Exhibit 10.1
 
SHARE PURCHASE AGREEMENT
 
This Share Purchase Agreement (this “Agreement”) is dated as of October 2, 2008,
by and among Washington Trust Bancorp, Inc., a Rhode Island corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
 
RECITALS
 
A.           The Company and each Purchaser is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.
 
B.           Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, that aggregate number of shares of common stock, par value $0.0625
per share (the “Common Stock”), of the Company, set forth below such Purchaser’s
name on the signature page of this Agreement (which aggregate amount for all
Purchasers together shall be 2,500,000 shares of Common Stock and shall be
collectively referred to herein as the “Shares”).
 
C.           The Company has engaged Keefe, Bruyette and Woods as its exclusive
placement agent (the “Placement Agent”) for the offering of the Shares on a
“reasonable efforts” basis.
 
D.             Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
“Registration Rights Agreement”), pursuant to which, among other things, the
Company will agree to provide certain registration rights with respect to the
Shares under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.
 
            NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows:
 
ARTICLE I.
DEFINITIONS
 
                1.1           Definitions. In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following
terms shall have the meanings indicated in this Section 1.1:
 
                     “Action” means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or, to the Company’s Knowledge, threatened in writing
against the Company, any Subsidiary or any of their respective properties or any
officer, director or employee of the Company or any Subsidiary acting in his or
her capacity as an officer, director or employee before or by any federal,
state, county, local or foreign court, arbitrator, governmental or
administrative agency, regulatory authority, stock market, stock exchange or
trading facility.
 
                     “Affiliate” means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
Controls, is controlled by or is under common control with such Person, as such
terms are used in and construed under Rule 405 under the Securities Act. With
respect to a Purchaser, any investment fund or managed account that is managed
on a discretionary basis by the same investment manager as such Purchaser will
be deemed to be an Affiliate of such Purchaser.
 
                     “Agreement” shall have the meaning ascribed to such term in
the Preamble.

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                     “Business Day” means a day, other than a Saturday or
Sunday, on which banks in New York City are open for the general transaction of
business.
 
                     “Buy-In” has the meaning set forth in Section 4.1(f).
 
                     “Buy-In Price” has the meaning set forth in Section 4.1(f).
 
                     “Closing” means the closing of the purchase and sale of the
Shares pursuant to this Agreement.
 
                    “Closing Bid Price” means, for any security as of any date,
the last closing price for such security on the Principal Trading Market, as
reported by Bloomberg, or, if the Principal Trading Market begins to operate on
an extended hours basis and does not designate the closing bid price then the
last bid price of such security prior to 4:00:00 p.m., New York City Time, as
reported by Bloomberg, or, if the Principal Trading Market is not the principal
securities exchange or trading market for such security, the last closing price
of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing
do not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the holder. If the Company and the holder are
unable to agree upon the fair market value of such security, then the Company
shall, within two Business Days submit via facsimile (a) the disputed
determination to an independent, reputable investment bank selected by the
Company and approved by the holder or (b) the disputed arithmetic calculation to
the Company’s independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.
 
                     “Closing Date” means the Trading Day when all of the
Transaction Documents have been executed and delivered by the applicable parties
thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2
hereof are satisfied, or such other date as the parties may agree.
 
                     “Commission” has the meaning set forth in the Recitals.
 
                     “Common Stock” has the meaning set forth in the Recitals,
and also includes any securities into which the Common Stock may hereafter be
reclassified or changed.
 
                     “Common Stock Equivalents” means any securities of the
Company or any Subsidiary which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.
 
                     “Company Counsel” means Goodwin Procter LLP.
 
                     “Company Deliverables” has the meaning set forth in
Section 2.2(a).
 
                     “Company’s Knowledge” means with respect to any statement
made to the knowledge of the Company, that the statement is based upon the
actual knowledge of the executive officers of the Company having responsibility
for the matter or matters that are the subject of the statement.
 
                     “Control” (including the terms “controlling”, “controlled
by” or “under common control with”) means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.

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                     “Disclosure Materials” has the meaning set forth in
Section 3.1(h).
 
                     “Effective Date” means the date on which the initial
Registration Statement required by Section 2(a) of the Registration Rights
Agreement is first declared effective by the Commission.
 
                     “Effectiveness Deadline” means the date on which the
initial Registration Statement is required to be declared effective by the
Commission under the terms of the Registration Rights Agreement.
 
                     “Environmental Laws” has the meaning set forth in
Section 3.1(l).
 
                     “Exchange Act” means the Securities Exchange Act of 1934,
as amended, or any successor statute, and the rules and regulations promulgated
thereunder.
 
                     “GAAP” means U.S. generally accepted accounting principles,
as applied by the Company.
 
                     “Indemnified Person” has the meaning set forth in
Section 4.9(b).
 
                     “Intellectual Property” has the meaning set forth in
Section 3.1(r).
 
                     “Irrevocable Transfer Agent Instructions” means, with
respect to the Company, the Irrevocable Transfer Agent Instructions, in the form
of Exhibit E, executed by the Company and delivered to and acknowledged in
writing by the Transfer Agent.
 
                     “Lien” means any lien, charge, claim, encumbrance, security
interest, right of first refusal, preemptive right or other restrictions of any
kind.
 
                     “Material Adverse Effect” means any of (i) a material and
adverse effect on the legality, validity or enforceability of any Transaction
Document , (ii) a material and adverse effect on the results of operations,
assets, business or financial condition of the Company and the Subsidiaries,
taken as a whole, or (iii) any adverse impairment to the Company's ability to
perform in any material respect on a timely basis its obligations under any
Transaction Document, except that any of the following, either alone or in
combination, shall not be deemed a Material Adverse Effect: (A) effects caused
by changes or circumstances affecting general market conditions in the U.S.
economy or which are generally applicable to the industry in which the Company
operates, which do not affect the Company in a materially disproportionate
manner, (B) effects resulting from or relating to the announcement or disclosure
of the sale of the Shares or other transactions contemplated by this Agreement,
or (C) effects caused by any event, occurrence or condition resulting from or
relating to the taking of any action in accordance with this Agreement.
 
                     “Material Contract” means any contract of the Company that
was filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item
601(b)(10) of Regulation S-K.
 
                     “Material Permits” has the meaning set forth in
Section 3.1(p).
 
                     “New York Courts” means the state and federal courts
sitting in the City of New York, Borough of Manhattan.
 
                     “Outside Date” means the thirtieth day following the date
of this Agreement; provided that if such day is not a Business Day, the first
day following such day that is a Business Day.
 
                     “Person” means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically listed
herein.
 
                     “Principal Trading Market” means the Trading Market on
which the Common Stock is primarily listed on and quoted for trading, which, as
of the date of this Agreement and the Closing Date, shall be the NASDAQ Global
Market.
 
                     “Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
 
                     “Purchase Price” means $20.00 per Share.
 
                     “Purchaser Deliverables” has the meaning set forth in
Section 2.2(b).

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                     “Purchaser Party” has the meaning set forth in
Section 4.9(a).
 
                     “Registration Rights Agreement” has the meaning set forth
in the Recitals.
 
                     “Registration Statement” means a registration statement
meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Registrable Securities (as defined
in the Registration Rights Agreement).
 
                     “Required Approvals” has the meaning set forth in
Section 3.1(e).
 
                     “Rule 144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
 
                     “SEC Reports” has the meaning set forth in Section 3.1(h).
 
                     “Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(vi).
 
                     “Securities Act” means the Securities Act of 1933, as
amended.
 
                     “Short Sales” include, without limitation, all “short
sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return basis), and
sales and other transactions through non-U.S. broker dealers or foreign
regulated brokers.
 
                     “Special Counsel” means Adler Pollock & Sheehan P.C.
 
                     “Subscription Amount” means with respect to each Purchaser,
the aggregate amount to be paid for the Shares purchased hereunder as indicated
on such Purchaser’s signature page to this Agreement next to the heading
“Aggregate Purchase Price (Subscription Amount)”.
 
                     “Subsidiary” means any entity in which the Company,
directly or indirectly, owns sufficient capital stock or holds a sufficient
equity or similar interest such that it is consolidated with the Company in the
financial statements of the Company.
 
                     “Trading Affiliate” has the meaning set forth in
Section 3.2(h).
 
                     “Trading Day” means (i) a day on which the Common Stock is
listed or quoted and traded on its Principal Trading Market (other than the OTC
Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market
(other than the OTC Bulletin Board), a day on which the Common Stock is traded
in the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on any Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported in the
“pink sheets” by Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided , that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
 
                     “Trading Market” means whichever of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the
NASDAQ Global Market, the NASDAQ Capital Market or the OTC Bulletin Board on
which the Common Stock is listed or quoted for trading on the date in question.
 
                     “Transaction Documents” means this Agreement, the schedules
and exhibits attached hereto, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
 
                     “Transfer Agent” means American Stock Transfer & Trust
Company, or any successor transfer agent for the Company.
 
ARTICLE II.
PURCHASE AND SALE

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2.1           Closing.
 
(a)           Amount.  Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
such number of Shares equal to the quotient resulting from dividing (i) the
Subscription Amount for such Purchaser by (ii) the Purchase Price, rounded down
to the nearest whole Share.
 
(b)           Closing.  The Closing of the purchase and sale of the Shares shall
take place at the offices of Goodwin Procter LLP, 53 State Street, Boston,
Massachusetts, on the Closing Date or at such other locations or remotely by
facsimile transmission or other electronic means as the parties may mutually
agree.
 
(c)           Form of Payment; Escrow.  Unless otherwise agreed to by the
Company and a Purchaser (as to itself only), on or prior to the Business Day
immediately prior to the Closing Date, each Purchaser shall wire its
Subscription Amount, in United States dollars and in immediately available
funds, to a non-interest bearing escrow account established by the Company and
the Placement Agent with JPMorgan Chase Bank, N.A. (the “Escrow Agent”) as set
forth on Exhibit G hereto (the aggregate amounts received being held in escrow
by the Escrow Agent are referred to herein as the “Escrow Amount”).  Unless
otherwise agreed to by the Company and a Purchaser (as to itself only), on the
Closing Date, (a) the Company and the Placement Agent shall instruct the Escrow
Agent to deliver, in immediately available funds, the Escrow Amount constituting
the aggregate purchase price as follows: (1) to the Placement Agent, the fees
and reimbursable expenses payable to the Placement Agent (which fees and
expenses shall be set forth in such instructions), and (2) the balance of the
aggregate purchase price to the Company and (b) the Company shall irrevocably
instruct the Transfer Agent to deliver to each Purchaser one or more stock
certificates, free and clear of all restrictive and other legends (except as
expressly provided in Section 4.1(b) hereof), evidencing the number of Shares
such Purchaser is purchasing as is set forth on such Purchaser’s signature page
to this Agreement next to the heading “Number of Shares to be Acquired”, within
three (3) Business Days after the Closing.
 
2.2           Closing Deliveries.   
 
                         (a)         On or prior to the Closing, the Company
shall issue, deliver or cause to be delivered to each Purchaser the following
(the “Company Deliverables”):
 
               
(i) 
this Agreement, duly executed by the Company;

 
               
(ii) 
facsimile copies of one or more stock certificates, free and clear of all
restrictive and other legends (except as provided in Section 4.1(b) hereof),
evidencing the Shares subscribed for by Purchaser hereunder, registered in the
name of such Purchaser as set forth on the Stock Certificate Questionnaire
included as Exhibit B-2 hereto (the “ Stock Certificates ”), with the original
Stock Certificates sent within three (3) Business Days of Closing;

 
               
(iii) 
a legal opinion of Company Counsel, dated as of the Closing Date and in the form
attached hereto as Exhibit C-1, executed by such counsel and addressed to the
Purchasers;

 
               
(iv) 
a legal opinion of Special Counsel, dated as of the Closing Date and in the form
attached hereto as Exhibit C-2, executed by such counsel and addressed to the
Purchasers;
        (v) the Registration Rights Agreement, duly executed by the Company;

 
               
(vi) 
duly executed Irrevocable Transfer Agent Instructions acknowledged in writing by
the Transfer Agent;

 
               
(vii) 
a certificate of the Secretary of the Company (the “Secretary’s Certificate”),
dated as of the Closing Date, (a) certifying the resolutions adopted by the
Board of Directors of the Company or a duly authorized committee thereof
approving the transactions contemplated by this Agreement and the other
Transaction Documents and the issuance of the Shares, (b) certifying the current
versions of the certificate or articles of incorporation, as amended, and
by-laws of the Company and (c) certifying as to the signatures and authority of
persons signing the Transaction

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Documents and related documents on behalf of the Company, in the form attached
hereto as Exhibit E;
     

               
(viii) 
the Compliance Certificate referred to in Section 5.1(g);

 
               
(ix) 
a certificate evidencing the formation and good standing of the Company in its
jurisdiction of formation issued by the Secretary of State (or comparable
office) of such jurisdiction, as of a date within five (5) Business Days of the
Closing Date;

 
               
(x) 
a certified copy of the Certificate of Incorporation, as certified by the
Secretary of State of the State (or comparable office) of such entity’s
jurisdiction of formation, as of a date within ten (10) Business Days of the
Closing Date.

 
                         (b)            On or prior to the Closing, each
Purchaser shall deliver or cause to be delivered to the Company the following
(the “Purchaser Deliverables”):
 
               
(i) 
this Agreement, duly executed by such Purchaser;

 
               
(ii) 
unless otherwise agreed to by the Company and a Purchaser (as to itself only),
its Subscription Amount, in U.S. dollars and in immediately available funds, in
the amount set forth as the “Purchase Price” indicated below such Purchaser’s
name on the applicable signature page hereto under the heading “Aggregate
Purchase Price (Subscription Amount)” by wire transfer to the escrow account set
forth on Exhibit G attached hereto;

 
               
(iii) 
the Registration Rights Agreement, duly executed by such Purchaser;

 
               
(iv) 
a fully completed and duly executed Selling Stockholder Questionnaire in the
form attached as Annex B to the Registration Rights Agreement; and

 
               
(v) 
a fully completed and duly executed Accredited Investor Questionnaire,
reasonably satisfactory to the Company, and Stock Certificate Questionnaire in
the forms attached hereto as Exhibits B-1 and B-2 , respectively.

 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
                3.1           Representations and Warranties of the Company. The
Company hereby represents and warrants as of the date hereof and the Closing
Date (except for the representations and warranties that speak as of a specific
date, which shall be made as of such date), to each of the Purchasers that:
 
                                (a)           Subsidiaries. The Company has no
direct or indirect Subsidiaries other than those listed in Schedule 3.1(a)
hereto. Except as disclosed in Schedule 3.1(a) hereto, the Company owns,
directly or indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any and all Liens, and all the issued and
outstanding shares of capital stock or comparable equity interest of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities.
 
                                (b)           Organization and Qualification.
The Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02
of Regulation S-X) is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own or lease and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Significant
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents. The Company and each of its Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not in
the reasonable judgment of the Company be expected to have a Material Adverse
Effect.  The Company is duly registered as a financial holding company under the
Bank Holding Company Act of 1956, as

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amended.  Each of the Company’s depository institution Subsidiaries’ deposit
accounts are insured up to applicable limits by the Federal Deposit Insurance
Corporation, and all premiums and assessments required to be paid in connection
therewith have been paid when due. The Company has conducted its business in
compliance with all applicable federal, state and foreign laws, orders,
judgments, decrees, rules, regulations and applicable stock exchange
requirements, including all laws and regulations restricting activities of bank
holding companies and banking organizations, except for any noncompliance that,
individually or in the aggregate, has not had and would not be reasonably
expected to have a Material Adverse Effect.
 
                                (c)           Authorization; Enforcement;
Validity. The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by each of the Transaction
Documents to which it is a party and otherwise to carry out its obligations
hereunder and thereunder. The Company’s execution and delivery of each of the
Transaction Documents to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby (including, but not limited to, the
sale and delivery of the Shares) have been duly authorized by all necessary
corporate action on the part of the Company, and no further corporate action is
required by the Company, its Board of Directors or its stockholders in
connection therewith other than in connection with the Required Approvals. Each
of the Transaction Documents to which it is a party has been (or upon delivery
will have been) duly executed by the Company and is, or when delivered in
accordance with the terms hereof, will constitute the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and
remedies or by other equitable principles of general application, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law. Except for Material
Contracts, there are no stockholder agreements, voting agreements, or other
similar arrangements with respect to the Company’s capital stock to which the
Company is a party or, to the Company’s Knowledge, between or among any of the
Company’s stockholders.
 
                                (d)           No Conflicts. The execution,
delivery and performance by the Company of the Transaction Documents to which it
is a party and the consummation by the Company of the transactions contemplated
hereby or thereby (including, without limitation, the issuance of the Shares) do
not and will not (i) conflict with or violate any provisions of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise
result in a violation of the organizational documents of the Company or any
Subsidiary, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would result in a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations and the
rules and regulations, assuming the correctness of the representations and
warranties made by the Purchasers herein, of any self-regulatory organization to
which the Company or its securities are subject, including all applicable
Trading Markets), or by which any property or asset of the Company is bound or
affected, except in the case of clauses (ii) and (iii) such as would not have or
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
 
                                (e)           Filings, Consents and Approvals.
Neither the Company nor any of its Subsidiaries is required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including,
without limitation, the issuance of the Shares), other than (i) the filing with
the Commission of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) filings required by
applicable state securities laws, (iii) the filing of a Notice of Sale of

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Securities on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filing of any requisite notices and/or application(s) to the
Principal Trading Market for the issuance and sale of the Common Stock and the
listing of the Common Stock for trading or quotation, as the case may be,
thereon in the time and manner required thereby, (v) the filings required in
accordance with Section 4.6 of this Agreement and (vi) those that have been made
or obtained prior to the date of this Agreement (collectively, the “Required
Approvals”).
 
                                (f)           Issuance of the Shares. The Shares
have been duly authorized and, when issued and paid for in accordance with the
terms of the Transaction Documents, will be duly and validly issued, fully paid
and nonassessable and free and clear of all Liens, other than restrictions on
transfer provided for in the Transaction Documents or imposed by applicable
securities laws, and shall not be subject to preemptive or similar
rights.   Assuming the accuracy of the representations and warranties of the
Purchasers in this Agreement, the Shares will be issued in compliance with all
applicable federal and state securities laws.
 
                                (g)           Capitalization. The number of
shares and type of all authorized, issued and outstanding capital stock, options
and other securities of the Company (whether or not presently convertible into
or exercisable or exchangeable for shares of capital stock of the Company) has
been set forth in the SEC Reports and has changed since the date of such SEC
Reports only due to stock grants or other equity awards or stock option and
warrant exercises that do not, individually or in the aggregate, have a material
effect on the issued and outstanding capital stock, options and other
securities. All of the outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and non-assessable, have been issued
in compliance in all material respects with all applicable federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase any capital
stock of the Company. Except as specified in the SEC Reports: (i) no shares of
the Company’s outstanding capital stock are subject to preemptive rights or any
other similar rights; (ii) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares of capital stock of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company,
other than those issued or granted pursuant to Material Contracts or equity or
incentive plans or arrangements described in the SEC Reports; (iii) there are no
material outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness
of the Company or by which the Company is bound; (iv) except as identified in
Schedule 3.1(y) hereto and the Registration Rights Agreement, there are no
agreements or arrangements under which the Company is obligated to register the
sale of any of their securities under the Securities Act; (v) there are no
outstanding securities or instruments of the Company or which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company; (vi) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Shares; (vii) the Company does not have any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement;
and (viii) the Company has no liabilities or obligations required to be
disclosed in the SEC Reports but not so disclosed in the SEC Reports, which,
individually or in the aggregate, do not or would not have or reasonably be
expected to have a Material Adverse Effect.
 
                                (h)           SEC Reports; Disclosure Materials.
The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it under the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the twelve months preceding the date
hereof (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports” and together with this Agreement and the Schedules to this
Agreement, the “Disclosure Materials”), on a timely basis or has received a
valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. As of their respective filing dates,
or, to the extent corrected by a subsequent restatement or subsequent filings,
the time of filing of such

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subsequent restatement or subsequent filings, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder, and,
except as corrected by subsequent filings, none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
 
                                (i)            Financial Statements. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing (or, to the extent corrected by a subsequent restatement, at the time of
the filing of such restatement). Such financial statements have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved,
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
balance sheet of the Company and its consolidated subsidiaries taken as a whole
as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments, which would not be material, either individually or
in the aggregate.
 
                                (j)            Tax Matters. The Company (i) has
prepared and filed all foreign, federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith, with
respect to which adequate reserves have been set aside on the books of the
Company and (iii) has set aside on its books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply, except, in the case of clauses (i) and
(ii) above, where the failure to so pay or file any such tax, assessment, charge
or return would not have or reasonably be expected to have a Material Adverse
Effect.
 
                                (k)           Material Changes. Since the date
of the latest audited financial statements included within the SEC Reports,
except as disclosed in subsequent SEC Reports filed prior to the date hereof,
(i) there have been no events, occurrences or developments that have had or
would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, (ii) the Company has not incurred any material
liabilities (contingent or otherwise) other than (A) trade payables, accrued
expenses and other liabilities incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not altered
materially its method of accounting or the manner in which it keeps its
accounting books and records, (iv) other than dividends disclosed on the
Company’s press releases available on its website, the Company has not declared
or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock (other than in connection with repurchases of
unvested stock issued to employees of the Company), (v) the Company has not
issued any equity securities to any officer, director or Affiliate, except
Common Stock (A) issued in the ordinary course as dividends on outstanding
preferred stock or (B) issued pursuant to existing Company stock option or stock
purchase plans or executive and director corporate arrangements disclosed in the
SEC Reports or (C) issued pursuant to other existing agreements disclosed in the
SEC Reports and (vi) there has not been any material change or amendment to, or
any waiver of any material right by the Company under, any Material Contract
under which the Company or any of its Subsidiaries is bound or subject. Except
for the transactions contemplated by this Agreement, no event, liability or
development has occurred or exists with respect to the Company or its
Subsidiaries or their respective business, properties, operations or financial
condition that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made that has not been
publicly disclosed at least one Trading Day prior to the date that this
representation is made.

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                                (l)            Environmental Matters. Neither
the Company nor any of its Subsidiaries (i) is in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”), (ii) owns or operates any real property
contaminated with any substance that is in violation of any Environmental Laws,
(iii) is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or (iv) is subject to any claim relating to any
Environmental Laws; which violation, contamination, liability or claim has had
or would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; and, to the Company’s Knowledge, there is no pending or
threatened investigation that might lead to such a claim.
 
                                (m)           Litigation. There is no Action
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii) except
as disclosed in the SEC Reports, is reasonably likely to have a Material Adverse
Effect, individually or in the aggregate, if there were an unfavorable decision.
Neither the Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty.  There has not been, and to the Company’s knowledge there is not
pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any of its
Subsidiaries under the Exchange Act or the Securities Act.
 
                                (n)           Employment Matters. No material
labor dispute exists or, to the Company’s Knowledge, is imminent with respect to
any of the employees of the Company which would have or reasonably be expected
to have a Material Adverse Effect. None of the Company’s employees is a member
of a union that relates to such employee’s relationship with the Company, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and each Subsidiary believes that its
relationship with its employees is good. To the Company’s Knowledge, no
executive officer is, or is now expected to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or
agreement or any restrictive covenant in favor of a third party, and to the
Company’s Knowledge, the continued employment of each such executive officer
does not subject the Company or any Subsidiary to any liability with respect to
any of the foregoing matters. The Company is in compliance with all U.S.
federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance would not have or reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
 
                                (o)           Compliance. Neither the Company
nor any of its Subsidiaries (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any of its Subsidiaries
under), nor has the Company or any of its Subsidiaries received written notice
of a claim that it is in default under or that it is in violation of, any
Material Contract (whether or not such default or violation has been waived),
(ii) is in violation of any order of which the Company has been made aware in
writing of any court, arbitrator or governmental body having jurisdiction over
the Company or its properties or assets, or (iii) is in violation of, or in
receipt of written notice that it is in violation of, any statute, rule or
regulation of any governmental authority applicable to the Company, or which
would have the effect of revoking or limiting FDIC deposit insurance, except in
each case as would not have or reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
 
                                (p)           Regulatory Permits. The Company
and each of its Subsidiaries possess or have applied for all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as currently conducted and as described in the SEC Reports, except where the
failure to possess such permits, individually or in the aggregate, has not and
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect (“Material Permits”), and (i) neither the Company nor
any of its Subsidiaries has received

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any notice in writing of proceedings relating to the revocation or material
adverse modification of any such Material Permits and (ii) the Company is
unaware of any facts or circumstances that would give rise to the revocation or
material adverse modification of any Material Permits.
 
                                (q)           Title to Assets. The Company and
its Subsidiaries have good and marketable title to all real property and
tangible personal property owned by them which is material to the business of
the Company and its Subsidiaries, taken as a whole, in each case free and clear
of all Liens except such as do not materially affect the value of such property
or do not interfere with the use made and proposed to be made of such property
by the Company and any of its Subsidiaries. Any real property and facilities
held under lease by the Company and any of its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.
 
                                (r)            Patents and Trademarks. The
Company and its Subsidiaries own, possess, license or have other rights to use
all foreign and domestic patents, patent applications, trade and service marks,
trade and service mark registrations, trade names, copyrights, inventions, trade
secrets, technology, Internet domain names, know-how and other intellectual
property (collectively, the “Intellectual Property”) necessary for the conduct
of their respective businesses as now conducted or as proposed to be conducted
in the SEC Reports except where the failure to own, possess, license or have
such rights would not have or reasonably be expected to have a Material Adverse
Effect. Except as set forth in the SEC Reports and except where such violations
or infringements would not have or reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (a) there are no
rights of third parties to any such Intellectual Property; (b) there is no
infringement by third parties of any such Intellectual Property; (c) there is no
pending or threatened action, suit, proceeding or claim by others challenging
the Company’s and its Subsidiaries’ rights in or to any such Intellectual
Property; (d) there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property; and (e) there is no pending or threatened action, suit, proceeding or
claim by others that the Company and/or any Subsidiary infringes or otherwise
violates any patent, trademark, copyright, trade secret or other proprietary
rights of others.
 
                                (s)           Insurance. The Company and each of
the Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as the Company believes to be
prudent and customary in the businesses and locations in which the Company and
the Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries
has received any notice of cancellation of any such insurance, nor, to the
Company’s Knowledge, will it or any Subsidiary be unable to renew their
respective existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
 
                                (t)            Transactions With Affiliates and
Employees. Except as set forth in the SEC Reports and other than the grant of
stock options or other equity awards that are not individually or in the
aggregate material in amount, none of the officers or directors of the Company
and, to the Company’s Knowledge, none of the employees of the Company, is
presently a party to any transaction with the Company or to a presently
contemplated transaction (other than for services as employees, officers and
directors) that would be required to be disclosed pursuant to Item 404 of
Regulation S-K promulgated under the Securities Act.
 
                                (u)           Internal Accounting Controls. The
Company maintains internal control over financial reporting (as such term is
defined in Rule 13a-15(f) under the Exchange Act) designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles, including that (i) transactions are executed in
accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any differences.

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                                (v)           Sarbanes-Oxley; Disclosure
Controls. The Company is in compliance in all material respects with all of the
provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it. The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) and 15d-15(e) under the Exchange Act), and such disclosure
controls and procedures are effective.
 
                                (w)          Certain Fees. No person or entity
will have, as a result of the transactions contemplated by this Agreement, any
valid right, interest or claim against or upon the Company or a Purchaser for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company, other than the
Placement Agent with respect to the offer and sale of the Shares (which
placement agent fees are being paid by the Company). The Company shall
indemnify, pay, and hold each Purchaser harmless against, any liability, loss or
expense (including, without limitation, attorneys’ fees and out-of-pocket
expenses) arising in connection with any such right, interest or claim.
 
                                (x)           Private Placement. Assuming the
accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2 of this Agreement and the accuracy of the information disclosed in
the Accredited Investor Questionnaires, no registration under the Securities Act
is required for the offer and sale of the Shares by the Company to the
Purchasers under the Transaction Documents.  The issuance and sale of the Shares
hereunder does not contravene the rules and regulations of the Principal Trading
Market.
 
                                (y)           Registration Rights. Other than as
set forth in the SEC Reports and other than each of the Purchasers or as set
forth in Schedule 3.1(y) hereto, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company other than those securities which are currently registered on an
effective registration statement on file with the Commission.
 
                                (z)           No Integrated Offering. Assuming
the accuracy of the Purchasers’ representations and warranties set forth in
Section 3.2, none of the Company, its Subsidiaries nor, to the
Company’s Knowledge, any of its Affiliates or any Person acting on its behalf
has, directly or indirectly, at any time within the past six months, made any
offers or sales of any Company security or solicited any offers to buy any
security under circumstances that would (i) eliminate the availability of the
exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale by the Company of the Shares as contemplated
hereby or (ii) cause the offering of the Shares pursuant to the Transaction
Documents to be integrated with prior offerings by the Company for purposes of
any applicable law, regulation or stockholder approval provisions, including,
without limitation, under the rules and regulations of any Trading Market on
which any of the securities of the Company are listed or designated.
 
                                (aa)          Listing and Maintenance
Requirements. The Company’s Common Stock is registered pursuant to Section 12(b)
or 12(g) of the Exchange Act, and the Company has taken no action designed to
terminate the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received written notice from any Trading Market on which the
Common Stock is listed or quoted to the effect that the Company is not in
compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason  to believe that it will not in the
foreseeable future continue to be, in compliance in all material respects with
the listing and maintenance requirements for continued trading of the Common
Stock on the Principal Trading Market.
 
                                (bb)         Investment Company. Neither the
Company nor any of its Subsidiaries is required to be registered as, and is not
an Affiliate of, and immediately following the Closing will not be required to
register as, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
 
                                (cc)         Questionable Payments. Neither the
Company nor any of its Subsidiaries, nor any directors, officers, nor to the
Company’s Knowledge, employees, agents or other Persons acting at the direction
of or on behalf of the Company or any of its Subsidiaries has, in the course of
its actions for, or on behalf of, the Company: (a) directly or indirectly, used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to foreign or domestic political activity; (b) made
any direct or indirect unlawful payments to any foreign or domestic governmental
officials or employees or to

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any foreign or domestic political parties or campaigns from corporate funds;
(c) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or (d) made any other unlawful bribe, rebate, payoff, influence
payment, kickback or other material unlawful payment to any foreign or domestic
government official or employee.
 
                                (dd)         Application of Takeover
Protections; Rights Agreements. Except as disclosed in the SEC Reports, the
Company has not adopted any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change in
control of the Company.  The Company and its board of directors have taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation or other organizational documents or the laws of
the jurisdiction of its incorporation or otherwise which is or could become
applicable to any Purchaser solely as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company’s issuance of the
Shares and any Purchaser’s ownership of the Shares.
 
                                (ee)          Disclosure. The Company confirms
that neither it nor any of its officers or directors nor any other Person acting
on its or their behalf has provided, and it has not authorized the Placement
Agent to provide, any Purchaser or its respective agents or counsel with any
information that it believes constitutes or could reasonably be expected to
constitute material, non-public information except insofar as the existence,
provisions and terms of the Transaction Documents and the proposed transactions
hereunder may constitute such information, all of which will be disclosed by the
Company in the Press Release(s) as contemplated by Section 4.6 hereof. The
Company understands and confirms that each of the Purchasers will rely on the
foregoing representations in effecting transactions in securities of the
Company. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed, except for
the announcement of this Agreement and related transactions and as may be
disclosed on the Form 8-K filed pursuant to Section 4.6.
 
                                (ff)           Off Balance Sheet Arrangements.
There is no transaction, arrangement, or other relationship between the Company
(or any Subsidiary) and an unconsolidated or other off balance sheet entity that
is required to be disclosed by the Company in its Exchange Act filings and is
not so disclosed and would have or reasonably be expected to have a Material
Adverse Effect.
 
                                (gg)         Acknowledgment Regarding
Purchasers’ Purchase of Shares.  The Company acknowledges and agrees that each
of the Purchasers is acting solely in the capacity of an arm’s length purchaser
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby.  The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions
contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Shares. 
 
                                (hh)         Regulation M Compliance.  In the
last thirty days, the Company has not, and to the Company’s Knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Shares,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the securities of the Company or (iii) paid or agreed to pay to any
Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii) compensation
paid to the Placement Agent in connection with the placement of the Shares.
 
                                (ii)           OFAC. Neither the Company nor any
Subsidiary nor, to the Company’s Knowledge, any director, officer, agent,
employee, Affiliate or Person acting on behalf of the Company or any Subsidiary
is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S.

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Treasury Department (“OFAC”); and the Company will not knowingly directly or
indirectly use the proceeds of the sale of the Shares, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture partner
or other Person or entity, towards any sales or operations in Cuba, Iran, Syria,
Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of
financing the activities of any Person currently subject to any U.S. sanctions
administered by OFAC.
 
                                (jj)           Money Laundering Laws. The
operations of each of the Company and any Subsidiary are and have been conducted
at all times in compliance with the money laundering statutes of applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
applicable governmental agency (collectively, the “Money Laundering Laws”) and
to the Company’s Knowledge, no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Company and/or any Subsidiary with respect to the Money Laundering Laws is
pending or threatened.
 
                                (kk)          No Additional Agreements. The
Company does not have any agreement or understanding with any Purchaser with
respect to the transactions contemplated by the Transaction Documents other than
as specified in the Transaction Documents.
 
                                (ll)           Reports, Registrations and
Statements.  Since December 31, 2007, the Company and each Subsidiary have filed
all material reports, registrations and statements, together with any required
amendments thereto, that it was required to file with the Board of Governors of
the Federal Reserve System (the “Federal Reserve”), the Office of the
Comptroller of the Currency (the “OCC”), and any other applicable federal or
state securities or banking authorities, except where the failure to file any
such report, registration or statement would not have or reasonably be expected
to have a Material Adverse Effect. All such reports and statements filed with
any such regulatory body or authority are collectively referred to herein as the
“Company Reports.” As of their respective dates, the Company Reports complied as
to form in all material respects with all the rules and regulations promulgated
by the Federal Reserve, the OCC and any other applicable foreign, federal or
state securities or banking authorities, as the case may be.
 
                                (mm)       Adequate Capitalization.  As of
December 31, 2007, the Company’s Subsidiary insured depository institutions meet
or exceed the standards necessary to be considered “adequately capitalized”
under the Federal Deposit Insurance Company’s regulatory framework for prompt
corrective action.
 
 
                                (nn)         Agreements with Regulatory
Agencies; Compliance with Certain Banking Regulations.  Neither the Company nor
any Subsidiary is subject to any cease-and-desist or other similar order or
enforcement action issued by, or is a party to any written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any capital directive by, or
since December 31, 2006, has adopted any board resolutions at the request of,
any governmental entity that currently restricts in any material respect the
conduct of its business or that in any material manner relates to its capital
adequacy, its liquidity and funding policies and practices, its ability to pay
dividends, its credit, risk management or compliance policies, its internal
controls, its management or its operations or business (each item in this
sentence, a “Regulatory Agreement”), nor has the Company or any Subsidiary been
advised since December 31, 2006 by any governmental entity that it is
considering issuing, initiating, ordering, or requesting any such Regulatory
Agreement.
 
The Company has no knowledge of any facts and circumstances, and has no reason
to believe that any facts or circumstances exist, that would cause any of its
Subsidiary banking institutions: (i) to be deemed not to be in satisfactory
compliance with the Community Reinvestment Act and the regulations promulgated
thereunder or to be assigned a CRA rating by federal or state banking regulators
of lower than “satisfactory”; (ii) to be deemed to be operating in violation, in
any material respect, of the Bank Secrecy Act, the Patriot Act, any order issued
with respect to anti-money laundering by the U.S. Department of the Treasury’s
Office of Foreign Assets Control, or any other anti-money laundering statute,
rule or regulation; or (iii) to be deemed not to be in satisfactory compliance,
in any material respect, with all applicable privacy

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of customer information requirements contained in any federal and state privacy
laws and regulations as well as the provisions of all information security
programs adopted by the Subsidiaries.
 
Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, each of the Company and each Subsidiary
has properly administered all accounts for which it acts as a fiduciary,
including accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in accordance with
the terms of the governing documents, applicable federal and state law and
regulation and common law.  None of the Company, any Subsidiary or any director,
officer or employee of the Company or any Subsidiary has committed any breach of
trust or fiduciary duty with respect to any such fiduciary account that would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and, except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the accountings for
each such fiduciary account are true and correct and accurately reflect the
assets of such fiduciary account.
 
 
                                (oo)         No General Solicitation or General
Advertising.  Neither the Company nor any person acting on its behalf has
engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in
connection with any offer or sale of the Shares.
 
                                (pp)         Mortgage Banking Business.  Except
as has not had and would not reasonably be expected to have a Material Adverse
Effect:
 
                                (i)           The Company and each of its
Subsidiaries has complied with, and all documentation in connection with the
origination, processing, underwriting and credit approval of any mortgage loan
originated, purchased or serviced by the Company or any of its Subsidiaries
satisfied, (A) all applicable federal, state and local laws, rules and
regulations with respect to the origination, insuring, purchase, sale, pooling,
servicing, subservicing, or filing of claims in connection with mortgage loans,
including all laws relating to real estate settlement procedures, consumer
credit protection, truth in lending laws, usury limitations, fair housing,
transfers of servicing, collection practices, equal credit opportunity and
adjustable rate mortgages, (B) the responsibilities and obligations relating to
mortgage loans set forth in any agreement between the Company or any of its
Subsidiaries and any Agency, Loan Investor or Insurer, (C) the applicable rules,
regulations, guidelines, handbooks and other requirements of any Agency, Loan
Investor or Insurer and (D) the terms and provisions of any mortgage or other
collateral documents and other loan documents with respect to each mortgage
loan; and
 
                                (ii)           No Agency, Loan Investor or
Insurer has (A) claimed in writing that the Company or any of its Subsidiaries
has violated or has not complied with the applicable underwriting standards with
respect to mortgage loans sold by the Company or any of its Subsidiaries to a
Loan Investor or Agency, or with respect to any sale of mortgage servicing
rights to a Loan Investor, (B) imposed in writing restrictions on the activities
(including commitment authority) of the Company or any of its Subsidiaries or
(C) indicated in writing to the Company or any of its Subsidiaries that it has
terminated or intends to terminate its relationship with the Company or any of
its Subsidiaries for poor performance, poor loan quality or concern with respect
to the Company’s or any of its Subsidiaries’ compliance with laws,
 
    For purposes of this Section 3(pp):  (A) “Agency” means the Federal Housing
Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home
Administration (now known as Rural Housing and Community Development Services),
the Federal National Mortgage Association, the Federal National Mortgage
Association, the United States Department of Veterans’ Affairs, the Rural
Housing Service of the U.S. Department of Agriculture or any other federal or
state agency with authority to (i) determine any investment, origination,
lending or servicing requirements with regard to mortgage loans originated,
purchased or serviced by the Company or any of its Subsidiaries or (ii)
originate, purchase, or service mortgage loans, or otherwise promote mortgage
lending, including state and local housing finance authorities; (B) “Loan
Investor” means any person (including an Agency) having a

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beneficial interest in any mortgage loan originated, purchased or serviced by
the Company or any of its Subsidiaries or a security backed by or representing
an interest in any such mortgage loan; and (C) “Insurer” means a person who
insures or guarantees for the benefit of the mortgagee all or any portion of the
risk of loss upon borrower default on any of the mortgage loans originated,
purchased or serviced by the Company or any of its Subsidiaries, including the
Federal Housing Administration, the United States Department of Veterans’
Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any
private mortgage insurer, and providers of hazard, title or other insurance with
respect to such mortgage loans or the related collateral.
 
                                (qq)         ERISA.  The Company is in
compliance in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (herein called “ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any “pension plan”; or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “Pension Plan” for which the Company would
have liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
 
                                (rr)           Shell Company Status. The Company
is not, and has never been, an issuer identified in Rule 144(i)(1).
 
 
                                (ss)          Registration Eligibility. The
Company is eligible to register the resale of the Shares by the Purchasers using
Form S-3 promulgated under the Securities Act
 
 
                3.2           Representations and Warranties of the Purchasers.
Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants as of the date hereof and as of the Closing Date to the Company as
follows:
 
                                (a)           Organization; Authority. If such
Purchaser is an entity, it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the applicable Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. If such
purchaser is an entity, the execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Purchaser. If such Purchaser is an entity, each
of this Agreement and the Registration Rights Agreement has been duly executed
by such Purchaser, and when delivered by such Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
 
                                (b)           No Conflicts. The execution,
delivery and performance by such Purchaser of this Agreement and the
Registration Rights Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Purchaser (if such Purchaser is an
entity), (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree

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(including federal and state securities laws) applicable to such Purchaser,
except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.
 
                                (c)           Investment Intent. Such Purchaser
understands that the Shares are “restricted securities” and have not been
registered under the Securities Act or any applicable state securities law and
is acquiring the Shares as principal for its own account and not with a view to,
or for distributing or reselling such Shares or any part thereof in violation of
the Securities Act or any applicable state securities laws, provided, however,
that by making the representations herein, such Purchaser does not agree to hold
any of the Shares for any minimum period of time and reserves the right, subject
to the provisions of this Agreement and the Registration Rights Agreement, at
all times to sell or otherwise dispose of all or any part of such Shares
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws. Such Purchaser is acquiring the Shares
hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Shares
(or any securities which are derivatives thereof) to or through any person or
entity.
 
                                (d)           Purchaser Status. At the time such
Purchaser was offered the Shares, it was, and at the date hereof it is, an
“accredited investor” as defined in Rule 501(a) under the Securities Act.
 
                                (e)           General Solicitation. Such
Purchaser is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general advertisement.
 
                                (f)           Experience of Such Purchaser. Such
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Shares, and has so evaluated the merits and risks of such investment.
Such Purchaser is able to bear the economic risk of an investment in the Shares
and, at the present time, is able to afford a complete loss of such investment.
 
                                (g)           Access to Information. Such
Purchaser acknowledges that it has had the opportunity to review the Disclosure
Materials and has been afforded (i) the opportunity to ask such questions as it
has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Shares and
the merits and risks of investing in the Shares; (ii) access to information
about the Company and the Subsidiaries and their respective financial condition,
results of operations, business, properties, management and prospects sufficient
to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed decision with respect to its acquisition of the
Shares.
 
                                (h)           Certain Trading Activities. Other
than with respect to the transactions contemplated herein, since the time that
such Purchaser was first contacted by the Company, the Placement Agent or any
other Person regarding the transactions contemplated hereby, neither the
Purchaser nor any Affiliate of such Purchaser which (x) had knowledge of the
transactions contemplated hereby, (y) has or shares discretion relating to such
Purchaser’s investments or trading or information concerning such Purchaser’s
investments, including in respect of the Shares, and (z) is subject to such
Purchaser’s review or input concerning such Affiliate’s investments or trading
(collectively, “Trading Affiliates”) has directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Purchaser
or Trading Affiliate,

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effected or agreed to effect any purchases or sales of the securities of the
Company (including, without limitation, any Short Sales involving the Company’s
securities). Notwithstanding the foregoing, in the case of a Purchaser and/or
Trading Affiliate that is, individually or collectively, a multi-managed
investment bank or vehicle whereby separate portfolio managers manage separate
portions of such Purchaser’s or Trading Affiliate’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s or Trading
Affiliate’s assets, the representation set forth above shall apply only with
respect to the portion of assets managed by the portfolio manager that have
knowledge about the financing transaction contemplated by this Agreement. Other
than to other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
 
                                (i)           Brokers and Finders. Other than
the Placement Agent with respect to the Company, no Person will have, as a
result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company or any Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Purchaser.
 
                                (j)           Independent Investment Decision.
Such Purchaser has independently evaluated the merits of its decision to
purchase Shares pursuant to the Transaction Documents, and such Purchaser
confirms that it has not relied on the advice of any other Purchaser’s business
and/or legal counsel in making such decision. Such Purchaser understands that
nothing in this Agreement or any other materials presented by or on behalf of
the Company to the Purchaser in connection with the purchase of the Shares
constitutes legal, tax or investment advice. Such Purchaser has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Shares. Such
Purchaser understands that the Placement Agent has acted solely as the agent of
the Company in this placement of the Shares and such Purchaser has not relied on
the business or legal advice of the Placement Agent or any of its agents,
counsel or Affiliates in making its investment decision hereunder, and confirms
that none of such Persons has made any representations or warranties to such
Purchaser in connection with the transactions contemplated by the Transaction
Documents.
 
                               (k)           Reliance on Exemptions. Such
Purchaser understands that the Shares being offered and sold to it in reliance
on specific exemptions from the registration requirements of U.S. federal and
state securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgements and understandings of such Purchaser
set forth herein in order to determine the availability of such exemptions and
the eligibility of such Purchaser to acquire the Shares.
 
                                (l)           No Governmental Review. Such
Purchaser understands that no U.S. federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Shares or the fairness or suitability of the investment in
the Shares nor have such authorities passed upon or endorsed the merits of the
offering of the Shares.
 
                                (m)          Regulation M. Such Purchaser is
aware that the anti-manipulation rules of Regulation M under the Exchange Act
may apply to sales of Common Stock and other activities with respect to the
Common Stock by the Purchasers.
 
                                (n)           Residency. Such Purchaser’s
residence (if an individual) or office in which its investment decision with
respect to the Shares was made (if an entity) are located at the address
immediately below such Purchaser’s name on its signature page hereto.
 
                               (o)           Beneficial Ownership.  The purchase
by such Purchaser of the Shares issuable to it at the Closing will not result in
such Purchaser (individually or together with any other Person with whom such
Purchaser has identified, or will have identified, itself as part of a “group”
in a public filing made with the Commission involving the Company’s securities)
acquiring, or obtaining the right to acquire, in excess of 19.999% of the
outstanding shares of Common Stock or the voting power of the Company on a post
transaction basis that assumes that such Closing shall have occurred.  Such
Purchaser does not presently intend to, alone or together with others, make a
public filing with the Commission to disclose that it has (or that it together
with such other Persons have) acquired, or obtained the right to acquire, as a
result of such

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Closing (when added to any other securities of the Company that it or they then
own or have the right to acquire), in excess of 19.999% of the outstanding
shares of Common Stock or the voting power of the Company on a post transaction
basis that assumes that each Closing shall have occurred
 
The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.
 
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
                4.1           Transfer Restrictions.
 
                                (a)           Compliance with Laws.
Notwithstanding any other provision of this Article IV, each Purchaser covenants
that the Shares may be disposed of only pursuant to an effective registration
statement under, and in compliance with the requirements of, the Securities Act,
or pursuant to an available exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act, and in compliance with any
applicable state, federal or foreign securities laws.  In connection with any
transfer of the Shares other than (i) pursuant to an effective registration
statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that the
transferor provides the Company with reasonable assurances (in the form of
seller and broker representation letters) that the securities may be sold
pursuant to such rule), the Company may require the transferor thereof to
provide to the Company and the Transfer Agent, at the transferor’s expense, an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company and the Transfer Agent, the form and substance of which opinion shall be
reasonably satisfactory to the Company and the Transfer Agent, to the effect
that such transfer does not require registration of such transferred Shares
under the Securities Act.  As a condition of transfer (other than pursuant to
clauses (i), (ii) or (iii) of the preceding sentence), any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights Agreement
with respect to such transferred Shares.
 
                                (b)           Legends. Certificates evidencing
the Shares shall bear any legend as required by the “blue sky” laws of any state
and a restrictive legend in substantially the following form, until such time as
they are not required under Section 4.1(c) or applicable law:
 
 
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED
THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM
OF SELLER AND BROKER REPRESENTATION LETTERS) THAT THE SECURITIES MAY BE SOLD
PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR
RESALES OF THESE SECURITIES.

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                                (c)           Removal of Legends. The
restrictive legend set forth in Section 4.1(b) above shall be removed and the
Company shall issue a certificate without such restrictive legend or any other
restrictive legend to the holder of the applicable Shares upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at the Depository Trust Company (“DTC”), if (i) such Shares are
registered for resale under the Securities Act (provided that, if the Purchaser
is selling pursuant to the effective registration statement registering the
Shares for resale, the Purchaser agrees to only sell such Shares during such
time that such registration statement is effective and such Purchaser is not
aware or has not been notified by the Company that such registration statement
has been withdrawn or suspended, and only as permitted by such registration
statement), (ii) such Shares are sold or transferred pursuant to Rule 144 (if
the transferor is not an Affiliate of the Company), or (iii) such Shares are
eligible for sale under Rule 144, without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to
such securities and without volume or manner-of-sale restrictions.  Following
the earlier of (i) the Effective Date or (ii) Rule 144 becoming available for
the resale of Shares, without the requirement for the Company to be in
compliance with the current public information required under Rule 144 as to the
Shares and without volume or manner-of-sale restrictions, the Company shall
cause Company Counsel to issue to the Transfer Agent the legal opinion referred
to in the Irrevocable Transfer Agent Instructions.  Any fees (with respect to
the Transfer Agent, Company Counsel or otherwise) associated with the issuance
of such opinion or the removal of such legend shall be borne by the
Company.  Following the Effective Date, or at such earlier time as a restrictive
legend is no longer required for certain Shares, the Company will no later than
three (3) Trading Days following the delivery by a Purchaser to the Company or
the Transfer Agent (with notice to the Company) of a legended certificate
representing such Shares (endorsed or with stock powers attached, signatures
guaranteed, and otherwise in form necessary to affect the reissuance and/or
transfer) and an opinion of counsel to the extent required by Section 4.1(a),
(such third Trading Day, the “Legend Removal Date”) deliver or cause to be
delivered to such Purchaser a certificate representing such Shares that is free
from all restrictive legends.  The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the restrictions
on transfer set forth in this Section 4.1(c).  Certificates for Shares free from
all restrictive legends may be transmitted by the Transfer Agent to the
Purchasers by crediting the account of the Purchaser’s prime broker with DTC as
directed by such Purchaser.
 
                                (d)           Irrevocable Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its Transfer
Agent, and any subsequent transfer agent in the form of Exhibit D attached
hereto (the “Irrevocable Transfer Agent Instructions”). The Company represents
and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 4.1(d) or instructions that are not
contradictory therewith will be given by the Company to its transfer agent in
connection with this Agreement, and that the Shares shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents and applicable
law. The Company acknowledges that a breach by it of its obligations under this
Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 4.1(d) will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this
Section 4.1(d), that a Purchaser shall be entitled, in addition to all other
available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.
 
                                (e)           Acknowledgement. Each Purchaser
hereunder acknowledges its primary responsibilities under the Securities Act and
accordingly will not sell or otherwise transfer the Shares or any interest
therein without complying with the requirements of the Securities Act. Except as
otherwise provided below, while the above-referenced registration statement
remains effective, each Purchaser hereunder may sell the Shares in accordance
with the plan of distribution contained in the registration statement and if it
does so it will comply therewith and with the related prospectus delivery
requirements unless an exemption therefrom is available.  Each Purchaser,
severally and not jointly with the other Purchasers, agrees that if it is
notified by the Company in writing at any time that the registration statement
registering the resale of the Shares is not effective or that the prospectus
included in such registration statement no longer complies with the requirements
of Section 10 of the Securities Act, the Purchaser will refrain from selling
such Shares until

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such time as the Purchaser is notified by the Company that such registration
statement is effective or such prospectus is compliant with Section 10 of the
Exchange Act, unless such Purchaser is able to, and does, sell such Shares
pursuant to an available exemption from the registration requirements of
Section 5 of the Securities Act. Both the Company and its Transfer Agent, and
their respective directors, officers, employees and agents, may rely on this
subsection (e) and each Purchaser hereunder will indemnify and hold harmless
each of such persons from any breaches or violations of this paragraph.
 
                                (f)           Buy-In. If the Company shall fail
for any reason or for no reason to issue to a Purchaser unlegended certificates
within three (3) Trading Days of receipt of all documents necessary for the
removal of the legend set forth above (the “Deadline Date”), then, in addition
to all other remedies available to such Purchaser, if on or after the Trading
Day immediately following such three (3) Trading Day period, such Purchaser
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the holder of shares of Common Stock that
such Purchaser anticipated receiving from the Company without any restrictive
legend (a “Buy-In”), then the Company shall, within three (3) Trading Days after
such Purchaser’s request and in such Purchaser’s sole discretion, either (i) pay
cash to the Purchaser in an amount equal to such Purchaser’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased (the “Buy-In Price”), at which point the Company’s obligation to
deliver such certificate (and to issue such shares of Common Stock) shall
terminate, or (ii) promptly honor its obligation to deliver to such Purchaser a
certificate or certificates representing such shares of Common Stock and pay
cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In
Price over the product of (a) such number of shares of Common Stock, times
(b) the Closing Bid Price on the Deadline Date.
 
                4.2           Acknowledgment of Dilution.  The Company
acknowledges that the issuance of the Shares may result in dilution of the
outstanding shares of Common Stock.  The Company further acknowledges that its
obligations under the Transaction Documents, including without limitation its
obligation to issue the Shares pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.
 
                4.3           Furnishing of Information. In order to enable the
Purchasers to sell the Shares under Rule 144 of the Securities Act, for a period
of one year from the Closing, the Company shall maintain the registration of the
Shares under Section 12(b) or 12(g) of the Exchange Act and to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act.  During such one year period, if the Company is
not required to file reports pursuant to such laws, it will prepare and furnish
to the Purchasers and make publicly available the information described in Rule
144(c)(2), if the provision of such information will allow resales of the Shares
pursuant to Rule 144.
 
                4.4           Form D and Blue Sky. The Company agrees to timely
file a Form D with respect to the Shares as required under Regulation D.  The
Company, on or before the Closing Date, shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for or
to qualify the Shares for sale to the Purchasers at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification). The Company
shall make all filings and reports relating to the offer and sale of the Shares
required under applicable securities or “Blue Sky” laws of the states of the
United States following the Closing Date.
 
                4.5           No Integration. The Company shall not, and shall
use its commercially reasonable efforts to ensure that no Affiliate of the
Company shall, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares to the Purchasers, or that will be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.

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                4.6           Securities Laws Disclosure; Publicity. By 9:00
a.m., New York City time, on the Trading Day immediately following the execution
of this Agreement, the Company shall issue one or more press releases (each, a
“Press Release”) reasonably acceptable to the Placement Agent disclosing all
material terms of the transactions contemplated hereby and any other material,
nonpublic information that the Company may have provided any Purchaser at any
time prior to the filing of the Press Release.  On or before 9:00 a.m., New York
City time, on the second Trading Day immediately following the execution of this
Agreement, the Company will file a Current Report on Form 8-K with the
Commission describing the terms of the Transaction Documents (and including as
exhibits to such Current Report on Form 8-K the material Transaction Documents
(including, without limitation, this Agreement and the Registration Rights
Agreement)). Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser or any Affiliate or investment adviser of any
Purchaser, or include the name of any Purchaser or any Affiliate or investment
adviser of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final Transaction Documents (including signature pages thereto) with the
Commission and (ii) to the extent such disclosure is required by law, at the
request of the Staff of the Commission or Trading Market regulations, in which
case the Company shall provide the Purchasers with prior written notice of such
disclosure permitted under this subclause (ii).  From and after the issuance of
the Press Release(s), no Purchaser shall be in possession of any material,
non-public information received from the Company, any Subsidiary or any of their
respective officers, directors or employees, that is not disclosed in the Press
Release(s). Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company as described in this
Section 4.6, such Purchaser will maintain the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and
terms of this transaction).
 
                4.7           Non-Public Information. Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents, and except with the express written consent of such
Purchaser and unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information, the Company
shall not, and shall cause each Subsidiary and each of their respective
officers, directors, employees and agents, not to, and each Purchaser shall not
directly solicit the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents to provide any Purchaser with any
material, non-public information regarding the Company or any of its
Subsidiaries from and after the filing of the Press Release(s).
 
                4.8           Indemnification.
 
                                (a)           Indemnification of Purchasers. In
addition to the indemnity provided in the Registration Rights Agreement, the
Company will indemnify and hold each Purchaser and its directors, officers,
stockholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of (i) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction
Documents or (ii) any action instituted against a Purchaser Party in any
capacity, or any of them or their respective affiliates, by any stockholder of
the Company who is not an affiliate of such Purchaser Party, with respect to any
of the transactions contemplated by this Agreement.  The Company will not be
liable to any Purchaser Party under this Agreement to the extent, but only to
the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or

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agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents; provided that such a claim for indemnification relating
to any breach of any of the representations or warranties made by the Company in
this Agreement is made within 18 months from the Closing.
 
                                (b)           Conduct of Indemnification
Proceedings. Promptly after receipt by any Person (the "Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however , that the failure of any Indemnified Person so to
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent that the Company is actually and materially and adversely
prejudiced by such failure to notify. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless:
(i) the Company and the Indemnified Person shall have mutually agreed to the
retention of such counsel; (ii) the Company shall have failed promptly to assume
the defense of such proceeding and to employ counsel reasonably satisfactory to
such Indemnified Person in such proceeding; or (iii) in the reasonable judgment
of counsel to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld,
delayed or conditioned, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.
 
                4.9           Listing of Common Stock. The Company will use its
reasonable best efforts to list the Shares for quotation on the Nasdaq Global
Market and maintain the listing of the Shares on the Nasdaq Global Market.
 
                4.10           Use of Proceeds. The Company intends to use the
net proceeds from the sale of the Shares hereunder for general corporate
purposes and to support strategic growth initiatives in its commercial and
wealth management business lines.
 
 
                4.11           Short Sales After The Date Hereof.  Such
Purchaser shall not, and shall cause its Trading Affiliates not to, engage,
directly or indirectly, in any transactions in the Company’s securities
(including, without limitation, any Short Sales involving the Company’s
securities) during the period from the date hereof until the earlier of such
time as (i) the transactions contemplated by this Agreement are first required
to be publicly announced as described in Section 4.6 or (ii) this Agreement is
terminated in full pursuant to Section 6.17.  Each Purchaser severally and not
jointly with the other Purchasers covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed by the
Company as described in Section 4.6, such Purchaser will maintain the
confidentiality of the existence and terms of this Agreement and the
transactions contemplated hereby.  Notwithstanding the foregoing, no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
Short Sales in the securities of the Company after the time that the
transactions contemplated by this Agreement are publicly disclosed by the
Company as described in Section 4.6.  Notwithstanding the foregoing, in the
event that a Purchaser is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser's assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement.  Each Purchaser understands and
acknowledges, severally and not jointly with any other Purchaser, that the
Commission currently takes the position that covering a short position
established prior to effectiveness of a resale registration statement with
shares included in such registration statement would be a violation of Section 5
of the Securities Act, as set

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forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance.
 
ARTICLE V.
CONDITIONS PRECEDENT TO CLOSING
 
5.1           Conditions Precedent to the Obligations of the Purchasers to
Purchase Shares. The obligation of each Purchaser to acquire Shares at the
Closing is subject to the fulfillment to such Purchaser’s satisfaction, on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by such Purchaser (as to itself only):
 
                                (a)           Representations and Warranties.
The representations and warranties of the Company contained herein shall be true
and correct in all material respects (except for those representations and
warranties which are qualified as to materiality, in which case such
representations and warranties shall be true and correct in all respects) as of
the date when made and as of the Closing Date, as though made on and as of such
date, except for such representations and warranties that speak as of a specific
date.
 
                                (b)           Performance. The Company shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by it at or prior to the Closing.
 
                                (c)           No Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
 
                                (d)           Consents. The Company shall have
obtained in a timely fashion any and all consents, permits, approvals,
registrations and waivers necessary for consummation of the purchase and sale of
the Shares at the Closing (including all Required Approvals), all of which shall
be and remain so long as necessary in full force and effect.
 
                                (e)           No Suspensions of Trading in
Common Stock; Listing . The Common Stock (i) shall be designated for quotation
or listed on the Principal Trading Market and (ii) shall not have been
suspended, as of the Closing Date, by the Commission or the Principal Trading
Market from trading on the Principal Trading Market nor shall suspension by the
Commission or the Principal Trading Market have been threatened, as of the
Closing Date, either (A) in writing by the Commission or the Principal Trading
Market or (B) by falling below the minimum listing maintenance requirements of
the Principal Trading Market.
 
                                (f)           Company Deliverables . The Company
shall have delivered the Company Deliverables in accordance with Section 2.2(a).
 
                                (g)           Compliance Certificate . The
Company shall have delivered to each Purchaser a certificate, dated as of the
Closing Date and signed by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the
conditions specified in Sections 5.1(a) and (b) in the form attached hereto as
Exhibit F.
 
                                (h)           Termination . This Agreement shall
not have been terminated as to such Purchaser in accordance with Section 6.17
herein.
 
 
5.2           Conditions Precedent to the Obligations of the Company to sell
Shares. The Company’s obligation to sell and issue the Shares at the Closing is
subject to the fulfillment to the satisfaction of the Company on or prior to the
Closing Date of the following conditions, any of which may be waived by the
Company:
 
                                (a)           Representations and Warranties.
The representations and warranties made by the Purchaser in Section 3.2 hereof
shall be true and correct in all material respects as of the date when made, and
as of the Closing Date as though made on and as of such date, except for
representations and warranties that speak as of a specific date.

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                                (b)           Performance. Such Purchaser shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by such Purchaser at or prior to the
Closing Date.
 
                                (c)           No Injunction. No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental authority
of competent jurisdiction that prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
 
                                (d)           Consents. The Company shall have
obtained in a timely fashion any and all consents, permits, approvals,
registrations and waivers necessary for consummation of the purchase and sale of
the Shares, all of which shall be and remain so long as necessary in full force
and effect.
 
                                (e)           Purchasers Deliverables. Such
Purchaser shall have delivered its Purchaser Deliverables in accordance with
Section 2.2(b).
 
                                (f)           Termination. This Agreement shall
not have been terminated as to such Purchaser in accordance with Section 6.17
herein.
 
ARTICLE VI.
MISCELLANEOUS
 
6.1           Fees and Expenses.  The Company and the Purchasers shall each pay
the fees and expenses of their respective advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the sale and
issuance of the Shares to the Purchasers.
 
 
6.2           Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.
 
 
6.3           Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section prior to 5:00 p.m., New York City
time, on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service with next day delivery specified, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:
 
 
 
If to the Company:  
Washington Trust Bancorp, Inc.

 
23 Broad Street

 
Westerly, Rhode Island 02891

 
Telephone No.: (401) 348-1200

 
Facsimile No.: (401) 348-1565

 
Attention:  Chief Executive Officer

   

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With a copy to:
Keefe, Bruyette and Woods

 
787 Seventh Avenue, Fourth Floor

 
New York, New York 10019

 
Telephone No.: (212) 887-7777

 
Facsimile No.: (212) 541-6644

 
Attention:  Patricia A. Murphy

 
 
If to a Purchaser:
To the address set forth under such Purchaser's name on the signature page
hereof;

 
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
                6.4           Amendments; Waivers; No Additional Consideration.
No provision of this Agreement may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and each of the
Purchasers holding or having the right to acquire at least two-thirds of the
Shares on a fully-diluted basis at the time of such amendment or, in the case of
a waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right. No consideration shall be offered or paid to any Purchaser to amend or
consent to a waiver or modification of any provision of any Transaction Document
unless the same consideration is also offered to all Purchasers who then hold
Shares.
 
                6.5           Construction. The headings herein are for
convenience only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied
against any party. This Agreement shall be construed as if drafted jointly by
the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement or any of the Transaction Documents.
 
                6.6           Successors and Assigns. The provisions of this
Agreement shall inure to the benefit of and be binding upon the parties and
their successors and permitted assigns. This Agreement, or any rights or
obligations hereunder, may not be assigned by the Company without the prior
written consent of the Purchasers. Any Purchaser may assign its rights hereunder
in whole or in part to any Person to whom such Purchaser assigns or transfers
any Shares in compliance with the Transaction Documents and applicable
law, provided such transferee shall agree in writing to be bound, with respect
to the transferred Shares, by the terms and conditions of this Agreement that
apply to the “Purchasers”.
 
                6.7           No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.
 
                6.8           Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in
the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or

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certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
                6.9           Survival. Subject to applicable statute of
limitations, the representations, warranties, agreements and covenants contained
herein shall survive the Closing and the delivery of the Shares, except that the
representations and warranties contained herein shall terminate upon the 18
month anniversary of the Closing Date.
 
                6.10           Execution. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
 
                6.11           Severability. If any provision of this Agreement
is held to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this
Agreement.
 
                6.12           Replacement of Shares.  If any certificate or
instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company and the Transfer Agent of such loss, theft or
destruction and the execution by the holder thereof of a customary lost
certificate affidavit of that fact and an agreement to indemnify and hold
harmless the Company and the Transfer Agent for any losses in connection
therewith or, if required by the Transfer Agent, a bond in such form and amount
as is required by the Transfer Agent. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Shares. If a replacement
certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or
instrument as a condition precedent to any issuance of a replacement.
 
                6.13           Remedies. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agree to
waive in any action for specific performance of any such obligation (other than
in connection with any action for a temporary restraining order) the defense
that a remedy at law would be adequate.
 
                6.14           Payment Set Aside. To the extent that the Company
makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such
payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Company, a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of any
such restoration the obligation or part thereof

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originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.
 
                6.15           Adjustments in Common Stock Numbers and Prices .
In the event of any stock split, subdivision, dividend or distribution payable
in shares of Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of Common
Stock), combination or other similar recapitalization or event occurring after
the date hereof and prior to the Closing, each reference in any Transaction
Document to a number of shares or a price per share shall be deemed to be
amended to appropriately account for such event.
 
                6.16           Independent Nature of Purchasers’ Obligations and
Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the obligations
of any other Purchaser under any Transaction Document.  The decision of each
Purchaser to purchase Shares pursuant to the Transaction Documents has been made
by such Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or any Subsidiary which may
have been made or given by any other Purchaser or by any agent or employee of
any other Purchaser, and no Purchaser and any of its agents or employees shall
have any liability to any other Purchaser (or any other Person) relating to or
arising from any such information, materials, statement or opinions.  Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment
hereunder and that no Purchaser will be acting as agent of such Purchaser in
connection with monitoring its investment in the Shares or enforcing its rights
under the Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser has been
represented by its own separate legal counsel in its review and negotiation of
the Transaction Documents.  The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company
and not because it was required or requested to do so by any Purchaser.
 
                6.17           Termination. This Agreement may be terminated and
the sale and purchase of the Shares abandoned at any time prior to the Closing
by either the Company or any Purchaser (with respect to itself only) upon
written notice to the other, if the Closing has not been consummated on or prior
to 5:00 p.m., New York City time, on the Outside Date; provided, however , that
the right to terminate this Agreement under this Section 6.17 shall not be
available to any Person whose failure to comply with its obligations under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such time.  Nothing in this Section 6.17 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the
event of a termination pursuant to this Section, the Company shall promptly
notify all non-terminating Purchasers and the Escrow Agent. Upon a termination
in accordance with this Section, the Company and the terminating Purchaser(s)
shall not have any further obligation or liability (including arising from such
termination) to the other, and no Purchaser will have any liability to any other
Purchaser under the Transaction Documents as a result therefrom.
 
                6.18           Waiver of Conflicts. Each party to this Agreement
acknowledges that Company Counsel, outside general counsel to the Company, and
Special Counsel has in the past performed and is or may now or in the future
represent one or more Purchasers or their affiliates or investment advisers (the
“Conflicted Purchaser Parties”) in matters unrelated to the transactions
contemplated by the Transaction Documents, including representation of such
Conflicted Purchaser Parties in matters of a similar nature to the transactions

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contemplated by the Transaction Documents. The applicable rules of professional
conduct require that Company Counsel and Special Counsel inform the parties
hereunder of this representation and obtain their consent. Company Counsel has
served as outside general counsel to the Company and has negotiated the terms of
the transactions contemplated by the Transaction Documents solely on behalf of
the Company. Special Counsel has served a special counsel to the company in
connection with delivering their opinion letter to the Purchasers.  The Company
and each Purchaser hereby (a) acknowledge that they have had an opportunity to
ask for and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledge that with respect to the transactions
contemplated by the Transaction Documents, Company Counsel and Special Counsel
has represented solely the Company, and not any Purchaser or any stockholder,
director or employee of the Company or any Purchaser; and (c) gives its informed
consent to Company Counsel’s and Special Counsel’s representation of the Company
in the transactions contemplated by the Transaction Documents.  The Company and
the Conflicted Purchaser Parties are willing to waive such conflict of interest
and to consent to Company Counsel’s and Special Counsel’s representation of the
Company and the Conflicted Purchaser Parties on the condition that in the event
that any litigation between the Company and any Conflicted Purchaser Party
ensues from the transactions contemplated hereby, Company Counsel and Special
Counsel shall be precluded from representing either party in such litigation
against the other.
 
                6.19           Rescission and Withdrawal Right. Notwithstanding
anything to the contrary contained in (and without limiting any similar
provisions of) the Transaction Documents, whenever any Purchaser exercises a
right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein
provided, then such Purchaser may rescind or withdraw, in its sole discretion
from time to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its future actions
and rights.

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IN WITNESS WHEREOF, the parties hereto have caused this Share Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
 
 
 
 

  WASHINGTON TRUST BANCORP, INC.    By:        Name:      Title:  

 
 
 
 
 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
[SIGNATURE PAGES FOR PURCHASERS FOLLOW]

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NAME OF PURCHASER:       By:       Name:     Title:             Aggregate
Purchase Price (Subscription Amount): $           Number of Shares to be
Acquired:           Tax ID No.:                 Address for Notice:            
      Telephone No.:            Facsimile No.:             E-mail Address:     
      Attention:    

 
 
 
 
 
 

 Delivery Instructions:  (if different than above)     c/o       Street:      
City/State/Zip:       Attention:       Telephone No.: