business day as may be agreed upon by the Offerors and the Placement
Agents  (the  "Closing  Date");  provided,  however,  that in no event shall the
Closing  Date occur later than  September  30, 2003 unless  consented  to by the
Purchaser.  Payment by the Purchaser shall be payable in the manner set forth in
the Subscription Agreement and shall be made prior to or on the Closing Date.

     2.3.2. Delivery.
            --------

     The certificate  for the Capital  Securities  shall be in definitive  form,
registered  in the name of the  Purchaser  and in the  aggregate  amount  of the
Capital Securities purchased by the Purchaser.

     2.3.3. Transfer Agent.
            ---------------

     The  Offerors  shall  deposit  the  certificate  representing  the  Capital
Securities with the  Institutional  Trustee or other  appropriate party prior to
the Closing Date.

     2.4. Placement Agents' Fees and Expenses.
          ------------------------------------

     2.4.1. Placement Agents' Compensation.
            -------------------------------

     Because the proceeds from the sale of the Capital  Securities shall be used
to purchase the Debentures from the Company,  the Company shall pay an aggregate
of $30.00 for each $1,000.00 of principal amount of Debentures sold to the Trust
(excluding  the  Debentures  related to the Common  Securities  purchased by the
Company).  Of this amount,  $15.00 for each  $1,000.00  of  principal  amount of
Debentures shall be payable to FTN Financial Capital Markets and $15.00 for each
$1,000.00 of principal amount of Debentures shall be payable to Keefe,  Bruyette
& Woods, Inc. Such amount shall be delivered to the Trustee or such other person
designated  by the  Placement  Agents on the Closing Date and shall be allocated
between and paid to the respective Placement Agents as directed by the Placement
Agents.

     2.4.2. Costs and Expenses.
            -------------------

     Whether or not this  Agreement  is  terminated  or the sale of the  Capital
Securities is consummated, the Company hereby covenants and agrees that it shall
pay or cause to be paid (directly or by reimbursement)  all reasonable costs and
expenses  incident to the  performance of the  obligations of the Offerors under
this Agreement,  including all fees,  expenses and  disbursements of counsel and
accountants for the Offerors;  all reasonable  expenses incurred by the Offerors
incident to the preparation,  execution and delivery of the Trust Agreement, the
Indenture,  and the  Guarantee;  and all other  reasonable  costs  and  expenses
incident to the  performance  of the  obligations  of the Company  hereunder and
under the Trust Agreement.

     2.5. Failure to Close.
          -----------------

     If any of the conditions to the Closing  specified in this Agreement  shall
not have been fulfilled to the  satisfaction  of the Placement  Agents or if the
Closing  shall not have  occurred on or before  10:00 a.m.  (St.  Louis time) on
September  30, 2003,  then each party  hereto,  notwithstanding  anything to the
contrary in this Agreement,  shall be relieved of all further  obligations under
this Agreement  without thereby waiving any rights it may have by reason of such
nonfulfillment  or  failure;  provided,  however,  that the  obligations  of the
parties  under  Sections  2.4.2,  7.5 and 9 shall not be so  relieved  and shall
continue in full force and effect.

                                       3
<PAGE>

Section 3. Closing Conditions.
           ------------------

     The  obligations  of the Purchaser and the Placement  Agents on the Closing
Date shall be subject to the  accuracy,  at and as of the Closing  Date,  of the
representations  and warranties of the Offerors contained in this Agreement,  to
the accuracy,  at and as of the Closing Date, of the  statements of the Offerors
made in any certificates  pursuant to this Agreement,  to the performance by the
Offerors of their respective obligations under this Agreement, to compliance, at
and as of the Closing  Date, by the Offerors  with their  respective  agreements
herein contained, and to the following further conditions:

     3.1. Opinions of Counsel.
          --------------------

     On the Closing Date, the Placement Agents shall have received the following
favorable  opinions,  each dated as of the  Closing  Date:  (a) from  McCarter &
English,  LLP,  counsel for the Offerors and  addressed to the Purchaser and the
Placement  Agents in  substantially  the form set forth on Exhibit B-1  attached
hereto and  incorporated  herein by this  reference,  (b) from Shipman & Goodwin
LLP, special Connecticut counsel to the Offerors and addressed to the Purchaser,
the Placement Agents and the Offerors,  in  substantially  the form set forth on
Exhibit B-2 attached  hereto and  incorporated  herein by this reference and (c)
from Lewis,  Rice & Fingersh,  L.C.,  special tax counsel to the  Offerors,  and
addressed to the Placement Agents and the Offerors,  in  substantially  the form
set  forth on  Exhibit  B-3  attached  hereto  and  incorporated  herein by this
reference,  subject  to the  receipt  by  Lewis,  Rice  &  Fingersh,  L.C.  of a
representation  letter  from the  Company in the form set forth in  Exhibit  B-3
completed in a manner reasonably  satisfactory to Lewis,  Rice & Fingersh,  L.C.
(collectively,  the "Offerors'  Counsel  Opinions").  In rendering the Offerors'
Counsel  Opinions,  counsel to the Offerors may rely as to factual  matters upon
certificates or other documents furnished by officers, directors and trustees of
the Offerors (copies of which shall be delivered to the Placement Agents and the
Purchaser) and by government officials, and upon such other documents as counsel
to the Offerors may, in their  reasonable  opinion,  deem appropriate as a basis
for the  Offerors'  Counsel  Opinions.  Counsel to the  Offerors may specify the
jurisdictions  in which  they are  admitted  to  practice  and that they are not
admitted to practice in any other jurisdiction and are not experts in the law of
any other jurisdiction.  If the Offerors' counsel is not admitted to practice in
the State of New York, the opinion of Offerors' counsel may assume, for purposes
of the  opinion,  that  the laws of the  State  of New  York  are  substantively
identical,  in all respects material to the opinion, to the internal laws of the
state in which such  counsel is admitted to  practice.  Such  Offerors'  Counsel
Opinions  shall not state that they are to be governed or qualified  by, or that
they are otherwise  subject to, any treatise,  written  policy or other document
relating to legal opinions,  including,  without  limitation,  the Legal Opinion
Accord of the ABA Section of Business Law (1991).

     3.2. Officer's Certificate.
          ----------------------

     At the Closing Date,  the  Purchaser  and the  Placement  Agents shall have
received certificates from the Chief Executive Officer of the Company,  dated as
of the Closing Date, stating that (i) the  representations and warranties of the
Offerors  set forth in Section 5 hereof are true and  correct as of the  Closing
Date and that the Offerors have complied with all  agreements  and satisfied all
conditions on their part to be performed or satisfied at or prior to the Closing
Date,  (ii) since the date of this  Agreement the Offerors have not incurred any
liability  or  obligation,  direct or  contingent,  or entered into any material
transactions,  other than in the ordinary course of business,  which is material
to the Offerors,  and (iii) covering such other matters as the Placement  Agents
may reasonably request.

     3.3. Administrator's Certificate.
          ----------------------------

     At the Closing Date,  the  Purchaser  and the  Placement  Agents shall have
received a certificate of one or more  Administrators of the Trust,  dated as of
the Closing Date, stating that the  representations  and warranties of the Trust
set forth in Section 5 are true and correct as of the Closing  Date and that the
Trust has complied with all  agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Date.

                                       4
<PAGE>

     3.4. Purchase Permitted by Applicable Laws; Legal Investment.
          --------------------------------------------------------

     The purchase of and payment for the Capital Securities as described in this
Agreement and pursuant to the Subscription Agreement shall (a) not be prohibited
by any applicable law or governmental regulation,  (b) not subject the Purchaser
or the  Placement  Agents to any penalty or, in the  reasonable  judgment of the
Purchaser and the Placement Agents,  other onerous  conditions under or pursuant
to any applicable law or  governmental  regulation,  and (c) be permitted by the
laws and  regulations  of the  jurisdictions  to  which  the  Purchaser  and the
Placement Agents are subject.

     3.5. Consents and Permits.
          ---------------------

     The Company and the Trust shall have  received  all  consents,  permits and
other  authorizations,  and made all such  filings and  declarations,  as may be
required from any person or entity pursuant to any law,  statute,  regulation or
rule (federal, state, local and foreign), or pursuant to any agreement, order or
decree  to which  the  Company  or the  Trust is a party or to which  either  is
subject, in connection with the transactions contemplated by this Agreement.

     3.6. Sale of Purchaser Securities.
          -----------------------------

     The  Purchaser  shall have sold  securities  issued by the  Purchaser in an
amount  such that the net  proceeds of such sale shall be (i)  available  on the
Closing Date and (ii) in an amount sufficient to purchase the Capital Securities
and all other capital or similar  securities  contemplated in agreements similar
to this Agreement and the Subscription Agreement.

     3.7. Information.
          -----------

     Prior to or on the Closing Date,  the Offerors  shall have furnished to the
Placement Agents such further information,  certificates, opinions and documents
addressed to the Purchaser and the Placement Agents,  which the Placement Agents
may reasonably request,  including,  without  limitation,  a complete set of the
Operative  Documents  or any other  documents or  certificates  required by this
Section 3; and all  proceedings  taken by the  Offerors in  connection  with the
issuance,  offer and sale of the Capital Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the Placement Agents.

     If any condition  specified in this Section 3 shall not have been fulfilled
when  and  as  required  in  this  Agreement,  or if  any  of  the  opinions  or
certificates  mentioned  above  or  elsewhere  in this  Agreement  shall  not be
reasonably  satisfactory  in form and  substance to the Placement  Agents,  this
Agreement may be terminated by the Placement Agents by notice to the Offerors at
any time at or prior to the Closing Date.  Notice of such  termination  shall be
given to the  Offerors in writing or by  telephone  or  facsimile  confirmed  in
writing.

Section 4. Conditions to the Offerors' Obligations.
           ---------------------------------------

     The  obligations  of the  Offerors  to sell the Capital  Securities  to the
Purchaser and consummate the  transactions  contemplated by this Agreement shall
be  subject  to  the   accuracy,   at  and  as  of  the  Closing  Date,  of  the
representations  and  warranties  of the  Placement  Agents  contained  in  this
Agreement and to the following further conditions:

     4.1. Executed Agreement.
          -------------------

     The Offerors shall have received from the Placement Agents an executed copy
of this Agreement.

                                       5
<PAGE>

     4.2. Fulfillment of Other Obligations.
          --------------------------------

     The Placement  Agents shall have  fulfilled all of their other  obligations
and duties  required to be  fulfilled  under this  Agreement  prior to or at the
Closing.

Section 5. Representations and Warranties of the Offerors.
           ----------------------------------------------

     Except as set forth on the Disclosure Schedule (as defined in Section 11.1)
attached  hereto,  if any,  the Offerors  jointly and  severally  represent  and
warrant to the  Placement  Agents and the Purchaser as of the date hereof and as
of the Closing Date as follows:

     5.1. Securities Law Matters.
          ----------------------

          (a)

     Neither  the  Company  nor the  Trust,  nor any of their  "Affiliates"  (as
defined in Rule 501(b) of  Regulation D under the  Securities  Act  ("Regulation
D")), nor any person acting on any of their behalf has,  directly or indirectly,
made offers or sales of any security,  or solicited  offers to buy any security,
under circumstances that would require the registration under the Securities Act
of any of the Capital Securities, the Guarantee or the Debentures (collectively,
the  "Securities") or any other securities to be issued, or which may be issued,
by the Purchaser.

          (b)

     Neither  the Company nor the Trust,  nor any of their  Affiliates,  nor any
person  acting on its or their behalf has (i) other than the  Placement  Agents,
offered for sale or solicited offers to purchase the Securities, (ii) engaged or
will engage,  in any "directed selling efforts" within the meaning of Regulation
S under the Securities Act ("Regulation  S") with respect to the Securities,  or
(iii)  engaged  in  any  form  of  offering,  general  solicitation  or  general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of any of the Securities.

          (c)

     The Securities  satisfy the  eligibility  requirements  of Rule  144A(d)(3)
under the Securities Act.

          (d)

     Neither  the  Company  nor the  Trust is or,  after  giving  effect  to the
offering  and  sale  of the  Capital  Securities  and  the  consummation  of the
transactions described in this Agreement,  will be an "investment company" or an
entity "controlled" by an "investment  company," in each case within the meaning
of  Section  3(a)  of the  Investment  Company  Act of  1940,  as  amended  (the
"Investment  Company  Act")  without  regard to Section  3(c) of the  Investment
Company Act.

          (e)

     Neither  the  Company nor the Trust has paid or agreed to pay to any person
or entity  (other than the Placement  Agents) any  compensation  for  soliciting
another to purchase any of the Securities.

     5.2. Organization, Standing and Qualification of the Trust.
          ------------------------------------------------------

     The Trust has been duly created and is validly existing in good standing as
a statutory  trust under the  Connecticut  Statutory  Trust Act (the  "Statutory
Trust  Act") with the power and  authority  to own  property  and to conduct the
business it transacts and proposes to transact and to enter into and perform its
obligations  under  the  Operative  Documents.  The Trust is duly  qualified  to
transact  business  as a  foreign  entity  and  is  in  good  standing  in  each
jurisdiction in which such qualification is necessary,  except where the failure

                                       6
<PAGE>

to so qualify or be in good standing would not have a material adverse effect on
the Trust. The Trust is not a party to or otherwise bound by any agreement other
than the  Operative  Documents.  The Trust is and will,  under  current  law, be
classified  for federal  income tax  purposes  as a grantor  trust and not as an
association taxable as a corporation.

     5.3. Trust Agreement.
          ---------------

     The Trust  Agreement  has been duly  authorized  by the Company and, on the
Closing Date,  will have been duly executed and delivered by the Company and the
Administrators  of the Trust,  and,  assuming due  authorization,  execution and
delivery by the Institutional Trustee, will be a valid and binding obligation of
the Company and such Administrators, enforceable against them in accordance with
its  terms,  subject  to  (a)  applicable  bankruptcy,  insolvency,  moratorium,
receivership,   reorganization,  liquidation  and  other  laws  relating  to  or
affecting  creditors'  rights  generally,  and (b) general  principles of equity
(regardless  of whether  considered  and applied in a proceeding in equity or at
law)  ("Bankruptcy and Equity").  Each of the  Administrators of the Trust is an
employee or a director of the Company or of a financial  institution  subsidiary
of the  Company  and has been duly  authorized  by the  Company to  execute  and
deliver the Trust Agreement.

     5.4. Guarantee Agreement and the Indenture.
          --------------------------------------

     Each of the Guarantee  and the  Indenture  has been duly  authorized by the
Company and, on the Closing Date will have been duly  executed and  delivered by
the Company,  and,  assuming due  authorization,  execution  and delivery by the
Guarantee Trustee,  in the case of the Guarantee,  and by the Indenture Trustee,
in the case of the  Indenture,  will be a valid and  binding  obligation  of the
Company  enforceable  against  it in  accordance  with  its  terms,  subject  to
Bankruptcy and Equity.

     5.5. Capital Securities and Common Securities.
          -----------------------------------------

     The Capital  Securities and the Common Securities have been duly authorized
by the Trust Agreement and, when issued and delivered  against payment  therefor
on the Closing Date to the Purchaser, in the case of the Capital Securities, and
to the Company, in the case of the Common Securities, will be validly issued and
represent undivided beneficial interests in the assets of the Trust. None of the
Capital  Securities  or the Common  Securities is subject to preemptive or other
similar rights.  On the Closing Date, all of the issued and  outstanding  Common
Securities  will be directly  owned by the Company free and clear of any pledge,
security interest, claim, lien or other encumbrance.

     5.6. Debentures.
          -----------

     The Debentures have been duly authorized by the Company and, at the Closing
Date,  will have been duly executed and  delivered to the Indenture  Trustee for
authentication in accordance with the Indenture,  and, when authenticated in the
manner provided for in the Indenture and delivered  against payment  therefor by
the Trust, will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture  enforceable  against the Company in accordance
with their terms, subject to Bankruptcy and Equity.

     5.7. Power and Authority.
          -------------------

     This  Agreement  has been duly  authorized,  executed and  delivered by the
Company and the Trust and  constitutes  the valid and binding  obligation of the
Company  and the  Trust,  enforceable  against  the  Company  and the  Trust  in
accordance with its terms, subject to Bankruptcy and Equity.

                                       7
<PAGE>

     5.8. No Defaults.
          ------------

     The Trust is not in violation of the Trust  Agreement  or, to the knowledge
of the Administrators,  any provision of the Statutory Trust Act. The execution,
delivery and  performance  by the Company or the Trust of this  Agreement or the
Operative  Documents  to  which  it is a  party,  and  the  consummation  of the
transactions  contemplated  herein  or  therein  and  the  use of  the  proceeds
therefrom, will not conflict with or constitute a breach of, or a default under,
or result in the creation or imposition of any lien, charge or other encumbrance
upon any  property or assets of the Trust,  the Company or any of the  Company's
Subsidiaries  (as defined in Section  5.11  hereof)  pursuant  to any  contract,
indenture,  mortgage,  loan agreement,  note, lease or other instrument to which
the Trust,  the Company or any of its  Subsidiaries is a party or by which it or
any of them may be bound,  or to which any of the  property  or assets of any of
them is  subject,  except  for a  conflict,  breach,  default,  lien,  charge or
encumbrance which could not, singly or in the aggregate,  reasonably be expected
to have a Material  Adverse  Effect nor will such action result in any violation
of the Trust  Agreement  or the  Statutory  Trust Act or  require  the  consent,
approval, authorization or order of any court or governmental agency or body. As
used herein,  the term "Material  Adverse  Effect" means any one or more effects
that  individually or in the aggregate are material and adverse to the Offeror's
ability to consummate the transactions  contemplated  herein or in the Operative
Documents or any one or more effects that  individually  or in the aggregate are
material  and  adverse to the  condition  (financial  or  otherwise),  earnings,
affairs,  business,  prospects or results of  operations  of the Company and its
Subsidiaries taken as whole,  whether or not occurring in the ordinary course of
business.

     5.9. Organization, Standing and Qualification of the Company.
          -------------------------------------------------------

     The  Company  has been  duly  incorporated  and is  validly  existing  as a
corporation  in good standing  under the laws of New Jersey,  with all requisite
corporate  power and authority to own its properties and conduct the business it
transacts and proposes to transact,  and is duly qualified to transact  business
and is in good standing as a foreign  corporation in each jurisdiction where the
nature of its activities requires such  qualification,  except where the failure
of the Company to be so qualified would not, singly or in the aggregate,  have a
Material Adverse Effect.

     5.10. Subsidiaries of the Company.
          ----------------------------

     Each of the  Company's  significant  subsidiaries  (as  defined  in Section
1-02(w)   of   Regulation   S-X  to  the   Securities   Act  (the   "Significant
Subsidiaries"))  is listed in Exhibit C attached hereto and incorporated  herein
by this reference.  Each  Significant  Subsidiary has been duly organized and is
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is chartered or organized,  with all  requisite  power and authority to
own its  properties  and  conduct  the  business it  transacts  and  proposes to
transact,  and is duly qualified to transact business and is in good standing as
a  foreign  entity in each  jurisdiction  where  the  nature  of its  activities
requires such  qualification,  except where the failure of any such  Significant
Subsidiary  to be so qualified  would not,  singly or in the  aggregate,  have a
Material  Adverse Effect.  All of the issued and  outstanding  shares of capital
stock of the  Significant  Subsidiaries  (a) have been duly  authorized  and are
validly issued, (b) are fully paid and nonassessable,  and (c) are wholly owned,
directly or indirectly,  by the Company free and clear of any security interest,
mortgage,  pledge,  lien,  encumbrance,  restriction  upon  voting or  transfer,
preemptive rights, claim, equity or other defect.

     5.11. Permits.
          ---------

     The Company and each of its  subsidiaries (as defined in Section 1-02(x) of
Regulation S-X to the Securities  Act) (the  "Subsidiaries")  have all requisite
power  and  authority,  and all  necessary  authorizations,  approvals,  orders,
licenses,  certificates  and  permits  of and from  regulatory  or  governmental
officials, bodies and tribunals, to own or lease their respective properties and
to conduct  their  respective  businesses  as now being  conducted,  except such
authorizations,  approvals, orders, licenses, certificates and permits which, if
not obtained  and  maintained,  would not,  singly or in the  aggregate,  have a
Material Adverse Effect, and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such authorizations,  approvals,  orders, licenses,  certificates or permits
which, singly or in the aggregate,  if the failure to be so licensed or approved
is the subject of an unfavorable decision,  ruling or finding,  would, singly or
in the  aggregate,  have a Material  Adverse  Effect;  and the  Company  and its
Subsidiaries are in compliance with all applicable laws, rules,  regulations and
orders and consents,  the violation of which would,  singly or in the aggregate,
have a Material Adverse Effect.

                                       8
<PAGE>

     5.12. Conflicts, Authorizations and Approvals.
          ----------------------------------------

     Neither the  Company nor any of its  Subsidiaries  is in  violation  of its
respective  articles  or  certificate  of  incorporation,  charter or by-laws or
similar organizational  documents or in default in the performance or observance
of any obligation,  agreement,  covenant or condition contained in any contract,
indenture,   mortgage,  loan  agreement,  note,  lease  or  other  agreement  or
instrument to which either the Company or any of its Subsidiaries is a party, or
by which it or any of them may be  bound  or to  which  any of the  property  or
assets of the Company or any of its Subsidiaries is subject, the effect of which
violation or default in performance or observance  would have,  singly or in the
aggregate, a Material Adverse Effect.

     5.13. Holding Company Registration and Deposit Insurance.
          ---------------------------------------------------

     The Company is duly  registered (i) as a bank holding  company or financial
holding company under the Bank Holding Company Act of 1956, as amended,  and the
regulations  of the  Board of  Governors  of the  Federal  Reserve  System  (the
"Federal  Reserve") or (ii) as a savings and loan holding company under the Home
Owners'  Loan Act of 1933,  as  amended,  and the  regulations  of the Office of
Thrift  Supervision  (the  "OTS"),  and the deposit  accounts  of the  Company's
Subsidiary depository  institutions are insured by the Federal Deposit Insurance
Corporation  ("FDIC") to the fullest  extent  permitted by law and the rules and
regulations  of the  FDIC,  and no  proceedings  for  the  termination  of  such
insurance are pending or threatened.

     5.14. Financial Statements.
           ---------------------

          (a)

     The consolidated  balance sheets of the Company and all of its Subsidiaries
as of December 31, 2002 and December  31, 2001 and related  consolidated  income
statements  and  statements of changes in  shareholders'  equity for the 3 years
ended  December 31, 2002 together with the notes thereto,  and the  consolidated
balance  sheets of the Company and all of its  Subsidiaries  as of June 30, 2003
and the related  consolidated  income  statements  and  statements of changes in
shareholders'  equity for the 6 months then ended,  copies of each of which have
been provided to the Placement Agents  (together,  the "Financial  Statements"),
have been prepared in accordance with generally accepted  accounting  principles
applied on a consistent  basis  (except as may be disclosed  therein) and fairly
present in all  material  respects  the  financial  position  and the results of
operations  and  changes in  shareholders'  equity of the Company and all of its
Subsidiaries as of the dates and for the periods indicated (subject, in the case
of interim financial statements, to normal recurring year-end adjustments,  none
of which shall be material). The books and records of the Company and all of its
Subsidiaries  have been, and are being,  maintained in all material  respects in
accordance  with  generally  accepted   accounting   principles  and  any  other
applicable   legal  and   accounting   requirements   and  reflect  only  actual
transactions.

                                       9
<PAGE>

          (b)

     The information in the Company's most recently filed (i) FR Y-9C filed with
the Federal  Reserve if the  Company is a bank  holding  company,  (ii) FR Y-9SP
filed with the Federal Reserve if the Company is a small bank holding company or
(iii)  H-(b)11  filed with the OTS if the Company is a savings and loan  holding
company (the "Regulatory  Report"),  previously provided to the Placement Agents
fairly presents in all material  respects the financial  position of the Company
and,  where  applicable,  all of its  Subsidiaries  as of the end of the  period
represented by such Regulatory Report.

          (c)

     Since the respective  dates of the Financial  Statements and the Regulatory
Report, there has been no material adverse change or development with respect to
the financial  condition or earnings of the Company and all of its Subsidiaries,
taken as a whole.

          (d)

     The  accountants of the Company who certified the Financial  Statements are
independent  public  accountants of the Company and its Subsidiaries  within the
meaning of the Securities Act and the rules and regulations thereunder.

     5.15. Regulatory Enforcement Matters.
          --------------------------------

     Neither the Company nor any of its  Subsidiaries is subject or is party to,
or has  received  any notice or advice  that any of them may  become  subject or
party to,  any  investigation  with  respect  to,  any  cease-and-desist  order,
agreement,  consent  agreement,  memorandum of understanding or other regulatory
enforcement  action,  proceeding  or  order  with or by,  or is a  party  to any
commitment letter or similar  undertaking to, or is subject to any directive by,
or has been since January 1, 2000, a recipient of any  supervisory  letter from,
or since January 1, 2000,  has adopted any board  resolutions at the request of,
any  Regulatory  Agency (as  defined  below)  that  currently  restricts  in any
material  respect the conduct of their  business or that in any material  manner
relates to their  capital  adequacy,  their credit  policies,  their  ability or
authority to pay dividends or make  distributions to their  shareholders or make
payments of principal or interest on their debt obligations, their management or
their business (each, a "Regulatory  Agreement"),  nor has the Company or any of
its  Subsidiaries  been advised since January 1, 2000, by any Regulatory  Agency
that it is  considering  issuing or requesting  any such  Regulatory  Agreement.
There  is no  material  unresolved  violation,  criticism  or  exception  by any
Regulatory  Agency  with  respect to any  report or  statement  relating  to any
examinations of the Company or any of its Subsidiaries. As used herein, the term
"Regulatory  Agency"  means  any  federal  or  state  agency  charged  with  the
supervision or regulation of depository institutions, bank, financial or savings
and  loan  holding  companies,   or  engaged  in  the  insurance  of  depository
institution deposits, or any court, administrative agency or commission or other
governmental  agency,   authority  or  instrumentality   having  supervisory  or
regulatory  authority  with  respect to the Company or any of its  Subsidiaries.
Neither the Company nor any of its  Subsidiaries  is  restricted,  prohibited or
otherwise  limited,  whether  by  statute  or  otherwise,  in their  ability  or
authority to pay dividends or make  distributions to their  shareholders or make
payments of  principal or interest on their debt  obligations,  and no event has
occurred or circumstance  exists that would be reasonably likely to give rise to
or serve as the basis for any such restriction, prohibition or limitation.

     5.16. No Material Change.
          --------------------

     Since  December  31,  2002,  there has been no material  adverse  change or
development  with respect to the condition  (financial or otherwise),  earnings,
affairs,  business,  prospects  or results of  operations  of the Company or its
Subsidiaries  on a  consolidated  basis,  whether or not arising in the ordinary
course of business.

                                       10
<PAGE>

     5.17. No Undisclosed Liabilities.
           ---------------------------

     Neither the Company nor any of its Subsidiaries has any material liability,
whether known or unknown,  whether  asserted or unasserted,  whether absolute or
contingent,  whether accrued or unaccrued,  whether  liquidated or unliquidated,
and whether due or to become due,  including  any liability for taxes (and there
is no past or present fact,  situation,  circumstance,  condition or other basis
for any present or future action, suit, proceeding,  hearing, charge, complaint,
claim or demand against the Company or its Subsidiaries  giving rise to any such
liability), except (i) for liabilities set forth in the Financial Statements and
(ii) normal  fluctuation in the amount of the liabilities  referred to in clause
(i) above occurring in the ordinary course of business of the Company and all of
its Subsidiaries since the date of the most recent balance sheet included in the
Financial Statements.

     5.18. Litigation.
           ----------

     No charge, investigation,  action, suit or proceeding is pending or, to the
knowledge of the Offerors,  threatened,  against or affecting the Company or its
Subsidiaries or any of their  respective  properties  before or by any courts or
any regulatory,  administrative  or governmental  official,  commission,  board,
agency or other  authority or body, or any  arbitrator,  wherein an  unfavorable
decision,  ruling or finding could have, singly or in the aggregate,  a Material
Adverse Effect.

     5.19. Deferral of Interest Payments on Debentures.
          ---------------------------------------------

     The  Company  has no  present  intention  to  exercise  its option to defer
payments of interest on the Debentures as provided in the Indenture. The Company
believes that the likelihood  that it would exercise its right to defer payments
of interest on the  Debentures  as provided in the  Indenture at any time during
which the Debentures are outstanding is remote because of the restrictions  that
would be  imposed on the  Company's  ability  to  declare  or pay  dividends  or
distributions on, or to redeem, purchase,  acquire or make a liquidation payment
with respect to, any of the Company's capital stock and on the Company's ability
to make any payments of principal,  interest or premium on, or repay, repurchase
or redeem, any of its debt securities that rank pari passu in all respects with,
or junior in interest to, the Debentures.

Section 6. Representations and Warranties of the Placement Agents.
           ------------------------------------------------------

     Each Placement  Agent  represents and warrants to the Offerors as to itself
(but not as to the other Placement Agent) as follows:

     6.1. Organization, Standing and Qualification.
          ----------------------------------------

          (a)

     FTN  Financial  Capital  Markets  is a  division  of First  Tennessee  Bank
National  Association,  a national banking  association duly organized,  validly
existing and in good  standing  under the laws of the United  States,  with full
power and  authority to own,  lease and operate its  properties  and conduct its
business as currently  being  conducted.  FTN Financial  Capital Markets is duly
qualified to transact business as a foreign  corporation and is in good standing
in each other  jurisdiction  in which it owns or leases property or conducts its
business  so as to require  such  qualification  and in which the  failure to so
qualify would,  individually or in the aggregate, have a material adverse effect
on the condition  (financial or  otherwise),  earnings,  business,  prospects or
results of operations of FTN Financial Capital Markets.

                                       11
<PAGE>

          (b)

     Keefe,  Bruyette & Woods,  Inc. is a corporation  duly  organized,  validly
existing and in good standing under the laws of the State of New York, with full
power and  authority to own,  lease and operate its  properties  and conduct its
business as currently being  conducted.  Keefe,  Bruyette & Woods,  Inc. is duly
qualified to transact business as a foreign  corporation and is in good standing
in each other  jurisdiction  in which it owns or leases property or conducts its
business  so as to require  such  qualification  and in which the  failure to so
qualify would,  individually or in the aggregate, have a material adverse effect
on the condition  (financial or  otherwise),  earnings,  business,  prospects or
results of operations of Keefe, Bruyette & Woods, Inc.

     6.2. Power and Authority.
          -------------------

     The  Placement  Agent has all  requisite  power and authority to enter into
this  Agreement,  and this  Agreement  has been  duly  and  validly  authorized,
executed and delivered by the Placement Agent and  constitutes the legal,  valid
and binding agreement of the Placement Agent,  enforceable against the Placement
Agent in accordance with its terms,  subject to Bankruptcy and Equity and except
as any  indemnification or contribution  provisions thereof may be limited under
applicable securities laws.

     6.3. General Solicitation.
          --------------------

     In the case of the offer  and sale of the  Capital  Securities,  no form of
general  solicitation or general  advertising was used by the Placement Agent or
its representatives  including,  but not limited to,  advertisements,  articles,
notices or other communications published in any newspaper,  magazine or similar
medium or broadcast  over  television  or radio or any seminar or meeting  whose
attendees have been invited by any general  solicitation or general advertising.
Neither the Placement Agent nor its representatives  have engaged or will engage
in any  "directed  selling  efforts"  within the  meaning of  Regulation  S with
respect to the Capital Securities.

     6.4. Purchaser.
          ---------

     The  Placement  Agent has made such  reasonable  inquiry as is necessary to
determine  that the  Purchaser is acquiring the Capital  Securities  for its own
account, that the Purchaser does not intend to distribute the Capital Securities
in contravention of the Securities Act or any other applicable  securities laws,
and that the Purchaser is not a "U.S. person" as that term is defined under Rule
902 of the Securities Act.

     6.5. Qualified Purchasers.
          --------------------

     The  Placement  Agent has not  offered or sold and will not arrange for the
offer or sale of the Capital  Securities  except (i) in an offshore  transaction
complying  with Rule 903 of Regulation  S, or (ii) to those the Placement  Agent
reasonably  believes  are  "accredited  investors"  (as  defined  in Rule 501 of
Regulation  D), or (iii) in any other manner that does not require  registration
of the Capital Securities under the Securities Act. In connection with each such
sale, the Placement Agent has taken or will take reasonable steps to ensure that
the  Purchaser  is aware  that (a) such  sale is being  made in  reliance  on an
exemption  under the  Securities  Act and (b) future  transfers  of the  Capital
Securities  will not be made except in  compliance  with  applicable  securities
laws.

     6.6. Offering Circulars.
          ------------------

     Neither  the  Placement  Agent nor its  representatives  will  include  any
non-public  information about the Company,  the Trust or any of their affiliates
in  any  registration  statement,   prospectus,  offering  circular  or  private
placement  memorandum used in connection with any purchase of Capital Securities
without the prior written consent of the Trust and the Company.

                                       12
<PAGE>

Section 7. Covenants of the Offerors.
          --------------------------

     The Offerors covenant and agree with the Placement Agents and the Purchaser
as follows:

     7.1. Compliance with Representations and Warranties.
          ----------------------------------------------

     During the period from the date of this  Agreement to the Closing Date, the
Offerors  shall  use  their  best  efforts  and take  all  action  necessary  or
appropriate to cause their representations and warranties contained in Section 5
hereof  to  be  true  as of  the  Closing  Date,  after  giving  effect  to  the
transactions contemplated by this Agreement, as if made on and as of the Closing
Date.

     7.2. Sale and Registration of Securities.
          -----------------------------------

     The  Offerors and their  Affiliates  shall not nor shall any of them permit
any person acting on their behalf (other than the Placement Agents), to directly
or  indirectly  (i) sell,  offer for sale or solicit  offers to buy or otherwise
negotiate  in respect of any security  (as defined in the  Securities  Act) that
would or could be integrated with the sale of the Capital Securities in a manner
that would require the  registration  under the Securities Act of the Securities
or (ii) make offers or sales of any such Security,  or solicit offers to buy any
such Security, under circumstances that would require the registration of any of
such Securities under the Securities Act.

     7.3. Use of Proceeds.
          ---------------

     The Trust shall use the proceeds from the sale of the Capital Securities to
purchase the Debentures from the Company.

     7.4. Investment Company.
          ------------------

     The Offerors shall not engage,  or permit any Subsidiary to engage,  in any
activity which would cause it or any  Subsidiary to be an  "investment  company"
under the provisions of the Investment Company Act.

     7.5. Reimbursement of Expenses.
          -------------------------

     If  the  sale  of  the  Capital  Securities  provided  for  herein  is  not
consummated  (i)  because  any  condition  set forth in  Section 3 hereof is not
satisfied,  or (ii) because of any refusal,  inability or failure on the part of
the  Company or the Trust to perform  any  agreement  herein or comply  with any
provision hereof other than by reason of a breach by the Placement  Agents,  the
Company shall  reimburse  the Placement  Agents upon demand for all of their pro
rata  share  of   out-of-pocket   expenses   (including   reasonable   fees  and
disbursements of counsel) in an amount not to exceed  $50,000.00 that shall have
been incurred by them in connection  with the proposed  purchase and sale of the
Capital  Securities.  Notwithstanding  the foregoing,  the Company shall have no
obligation to reimburse the Placement Agents for their out-of-pocket expenses if
the sale of the Capital  Securities  fails to occur  because the  condition  set
forth in Section 3.6 is not satisfied or because either of the Placement  Agents
fails to fulfill a condition set forth in Section 4.

     7.6. Directed Selling Efforts, Solicitation and Advertising.
          ------------------------------------------------------

     In connection with any offer or sale of any of the Securities, the Offerors
shall not, nor shall either of them permit any of their Affiliates or any person
acting on their behalf,  other than the Placement Agents,  to, (i) engage in any
"directed selling efforts" within the meaning of Regulation S, or (ii) engage in
any  form  of  general  solicitation  or  general  advertising  (as  defined  in
Regulation D).

                                       13
<PAGE>

     7.7. Compliance with Rule 144A(d)(4) under the Securities Act.
          --------------------------------------------------------

     So long  as any of the  Securities  are  outstanding  and  are  "restricted
securities"  within the meaning of Rule 144(a)(3)  under the Securities Act, the
Offerors  will,  during  any  period  in which  they are not  subject  to and in
compliance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934, as
amended (the "Exchange Act"), or the Offerors are not exempt from such reporting
requirements  pursuant  to and in  compliance  with  Rule  12g3-2(b)  under  the
Exchange Act,  provide to each holder of such restricted  securities and to each
prospective  purchaser  (as  designated  by  such  holder)  of  such  restricted
securities,  upon  the  request  of such  holder  or  prospective  purchaser  in
connection with any proposed transfer,  any information  required to be provided
by Rule  144A(d)(4)  under the Securities  Act, if applicable.  This covenant is
intended to be for the benefit of the holders,  and the  prospective  purchasers
designated by such holders, from time to time of such restricted securities. The
information  provided by the Offerors  pursuant to this Section 7.7 will not, at
the date  thereof,  contain any untrue  statement of a material  fact or omit to
state any material fact  necessary to make the statements  therein,  in light of
the circumstances under which they were made, not misleading.

     7.8. Quarterly Reports.
          ------------------

     Within 50 days of the end of each calendar year quarter and within 100 days
of the end of each  calendar  year during  which the  Debentures  are issued and
outstanding,  the  Offerors  shall  submit  to The Bank of New York a  completed
quarterly  report  in the form  attached  hereto  as  Exhibit  D.  The  Offerors
acknowledge  and agree that The Bank of New York and its  successors and assigns
is a third party beneficiary of this Section 7.8

Section 8. Covenants of the Placement Agents.
           ----------------------------------

     The Placement Agents covenant and agree with the Offerors that,  during the
period from the date of this Agreement to the Closing Date, the Placement Agents
shall use their best  efforts and take all action  necessary or  appropriate  to
cause their  representations and warranties contained in Section 6 to be true as
of Closing Date,  after giving effect to the  transactions  contemplated by this
Agreement,  as if made  on and as of the  Closing  Date.  The  Placement  Agents
further covenant and agree not to engage in hedging transactions with respect to
the Capital Securities unless such transactions are conducted in compliance with
the Securities Act.

Section 9. Indemnification.
          -----------------

     9.1. Indemnification Obligation.
          --------------------------

     The Offerors  shall jointly and  severally  indemnify and hold harmless the
Placement  Agents  and the  Purchaser  and  each  of  their  respective  agents,
employees,  officers and directors  and each person that controls  either of the
Placement  Agents or the  Purchaser  within  the  meaning  of  Section 15 of the
Securities  Act or  Section  20 of the  Exchange  Act,  and  agents,  employees,
officers and directors or any such controlling person of either of the Placement
Agents or the Purchaser  (each such person or entity,  an  "Indemnified  Party")
from and against any and all losses, claims, damages, judgments,  liabilities or
expenses,  joint or several,  to which such Indemnified Party may become subject
under the Securities  Act, the Exchange Act or other federal or state  statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation,  if such  settlement  is effected  with the  written  consent of the
Offerors),  insofar as such losses, claims, damages,  judgments,  liabilities or
expenses  (or actions in respect  thereof)  arise out of, or are based upon,  or
relate to, in whole or in part,  (a) any  untrue  statement  or  alleged  untrue
statement of a material fact contained in any  information  (whether  written or
oral) or  documents  executed in favor of,  furnished  or made  available to the
Placement  Agents or the  Purchaser  by the  Offerors,  or (b) any  omission  or
alleged  omission  to  state in any  information  (whether  written  or oral) or

                                       14
<PAGE>

documents  executed in favor of,  furnished or made  available to the  Placement
Agents or the  Purchaser by the Offerors a material  fact  required to be stated
therein or necessary to make the statements  therein not  misleading,  and shall
reimburse  each  Indemnified  Party for any legal  and  other  expenses  as such
expenses are reasonably  incurred by such  Indemnified  Party in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, judgments,  liability,  expense or action described in this Section 9.1.
In addition to their other obligations under this Section 9, the Offerors hereby
agree that,  as an interim  measure  during the  pendency of any claim,  action,
investigation,  inquiry or other  proceeding  arising out of, or based upon,  or
related to the matters described above in this Section 9.1, they shall reimburse
each  Indemnified  Party on a quarterly basis for all reasonable  legal or other
expenses incurred in connection with  investigating or defending any such claim,
action, investigation, inquiry or other proceeding,  notwithstanding the absence
of a  judicial  determination  as to the  propriety  and  enforceability  of the
possibility  that such  payments  might later be held to have been improper by a
court  of  competent   jurisdiction.   To  the  extent  that  any  such  interim
reimbursement  payment is so held to have been improper,  each Indemnified Party
shall  promptly  return such amounts to the  Offerors  together  with  interest,
determined on the basis of the prime rate (or other commercial  lending rate for
borrowers of the highest credit  standing)  announced from time to time by First
Tennessee  Bank  National  Association  (the  "Prime  Rate").  Any such  interim
reimbursement payments which are not made to an Indemnified Party within 30 days
of a request for  reimbursement  shall bear  interest at the Prime Rate from the
date of such request.

     9.2. Conduct of Indemnification Proceedings.
          --------------------------------------

     Promptly  after  receipt by an  Indemnified  Party under this  Section 9 of
notice of the  commencement of any action,  such  Indemnified  Party shall, if a
claim in respect  thereof is to be made against the Offerors  under this Section
9, notify the Offerors in writing of the commencement  thereof;  but, subject to
Section 9.4, the omission to so notify the Offerors  shall not relieve them from
any  liability  pursuant  to  Section  9.1  which the  Offerors  may have to any
Indemnified  Party unless and to the extent that the Offerors did not  otherwise
learn of such action and such failure by the  Indemnified  Party  results in the
forfeiture by the Offerors of substantial rights and defenses.  In case any such
action is brought against any Indemnified Party and such Indemnified Party seeks
or intends to seek indemnity  from the Offerors,  the Offerors shall be entitled
to participate  in, and, to the extent that they may wish, to assume the defense
thereof  with  counsel  reasonably   satisfactory  to  such  Indemnified  Party;
provided,  however,  if the  defendants  in any  such  action  include  both the
Indemnified  Party  and  the  Offerors  and the  Indemnified  Party  shall  have
reasonably  concluded that there may be a conflict  between the positions of the
Offerors and the Indemnified  Party in conducting the defense of any such action
or that there may be legal  defenses  available to it and/or  other  Indemnified
Parties  which  are  different  from or  additional  to those  available  to the
Offerors,  the Indemnified Party shall have the right to select separate counsel
to assume such legal  defenses  and to otherwise  participate  in the defense of
such action on behalf of such Indemnified Party. Upon receipt of notice from the
Offerors to such Indemnified Party of their election to so assume the defense of
such action and approval by the Indemnified Party of counsel, the Offerors shall
not be liable to such  Indemnified  Party under this  Section 9 for any legal or
other expenses  subsequently  incurred by such  Indemnified  Party in connection
with the defense  thereof unless (i) the  Indemnified  Party shall have employed
such counsel in connection  with the  assumption of legal defenses in accordance
with the proviso in the preceding sentence (it being understood,  however,  that
the  Offerors  shall not be liable for the  expenses  of more than one  separate
counsel representing the Indemnified Parties who are parties to such action), or
(ii) the Offerors shall not have employed counsel reasonably satisfactory to the
Indemnified  Party to represent the  Indemnified  Party within a reasonable time
after notice of commencement of the action,  in each of which cases the fees and
expenses  of counsel of such  Indemnified  Party  shall be at the expense of the
Offerors.

                                       15
<PAGE>

     9.3. Contribution.
          -------------

     If the  indemnification  provided  for in this Section 9 is required by its
terms, but is for any reason held to be unavailable to or otherwise insufficient
to hold  harmless  an  Indemnified  Party  under  Section  9.1 in respect of any
losses, claims, damages,  liabilities or expenses referred to herein or therein,
then the  Offerors  shall  contribute  to the  amount  paid or  payable  by such
Indemnified  Party  as a  result  of any  losses,  claims,  damages,  judgments,
liabilities  or  expenses  referred  to  herein  (i) in  such  proportion  as is
appropriate to reflect the relative  benefits  received by the Offerors,  on the
one hand, and the  Indemnified  Party,  on the other hand,  from the offering of
such Capital Securities,  or (ii) if the allocation provided by clause (i) above
is not permitted by applicable  law, in such  proportion  as is  appropriate  to
reflect not only the relative  benefits referred to in clause (i) above but also
the relative fault of the Offerors,  on the one hand, and the Placement  Agents,
on  the  other  hand,  in  connection   with  the  statements  or  omissions  or
inaccuracies  in the  representations  and  warranties  herein or other breaches
which  resulted in such  losses,  claims,  damages,  judgments,  liabilities  or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits  received by the Offerors,  on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion,  in the
case of the  Offerors,  as the total price paid to the  Offerors for the Capital
Securities sold by the Offerors to the Purchaser (net of the  compensation  paid
to the Placement Agents hereunder,  but before deducting  expenses),  and in the
case of the Placement Agents, as the compensation received by them, bears to the
total of such amounts paid to the Offerors and received by the Placement  Agents
as  compensation.  The relative  fault of the Offerors and the Placement  Agents
shall be  determined  by reference  to, among other  things,  whether the untrue
statement  or alleged  untrue  statement  of a material  fact or the omission or
alleged omission of a material fact or the inaccurate or the alleged  inaccurate
representation  and/or warranty relates to information  supplied by the Offerors
or the Placement Agents and the parties' relative intent,  knowledge,  access to
information  and  opportunity  to correct or prevent such statement or omission.
The provisions  set forth in Section 9.2 with respect to notice of  commencement
of any action shall apply if a claim for contribution is made under this Section
9.3; provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under  Section 9.2 for purposes of
indemnification.  The Offerors and the Placement  Agents agree that it would not
be just  and  equitable  if  contribution  pursuant  to this  Section  9.3  were
determined by pro rata allocation or by any other method of allocation that does
not take  account of the  equitable  considerations  referred to in this Section
9.3.  The  amount  paid or payable  by an  Indemnified  Party as a result of the
losses, claims, damages, judgments,  liabilities or expenses referred to in this
Section 9.3 shall be deemed to  include,  subject to the  limitations  set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection  with  investigating  or defending any such action or claim. In no
event shall the liability of the Placement Agents hereunder be greater in amount
than the dollar  amount of the  compensation  (net of  payment of all  expenses)
received by the Placement Agents upon the sale of the Capital  Securities giving
rise to such obligation. No person found guilty of fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution  from  any  person  who was not  found  guilty  of such  fraudulent
misrepresentation.

     9.4. Additional Remedies.
          --------------------

     The indemnity and contribution  agreements  contained in this Section 9 are
in  addition  to any  liability  that the  Offerors  may  otherwise  have to any
Indemnified Party.

     9.5. Additional Indemnification.
          --------------------------

     The Company  shall  indemnify and hold harmless the Trust against all loss,
liability,  claim,  damage and expense  whatsoever,  as due from the Trust under
Sections 9.1 through 9.4 hereof.

Section 10. Rights and Responsibilities of Placement Agents.
            -----------------------------------------------

                                       16
<PAGE>

     10.1. Reliance.
          ----------

     In performing their duties under this Agreement, the Placement Agents shall
be entitled to rely upon any notice,  signature  or writing  which they shall in
good faith believe to be genuine and to be signed or presented by a proper party
or parties.  The Placement  Agents may rely upon any opinions or certificates or
other  documents  delivered  by the  Offerors or their  counsel or  designees to
either the Placement Agents or the Purchaser.

     10.2. Rights of Placement Agents.
          ----------------------------

     In connection  with the  performance of their duties under this  Agreement,
the Placement Agents shall not be liable for any error of judgment or any action
taken or omitted to be taken unless the Placement Agents were grossly  negligent
or  engaged  in  willful  misconduct  in  connection  with such  performance  or
non-performance.  No provision of this  Agreement  shall  require the  Placement
Agents to  expend or risk  their  own  funds or  otherwise  incur any  financial
liability on behalf of the Purchaser in connection  with the  performance of any
of their duties hereunder.  The Placement Agents shall be under no obligation to
exercise any of the rights or powers vested in them by this Agreement.

Section 11. Miscellaneous.
            --------------

     11.1. Disclosure Schedule.
          ---------------------

     The term "Disclosure Schedule," as used herein, means the schedule, if any,
attached  to this  Agreement  that sets forth items the  disclosure  of which is
necessary  or  appropriate  as an exception  to one or more  representations  or
warranties contained in Section 5 hereof;  provided,  that any item set forth in
the Disclosure Schedule as an exception to a representation or warranty shall be
deemed an admission  by the Offerors  that such item  represents  an  exception,
fact,  event or circumstance  that is reasonably  likely to result in a Material
Adverse  Effect.  The  Disclosure  Schedule  shall  be  arranged  in  paragraphs
corresponding  to the section  numbers  contained  in Section 5.  Nothing in the
Disclosure  Schedule  shall be deemed  adequate to disclose  an  exception  to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with reasonable  particularity and describes the relevant facts in
reasonable detail.  Without limiting the generality of the immediately preceding
sentence,  the mere listing (or inclusion of a copy) of a document or other item
in the Disclosure Schedule shall not be deemed adequate to disclose an exception
to a  representation  or  warranty  made  herein  unless the  representation  or
warranty  has to do with the  existence  of the  document or other item  itself.
Information   provided  by  the  Company  in  response  to  any  due   diligence
questionnaire  shall not be deemed part of the Disclosure Schedule and shall not
be  deemed  to be an  exception  to one or more  representations  or  warranties
contained in Section 5 hereof unless such  information is specifically  included
on the  Disclosure  Schedule in accordance  with the  provisions of this Section
11.1.

     11.2. Legal Expenses.
           ---------------

     At Closing,  the Placement  Agents shall provide a credit for the Offerors'
transaction-related legal expenses in the amount of $10,000.00.

     11.3. Notices.
          ---------

     Prior to the Closing,  and thereafter with respect to matters pertaining to
this  Agreement  only,  all notices  and other  communications  provided  for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or overnight air courier guaranteeing next day delivery:

                                       17
<PAGE>

         if to the Placement Agents, to:

                                  FTN Financial Capital Markets
                                  845 Crossover Lane, Suite 150
                                  Memphis, Tennessee  38117
                                  Telecopier:  901-435-4706
                                  Telephone:  800-456-5460
                                  Attention:  James D. Wingett

                                          and

                                  Keefe, Bruyette & Woods, Inc.
                                  787 7th Avenue
                                  4th Floor
                                  New York, New York  10019
                                  Telecopier:  212-403-2000
                                  Telephone:  212-403-1004
                                  Attention:  Mitchell Kleinman, General Counsel

         with a copy to:

                                  Lewis, Rice & Fingersh, L.C.
                                  500 North Broadway, Suite 2000
                                  St. Louis, Missouri  63102
                                  Telecopier:  314-241-6056
                                  Telephone:  314-444-7600
                                  Attention:  Thomas C. Erb, Esq.

                                          and

                                  Sidley Austin Brown & Wood LLP
                                  787 7th Avenue
                                  New York, New York  10019
                                  Telecopier:  212-839-5599
                                  Telephone:  212-839-5300
                                  Attention:  Renwick Martin, Esq.

         if to the Offerors, to:

                                  Stewardship Financial Corporation
                                  630 Godwin Avenue
                                  Midland Park, New Jersey 07432
                                  Telecopier:  201-251-9570
                                  Telephone:  201-444-7100 Ext. 7125
                                  Attention:  Julie Holland

         with a copy to:

                                  McCarter & English, LLP
                                  Four Gateway Center
                                  100 Mulberry Street
                                  Newark, New Jersey 07101-0652
                                  Telecopier:  973-624-7071
                                  Telephone:  973-622-4444
                                  Attention:  Todd M. Poland, Esq.

                                       18

     All such notices and communications shall be deemed to have been duly given
(i) at the time delivered by hand, if personally  delivered,  (ii) five business
days after being deposited in the mail, postage prepaid,  if mailed,  (iii) when
answered back, if telexed, (iv) the next business day after being telecopied, or
(v) the next  business  day  after  timely  delivery  to a  courier,  if sent by
overnight  air  courier  guaranteeing  next day  delivery.  From and  after  the
Closing,  the  foregoing  notice  provisions  shall be  superseded by any notice
provisions of the Operative Documents under which notice is given. The Placement
Agents, the Company,  and their respective counsel,  may change their respective
notice  addresses  from time to time by written  notice to all of the  foregoing
persons.

11.4. Parties in Interest, Successors and Assigns.
      -------------------------------------------

     Except as expressly set forth herein, this Agreement is made solely for the
benefit of the Placement  Agents,  the Purchaser and the Offerors and any person
controlling  the  Placement  Agents,  the  Purchaser  or the  Offerors and their
respective successors and assigns; and no other person shall acquire or have any
right under or by virtue of this  Agreement.  This Agreement  shall inure to the
benefit  of and be  binding  upon  the  successors  and  assigns  of each of the
parties.

11.5. Counterparts.
      ------------

     This   Agreement  may  be  executed  by  the  parties  hereto  in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

11.6. Headings.
      --------

     The headings in this  Agreement are for  convenience  of reference only and
shall not limit or otherwise affect the meaning hereof.

11.7. Governing Law.
      -------------

     THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS OF LAWS) OF THE STATE OF
NEW YORK.

11.8. Entire Agreement.
      ----------------

     This  Agreement,  together  with  the  Operative  Documents  and the  other
documents  delivered in connection  with the  transactions  contemplated by this
Agreement,  is intended by the parties as a final  expression of their agreement
and  intended to be a complete and  exclusive  statement  of the  agreement  and
understanding  of the parties hereto in respect of the subject matter  contained
herein  and  therein.  There  are  no  restrictions,   promises,  warranties  or
undertakings, other than those set forth or referred to herein and therein. This
Agreement,  together  with  the  Operative  Documents  and the  other  documents

                                       19
<PAGE>

delivered in connection  with the  transaction  contemplated  by this Agreement,
supersedes  all prior  agreements  and  understandings  between the parties with
respect to such subject matter.

11.9. Severability.
      ------------

     In the event that any one or more of the provisions  contained  herein,  or
the  application  thereof  in any  circumstances,  is held  invalid,  illegal or
unenforceable  in any  respect  for  any  reason,  the  validity,  legality  and
enforceability of any such provision in every other respect and of the remaining
provisions  hereof  shall  not be in any way  impaired  or  affected,  it  being
intended  that all of the  Placement  Agents'  and the  Purchaser's  rights  and
privileges shall be enforceable to the fullest extent permitted by law.

11.10. Survival.
       --------

     The  Placement  Agents  and the  Offerors,  respectively,  agree  that  the
representations,  warranties  and  agreements  made  by  each  of  them  in this
Agreement and in any certificate or other instrument  delivered  pursuant hereto
shall  remain in full force and effect and shall  survive the  delivery  of, and
payment for, the Capital Securities.

                     Signatures appear on the following page

                                       20
<PAGE>

     If this Agreement is satisfactory to you, please so indicate by signing the
acceptance  of this  Agreement  and deliver  such  counterpart  to the  Offerors
whereupon this Agreement will become binding  between us in accordance  with its
terms.

                                  Very truly yours,

                                  STEWARDSHIP FINANCIAL CORPORATION

                                  By:   /s/ Paul Van Ostenbridge
                                        ----------------------------------------
                                  Name:     Paul Van Ostenbridge
                                        ----------------------------------------
                                  Title:    President / CEO
                                        ----------------------------------------

                                  STEWARDSHIP STATUTORY TRUST I

                                  By:    /s/ Paul Van Ostenbridge
                                        ----------------------------------------
                                  Name:      Paul Van Ostenbridge
                                        ----------------------------------------
                                  Title:  Administrator
                                        ----------------------------------------

CONFIRMED AND ACCEPTED,
as of the date first set forth above

FTN FINANCIAL CAPITAL MARKETS,
a division of First Tennessee Bank National Association,
as a Placement Agent

By:   /s/ James D. Wingett
      ----------------------------------------
Name:     James D. Wingett
      ----------------------------------------
Title:    Senior Vice President
      ----------------------------------------

KEEFE, BRUYETTE & WOODS, INC.,
a New York corporation, as a Placement Agent

By:   /s/ Peter J. Wirth
      ----------------------------------------
Name:     Peter J. Wirth
      ----------------------------------------
Title:    Managing Director
      ----------------------------------------

                                       21

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