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STOCK PURCHASE AGREEMENT
 
by and among
 
WASHINGTON TRUST BANCORP, INC.,
 
WESTON FINANCIAL GROUP, INC.

 
and
 
The Individual Shareholders Party Hereto
 
Dated as of: March 18, 2005
 

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TABLE OF CONTENTS

 
 Page
   
ARTICLE I. DEFINITIONS
2
Section 1.1.
Definitions.
2
   
ARTICLE II. PURCHASE AND SALE
13
Section 2.1.
Purchase and Sale of the Shares
13
Section 2.2.
Closing Revenue Adjustment.
13
Section 2.3.
Closing
14
Section 2.4.
Closing Balance Sheet
15
Section 2.5.
Adjustment to the Purchase Price
16
Section 2.6.
Contingent Payments
16
Section 2.7.
Calculation of Contingent Payments
18
Section 2.8.
Acceleration of Contingent Payments
19
Section 2.9.
Payment Procedures
21
Section 2.10.
Setoff
21
Section 2.11.
Spinout of Real Estate Partnerships and Subsidiaries
21
Section 2.12.
Park Insurance Agency
21
   
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPALS
21
Section 3.1.
Organization and Qualification of the Company
22
Section 3.2.
Capitalization; Beneficial Ownership.
22
Section 3.3.
Subsidiaries and Investments.
23
Section 3.4.
Authority; No Violation by the Company.
23
Section 3.5.
Real and Personal Property.
24
Section 3.6.
Clients and Client Accounts
25
Section 3.7.
Financial Statements.
27
Section 3.8.
Taxes.
28
Section 3.9.
Collectibility of Accounts Receivable
30
Section 3.10.
Absence of Certain Changes
31
Section 3.11.
Ordinary Course
32
Section 3.12.
Banking Relations
32
Section 3.13.
Intellectual Property.
32
Section 3.14.
Contracts
34
Section 3.15.
Litigation
35
Section 3.16.
Compliance with Laws.
36
Section 3.17.
Business; Registrations.
36
Section 3.18.
Mutual Funds
39
Section 3.19.
Compliance Policies and Procedures
43
Section 3.20.
Insurance Agency Matters
43

 
 

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 Page
     
Section 3.21.
Transactions with Interested Persons
44
Section 3.22.
Employee Benefit Programs
45
Section 3.23.
List of Directors, Officers and Employees.
46
Section 3.24.
Insurance
48
Section 3.25.
Powers of Attorney
48
Section 3.26.
Finder’s Fee
48
Section 3.27.
Non-Foreign Status
48
Section 3.28.
Corporate Records; Copies of Documents
48
Section 3.29.
Disclosure
49
   
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF EACH PRINCIPAL
49
Section 4.1.
Ownership Interests
49
Section 4.2.
Authority
50
Section 4.3.
Finder’s Fee
50
Section 4.4.
Investment Advisory Representation
50
Section 4.5.
Agreements
50
Section 4.6.
Employment Date
51
Section 4.7.
Non-Foreign Status
51
 
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF EACH OTHER SHAREHOLDER AND EACH
PRINCIPAL
51
 REGARDING THE OTHER SHAREHOLDERS.  
Section 5.1.
Ownership Interests
51
Section 5.2.
Authority
51
Section 5.3.
Finder’s Fee
52
   
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF THE BUYER
52
Section 6.1.
Organization
52
Section 6.2.
Authority; No Violation.
52
Section 6.3.
Consents and Approvals
52
Section 6.4.
No Actions, Suits or Proceedings
53
Section 6.5.
Financial Ability
53
Section 6.6.
No Other Broker
53
Section 6.7.
Eligibility to Make Election under Bank Holding Company Act
53
   
ARTICLE VII. COVENANTS
53
Section 7.1.
Conduct of Business.
53
Section 7.2.
Public Announcements
57
Section 7.3.
Access; Certain Communication.
57
Section 7.4.
Reasonable Best Efforts; Further Assurances
58
Section 7.5.
Regulatory Matters; Third Party Consents.
58
Section 7.6.
Employee Matters
59
Section 7.7.
Notification of Certain Matters
60
Section 7.8.
Changes in Assets Under Management
61
Section 7.9.
Maintenance of Records.
61

 
 

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 Page
     
Section 7.10.
Non‑Competition/Non-Solicitation
61
Section 7.11.
Non-Solicitation of Other Offers
62
Section 7.12.
No Transfer of Shares
62
Section 7.13.
Covenants With Respect to Section 15(f) of the Investment Company Act
62
   
ARTICLE VIII. CONDITIONS TO CLOSING
63
Section 8.1.
Conditions to Buyer’s Obligations
63
Section 8.2.
Conditions to the Company’s and the Principals’ Obligations
65
Section 8.3.
Mutual Conditions
66
   
ARTICLE IX. INDEMNIFICATION
67
Section 9.1.
Survival
67
Section 9.2.
Indemnification.
67
Section 9.3.
Procedures
68
Section 9.4.
No Contribution or Similar Rights
68
Section 9.5.
Reductions for Insurance Proceeds and Other Recoveries
69
Section 9.6.
Sole and Exclusive Remedy
69
   
ARTICLE X. CERTAIN TAX MATTERS
69
Section 10.1.
General
69
Section 10.2.
Tax Indemnification
70
Section 10.3.
Straddle Period
70
Section 10.4.
Responsibility for Filing Tax Returns
70
Section 10.5.
Cooperation on Tax Matters.
70
Section 10.6.
Tax-Sharing Agreements
71
Section 10.7.
Certain Taxes and Fees
71
   
ARTICLE XI. TERMINATION/SURVIVAL
71
Section 11.1.
Termination.
71
Section 11.2.
Effect of Termination
72
   
ARTICLE XII. MISCELLANEOUS
72
Section 12.1.
Expenses.
72
Section 12.2.
Amendments; Waiver.
72
Section 12.3.
Entire Agreement
73
Section 12.4.
Specific Performance; Injunctive Relief
73
Section 12.5.
Severability
73
Section 12.6.
Notices
73
Section 12.7.
Binding Effect; No Third-Party Beneficiaries; No Assignment
74
Section 12.8.
Counterparts
74
Section 12.9.
Governing Law
74
Section 12.10.
Service; Jurisdiction
74
Section 12.11.
WAIVER OF JURY TRIAL
75
Section 12.12.
Drafting Conventions; No Construction Against Drafter.
75

 
 

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Page
     
Section 12.13.
Shareholders’ Representative
75
      EXHIBITS     Exhibit A Form of Investment Advisory Notice   Exhibit B-1
Form of Opinion of Nixon Peabody LLP and Greenberg Traurig LLP
 
Exhibit B-2
Form of Opinion of Goodwin Procter LLP   Exhibit C Form of Employment Agreement
  Exhibit 3.6 Forms of Advisory Contracts  

 

 

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STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT, dated as of March 18, 2005 (this “Agreement”), is
by and among Washington Trust Bancorp, Inc., a Rhode Island corporation (the
“Buyer”), Weston Financial Group, Inc., a Massachusetts corporation (the
“Company”), I. Richard Horowitz, Joseph Robbat, Jr., Douglas A. Biggar, Wayne M.
Grzecki, Robert I. Stock and Ronald A. Sugameli (those individuals,
collectively, the “Principals”), and the Persons listed on the signature page to
this Agreement under the heading “Other Shareholders” (the Principals and the
Other Shareholders are referred to herein collectively as the “Shareholders”).
 
RECITALS
 
WHEREAS, the Company and its Subsidiaries are engaged in the business of
providing investment management and advisory services, and of selling certain
insurance products and services, to accounts of certain institutional and
individual investors;
 
WHEREAS, as of the date of this Agreement, the issued and outstanding shares of
the capital stock of the Company consists of (a) 1,399,998 shares of the
Company’s Common Stock, par value $.001 per share (that stock, the “Common
Stock”; those shares of Common Stock, the “Common Shares”), (b) 800 shares of
the Company’s Class AA Common Stock, par value $.001 per share (that stock, the
“Class AA Stock”) and (c) 375 shares of the Company’s Series A Convertible
Preferred Stock, par value $.01 per share (that stock, the “Series A Preferred
Stock”);
 
WHEREAS, as of the date hereof, the Principals own all of the Common Shares and
the Other Shareholders own all of the issued and outstanding shares of Class AA
Stock and Series A Preferred Stock (the shares of Series A Preferred Stock and
the shares of Class AA Stock held by the Other Shareholders shall be referred to
as the “Other Shares”);
 
WHEREAS, prior to the Closing, the Principals and the Company shall cause the
Company (a) to distribute the shares of the Real Estate Subsidiaries (as defined
below in Section 1.1(a)) to the Shareholders as a dividend pro rata to their
interests in accordance with Schedule 2.3(a) and (b) to take all such other
actions as are necessary or appropriate to ensure that, as of the Closing, the
Company does not directly or indirectly own any shares of capital stock or other
securities of or ownership interests with respect to any of the Real Estate
Subsidiaries (those share distributions and all actions related thereto,
collectively, the “Real Estate Separation”);
 
WHEREAS, prior to the Closing, the Principals holding shares of capital stock of
Park shall transfer such shares to the Company so that, at the time of the
Closing, Park is a wholly owned subsidiary of the Company.
 
WHEREAS, the parties desire to enter into this Agreement to provide for the
acquisition by the Buyer of the Company through the purchase by the Buyer from
the Principals and the

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Other Shareholders of the Common Shares and the Other Shares (referred to herin
collectively as the "Shares")
 
NOW, THEREFORE, the parties agree as follows:
 
 
ARTICLE I.  
 
DEFINITIONS
 
Section 1.1.  Definitions. 
 
(a)  For all purposes in this Agreement, the following terms have the respective
meanings set forth in this Section 1.1:
 
“Acquired Business” means the Company and its Subsidiaries and all businesses
conducted jointly or individually by them as of the Closing. The Principals
understand and agree that nothing in this Agreement prohibits or in any way
limits the Buyer and its Affiliates from reorganizing some or all of the
components of the Acquired Business within the Combined Buyer Group, and the
Buyer understands and agrees that no such reorganization will extinguish or
otherwise limit the Buyer’s obligations under this Agreement, including its
obligations that relate to the Contingent Payments (as defined below in this
Section 1.1(a)) and the Bonus Plan (each as defined in Section 6.6(a)).
 
“Adjusted Fees” means the sum of (i) aggregate Annual Investment Advisory
Revenue of all Retained Client Accounts plus (ii) the aggregate Annual
Investment Advisory Revenue of all Mutual Funds that are Retained Clients, with
the calculation of Annual Investment Advisory Revenue being subject to the
following adjustments for purposes of this definition (and not for the
definition of Reference Fees):
 
(i)  The aggregate Annual Investment Advisory Revenue of all Retained Client
Accounts shall be increased to reflect the effect of each account with the
Company that (A) is opened by a Retained Client who is not a Related Person
between January 1, 2005 and the close of business on the third Business Day
prior to the Closing Date and (B) is managed by a Manager, by multiplying (1)
the result obtained by adding the fair market value of any assets contributed to
that account and reduced by the fair market value of any assets withdrawn from
that account, in each case between January 1, 2005 and the close of business on
the third Business Day prior to the Closing Date (with appropriate netting
adjustments being made with respect to those contributions and withdrawals and
with fair market value determined as of the date of the applicable contribution
or withdrawal, as the case may be), times (2) the product of (x) the result of
dividing (a) the total revenues of the Company during the most recent billing
cycle of the Manager of that account ending prior to the close of business on
the third Business Day prior to the Closing Date that are derived from all
Client Accounts managed by the Manager of that account by (b) the total assets
under management of all those Clients Accounts as of the end of that billing
cycle times (y) an appropriate annualization factor that is based on the
frequency of the billing cycle for that Manager, subject to adjustment

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in the case of any event that occurs subsequent to the end of that billing cycle
that would have changed the foregoing calculation if it had occurred during that
billing cycle.
 
(ii)  For each Retained Client Account that is not owned by a Related Person,
Base Date Account Value will be increased by the fair market value of any assets
contributed to that Retained Client Account and reduced by the fair market value
of any assets withdrawn from that Retained Client Account, in each case between
January 1, 2005 and the close of business on the third Business Day prior to the
Closing Date (with appropriate netting adjustments being made with respect to
those contributions and withdrawals and with fair market value determined in
each case as of the date of the applicable contribution or withdrawal, as the
case may be); provided that in the case of the Client identified by the code
C001679 on Schedule 3.6(a), if that Client is a Retained Client, there shall not
be taken into account the effect of the withdrawal by that Client on or about
January 11, 2005 of an aggregate amount of $3,899,172 from that Client’s Client
Accounts, unless, between the Base Date and the close of business on the third
Business Day prior to the Closing Date, that Client reduces the annual retainer
fee that Client pays to the Company below $35,000, in which case the effect of
that $3,889,172 withdrawal shall be taken into account in the same proportion
that the reduction in the retainer fee bears to $35,000.
 
(iii)  For each Retained Client Account, the Applicable Rate will be the product
of (A) the result of dividing (1) the total revenues of the Company during the
most recent billing cycle of the Manager of that Client Account ending prior to
the close of business on the third Business Day prior to the Closing Date that
are derived from all Client Accounts managed by the Manager of that Client
Account by (2) the total assets under management of all those Clients Accounts
as of the end of that billing cycle times (B) an appropriate annualization
factor that is based on the frequency of the billing cycle for that Manager,
subject to adjustment in the case of any event that occurs subsequent to the end
of that billing cycle that would have changed this calculation of Applicable
Rate if it had occurred during that billing cycle.
 
(iv)  For each Mutual Fund that is a Retained Client, Base Date Account Value
will be increased by the fair market value of any assets contributed to that
Mutual Fund by its shareholders who are not Related Persons and reduced by the
fair market value of any assets withdrawn from that Mutual Fund, in each case
between January 1, 2005 and the close of business on the third Business Day
prior to the Closing Date (with appropriate netting adjustments being made with
respect to those contributions and withdrawals and with fair market value
determined in each case as of the date of the applicable contribution or
withdrawal, as the case may be).
 
(v)  For each Mutual Fund that is a Retained Client, the Applicable Rate will be
the product of (A) the result obtained by dividing (1) the total revenues of the
Company during the most recent billing cycle of that Mutual Fund ending prior to
the close of business on the third Business Day prior to the Closing Date that
are derived from that Mutual Fund by (2) the Net Asset Value of that Mutual Fund
as of the end of that billing cycle times (B) an appropriate annualization
factor that is based on the frequency of the billing cycle for that Mutual Fund,
subject to adjustment in the case of

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any event that occurs subsequent to the end of that billing cycle that would
have changed this calculation of Applicable Rate if it had occurred during that
billing cycle.
 
“Advisers Act” means the Investment Advisers Act of 1940, as amended, and the
rules and regulations thereunder.
 
“Advisory Contract” means a written contract between a Client or a New Client
and the Company, containing the terms and conditions set forth on Exhibit 3.6.
 
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with that Person,
provided that neither the Company nor any of its Subsidiaries is to be
considered an Affiliate of any Shareholder under this Agreement.
 
“Annual Investment Advisory Revenue” means (i) for a Client Account, the product
of the Base Date Account Value for that Client Account times the Applicable Rate
for that Client Account and (ii) for a Mutual Fund, the aggregate annual revenue
projected to be realized by the Company as an advisory fee or a 12b-1 fee with
respect to that Mutual Fund, as determined based on the product of the Base Date
Account Value for that Mutual Fund times the Applicable Rate for that Mutual
Fund, in each case as set forth on Schedule 3.6(a) and subject to the
adjustments that may apply to the calculation of Adjusted Fees. For each New
Client Account, Annual Investment Advisory Revenue means the product of (A) the
result of (x) the fair market value of any assets contributed to that New Client
Account between January 1, 2005 and the close of business on the third Business
Day prior to the Closing minus (z) the fair market value of any assets withdrawn
from that Client Account during that same period (with appropriate netting
adjustments being made with respect to those contributions and withdrawals and
with fair market value determined in each case as of the date of the applicable
contribution or withdrawal, as the case may be) times (B) the weighted-average
annual rate, based on assets under management, at which the Company charges
clients of the Company for assets managed by the Manager of that New Client
Account, calculated on the basis of the most recent billing statement for that
Manager (either quarterly or monthly, as the case may be) prior to the close of
business on the third Business Day prior to the Closing Date, subject to
adjustment in the case of any event that changes that rate following the date of
that billing statement that is announced, published or otherwise becomes known
to the Company.
 
“Applicable Law” means any applicable domestic or foreign federal, state or
local statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree, policy, guideline or other
requirement of any Governmental Authority.
 
“Applicable Rate” means with respect to a Client Account or a Mutual Fund, the
fee rate (expressed as a percentage) that is set forth opposite the name of that
Client Account or Mutual Fund, as the case may be, on Schedule 3.6(a), in each
case subject to the adjustments that may apply to the calculation of Adjusted
Fees. The Applicable Rates set forth on Schedule 3.6(a) represent (i) in the
case of a Client Account, the product of (A) the result of dividing the total
revenues of the Company during the month of December 2004 derived from all
Client Accounts managed by the Manager of that Client Account by the total
assets under management

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of all those Clients Accounts as of the Base Date times (B) twelve and (ii) in
the case of a Mutual Fund, the product of (C) the result of dividing the total
revenues of the Company during the month of December 2004 derived from that
Mutual Fund by the Net Asset Value of that Mutual Fund as of the Base Date times
(D) twelve.
 
“Base Date” means December 31, 2004.
 
“Base Date Account Value” means (i) for a Client Account, the fair market value
of the assets in such Client Account as of the close of business on the Base
Date and (ii) for a Mutual Fund, the Net Asset Value of that Mutual Fund as of
the close of business on the Base Date, in each case as set forth on Schedule
3.6(a) and subject to the adjustments that may apply to the calculation of
Adjusted Fees; provided that, in order to avoid duplication in calculations
contemplated by this Agreement that are based on the foregoing definition, the
fair market value of assets in a Client Account will not include the fair market
value of shares in any Mutual Fund that are held in that Client Account.
 
“Brokerage Services” means the mutual-fund sales and prospectus distribution and
other broker-dealer services performed by WSC as of the Closing in connection
with the Acquired Business.
 
“Business Day” means any day other than a Saturday, a Sunday or a day on which
state-chartered banks in the State of Rhode Island generally are closed for
regular banking business.
 
“Clients” means, collectively, (i) the Persons that own the Client Accounts and
(ii) the Mutual Funds. For the avoidance of doubt, a Person will not be
considered a Client solely because such Person is a shareholder of a Mutual
Fund.
 
“Client Account” means an account that is (i) opened and maintained by a Client
in accordance with an Advisory Contract or a Financial Planning Contract and
(ii) listed on Schedule 3.6(a).
 
“Client Consent” means, with respect to a Client, a Client Consent Request
countersigned by that Client.
 
“Client Consent Request” means a written notice delivered by the Company to a
Client or a New Client that describes the transactions contemplated by this
Agreement and requests the written consent of that Client or New Client to the
transactions contemplated by this Agreement (including any assignment of an
Advisory Contract that is deemed to occur under the Advisers Act) with respect
to all Client Accounts or New Client Accounts of that Client or New Client and
the agreement of that Client or New Client to continue its business relationship
with the Company following the Closing on the same terms and to the same extent
as it exists on the date of this Agreement. For purposes of this Agreement, a
Client Consent Request will be deemed to have been received by a Client or a New
Client three business days following the date that the Company sends the Client
Consent Request to that Client or New Client.
 
“Closing Date” means the date the Closing takes place.

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“Closing Revenue Adjustment Amount” means (i) if the Closing Revenue Ratio
equals or exceeds 0.95, then $0 or (ii) if the Closing Revenue Ratio is less
than 0.95, then an amount equal to the product of (A) the excess of 0.95 over
the Closing Revenue Ratio times (B) a fraction, the numerator of which is four
and the denominator of which is three, times (C) $20,000,000; provided that in
no event may the Closing Revenue Adjustment Amount exceed $4,000,000.
 
“Closing Revenue Ratio” means the ratio obtained by dividing (i) the sum of (A)
Adjusted Fees plus (B) New Client Fees by (ii) Reference Fees.
 
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.
 
“Combined Buyer Group” means, collectively, the Buyer and its Affiliates
(including the Acquired Business) following the Closing.
 
“Contingent Payment” means any of the First Contingent Payment, the Second
Contingent Payment and the Third Contingent Payment.
 
“Designated Territory” means Rhode Island, Connecticut, Massachusetts, New York,
New Jersey, New Hampshire, Vermont, Maine, Minnesota, North Carolina,
Pennsylvania, Florida and California.
 
“Encumbrance” means any lien, pledge, security interest, claim, charge,
easement, limitation, commitment, encroachment, restriction or encumbrance of
any kind or nature whatsoever.
 
“Environmental Law” means all federal, state and local laws, rules, regulations,
common law, ordinances, decrees, orders, contracts and other binding obligations
relating to pollution (including the treatment, storage and disposal of wastes
and the cleanup of releases and threatened releases of materials), the
preservation of the environment or the exposure to materials in the environment
or workplace.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations thereunder.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder.
 
“Financial Planning Contract” means any written contract, retainer agreement,
arrangement or understanding under which the Company provides financial planning
or similar services to any Person.
 
“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time.
 
“Governmental Authority” means any nation or government, any state, territory or
other political subdivision, any entity exercising executive, legislative,
judicial, regulatory or

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administrative functions of or pertaining to government, including the SEC or
any other government authority, agency, department, board, commission or
instrumentality of the United States, any foreign government, any state or
territory of the United States or any political subdivision thereof, and any
court, tribunal or arbitrator of competent jurisdiction, and any governmental or
non-governmental self-regulatory organization, agency or authority (including
the National Association of Securities Dealers, Inc., the Commodities and
Futures Trading Commission, the National Futures Association, the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, the Office of Trust
Supervision and the Rhode Island Department of Business Regulation).
 
“Immediate Family” means, with respect to any natural person, that person’s
spouse, parents, grandparents, children, grandchildren and siblings, nieces,
nephews and in-laws (and estates, trusts, partnerships and other entities and
legal relationships of which at least a majority in interest of the
beneficiaries, owners, investors, members or participants at all times in
question are, directly or indirectly, one or more of the persons described
above, including that natural person).
 
“Insurance Services” means the insurance agency and brokerage services performed
by Park as of Closing.
 
“Intellectual Property” means (i) inventions, whether or not patentable, reduced
to practice or made the subject of one or more pending patent applications, (ii)
national and multinational statutory invention registrations, patents and patent
applications (including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof) registered or
applied for in the United States and all other nations throughout the world, all
improvements to the inventions disclosed in each such registration, patent or
patent application, (iii) trademarks, service marks, trade dress, logos, domain
names, trade names and corporate names (whether or not registered) in the United
States and all other nations throughout the world, including all variations,
derivations, combinations, registrations and applications for registration of
the foregoing and all goodwill associated therewith, (iv) copyrights (whether or
not registered) and registrations and applications for registration thereof in
the United States and all other nations throughout the world, including all
derivative works, moral rights, renewals, extensions, reversions or restorations
associated with such copyrights, now or hereafter provided by law, regardless of
the medium of fixation or means of expression, (v) computer software (including
source code, object code, firmware, operating systems and specifications), (vi)
trade secrets and, whether or not confidential, business information (including
pricing and cost information, business and marketing plans and customer and
supplier lists) and know-how (including processes, models, formulas, operating
platforms and techniques and research and development information), (vii)
industrial designs (whether or not registered), (viii) databases and data
collections, (ix) copies and tangible embodiments of any of the foregoing, in
whatever form or medium, (x) all rights to obtain and rights to apply for
patents, and to register trademarks and copyrights, (xi) all rights in all of
the foregoing provided by treaties, conventions and common law and (xii) all
rights to sue or recover and retain damages and costs and attorneys’ fees for
past, present and future infringement or misappropriation of any of the
foregoing.

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“Investment Company Act” means the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
 
“Investment Company” means any Person registered or required to be registered as
an investment company under the Investment Company Act.
 
“Investment Management Services” means any services that involve (i) the
sponsorship, administration or management of an investment fund (or portions
thereof or a group of investment funds), (ii) the management of an investment
account (or portions thereof or a group of investment accounts), (iii) the
giving of advice with respect to either the investment and/or reinvestment of
assets or funds (as any group of assets or funds) or the selection of investment
management professionals or firms, (iv) personal financial planning for
individuals, including the preparation of personal financial plans and tax
returns, the monitoring of investments and the performance of general consulting
with respect to taxes, investments or other personal financial matters, or (v)
presentations on financial planning matters to groups through seminars and
similar programs.
 
“IRS” means the United States Internal Revenue Service.
 
“knowledge of the Company” or any similar qualification regarding the knowledge
of the Company or any of its Subsidiaries or the Principals means to the
knowledge of any of I. Richard Horowitz, Joseph Robbat, Jr., Douglas A. Biggar,
Wayne M. Grzecki, Robert I. Stock, Ronald A. Sugameli, Nicole Tremblay, or
Stephen G. DaCosta in each case after due inquiry.
 
“Lost Client” means a Client who, as of the close of business on the third
Business Day prior to the Closing Date, is not a Retained Client.
 
“Lost Client Account” means a Client Account that was owned by a Lost Client on
the Base Date.
 
“Manager” means one of the fifteen portfolio managers listed on Schedule 3.6(a).
 
“Material Adverse Effect” means a material adverse effect on the condition
(financial or otherwise), business, assets, liabilities or results of operations
of the Company and its Subsidiaries, taken as whole; provided that, for the
purposes of Section 8.1(a) and 8.1(h), the term “Material Adverse Effect” will
be deemed not to include any such material adverse effect that is primarily
attributable to (i) changes affecting the United States or foreign economies in
general or affecting the investment management industry in general, (ii) changes
in Applicable Law or (iii) military conflicts or acts of terrorism, as long as,
in the case of any change or event described by clause (i), (ii) or (iii), that
change or event does not disproportionately affect the Company or its
Subsidiaries relative to other participants in the investment management
industry.
 
“Mutual Fund Consent” means, with respect to a Mutual Fund, the approval by a
majority of the shareholders of that Mutual Fund of the change in control of its
investment advisor that results from the transactions contemplated by this
Agreement at a duly convened

--------------------------------------------------------------------------------

meeting called by the trustees of that Mutual Fund pursuant to an applicable
Proxy Statement (as defined in Section 7.5(b)).
 
“Mutual Fund Governing Documents” means, with respect to each Mutual Fund, that
Mutual Fund’s declaration of trust ands by-laws, in each case as amended.
 
“Mutual Funds” means, collectively, the New Century Capital Portfolio, the New
Century Balanced Portfolio, the New Century Aggressive Portfolio, the New
Century International Portfolio, the New Century Alternative Strategies
Portfolio and the New Century Money Market Portfolio.
 
“Negative Consent” means, with respect to any Client who receives a Client
Consent Request and does not deliver a Client Consent to the Company, the
failure of that Client within 60 days of its receipt of a Client Consent Request
to notify or otherwise communicate to the Company or any of the Principals
regarding its intention to terminate its business relationship with the Company
or any of its Subsidiaries.
 
“Net Asset Value” means, with respect to a Mutual Fund as of a specified time,
the net asset value of that Mutual Fund, as determined in accordance with the
Mutual Fund Governing Documents and the prospectus of that Mutual Fund that is
in effect as of the specified time.
 
“New Century Portfolios” means New Century Portfolios, a Massachusetts business
trust.
 
“New Client” means a Person, other than a Client, that is not a Related Person
that enters into an Advisory Contract or a Financial Planning Contract following
the Base Date.

“New Client Account” means an account with the Company that is opened and
maintained by a New Client in accordance with an Advisory Contract or a
Financial Planning Contract and managed by a Manager.

“New Client Fees” means the aggregate Annual Investment Advisory Revenue of all
Retained Client Accounts of New Clients, as set forth on the Revised Client
Revenue Schedule (as defined in Section 2.2(a)).
 
“Park” means The Park Insurance Agency, Inc., a Massachusetts corporation.
 
“Permitted Encumbrances” means Encumbrances that:
 
(i)  are disclosed on the Base Balance Sheet;
 
(ii)  are for taxes or assessments that are not yet due and payable (and for
which adequate reserves or accruals are established on the Base Balance Sheet);
or
 
(iii)  do not materially detract from the value of, or materially interfere with
the present or intended use of, the assets or property affected by those
Encumbrances.

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“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
 
“Real Estate Partnerships” means Weston Multivest III L.P., Weston Multivest IV
L.P., Weston Properties XIX L.P., Weston Properties XXII L.P. and Weston
Multivest Capital Associates, L.P.
 
“Real Estate Subsidiaries” means Weston Multivest Corporation, Inc., Weston
Properties Corporation, Inc. and Weston Haverhill Inc.
 
“Records” means all records and original documents in the possession or
maintained on behalf of the Company or any of its Subsidiaries or any of the
Principals that pertain to or are utilized by the Company and its Subsidiaries
to administer, reflect, monitor, evidence or record information respecting the
business or conduct of the Company, its Subsidiaries and/or the Mutual Funds,
including (i) all such records maintained on electronic or magnetic media, or in
the electronic database system of the Company and its Subsidiaries and (ii) all
such records and original documents necessary or appropriate to comply with any
Applicable Law, including any and all records kept in accordance with the
requirements of the Advisers Act or the Investment Company Act or documents
filed pursuant to any other Applicable Laws.
 
“Reference Fees” means the sum of (i) the aggregate Annual Investment Advisory
Revenue of all Client Accounts plus (ii) the aggregate Annual Investment
Advisory Revenue of all Mutual Funds, as set forth on Schedule 3.6(a) under the
heading “Reference Fees”.
 
“Representation Agreement” means, with respect to each Other Shareholder, an
agreement under which the Other Shareholder appointed the Company and each of
the Principals as that Other Shareholder’s agent and attorney-in-fact for
certain matters in connection with the transactions contemplated by this
Agreement, all on the terms and subject to the conditions set forth therein.
 
“Retained Client” means a Client or a New Client who, as of the close of
business on the third Business Day prior to the Closing Date, (i) has not (A)
terminated its business relationship with the Company or any of its Subsidiaries
or (B) notified or otherwise communicated to the Company or any of the
Principals regarding its intention to do so and (ii) (C) in the case of a Client
that is not a Mutual Fund or a New Client, has either delivered to the Company a
Client Consent or is deemed to have provided a Negative Consent, that in either
case applies to all Client Accounts of that Client (including any Client
Accounts opened by that Client between January 1, 2005 and the close of business
on the third Business Day prior to the Closing Date) or New Client Accounts of
that New Client, as applicable; provided that a Client that is a party to an
Advisory Contract listed on Schedule 3.6(c) must deliver a Client Consent in
order to be considered a Retained Client, and (D) in the case of a Client that
is a Mutual Fund, has delivered a Mutual Fund Consent.
 
“Retained Client Account” means (i) with respect to a Client, a Client Account
that is owned by a Retained Client on the Base Date and at the close of business
on the third

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Business Day prior to the Closing Date and (ii) with respect to a New Client, a
New Client Account owned by a Retained Client at the close of business on the
third Business Day prior to the Closing Date.
 
“SEC” means the United States Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1993, as amended, and the rules and
regulations thereunder.
 
“Subsidiary” means any Person with respect to which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly or
indirectly owned by another Person. For purposes of this Agreement, Park shall
be deemed a Subsidiary of the Company, and the Real Estate Subsidiaries shall
not be deemed Subsidiaries of the Company.
 
“Supplemental Confidentiality Agreement” means the letter agreement dated March
16, 2005 between the Buyer and the Company.
 
“Tax Authority” includes the IRS and any state, local, foreign or other
governmental authority responsible for the administration of any Taxes (as
defined in Section 3.8).
 
“Tax Return” means any return, report, information statement, schedule or other
document (including any related or supporting information) with respect to
Taxes.
 
“Treasury Regulations” means the regulations promulgated under the Code.
 
“Unbooked Brokerage Commissions” means fees receivable by the Company or any
Subsidiary from any insurance company or with respect to any Brokerage Services,
or from any Principal pursuant to Section 2.12 or otherwise, in each case as set
forth on a schedule delivered by the Company to the Buyer at the Closing.
 
“WSC” means Weston Securities Corporation, Inc., a Massachusetts corporation and
wholly-owned subsidiary of the Company.
 
(b)  The following terms have the meaning specified in the indicated section of
this Agreement:
 

Term
 
Section
 
2006 EBITDA
Section 2.6(d)(iv)
2007 EBITDA
Section 2.6(d)(v)
2008 EBITDA
Section 2.6(d)(vi)
Accounting Referee
Section 2.2(b)
Acquired Business Pretax Income
Section 7.6(a)
Agreement
Preamble
Balance Sheet Date
Section 3.7(c)
Base Balance Sheet
Section 3.7(c)

 

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Bonus Plan
Section 7.6(a)
Buyer
Preamble
Buyer Indemnified Parties
Section 9.2(a)
Buyer’s Revenue Adjustment Amount
Section 2.2(a)
By-laws
Section 3.1
Charter
Section 3.1
Class AA Stock
Recitals
Closing
Section 2.3
Closing Balance Sheet
Section 2.4(a)
Closing Working Capital
Section 2.4(a)
Common Stock
Recitals
Company
Preamble
Company Organizational Documents
Section 3.1
Company Securities
Section 3.2(b)
Damages
Section 9.2(a)
Earnout Period
Section 2.6(e)
EBITDA
Section 2.6(d)(vii)
Existing-Business Transfer
Section 2.6(e)
Expenses
Section 2.6(d)(ix)
Final Closing Revenue Adjustment Amount
Section 2.2(b)
Final EBITDA
Section 2.7(b)
Final Working Capital
Section 2.5(a)
Financial Statements
Section 3.7(a)(iii)
First Contingent Payment
Section 2.6(d)(i)
Fund Agreements
Section 3.18(b)
Fund Financial Statement
Section 3.18(n)
Fund Regulatory Documents
Section 3.18(k)
Indemnified Party
Section 9.3
Indemnifying Party
Section 9.3
Insurance Clients
Section 3.20(b)
Leased Real Property
Section 3.5(a)
Leases
Section 3.5(a)
Licensed Intellectual Property
Section 3.13(c)
Open Contingent Payments
Section 2.8(a)
Other Shareholders
Recitals
Other Shares
Recitals
Pre-Closing Tax Period
Section 10.2
Preliminary Schedule
Section 2.7(a)
Prime Rate
Section 2.5(b)
Principals
Preamble
Proxy Statement
Section 7.5(c)
Purchase Price
Section 2.1
Qualifying Revenues
Section 2.6(d)(viii)
Related Person
Section 3.6(a)(i)
Restricted Period
Section 7.10(a)
Revised Client Revenue Schedule
Section 2.2(a)

 

--------------------------------------------------------------------------------

 

Rule 12b-1 Plans
Section 3.18(d)
Second Contingent Payment
Section 2.6(d)(ii)
Second Preliminary Statement
Section 2.7(c)
Series A Preferred Stock
Recitals
Shareholders
Preamble
Shareholders’ Representative
Section 12.13(a)
Shares
Recitals
Straddle Period
Section 10.3
Subsidiary Securities
Section 3.3(b)
Target Working Capital
Section 2.5(a)
Taxes
Section 3.8(a)
Third Contingent Payment
Section 2.6(d)(iii)
Third Party Interests
Section 3.3(c)
Third Preliminary Statement
Section 2.7(c)
Trigger Event
Section 2.8(a)(i)
Warranty Breach
Section 9.2(a)(i)

 
ARTICLE II.  
 
PURCHASE AND SALE
 
Section 2.1.  Purchase and Sale of the Shares. Upon the terms and subject to the
conditions of this Agreement, the Shareholders agree to sell to the Buyer, and
the Buyer agrees to purchase from the Shareholders, the Shares at the Closing.
The purchase price for the Shares is $20,000,000 less the Closing Revenue
Adjustment Amount (as calculated by the Company in accordance with Section
2.2(a)) (the amount equal to that difference, the “Purchase Price”). The Buyer
shall pay the Purchase Price as provided in Section 2.3, and the Purchase Price
is subject to adjustment as provided in Sections 2.2(b), 2.5, 2.6, 2.7 and 2.8.
 
Section 2.2.  Closing Revenue Adjustment.
 
(a)  Two Business Days prior to the Closing Date, the Company shall deliver to
the Buyer a revised version of Schedule 3.6(a) (the “Revised Client Account
Revenue Schedule”) that identifies (i) each Lost Client Account, (ii) each
Retained Client Account, (iii) each New Client Account and (iv) the Closing
Revenue Ratio. If the Closing Revenue Ratio is less than 0.95, then the Company
shall include on the Revised Client Revenue Schedule (and based on the
information set forth therein) its calculation of the Closing Revenue Adjustment
Amount.
 
(b)  If the Buyer disagrees with any information set forth in the Revised Client
Revenue Schedule, it will so notify the Shareholders’ Representative no later
than 30 days after the Closing and specify the items as to which the Buyer
disagrees and provide to Shareholders’ Representative the Buyer’s calculation of
the Closing Revenue Adjustment Amount (“Buyer’s Revenue Adjustment Amount”). If
the Buyer and Shareholders’ Representative are not able to resolve the disputed
items within 15 days thereafter, then they shall refer the disputed items to an
independent accounting firm of nationally recognized standing mutually
acceptable to the Buyer

--------------------------------------------------------------------------------

and the Shareholders’ Representative (any such firm selected under this Section
2.2(b) or under Section 2.4 or 2.7, an “Accounting Referee”). The Accounting
Referee must consider only the disputed items and must deliver to the Buyer and
the Shareholders’ Representative as soon as practicable, but in any event within
45 days, a report setting forth its calculation of the Closing Revenue
Adjustment Amount; provided that the amount calculated by the Accounting Referee
must not be greater than the Buyer’s Revenue Adjustment Amount or less than the
amount of the Closing Revenue Adjustment Amount calculated by the Company and
set forth on the Revised Client Revenue Schedule. The determination of the
Accounting Referee will be binding upon the Buyer and the Principals. The cost
of such review and report will be borne (i) by the Principals, if the difference
between the Final Closing Revenue Adjustment Amount (as defined below in this
Section 2.2(b)) and the Closing Revenue Adjustment Amount set forth in the
Revised Client Revenue Schedule is greater than the difference between the Final
Closing Revenue Adjustment Amount and Buyer’s Revenue Adjustment Amount, (ii) by
the Buyer if the first such difference is less than the second such difference
and (iii) otherwise equally by the Buyer and the Principals. “Final Closing
Revenue Adjustment Amount” means (A) the Closing Revenue Adjustment Amount as
set forth in the Revised Client Revenue Schedule, if no notice of disagreement
is delivered by the Buyer pursuant to this Section 2.2(b) or (B) if such a
notice of disagreement is delivered, (1) as agreed by the Buyer and the
Shareholders’ Representative pursuant to this Section 2.2(b) or (2) in the
absence of such agreement, the Closing Revenue Adjustment Amount as calculated
by the Accounting Referee.
 
(c)  If the Final Closing Revenue Adjustment Amount is greater than the amount
of the Closing Revenue Adjustment Amount as set forth in the Revised Client
Revenue Schedule, then the Principals shall pay to the Buyer, as an adjustment
to the Purchase Price, the amount of such excess in the manner provided and with
interest as set forth in Section 2.5(b).
 
Section 2.3.  Closing. Subject to Section 11.1, the closing of the purchase and
sale of the Shares hereunder (the “Closing”) shall take place at the offices of
Goodwin Procter LLP, Exchange Place, 53 State Street, Boston, Massachusetts
02109, as soon as possible, but in no event later than 5 Business Days, after
satisfaction of the conditions set forth in Article VIII, or at such other time
or place as the Buyer and the Shareholders’ Representative may agree. At the
Closing:
 
(a)  The Buyer shall deliver to the Shareholders, in accordance with the
allocations set forth on Schedule 2.3(a), cash in an aggregate amount equal to
$20,000,000 less the Closing Revenue Adjustment Amount, if any (as calculated by
the Company under Section 2.2(a)), in each case in immediately available funds
by wire transfer to accounts of the Shareholders designated by the Principals in
written notices to the Buyer not later than two Business Days prior to the
Closing Date. If the Principals do not deliver those notices, then the Buyer may
make the payments required under this Section 2.3(a) by certified or official
bank check payable in immediately available funds; and
 
(b)  The Shareholders shall deliver to Buyer valid title to the Shares, free and
clear of any Encumbrances and any other limitation or restriction (including any
right to vote, sell or otherwise dispose of the Shares), together with
certificates for the Shares duly endorsed or accompanied by stock powers duly
endorsed in blank, with any required transfer stamps affixed thereto.

--------------------------------------------------------------------------------

 
Section 2.4.  Closing Balance Sheet.
 
(a)  As promptly as practicable, but no later than 60 days, after the Closing
Date, the Buyer will cause to be prepared and delivered to the Shareholders’
Representative a consolidated balance sheet of the Company and its Subsidiaries
as of the close of business on the Closing Date (the “Closing Balance Sheet”),
and a certificate based on the Closing Balance Sheet setting forth the Buyer’s
calculation of Closing Working Capital. The Closing Balance Sheet will (i)
fairly present the consolidated financial position of the Company and the
Subsidiaries as at the close of business on the Closing Date (without giving
effect to the transactions contemplated by this Agreement other than the Real
Estate Separation and the contribution of the shares of capital stock of Park to
the Company) in accordance with GAAP, (ii) include line items substantially
consistent with those in the Base Balance Sheet; and (iii) be prepared in
accordance with accounting policies and practices consistent with those used in
the preparation of the Base Balance Sheet, but in all instances in accordance
with GAAP. “Closing Working Capital” means the excess of the consolidated
current assets over the consolidated current liabilities of the Company and the
Subsidiaries (which current liabilities, for the avoidance of doubt, will
include an accrual for all unpaid fees, costs, expenses and Taxes incurred or to
be incurred by the Company and its Subsidiaries in connection with the
transactions contemplated by this Agreement, including to the extent applicable,
any such costs and expenses relating to the Special Transaction Bonus that is
identified and described in Schedule 3.22), in each case as shown on the Closing
Balance Sheet, plus, except to the extent reflected in the Closing Balance
Sheet, any Unbooked Brokerage Commissions actually received by the Company in
the 30 days following the Closing, up to a maximum of $60,000.
 
(b)  If the Shareholders’ Representative disagrees with the Buyer’s calculation
of Closing Working Capital delivered pursuant to Section 2.4(a), the
Shareholders’ Representative may, within 15 days after delivery of the documents
referred to in Section 2.4(a), deliver a notice to the Buyer disagreeing with
such calculation and setting forth the Shareholders’ Representative’s
calculation of such amount. Any such notice of disagreement shall specify those
items or amounts as to which the Shareholders’ Representative disagrees, and the
Shareholders’ Representative shall be deemed to have agreed with all other items
and amounts contained in the Closing Balance Sheet and the calculation of
Closing Working Capital delivered pursuant to Section 2.4(a).
 
(c)  If a notice of disagreement shall be duly delivered pursuant to Section
2.4(b), the Buyer and the Shareholders’ Representative shall, during the 15 days
following such delivery, use their reasonable best efforts to reach agreement on
the disputed items or amounts in order to determine, as may be required, the
amount of Closing Working Capital, which amount shall not be less than the
amount thereof shown in the Buyer’s calculations delivered pursuant to Section
2.4(a) nor more than the amount thereof shown in the Shareholders’
Representative’s calculation delivered pursuant to Section 2.4(b). If, during
such period, the Buyer and the Shareholders’ Representative are unable to reach
such agreement, they shall promptly thereafter cause an Accounting Referee (as
defined in Section 2.2(b)) promptly to review this Agreement and the disputed
items or amounts for the purpose of calculating Closing Working Capital. In
making such calculation, the Accounting Referee must consider only those items
or amounts in the Closing Balance Sheet or the Buyer’s calculation of Closing
Working Capital as to which the Shareholders’ Representative has disagreed. The
Accounting Referee shall deliver to the Buyer

--------------------------------------------------------------------------------

and the Shareholders’ Representative, as promptly as practicable, a report
setting forth such calculation. The report is to be final and binding upon the
Buyer and the Principals. The cost of such review and report shall be borne (i)
by the Buyer if the difference between Final Working Capital (as defined in
Section 2.5(a)) and the Buyer’s calculation of Closing Working Capital delivered
pursuant to Section 2.4(a) is greater than the difference between Final Working
Capital and the Shareholders’ Representative’s calculation of Closing Working
Capital delivered pursuant to Section 2.4(b), (ii) by the Principals if the
first such difference is less than the second such difference and (iii)
otherwise equally by the Buyer and the Principals.
 
(d)  The Buyer and the Shareholders’ Representative agree that they shall, and
agree to cause the Company and each Subsidiary of the Company to, cooperate and
assist in the preparation of the Closing Balance Sheet and the calculation of
Closing Working Capital and in the conduct of the audits and reviews referred to
in this Section 2.4, including by making available, to the extent necessary,
books, records, work papers and personnel.
 
Section 2.5.  Adjustment to the Purchase Price.
 
(a)  If Target Working Capital exceeds Final Working Capital, the Principals
shall pay to the Buyer, as an adjustment to the Purchase Price, in the manner
and with interest as provided in Section 2.5(b), the amount of such excess. If
Final Working Capital exceeds Target Working Capital, the Buyer shall pay to the
Shareholders, in the manner and with interest as provided in Section 2.5(b), the
amount of such excess. “Target Working Capital” means $450,000. “Final Working
Capital” means Closing Working Capital (i) as shown in the Buyer’s calculation
delivered pursuant to Section 2.4(a), if no notice of disagreement with respect
thereto is duly delivered pursuant to Section 2.4(b); or (ii) if such a notice
of disagreement is delivered, (A) as agreed by the Buyer and the Shareholders’
Representative pursuant to Section 2.4(c) or (B) in the absence of such
agreement, as shown in the Accounting Referee’s calculation delivered pursuant
to Section 2.4(c); provided that in no event shall Final Working Capital be less
than the Buyer’s calculation of Closing Working Capital delivered pursuant to
Section 2.4(a) or more than the Shareholders’ Representative’s calculation of
Closing Working Capital delivered pursuant to Section 2.4(b).
 
(b)  Any payment pursuant to Section 2.5(a) shall be made within 10 days after
Final Working Capital has been determined, by delivery by the Buyer or the
Principals, as the case may be, of a certified or official bank check payable in
immediately available funds or by causing such payments to be credited to such
account, as may be designated by the parties receiving any such payments. The
amount of any payment to be made pursuant to this Section 2.5 shall bear
interest from and including the Closing Date to but excluding the date of
payment at a rate per annum equal to the Prime Rate as published in the Wall
Street Journal, Eastern Edition (the “Prime Rate”) in effect from time to time
during the period from the Closing Date to the date of payment. The interest is
payable at the same time as the payment to which it relates and is to be
calculated daily on the basis of a year of 365 days and the actual number of
days elapsed.
 
Section 2.6.  Contingent Payments.

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(a)  On or before the earlier of (i) 15 Business Days after the date the Buyer
files with the SEC its annual report on Form 10-K for the fiscal year ending
December 31, 2006, and (ii) April 15, 2007, the Buyer shall pay to the
Shareholders an aggregate amount in cash equal to the First Contingent Payment.
 
(b)  On or before the earlier of (i) 15 Business Days after the date the Buyer
files with the SEC its annual report on Form 10-K for the fiscal year ending
December 31, 2007, and (ii) April 15, 2008, the Buyer shall pay to the
Shareholders an aggregate amount in cash equal to the Second Contingent Payment.
 
(c)  On or before the earlier of (i) 15 Business Days after the date the Buyer
files with the SEC its annual report on Form 10-K for the fiscal year ending
December 31, 2008, and (ii) April 15, 2009, the Buyer shall pay to the
Shareholders an aggregate amount in cash equal to the Third Contingent Payment.
 
(d)  For purposes of Sections 2.6, 2.7 and 2.8, the following terms have the
following meanings:
 
(i)  “First Contingent Payment” means an amount based on 2006 EBITDA determined
according to the table and principles set forth in Schedule 2.6; provided that
in no event will the First Contingent payment be less than $2,000,000.
 
(ii)  “Second Contingent Payment” means an amount based on 2007 EBITDA
determined according to the table and principles set forth in Schedule 2.6;
provided that in no event will the Second Contingent Payment be less than
$2,000,000.
 
(iii)  “Third Contingent Payment” means an amount based on 2008 EBITDA
determined according to the table and principles set forth in Schedule 2.6;
provided that in no event will the Third Contingent Payment be less than
$2,000,000.
 
(iv)  “2006 EBITDA” means EBITDA for the fiscal year ending December 31, 2006.
 
(v)  “2007 EBITDA” means EBITDA for the fiscal year ending December 31, 2007.
 
(vi)  “2008 EBITDA” means EBITDA for the fiscal year ending December 31, 2008.
 
(vii)  “EBITDA” means, with respect to a specific time period, the excess of
Qualifying Revenues over Expenses.
 
(viii)   “Qualifying Revenues” means, with respect to a specified time period,
that portion of the consolidated revenues of the Acquired Business (as
determined in accordance with GAAP applied on a consistent basis) that are
generated by the Acquired Business during that period from Investment Management
Services, Insurance Services and Brokerage Services (regardless of where in the
Combined Buyer Group they are generated).

--------------------------------------------------------------------------------

 
(ix)  “Expenses” means, with respect to a specific time period, all consolidated
expenses, costs and charges of any nature (as determined on an accrual basis in
accordance with GAAP applied on a consistent basis) of the Acquired Business
(regardless of where in the Combined Buyer Group they are incurred) including
(A) any incentive compensation, profit sharing or bonus expense payable to
persons employed by a member of the Combined Buyer Group in connection with the
Acquired Business (including, to the extent required by GAAP, expenses relating
to the granting of stock options or other equity instruments), but excluding (B)
(1) the payment of interest expense on indebtedness for borrowed money, (2) the
payment of federal, state, local and foreign taxes based on or measured by gross
or net income, (3) the effect of any depreciation or amortization with respect
to any property or assets of the Acquired Business and (4) any amount paid to
any Principal as severance and any amount paid for the continuation of that
Principal’s health and dental benefits following the termination of that
Principal’s employment with the Company by the Company without cause or by the
Principal for good reason under his employment agreement with the Company that
is then in effect; provided further that Expenses shall not include any
allocation to the Acquired Business of general corporate or administrative costs
or other similar overhead costs of the Buyer and its Affiliates, except to the
extent they represent costs actually incurred by the Buyer and its Affiliates in
connection with services or expenses requested by, or undertaken for the benefit
of, the Acquired Business, including services or expenses that are jointly
requested by, or undertaken for the joint benefit of, the Acquired Business and
other businesses of the Buyer and its Affiliates, in which case there shall be
allocated to the Acquired Business its proportionate share of those costs.
 
(e)  During the period commencing on the Closing Date and ending at the close of
business on December 31, 2008 (the “Earnout Period”), without the mutual written
consent of the Parent and the Shareholders’ Representative, no member of the
Combined Buyer Group may effect (i) any transfer or partial transfer to or from
any other member of the Combined Buyer Group of, or (ii) any internal
reorganization or partial reorganization of the Combined Buyer Group relating
to, any client or customer account (or any assets therein or services with
respect thereto) or business division, product or service of the Acquired
Business or of the Buyer and its Affiliates, as the case may be, in each case
that existed prior to the Closing (any such transfer or reorganization, an
“Existing-Business Transfer”).
 
Section 2.7.  Calculation of Contingent Payments.
 
(a)  At the time of the payment of the First Contingent Payment, the Buyer shall
deliver to the Shareholders’ Representative a statement setting forth the
Buyer’s calculation of 2006 EBITDA (the “Preliminary Statement”). If the
Shareholders’ Representative disagrees with any item or amount contained in the
Preliminary Statement or with the Buyer’s calculation of 2006 EBITDA set forth
therein, the Shareholders’ Representative may, within 15 days after delivery of
the Preliminary Statement, deliver a notice to the Buyer disagreeing with such
calculation and setting forth the Shareholders’ Representative’s calculation of
2006 EBITDA. Any notice of disagreement shall specify those items or amounts as
to which the Shareholders’ Representative disagrees, and the Shareholders’
Representative will be deemed to have agreed with all other items and amounts.
If the Buyer and the Shareholders’ Representative are not able to resolve such
dispute within 15 days after the delivery of such notice, they shall promptly

--------------------------------------------------------------------------------

thereafter cause an Accounting Referee (as defined in Section 2.2(b)) to review
this Agreement and the disputed items or amounts for the purpose of calculating
2006 EBITDA. The Accounting Referee shall deliver to the Buyer and the
Shareholders’ Representative, as promptly as practicable, a report setting forth
such calculation, which amount shall not be less than the Buyer’s calculation of
2006 EBITDA as set forth in the Preliminary Statement or more than the
Shareholders’ Representative’s calculation of 2006 EBITDA delivered pursuant to
Section 2.7(a). That report shall be final and binding upon the Buyer and the
Principals. The cost of such review and report shall be paid (i) by the Buyer if
the difference between Final 2006 EBITDA (as defined in Section 2.7(b)) and the
Buyer’s calculation of 2006 EBITDA as set forth in the Preliminary Statement is
greater than the difference between Final 2006 EBITDA and the Shareholders’
Representative’s calculation of 2006 EBITDA delivered pursuant to this
Section 2.7(a), (ii) by the Principals, if the first such difference is less
than the second such difference and (iii) otherwise equally by the Buyer and the
Principals.
 
(b)  If the Buyer’s calculation of 2006 EBITDA as set forth in the Preliminary
Statement was less than Final 2006 EBITDA, then the Buyer shall pay to the
Shareholders an amount equal to the excess of (i) the amount that would have
been paid as the First Contingent Payment if the Buyer had based its calculation
of the First Contingent Payment on an amount equal to Final 2006 EBITDA over
(ii) the amount paid by the Buyer as the First Contingent Payment under Section
2.6(a); provided that in no event will any interest be incurred on any such
excess. As used herein, “Final 2006 EBITDA” means 2006 EBITDA (A) as shown in
the Preliminary Statement, if no notice of disagreement with respect thereto is
duly delivered pursuant to Section 2.7(a); or (B) if such a notice of
disagreement is delivered, (1) as agreed by the Buyer and the Shareholders’
Representative pursuant to Section 2.7(a) or (2) in the absence of such
agreement, as shown in the Accounting Referee’s calculation delivered pursuant
to Section 2.7(a); provided that in no event shall Final 2006 EBITDA be less
than the amount as shown in the Preliminary Statement or more than the
Shareholders’ Representative’s calculation in the notice of disagreement
delivered pursuant to Section 2.7(a).
 
(c)  At the time of the payment of the Second Contingent Payment and the Third
Contingent Payment, the Buyer shall deliver to the Shareholders’ Representative
a statement setting forth the Buyer’s respective calculations of 2007 EBITDA and
2008 EBITDA (those statements, the “Second Preliminary Statement” and the “Third
Preliminary Statement”). If the Shareholders’ Representative disagrees with any
item or amount contained in the Second Preliminary Statement or the Third
Preliminary Statement or with the Buyer’s calculation of 2007 EBITDA or 2008
EBITDA, then, in each case the Shareholders’ Representative may, within 15 days
after delivery of the Secondary Preliminary Statement or the Third Preliminary
Statement, as applicable, deliver a notice to the Buyer disagreeing with the
applicable calculation and setting forth the Shareholders’ Representative’s
calculation of 2007 EBITDA or 2008 EBITDA, as applicable. Upon delivery of such
a notice, all matters in dispute shall be resolved in a manner consistent with
the process described in Sections 2.7(a) and 2.7(b) with respect to 2006 EBITDA
and the Preliminary Statement.
 
Section 2.8.  Acceleration of Contingent Payments.
 
(a)  If at any time during the Earnout Period:

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(i)  the Buyer consummates (A) a merger or consolidation of the Acquired
Business with or into another Person pursuant to which, immediately following
the consolidation or merger, a majority of the outstanding voting power of the
surviving or consolidated Person is owned by a Person other than the Buyer or
one or more of its Affiliates or (B) the sale, of all or substantially all of
the properties and assets of the Acquired Business to any Person other than the
Buyer or one or more of its Affiliates;
 
(ii)  the Buyer or one or more of its Affiliates consummates the sale of a
majority of the voting power of the Acquired Business to Persons other than the
Buyer or one or more of its Affiliates; or
 
(iii)  the Buyer or one or more of its Affiliates terminates all or
substantially all of the business operations of the Acquired Business relating
to Investment Management Services, Brokerage Services and Insurance Services,
taken as a whole, and does not then cause the Acquired Business to provide any
products or services that are comparable to the terminated business operations
(any of the events described by clauses (i), (ii) or (iii) of this Section
2.8(a), a “Trigger Event”);
 
(b)  then the Buyer shall immediately (and, in any event, within five Business
Days) (A) deliver to the Shareholders’ Representative a report setting forth a
reasonably detailed calculation of the present discounted value of all
Contingent Payments that, at the time of the occurrence of Trigger Event, the
Principals have not already received or with respect to which the rights of the
Principals have not otherwise lapsed (those Contingent Payments, the “Open
Contingent Payments”) and (B) pay to the Principals an aggregate amount in cash
equal to that value.
 
For purposes of this Section 2.8(a), the present discounted value of the Open
Contingent Payments will be as determined in good faith by the Buyer, taking
into account (1) the time remaining in the Earnout Period at the time of the
Trigger Event, (2) EBITDA between the Closing Date and the date of the Trigger
Event and (3) projected EBITDA between the date of the Trigger Event and the end
of the Earnout Period, based on (x) good faith projections of Qualifying
Revenues for that period and (y) an assumption that the ratio of EBITDA to
Qualifying Revenues for that period will equal the ratio of EBITDA to Qualifying
Revenues for the period between the Closing Date and the date of the Trigger
Event and (4) a discount rate equal to the Prime Rate.
 
(c)  If the Shareholders’ Representative disagrees with the Buyer’s calculation
of the present discounted value of the Open Contingent Payments delivered
pursuant to Section 2.8(a), the Shareholders’ Representative may, within 10 days
after delivery of the report referred to in Section 2.8(a), deliver a notice to
the Buyer disagreeing with that calculation and requesting that the Buyer engage
an independent investment banking firm of nationally recognized standing that is
reasonably acceptable to the Shareholders’ Representative. Within 10 days of its
engagement, the investment banking firm must deliver a report setting forth a
calculation of the present discounted value of the Open Contingent Payments that
incorporates the principles set forth in Section 2.8(a) that will be final and
binding upon all of the parties. If the investment banking firm’s calculation is
greater than the amount the Buyer paid to the Principals pursuant to

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Section 2.8(a), the Buyer shall pay to the Shareholders an aggregate amount in
cash equal to the excess.
 
Section 2.9.  Payment Procedures. The Buyer shall make any payment due to the
Shareholders under Section 2.6, 2.7 or 2.8 in accordance with the allocations
set forth on Schedule 2.3(a), in each case in immediately available funds by
wire transfer to accounts of the Principals designated by the Shareholders in
written notices not later than two Business Days prior to the anticipated
payment date. If the Principals do not deliver those notices, then the Buyer may
make any such payment by certified or official bank check payable in immediately
available funds. Any payment made by the Buyer under Section 2.6, 2.7 or 2.8 is
to be treated as an adjustment to the Purchase Price.
 
Section 2.10.  Setoff. The Buyer may set off (a) the amount of any Damages (as
defined in Section 8.2(a)) for which it or any other Buyer Indemnified Party (as
defined in Section 8.2(a)) is entitled to indemnification under Section 9.2 and
(b) any other amounts to which it may be entitled under this Agreement,
including under Sections 2.2(c), 2.5(a) or 9.2, against any amounts otherwise
owed by the Buyer to the Shareholders with respect Contingent Payments under
Sections 2.6, 2.7 or 2.8.
 
Section 2.11.  Spinout of Real Estate Partnerships and Subsidiaries. Prior to
the Closing the Company shall complete the Real Estate Separation and shall take
such other actions as may be necessary or appropriate to divest itself of all
interests, direct or indirect, that the Company may have in the Real Estate
Partnerships. Within 15 Business Days of the Closing Date, the Principals shall
(i) prepare and obtain all necessary corporate or similar authorizations to
change the corporate and partnership names of the Real Estate Subsidiaries and
Real Estate Partnerships to names that do not contain the name “Weston” and (ii)
deliver to the Buyer copies of any applicable certificates of amendment to the
articles of organization or certificates of partnership of the Real Estate
Subsidiaries and Real Estate Partnerships filed in connection with those name
changes, in each case certified by the secretaries of state of the respective
jurisdictions in which those entities are organized.
 
Section 2.12.  Park Insurance Agency. Prior to the Closing each Principal who
holds shares of capital stock of Park shall contribute such shares to the
Company so that at the Closing Park will be a wholly owned subsidiary of the
Company. At the Closing, any Principal who is entitled to receive any
commissions or similar payments with respect to insurance policies sold by Park
or such Principal shall assign all of such Principal’s rights with respect to
such payments to Park.
 
 
ARTICLE III.  
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE PRINCIPALS
 
As a material inducement to the Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, the Company and the Principals,
jointly and severally, make

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to the Buyer, as of the date hereof and as of the Closing, the representations
and warranties set forth in this Article III.
 
Section 3.1.  Organization and Qualification of the Company. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts, and has all necessary power and authority
to own or lease its properties and to conduct its business in the manner and in
the places where such properties are owned or leased or such business is
currently conducted. A copy of the Company’s articles of organization, as
amended to date, certified by the Secretary of State of the Commonwealth of
Massachusetts (the “Charter”), and by-laws, as amended to date, certified by the
clerk of the Company (the “By-laws,” and together with the Charter, the “Company
Organizational Documents”), all of which were heretofore delivered to the
Buyer’s counsel, are complete and correct, and no amendments thereto are
pending. The Company is not in violation of any term of the Company
Organizational Documents. The Company is duly qualified to do business as a
foreign corporation under the laws of each jurisdiction in which the nature of
its business, activities or other contacts in that jurisdiction or the ownership
or leasing of its properties requires such qualification, except where the
failure to be so licensed or qualified could not reasonably be expected to have
a Material Adverse Effect.
 
Section 3.2.  Capitalization; Beneficial Ownership.
 
(a)  The authorized capital stock of the Company consists of (i) 1,500,000
shares of Common Stock, of which 1,399,998 shares are issued and outstanding,
(ii) 3,000,000 shares of Class AA Stock, of which 800 shares are issued and
outstanding and (iii) 2,000 shares of Series A Preferred Stock, of which 375
shares are issued and outstanding. As of the Closing, the only issued and
outstanding shares of capital stock of the Company will be the Shares.
 
(b)  All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable. Except as
set forth in Section 3.2(a), there are no outstanding (i) shares of capital
stock or voting securities of the Company, (ii) securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (iii) options, warrants or other rights to acquire
from the Company, or any other obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company or (iv) stock appreciation,
phantom stock, profit participation or similar rights with respect to shares of
capital stock or voting securities of the Company (the items in Sections
3.2(b)(i) through 3.2(b)(iv) being referred to collectively as “Company
Securities”). There are no, and in the last ten (10) years there have not been
any, obligations of the Company or any of its Subsidiaries to repurchase, redeem
or otherwise acquire any Company Securities.
 
(c)  As of the date hereof, the Principals and the Other Shareholders own
beneficially and of record the Common Shares and Other Shares, as applicable,
set forth opposite their names on Schedule 3.2(c), free and clear of any
Encumbrances and any other limitation or restriction (including any restriction
on the right to vote, sell or otherwise dispose of the Company Shares). At the
Closing, the Principals shall transfer and deliver to the Buyer valid title to
the Shares free and clear of any Encumbrances and any such limitation or
restriction.

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Section 3.3.  Subsidiaries and Investments. 
 
(a)  Schedule 3.3(a) contains a complete and accurate list of each Subsidiary of
the Company. Each Subsidiary of the Company is a corporation duly authorized and
validly existing in the laws of the state of its incorporation, with all
necessary power and authority to own or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is currently conducted. Copies of the charter, bylaws
and similar organization documents for each Subsidiary of the Company, all of
which were heretofore delivered to the Buyer’s counsel, are complete and
correct, and no amendments thereto are pending. Each Subsidiary is duly
qualified to do business as a foreign corporation under the laws of each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties requires such qualification, except where the failure to be so
licensed or qualified could not reasonably be expected to have a material
adverse effect on that Subsidiary.
 
(b)  All of the outstanding capital stock or other voting securities of each
Subsidiary is owned by the Company, directly or indirectly, free and clear of
any Encumbrances and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or any other voting securities). There are no outstanding (i) securities
of the Company or any Subsidiary convertible into or exchangeable for shares of
capital stock or voting securities of any Subsidiary, (ii) options, warrants or
other rights to acquire from the Company or any Subsidiary, or other obligation
of the Company or any Subsidiary to issue, any capital stock, voting securities
or securities convertible into or exchangeable for capital stock or voting
securities of any Subsidiary or (iii) stock appreciation, phantom stock, profit
participation or similar rights with respect to shares of capital stock or
voting securities of any Subsidiary (the items in Sections 3.3(c)(i) through
3.3(c)(iii) being referred to collectively as “Subsidiary Securities”). There
are no, and in the past ten (10) years there have not been any, obligations of
the Company or any Subsidiary to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
 
(c)  Except for the Subsidiaries of the Company or as set forth on
Schedule 3.3(c), neither the Company nor any of its Subsidiaries owns, directly
or indirectly, any shares of capital stock, other securities or ownership
interests or investment in any other Person (collectively, “Third Party
Interests”). Schedule 3.3(c) sets forth a complete description of each Third
Party Interest, including the name of each record and beneficial owner of the
Third Party Interest, its percentage interest with respect to the Person to
which the Third Party Interest relates and any voting or similar rights with
respect thereto. Except as expressly provided in the contracts listed on
Schedule 3.3(c), neither the Company nor any of its Subsidiaries have any rights
to, or are bound by any commitment or obligation to, acquire by any means,
directly or indirectly, any Third Party Interests or make any further investment
in, or contribution or advance with respect to, any Third Party Interest or to
any other Person. Except as expressly provided in the contracts listed on
Schedule 3.3(c), neither the Company nor any of its Subsidiaries has any
obligation (whether as guarantor, controlling person or otherwise) for the
present, future or contingent liabilities or obligations of any Person set forth
(or required to be set forth) on Schedule 3.3(c).
 
Section 3.4.  Authority; No Violation by the Company.

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(a)  The Company has full right, authority and power to enter into this
Agreement and each agreement, document and instrument to be executed and
delivered by the Company pursuant to, or as contemplated by, this Agreement and
to carry out the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Company of this Agreement and each such other
agreement, document and instrument have been duly authorized by all necessary
action of the Company and its shareholders, and no other action on the part of
the Company, any Subsidiary of the Company or any shareholder of the Company is
required in connection therewith. No Other Shareholder has objected to any of
the transactions contemplated hereby. This Agreement and each agreement,
document and instrument executed and delivered by the Company pursuant to, or as
contemplated by, this Agreement constitutes, or when executed and delivered will
constitute, valid and binding obligations of the Company enforceable against it
in accordance with their terms, except as enforceability may be restricted,
limited or delayed by applicable bankruptcy or other laws affecting creditors’
rights generally or by equitable principles. The execution, delivery and
performance by the Company of this Agreement and each such other agreement,
document and instrument and consummation of the transactions contemplated hereby
and thereby:
 
(i)  does not and will not violate any provision of the Company Organizational
Documents, any of the Mutual Fund Governing Documents or the Representation
Agreements, in each case as amended to date;
 
(ii)  does not and will not violate any Applicable Laws or require the Company,
any of its Subsidiaries or any Mutual Fund to obtain any approval, consent or
waiver of, or make any filing with, any Person or Governmental Authority, except
as provided for elsewhere in this Agreement regarding the Mutual Funds or as
specifically identified on Schedule 3.4 hereto, which approvals, consents and
waivers identified in such Schedule will, when obtained as of the Closing,
conform in all material respects to, and otherwise satisfy in all material
respects, all Applicable Laws; and
 
(iii)  except as specifically identified on Schedule 3.4 hereto, does not and
will not result in a breach of, constitute a default under, accelerate any
obligation under, or give rise to a right of termination of, any agreement,
contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which the
Company, any of its Subsidiaries or any of the Mutual Funds is a party or by
which the property of the Company, any of its Subsidiaries or any of the Mutual
Funds is bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on (A)
any of assets of the Company, any of its Subsidiaries or any of the Mutual Funds
or (B) any Person’s interest in the Company, any of its Subsidiaries or any of
the Mutual Funds.
 
Section 3.5.  Real and Personal Property.
 
(a)  Neither the Company nor any of its Subsidiaries owns, or has at any time,
owned, directly or indirectly, any interest in real property. All of the real
property leased by the Company and its Subsidiaries is identified on
Schedule 3.5(a) (the “Leased Real Property”). All leases with respect to the
Leased Real Property are identified on Schedule 3.5(a) (the “Leases”),

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and true and complete copies thereof have been delivered to Buyer. Each of the
Leases has been duly authorized and executed by the parties thereto and is in
full force and effect. Neither the Company nor any of its Subsidiaries is in
default under any of the Leases, and no event has occurred that, with notice or
the passage of time, or both, would give rise to such a default. To the
Company’s knowledge, none of the other parties to any of the Leases is in
default thereunder and there is no event that, with notice or the passage of
time, or both, would give rise to such a default. The Company is not aware of
any reason why any Lease would be terminated other than upon the expiration of
the current term described therein. There is no pending or, to the Company’s
knowledge, contemplated or threatened condemnation of any of the Leased Real
Property or any part thereof. Except as set forth on Schedule 3.5(a), to the
Company’s knowledge, none of the Leased Real Property, the buildings,
structures, facilities, fixtures or other improvements thereon, or the use
thereof, contravenes or violates the terms of any Lease or any material
building, zoning, fire protection, administrative, occupational safety and
health or other applicable law, rule or regulation. 
 
(b)  Except as set forth on Schedule 3.5(b), the Company and its Subsidiaries
own good and marketable title to, or, in the case of leased property or assets,
have valid leasehold interest in, all of the property and assets reflected in
the Base Balance Sheet (as defined in Section 3.7(c)) or acquired after the
Balance Sheet Date (as defined in Section 3.7(c)), in each case free and clear
of all Encumbrances other than Permitted Encumbrances. There are no developments
affecting any such property or assets pending or, to the knowledge of the
Company threatened, that might materially detract from the value, materially
interfere with any present or intended use or materially adversely affect the
marketability of any such property or assets. Except as disclosed on Schedule
3.5(b), the property, assets and rights owned by the Company and its
Subsidiaries constitute all of the property, assets and rights used or held for
use in connection with the businesses of the Company and its Subsidiaries and
are sufficient to conduct those businesses as currently conducted and as planned
to be conducted following the Closing.
 
Section 3.6.  Clients and Client Accounts. 
 
(a)  Schedule 3.6(a) is a list as of the Base Date of all Client Accounts and
all Mutual Funds, setting forth with respect to each Client Account or Mutual
Fund, as the case may be:
 
(i)  (A) in the case of a Client Account, the name of each Client that is (x) a
Shareholder or a director, officer or employee of the Company or any of its
Subsidiaries, (y) an Immediate Family member or Affiliate of any of the Persons
described in clause (x), or (z) a trust or collective investment vehicle in
which any of the Persons described in clause (x) or (y) is a holder of a
beneficial interest (any of those Persons described in clause (x), (y) or (z), a
“Related Person”), and (B) in the case of the Mutual Funds, the name of the
Mutual Fund and any Related Person who had an investment in the Mutual Fund as
of the Base Date;
 
(ii)  the state (or, if the Client is not a U.S. citizen, the country) of which
the Client is a citizen or resident (in the case of individuals) or domiciled
(in the case of entities);

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(iii)  the Base Date Account Value, Applicable Rate and Annual Investment
Advisory Revenue for that Client Account or Mutual Fund.
 
(b)  Each Client (other than the Mutual Funds, which have entered into advisory
agreements with the Company that are listed on Schedule 3.18(b)) has entered
into an Advisory Contract with the Company with respect to each Client Account
owned by such Client in each case containing the terms and conditions of one of
the forms of agreement attached as Exhibit 3.6. All Client Account assets which
are subject to Advisory Contracts are managed by one of the fifteen Managers
listed on Schedule 3.6(a) hereto. As of the date hereof, except as set forth in
Schedule 3.6(b) and expressly described thereon, there are no contracts,
agreements, arrangements or understandings pursuant to which the Company, any of
its Subsidiaries, or any of their respective officers, employees, or other
representatives including the Principals has undertaken or agreed to cap, waive,
offset, reimburse or otherwise reduce any or all fees or charges payable by or
with respect to any of the Clients or pursuant to any Advisory Contract. As of
the date hereof, except as set forth in Schedule 3.6(b), no Client or, in the
case of the Mutual Funds, any underlying shareholder therein, as applicable, has
notified or otherwise communicated to the Company or any of the Principals
regarding an intention to terminate or reduce its business relationship with the
Company, or adjust the fee schedule with respect to any Advisory Contract in a
manner that would reduce the fees of the Company or any of its Subsidiaries in
connection with such Client relationship.
 
(c)  Except for the Advisory Contracts between the Company and the Mutual Funds,
none of the Advisory Contracts will terminate according to its terms or as a
result of any provisions of Applicable Law in connection with the transactions
contemplated by this Agreement.
 
(d)  Neither the Company nor any of its Subsidiaries has any clients or
customers with respect to which fees payable to the Company or any of its
Subsidiaries are based on performance or otherwise provide for compensation on
the basis of a share of capital gains or appreciation in respect of the funds
(or any portion thereof) of any client or customer.
 
(e)  Except as disclosed in Schedule 3.6(e), the Company does not provide
Investment Management Services through (i) any issuer or other Person that is an
investment company (within the meaning of the Investment Company Act), (ii) any
issuer or other Person that would be an investment company (within the meaning
of the Investment Company Act) but for the exemptions contained in the
Investment Company Act, or (iii) any issuer or other Person that is not required
to be registered under the laws of the appropriate securities regulatory
authority in the jurisdiction in which the issuer or other Person is domiciled
(other than the United States), that is or holds itself out as engaged primarily
in the business of investing or trading in securities.
 
(f)  No circumstances exist regarding the relationship between the Company and
any of its Subsidiaries, on the one hand, and any of their respective clients or
customers, on the other hand, that has had or could reasonably be expected to
have a Material Adverse Effect. To the knowledge of the Company, there is no
client or customer of the Company or its Subsidiaries or Insurance Client whose
investment or other activities, reputation or credit history

--------------------------------------------------------------------------------

would reasonably be expected to cause the Buyer or any of its Affiliates any
damages or impair the public reputation and standing of the Buyer or any of its
Affiliates.
 
(g)  Except as set forth in Schedule 3.6(g), no exemptive orders, “no-action”
letters or similar exemptions or regulatory relief have been obtained, or are
any requests pending therefor, by or with respect to the Company, its
Subsidiaries or any Principals or any officer, director, partner or employee of
the Company or its Subsidiaries, in connection with the business of the Company
or any of its Subsidiaries, or with respect to any client or customer of the
Company or its Subsidiaries in connection with the provision of Investment
Management Services to such client or customer by the Company or its
Subsidiaries.
 
Section 3.7.  Financial Statements.
 
(a)  The Company has delivered to the Buyer the following financial statements,
copies of which are attached as Schedule 3.7(a):
 
(i)  audited consolidated balance sheets of the Company and its Subsidiaries at
February 28, 2002, February 28, 2003 and February 29, 2004, and audited
consolidated statements of income and shareholders’ equity and cash flows for
each of the three years then ended, in each case together with the audit reports
thereon of the Company’s independent certified public accountants; and
 
(ii)  an unaudited consolidated balance sheet of the Company and its
Subsidiaries at December 31, 2004, and unaudited consolidated statements of
income and shareholders’ equity and cash flows for the ten month period then
ended, in each case certified by the Company’s treasurer;
 
(iii)  unaudited balance sheets of Park at February 28, 2002, February 28, 2003
and February 29, 2004, and unaudited statements of income and shareholders’
equity and cash flows for each of the three years then ended, and the unaudited
balance sheet of Park at December 31, 2004;
 
(b)  The financial statements set forth in Schedule 3.7(a) present fairly the
financial condition of the Company, Park and its Subsidiaries at the dates of
those financial statements and the results of its operations for the periods
covered thereby in accordance with GAAP using the accrual method of accounting,
applied consistently during the periods covered thereby (except that the
Company’s and Park’s unaudited financial statements do not include footnote
disclosure and are subject to normal year-end audit adjustments that are not in
the aggregate material).
 
(c)  The unaudited consolidated balance sheet of the Company at December 31,
2004 (the “Balance Sheet Date”) (including any notes thereto) is referred to
hereinafter as the “Base Balance Sheet”. As of the Balance Sheet Date, the
Company and its Subsidiaries did not have any liabilities of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including, without limitation, liabilities as guarantor or otherwise
with respect to obligations of others, liabilities for Taxes due or then accrued
or to become due, or contingent or potential liabilities relating to activities
of the

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Company and its Subsidiaries or the conduct of their respective businesses prior
to Balance Sheet Date regardless of whether claims in respect thereof had been
asserted as of such date) except (i) liabilities stated or adequately reserved
against on the Base Balance Sheet, (ii) liabilities specified in Schedule
3.7(c), (iii) liabilities incurred after the Balance Sheet Date in the ordinary
course of business of consistent with past practice that, individually or in the
aggregate, are not material to the Company and the Subsidiaries, taken as a
whole, and (iv) liabilities for Taxes incurred after the Balance Sheet Date in
the ordinary course of business consistent with past practice.
 
Section 3.8.  Taxes.
 
(a)  The Company and each of its Subsidiaries have paid or caused to be paid all
federal, provincial, territorial, state, municipal, local, foreign or other
taxes, imposts, rates, levies, assessments and other charges including, without
limitation, all income, franchise, gains, capital, real property, goods and
services, transfer, value added, gross receipts, windfall profits, severance, ad
valorem, personal property, production, sales, use, license, stamp, documentary
stamp, mortgage recording, excise, employment, payroll, social security,
unemployment, disability, estimated or withholding taxes, and all customs and
import duties, together with any interest, additions, fines or penalties with
respect thereto or in respect of any failure to comply with any requirement
regarding Tax Returns and any interest in respect of such additions, fines or
penalties (collectively, “Taxes”), required to have been paid by any of them
through the date hereof.
 
(b)  The Company and each of its Subsidiaries have withheld and paid all Taxes
required to have been withheld and paid in connection with any amounts paid or
owing to any employee, independent contractor, creditor, shareholder, or other
third party.
 
(c)  The Company and each of its Subsidiaries have, in accordance with
Applicable Law, filed all federal, state, material local and foreign Tax Returns
required to be filed by it. All such Tax Returns were correct and complete in
all respects (including, without limitation, after having taken into account its
payroll, property or receipts, and other factors used in any state’s
apportionment or allocation formula). A list of all federal, state, local and
foreign income Tax Returns filed with respect to the Company and its
Subsidiaries for taxable periods ended on or after February 28, 1999, is set
forth in Schedule 3.8(c), and Schedule 3.8(c) indicates those Tax Returns that
have been audited or currently are the subject of an audit. For each taxable
period of the Company and its Subsidiaries ended on or after February 28, 1999,
the Company delivered to the Buyer correct and complete copies of all federal,
state, local and foreign income Tax Returns, examination reports and statements
of deficiencies assessed against or agreed to by the Company and any of its
Subsidiaries.
 
(d)  Neither the IRS nor any other Governmental Authority is now asserting or,
to the Company’s knowledge, threatening to assert against the Company or any of
its Subsidiaries any deficiency or claim for additional Taxes. No claim has ever
been made by a Governmental Authority in a jurisdiction where the Company or any
of its Subsidiaries does not file reports and returns that the Company or one or
more of its Subsidiaries is or may be subject to taxation by that jurisdiction.
There are no Encumbrances on any of the assets of the Company or any of its
Subsidiaries that arose in connection with any failure (or alleged failure) to
pay any

--------------------------------------------------------------------------------

Taxes. Neither the Company nor any of its Subsidiaries has ever entered into a
closing agreement pursuant to Section 7121 of the Code.
 
(e)  There has not been any audit of any Tax Return filed by the Company or any
of its Subsidiaries, no such audit is in progress, and neither the Company nor
any of its Subsidiaries has been notified by any Tax Authority that any such
audit is contemplated or pending. Except as set forth in Schedule 3.8(e), no
extension of time with respect to any date on which a Tax Return was or is to be
filed by the Company or any of its Subsidiaries is in force, and no waiver or
agreement by the Company or any of its Subsidiaries is in force for the
extension of time for the assessment or payment of any Taxes.
 
(f)  Neither the Company nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or could result,
separately or in the aggregate, in the payment of any “excess parachute payment”
within the meaning of Code Section 280G (or any corresponding provision of
state, local or foreign Tax law). Neither the Company nor any of its
Subsidiaries has been a United States real property holding corporation within
the meaning of Code Section 897(c)(2) during the applicable period specified in
Code §897(c)(1)(A)(ii). Each of the Company and its Subsidiaries have disclosed
on their federal income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal income Tax within the meaning of
Code Section 6662. Neither the Company nor any of its Subsidiaries is a party to
or bound by any Tax allocation or sharing agreement. Neither the Company nor any
of its Subsidiaries (i) has been a member of an Affiliated Group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was the Company) or (ii) has any liability for the Taxes of any Person
(other than the Company or any of its Subsidiaries) under Treasury Regulations
Section 1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise.
 
(g)  Schedule 3.8(g) sets forth the following information with respect to each
of the Company and its Subsidiaries (or, in the case of clause (ii) below, with
respect to each of the Company’s Subsidiaries) as of the most recent practicable
date (as well as on an estimated pro forma basis as of the Closing giving effect
to the consummation of the transactions contemplated hereby): (i) the basis of
the Company or its Subsidiary in its assets; (ii) the basis of the Principals in
the Shares and the basis of the Company in the shares of stock of each
Subsidiary (or the amount of any excess loss account); (iii) the amount of any
net operating loss, net capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution allocable to the Company or any
of its Subsidiaries; and (iv) the amount of any deferred gain or loss allocable
to the Company or any of its Subsidiary arising out of any intercompany
transaction.
 
(h)  The unpaid Taxes of the Company and its Subsidiaries (A) did not, as of the
Balance Sheet Date, exceed the reserve for Tax liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the Base Balance Sheet (rather
than in any notes thereto) and (B) do not exceed that reserve as adjusted for
the passage of time through the Closing Date in accordance with the past custom
and practice of the Company and its Subsidiaries in filing their Tax Returns.
Since the date of the Base Balance Sheet, neither the Company nor any of its
Subsidiaries has incurred any

--------------------------------------------------------------------------------

liability for Taxes arising from extraordinary gains or losses, as that term is
used in GAAP, outside the ordinary course of business consistent with past
custom and practice.
 
(i)  Neither the Company nor any of its Subsidiaries will be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any:
 
(i)  change in method of accounting for a taxable period ending on or prior to
the Closing Date;
 
(ii)  “closing agreement” as described in Code Section 7121 (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date;
 
(iii)  intercompany transaction or excess loss account described in Treasury
Regulations under Code Section 1502 (or any corresponding or similar provision
of state, local or foreign income Tax law);
 
(iv)  installment sale or open transaction disposition made on or prior to the
Closing Date; or
 
(v)  prepaid amount received on or prior to the Closing Date.
 
(j)  Neither the Company nor any of its Subsidiaries has distributed stock of
another Person, or has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part by
Section 355 or Section 361 of the Code.
 
(k)  The payroll, property, receipts of Company and its Subsidiaries or other
factors used in a particular state’s apportionment or allocation formula results
or has resulted in apportionment or allocation of business income to no state or
jurisdiction other than Massachusetts, and neither the Company nor any of its
Subsidiaries has non-business income that is or was allocated, apportioned or
otherwise sourced to any state or jurisdiction other than Massachusetts.
 
(l)  The Company and its Subsidiaries employ the accrual method as their overall
accounting method for calculating income and deductions.
 
Section 3.9.  Collectibility of Accounts Receivable. All of the accounts
receivable of the Company and its Subsidiaries shown or reflected on the Base
Balance Sheet or arising after the Balance Sheet Date (less the reserve for bad
debts set forth on the Base Balance Sheet as adjusted since such date as set
forth on Schedule 3.9), were generated by the Company and its Subsidiaries in
good faith and, to the extent outstanding on the Closing Date and included in
the computation of the working capital in the certificate delivered to the Buyer
at Closing under Section 8.1(h) hereof, are valid and enforceable claims, fully
collectible and subject to no set off or counterclaim. Except as disclosed on
Schedule 3.9, the Company and its Subsidiaries have no accounts or loans
receivable from any Person that is affiliated with the Company or any of its

--------------------------------------------------------------------------------

Subsidiaries or from any director, officer, partner, manager, member or employee
of the Company or any of its Subsidiaries.
 
Section 3.10.  Absence of Certain Changes. Except as disclosed in Schedule 3.10,
since the Balance Sheet Date there has not been:
 
(a)  any change in the condition (financial or otherwise), properties, assets,
liabilities, business or operations of the Company and its Subsidiaries, taken
as a whole, that individually or in the aggregate, has had or could reasonably
be expected to have a Material Adverse Effect;
 
(b)  any amendment, modification, waiver or termination or, to the knowledge of
the Company, proposed or threatened amendment, modification, waiver or
termination, whether written or oral, of any Advisory Contract listed in
Schedule 3.6(a), including any amendment, waiver or modification involving or
relating to the fees chargeable under any of those agreements;
 
(c)  Any obligation or liability of any nature, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown, including,
without limitation, (i) liabilities for Taxes due or to become due, (ii)
contingent or potential liabilities relating to services provided by the Company
or any of its Subsidiaries or the conduct of the business of the Company or any
of its Subsidiaries since the Balance Sheet Date regardless of whether claims in
respect thereof have been asserted or (iii) contingent liabilities incurred by
the Company or its Subsidiaries as guarantor or otherwise with respect to the
obligations of the Company or any of its Subsidiaries or others, incurred by the
Company or its Subsidiaries, other than obligations and liabilities incurred in
the ordinary course of business consistent with past practices (it being
understood that liability claims in respect of services provided shall not be
deemed to be incurred in the ordinary course of business);
 
(d)  any Encumbrances on any of the properties or assets of the Company, any of
its Subsidiaries or any of the Mutual Funds, other than Permitted Encumbrances;
 
(e)  any cancellation of any material debt or claim owing to, or waiver of any
material right of, the Company, any of its Subsidiaries or any of the Mutual
Funds;
 
(f)  any purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company, any of its Subsidiaries or any of the
Mutual Funds, other than in the ordinary course of business consistent with past
practices;
 
(g)  any material amount of damage, destruction or loss, whether or not covered
by insurance, to the properties, assets or business of the Company, any of its
Subsidiaries or any of the Mutual Funds;
 
(h)  any declaration, setting aside or payment of any dividend or distribution
by the Company, or the making of any other distribution in respect of any
Company Securities, or any direct or indirect redemption, purchase or other
acquisition by the Company of any Company Securities;

--------------------------------------------------------------------------------

 
(i)  any labor trouble or claim of unfair labor practices involving the Company
or any of its Subsidiaries or change in the compensation payable or to become
payable by the Company, any of its Subsidiaries or any of the Mutual Funds to
any of its officers, employees, agents or independent contractors other than
normal merit increases in accordance with its usual practices, or any bonus
payment or arrangement made to or with any of such officers, employees, agents
or independent contractors;
 
(j)  any change in the identities, officers, duties or compensation of the
officers or management of the Company, any of its Subsidiaries or any of the
Mutual Funds;
 
(k)  any payment or discharge of a material lien or liability of the Company,
any of its Subsidiaries or any of the Mutual Funds, other than in the ordinary
course of business consistent with past practices;
 
(l)  any obligation or liability incurred by the Company, any of its
Subsidiaries or any of the Mutual Funds to any of its officers, directors,
members, managers, shareholders or employees, or any loans or advances made by
the Company or any of its Subsidiaries to any of its officers, directors,
managers, members, shareholders or employees, except normal compensation and
expense allowances payable to officers or employees in the ordinary course of
business consistent with past practices;
 
(m)  any change in accounting methods or practices, pricing, billing or
collection practices or policies, or payment practices or polices used by the
Company, any of its Subsidiaries or any of the Mutual Funds;
 
(n)  any other material transaction entered into by the Company, any of its
Subsidiaries or any of the Mutual Funds not in the ordinary course of business
consistent with past practices; or
 
(o)  any agreement or understanding, whether in writing or otherwise, for the
Company, any of its Subsidiaries or any of the Mutual Funds to take any of the
actions specified in paragraphs (a) through (n) above.
 
Section 3.11.  Ordinary Course. Since Balance Sheet Date, other than with
respect to transactions specifically contemplated by this Agreement, the
Company, its Subsidiaries and the Mutual Funds have conducted their respective
businesses only in the ordinary course and consistent with past practices.
 
Section 3.12.  Banking Relations. All of the arrangements that the Company, its
Subsidiaries and the Mutual Funds have with any banking institution are, in all
material aspects, completely and accurately described and summarized in
Schedule 3.12, indicating with respect to each of the arrangements the type of
arrangement maintained (such as checking account, borrowing arrangements, etc.)
and the Persons authorized in respect thereof.
 
Section 3.13.  Intellectual Property.
 
(a)  Except for the Licensed Intellectual Property (as defined in Section
3.13(c)), the Company and its Subsidiaries have exclusive ownership of, or
exclusive license to

--------------------------------------------------------------------------------

use, all material Intellectual Property used in the businesses of the Company
and its Subsidiaries as presently conducted. All of the rights of the Company
and its Subsidiaries in such Intellectual Property are freely transferable.
There are no claims or demands of any other Person pertaining to any of that
Intellectual Property and no proceedings have been instituted, are pending or,
to the Company’s knowledge, threatened, that challenge the rights of the Company
or any of its Subsidiaries in respect thereof. The Company and its Subsidiaries
have the right to use, free and clear of any claims or rights of any other
Person, all customer lists (subject to applicable confidentiality restrictions),
investment or other processes, computer software, systems, data compilations,
research results and other similar information used in the businesses of the
Company and its Subsidiaries as presently conducted.
 
(b)  All patents, patent applications, trademarks, trademark applications and
registrations and registered copyrights and all other items of material
Intellectual Property that are owned by or licensed to the Company or any of its
Subsidiaries or used by the Company or any of its Subsidiaries in the businesses
of the Company and its Subsidiaries as presently conducted are listed in
Schedule 3.13(b). All of such patents, patent applications, trademark
registrations, trademark applications and registered copyrights have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office, the United States Register of Copyrights, or the corresponding offices
of other jurisdictions as identified on Schedule 3.13(b), and have been properly
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations of the United States and each of those other
jurisdictions.
 
(c)  All licenses or other agreements under which the Company or any of its
Subsidiaries are granted rights in items of Intellectual Property that are
material to the business or operations of the Company or any of its Subsidiaries
are listed in Schedule 3.13(c) (the “Licensed Intellectual Property”). All of
those licenses or other agreements are in full force and effect, and there is no
default under any of those licenses and agreements by the Company or any of its
Subsidiaries or, to the Company’s knowledge, any other party thereto, and,
except as set forth on Schedule 3.13(c), all of the rights of the Company or any
of its applicable Subsidiaries thereunder are freely assignable. The
consummation of the transactions contemplated by this Agreement will not
materially alter or impact the unrestricted right of the Company or its
Subsidiaries to use the Intellectual Property thereunder free and clear of
claims or other rights of any Person (other than the claims of a licensor under
a licensing or similar agreement disclosed on Schedule 3.13(c)). To the
knowledge of the Company, the licensors under those licenses and other
agreements have and had all requisite power and authority to grant the rights
purported to be conferred thereby. True and complete copies of all those
licenses and other agreements, and any amendments thereto, have been provided to
the Buyer.
 
(d)  Neither the Company nor any of its Subsidiaries has granted rights to any
Person in Intellectual Property owned or licensed by the Company or any of its
Subsidiaries.
 
(e)  The Company and its Subsidiaries have taken all commercially reasonable
steps required in accordance with sound business practices to establish and
preserve its ownership and other rights in all Intellectual Property. Except as
set forth in Schedule 3.13(e) hereto, the Company and its Subsidiaries have
required all Persons having access to valuable proprietary or non-public
information of the Company and its Subsidiaries to execute agreements under
which those Persons are required to maintain the confidentiality of all
proprietary or non-public

--------------------------------------------------------------------------------

information of the Company and its Subsidiaries. The Company and its
Subsidiaries have not made any of that information available to any Person other
than employees of the Company and its Subsidiaries except pursuant to written
agreements requiring the recipients to maintain the confidentiality of the
information.. The Company has no knowledge of any infringement by other Persons
of any Intellectual Property rights of the Company and its Subsidiaries.
 
(f)  To the Company’s knowledge, the present business, activities and products
of the Company, its Subsidiaries and the Mutual Funds and those presently
contemplated by the Company do not infringe any rights of any other Person in
Intellectual Property. No proceeding charging the Company, any of its
Subsidiaries or any of the Mutual Funds with infringement of any Intellectual
Property of any other Person has been filed or, to the knowledge of the Company,
is threatened to be filed. To the knowledge of the Company, none of the Company,
its Subsidiaries or the Mutual Funds is making unauthorized use of any
confidential information or trade secrets of any Person, including without
limitation, any former employer of any past or present employee of the Company
or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries nor,
to the knowledge of the Company, any of the Company’s or any of its
Subsidiaries’ employees have any agreements or arrangements with any Persons
other than the Company and its Subsidiaries related to confidential information
or trade secrets of such Persons or restricting any such employee’s ability to
engage in business activities of any nature.
 
Section 3.14.  Contracts. Except for contracts, commitments, plans, agreements
and licenses expressly contemplated hereby or identified in Schedule 3.14 or in
Schedule 3.5(a), Schedule 3.6(a), Schedules 3.13(b) or (c), Schedules 3.18(b) or
(c) or Schedule 3.23(c) (true and complete copies of which have been delivered
to the Buyer), none of the Company, any of its Subsidiaries or any of the Mutual
Funds is a party to or subject to:
 
(a)  any Advisory Contract or any other contract for the provision of Investment
Management Services or other similar or related services;
 
(b)  any plan or contract providing for bonuses, pensions, options, stock (or
beneficial interest) purchases (or other securities or phantom equity
purchases), deferred compensation, retirement payments, profit sharing, or the
like;
 
(c)  any employment arrangement or other employment contract or contract for
services that is not terminable at will by the Company or one of its
Subsidiaries or a Mutual Fund without liability for any penalty or severance
payment (except for regular payments in arrears for services rendered under
contracts that require payment for services rendered to the date of such
termination);
 
(d)  any contract or agreement for the purchase of any assets, material or
equipment, except purchase orders in the ordinary course of business consistent
with past practice for less than $50,000 in the aggregate;
 
(e)  any other contracts or agreements creating any obligations of the Company,
any of its Subsidiaries or any of the Mutual Funds of $50,000 or more with
respect to any such contract or agreement;

--------------------------------------------------------------------------------

 
(f)  any contract or agreement not made in the ordinary course of business;
 
(g)  any contract with any solicitor or sales agent;
 
(h)  any contract limiting the freedom of the Company, any of its Subsidiaries
or any of the Mutual Funds or any of the Principals (or their Affiliates) to
compete in any line of business or with any Person;
 
(i)  any license agreement;
 
(j)  any agreement providing for the borrowing or lending of money, and none of
the Company, any of its Subsidiaries or any of the Mutual Funds has any
obligations: (i) for borrowed money, (ii) evidenced by bonds, debentures, notes
or similar instruments, (iii) to pay the deferred purchase price of property or
services, (iv) under leases that would, in accordance with GAAP, appear on the
balance sheet of the lessee as a liability, (v) secured by an Encumbrance, (vi)
in respect of letters of credit, or bankers acceptances, contingent or
otherwise, or (vii) in respect of any guaranty or endorsement or other
obligations to be liable for the debts of another person or entity; or
 
(k)  any other material contract or agreement to which the Company, any of its
Subsidiaries or any of the Mutual Funds is a party or by which it is bound.
 
Each of the contracts described in Schedule 3.5(a), Schedule 3.6(a),
Schedules 3.13(b) and (c), Schedule 3.14, Schedules 3.18(b) or (c) or Schedule
3.23(c) is a valid and binding obligation of the Company, a Subsidiary of the
Company or one of the Mutual Funds, is in full force and effect and is
enforceable in accordance with its respective terms, and there is not, under any
such contract, an existing material breach by the Company, any of its
Subsidiaries or any of the Mutual Funds or, to the knowledge of the Company, any
other party thereto or any event that, with the giving of notice or the lapse of
time or both, would become such a breach by the Company, any of its Subsidiaries
or any of the Mutual Funds or, to the knowledge of the Company, any other party
thereto. The Company and its Subsidiaries have at all times been in compliance
with the guidelines and restrictions set forth in any contract described in
Schedule 3.6(a), including, without limitation, any limitation set forth in the
applicable prospectus, offering memorandum or marketing material for a
collective investment vehicle or governing documents for any Client. Each
contract listed on Schedule 3.6(a) will remain valid and effective following the
Closing in accordance with its respective terms if a Client Consent is obtained
in respect of the contract prior to the Closing.
 
Section 3.15.  Litigation. Except as set forth in Schedule 3.15, there is no
litigation or legal or other action, suit, proceeding or, to the knowledge of
the Company, investigation, at law or in equity, before any Governmental
Authority, (a) in which the Company, any of its Subsidiaries, any Principal, any
officer, director, manager, member, partner or employee of the Company or any of
its Subsidiaries is engaged, or, to the knowledge of the Company, with which any
of them is threatened, in connection with the business, affairs, properties or
assets of the Company or any of its Subsidiaries, (b) that seeks damages from
any Person identified in the preceding clause (a) in connection with the
transactions contemplated by this Agreement, or (c) that (individually or in the
aggregate) might call into question the validity or hinder the

--------------------------------------------------------------------------------

enforceability or performance of this Agreement, or any of the other agreements,
documents and instruments contemplated hereby and the transactions contemplated
hereby and thereby. There are no proceedings pending, or to the knowledge of the
Company, threatened, relating to the termination of, or limitation of, the
rights of the Company or any of its Subsidiaries regarding any of their
respective registrations under the Advisers Act, as an investment adviser, or
any similar or related rights any registrations or qualifications with various
states or other jurisdictions, or under any other Applicable Laws.
 
Section 3.16.  Compliance with Laws. 
 
(a)  The Company and its Subsidiaries are, and at all times have been, in
compliance in all material respects with all Applicable Laws including (i) the
Advisers Act, the USA Patriot Act, the Commodity Exchange Act, ERISA, the
Exchange Act, the Investment Company Act, and the Securities Act and the
regulations promulgated under each of them, (ii) the rules and regulations of
self-regulatory organizations including, the NASD and each applicable exchange
(as defined under the Exchange Act), (iii) the privacy and security provisions
of the Gramm-Leach-Bliley Act of 1999 and (iv) and all other foreign, federal or
state securities laws and regulations applicable to the business or affairs or
properties or assets of the Company and any of its Subsidiaries.
 
(b)  Neither the Company, any Subsidiary or any Principal nor, to the knowledge
of the Company, any officer, director, shareholder, manager, member, partner or
employee of the Company or any of its Subsidiaries, is in default with respect
to any judgment, order, writ, injunction, decree, demand or assessment issued by
any court or any other Governmental Authority relating to any aspect of the
business or affairs or properties or assets of the Company or any of its
Subsidiaries or that could give rise to an affirmative answer to any of the
questions in Item 11, Part I of Form ADV.
 
(c)  Neither the Company or any of its Subsidiaries nor any of the Principals is
subject to any cease-and-desist or other order issued by, or is a party to any
written agreement, consent agreement or memorandum of understanding with, or is
a party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any supervisory letter from or has
adopted any resolutions at the request of, any self-regulatory organization or
other Governmental Authority, that restricts the conduct of the business of any
of the Company, its Subsidiaries or the Principals or that in any manner is
related to the business of any of the Company, the Subsidiaries, or the
Principals, and the knowledge of the Company, none of those Persons is
threatened with the imposition or receipt of any of the foregoing.
 
(d)  Neither the Company, any of its Subsidiaries or any Principal nor, any
officer, director, manager, member, partner or employee of the Company or any of
its Subsidiaries, nor, to the knowledge of the Company, any Other Shareholder is
charged or, to the knowledge of the Company, threatened with, or under
investigation with respect to, any violation of any provision of any Applicable
Laws, including any violation that could give rise to an affirmative answer to
any of the questions in Item 11, Part I of Form ADV.
 
Section 3.17.  Business; Registrations.

--------------------------------------------------------------------------------

 
(a)  The Company has, since February 11, 1983 been engaged solely in the
business of providing Investment Management Services.
 
(b)  The Company has at all times since February 11, 1983 been duly registered
as an investment adviser under the Advisers Act. The Company is duly registered,
licensed and qualified as an investment adviser or has provided notice of
operation as, an investment adviser in all jurisdictions where such
registration, licensing, qualification or notice is required in order to conduct
their business and where the failure to be so registered, licensed or qualified
or to have provided notice could reasonably be expected to have a Material
Adverse Effect. The Company and its Subsidiaries are in compliance with all
foreign, federal and state laws requiring registration, licensing, qualification
or notice of operation as, an investment adviser and have currently effective
notice filings in each of the jurisdictions listed in Schedule 3.17(b). The
Company has delivered to the Buyer, true and complete copies of the most recent
Forms ADV of the Company as amended to date, and has made available copies of
all foreign and state registration forms, in each case as amended to date. The
information contained in such forms was true and complete at the time of filing
and the Company has made all amendments to such forms as are required under any
Applicable Law. At all times in connection with its federal registration as an
investment adviser, the Company has maintained, and currently maintains, a Form
ADV that complies in all material respects with Applicable Law.  At no point
during this period has the Company’s Form ADV (including its current Form ADV)
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were or are made, not misleading.
 
(c)  The Company, its Subsidiaries and their respective personnel validly
possess all Permits required from foreign, federal, state or local authorities
in order for them to conduct the businesses presently conducted by the Company
and its Subsidiaries in the manner presently conducted. Neither the Company or
any of its Subsidiaries nor any of their respective personnel is subject to any
material limitation imposed in connection with one or more of the Permits.
 
(d)  WSC is and has, since October 10, 1984 been a member in good standing of
the NASD and duly registered as a broker-dealer under the Exchange Act, and is
and has, since September 9, 2002, been registered and a member in good standing
of the MSRB. WSC is duly registered, licensed and qualified as a broker-dealer
in all jurisdictions where such registration, licensing or qualification is
required in order to conduct its business and where the failure to be so
registered, licensed or qualified could have a Material Adverse Effect. WSC and
its employees do not hold any registrations, memberships or similar membership
privileges with any national securities exchange, board of trade, commodities
exchange, clearing corporation or association, securities dealers association or
similar institutions other than the NASD and MSRB, and neither the Company nor
any of its Subsidiaries other than WSC holds any registrations, memberships or
similar membership privileges with any national securities exchange, board of
trade, commodities exchange, clearing corporation or association, securities
dealers association or similar institutions. The Company has delivered to the
Buyer a true and complete copy of each agreement with respect to such
registration, membership or privileges and each such agreement is a valid and
binding agreement of WSC, enforceable in accordance with its terms. WSC is in
compliance in all material respects with all Applicable Laws requiring
registration,

--------------------------------------------------------------------------------

licensing or qualification as a broker-dealer, including without limitation all
net capital requirements, and has currently effective notice filings in each of
the jurisdictions listed in Schedule 3.17(b).
 
(e)  The Company has delivered to the Buyer or its representatives, true and
complete copies of WSC’s most recent Form BD, as amended to date, and has made
available copies of all foreign and state registration forms, likewise as
amended to date. The information contained in such forms was true and complete
in all material respects at the time of filing and WSC has made all amendments
of a material nature to such forms as are required under any Applicable Laws.
The information contained in WSC’s most recent Form BD, as amended to date, is
true and complete in all material respects.
 
(f)  Schedule 3.17(f) contains a complete list of (i) each Person who is, or who
is required to be, registered in connection with the business of the Mutual
Funds, the Real Estate Partnerships, the Company or any of its Subsidiaries as
an investment adviser representative within the meaning of the Advisers Act, an
associated person within the meaning of the Exchange Act, or an insurance agent
under other Applicable Laws, (ii) all Permits required from any Governmental
Authority to be held by such Persons in connection with either the Investment
Management Services or Brokerage Services rendered by the Company or any of its
Subsidiaries to or on behalf of the Mutual Funds or the Real Estate
Partnerships, or solicitation of broker-dealers, banks and other institutions
for the purpose of distributing Mutual Fund or the Real Estate Partnerships, and
(iii) all professional licenses and registrations required to be held by such
Persons in connection with such Investment Management Services or Brokerage
Services.
 
(g)  Neither the Company or any of its Subsidiaries nor, to the knowledge of the
Company, any Person “associated” (as defined under both the Investment Company
Act and the Advisers Act) with the Company or any of its Subsidiaries, has been
convicted of any crime or is or has engaged in any conduct that would be a basis
for (i) denying, suspending or revoking registration of any investment adviser
under the Advisers Act, or ineligibility to serve as an associated person of any
investment adviser, (ii) being ineligible to serve as an investment adviser (or
in any other capacity contemplated by the Investment Company Act) to a
registered investment company pursuant to the Investment Company Act or (iii)
being ineligible to serve as a broker-dealer or an associated person of a
broker-dealer pursuant to Section 15(b) of the Exchange Act, and to the
knowledge of the Company, there is no proceeding or investigation that is
reasonably likely to become the basis for any such ineligibility,
disqualification, denial, suspension or revocation.
 
(h)  Neither the Company nor any of its Subsidiaries is a “commodity pool
operator” or “commodity trading adviser” within the meaning of the Commodity
Exchange Act. Neither the Company or any of its Subsidiaries nor any of its
officers or employees is required to be registered as a commodity trading
adviser, a commodity pool operator, a futures commission merchant, an associated
person, a counseling officer, a sales person or in any similar capacity with the
SEC, the Commodity Futures Trading Commission, the National Futures Association
or the securities commission of any state or any self-regulatory organization.
No Person other than a full-time employee of the Company or one of its
Subsidiaries renders Investment Management

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Services to or on behalf of, or solicits Persons with respect to, the provision
of Investment Management Services by, the Company and its Subsidiaries. 
 
(i)  The only place of business (within the meaning of Rule 203A-3(b) under the
Advisers Act) of the Company and its Subsidiaries is located at 40 William
Street, Wellesley, Massachusetts 02481.
 
Section 3.18.  Mutual Funds.
 
(a)  Each Mutual Fund is duly organized, validly existing and in good standing
in the jurisdiction in which it is organized and has all requisite power and
authority to conduct its business in the manner and in the places where its
business is currently conducted. Each Mutual Fund is and has been, since its
inception, engaged solely in the investment company business.
 
(b)  Schedule 3.18(b) describes each of the investment advisory agreements,
distribution or underwriting contracts, plans adopted pursuant to Rule 12b-1
under the Investment Company Act, arrangements for the payment of service fees
(as such term is defined in Rule 2830 of the NASD Conduct Rules), administrative
services agreements, custodian agreements and other agreements and contracts
(other than agreements and contracts entered into by the Mutual Funds in the
ordinary course of business in connection with the making of investments)
(collectively, the “Fund Agreements”) pertaining to any of the Funds, all of
which are in full force and effect. As to each Mutual Fund, there is in effect
an investment advisory agreement and a distribution agreement. Each Fund
Agreement pursuant to which the Company or WSC has, or may have, received
compensation with respect to its activities in connection with any of the Mutual
Funds was duly approved in the manner and to the extent required under the
applicable provisions of the Investment Company Act.
 
(c)  Schedule 3.18(c) sets forth (i) a listing of all contracts pursuant to
which the Company or any of its Subsidiaries or any other party provides
Investment Management Services or administration, accounting, distribution or
other services to a Mutual Fund on the date of this Agreement, copies of which
have previously been provided to the Buyer, and (ii) the most recent date on
which each such contract was approved, renewed or continued in accordance with
Section 15 of the Investment Company Act. Each such contract, and any subsequent
renewal thereof, has been duly approved, authorized, executed and delivered by
each party thereto and, to the extent applicable, has been adopted in compliance
with Section 15 of the Investment Company Act and is a valid and binding
agreement of each such party, enforceable against the applicable Mutual Fund
accordance with its terms (subject to bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors’ rights generally and to
general equity principles), and each such party is in material compliance with
the terms of each investment advisory contract and other contract to which it is
a party, is not currently in material default under any of the terms of any such
investment advisory contract or other contract; no event has occurred or
condition exists that with notice or the passage of time would constitute such a
default, and each such investment advisory contract or other contract is in full
force and effect. Except as set forth in Schedule 3.18(c), no such contract, or
any other arrangement or understanding relating to a Mutual Fund, contains any
undertaking or proposal by the Seller to (A) cap fees or to reimburse any or all
fees or expenses of a Mutual Fund or (B) assume or pay any liabilities or
obligations of a Mutual Fund, and except as set forth in Schedule 3.18(c), the

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Company and its Subsidiaries have no such obligations. Except as set forth in
Schedule 3.18(c), no Mutual Fund has expressed an intention to the Company or
any of its Subsidiaries to terminate or reduce its relationship with any of
them, or adjust the fee schedule, fee caps, waivers or expense limitations or
undertakings with respect to any contract in any manner.
 
(d)  Schedule 3.18(d) lists all plans of distribution relating to any currently
outstanding shares of the Mutual Funds and adopted in accordance with Rule 12b-1
(the “Rule 12b-1 Plans”) under the Investment Company Act and all agreements
related thereto. True and complete copies of the Rule 12b-1 Plans and related
agreements have previously been provided to the Buyer. All of the Rule 12b-1
Plans and any related agreements have been adopted (and the Rule 12b-1 Plan have
from time to time been renewed) in accordance with the provisions of Rule 12b-1
under the Investment Company Act and are all currently in full force and effect.
 
(e)  Since the date of its respective most recent audited financial statements,
each Mutual Fund has had and now has all material permits, licenses,
certificates of authority, orders and approvals of, and has made all material
filings, applications and registrations with, any Governmental Authorities that
are required under Applicable Law in order to permit each such Mutual Fund to
carry on its respective business as presently conducted, and all such permits,
licenses, certificates of authority, registrations, orders and approvals are in
full force and effect. There are no proceedings pending or, to the knowledge of
the Company, threatened, and, to the knowledge of the Company, no event has
occurred or condition exists that is reasonably likely to form the basis for any
proceeding, that is reasonably likely to result in the revocation, cancellation
or suspension, or any adverse modification, of any such permit, license,
certificate of authority, order or approval, and the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby will
not result in any such revocation, cancellation, suspension or modification.
 
(f)  Each of the Mutual Funds has at all times been operated in compliance in
all material respects with Applicable Law and the applicable guidelines and
restrictions set forth in the prospectus, statement of additional information or
other offering documents of the relevant Mutual Fund, and consummation of the
transactions contemplated by this Agreement will not result in any violation of
any such guidelines or restrictions or any procedures adopted by the respective
trustees of the Mutual Funds.
 
(g)  Except as set forth in Schedule 3.18(g), there are no currently effective
special restrictions, consent judgments or SEC or judicial orders on or with
regard to any of the Mutual Funds. No stop order suspending the effectiveness of
any registration statement of any of the Mutual Funds has been issued and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company are contemplated.
 
(h)  None of the Company, any of its Subsidiaries or any of the Mutual Funds
has, or has had at any time, any agreement or understanding (i) with any
shareholder or group of shareholders of any of the Mutual Funds to permit or
encourage the practice of short-term buying or selling of Mutual Fund shares or
(ii) relating to the receipt and transmission of orders to purchase or redeem
Mutual Fund shares after 4:00 p.m. New York City time, other than arrangements
with financial intermediaries (including, without limitation, retirement plan
administrators) who are to receive orders from investors prior to 4:00 p.m. New
York City time.

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(i)  Each prospectus relating to a Mutual Fund (which term, as used in this
Agreement includes any related statement of additional information), as amended
or supplemented from time to time, used since the Mutual Fund’s inception has
complied in all material respects with Applicable Law, and each current
prospectus for the Mutual Funds so complies.  All supplemental advertising and
marketing material relating to each Mutual Fund used since each Mutual Fund’s
inception has complied in all material respects with Applicable Law, and all
such advertising and marketing material currently in use complies in all
material respect with Applicable Law.  None of such prospectuses, amendments,
supplements or supplemental advertising and marketing materials, as of their
respective dates, included or includes an untrue statement of a material fact or
has omitted or omits to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
or are made, not misleading.
 
(j)  Each Mutual Fund’s investments have been made in accordance with that
Mutual Fund’s investment policies and restrictions set forth in its registration
statement in effect at the time the investments were made and have been held in
accordance with its respective investment policies and restrictions, to the
extent applicable and in effect at the time such investments were held, except
for a limited number of inadvertent investments that were all promptly
recognized as such and promptly remedied in such a manner such that neither the
applicable Mutual Fund nor the Company nor any of its Subsidiaries suffered or
incurred any material liabilities, damages or costs.
 
(k)  Each of the Mutual Funds has timely filed (other than in respect of Taxes,
that are the subject of Section 3.18(m)) all reports, registration statements
and other documents, together with any amendments required to be made with
respect thereto, that were required to be filed with any Governmental Authority,
including the SEC (the “Fund Regulatory Documents”), and has paid all fees and
assessments due and payable in connection therewith, and as of their respective
dates, each of the foregoing filings complied in all material respects with the
requirements of Applicable Law, and none of the Fund Regulatory Documents or
related prospectuses, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Company has
made available to the Buyer a copy of each Fund Regulatory Document filed with
the SEC since January 1, 2003 and will deliver to the Buyer promptly after the
filing thereof a copy of each Fund Regulatory Document filed with the SEC by a
Mutual Fund after the date hereof and prior to the Closing.
 
(l)  None of the Company or any of its Subsidiaries or any Person who is an
“affiliated person” or an “interested person” (each as defined in the Investment
Company Act) with respect to the Company or any of its Subsidiaries, receives or
is entitled to receive any compensation directly or indirectly (i) from any
Person in connection with the purchase or sale of securities or other property
to, from or on behalf of any of the Mutual Funds, other than bona fide ordinary
compensation as principal underwriter for any of the Mutual Funds or as broker
in connection with the purchase or sale of securities in compliance with Section
17(e) of the Investment Company Act, or (ii) from any of the Mutual Funds or
their security holders for other than bona fide investment advisory,
administrative or other services. Accurate and complete

--------------------------------------------------------------------------------

disclosure of all such compensation arrangements has been made in the
registration statements of the Mutual Funds filed in accordance with Applicable
Law.
 
(m)  Except as set forth on Schedule 3.18(m), (i) since its inception, each
Mutual Fund has elected to be treated as, and has qualified to be classified as,
a regulated investment company taxable under Subchapter M of Chapter 1 of the
Code and under any similar provisions of state or local law in any jurisdictions
in which the Mutual Fund filed, or is required to file, a Tax Return; (ii) each
Mutual Fund has filed all material Tax Returns required to have been filed and
has paid in a timely manner all material Taxes required to have been paid by the
Mutual Fund, and, to the knowledge of the Company, there are no circumstances
that would cause a Mutual Fund to fail to so qualify in the current taxable
year; (iii) no Mutual Fund has waived in writing any statute of limitations in
respect of Taxes of that Mutual Fund; (iv) no issues that have been raised in
writing by the relevant Tax Authority in connection with the examination of the
Tax Returns referred to in clause (ii) are currently pending; and (v) all
deficiencies asserted in writing or assessments made in writing as a result of
any examination of the Tax Returns referred to in clause (ii) by a Tax Authority
have been paid in full.
 
(n)  The Company has made available to the Buyer copies of the most recently
available audited financial statements, prepared in accordance with GAAP, of
each of the Mutual Funds, and unaudited financial statements, prepared in
accordance with GAAP, of each of the Mutual Funds for the first six months of
its most recent fiscal year if the ending date of such six-month period occurred
more than sixty (60) days prior to the date of this Agreement (each hereinafter
referred to as a “Fund Financial Statement”). Each of the Fund Financial
Statements is consistent with the books and records of that Fund, and presents
fairly the consolidated financial position of the related Mutual Fund in
accordance with GAAP applied on a consistent basis (except as otherwise noted
therein) at the respective date of such Fund Financial Statement and the results
of operations and cash flows for the respective periods indicated. The Fund
Financial Statements reflect and disclose all material changes in accounting
principles and practices adopted by each of the Mutual Funds during the periods
covered by each Fund Financial Statement. The independent auditors of the Mutual
Fund are appropriately registered with the Public Company Accounting Oversight
Board (PCAOB), and, in each instance, the engagement of those auditors for audit
or non-audit services has complied with Applicable Law.
 
(o)  There is no litigation or legal action, suit, proceeding or investigation
at law or in equity pending or, to the knowledge of the Company, threatened, in
any court or before any other Governmental Authority, by, against, or otherwise
involving, any of the Mutual Funds, or to the knowledge of the Company any
officer or trustee thereof relating to the activities of the Mutual Funds, any
disqualification of any of the Mutual Funds or to the knowledge of the Company
any officer or trustee thereof under Section 9(a) of the Investment Company Act,
or any event that would require the Company to give an affirmative response to
any of the questions in Item 11 to Part I of its Form ADV or require WSC to give
an affirmative response to any of the questions in Item 11 of its Form BD. There
are no judgments, injunctions, orders or other judicial or administrative
mandates outstanding against or affecting any of the Mutual Funds or, to the
knowledge of the Company any officer or trustee thereof relating to the
activities of or affecting the Mutual Funds.

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(p)  (i) Each Mutual Fund is duly registered as an investment company under the
Investment Company Act; (ii) all shares of the Mutual Funds outstanding on the
date of this Agreement, and all shares of the Mutual Funds to be issued between
the date of this Agreement and the Closing will be, duly and validly issued,
fully paid and nonassessable and qualified for sale, or sold pursuant to an
exemption from such qualification, under all applicable laws of any state or
territory of the United States of America; (iii) all outstanding securities of
the Mutual Funds required to be registered under the Securities Act have been,
or between the date of this Agreement and the Closing will be, offered and sold
in accordance with the registration requirements of the Securities Act; and (iv)
no registration statement relating to securities issued by the Mutual Funds
contained as of its effective date any untrue statement of a material fact or
omitted to state a material fact required to be stated therein in order to make
the statements therein relating to the Mutual Funds not misleading.
 
(q)  Except as set forth on Schedule 3.18(q), no exemptive orders have been
obtained, nor are any requests pending therefor, with respect to any Mutual Fund
under the Exchange Act, the Securities Act, the Investment Company Act or the
Investment Advisers Act.
 
(r)  Each Mutual Fund has duly adopted all required codes, policies, procedures
pursuant to the Investment Company Act, to the extent applicable, and has
otherwise complied in all material respects with any applicable requirements of
such Act. Each Mutual Fund has duly adopted a code of ethics as contemplated by
the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations
thereunder. To the knowledge of the Company, there have been no violations or
allegations of violations of such codes, policies or procedures.
 
(s)  All advertising or marketing materials relating to any Mutual Fund that are
required to be filed with the NASD and state regulators have been timely filed
therewith.
 
Section 3.19.  Compliance Policies and Procedures. To the extent applicable, the
Company and its Subsidiaries were in compliance with Rule 206(4)-7 under the
Advisers Act by October 5, 2004 and Rule 204A-1 by February 1, 2005. Prior to
taking such measures, the Company had written policies and procedures to the
extent required under the Advisers Act, and there have been no material
violations or allegations of material violations of such written policies and
procedures including without limitation procedures for protection of non-public
information and compliance with fiduciary standards.
 
Section 3.20.  Insurance Agency Matters.
 
(a)  Each employee of the Company or any of its Subsidiaries, including Park,
responsible for selling, soliciting or placing insurance for the Company or any
of its Subsidiaries, including Park, is duly licensed to act as an insurance
agent, broker or producer and is in good standing with each applicable
Governmental Authority, including all applicable state insurance regulators.
Schedule 3.20(a) is a true, complete and accurate list of each Governmental
Authority with which each such employee is licensed to engage in such
activities, and all such licenses are in good standing. Park is duly licensed to
act as an insurance agent, broker, producer or adviser, as the case may be, in
each state identified on Schedule 3.20(a). Except as listed on Schedule 3.20(a),
Park does not sell any fixed or variable annuity products.

--------------------------------------------------------------------------------

 
(b)  Schedule 3.20(b) lists all of the clients and customers of Park (the
“Insurance Clients”) and the commissions to which Park is entitled with respect
to each such Insurance Client, as of the date hereof. Park has the exclusive and
unencumbered right to receive those commissions and, except as set forth in
Schedule 3.20(b), no consent of any other party is required with respect to
those exclusive rights in connection with the transactions contemplated by this
Agreement. To the knowledge of the Company, no policies of insurance in force
for which Park receives commissions or other remuneration will be terminated
before the stated expiration date or will not be renewed upon expiration.
 
(c)  No Person other than the employees of the Company and its Subsidiaries,
including Park, is or has been authorized or permitted to place business on
Park’s behalf. No binder of insurance or other proposal of coverage has been
issued or sent to any Person by Park or on its behalf unless and until the
relevant risk has been properly bound and all binders of insurance and proposals
of coverage on the part of Park are complete and accurate in all material
respects.
 
(d)   Schedule 3.20(d) sets forth the policy of Park with respect to the
commissions booked in its records, and no commissions have been booked except in
accordance with that policy. To the knowledge of the Company, there are no facts
or circumstances that might require reversal of commissions booked or return of
commissions already collected.
 
(e)  Park has not breached any duty owed to the Insurance Clients. Park has not
paid insurance premiums, premium adjustments or other items on behalf of an
Insurance Client except with the authority of that Insurance Client.
 
(f)  Park has not been party to the placement, directly or indirectly, of
insurance that is (i) unlawful or (ii) a part of a fictitious or sham
transaction.
 
(g)  Except for arrangements between Park and certain Principals, referred to in
Section 2.12, there are no arrangements whereby any part of any brokerage or
commission payable to Park by any insured is shared with the insured or any
other Person.
 
(h)  To the knowledge of the Company, all insurance carriers with which business
has been placed by Park are paying claims in the normal course and without undue
delay.
 
(i)  The only fixed or variable annuity products sold or marketed by Park are
those listed on Schedule 3.20(i).
 
Section 3.21.  Transactions with Interested Persons. Except as set forth on
Schedule 3.21, none of the Affiliates, shareholders, partners, managers,
members, officers, supervisory employees or directors, nor, to the knowledge of
the Company, any of their respective Immediate Family members, (a) is a party to
any transaction or contract or arrangement with the Company or any of its
Subsidiaries, or (b) owns directly or indirectly on an individual or joint basis
any interest in (excluding passive investments in less than 1% of the shares of
any company that lists its shares on a national securities exchange), or serves
as an officer or director or in another similar capacity of, any competitor,
supplier or customer or client of the Company or any of its Subsidiaries, or any
organization that has a material contract or arrangement with the Company.

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Section 3.22.  Employee Benefit Programs. 
 
(a)  Schedule 3.22 hereto lists every Employee Program (as defined in Section
3.22(h) that has been “maintained” (as defined below) by the Company or its
ERISA Affiliates (as defined in Section 3.21(h)) at any time after December 31,
1997.
 
(b)  Each Employee Program that has ever been maintained by the Company or any
of its ERISA Affiliates and that has at any time been intended to qualify under
Section 401(a) or 501(c)(9) of the Code has received a favorable determination
or approval letter from the IRS regarding its qualification under the applicable
Section of the Code. To the knowledge of the Company, no event or omission has
occurred that would cause any such Employee Program to lose its qualification
under the applicable Code Section.
 
(c)  With respect to any Employee Program ever maintained by the Company or any
of its ERISA Affiliates, there has occurred no (i) non-exempt “prohibited
transaction,” as defined in Section 406 of ERISA or Section 4975 of the Code, or
(ii) breach of any duty under ERISA or other Applicable Law (including, without
limitation, any health care continuation requirements), or any other tax law
requirements, or conditions to favorable tax treatment, applicable to such plan,
that, in the case of any of (i) or (ii), would result, directly or indirectly
(including, without limitation, through any obligation of indemnification or
contribution), in any Taxes, penalties or other liability to the Company or any
of its ERISA Affiliates. No litigation, arbitration, or governmental
administrative proceeding (or investigation) or other proceeding (other than
those relating to routine claims for benefits) is pending or, to the knowledge
of the Company, threatened with respect to any such Employee Program. All
payments and/or contributions required to have been made by the Company or any
ERISA Affiliate with respect to all Employee Programs ever maintained by the
Company or any ERISA Affiliate, for all periods prior to the Closing Date,
either have been made or have been accrued.
 
(d)  Neither the Company nor any ERISA Affiliate has ever maintained any
Employee Program that has been subject to title IV of ERISA (including, but not
limited to, any Multiemployer Plan (as defined in Section 3.22(h)) or (ii) has
ever provided health care or any other non-pension benefits to any employees
after their employment was terminated (other than as required by part 6 of
subtitle B of Title I of ERISA or the corresponding provisions of the Code or
similar state law) or has ever promised to provide such post-termination
benefits.
 
(e)  With respect to each Employee Program maintained by the Company or any of
its ERISA Affiliates within the three years preceding the Closing, complete and
correct copies of the following documents (if applicable to such Employee
Program) have previously been made available to the Buyer: (i) all documents
embodying or governing such Employee Program, and any funding medium for the
Employee Program (including, without limitation, trust agreements) as they may
have been amended; (ii) the most recent IRS determination or approval letter
with respect to such Employee Program under Code Sections 401 or 501(c)(9), and
any applications for determination or approval subsequently filed with the IRS;
(iii) the three most recently filed IRS Forms 5500, with all applicable
schedules and accountants’ opinions attached thereto; (iv) the summary plan
description for such Employee Program (or other descriptions of such Employee
Program provided to employees) and all modifications thereto; (v) any insurance
policy (including any fiduciary liability insurance policy) related to such

--------------------------------------------------------------------------------

Employee Program; and (vi) any documents evidencing any loan to an Employee
Program that is a leveraged employee stock ownership plan.
 
(f)  Each Employee Program required to be listed in Schedule 3.22 may be
amended, terminated or otherwise modified by the Company or the ERISA Affiliate
to the greatest extent permitted by law.
 
(g)  Neither the Company nor any ERISA Affiliate is party to any agreement or
Employee Program that would require it, or the Buyer or any Affiliates to take
any action or make any payment that would result, either individually or in the
aggregate, in the payment of an “excess parachute payment” within the meaning of
Section 280G of the Code.
 
(h)  For purposes of this section:
 
(i)   “Employee Program” means (A) all employee benefit plans within the meaning
of ERISA Section 3(3), including, but not limited to, multiple employer welfare
arrangements (within the meaning of ERISA Section 3(4)), plans to which more
than one unaffiliated employer contributes and employee benefit plans (such as
foreign or excess benefit plans) that are not subject to ERISA; and (B) all
stock option plans, bonus or incentive award plans, severance pay policies or
agreements, deferred compensation agreements, supplemental income arrangements,
vacation plans, and all other employee benefit plans, agreements, and
arrangements not described in (A) above. In the case of an Employee Program
funded through an organization described in Code Section 501(c)(9), each
reference to such Employee Program shall include a reference to such
organization.
 
(ii)  An entity “maintains” an Employee Program if that entity sponsors,
contributes to, or provides (or has promised to provide) benefits under that
Employee Program, or has any obligation (by agreement or under Applicable Law)
to contribute to or provide benefits under that Employee Program, or if that
Employee Program provides benefits to or otherwise covers employees of that
entity, or their spouses, dependents, or beneficiaries.
 
(iii)  An entity is an “ERISA Affiliate” of the Company if it would have ever
been considered a single employer with the Company under ERISA Section 4001(b)
or part of the same “controlled group” as the Company for purposes of ERISA
Section 302(d)(8)(C).
 
(iv)  “Multiemployer Plan” means a (pension or non-pension) employee benefit
plan to which more than one employer contributes and that is maintained pursuant
to one or more collective bargaining agreements.
 
Section 3.23.  List of Directors, Officers and Employees.
 
(a)  Schedule 3.23(a) contains a true and complete list of all current
directors, officers and employees of, and consultants to, the Company and any of
its Subsidiaries and includes the current job title and aggregate annual
compensation of each such individual. To the knowledge of the Company (without
inquiry), as of the date hereof, no employee of the

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Company or any of its Subsidiaries currently intends to terminate employment
with the Company or a Subsidiary prior to the first anniversary of the Closing.
 
(b)  To the knowledge of the Company, except as set forth on Schedule 3.23(b),
each Principal is in good health and, to the knowledge of the Company (without
inquiry), each employee listed on Schedule 3.23(a) is in good health.
 
(c)  Except as set forth on Schedule 3.23(c), there are no controversies pending
or threatened between the Company or any of its Subsidiaries and any of their
respective employees. Except as set forth on Schedule 3.23(c), the Company and
its Subsidiaries have no obligations, contingent or otherwise, under (i) any
employment, collective bargaining or other labor agreements, (ii) any written or
oral agreements containing severance or termination pay arrangements, (iii) any
deferred compensation agreements, retainer or consulting arrangements, (iv) any
pension or retirement plans, any bonus or profit-sharing plans, any unit or
membership interest option plans, or unit or membership interest purchase plans,
or (v) any other employee contracts or non-terminable (whether with or without
penalty) employment arrangements (each an “Employment Arrangement”). Neither the
Company nor any of its Subsidiaries is in default with respect to any material
term or condition of any Employment Arrangement, and the transactions
contemplated by this Agreement will not result in any such default, including
after the giving of notice, lapse of time or both. Neither the Company nor any
of its Subsidiaries is delinquent in payments to any of its employees for any
wages, salaries, commissions, bonuses or other direct compensation for any
services performed for it to the date hereof or amounts required to be
reimbursed to such employees. Upon termination of the employment of any of those
employees, neither the Company nor any of its Subsidiaries would by reason of
the transactions contemplated by this Agreement or anything done prior to the
Closing, be liable to any of those employees for so-called “severance pay” or
any other payments. Neither the Company nor any of its Subsidiaries has any
policy, practice, plan or program of paying severance pay or any form of
severance compensation in connection with the termination of employment. The
Company and each of its Subsidiaries is in compliance in all material respects
with all Applicable Laws respecting labor, employment, fair employment
practices, work place safety and health, terms and conditions of employment, and
wages and hours. There are no, and have never been, any charges or threatened
charges of employment discrimination or unfair labor practices against or
involving the Company or any of its Subsidiaries. There are no material
grievances, complaints or charges that have been filed against the Company or
any of its Subsidiaries under any dispute resolution procedure and there is no
arbitration or similar proceeding pending and, to the knowledge of the Company,
no claim therefor has been asserted. Except as set forth on Schedule 3.23(c),
the Company and each of its Subsidiaries has in place all employee policies
required by Applicable Laws, and there have been no material violations or
alleged violations of any of such policies. To the knowledge of the Company,
none of the Company, any of its Subsidiaries nor any of the Principals have
received any notice indicating that any of the Company’s or any of its
Subsidiary’s employment policies or practices are currently being audited or
investigated by any Governmental Authority. The Company and each of its
Subsidiaries are, and at all times since November 6, 1986 have been, in
compliance with the requirements of the Immigration Reform Control Act of 1986.
 
(d)  No officer or director of the Company or any of its Subsidiaries (including
the Principals) has been: (i) subject to voluntary or involuntary petition under
any bankruptcy or

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insolvency laws or the appointment of a receiver, fiscal agent or similar
officer by a court for his or her business or property or that of any
partnership of which he or she was a general partner or any corporation or
business association of which he or she was an executive officer; (ii) convicted
in a criminal proceeding or named as a subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses) or been otherwise
accused of any act of moral turpitude; (iii) the subject of any order, judgment,
or decree (not subsequently reversed, suspended or vacated) of any court of
competent jurisdiction permanently or temporarily enjoining him or her from, or
otherwise imposing limits or conditions on his or her ability to engage in any
securities, investment advisory, banking, insurance or other type of business or
acting as an officer or director of a public company; (iv) found by a court of
competent jurisdiction in a civil action or by the SEC or the Commodity Futures
Trading Commission to have violated any federal, provincial or state
commodities, securities or unfair trade practices law, which judgment or finding
has not been subsequently reversed, suspended, or vacated; or (vi) has engaged
in other conduct that would be required to be disclosed in a prospectus under
Item 401(f) of SEC Regulation S-K
 
Section 3.24.  Insurance. The Company and its Subsidiaries maintain in full
force and effect insurance as listed on Schedule 3.24, which includes all bonds
and insurance required by ERISA and by any contract to which the Company or any
of its Subsidiaries is a party. Neither the Company nor any of its Subsidiaries
is in default under any such insurance policy. Except as identified on
Schedule 3.24, each such insurance policy or equivalent policies will remain in
full force and effect after the Closing, with the Company or one of its
Subsidiaries as the sole owner and beneficiary of each such policy.
 
Section 3.25.  Powers of Attorney. Except as granted under Section 11.13 and
under the Representation Agreements, neither the Company nor any of the
Principals has any outstanding power of attorney with respect to any interest in
the Company. Pursuant to the Representation Agreements, the Company and each
Principal has all requisite power and authority to execute and deliver this
Agreement, and to perform the transactions contemplated by this Agreement
(including the delivery of the Other Shares to the Buyer in accordance with
Section 2.3), on behalf of each Other Shareholder.
 
Section 3.26.  Finder’s Fee. Except for Berkshire Capital Securities LLC, whose
fees will be paid by the Principals, there is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of the Company, any Subsidiary or any Principal who might be entitled
to any fee or commission in connection with the transactions contemplated by
this Agreement.
 
Section 3.27.  Non-Foreign Status. None of the Company or any of the
Shareholders is a “foreign person” within the meaning of Section 1445 of the
Code and Treasury Regulations Section 1.1445-2, and no interest in the Company
is a “United States real property interest” within the meaning of Section 897 of
the Code.
 
Section 3.28.  Corporate Records; Copies of Documents. The Records accurately
record in all material respects all corporate or company action taken by their
respective shareholders and directors of the Company and its Subsidiaries, and
true and complete copies of the originals of those documents have been provided
to the Buyer for review. The Company and its

--------------------------------------------------------------------------------

Subsidiaries have provided Buyer and its counsel true and correct copies of all
documents referred to in this Agreement or in the Schedules delivered to the
Buyer in connection herewith.
 
Section 3.29.  Disclosure.
 
(a)  None of the representations or warranties or other statements of the
Company or any of the Principals contained in this Agreement, in any schedule or
exhibit hereto or in any certificate or other document delivered under the
provisions of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained therein not misleading. To the knowledge of the Company, the documents
and information provided or made available to the Buyer and its representatives
in response to written inquiries and requests made by the Buyer or any of its
representatives in connection with the evaluation, negotiation or documentation
of the transactions contemplated by this Agreement, have been responsive in all
material respects to those inquiries and requests, such that, upon the receipt
of those documents and that information, when taken together with the documents
provided or made available to the Buyer under the document index entitled,
“Project Peabody - Due Diligence List”, the Buyer was in possession of all
documents and information necessary to provide a reasonable Person in all
material respects with a fully-informed understanding of the subject matter of
those inquires and requests.
 
(b)  None of the information in the Proxy Statement (other than any information
to be supplied by or on behalf of Buyer or its Affiliates for inclusion therein)
will, at the time any such Proxy Statement is mailed to the shareholders of the
applicable Mutual Fund, or at the time of the meeting of the shareholders of
such Mutual Fund, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
 
 
ARTICLE IV.  
 
REPRESENTATIONS AND WARRANTIES OF EACH PRINCIPAL
 
As a material inducement to the Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, each Principal hereby severally
makes to the Buyer, as of the date of this Agreement and as of the Closing, the
representations and warranties set forth in this Article IV.
 
Section 4.1.  Ownership Interests. Such Principal owns of record and
beneficially the Shares ascribed to such Principal on Schedule 4.1 and such
Shares are duly authorized, validly issued and free and clear of any
Encumbrances and any other limitation or restriction (including any restriction
on the right to vote, sell or otherwise dispose of the Shares). Those Shares are
the only Company Securities held by the Principal or with respect to which the
Principal has any rights. There are no voting trusts, voting agreements, proxies
or other agreements, instruments or undertakings with respect to the management
or control of the Company to which the Company or the Principal is a party. The
Principal has not granted any power of attorney with respect to any interests in
the Company.
 

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Section 4.2.  Authority. The Principal has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Principal
pursuant to, or as contemplated by, this Agreement and to carry out the
transactions contemplated hereby and thereby. This Agreement and each agreement,
document and instrument executed and delivered by the Principal pursuant to this
Agreement constitutes, or when executed and delivered will constitute, a valid
and binding obligation of the Principal, enforceable in accordance with its
respective terms, except as enforceability may be restricted, limited or delayed
by applicable bankruptcy or other laws affecting creditors’ rights generally or
by equitable principles. The execution, delivery and performance of this
Agreement and each such agreement, document and instrument:
 
(a)  does not and will not violate any Applicable Laws, or, except as set forth
on Schedule 3.4, require the Principal to obtain any approval, consent or waiver
from, or make any filing with, any Person or Governmental Authority; and
 
(b)  except as set forth on Schedule 3.4, does not and will not result in a
breach of, constitute a default under, accelerate any obligation under, or give
rise to a right of termination of, any agreement, contract, instrument,
mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award to which the Principal is a party or
by which the property of the Principal is bound or affected, or result in the
creation or imposition of any Encumbrance on any assets of the Principal.
 
Section 4.3.  Finder’s Fee. Except for Berkshire Capital Securities LLC, whose
fees will be paid by the Principals, there is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of the Company, any Subsidiary or any Principal who might be entitled
to any fee or commission in connection with the transactions contemplated by
this Agreement.
 
Section 4.4.  Investment Advisory Representation. Except for Investment
Management Services provided by the Principal for his own account or the account
of his Immediate Family and that the Principal is managing without a fee or any
other remuneration, the Principal does not provide Investment Management
Services to any Person other than on behalf of the Company and its Subsidiaries
pursuant to an investment advisory or management agreement between the Company
or one of its Subsidiaries and a customer or client thereof.
 
Section 4.5.  Agreements. The Principal is not a party to any employment,
non-competition, trade secret or confidentiality agreement, arrangement,
understanding or obligation with or to any Person other than the Company or one
of its Subsidiaries. There are no agreements or arrangements not disclosed in a
Schedule to this Agreement, to which the Principal is a party relating to the
business of the Company, any of its Subsidiaries, or to the Principal’s direct
or indirect rights and obligations as a shareholder, partner, officer or
employee of the Company. The execution, delivery and performance of this
Agreement will not violate or result in a default or acceleration of any
obligation under any contract, agreement, indenture or other instrument
involving the Company or any of its Subsidiaries to which the Principal is a
party.

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Section 4.6.  Employment Date. The Principal’s (i) date of birth, and (ii) date
of commencement of employment with the Company are accurately reflected in
Schedule 4.6.
 
Section 4.7.  Non-Foreign Status. The Principal is not a “foreign person” within
the meaning of Section 1445 of the Code and Treasury Regulations Section
1.1445-2.
 
 
ARTICLE V.  
 
REPRESENTATIONS AND WARRANTIES OF EACH OTHER SHAREHOLDER
AND EACH PRINCIPAL REGARDING THE OTHER SHAREHOLDERS.
 
As a material inducement to the Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, each Principal and each Other
Shareholder hereby severally makes to the Buyer, as of the date of this
Agreement and as of the Closing, each of the representations and warranties set
forth in this Article V:
 
Section 5.1.  Ownership Interests. Each Other Shareholder owns of record and
beneficially the Other Shares ascribed to that Other Shareholder on Schedule 5.1
and those Other Shares are free and clear of any Encumbrances and any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of those Other Shares). Those shares are the only Company
Securities held by the Other Shareholder or with respect to which the Other
Shareholder has any rights. There are no voting trusts, voting agreements,
proxies or other agreements, instruments or undertakings with respect to the
management or control of the Company to which the Other Shareholder is a party.
Except as provided in the Representation Agreement and Section 12.13 of this
Agreement, the Other Shareholder has not granted any power of attorney with
respect to any interests in the Company.
 
Section 5.2.  Authority. Each Other Shareholder has full right, authority, power
and capacity to sell and deliver to the Buyer the Other Shares ascribed to the
Other Shareholder on Schedule 5.1, to enter into this Agreement, the
Representation Agreement and each agreement, document and instrument to be
executed and delivered by or on behalf of the Other Shareholder pursuant to, or
as contemplated by, this Agreement, the Representation Agreement and to carry
out the transactions contemplated hereby and thereby. This Agreement, the
Representation Agreement and each agreement, document and instrument executed
and delivered by the Other Shareholder pursuant to such agreement constitutes,
or when executed and delivered will constitute, a valid and binding obligation
of the Other Shareholder, enforceable in accordance with its respective terms,
except as enforceability may be restricted, limited or delayed by applicable
bankruptcy or other laws affecting creditors’ rights generally or by equitable
principles. The execution, delivery and performance of this Agreement, the
Representation Agreement and each agreement, document and instrument and the
sale and delivery to the Buyer of the Other Shares ascribed to the Other
Shareholder on Schedule 5.1, does not and will not violate any laws of the
United States or any state or other jurisdiction applicable to the Company, or,
require the Company to obtain any approval, consent or waiver from, or make any
filing with, any Person, and (b) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give rise to a
right of termination of, any agreement, contract,

--------------------------------------------------------------------------------

instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award which the property of the
Other Shareholder is bound or affected, or result in the creation or imposition
of any Encumbrance on any assets of the Other Shareholder.
 
Section 5.3.  Finder’s Fee. Except for Berkshire Capital Securities LLC, whose
fees will be paid by the Principals, there is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of the Company, any Subsidiary or any Shareholder who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
 
 
ARTICLE VI.  
 
REPRESENTATIONS AND WARRANTIES OF THE BUYER
 
As a material inducement to the Principals to enter into this Agreement and
consummate the transactions contemplated hereby, the Buyer hereby makes to the
Principals, as of the date of this Agreement and as of the Closing, the
representations and warranties set forth in this Article VI.
 
Section 6.1.  Organization. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Rhode
Island and has all corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted.
 
Section 6.2.  Authority; No Violation.
 
(a)  The execution, delivery and performance by the Buyer of this Agreement and
the consummation of the transactions contemplated hereby are within the
corporate powers of the Buyer and have been duly authorized by all necessary
corporate action on the part of the Buyer. This Agreement constitutes a valid
and binding obligation of the Buyer enforceable against it in accordance with
their terms, except as enforceability may be restricted, limited or delayed by
applicable bankruptcy or other laws affecting creditors’ rights generally or by
equitable principles.
 
(b)  The execution, delivery and performance by the Buyer of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
violate the articles of incorporation or bylaws of the Buyer or (ii) assuming
compliance with the matters referred to in Section 6.3, violate any Applicable
Law.
 
Section 6.3.  Consents and Approvals. The execution, delivery and performance by
the Buyer of this Agreement and the consummation of the transactions
contemplated hereby require no material action by or in respect of, or material
filing with, any Governmental Authority other than (i) compliance with any
applicable requirements of the Exchange Act and (ii) filing with, notification
to, or the consent of, (A) the Board of Governors of the Federal Reserve System,
(B) the Federal Deposit Insurance Corporation, (C) the Rhode Island Department
of Business

--------------------------------------------------------------------------------

Regulation - Division of Banking, (D) the Massachusetts Department of Insurance
and (E) the National Association of Securities Dealers, Inc.
 
Section 6.4.  No Actions, Suits or Proceedings. There is no action, suit or
proceeding pending, or, to the knowledge of the Buyer, threatened against the
Buyer, or before any Governmental Authority that questions the validity or
legality of this Agreement or of the transactions contemplated hereby, or that
seeks to prevent the consummation of the transactions contemplated by this
Agreement.
 
Section 6.5.  Financial Ability. The Buyer has, or will have on or before the
Closing Date, sufficient cash, available lines of credit and other sources of
immediately available funds to enable it to pay the Purchase Price.
 
Section 6.6.  No Other Broker. Other than Sandler O’Neill & Partners, L.P., the
fees and expenses of which will be paid by the Buyer or one of its Affiliates,
there is no investment banker, broker, finder or other intermediary that has
been retained by or is authorized to act on behalf of the Buyer in connection
with the transactions contemplated by this Agreement.
 
Section 6.7.  Eligibility to Make Election under Bank Holding Company Act. The
Buyer is not aware of any legal impediment to its right to make an election in
accordance with Section 4(l) of the Bank Holding Company Act of 1956, as
amended, to be treated as a financial holding company effective on or prior to
the occurrence of the Closing.
 
 
ARTICLE VII.
 
COVENANTS
 
Section 7.1.  Conduct of Business.
 
(a)  From the date of this Agreement until the Closing, the Company and its
Subsidiaries shall, the Principals shall cause the Company and its Subsidiaries
to, and the Company shall use its reasonable best efforts to cause the Mutual
Funds to:
 
(i)  bill and collect accounts receivable, pay expenses and generally carry on
business in the ordinary course of business consistent with past practice;
 
(ii)  preserve their respective present business organizations and
relationships;
 
(iii)  keep available the present services of their employees;
 
(iv)  preserve the rights, franchises, goodwill and relationships of their
clients, customers and others business partners;
 
(v)  maintain the insurance policies and bonds listed on Schedule 3.24 or
procure comparable replacement policies and maintain those replacement policies;
and

--------------------------------------------------------------------------------

 
(vi)  file on a timely basis all Tax Returns required to be filed by it for all
periods ending on or before the Closing Date and to pay on a timely basis all
Taxes that are due and payable with respect to the Company and its Subsidiaries.
 
(b)  Without limiting the generality of Section 7.1(a), and except as otherwise
expressly contemplated by this Agreement, from the date of this Agreement until
the Closing, the Company and its Subsidiaries shall not, the Principals shall
cause the Company and its Subsidiaries not to:
 
(i)  (A) split, combine or reclassify any shares of their capital stock or
issue, authorize, or propose the issuance of, any securities in respect of, in
lieu of, or in substitution for, shares of capital stock of the Company and any
of its Subsidiaries, or (B) repurchase, redeem or otherwise acquire any shares
of the capital stock of the Company or any of its Subsidiaries, including
Company Securities and Subsidiary Securities;
 
(ii)  issue, deliver or sell, or authorize or propose the issuance, delivery or
sale of, any Company Securities or Subsidiary Securities, or any rights,
warrants or options to acquire, any such shares, or enter into any agreement
with respect to any of the Company Securities or Subsidiary Securities;
 
(iii)  amend the Company Organizational Documents, the articles of incorporation
or by-laws or other comparable governing documents of any of its Subsidiaries;
 
(iv)  authorize capital expenditures that, in the aggregate, exceed $50,000,
without the prior written consent of the Parent, which consent may not be
unreasonably withheld;
 
(v)  enter into any new line of business;
 
(vi)  acquire, by merging or consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by entering
into any other transaction with, any Person or acquire any assets that would be
material, either individually or in the aggregate, to the Company and its
Subsidiaries;
 
(vii)  change any method, policies or procedures of accounting, except as
required by changes in GAAP or regulatory accounting principles;
 
(viii)  amend, modify, waive any right in respect of or terminate any agreement
listed in Schedule 3.6(a), or, where not listed therein, any contract or
agreement to which any Client is a party, including with regard to the fees
chargeable under any of those agreements;
 
(ix)  enter into, amend, modify, waive any right in respect of or terminate any
material agreement;
 
(x)  make any Tax election or settle or compromise any federal, state, local or
foreign Tax liability or take any action that would prevent any of the Mutual

--------------------------------------------------------------------------------

Funds from qualifying as a “regulated investment company”, within the meaning of
Section 851 of the Code;
 
(xi)  pay, discharge or satisfy any claim, liability or obligation, other than
obligations arising in the ordinary course of business consistent with past
practice;
 
(xii)  settle or compromise any litigation or legal or other action, suit,
proceeding or investigation involving or in any way affecting the Company or any
of its Subsidiaries or any of the Mutual Funds;
 
(xiii)  adopt, amend, renew or terminate any plan or any agreement, arrangement,
plan or policy between the Company or any Subsidiary on the one hand, and one or
more of its current or former directors, officers or, employees or consultants;
 
(xiv)  increase in any manner the compensation or fringe benefits of any
director, officer, employee or consultant, or pay any benefit not required by
any plan or agreement as in effect as of the date of this Agreement (including,
without limitation, the granting of stock options, stock appreciation rights,
restricted stock, restricted stock units or performance units or shares);
 
(xv)  hire new management employees;
 
(xvi)  enter into, modify or renew any employment, severance or other agreement
with any director, officer, employee or consultant of the Company or any of its
Subsidiaries or establish, adopt, enter into or amend any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement providing for any
benefit to any director, trustee, officer, employee or consultant of the Company
or any of its Subsidiaries or any of the Mutual Funds;
 
(xvii)  sell, lease, encumber, assign or otherwise dispose of, any of the
assets, properties or other rights of the Company, any of its Subsidiaries or
any of the Mutual Funds, other than in the ordinary course of business
consistent with past practice;
 
(xviii)  incur any indebtedness for borrowed money or assume, guarantee,
endorse, or otherwise as an accommodation become responsible for, the
liabilities or obligations of any Person, or make any loan or advance to any
Person or waive any rights with respect to any existing loans;
 
(xix)  take, or fail to take, any action that constitutes a breach or default
under any contract, agreement or license to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their respective
properties is bound;
 
(xx)  make any contribution to or investment in any Person;

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(xxi)  enter into or renew, amend or terminate, or give notice of a proposed
renewal, amendment or termination of, or make any other commitment with respect
to, any Lease; or
 
(xxii)  agree to do any of the foregoing.
 
(c)  Without limiting the generality of Section 7.1(a) or Section 7.1(b), and
except as otherwise expressly contemplated by this Agreement, from the date of
this Agreement until the Closing, the Company shall use its reasonable best
efforts to cause the Mutual Funds to operate their respective businesses, only
in the usual, regular and ordinary course and in accordance with past practice,
conduct their respective businesses in a manner comporting with the standards of
service quality heretofore met by them and to maintain the goodwill of the
investors in each of the Mutual Funds. Without limiting the foregoing, from the
date hereof until the Closing, the Company shall use its reasonable best efforts
to ensure that no Mutual Fund will:
 
(i)  incur any material indebtedness for borrowed money, issue or sell any debt
securities or prepay any debt;
 
(ii)  have any action taken by its trustee(s) that would be reasonably expected
to have a material effect on such Mutual Fund;
 
(iii)  mortgage, pledge or otherwise subject to any encumbrance other than a
Permitted Encumbrance, any of its properties or assets, tangible or intangible;
 
(iv)  forgive or cancel any material debts or claims, or waive any material
rights, except in exchange for fair value
 
(v)  enter into any material agreement, commitment or other transaction (other
than in connection with the transactions contemplated hereby);
 
(vi)  pay any bonus to any officer, director, partner, stockholder, employee,
sales representative, or agent of any Mutual Fund or grant to any such person
any other increase in compensation in any form;
 
(vii)  except as may be required by Applicable Law and after notice to the
Buyer, adopt or amend any employment, collective bargaining, bonus,
profit-sharing, compensation, stock option, pension, retirement, deferred
compensation or other plan, agreement, trust, fund or arrangement for the
benefit of officers, directors, trustees, partners, stockholders, employees,
sales representatives or agents of any Mutual Fund;
 
(viii)  amend any of its Mutual Fund Governing Documents;
 
(ix)  change in any material respect its accounting practices, policies or
principles, except as may be required by Applicable Law or GAAP;

--------------------------------------------------------------------------------

 
(x)  incur any material liability or obligation (whether absolute, accrued,
contingent or otherwise and whether direct or as guarantor or otherwise with
respect to the obligations of others);
 
(xi)  make any changes in selling policies or practices relating or other terms
of sale or accounting therefor or in policies of employment unless required by
Applicable Law;
 
(xii)  enter into any type of business not conducted as of the date of this
Agreement or create or organize any subsidiary or enter into or participate in
any joint venture or partnership;
 
(xiii)  enter into any agreement or transaction with an Affiliate or make any
amendment or modification to any such agreement unless required by Applicable
Law; or
 
(xiv)  agree or commit to do any of the foregoing.
 
(d)  Without limiting the generality of Sections 7.1(a), (b) or (c), from the
date of this Agreement until the Closing, neither the Company nor any of the
Principals shall take or omit to take, and the Company shall use its reasonable
best efforts to cause the Mutual Funds not to take or omit to take, any action
that is intended to or results in, or may reasonably be expected to result in,
any of the representations and warranties set forth in Articles III, IV or V
being or becoming untrue or incorrect in any respect at any time during that
period.
 
Section 7.2.  Public Announcements. The parties shall agree upon the form and
substance of any press release or other public disclosure related to this
Agreement or any of the transactions contemplated hereby and shall not issue any
such press release or make such a public disclosure without the consent of the
other parties, which consent shall not be unreasonably withheld; provided,
however, that nothing prohibits any party, following notification to the other
parties if practicable, from making any disclosure that is required under any
Applicable Law.
 
Section 7.3.  Access; Certain Communication. 
 
(a)  From the date of this Agreement until the Closing, subject to Applicable
Laws relating to the exchange of information and applicable client
confidentiality requirements, the Company and the Principals shall afford to the
Buyer and its authorized agents and representatives, complete access, upon
reasonable notice and during normal business hours, to the offices and
properties, contracts, documents, information, customers, clients and personnel
of the Company, its Subsidiaries and the Mutual Funds. The Company shall, and
the Principals shall cause the Company and its personnel to, provide assistance
to the Buyer in the investigation of matters relating to this Agreement and the
transactions contemplated hereby; provided, that the investigation is conducted
in a manner that does not unreasonably interfere with normal operations,
customers and employee relations.

--------------------------------------------------------------------------------

 
(b)  No information directly or indirectly obtained as a result of the access or
investigations permitted in this Section 7.3 shall affect or limit the
representations and warranties set forth in this Agreement or any certificate or
other document delivered in connection herewith.
 
Section 7.4.  Reasonable Best Efforts; Further Assurances.
 
(a)  Subject to the terms and conditions of this Agreement, the Buyer, the
Company and the Principals shall use their respective reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under Applicable Law to fulfill the conditions set
forth in Sections 8.1 and 8.3 (in the case of the obligations of the Company and
the Principals under this Section 7.4) and Sections 8.2 and 8.3 (in the case of
the obligations of the Buyer under this Section 7.4). Without limiting the
generality of the foregoing, (i) the Company and the Principals shall cause the
Real Estate Separation to occur prior to the Closing and (ii) the Buyer shall
take the steps necessary to make an election in accordance with Section 4(l) of
the Bank Holding Company Act of 1956, as amended, to be treated as a financial
holding company on or prior to the Closing.
 
(b)  The Buyer and the Principals agree, and the Principals, prior to the
Closing, and the Buyer, after the Closing, agree to cause the Company and each
of its Subsidiaries, to execute and deliver such documents, certificates,
agreements and other writings and to take such actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.
 
Section 7.5.  Regulatory Matters; Third Party Consents.
 
(a)   Subject to the terms of Sections 7.5(b) and (c) and 12.1(b), the Company
and the Principals, on the one hand, and the Buyer, on the other hand, shall
cooperate with each other and use all commercially reasonable efforts promptly
to prepare and file all necessary documentation, to effect all applications,
notices, petitions and filings, and to obtain as promptly as practicable all
permits, consents, approvals, waivers and authorizations of all third parties
and Governmental Authorities that are necessary to consummate the transactions
contemplated by this Agreement. Subject to Applicable Laws regarding the
exchange of information, the Buyer and the Company will have the right to review
in advance, and will consult with the other on, all the information relating to
the Buyer or the Company, as the case may be, and any of their respective
Affiliates, that appears in any filing made with, or written materials submitted
to, any third party or any Governmental Authority in connection with the
transactions contemplated by this Agreement.
 
(b)  As soon as reasonably practicable and in any event by the fifth Business
Day following the date of this Agreement, the Company shall, and the Principals
shall cause the Company to, (i) inform the Clients of the transactions
contemplated by this Agreement and (ii) deliver to each of them a Client Consent
Request. Any Client Consent Request in the form of Exhibit A that is timely
delivered to a Client will be a valid Client Consent Request the purposes of
this Section 7.5. Prior to the Closing, the Company and the Principals shall use
their respective reasonable best efforts to obtain Client Consents from each of
the Clients and the New Clients.

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(c)  Promptly following execution of this Agreement, the Company shall use its
reasonable best efforts to secure the approvals of the respective boards of
trustees of the Mutual Funds with respect to (i) continuing existing advisory
and distribution arrangements (including any agreements related to plans of
distribution pursuant to Rule 12b-1 under the Investment Company Act) for the
Mutual Funds following the consummation of the transactions contemplated by this
Agreement, (ii) calling a meeting of shareholders of the Mutual Funds to vote on
such of the foregoing matters as may require their approval under Applicable Law
or the Mutual Fund Governing Documents and (iii) the preparation and filing of
proxy materials (the “Proxy Statement”) relating to the matters to be considered
at the foregoing shareholder meeting and the subsequent solicitation of
shareholders of the Mutual Funds with respect to the matters to be considered at
the aforementioned shareholder meeting, as soon as reasonably practicable
following those approvals. The Company shall also use its reasonable best
efforts to secure such approvals or meet such other conditions as may be
necessary for the continuation or maintenance of any other current agreements or
other arrangements with respect to the Mutual Funds that would terminate or
otherwise be materially altered as a result of the consummation of the
transactions contemplated by this Agreement. The Company and the Principals
covenant and agree that any material provided by the Company or the Mutual Funds
that is included in the Proxy Statement, any supplement thereto or any related
soliciting materials shall comply in all material respects with Applicable Law
and shall be accurate and complete and not contain any untrue statement of
material fact, or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading. The Company shall assist, in a manner
compliant with Applicable Law, in the solicitation of proxies for the
aforementioned shareholder meeting and shall use its best efforts to obtain
approval of the proposals set forth in the Proxy Statement.
 
Section 7.6.  Employee Matters.
 
(a)  For a period of not less than five full fiscal years after the Closing, the
Acquired Business shall maintain a cash bonus plan for key employees of the
Acquired Business, including the Principals (that plan, the “Bonus Plan”).
Promptly following the end of each fiscal year of the Buyer that the Bonus Plan
is in effect, the Acquired Business shall establish in accordance with the terms
of the Bonus Plan an aggregate annual bonus pool equal to 20% of the
consolidated pretax operating income of the Acquired Business for that fiscal
year (“Acquired Business Pretax Income”), as set forth on internally prepared
financial statements of the Buyer that are derived from the books and records of
the Acquired Business and other members of the Combined Buyer Group and prepared
in accordance with the accounting policies of practices of the Buyer that are
used in the preparation of internal financial statements of other members and
business divisions of the Combined Buyer Group. Subject to the prior written
consent of the president or the chief executive officer of the Buyer, the
Principals may allocate the bonus pool for a particular fiscal year when the
Bonus Plan is in effect among eligible key employees of the Acquired Business in
their reasonable discretion as long as any Person receiving any payment under
the Bonus Plan is an employee of the Buyer or one of its Affiliates at the time
the allocation is made and at the time payments in respect of the bonus pool are
made.
 
(b)  For purposes of calculating Acquired Business Pretax Income there shall not
be taken into account the effect of any Existing-Business Transfer (which
accordingly shall be deemed not to have occurred), except that, subject to the
obtaining of any consent required

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under Section 2.6(e) during the Earnout Period, with respect to an
Existing-Business Transfer to the Acquired Business, Acquired Business Pretax
Income shall be adjusted to take into account in each applicable fiscal year an
amount equal to the difference (which may be positive or negative) of (A) the
net increase or decrease in Acquired Business Pretax Income that is attributable
to that Existing-Business Transfer during the applicable fiscal year minus (B)
the net positive or negative contribution to the consolidated pretax operating
income of the Buyer and its Affiliates for the twelve-months prior to the date
of that Existing-Business Transfer that was attributable to the client or
customer account (or any assets therein or services with respect thereto) or
business division, product or service that is the subject of the applicable
Existing-Business Transfer; provided that the foregoing adjustment shall not
apply to any net increase or decrease in Acquired Business Pretax Income that is
attributable to post-Closing contributions to the assets under management in any
client or customer account by the underlying client or customer. In cases of
contributions of the type described in the preceding proviso clause, the full
amount of the net increase or decrease in Acquired Business Pretax Income shall
be taken into account.
 
(c)  Subject to the provisions of any Applicable Law (including ERISA), the
Buyer and the Company shall use their commercially reasonable efforts (i) to
permit employees of the Company and its Subsidiaries (i) to maintain their
accounts in the Company's 401(k) plan in the Mutual Funds and (ii) make one or
more of the Mutual Funds available as an investment option to those employees
under the Company’s 401(k) plan for at least three full calendar years following
December 31, 2005.
 
(d)  If at any time following the Closing, any employee of the Company performs
any services or devotes any of his working time during his normal working hours
for the Company on behalf any of the Real Estate Subsidiaries or Real Estate
Partnerships, the Principals will cause the applicable Real Estate Subsidiary or
Real Estate Partnership to reimburse the Company for those services and that
time in an amount equal to their fair value, which the Buyer and the Principals
shall determine in good faith.
 
Section 7.7.  Notification of Certain Matters. The Company and the Principals
shall give prompt notice to the Buyer of:
 
(a)  any notice or other communication from any Person other than a Client
suggesting that the consent of that Person is or may be required in connection
with the transactions contemplated by this Agreement;
 
(b)  any notice or other communication from any Governmental Authority relating
to the transactions contemplated by this Agreement;
 
(c)  any actions, suits, claims, investigations or proceedings commenced or, to
the knowledge of the Company, threatened against, relating to, affecting or
otherwise involving the Company, any of its Subsidiaries or any of the
Principals that (i) if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 3.15 or (ii) relate to the
consummation of the transactions contemplated by this Agreement;

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(d)  any notice or other communication from any Person that any Client has
terminated or has substantially reduced, or intends to terminate or
substantially reduce, the Client’s account and/or business relationship with the
Company or any of its Subsidiaries;
 
(e)  any development causing a breach of any of the representations or
warranties set forth in Articles III, IV, or V.
 
No disclosure pursuant to this Section 7.7 will be deemed to amend or supplement
any of the Schedules to this Agreement or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant by the Company or
any of the Shareholders.
 
Section 7.8.  Changes in Assets Under Management. Contemporaneously with the
delivery of the Revised Client Revenue Schedule under Section 2.2(a), the
Company shall deliver to the Buyer a report setting forth (a) a description of
any material fee changes (including, without limitation, any caps, waivers,
offsets or reimbursements) with respect to any of the Client Accounts and the
Mutual Funds and (b) a description of any material changes in the amount of
assets in a Client Account or Mutual Fund as a result of deposits or withdrawals
made to or from that Client Account or Mutual Fund, in each case from the Base
Date until the close of business on the third business day prior to the Closing
Date, and a description of any such fee or asset changes proposed or otherwise
expected to be instituted thereafter (it being understood and agreed that,
solely for purposes of this Section 7.8, net deposits or withdrawals with
respect to any Client Account or Mutual Fund in the aggregate in excess of
$50,000 shall be deemed material).
 
Section 7.9.  Maintenance of Records. 
 
(a)  From the date of this Agreement until the Closing, the Company shall, and
the Principals shall cause the Company and its Subsidiaries to, maintain the
Records in the same manner and with the same care that the Records have been
maintained prior to the execution of this Agreement. From and after the Closing
Date, each of the parties shall permit the other parties reasonable access to
any applicable Records in their possession relating to matters arising on or
before the Closing Date to the extent necessary to assist the requesting party
access in connection with any claim, action, litigation or other proceeding
involving that party or any legal obligation owed by that party to any present
or former client or customer of the Company or any of its Subsidiaries.
 
(b)  For a period of six years from the Closing Date, no Principal shall dispose
of or destroy any business records or files relating to Taxes or Tax Returns
that pertain to the Company or any of its Subsidiaries without first offering to
turn over possession of those records or files to the Company by written notice
to the Company and the Buyer at least thirty (30) days prior to any such
disposition or destruction.
 
Section 7.10.  Non-Competition/Non-Solicitation.
 
(a)  For a period of six full years following the Closing Date (the “Restricted
Period”), as defined below, each Principal shall not, other than for the benefit
of the Buyer and its Affiliates, directly or indirectly, whether as owner,
partner, shareholder, director, consultant, agent, employee, co-venturer or
otherwise, engage, own, operate, participate or invest in any

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business or activity anywhere in the Designated Territory that develops,
markets, sells, offers or provides any products or services that are competitive
with or similar to any products or services that are developed, marketed, sold,
offered or provided by the Acquired Business.
 
(b)  During the Restricted Period, each Principal shall not, other than for the
benefit of the Buyer and its Affiliates, directly or indirectly, in any manner,
(i) call upon, solicit, accept, divert or take away any of the customers,
clients, business partners, prospective customers, clients or business partners
of the Company or the Buyer or any of their respective Affiliates, (ii) hire any
employee or consultant of the Company, (or any Person who was an employee or
consultant of the Company or the Buyer or any of their respective Affiliates at
any time during the six months prior to the end of the Restricted Period) or the
Buyer or any of their respective Affiliates or solicit, entice or attempt to
persuade any of those employees or consultants to leave the services of the
Company or the Buyer or any of their respective Affiliates for any reason or
(iii) disparage the Company or the Buyer or any of their respective Affiliates
to any employee or consultant of the Company or the Buyer or any of their
respective Affiliates or to any customer, client or business partner or
prospective customer, client or business partner of the Company or the Buyer or
any of their respective Affiliates.
 
(c)  In the event that any term or provision of this Section 7.10 shall be
determined to be illegal, invalid or unenforceable, the remainder of this
Section 7.10 shall be enforced to the fullest extent possible and the illegal,
invalid or unenforceable term or provision shall be interpreted to reflect the
parties’ original intent as nearly as possible without being illegal, invalid or
unenforceable. If such amendment or interpretation is not possible, the illegal,
invalid or unenforceable provision or portion of a provision will be severed
from the remainder of this Section 7.10 and the remainder of this Section 7.10
shall be enforced to the fullest extent possible as if such illegal, invalid or
unenforceable provision or portion of a provision were not included.
 
Section 7.11.  Non-Solicitation of Other Offers. From the date of this Agreement
until the Closing or the termination of this Agreement under Article XI,
whichever is applicable, neither the Company nor any Principal may, directly or
indirectly, solicit, encourage, assist, initiate or entertain discussions,
engage in negotiations with, provide any information to, or enter into or
consummate any agreement or transaction with, any Person other than the Buyer
and/or one or more of its Affiliates concerning any business combination
transaction involving or relating to the Company or any of its Subsidiaries,
including any merger, share exchange, consolidation, sale of all or
substantially all of the assets of the Company or any of its Subsidiaries or
sale of any Company Securities, including the Shares.
 
Section 7.12.  No Transfer of Shares. No Principal will sell, transfer, assign
or dispose of any of that Principal’s Shares other than pursuant to the terms of
this Agreement.
 
Section 7.13.  Covenants With Respect to Section 15(f) of the Investment Company
Act.
 
(a)  (a)In accordance with Section 15(f) of the Investment Company Act, (i) for
a period of three years after the Closing Date, the Buyer shall not cause, and
shall use all commercially reasonable efforts not to permit, any “interested
person” (as that term is defined in the Investment Company Act) of the Buyer or
the Company to become, or to continue as, a

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member of the board of trustees of any of the Mutual Funds, unless, taking into
account that interested person, at least 75% of the members of any such board of
trustees are not interested persons of the Buyer or the Company; and (ii) the
Buyer shall not engage in or cause, and shall use all commercially reasonable
efforts to prevent its Affiliates from engaging in or causing, any act, practice
or arrangement that, as a result of the transactions contemplated by this
Agreement or any express or implied terms, conditions or understandings
applicable thereto, imposes an unfair burden (as that term is used in the
Investment Company Act) on any of the Mutual Funds within the meaning of Section
15(f) of the Investment Company Act.
 
(b)  (b)If the Company or the Buyer and/or any of their respective Affiliates or
the Mutual Funds shall have obtained an order from the SEC providing an
exemption from the provisions of Section 15(f) of the Investment Company Act or
an opinion of counsel based on judicial precedents under applicable federal law
with respect to the meaning of that section, which opinion is reasonably
satisfactory in form and substance to the Company and the board of trustees of
the Mutual Funds, then this Agreement shall be deemed to be modified to the
extent necessary to permit the Company, the Buyer and their Affiliates to act in
a manner consistent with such exemptive order or legal opinion.
 
 
ARTICLE VIII. 
 
CONDITIONS TO CLOSING
 
Section 8.1.  Conditions to Buyer’s Obligations. The obligations of the Buyer to
effect the Closing shall be subject to the following conditions, any of which
may be waived in writing by the Buyer:
 
(a)  (i) The Company and the Principals shall have performed in all material
respects all of their respective obligations under this Agreement required to be
performed by them on or prior to the Closing, (ii) the representations and
warranties of the Company and the Shareholders contained in this Agreement and
in any certificate or other writing delivered by the Company or any of the
Shareholders pursuant hereto (A) that are qualified by materiality or Material
Adverse Effect shall be true as of the date of this Agreement and at and as of
the Closing as if made at and as of that time, and (B) that are not qualified by
materiality or Material Adverse Effect shall be true in all material respects as
of the date of this Agreement and at and as of the Closing as if made at and as
of that time, and (iii) the Buyer shall have received a certificate signed by
the president of the Company in his capacity as president (and not in his
individual capacity) and by each of the Principals to the foregoing effect;
 
(b)  The Shareholders shall have delivered to the Buyer valid title to the
Shares, free and clear of any Encumbrances, together with certificates for the
Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with
any required transfer stamps affixed thereto;
 
(c)  The Buyer shall have received opinions of Nixon Peabody LLP, counsel to the
Company and the Principals, and Greenberg Traurig LLP, counsel to the Mutual
Funds and

--------------------------------------------------------------------------------

the Company, each dated the Closing Date, that, between the two of them,
containing the numbered opinions set forth on Exhibit B-1;
 
(d)  The Buyer shall have made an election in accordance with Section 4(l) of
the Bank Holding Company Act of 1956, as amended, to be treated as a financial
holding company, and that election shall be effective upon the occurrence of the
Closing;
 
(e)  No regulatory action shall impose any term, condition or restriction upon
the Company or any of its Subsidiaries or the Buyer or any of its Affiliates
that the Buyer reasonably determines would make it inadvisable for the Buyer to
proceed with the consummation of the transactions contemplated hereby;
 
(f)  The respective members of the boards of directors of the Company and each
of its Subsidiaries shall have resigned;
 
(g)  Each Principal shall be an active employee of the Company and have executed
and delivered to the Buyer an employment agreement in the form of Exhibit C;
 
(h)  No event will have occurred (or failed to occur) that has had, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;
 
(i)  The consolidated working capital of the Company and its Subsidiaries
(determined in accordance with the principles applicable to the definition of
Closing Working Capital set forth in Section 2.4(a)), will be not less than
$450,000 and the treasurer of the Company in his capacity as such (and not in
his individual capacity) will have delivered a certificate to the Buyer to the
foregoing effect;
 
(j)  All consents and approvals of the Mutual Funds’ respective boards of
trustees and shareholders and of any other party required under any of the
Mutual Fund Governing Documents, Applicable Law or otherwise with respect to the
continuation or maintenance of any current agreements or other arrangements with
respect to the Mutual Funds that would terminate or otherwise be materially
altered as a result of the consummation of the transaction contemplated by this
Agreement shall have been duly and validly obtained;
 
(k)  The ratio obtained by dividing (i) Adjusted Fees by (ii) Reference Fees
shall equal or exceed 0.80;
 
(l)  The Company and the Shareholders shall have completed the Real Estate
Separation on terms and conditions acceptable to the Buyer and shall have
delivered to the Buyer such evidence as it may reasonably request in connection
therewith;
 
(m)  To the extent necessary for the Parent and its Affiliates to comply as of
the Closing with any applicable requirements of the Bank Holding Company Act of
1956, as amended, and the rules and regulations thereunder, the Company shall
have caused the composition of the respective boards of trustees of the Mutual
Funds to be reconstituted.

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(n)  The Company and the Principals shall have caused Park to become a
wholly-owned Subsidiary of the Company and shall have provided evidence thereof
that is reasonably satisfactory to the Buyer;
 
(o)  Each of the Principals shall have executed and delivered to the Buyer a
general release and waiver of claims (each, a “Release”) in form and substance
reasonably acceptable to the Buyer; and
 
(p)  The Company shall have executed (where applicable) and delivered to the
Buyer the following:
 
(i)  certified copies of resolutions of the board of directors (and, if
necessary, the shareholders) of the Company authorizing the execution of this
Agreement and each of the agreements, documents and instruments contemplated by
this Agreement to which the Company is a party;
 
(ii)  copies of the Articles of Organization and by-laws of the Company and each
of its Subsidiaries that, in the case of each set of Articles of Organization,
are certified as of a recent date by the Secretary of State of the Commonwealth
of Massachusetts;
 
(iii)  certificates issued by the Secretary of State of each State in which the
Company or any of its Subsidiaries does business certifying that the Company or
the applicable Subsidiary is in good standing in such State as of the most
recent practicable date;
 
(iv)  true and correct copies of each of the agreements, documents and
instruments contemplated by this Agreement and all agreements, documents,
instruments and certificates delivered or to be delivered in connection
therewith;
 
(v)  certificates of the secretary of the Company and each of the Subsidiaries
certifying as to matters that are customary in transactions of the type
contemplated by this Agreement;
 
(vi)  from each Shareholder a “transferor’s certificate of non-foreign status”
as provided in the Treasury Regulations under Section 1445 of the Code
outstanding in a form reasonably acceptable to the Buyer; and
 
(vii)  such other certificates and documents as are required hereby or are
reasonably requested by the Buyer.
 
Section 8.2.  Conditions to the Company’s and the Principals’ Obligations. The
obligations of the Principals to effect the Closing shall be subject to the
following conditions, which may be waived in writing by the Principals:
 
(a)  The Buyer shall have paid to the Principals the Purchase Price in
accordance with Section 2.3;

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(b)  (i) The Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the Closing,
(ii) the representations and warranties of the Buyer contained in this Agreement
and in any certificate or other writing delivered by the Buyer pursuant hereto
shall be true in all material respects as of the date of this Agreement and at
and as of the Closing as if made at and as of that time and (iii) the Principals
shall have received a certificate signed by the president or chief executive
officer of the Buyer in his capacity as such (and not in his individual
capacity) to the foregoing effect;
 
(c)  The Shareholders shall have received the opinion of Goodwin Procter LLP,
counsel to the Buyer, dated the Closing Date, contained the numbered opinions
set forth on Exhibit B-2;
 
(d)  The Buyer shall have executed and delivered to the Company, as applicable,
the following:
 
(i)  certified copies of votes of the board of directors of the Buyer
authorizing the execution of this Agreement and each of the other agreements,
documents or instruments contemplated hereby to which the Buyer is a party; and
 
(ii)  true and correct copies of each of the agreements, documents and
instruments contemplated hereby to which the Buyer is a party, and all
agreements, documents, instruments and certificates delivered or to be delivered
in connection therewith by the Buyer.
 
Section 8.3.   Mutual Conditions. The obligations of each of the Principals and
the Buyer to effect the Closing shall be subject to the following conditions:
 
(a)  (i) No order, injunction or decree issued by any court or other
Governmental Authority of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the transactions contemplated by this
Agreement shall be in effect; (ii) no proceeding initiated by any Governmental
Authority seeking an injunction of the transactions contemplated by this
Agreement shall be pending; and (iii) no statute, rule, regulation, order,
injunction or decree shall have been proposed, enacted, entered, promulgated or
enforced by any Governmental Authority that prohibits, restricts or makes
illegal consummation of the transactions contemplated by this Agreement; and
 
(b)  All regulatory approvals, actions and consents required to consummate the
transactions contemplated hereby and for the Buyer to operate the businesses of
the Company and its Subsidiaries following the Closing as currently conducted
and as proposed to be conducted by the Buyer shall have been obtained and shall
remain in full force and effect and all statutory waiting periods in respect
thereof shall have expired.

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ARTICLE IX.  
 
INDEMNIFICATION
 
Section 9.1.  Survival. The representations and warranties of the parties hereto
contained in this Agreement or in any certificate or other document delivered
pursuant hereto or in connection herewith will survive the Closing until the
later of (a) the 18-month anniversary of the Closing Date and (b) the earlier of
(a) the date the Buyer files with the SEC an annual report on Form 10-K for the
fiscal year ending December 31, 2006 or (b) April 15, 2007; provided that the
representations and warranties in Sections 3.1, 3.2, 3.3, 3.4 and 3.26 and in
Article IV and V will survive indefinitely or until the latest date permitted by
law, and the representations and warranties in Sections 3.8 and 3.22 will
survive until the expiration of the applicable statute of limitations applicable
to the matters covered thereby (after giving effect to any waiver or extension
thereof). The covenants and agreements of the parties hereto contained in this
Agreement or in any certificate or other document delivered pursuant hereto or
in connection herewith will survive the Closing indefinitely or for any shorter
period explicitly specified therein, except that for those covenants and
agreements that survive for a shorter period, breaches thereof will survive
indefinitely or until the latest date permitted by law. Notwithstanding the
preceding sentences in this Section 9.1, any breach of representation, warranty,
covenant or agreement in respect of which indemnity may be sought under this
Agreement will survive the time at which it would otherwise terminate pursuant
to those preceding sentences, if notice of the inaccuracy or breach thereof
giving rise to such right of indemnity is given to the party against whom
indemnity may be sought prior to that time.
 
Section 9.2.  Indemnification.
 
(a)  The Principals shall jointly and severally indemnify the Buyer and its
Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives (and, effective at the Closing, the
Company and each of its Subsidiaries) (those parties, the “Buyer Indemnified
Parties”) against all damages, losses, costs, claims, penalties, fines,
obligations, liabilities and expenses (including reasonable expenses of
investigation and reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding whether involving a third-party claim or a claim
solely between the parties hereto and any punitive, special, exemplary,
incidental, indirect or consequential damages, losses, liabilities or expenses,
and any lost profits or diminution in value) (all those items, collectively
“Damages”), incurred or suffered by any Buyer Indemnified Party arising out of
or relating to:
 
(i)  any breach of or inaccuracy in any of the representations and warranties
made by the Company and the Principals in this Agreement or in any certificate
or other document delivered pursuant hereto or in connection herewith (each such
breach or inaccuracy, a “Warranty Breach”);
 
(ii)  any breach of covenant or agreement made or to be performed by the Company
or any of the Principals pursuant to this Agreement;
 
(iii)  the Real Estate Separation or any of the Real Estate Subsidiaries or Real
Estate Partnerships or any of their respective businesses, operations,
investments,

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assets, liabilities (whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown) or any other matter related thereto;
 
(iv)  any claim by or on behalf of any Other Shareholder relating in any way to
that Other Shareholder’s status as a shareholder of the Company or the
transactions contemplated by this Agreement; or
 
(v)  any transaction or potential transaction with any Person other than the
Buyer regarding a merger, consolidation, asset sale, share exchange, stock sale
or other business combination transaction involving the Company or any Company
Securities,
 
in each case regardless of whether such Damages arise as a result of the
negligence, strict liability or any other liability under any theory of law or
equity of, any Buyer Indemnified Party; provided that with respect to
indemnification by the Principals for Warranty Breaches under Section 9.2(a)(i)
(other than Warranty Breaches in respect of Sections 3.1, 3.2, 3.3, 3.4, 3.8 or
3.26 or in Article IV or V arising out of fraud or intentional
misrepresentation), (i) the Principals will not be liable unless the aggregate
amount of Damages with respect to Warranty Breaches exceeds $25,000, at which
point the Principals will be liable for the aggregate amount of all Damages up
to and in excess of $25,000 and (ii) each Principal’s maximum liability with
respect to Warranty Breaches will not exceed 50% of the amount the Principal
receives at the Closing in respect of the Purchase Price.
 
(b)  The Buyer shall indemnify the Principals against all Damages incurred or
suffered by the Principals arising out of or relating to (i) any breach of or
inaccuracy in, any of the representations and warranties made by the Buyer in
this Agreement or in any certificate or other document delivered pursuant hereto
or in connection herewith or (ii) any breach of covenant or agreement made or to
be performed by the Buyer pursuant to this Agreement, regardless of whether such
Damages arise as a result of the negligence, strict liability or any other
liability under any theory of law or equity of, the Principals.
 
Section 9.3.  Procedures. The party seeking indemnification under Section 9.2
(the “Indemnified Party”) shall give prompt notice to the party against whom
indemnity is sought (the “Indemnifying Party”) of the assertion of any claim, or
the commencement of any suit, action or proceeding in respect of which indemnity
may be sought under that Section. The Indemnifying Party may at the request of
the Indemnified Party participate in and control the defense of any such suit,
action or proceeding at its own expense. The Indemnifying Party shall not be
liable under Section 9.2 for any settlement effected without its consent of any
claim, litigation or proceeding in respect of which indemnity may be sought
hereunder.
 
Section 9.4.  No Contribution or Similar Rights. In furtherance of the Releases
the Principals are executing and delivering under Section 8.1(o), if any claim
is made against, or any payment becomes due from, any Principal under this
Article IX or under Article X, that Principal will have no right against the
Company or any of its Subsidiaries or any director, officer or employee thereof
(in their capacity as such), whether by reason of contribution, indemnification,
subrogation or otherwise, in respect of any such claim or payment, and shall not
take any action against the Company, any of its Subsidiaries or any such person
with respect thereto.

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Section 9.5.  Reductions for Insurance Proceeds and Other Recoveries. The amount
that any Indemnifying Party is or may be required to pay to any Indemnified
Party pursuant to this Article IX, shall be reduced (retroactively or
prospectively) by any insurance proceeds or other amounts actually recovered
from third parties by or on behalf of such Indemnified Party in respect of the
Damages underlying the claim for which the Indemnified Party is seeking
indemnification; provided that nothing in this Section 9.5 obligates an
Indemnified Party to seek recovery of any such insurance proceeds or other
amounts; provided further that, except as expressly provided in this Section
9.5, the existence of a claim by an Indemnified Party for monies from an insurer
or against a third party in respect of any Damages shall not delay or otherwise
alter any payment or other obligation of the Indemnifying Party with respect to
those Damages under this Article IX. Notwithstanding the foregoing or any other
provision of this Agreement, it is the intention of the parties that no insurer
or any other third party shall be (i) entitled to a benefit it would not be
entitled to receive in the absence of the foregoing indemnification provisions
or (ii) relieved of the responsibility to pay any claims for which it is
obligated. If an Indemnified Party has received the payment required by this
Agreement from an Indemnifying Party in respect of any Damages and later
receives insurance proceeds or other amounts in respect of such Damages, then
such Indemnified Party shall hold such insurance proceeds or other amounts (in
each case, net of any amounts expended or costs incurred by the Indemnifying
Party in obtaining such insurance proceeds or other amounts) in trust for the
benefit of the Indemnifying Party and shall pay to the Indemnifying Party, as
promptly as practicable after receipt, a sum equal to the amount of such net
insurance proceeds or other amounts received, up to the aggregate amount of any
payments received from the Indemnifying Party pursuant to this Agreement in
respect of such Damages (or, if there is more than one Indemnifying Party, the
Indemnified Party shall pay each Indemnifying Party its proportionate share
(based on payments received from the Indemnifying Parties) of such net insurance
proceeds or other amounts).
 
Section 9.6.  Sole and Exclusive Remedy. Following the Closing, except as
expressly provided in this Agreement, the remedies provided in this Article IX
shall be the sole and exclusive remedies of the parties and their respective
officers, directors, employees, Affiliates, agents, representatives, successors
and assigns for any breach of or inaccuracy in any of the representations or
warranties contained in this Agreement or in any certificate or other document
delivered pursuant hereto; provided, however, that nothing herein is intended to
waive or otherwise limit any claims for Damages resulting or arising from
fraudulent or willful misconduct (including intentional misrepresentation) or
waive any equitable remedies to which a party may be entitled.
 
 
ARTICLE X. 
 
CERTAIN TAX MATTERS
 
Section 10.1.  General
 
. The following provisions shall govern the allocation of responsibility as
between the Buyer and the Principals for certain tax matters following the
Closing Date.

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Section 10.2.  Tax Indemnification. Each Principal shall jointly and severally
indemnify the Company, its Subsidiaries, Buyer, and each Buyer Affiliate and
hold them harmless from and against, without duplication, any Damages
attributable to (i) all Taxes (or the non-payment thereof) of the Company and
its Subsidiaries for all taxable periods ending on or before the Closing Date
and the portion through the end of the Closing Date for any taxable period that
includes (but does not end on) the Closing Date (the “Pre-Closing Tax Period”),
(ii) all Taxes of any member of an affiliated, consolidated, combined or unitary
group of which the Company or any of its Subsidiaries (or any predecessor of any
of the foregoing) is or was a member on or prior to the Closing Date, including
pursuant to Treasury Regulation §1.1502-6 or any analogous or similar state,
local, or foreign law or regulation, and (iii) any and all Taxes of any Person
(other than the Company and its Subsidiaries) imposed on the Company or any of
its Subsidiaries as a transferee or successor, by contract or pursuant to any
law, rule, or regulation, which Taxes relate to an event or transaction
occurring before the Closing; provided, however, that in the case of clauses
(i), (ii), and (iii) above, the Principals shall be liable only to the extent
that such Taxes exceed the amount, if any, reserved for such Taxes (excluding
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) on the face of the Closing Balance Sheet (rather than in
any notes thereto) and taken into account in determining the purchase price
adjustment under Section 2.5. The Principals shall reimburse the Buyer for any
Taxes of the Company or its Subsidiaries that are the responsibility of the
Principals pursuant to this Section 10.2 within fifteen (15) business days after
payment of such Taxes by the Buyer, the Company, or its Subsidiaries.
 
Section 10.3.   Straddle Period. In the case of any taxable period that includes
(but does not end on) the Closing Date (a “Straddle Period”), the amount of any
Taxes based on or measured by income or receipts of the Company and its
Subsidiaries for the Pre-Closing Tax Period shall be determined based on an
interim closing of the books as of the close of business on the Closing Date
(and for such purpose, the taxable period of any partnership or other
pass-through entity in which the Company or any of its Subsidiaries holds a
beneficial interest shall be deemed to terminate at such time) and the amount of
other Taxes of the Company and its Subsidiaries for a Straddle Period that
relates to the Pre-Closing Tax Period shall be deemed to be the amount of such
Tax for the entire taxable period multiplied by a fraction the numerator of
which is the number of days in the taxable period ending on the Closing Date and
the denominator of which is the number of days in such Straddle Period.
 
Section 10.4.  Responsibility for Filing Tax Returns. The Buyer shall prepare or
cause to be prepared and file or cause to be filed all Tax Returns for the
Company and its Subsidiaries that are filed after the Closing Date. The Buyer
shall permit the Shareholders’ Representative to review each such Tax Return
described in the preceding sentence prior to filing.
 
Section 10.5.  Cooperation on Tax Matters.
 
(a)  Buyer, the Company and its Subsidiaries, and the Principals shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to Section 10.4 and any
audit, litigation or other proceeding with respect to Taxes.

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(b)  The Buyer and the Principals further agree, upon request, to provide the
other Party with all information that either Party may be required to report
pursuant to Code Section 6043 and all Treasury Regulations promulgated
thereunder.
 
Section 10.6.  Tax-Sharing Agreements. All tax-sharing agreements or similar
agreements with respect to or involving the Company and its Subsidiaries shall
be terminated as of the Closing Date and, after the Closing Date, the Company
and its Subsidiaries shall not be bound thereby or have any liability
thereunder.
 
Section 10.7.  Certain Taxes and Fees. All transfer, documentary, sales, use,
stamp, registration and other such Taxes, and all conveyance fees, recording
charges and other fees and charges (including any penalties and interest)
incurred in connection with consummation of the transactions contemplated by
this Agreement shall be paid by the Principals when due, and Principals will, at
their own expense, file all necessary Tax Returns and other documentation with
respect to all such Taxes, fees and charges, and, if required by applicable law,
the Buyer will, and will cause its Affiliates to, join in the execution of any
such Tax Returns and other documentation.
 
 
ARTICLE XI.  
 
TERMINATION/SURVIVAL
 
Section 11.1.  Termination.
 
(a)  This Agreement may be terminated at any time prior to the Closing as
follows:
 
(i)  by the mutual written consent of the Buyer and the Principals;
 
(ii)  by either the Buyer or the Principals, if the Closing has not occurred by
September 30, 2005;
 
(iii)  by either the Buyer or the Principals if there is any law or regulation
that makes consummation of the transactions contemplated by this Agreement
illegal or otherwise prohibited, or if consummation of the transactions
contemplated by this Agreement would violate any nonappealable final order,
decree or judgment of any court or other Governmental Authority having competent
jurisdiction; or
 
(iv)  by either the Buyer or the Principals, (A) if there has been material
misrepresentation, breach of warranty or breach of covenant or other obligation
under this Agreement on the part of any of the Principals or the Company (in the
case of a termination by the Buyer) or on the part of the Buyer (in the case of
a termination by the Principals); or (B) if any condition to the obligations of
the terminating party to consummate the Closing under this Agreement becomes
incapable of fulfillment through no fault of the terminating party.

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(b)  The termination of this Agreement shall be effectuated by the delivery by
the party terminating this Agreement to the other party of a written notice of
such termination.
 
Section 11.2.  Effect of Termination. If this Agreement is terminated as
permitted by Section 11.1, the termination will be without liability of any
party (or any stockholder, director, officer, employee, agent, consultant or
representative of any party) to any other party to this Agreement; provided that
if the termination results from the (i) willful failure of a party to fulfill a
condition to the performance of the obligations of another party, (ii) failure
to perform a covenant of this Agreement or (iii) breach by any party to this
Agreement of any representation or warranty or agreement contained herein, the
failing or breaching party will be fully liable for any and all Damages incurred
or suffered by any other party as a result of such failure or breach. The
provisions of Sections 7.2, 11.2, 12.1 and 12.6 and Sections 12.9 through 12.2
will survive any termination of this Agreement pursuant to Section 11.1.
 
 
ARTICLE XII.  
 
MISCELLANEOUS
 
Section 12.1.  Expenses.
 
(a)  Except as otherwise provided in this Agreement, all costs and expenses
incurred in connection with this Agreement are to be paid by the party incurring
those costs or expenses. Without limiting the generality of the foregoing
sentence, the Principals shall bear all costs and expenses they incur in
connection with this Agreement and shall not cause the Company or any of its
Subsidiaries to pay or reimburse any of the Principals for any of those costs
and expenses.
 
(b)  Notwithstanding Section 12.1(a):
 
(i)  the Company shall pay, and the Principals shall cause the Company to pay,
prior to the Closing Date, all costs and expenses associated with requesting
and/or obtaining consents from any Persons not party to this Agreement that are
incurred in connection with the transactions contemplated by this Agreement,
including all costs and expenses associated with the Client Consent Requests;
and
 
(ii)  the Company shall pay, and the Principals shall cause the Company to pay,
prior to the Closing Date, all expenses of the Mutual Funds arising out of the
transactions contemplated by this Agreement, including without limitation
(A) the expenses of preparing, filing, printing and mailing the Proxy Statement
and the cost of any proxy solicitation firm; (B) the cost of any prospectus
supplements; and (C) costs of preparing, negotiating and executing new advisory
and distribution agreements.
 
Section 12.2.  Amendments; Waiver.
 
(a)  Any provision of this Agreement may be amended or waived if, but only if,
the amendment or waiver is in writing and is signed, in the case of an
amendment, by each

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party to this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective.
 
(b)  No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies in this
Agreement provided are cumulative and not exclusive of any rights or remedies
provided by law.
 
Section 12.3.  Entire Agreement. This Agreement, the Supplemental
Confidentiality Agreement and the letter agreement dated as of the date hereof
between the Buyer and the Company constitute the entire agreement between the
parties with respect to the subject matters hereof and thereof and supersedes
all prior agreements and understandings, both oral and written, between the
parties with respect to the subject matters hereof and thereof.
 
Section 12.4.  Specific Performance; Injunctive Relief. The parties agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with its terms and that the parties are entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions of this Agreement in
any court of competent jurisdiction, in addition to any other remedy to which
they are entitled at law or in equity.
 
Section 12.5.  Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court or other Governmental Authority of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement are to remain in full
force and effect and are in no way to be affected, impaired or invalidated so
long as the economic and legal substance of the transactions contemplated by
this Agreement are not affected in any manner materially adverse to any party.
Upon such a determination, the parties shall negotiate in good faith to modify
this Agreement to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent
possible.
 
Section 12.6.  Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if (a) delivered in person, (b) transmitted
by telecopy (with confirmation), (c) mailed by certified or registered mail
(return receipt requested) or (d) delivered by an express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
 
If to the Buyer:
 
Washington Trust Bancorp, Inc.
23 Broad Street
Westerly, Rhode Island 02891
Facsimile: (401) 348-1404
Attention: Chief Executive Officer or President

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With a copy to:
 
Goodwin Procter LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109
Facsimile: (617) 523-1231
Attention: Paul W. Lee, P.C.
 
If to the Company or the Shareholders:
 
Weston Financial Group, Inc.
40 William Street, Suite 330
Wellesley, MA 02181
Facsimile: 781-235-1905
Attention: Wayne M. Grzecki
 
With a copy to:
 
Nixon Peabody LLP
100 Summer Street
Boston, Massachusetts 02110
Facsimile: (617) 345-1300
Attention: Carter S, Bacon, Jr., P.C.
 
Section 12.7.  Binding Effect; No Third-Party Beneficiaries; No Assignment. This
Agreement inures to the benefit of and is binding upon the parties and the
respective successors and permitted assigns. Nothing in this Agreement is
intended to confer (or is to be construed as conferring) upon any Person other
than the parties and their respective successors and permitted assigns any
right, remedy or claim under or by reason of this Agreement or any provision
hereof. Without the prior written consent of the parties hereto, this Agreement
may not be assigned by any of the parties hereto, except that the Buyer may at
any time assign all or any portion of its rights and obligations hereunder to
any of its Affiliates; provided that, in the case of such an assignment, the
Buyer will remain liable for all of its obligations under this Agreement.
 
Section 12.8.  Counterparts. This Agreement may be executed in two or more
counterparts, each of which is to be deemed an original, but all of which taken
together are to constitute one and the same Agreement.
 
Section 12.9.  Governing Law. This Agreement is to be governed by the laws of
the State of Rhode Island.
 
Section 12.10.  Service; Jurisdiction. The parties agree that any suit, action
or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
District of Rhode Island or any Rhode Island state court, so long as one of
those courts has subject matter jurisdiction over the suit, action or
proceeding, and that any cause of action arising out of this Agreement is to be
deemed to have arisen from a transaction of

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business in the State of Rhode Island, and each of the parties hereby
irrevocably consents to the jurisdiction of those courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
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 suit, action
or proceeding in any of those courts or that any such suit, action or proceeding
brought in any of those courts has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any of
those courts. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 12.6 shall be deemed effective
service of process on such party.
 
Section 12.11.  WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
 
Section 12.12.  Drafting Conventions; No Construction Against Drafter.
 
(a)  The headings in this Agreement are provided for convenience and do not
affect its meaning. The words “include”, “includes” and “including” are to be
read as if they were followed by the phrase “without limitation”. Unless
specified otherwise in this Agreement, any reference to an agreement means that
agreement as amended or supplemented, subject to any restrictions on amendment
contained in such agreement. Unless specified otherwise, any reference to a
statute or regulation means that statute or regulation as amended or
supplemented from time to time and any corresponding provisions of successor
statutes or regulations. If any date specified in this Agreement as a date for
taking action falls on a day that is not a business day, then that action may be
taken on the next business day. Unless specified otherwise, the words “party”
and “parties” refer only to a named party to this Agreement.
 
(b)  The parties have participated jointly in the negotiation and drafting of
this Agreement. If an ambiguity or question of intent or interpretation arises,
this Agreement is to be construed as if drafted jointly by the parties and there
is to be no presumption or burden of proof favoring or disfavoring any party
because of the authorship of any provision of this Agreement.
 
Section 12.13.  Shareholders’ Representative.
 
(a)  Each of the Shareholders hereby irrevocably constitutes and appoints Wayne
M. Grzecki (the “Shareholders’ Representative”) as that Shareholder’s true and
lawful agent and attorney-in-fact for the purposes specified in Section
12.13(b). This power of attorney is coupled with an interest and is irrevocable.
The Shareholders’ Representative shall serve without compensation.
 
(b)  The Shareholders’ Representative shall have full power and authority, on
behalf of all Shareholders, to control, and resolve all disputes concerning
matters described in Sections 2.2 and 2.4 through 2.8. In furtherance of the
foregoing and with respect to those matters, the Shareholders’ Representative
shall have the power to enter into any agreement in connection therewith, to
exercise all or any of the powers, authority and discretion conferred upon it
under this Agreement, to waive any terms and conditions of this Agreement, to
give and

--------------------------------------------------------------------------------

receive notices on behalf of the Shareholders and to be the Shareholders’
exclusive representative with respect to any matter, suit, claim, action or
proceeding arising with respect to the matters described in Sections 2.2, 2.4
through 2.8 and Section 10.4. The Shareholders’ Representative agrees to act as,
and to undertake the duties and responsibilities of, such agent and
attorney-in-fact.
 
(c)  If, following the date of this Agreement, Wayne M. Grzecki ceases to serve
as the Shareholders’ Representative for any reason, then the Principals shall
elect, by a majority vote of the Principals that will be binding upon all of the
Principals and the Other Shareholders, another Principal to serve as a successor
to Mr. Grzecki as the Shareholder’s Representative, and that successor will
thereupon be deemed to be the Shareholders’ Representative for all purposes
under this Agreement and will be vested in all the powers, and subject to all of
the obligations, of the Shareholders’ Representative under this Agreement.
 
(d)  The Buyer and its Affiliates and their respective officers, directors,
employees, agents, advisors and representatives shall be entitled to rely on any
actions taken by the Shareholders’ Representative under this Agreement without
any liability or obligation to any of the Shareholders, notwithstanding any
knowledge on the part of the Buyer or any of its Affiliates or any of their
respective officers, directors, employees, agents, advisors or representatives
of any dispute, disagreement or controversy regarding or involving any of the
Shareholders.
 
[Signature Pages Follow]

 

 

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IN WITNESS WHEREOF, the parties are signing this Agreement as of the date first
above written.
 
WASHINGTON TRUST BANCORP, INC.
 
By: /s/ John C. Warren
Name: John C. Warren
Title: Chairman and Chief Executive Officer
 

 
WESTON FINANCIAL GROUP, INC.
 
By: /s/ I. Richard Horowitz
I. Richard Horowitz, President
 
/s/ I. Richard Horowitz
I. Richard Horowitz
 
/s/ Joseph Robbat, Jr.
Joseph Robbat, Jr.
 
/s/ Douglas A. Biggar
Douglas A. Biggar
 
/s/ Wayne M. Grzecki
Wayne M. Grzecki
 
/s/ Robert I. Stock
Robert I. Stock
 
/s/ Ronald A. Sugameli
Ronald A. Sugameli
 

 

[Signature Page to the Stock Purchase Agreement]

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Other Shareholders:
 
William L. O’Neill and Susan O’Neill, as Joint Tenants
 
Sue W. Goldstein
 
Elizabeth W. Cady
 
First Trust Corporation, as Trustee of the Barbara Beckingham Profit Sharing
Plan
 
First Trust Corporation FBO Brenda Y. Allen
 
Donald Gaiter
 
Dr. David Koffman, Trustee
 
Alden French, III
 
Timothy H. French
 
Dorothy W. French
 
Julia W. French
 
Pensco Trust Co. FBO Peter D. Gross MD IRA Acct GR-240
 
Kerry P. Falco
 

 

[Signature Page to the Stock Purchase Agreement]

 
 

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By: /s/ I. Richard Horowitz
I. Richard Horowitz
Attorney-in-Fact

By: /s/ Joseph Robbat, Jr.
Joseph Robbat, Jr.
Attorney-in-Fact

By: /s/ Douglas A. Biggar
Douglas A. Biggar
Attorney-in-Fact

By: /s/ Wayne M. Grzecki
Wayne M. Grzecki
Attorney-in-Fact

By: /s/ Robert I. Stock
Robert I. Stock
Attorney-in-Fact

By: /s/ Ronald A. Sugameli
Ronald A. Sugameli
Attorney-in-Fact