PURCHASE AGREEMENT

     THIS PURCHASE AGREEMENT (the “Agreement”) is made as of the 1st day of May,
2008, by and between The South Financial Group, Inc. (the “Company”), a
corporation organized under the laws of the State of South Carolina, with its
principal offices at 102 Main Street, Greenville, South Carolina 29601 and the
purchaser whose name and address is set forth on the signature page hereof (the
“Purchaser”).

     IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser agree as follows:

     SECTION 1. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the issuance and sale
of up to 250,000,000 shares (the “Shares”) consisting of (1) up to 55,562 shares
Mandatory Convertible Non-cumulative Preferred Stock Series 2008ND-V, no par
value and $1,000 liquidation preference per share (the “Series ND-V”), (2) up to
184,718 shares of Mandatory Convertible Non-cumulative Preferred Stock Series
2008ND-NV, no par value and $1,000 liquidation preference per share (the “Series
ND-NV”), (3) up to 2,248 shares of Mandatory Convertible Non-cumulative
Preferred Stock Series 2008D-V, no par value and $1,000 liquidation preference
per share (the “Series D-V”), and (4) up to 7,472 shares of Mandatory
Convertible Non-cumulative Preferred Stock Series 2008D-NV, no par value and
$1,000 liquidation preference per share (the “Series D-NV” and together with the
Series ND-V, the Series ND-NV and the Series D-V, the “Preferred Stock”) of the
Company. The Preferred Stock shall be convertible into shares (the “Conversion
Shares,” the Shares and the Conversion Shares together are referred to as the
“Securities”) of the Company’s $1.00 par value Common Stock (the “Common Stock”)
and are subject to the terms of conditions of the Certificates of Designations
attached to the Articles of Amendment to the Company’s Articles of
Incorporation, to be dated as of the date of the Closing or as of such earlier
date following the date of this Agreement as the Company may determine (each, a
“Certificate of Designation,” and, collectively, the “Certificates of
Designations”). The Certificates of Designations shall be substantially in the
forms set forth in Exhibit A hereto.

     SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing (as
defined in Section 3), the Company will, subject to the terms and conditions of
this Agreement, issue and sell to the Purchaser and the Purchaser will buy from
the Company, upon the terms and conditions hereinafter set forth, the number of
Shares (at the purchase price) shown below:

 
Number of Shares to Be 
Purchased  Price Per 
Share In 
Dollars   
Aggregate 
Price  Series ND-V:  $1,000  $  Series ND-NV:  $1,000  $  Series D-V:  $1,000 
$  Series D-NV:  $1,000  $ 

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     The Company is entering into this same form of purchase agreement with
certain other investors (the “Other Purchasers”) and expects to complete sales
of the shares of Preferred Stock to them. The Purchaser and the Other Purchasers
are hereinafter sometimes collectively referred to as the “Purchasers,” and this
Agreement and the purchase agreements executed by the Other Purchasers are
hereinafter sometimes collectively referred to as the “Agreements.” The term
“Placement Agent” shall mean Sandler O’Neill & Partners, L.P.

     SECTION 3. Delivery of the Shares at the Closing. The completion of the
purchase and sale of the Shares (the “Closing”) shall occur at the offices of
Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York 10104
as soon as practicable and as agreed to by the parties hereto, within five
business days following the execution of the Agreements, or on such later date
or at such different location as the parties shall agree in writing, but not
prior to the date that the conditions for Closing set forth below have been
satisfied or waived by the appropriate party (the “Closing Date”).

     At the Closing, the Purchaser shall deliver, in immediately available
funds, the full amount of the purchase price for the Shares being purchased
hereunder by wire transfer to an account designated by the Company and the
Company shall deliver to the Purchaser one or more stock certificates registered
in the name of the Purchaser, or in such nominee name(s) as designated by the
Purchaser in writing, representing the number of Shares set forth in Section 2
above and bearing the legend set forth in Section 5.6 referring to the fact that
the Shares were sold in reliance upon the exemption from registration under the
Securities Act of 1933, as amended (the “Securities Act”), provided by Section
4(2) thereof and Rule 506 thereunder. The Company will promptly substitute one
or more replacement certificates without the legend at such time as the
Securities are sold pursuant to the Registration Statement (as defined herein)
or the Securities may be sold pursuant to Rule 144 under the Securities Act
without any restriction as to the number of securities as of a particular date
that can be immediately sold. The name(s) in which the stock certificates are to
be registered are set forth in the Stock Certificate Questionnaire attached
hereto as part of Appendix I.

     The Company’s obligation to complete the purchase and sale of the Shares
and deliver such stock certificate(s) to the Purchaser at the Closing shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of same-day funds in the full amount of
the purchase price for the Shares being purchased hereunder; (b) completion of
the purchases and sales under the Agreements with the Other Purchasers; and (c)
the accuracy of the representations and warranties made by the Purchasers and
the fulfillment of those undertakings of the Purchasers to be fulfilled prior to
the Closing. The Purchaser’s obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be subject to
the following conditions: (a) each of the representations and warranties of the
Company made herein shall be accurate as of the Closing Date; (b) the delivery
to the Purchaser by counsel to the Company of a legal opinion in a form
reasonably satisfactory to counsel to the Placement Agent; (c) receipt by the
Purchaser of a certificate executed by the chief executive officer and the chief
financial or accounting officer of the Company, dated as of the Closing Date, to
the effect that the representations and warranties of the Company set forth
herein are true and correct as of the date of this Agreement and as of such
Closing Date and that the Company has complied with all the agreements and
satisfied all

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the conditions herein on its part to be performed or satisfied on or prior to
such Closing Date; (d) the fulfillment in all material respects of those
undertakings of the Company to be fulfilled prior to the Closing; and (e) the
Company having received a minimum of $250,000,000 in commitments to buy Shares
(including those Shares to be purchased by the Purchaser hereunder). The
Purchaser’s obligations hereunder are expressly not conditioned on the purchase
by any or all of the Other Purchasers of the Shares that they have agreed to
purchase from the Company, so long as the condition set forth in clause (e) of
the preceding sentence is satisfied.

     SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Purchaser as
follows:

     4.1 Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of South
Carolina and the Company is qualified to do business as a foreign corporation in
each jurisdiction in which qualification is required, except where failure to so
qualify would not have a Material Adverse Effect (as defined herein). The
Company’s subsidiaries (each a “Subsidiary” and collectively the “Subsidiaries”)
are listed on Exhibit B to this Agreement. Except as otherwise stated on Exhibit
B, each Subsidiary is a direct or indirect wholly owned subsidiary of the
Company. Each Subsidiary is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is qualified to
do business as a foreign corporation in each jurisdiction in which qualification
is required, except where failure to so qualify would not have a Material
Adverse Effect.

     4.2 Bank Holding Company Act. The Company is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the “BHC
Act”). The Company's banking subsidiary holds the requisite authority from the
South Carolina State Board of Financial Institutions to do business as a
state-chartered banking corporation under the laws of the State of South
Carolina. The Company and its banking subsidiary are in compliance in all
material respects with all laws administered by the Board of Governors of the
Federal Reserve System (the “Federal Reserve Board”), the Federal Deposit
Insurance Corporation (the “FDIC”) and any other federal or state bank
regulatory authorities (together with the Federal Reserve Board and the FDIC,
the “Bank Regulatory Authorities”) with jurisdiction over the Company and its
subsidiaries, except for failures to be so in compliance that would not,
individually or in the aggregate, have a Material Adverse Effect

     4.3 Reporting Company; Form S-3. The Company is a “well-known seasoned
issuer” (as defined in Rule 405 promulgated under the Securities Act) eligible
to register the Securities for resale by the Purchaser on a registration
statement on Form S-3 under the Securities Act. The Company is subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and has filed all reports required thereby. Provided none of
the Purchasers is deemed to be an underwriter with respect to any shares, to the
Company’s knowledge, there exist no facts or circumstances (including without
limitation any required approvals or waivers or any circumstances that may delay
or prevent the obtaining of accountant’s consents) that reasonably could be
expected to prohibit

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or materially delay the preparation and filing of a registration statement on
Form S-3 that will be available for the resale of the Shares by the Purchaser.

     4.4 Authorized Capital Stock. The Company had duly authorized and validly
issued outstanding capitalization as set forth under the heading
“Capitalization” in the confidential Private Placement Memorandum dated May 1,
2008 prepared by the Company (including all exhibits, supplements and amendments
thereto, the “Private Placement Memorandum”) as of the date set forth therein;
the issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform in all material respects to the description thereof
contained in the Private Placement Memorandum. Except for options, restricted
stock, restricted stock units and similar securities issued under the Company’s
existing shareholder-approved equity compensation plans, the Company does not
have outstanding any options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. Except for the conversion rights set forth on Schedule, 4.4, with
respect to each of the Subsidiaries (i) all the issued and outstanding shares of
such Subsidiary’s capital stock have been duly authorized and validly issued,
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and (ii) there are no outstanding options to purchase, or any preemptive rights
or other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
such Subsidiary’s capital stock or any such options, rights, convertible
securities or obligations.

     4.5 Issuance, Sale and Delivery of the Shares. The Shares have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be validly issued, fully paid and nonassessable, and will
conform in all material respects to the description thereof set forth in the
Private Placement Memorandum. The Company shall at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the Shares, the full number of shares of
Common Stock issuable upon the conversion of all the Shares from time to time
outstanding. No preemptive rights or other rights to subscribe for or purchase
any shares of preferred stock of the Company exist with respect to the issuance
and sale of the Shares by the Company pursuant to this Agreement. The shares of
Common Stock that may be issued upon conversion of the Shares have been duly
authorized, and upon such issuance will be validly issued, fully paid and
nonassessable and no preemptive rights or other rights to subscribe for or
purchase any shares of Common Stock of the Company exist with respect to the
issuance of such shares. No stockholder of the Company has any right (which has
not been waived or has not expired by reason of lapse of time following
notification of the Company’s intention to file the Registration Statement (as
hereinafter defined)) to require the Company to register the sale of any capital
stock owned by such stockholder under the Registration Statement. No further
approval or authority of the stockholders or the Board of

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Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein.

     4.6 Due Execution, Delivery and Performance of the Agreements. The Company
has full legal right, corporate power and authority to enter into this Agreement
and perform the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company. This Agreement constitutes a
legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of creditors’
rights and the application of equitable principles relating to the availability
of remedies, and subject to 12 U.S.C. §1818(b)(6)(D) (or any successor statute)
and similar bank regulatory powers and to the application of principles of
public policy, and except as rights to indemnity or contribution, including but
not limited to, indemnification provisions set forth in Section 7.3 of this
Agreement may be limited by federal or state securities law or the public policy
underlying such laws. At Closing, the Articles of Amendment to which the
Certificate of Designation will be attached will have been filed with the
Secretary of the State of South Carolina and will be in full force and effect
and enforceable against the Company in accordance with their terms.

     4.7 Accountants. Each of PricewaterhouseCoopers LLP and KPMG LLP, who have
expressed their opinions with respect to the consolidated financial statements
contained in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007, which is incorporated by reference into the Private Placement
Memorandum and incorporated by reference into the Registration Statement and the
Prospectus (as defined herein) that forms a part thereof, are registered
independent public accountants as required by the Securities Act and the rules
and regulations promulgated thereunder (the “1933 Act Rules and Regulations”)
and by the rules of the Public Accounting Oversight Board.

     4.8 No Defaults or Consents. The execution and performance of this
Agreement by the Company and the consummation of the transactions herein
contemplated will not (i) violate any provision of the amended and restated
articles of incorporation or bylaws of the Company or the organizational
documents of any Subsidiary and (ii) except as would not reasonably be expected
to result in a Material Adverse Effect, will not (x) result in the creation of
any lien, charge, security interest or encumbrance upon any assets of the
Company or any Subsidiary pursuant to the terms or provisions of, and will not
conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under, or give
rise to the accelerated due date of any payment due under, any agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument to which any of the Company or any Subsidiary is a party or by which
any of the Company or any Subsidiary or their respective properties may be bound
or affected or (y) violate any statute or any authorization, judgment, decree,
order, rule or regulation of any court or any regulatory body, administrative
agency or other governmental agency or body applicable to the Company or any
Subsidiary or any of their respective properties. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental agency or body is required for the execution and
delivery of this Agreement or the consummation of the transactions

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contemplated by this Agreement, except for compliance with the Blue Sky laws and
federal securities laws applicable to the offering of the Shares. For the
purposes of this Agreement the term “Material Adverse Effect” shall mean a
material adverse effect on the business, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole; provided that
a “Material Adverse Effect” shall not be deemed to include any effects to the
extent resulting from (i) changes in accounting principles generally accepted in
the United States or regulatory accounting requirements applicable to banks or
their holding companies generally, (ii) changes in laws, rules or regulations of
general applicability or interpretations thereof, (iii) changes in general
economic or market conditions in the United States or in the regions in which
the Company and/or its Subsidiaries operate or conduct business or general
changes in the industries in which the Company and/or its Subsidiaries
participate, (iv) the announcement or disclosure of the sale of the Securities
or other transactions contemplated by this Agreement or (v) effects caused by
any event, occurrence or condition resulting from or relating to the taking of
any action in accordance with this Agreement.

     4.9 Contracts. The material contracts to which the Company is a party that
are filed pursuant to the Securities Act or the Exchange Act with the Securities
and Exchange Commission (the “Commission”) by the Company, have been duly and
validly authorized, executed and delivered by the Company and constitute the
legal, valid and binding agreements of the Company, enforceable by and against
it in accordance with their respective terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to enforcement of creditors’ rights generally, and general
equitable principles relating to the availability of remedies, and subject to 12
U.S.C. §1818(b)(6)(D) (or any successor statute) and similar bank regulatory
powers and to the application of principles of public policy, and except as
rights to indemnity or contribution may be limited by federal or state
securities laws and the public policy underlying such laws.

     4.10 Deposit Accounts. The deposit accounts of the Company’s banking
subsidiary are insured up to the maximum amount provided by the FDIC and no
proceedings for the modification, termination or revocation of any such
insurance are pending or threatened.

     4.11 No Actions. Except as disclosed in the Private Placement Memorandum,
there are no legal or governmental actions, suits or proceedings pending or, to
the Company’s knowledge, threatened against the Company or any Subsidiary before
or by any court, regulatory body or administrative agency or any other
governmental agency or body, domestic, or foreign, which actions, suits or
proceedings, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect; and no labor disturbance by the employees of the
Company exists or, to the Company’s knowledge, is imminent, that would
reasonably be expected to have a Material Adverse Effect.

     4.12 No Restrictions on Subsidiaries. No Subsidiary of the Company is
currently prohibited, directly or indirectly, under any order of the Federal
Reserve Board (other than orders applicable to bank holding companies and their
subsidiaries generally), or any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the

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Company or from transferring any of such Subsidiary's properties or assets to
the Company or any other Subsidiary of the Company.

     4.13 Properties. The Company and each Subsidiary has valid title to all the
properties and assets described as owned by it in the consolidated financial
statements included in the Private Placement Memorandum, free and clear of all
liens, mortgages, pledges, or encumbrances of any kind except (i) those, if any,
reflected in such consolidated financial statements, or (ii) those that would
not reasonably be expected to have a Material Adverse Effect. The Company and
each Subsidiary holds its material leased properties under valid and binding
leases. The Company and any Subsidiary owns or leases all such material
properties as are necessary to its operations as now conducted.

     4.14 No Material Adverse Change. Except as disclosed in the Private
Placement Memorandum, since December 31, 2007, (i) the Company and its
Subsidiaries have conducted their respective businesses in all material respects
in the ordinary course, consistent with prior practice, (ii) except for publicly
disclosed ordinary dividends on the Common Stock, the Company has not made or
declared any distribution in cash or in kind to its stockholders, (iii) neither
the Company nor its Subsidiaries has incurred any liabilities or obligations of
any nature (absolute, accrued, contingent or otherwise) which are not fully
reflected or reserved against in the financial statements described in Section
4.31, except for liabilities that have arisen since such date in the ordinary
and usual course of business and consistent with past practice and that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect and (iv) no event or events have
occurred that, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect.

     4.15 Intellectual Property. The Company owns, is licensed or otherwise
possesses all rights to use, all patents, patent rights, inventions, know-how
(including trade secrets and other unpatented or unpatentable or confidential
information, systems, or procedures), trademarks, service marks, trade names,
copyrights and other intellectual property rights (collectively, the
“Intellectual Property”) necessary for the conduct of its business as described
in the Private Placement Memorandum, except as would not reasonably be expected
to have a Material Adverse Effect. No claims have been asserted against the
Company by any person with respect to the use of any such Intellectual Property
or challenging or questioning the validity or effectiveness of any such
Intellectual Property except as would not reasonably be expected to have a
Material Adverse Effect.

     4.16 Compliance. None of the Company nor its Subsidiaries has been advised,
nor do any of them have any reason to believe, that it is not conducting
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and regulations,
except where failure to be so in compliance would not have a Material Adverse
Effect.

     4.17 Business with Cuba. The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida), relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba.

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     4.18 Taxes. The Company and each Subsidiary has filed on a timely basis
(giving effect to extensions) all required federal, state and foreign income and
franchise tax returns and has paid or accrued all taxes shown as due thereon,
and none of the Company or any subsidiary has knowledge of a tax deficiency that
has been or might be asserted or threatened against it, in each case, that could
have a Material Adverse Effect. All tax liabilities accrued through the date
hereof have been adequately provided for on the books of the Company.

     4.19 Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income taxes) that are required to be paid in connection with the
sale and transfer of the Shares to be sold to the Purchaser hereunder will have
been, fully paid or provided for by the Company and all laws imposing such taxes
will have been fully complied with.

     4.20 Investment Company. The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof,
will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.

     4.21 Offering Materials. Except as provided in Section 8, each of the
Company, its directors and officers has not distributed and will not distribute
prior to the Closing Date any offering material, including any “free writing
prospectus” (as defined in Rule 405 promulgated under the Securities Act), in
connection with the offering and sale of the Shares other than the Private
Placement Memorandum or any amendment or supplement thereto. The Company has not
in the past nor will it hereafter take any action independent of the Placement
Agent to sell, offer for sale or solicit offers to buy any securities of the
Company that could result in the initial sale of the Shares not being exempt
from the registration requirements of Section 5 of the Securities Act.

     4.22 Insurance. The Company maintains insurance underwritten by insurers of
recognized financial responsibility, of the types and in the amounts that the
Company reasonably believes is adequate for its business, including, but not
limited to, insurance covering real and personal property owned or leased by the
Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, with such deductibles as are customary for
companies in the same or similar business, all of which insurance is in full
force and effect.

     4.23 Additional Information. The information contained in the following
documents, which the Placement Agent has furnished to the Purchaser (it being
understood that all documents publicly filed with or publicly furnished to the
Commission shall be deemed “furnished” by the Placement Agent for purposes of
this Section 4.23), or will furnish prior to the Closing, as of the dates
thereof, did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading:

     (a) the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2007;

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     (b) the Company’s Definitive Proxy Statement for Annual Meeting of
stockholders to be held May 6, 2008;

     (c) the Company’s Current Reports on Form 8-K filed with the Commission on
March 18, 2008 and April 22, 2008; and

     (d) the Private Placement Memorandum, including all addenda and exhibits
thereto, other than this Agreement and appendices and exhibits hereto.

     The documents incorporated by reference in the Private Placement Memorandum
or attached as exhibits thereto, at the time they became effective or were filed
with the Commission, as the case may be, complied in all material respects with
the requirements of the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder (the “1934 Act Rules and Regulations”
and, together with the 1933 Act Rule and Regulations, the “Rules and
Regulations”). In the past 12 calendar months, the Company has filed all
documents required to be filed by it prior to the date hereof with the
Commission pursuant to the reporting requirements of the Exchange Act.

     4.24 Price of Common Stock. The Company has not taken, and will not take,
directly or indirectly, any action designed to cause or result in, or that has
constituted or that would reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Common Stock to
facilitate the sale of the Preferred Stock.

     4.25 Use of Proceeds. The Company shall use the proceeds from the sale of
the Shares as described under “Use of Proceeds” in the Private Placement
Memorandum.

     4.26 Non-Public Information. Subject to Section 8, the Company hereby
represents that it has not disclosed to the Purchaser, whether in the Private
Placement Memorandum or otherwise, information that would constitute material
non-public information as of the Closing Date other than the existence of the
transaction contemplated hereby.

     4.27 Use of Purchaser Name. Except as otherwise required by applicable law
or regulation the Company shall not use the Purchaser’s name or the name of any
of its affiliates in any advertisement, announcement, press release or other
similar public communication unless it has received the prior written consent of
the Purchaser for the specific use contemplated which consent shall not be
unreasonably withheld.

     4.28 Related Party Transactions. No transaction has occurred between or
among the Company, on the one hand, and its affiliates, officers or directors on
the other hand, that is required to have been described under applicable
securities laws in its Exchange Act filings and is not so described in such
filings.

     4.29 Off-Balance Sheet Arrangements. There is no transaction, arrangement
or other relationship between the Company 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 or that otherwise would be
reasonably likely to have a Material Adverse Effect.

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     4.30 Governmental Permits, Etc. The Company and each Subsidiary has all
franchises, licenses, certificates and other authorizations from such federal,
state or local government or governmental agency, department or body that are
currently necessary for the operation of the business of the Company as
currently conducted, except where the failure to posses currently such
franchises, licenses, certificates and other authorizations is not reasonably
expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such permit that, if the subject of an unfavorable decision,
ruling or finding, could reasonably be expected to have a Material Adverse
Effect.

     4.31 Financial Statements. The consolidated financial statements of the
Company and the related notes and schedules thereto included in its Exchange Act
filings fairly present the financial position, results of operations,
stockholders’ equity and cash flows of the Company and its consolidated
Subsidiaries at the dates and for the periods specified therein. Such financial
statements and the related notes and schedules thereto have been prepared in
accordance with accounting principles generally accepted in the United States
consistently applied throughout the periods involved (except as otherwise noted
therein) and all adjustments necessary for a fair presentation of results for
such periods have been made; provided, however, that the unaudited financial
statements are subject to normal year-end audit adjustments (which are not
expected to be material) and do not contain all footnotes required under
generally accepted accounting principles.

     4.32 Listing Compliance. The Company is in compliance with the requirements
of the Nasdaq Global Select Market (“Nasdaq”) for continued quotation of the
Common Stock thereon. The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or the quotation of the Common Stock on Nasdaq, nor has the Company
received any notification that the Commission or Nasdaq contemplating
terminating such registration or quotation. The transactions contemplated by
this Agreement will not contravene the rules and regulations of Nasdaq. The
Company will comply with all requirements of Nasdaq with respect to the issuance
of the Shares and shall cause the Conversion Shares to be quoted on Nasdaq and
listed on any other exchange on which the Company’s Common Stock is listed on or
before the Closing Date.

     4.33 Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Exchange Act) that are designed
to ensure that material information relating to the Company is made known to the
Company’s principal executive officer and the Company’s principal financial
officer or persons performing similar functions. The Company is otherwise in
compliance in all material respects with all applicable provisions

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of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations
promulgated thereunder.

     4.34 Foreign Corrupt Practices. Neither the Company, nor any Subsidiary,
nor, to the knowledge of the Company, any director, officer, agent, employee or
other Person acting on behalf of the Company or any Subsidiary has, in the
course of its actions for, or on behalf of, the Company (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

     4.35 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 material liability; the Company has not incurred and
does not expect to incur any material 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.

     4.36 Environmental Matters. There has been no storage, disposal,
generation, manufacture, transportation, handling or treatment of toxic wastes,
hazardous wastes or hazardous substances by the Company or to its knowledge, any
Subsidiary (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or any Subsidiary in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or that would require
remedial action under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind into such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or any Subsidiary or with respect to which the Company or any
Subsidiary have knowledge; in each of the foregoing cases, except as would not
reasonably be expected to have a Material Adverse Effect. As used in this
Section 4.36, the terms “hazardous wastes”, “toxic wastes”, “hazardous
substances”, and “medical wastes” shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with respect to
environmental protection.

     4.37 Integration; Other Issuances of Shares. Neither the Company nor its
subsidiaries or any affiliates, nor any Person acting on its or their behalf,
has issued any

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securities of the Company which would be integrated with the sale of the Shares
to such Purchaser for purposes of the Securities Act or of any applicable
stockholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated, nor will the Company or
its subsidiaries or affiliates take any action or steps (and neither have they
taken any action or steps) that would require registration of any of the Shares
under the Securities Act or cause the offering of the Shares to be integrated
with other offerings. Assuming the accuracy of the representations and
warranties of Purchasers, the offer and sale of the Shares by the Company to the
Purchasers pursuant to this Agreement will be exempt from the registration
requirements of the Securities Act.

     4.38 Filing of Form 8-K. Prior to 9:30 a.m. on the first business day after
the date hereof, the Company shall issue a press release announcing the
execution of this Agreement and the Company shall file a Current Report on Form
8-K describing the material terms of the transactions contemplated by this
Agreement (for clarification purposes only and without implication to the
contrary, the transactions contemplated by this Agreement include only the
transaction between the Company and the Purchaser and do not include any other
transaction between the Company and any other third party purchaser of the
Company’s securities), and attaching as an exhibit to such Form 8-K a form of
this Agreement.

     4.39 Shareholder Approval. The Company shall use its reasonable best
efforts to obtain as soon as reasonably practicable, but in no event later than
180 days after the Closing Date, the requisite shareholder approval (the
“Shareholder Approval”) with respect to the transactions contemplated hereby in
a manner that complies with Nasdaq Marketplace Rule 4350(i)(1)(D) and all other
relevant rules and regulations of the Nasdaq. If the Company is unable to obtain
the Shareholder Approval within 180 days of the Closing Date, it shall use its
reasonable best efforts to obtain such approval at (i) the next annual meeting
of its shareholders (and each annual meeting thereafter) and (ii) a special
meeting of its shareholders to be held every 180 days following its annual
meeting in each year (other than 2008) until such Shareholder Approval is
obtained.

     4.40 U.S. Real Property Holding Corporation Status. The Company is not, nor
has ever been, a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended.

     4.41 Shell Company Status. The Company is not, nor has ever been, an issuer
of the type described in Rule 144(i)(l) under the Securities Act.

     4.42 Solvency. The Company and each of its Subsidiaries does and will after
giving effect to the to the transactions contemplated hereby to occur at the
Closing and the sale of securities to the Other Purchasers (a) own assets the
fair saleable value of which are (i) greater than the total amount of its
liabilities (including known contingent liabilities) and (ii) greater than the
amount that will be required to pay the probable liabilities of its existing
debts as they become absolute and matured considering the financing alternatives
reasonably available to it and (b) not have capital that will be unreasonably
small in relation to its business as presently conducted or any contemplated.
The Company has no knowledge of any facts or circumstances which lead it to
believe that it or any of its

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Subsidiaries will be required to file for reorganization or liquidation under
the bankruptcy or reorganization laws of any jurisdiction, and has no present
intent to so file.

     SECTION 5. Representations, Warranties and Covenants of the Purchaser. The
Purchaser represents and warrants to, and covenants with, the Company that:

     5.1 Experience. (i) The Purchaser is knowledgeable, sophisticated and
experienced in financial and business matters, in making, and is qualified to
make, decisions with respect to investments in shares representing an investment
decision like that involved in the purchase of the Shares, including investments
in securities issued by the Company and comparable entities, has the ability to
bear the economic risks of an investment in the Shares and has reviewed
carefully the Private Placement Memorandum and has requested, received, reviewed
and considered all information it deems relevant in making an informed decision
to purchase the Shares; (ii) the Purchaser is acquiring the number of Shares set
forth in Section 2 above in the ordinary course of its business and for its own
account for investment only and with no present intention of distributing any of
the Securities or any arrangement or understanding with any other persons
regarding the distribution of such Securities (the foregoing representation and
warranty not limiting the Purchaser’s right to sell pursuant to the Registration
Statement or in compliance with the Securities Act and the Rules and
Regulations, or, other than with respect to any claims arising out of a breach
of this representation and warranty, the Purchaser’s right to indemnification
under Section 7.3); (iii) the Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Securities, nor
will the Purchaser engage in any short sale that results in a disposition of any
of the Securities by the Purchaser, except in compliance with the Securities Act
and the Rules and Regulations and any applicable state securities laws; (iv) the
Purchaser has completed or caused to be completed the Registration Statement
Questionnaire attached hereto as part of Appendix I, for use in preparation of
the Registration Statement, and the answers thereto are true and correct as of
the date hereof and will be true and correct as of the effective date of the
Registration Statement (provided that if such information ceases to be true
between the date hereof and the effective date of the Registration Statement,
the Purchaser may provide the updated information to the Company for
incorporation into the Registration Statement) and the Purchaser will notify the
Company immediately of any material change in any such information provided in
the Registration Statement Questionnaire until such time as the Purchaser has
sold all of its Shares or Conversion Shares or, if earlier, until the Company is
no longer required to keep the Registration Statement effective; (v) the
Purchaser has, in connection with its decision to purchase the number of Shares
set forth in Section 2 above, relied solely upon the Private Placement
Memorandum and the representations and warranties of the Company contained
herein; (vi) the Purchaser has had an opportunity to discuss this investment
with representatives of the Company and ask questions of them and (vii) the
Purchaser is an “accredited investor” within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act.

     5.2 Reliance on Exemptions. The Purchaser understands that the Shares are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of the Securities Act, the Rules and Regulations and
state securities laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser’s

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compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Shares.

     5.3 Confidentiality. For the benefit of the Company, the Purchaser
previously agreed with the Placement Agent to keep confidential all information
concerning this private placement. The Purchaser understands that the
information contained in the Private Placement Memorandum is strictly
confidential and proprietary to the Company and has been prepared from the
Company’s publicly available documents and other information and is being
submitted to the Purchaser solely for such Purchaser’s confidential use. The
Purchaser agrees to use the information contained in the Private Placement
Memorandum for the sole purpose of evaluating a possible investment in the
Shares and the Purchaser acknowledges that it is prohibited from reproducing or
distributing the Private Placement Memorandum, this Agreement, or any other
offering materials or other information provided by the Company in connection
with the Purchaser’s consideration of its investment in the Company, in whole or
in part, or divulging or discussing any of their contents, except to its
financial, investment or legal advisors in connection with its proposed
investment in the Shares, which or whom the Purchaser will cause to comply with
the obligations under this Section 5.3. Further, the Purchaser understands that
the existence and nature of all conversations and presentations, if any,
regarding the Company and this offering must be kept strictly confidential. The
Purchaser understands that the federal securities laws impose restrictions on
trading based on information regarding this offering. In addition, the Purchaser
hereby acknowledges that unauthorized disclosure of information regarding this
offering may result in a violation of Regulation FD. The obligations under this
Section 5.3 will terminate upon the filing by the Company of the 8-K Filing. In
addition to the above, the Purchaser shall maintain in confidence the receipt
and content of any notice of a Suspension (as defined in Section 5.9 below). The
foregoing agreements shall not apply to any information that is or becomes
publicly available through no fault of the Purchaser, or that the Purchaser is
legally required to disclose; provided, however, that if the Purchaser is
requested or ordered to disclose any such information pursuant to any court or
other government order or any other applicable legal procedure, to the extent
permitted by applicable law it shall provide the Company with prompt notice of
any such request or order in time sufficient to enable the Company to seek an
appropriate protective order.

     5.4 Investment Decision. The Purchaser understands that nothing in this
Agreement or any other materials presented to the Purchaser in connection with
the purchase and sale of the Shares constitutes legal, tax or investment advice.
The 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.

     5.5 Risk of Loss. The Purchaser understands that its investment in the
Shares involves a significant degree of risk, including a risk of total loss of
the Purchaser’s investment, and the Purchaser has full cognizance of and
understands all of the risk factors related to the Purchaser’s purchase of the
Shares, including, but not limited to, those set forth under the caption “Risk
Factors” in the Private Placement Memorandum. The Purchaser understands that the
market price of the Common Stock has been volatile, that there is no

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existing market for the Preferred Stock and that no representation is being made
as to the future value of the Securities.

     5.6 Legend. The Purchaser understands that, until such time as the
Securities are sold pursuant to the Registration Statement or the Securities may
be sold pursuant to Rule 144 under the Securities Act without any restriction as
to the securities that can then be immediately sold (i.e. currently one year
following Closing), the Securities will bear a restrictive legend in
substantially the following form:

“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE
OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

     5.7 Transfer Restrictions. Consistent with the legend set forth in Section
5.6, the Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than
pursuant to the Registration Statement, the Company may require the transferor
to provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of the transferred Securities under the
Securities Act. As a condition of such transfer (unless effected pursuant to the
Registration Statement or under Rule 144), 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. The certificates representing the Shares and
the Conversion Shares may be subject to a stop transfer order for the purpose of
enforcing the foregoing provisions, and the Company will instruct the transfer
agent to transfer Securities to a transferee if the foregoing provisions are
complied with and if, in the case of a transfer pursuant to the Registration
Statement, the transferor causes the Prospectus (as defined in Section 5.9) to
be delivered to the transferee. At such time as the Securities are no longer
required to bear a restrictive legend, the Company agrees that it will, no later
than three business days after delivery by the Purchaser to the Company or its
transfer agent of a certificate (in the case of a transfer, in the proper form
for transfer) representing Securities issued with the foregoing restrictive
legend, deliver or cause

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to be delivered to the Purchaser a certificate representing such Securities that
is free from all restrictive and other legends. The Company shall not make any
notation on its records or give instructions to its transfer agent that enlarge
the restrictions on transfer set forth in this Section.

     5.8 Residency. The Purchaser’s principal executive offices are in the
jurisdiction set forth immediately below the Purchaser’s name on the signature
pages hereto.

     5.9 Public Sale or Distribution. The Purchaser hereby covenants with the
Company not to make any sale of the Securities under the Registration Statement
without complying with the provisions of this Agreement and without effectively
causing the prospectus delivery requirement under the Securities Act to be
satisfied (whether physically or through compliance with Rule 172 under the
Securities Act or any similar rule), and the Purchaser acknowledges and agrees
that Securities sold under the Registration Statement are not transferable on
the books of the Company unless the certificate submitted to the transfer agent
evidencing the Shares or the Conversion Shares is accompanied by a separate
Purchaser’s Certificate of Subsequent Sale: (i) in the form of Appendix II
hereto, (ii) executed by an officer of, or other authorized person designated
by, the Purchaser, and (iii) to the effect that (A) the Securities have been
sold in accordance with the Registration Statement, the Securities Act and any
applicable state securities or Blue Sky laws and (B) the prospectus delivery
requirement effectively has been satisfied. The Purchaser acknowledges that
there may occasionally be times when the Company must suspend the use of the
prospectus (the “Prospectus”) forming a part of the Registration Statement (a
“Suspension”), subject to the provisions of this Section 5.9, until such time as
an amendment to the Registration Statement has been filed by the Company and
declared effective by the Commission, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the Exchange Act, as
a result of the Company’s expectation that such registration, any offering
thereunder or any use thereof would reasonably be expected to materially and
adversely affect or materially interfere with any bona fide transaction or
financing under consideration by the Company or would require the disclosure of
information that has not been, and is not otherwise required to be, disclosed to
the public, the premature disclosure of which would materially and adversely
affect the Company. Without the Company’s prior written consent, which consent
shall not unreasonably be withheld or delayed, the Purchaser shall not use any
written materials to offer the Shares for resale other than the Prospectus,
including any “free writing prospectus” as defined in Rule 405 under the
Securities Act. The Purchaser covenants that it will not sell any Securities
pursuant to said Prospectus during the period commencing at the time when
Company gives the Purchaser written notice of the Suspension and ending at the
time when the Company gives the Purchaser written notice that the Purchaser may
thereafter effect sales pursuant to said Prospectus. Notwithstanding the
foregoing, the Company agrees that no Suspension shall be for a period of longer
than 45 consecutive days, and all Suspensions in the aggregate shall be for a
period no longer than 60 days in any 365 day period. For the purpose of the
forgoing sentence two days shall be “consecutive” if the second day is less than
five calendar days after the first day. The Purchaser further covenants to
notify the Company promptly of the sale of all of its Securities.

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     5.10 Organization; Validity; Enforcements. The Purchaser further represents
and warrants to, and covenants with, the Company that (i) the Purchaser has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
(ii) the making and performance of this Agreement by the Purchaser and the
consummation of the transactions herein contemplated will not violate any
provision of the organizational documents of the Purchaser or conflict with,
result in the breach or violation of, or constitute, either by itself or upon
notice or the passage of time or both, a default under any material agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other
instrument to which the Purchaser is a party or, any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental agency or body
applicable to the Purchaser, (iii) no consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other governmental
agency or body is required on the part of the Purchaser for the execution and
delivery of this Agreement or the consummation of the transactions contemplated
by this Agreement, (iv) upon the execution and delivery of this Agreement, this
Agreement shall constitute a legal, valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
the enforcement of creditor’s rights and the application of equitable principles
relating to the availability of remedies, and except as rights to indemnity or
contribution, including, but not limited to, the indemnification provisions set
forth in Section 7.3 of this Agreement, may be limited by federal or state
securities laws or the public policy underlying such laws and (v) there is not
in effect any order enjoining or restraining the Purchaser from entering into or
engaging in any of the transactions contemplated by this Agreement.

     5.11 Short Sales. The Purchaser has not undertaken since the date that it
was first contacted regarding the offering contemplated hereby, and shall not
undertake prior to the Company filing the Current Report on Form 8-K
contemplated by Section 4. 38 of this Agreement, any sales or agreements to sell
shares of Common Stock, any short sale of Common Stock, whether or not against
the box, established any “put equivalent position” (as defined in Rule 16a-1(h)
under the Exchange Act with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock (collectively,
“Shorting Actions”). Furthermore, the Purchaser agrees that it shall not use
Securities to close, settle or otherwise satisfy any contract, agreement,
arrangement or transaction entered into as a result of or in connection with any
Shorting Action taken at any time prior to the effectiveness of the Registration
Statement.

     5.12 Limited Right of First Refusal. Except for the issuance of securities
of the Company (or securities convertible into or containing options or rights
to acquire securities of the Company) (i) pursuant to any stock option plan or
other equity-based compensation plan or arrangement and any shares issued in
connection therewith, (ii) as consideration in any merger, consolidation,
acquisition or similar business combination, or (iii) that would result in an
adjustment to the Conversion Price, Adjusted Conversion Price or

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Further Adjusted Conversion Price, or that would result in an additional
distribution upon conversion as set forth in Section III(e) of the Certificates
of Designation, if the Company engages in any sale of any shares of any Common
Stock or any securities convertible into or containing options or rights to
acquire any shares of Common Stock, the Company will use its reasonable best
efforts to offer, prior to such sale, to the Purchaser (but only if holding more
than $5,000,000 liquidation value of shares of Preferred Stock) the right to
purchase a pro rata portion of such securities equal to the percentage
determined by dividing (i) the sum of (A) the number of shares of Common Stock
held by the Purchaser plus (B) the number of shares of Common Stock that may be
acquired by the Purchaser upon the conversion of all shares of Preferred Stock
held by the Purchaser, by (ii) the sum of (A) the number of shares of Common
Stock then outstanding plus (B) the number of shares of Common Stock then
purchasable upon exercise of all outstanding options or other rights to acquire
any shares of Common Stock and the conversion of all outstanding convertible
securities (including the Preferred Stock). The Purchaser will be entitled to
purchase all or part of such securities at the same price and on the same terms
as such securities are to be offered to other persons or entities. The Purchaser
must exercise its purchase rights under this Section 5.12 as soon as practicable
under the circumstances following notice from the Company describing in
reasonable detail, to the extent known at the time, the securities being
offered, the estimated purchase price thereof, the payment terms and the
Purchaser’s percentage allotment. If the Purchaser does not elect to participate
in the offering within a reasonable period of time under the circumstances
(which in no event shall be more than five business days following the
aforementioned notice or, in the case of any public offering of securities,
within twenty-four hours thereof, or such later time as precedes the pricing of
the applicable offering), the Company will be free to sell such securities that
the Purchaser has not elected to purchase on terms and conditions not materially
more favorable to the purchasers thereof than those offered to the Purchasers of
Preferred Stock. The purchase rights provided under this Section 5.12 are not
transferable and shall terminate at such time as the Purchaser of Preferred
Stock ceases to hold at least 50% of the Preferred Stock purchased hereunder.
The foregoing shall not be deemed to require the Company to engage in
negotiation with the Purchaser of the pricing or other terms of the applicable
securities. The foregoing is subject to any limitations that may be imposed from
time to time by the Nasdaq Marketplace Rules or interpretations thereof by the
Nasdaq, in each case as may be set forth in writing by the Nasdaq or in the
opinion of outside counsel to the Company (which counsel is reasonably
acceptable to the Purchasers), and any failure to comply with the foregoing as a
result thereof shall not be a breach of this Agreement.

     SECTION 6. Survival of Agreements; Non-Survival of Company Representations
and Warranties. Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all covenants and agreements made by the
Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor. All representations and warranties, made by the Company and the
Purchaser herein and in the certificates for the Shares delivered pursuant
hereto shall survive for a period of one year following the later of the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.

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     SECTION 7. Registration of the Shares; Compliance with the Securities Act.

7.1 Registration Procedures and Expenses. The Company shall:

     (a) as soon as practicable, but in no event later than 30 calendar days
following the Closing Date (the “Filing Deadline”), prepare and file with the
Commission the Registration Statement on Form S-3 (or other appropriate form
(which, for so long as the Company is a “well known seasoned issuer,” shall be
an “Automatic Shelf Registration Statement,” as those terms are defined in Rule
405 of the Securities Act) that may be used to sell the Securities at market,
rather than fixed, prices) relating to the resale of the Securities (including
shares of Common Stock issuable as a result of an anti-dilution adjustment to
the Conversion Price (as defined in the Certificate of Designations) and any
capital stock of the Company issued with respect to the Shares or the Conversion
Shares as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise (collectively, the “Registrable
Securities”) by the Purchaser and the Other Purchasers from time to time on,
which Registration Statement the Company shall have provided to the Purchaser in
draft form no less than five calendar days prior to filing;

     (b) if such Registration Statement is not automatically effective upon
filing, use its reasonable best efforts, subject to receipt of necessary
information from the Purchasers, to cause the Commission to declare the
Registration Statement effective upon filing;

     (c) promptly prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective until
the earliest of (i) one year after the effective date of the Registration
Statement or (ii) such time as the Registrable Securities become eligible for
resale by each of the Purchasers pursuant to Rule 144 under the Securities Act
without any restrictions as to the securities that can be immediately sold (i.e.
currently one-year from Closing); provided that, for the avoidance of doubt, in
no event shall the Company have any obligation to keep the Registration
Statement effective after such time as all of the Registrable Securities have
been sold pursuant to the Registration Statement or Rule 144;

     (d) furnish to the Purchaser with respect to the Registrable Securities
registered under the Registration Statement such number of copies of
prospectuses and such other documents as the Purchaser may reasonably request,
in order to facilitate the public sale or other disposition of all or any of the
Registrable Securities by the Purchaser;

     (e) file documents required of the Company for normal Blue Sky clearance in
states specified in writing by the Purchaser; provided, however, that the
Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented;

     (f) bear all expenses in connection with the procedures in paragraphs (a)
through (e) of this Section 7.1 and the registration of the Registrable
Securities pursuant to the Registration Statement, other than fees and expenses,
if any, of counsel or other advisers to the Purchaser or the Other Purchasers or
brokerage fees, commissions and other sales related

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expenses incurred by the Purchaser or the Other Purchasers, if any in connection
with the offering of the Registrable Securities pursuant to the Registration
Statement;

     (g) file a Form D with respect to the Shares as required under Regulation D
and to provide a copy thereof to the Purchaser promptly after filing;

     (h) issue a press release describing the transactions contemplated by this
Agreement on the Closing Date;

     (i) in order to enable the Purchasers to sell the Shares and Conversion
Shares under Rule 144 to the Securities Act, for a period of one year from
Closing, use its commercially reasonable efforts to comply with the requirements
of Rule 144, including without limitation, use its commercially reasonable
efforts to comply with the requirements of Rule 144(c)(1) with respect to public
information about the Company and to timely file all reports required to be
filed by the Company under the Exchange Act;

     (j) ensure that the Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made) not
misleading;

     (k) notify the Purchaser in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a result of which
the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(provided that the Company shall endeavor that such notice not contain any
material, nonpublic information), and, promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission;

     (l) use its reasonable best efforts to prevent the issuance of any stop
order or other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction and, if such an order or suspension is issued, to obtain the
prompt withdrawal of such order or suspension and to notify each Purchaser who
holds Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual written notice of the initiation or
written threat of any proceeding for such purpose; and

     (m) include in the “plan of distribution” section of the Registration
Statement disclosure substantially to the effect that: “The selling stockholders
may enter into derivative transactions with third parties, or sell securities
not covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in connection
with those derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use securities pledged by the selling
stockholders or borrowed from the selling stockholders or others to settle those
sales or to close out any related open borrowings of stock,

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and may use securities received from the selling stockholders in settlement of
those derivatives to close out any related open borrowings of stock.”

     The Company understands that the Purchaser disclaims being an underwriter,
but the Purchaser being deemed an underwriter shall not relieve the Company of
any obligations it has hereunder. A draft of the proposed form of the
questionnaire related to the Registration Statement to be completed by the
Purchaser is attached hereto as Appendix I.

     7.2 Transfer of Shares and Conversion Shares After Registration. The
Purchaser agrees that it will not effect any disposition of the Shares or
Conversion Shares or its right to purchase the Shares or Conversion Shares that
would constitute a sale within the meaning of the Securities Act or pursuant to
any applicable state securities laws, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law (including
pursuant to rule 144), and that it will promptly notify the Company of any
changes in the information set forth in the Registration Statement regarding the
Purchaser or its plan of distribution.

7.3 Indemnification. For the purpose of this Section 7.3:

(i) the term “Purchaser/Affiliate” shall mean any affiliate of the Purchaser,
including a transferee who is an affiliate of the Purchaser, and any person who
controls the Purchaser or any affiliate of the Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act; and

(ii) the term “Registration Statement” shall include any preliminary prospectus,
final prospectus, free writing prospectus, exhibit, supplement or amendment
included in or relating to, and any document incorporated by reference in, the
Registration Statement referred to in Section 7.1.

     (a) The Company agrees to indemnify and hold harmless the Purchaser and
each Purchaser/Affiliate, against any and all losses, claims, damages,
liabilities or expenses, joint or several, to which the Purchaser or
Purchaser/Affiliates may become subject (including in settlement of any
litigation or any investigation or proceeding by any governmental agency or
body, commenced or threatened, if such settlement is effected with the written
consent of the Company, subject to Section 7.3(c) below), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of any breach of the representations,
warranties or covenants of the Company set forth herein or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, including the Prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rules 430B, 430C or 434, of the Rules
and Regulations, or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required or
any amendment or supplement

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thereto, or arise out of or are based upon the omission or alleged omission to
state in any of them a material fact required to be stated therein or necessary
to make the statements in the Registration Statement or any amendment or
supplement thereto not misleading or in the Prospectus or any amendment or
supplement thereto not misleading in light of the circumstances under which they
were made, and will promptly reimburse each Purchaser and each
Purchaser/Affiliate for any reasonable legal and other expenses as such expenses
are reasonably incurred by such Purchaser or such Purchaser/Affiliate in
connection with investigating, defending or preparing to defend, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that, subject to Section 7.3(c) below, the Company
will not be liable for amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company, which consent shall not be unreasonably withheld, and the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Purchaser expressly for use therein, or (ii)
any breach of the representations, warranties or covenants of the Purchaser set
for herein, or (iii) the inaccuracy of any representation or warranty made by
such Purchaser herein.

     (b) The Purchaser will severally, but not jointly with any other Purchaser,
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, damages, liabilities
or expenses to which the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person may become subject
(including in settlement of any litigation, but only if such settlement is
effected with the written consent of such Purchaser) insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue or alleged untrue
statements or omissions contained in the Registration Statement, the Prospectus,
or any amendment or supplement thereto, in each case to the extent, but only to
the extent, that such untrue statement or omission or alleged untrue statement
or omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchaser expressly
for use therein; and will reimburse the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person for any
legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Purchaser’s aggregate liability under this
Section 7 shall not exceed the amount of net proceeds received by such Purchaser
on the sale of the Shares pursuant to the Registration Statement. The Company
acknowledges that the information required under Item 507 of Regulation S-K, as
it may be amended from time to time, and any other information required by law
or regulation (including the requirements of the Financial Industry Regulatory
Authority, Inc.) or requested by the SEC in respect of selling shareholders will
be the only written information furnished to the Company by or on behalf of

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any Purchaser expressly for use in the Registration Statement, Prospectus or any
amendment or supplement thereto.

     (c) Promptly after receipt by an indemnified party under this Section 7.3
of notice of the threat or commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 7.3 promptly notify the indemnifying party in writing
thereof, but the omission to notify the indemnifying party will not relieve it
from any liability that it may have to any indemnified party for contribution or
otherwise under the indemnity agreement contained in this Section 7.3 to the
extent it is not prejudiced as a result of such failure. In case any such action
is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party, and the indemnifying party and the indemnified party shall
have reasonably concluded, based on an opinion of counsel, that there may be a
conflict of interest between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may
be legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election to assume
the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7.3 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel representing all of
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of action, in each of which cases the reasonable fees and
expenses of counsel shall be at the expense of the indemnifying party. The
indemnifying party shall not be liable for any settlement of any action without
its written consent; provided that such consent shall not be unreasonably
withheld. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnification could have been sought hereunder by such indemnified party from
all liability on claims that are the subject matter of such proceeding.

     (d) If the indemnification provided for in this Section 7.3 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) of this Section 7.3 in respect to any losses, claims, damages, liabilities
or expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such

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proportion as is appropriate to reflect the relative benefits received by the
Company and the Purchaser from the private placement of Preferred Stock
hereunder or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but the relative
fault of the Company and the Purchaser in connection with the statements or
omissions or inaccuracies in the Registration Statement and/or Prospectus that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company on the one hand and each Purchaser on the other shall be deemed to
be in the same proportion as the amount paid by such Purchaser to the Company
pursuant to this Agreement for the Shares purchased by such Purchaser that were
sold pursuant to the Registration Statement bears to the positive difference, if
any (the “Difference”) between the amount received by such Purchaser from the
sale of Securities pursuant to the Registration Statement and the amount such
Purchaser paid for such Securities. The relative fault of the Company on the one
hand and each Purchaser on the other shall be determined by reference to, among
other things, whether the untrue or alleged statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Purchaser and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 7.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 7.3 with respect to the
notice of the threat or commencement of any threat or action shall apply if a
claim for contribution is to be made under this paragraph (d); provided,
however, that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (c) for purposes of
indemnification. The Company and the Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 7.3 were determined
solely by pro rata allocation (even if the Purchaser were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, the Purchaser shall not be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that the Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

     7.4 Termination of Conditions and Obligations. The restrictions imposed by
Section 5.9 or Section 7.2 upon the transferability of the Securities shall
cease and terminate as to any particular number of the Securities upon the
earlier of (i) the passage of one year from the effective date of the
Registration Statement covering such Securities and (ii) at such time as an
opinion of counsel satisfactory in form and substance to the Company shall have
been rendered to the effect that such conditions are not necessary in order to
comply with the Securities Act.

     7.5 Delay in Filing or Effectiveness of Registration Statement If the
Registration Statement is not filed by the Company with the Commission and
effective on or

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prior to the Filing Deadline, then for each day following the Filing Deadline,
until but excluding the date the Registration Statement is filed, or if the
Registration Statement is not automatically effective upon filing and is not
declared effective by the Commission by the Filing Deadline, then for each day
following the Filing Deadline, until but excluding the date the Registration
Statement becomes effective, the Company shall, for each such day, pay the
Purchaser with respect to any such failure, as liquidated damages and not as a
penalty, an amount per 30-day period equal to 1.0% of the purchase price paid by
such Purchaser for its Shares pursuant to this Agreement; and for any such
30-day period, such payment shall be made no later than three business days
following such 30-day period. Any payments made pursuant to this Section 7.5
shall not constitute the Purchaser’s exclusive remedy for such events.
Notwithstanding the foregoing provisions, in no event shall the Company be
obligated to pay any liquidated damages pursuant to this Section 7.5 (i) to more
than one Purchaser in respect of the same Shares for the same period of time or
(ii) in an aggregate amount that exceeds 10% of the purchase price paid by the
Purchasers for the Shares pursuant to this Agreement. Such payments shall be
made to the Purchasers in cash.

     SECTION 8. Purchasers That May Receive Non-Public Information.
Notwithstanding anything contained herein to the contrary, the Purchaser may
have elected to receive (and therefore received) certain information that may be
deemed to be material non-public information (the “Confidential Information”).
If so, the Purchaser hereby agrees (i) not to use the Confidential Information
for any purpose other than in connection with its evaluation of a possible
investment in the Shares, (ii) to keep all Confidential Information confidential
and not to disclose or reveal in any manner whatsoever any Confidential
Information to any person other than such Purchaser’s representatives who are
actively and directly participating in the evaluation of a possible investment
in the Shares or otherwise need to know the Confidential Information for such
purpose and who have been advised by such Purchaser of, and have agreed to be
bound by, the restrictions contained in this Section 8, and (iii) not to effect
any transaction in (other than as contemplated by this Agreement) any securities
of the Company until the earlier of (A) six months from the date of the
Confidentiality Agreement signed by the Purchaser and (B) such time as the
Company in its reasonable opinion determines that the Confidential Information
is no longer considered material non-public information. The Purchaser further
acknowledges that its receipt of the Confidential Information will require that
its Shares and Conversion Shares be subject to a stop transfer order with the
Company’s transfer agent that restricts the transfer of such shares. The Company
agrees promptly to advise the Purchaser if the Confidential Information has been
made public or if, in its discretion, the Confidential Information is no longer
considered material non-public information.

     SECTION 9. Broker’s Fee. The Purchaser acknowledges that the Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser. The Purchaser and the Company agree that the Purchaser shall
not be responsible for such fee and that the Company will indemnify and hold
harmless the Purchaser and each Purchaser/Affiliate against any losses, claims,
damages, liabilities or expenses, joint or several, to which such Purchaser or
Purchaser/Affiliate may become subject with respect to such fee. Each of the
parties hereto represents that, on the basis of any actions and agreements by
it, there are no other brokers or finders entitled to compensation in connection
with the sale of the Shares to the Purchaser.

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     SECTION 10. Independent Nature of Purchasers’ Obligations and Rights. The
obligations of the Purchaser under this Agreement 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 the
Agreements. The decision of each Purchaser to purchase the Shares pursuant to
the Agreements has been made by such Purchaser independently of any other
Purchaser. Nothing contained in the Agreements, 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
Agreements. The Purchaser acknowledges that no Other Purchaser has acted as
agent for the Purchaser in connection with making its investment hereunder and
that no Other Purchaser will be acting as agent of the Purchaser in connection
with monitoring its investment in the Shares or enforcing its rights under this
Agreement. The Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any Other Purchaser to be joined as
an additional party in any proceeding for such purpose.

     SECTION 11. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, e-mail, confirmed facsimile or nationally
recognized overnight express courier postage prepaid, and shall be deemed given
when so mailed and shall be delivered as addressed as follows:

  (a) if to the Company, to:

The South Financial Group, Inc.
102 South Main Street
Greenville, South Carolina 29601
Attention: William Crawford
Facsimile: (864) 239-6423
E-mail:wcrawford@carolinafirst.com

with a copy to:

Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Nicholas G. Demmo
Facsimile: 212.403.2000
E-mail: NGDemmo@wlrk.com

or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and

     (b) if to the Purchaser, at its address as set forth at the end of this
Agreement, or at such other address or addresses as may have been furnished to
the Company in writing.

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     SECTION 12. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Purchaser.
Any amendment or waiver effected in accordance with this Section 12 shall be
binding upon each holder of any securities purchased under this Agreement at the
time outstanding, each future holder of all such securities, and the Company.

     SECTION 13. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

     SECTION 14. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.

     SECTION 15. Governing Law; Venue. This Agreement is to be construed in
accordance with and governed by the federal law of the United States of America
and the internal laws of the State of New York without giving effect to any
choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of New York to the rights
and duties of the parties. Each of the Company and the Purchaser submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby. Each of the Company and the
Purchaser irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

     SECTION 16. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties. Facsimile signatures shall be deemed original signatures.

     SECTION 17. Entire Agreement. This Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters. Each party
expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of this Agreement.

     SECTION 18. Fees and Expenses. Except as set forth herein, each of the
Company and the Purchaser shall pay its respective fees and expenses related to
the transactions contemplated by this Agreement.

     SECTION 19. Parties. This Agreement is made solely for the benefit of and
is binding upon the Purchaser and the Company and to the extent provided in
Section 7.3,

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any person controlling the Company or the Purchaser, the officers and directors
of the Company, and their respective executors, administrators, successors and
assigns and subject to the provisions of Section 7.3, no other person shall
acquire or have any right under or by virtue of this Agreement. The term
“successor and assigns” shall not include any subsequent purchaser, as such
purchaser, of the Shares sold to the Purchaser pursuant to this Agreement.

     SECTION 20. Further Assurances. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurance as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.

[Remainder of Page Left Intentionally Blank]

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

THE SOUTH FINANCIAL GROUP, INC.

By:_________________________________
Name:
Title:

Print or Type:

___________________________________
Name of Purchaser
(Individual or Institution)

___________________________________
Jurisdiction of Purchaser’s Executive Offices

___________________________________
Name of Individual representing
Purchaser (if an Institution)

___________________________________
Title of Individual representing
Purchaser (if an Institution)

Signature by:

Individual Purchaser or Individual
representing Purchaser:

______________________________

Address: ____________________________

Telephone: ___________________________

Facsimile: ____________________________

E-mail: ______________________________

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