EXHIBIT 1.1

                               PURCHASE AGREEMENT

                                      AMONG


                     FIRST LITCHFIELD FINANCIAL CORPORATION,


                       FIRST LITCHFIELD STATUTORY TRUST II





                                       AND


                                   TWE, LTD.,



                                  AS PURCHASER

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



                            Dated as of June 16, 2006

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

<PAGE>

                               PURCHASE AGREEMENT
                     ($3,000,000 TRUST PREFERRED SECURITIES)

         THIS  PURCHASE  AGREEMENT,  dated as of June 16, 2006,  is entered into
among,  First  Litchfield  Financial  Corporation,  a Delaware  corporation (the
"Company"), First Litchfield Statutory Trust II, a Delaware statutory trust (the
"Trust,"  and,  together with the Company,  the  "Sellers"),  and TWE,  Ltd., an
exempted company  incorporated  under the laws of the Cayman Islands  (including
any assignee thereof, the "Purchaser").

                                   WITNESSETH:

         WHEREAS,  the  Sellers  propose to issue and sell 3,000  Floating  Rate
Preferred  Securities of the Trust, having a stated liquidation amount of $1,000
per preferred  security,  bearing a variable  rate of interest per annum,  reset
quarterly,  equal to LIBOR (as defined in the Indenture (as defined below)) plus
1.65% (the "Preferred Securities");

         WHEREAS,  the entire proceeds from the sale of the Preferred Securities
will be  combined  with the  entire  proceeds  from the sale by the Trust to the
Company of its common securities (the "Common Securities"),  and will be used by
the Trust to purchase  $3,093,000 in principal  amount of the  unsecured  junior
subordinated notes of the Company (the "Junior Subordinated Notes");

         WHEREAS,  the  Preferred  Securities  and the Common  Securities of the
Trust will be issued  pursuant to the Amended and Restated Trust  Agreement (the
"Trust Agreement"),  dated as of the Closing Date (as defined below),  among the
Company,  as depositor,  Wilmington Trust Company,  as property trustee (in such
capacity,  the "Property  Trustee"),  and as Delaware trustee (in such capacity,
the "Delaware  Trustee"),  the  Administrative  Trustees  named therein (in such
capacities, the "Administrative Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust;

         WHEREAS,  the Preferred  Securities  will be fully and  unconditionally
guaranteed on a subordinated  basis by the Company with respect to distributions
and amounts payable upon liquidation,  redemption or repayment (the "Guarantee")
pursuant and subject to the Guarantee Agreement (the "Guarantee Agreement"),  to
be dated as of the Closing Date and  executed  and  delivered by the Company and
Wilmington Trust Company, as guarantee trustee (in such capacity, the "Guarantee
Trustee"),  for the benefit  from time to time of the  holders of the  Preferred
Securities; and

         WHEREAS,  the Junior  Subordinated  Notes will be issued  pursuant to a
Junior Subordinated  Indenture,  dated as of the Closing Date (the "Indenture"),
between the Company, and Wilmington Trust Company, as indenture trustee (in such
capacity, the "Indenture Trustee").

         NOW,  THEREFORE,  in consideration of the mutual agreements and subject
to the terms and  conditions  herein  set forth,  the  parties  hereto  agree as
follows:

            Section  1.  Definitions.   The  Preferred  Securities,  the  Common
                         -----------
Securities and the Junior Subordinated Notes are collectively referred to herein
as  the  "Securities."  This  Purchase  Agreement,   the  Indenture,  the  Trust
Agreement,  the Guarantee Agreement and the

                                       2
<PAGE>

Securities are collectively referred to herein as the "Operative Documents." All
other  capitalized  terms used but not defined in this Purchase  Agreement shall
have the meanings ascribed thereto in the Indenture.

            Section 2. Purchase and Sale of the Preferred Securities.
                       ---------------------------------------------

            2.1 The Sellers  agree to sell to the  Purchaser,  and the Purchaser
agrees to purchase from the Sellers,  the Preferred  Securities for an aggregate
amount (the  "Purchase  Price")  equal to  $3,000,000.  In  connection  with the
purchase of the  Preferred  Securities,  the  Company  shall pay a 0.0% fee (the
"Fee") to its introducing agent (the "Introducing Agent") for services rendered.
The Purchaser  shall be responsible for the following  expenses:  (i) any rating
agency costs and expenses and (ii) any fee payable to the Company's  Introducing
Agent; provided that such Introducing Agent has an agreement with the Purchaser.
The Purchaser  shall not be responsible  for any expenses set forth in Section 7
hereof  unless  otherwise  provided  therein.  The Trust shall use the  Purchase
Price,  together  with the proceeds from the sale of the Common  Securities,  to
purchase the Junior Subordinated Notes.

            2.2  Delivery  or  transfer  of,  and  payment  for,  the  Preferred
Securities  shall be made at 11:00 A.M. New York City time, on June 16, 2006, or
such  later date (not later than July 14,  2006) as the  parties  may  designate
(such date and time of delivery and payment for the Preferred  Securities  being
herein called the "Closing Date"). On the Closing Date, the Preferred Securities
shall be transferred  and delivered to the Purchaser,  or its designee,  against
the  payment of the  Purchase  Price to the  Sellers  made by wire  transfer  in
immediately  available  funds to a U.S.  account  designated  in  writing by the
Company.

            2.3  Delivery  of the  Preferred  Securities  shall  be made at such
location, and in such names and denominations,  as the Purchaser shall designate
in advance of the  Closing  Date.  The  Company  and the Trust agree to have the
Preferred  Securities  available for inspection and checking by the Purchaser in
New York, New York, not later than 2:00 P.M. New York City time, on the business
day prior to the Closing  Date.  The closing  for the  purchase  and sale of the
Preferred  Securities shall occur at the offices of Thacher Proffitt & Wood LLP,
Two World Financial Center, New York, New York 10281, or such other place as the
parties hereto shall agree.

            2.4 The Preferred Securities shall be sold by the Trust, directly or
indirectly,  to the  Purchaser  without  registration  of  any of the  Preferred
Securities,  the Junior Subordinated Notes or the Guarantee under the Securities
Act of  1933,  as  amended  (the  "Securities  Act"),  or any  other  applicable
securities laws in reliance upon exemptions from the  registration  requirements
of the Securities Act and other applicable  securities laws. The Sellers and the
Purchaser have entered into this Agreement to set forth their  understanding  as
to their relationship and their respective rights, duties and obligations.

            2.5 Upon original  issuance  thereof,  the Preferred  Securities and
Junior  Subordinated  Notes certificates shall each contain a legend as required
pursuant to any of the Operative Documents.

                                       3
<PAGE>

            Section 3. Closing Conditions.  The obligations of the parties under
                       ------------------
this Agreement on the Closing Date are subject to the following conditions:

            3.1 Accuracy of Representations and Warranties.  The representations
                ------------------------------------------
and warranties  contained in this  Agreement,  and the statements of the Sellers
made in any certificates pursuant to this Agreement, shall be accurate as of the
date of delivery of the Preferred Securities.

            3.2 Opinions of Counsel.  On the Closing Date,  the Purchaser  shall
                -------------------
have received the following  favorable opinions or certificate,  as the case may
be, each dated as of the Closing  Date:  (a) from  Thacher  Proffitt & Wood LLP,
special   counsel  for  the   Purchaser   and  addressed  to  the  Purchaser  in
substantially the form set forth on Exhibit A-1 attached hereto and incorporated
herein by this reference, (b) either (i) an opinion from Cranmore,  FitzGerald &
Meaney,  counsel for the Sellers, or (ii) an opinion from the General Counsel or
Chief Legal  Officer of the  Company,  or (iii) if the  Company  does not have a
General Counsel or Chief Legal Officer, an Officers'  Certificate from the Chief
Executive Officer, President or Executive Vice President of the Company, and the
Chief Financial  Officer,  Treasurer or Assistant  Treasurer of the Company,  in
each case  addressed  to the  Purchaser in  substantially  the form set forth on
Exhibit A-2 attached hereto and incorporated herein by this reference,  (c) from
Thacher Proffitt & Wood LLP, special tax counsel for the Purchaser and addressed
to the  Purchaser  in  substantially  the form set forth on Exhibit A-3 attached
hereto  and  incorporated  herein by this  reference,  (d) from  Morris,  James,
Hitchens & Williams LLP,  special Delaware counsel to the Trust and addressed to
the Purchaser and the Sellers,  in  substantially  the form set forth on Exhibit
A-4 attached  hereto and  incorporated  herein by this  reference,  and (e) from
Morris,  James,  Hitchens  & Williams  LLP,  special  counsel  to the  Indenture
Trustee,  the Property  Trustee,  the Delaware Trustee and the Guarantee Trustee
and addressed to the Purchaser and the Sellers,  in  substantially  the form set
forth on Exhibit A-5 attached hereto and incorporated  herein by this reference.
Each  certificate  or opinion  addressed to the  Purchaser  shall state that the
first  entity,  if any, to which the  Purchaser  transfers  any of the Preferred
Securities,  and, if such transferee is a warehouse entity,  the next subsequent
transferee that is not a warehouse entity (each, a "Subsequent Purchaser") shall
be entitled to rely on such opinion.

            3.3 Officer's  Certificate.  The Company shall have furnished to the
                ----------------------
Purchaser a certificate of the Company,  signed by the Chief Executive  Officer,
President or an Executive  Vice  President and by the Chief  Financial  Officer,
Treasurer  or  Assistant  Treasurer  of the  Company,  and the Trust  shall have
furnished  to  the  Purchaser  a  certificate   of  the  Trust,   signed  by  an
Administrative  Trustee of the Trust,  in each case dated the Closing Date, and,
in the case of the Company,  as to 3.3.1 and 3.3.2 below and, in the case of the
Trust, as to 3.3.1 below:

         3.3.1 the representations and warranties in this Agreement are true and
correct  on and as of the  Closing  Date with the same  effect as if made on the
Closing  Date,  and the  Company  and  the  Trust  have  complied  with  all the
agreements  and  satisfied  all the  conditions  on either  of their  part to be
performed or satisfied at or prior to the Closing Date; and

         3.3.2 since the date of the Interim  Financial  Statements  (as defined
below), there has been no material adverse change in the condition (financial or
other),  earnings,  business,

                                       4
<PAGE>

prospects  or  assets of the  Company  and its  subsidiaries,  taken as a whole,
whether or not arising from  transactions  occurring  in the ordinary  course of
business.

         3.4  No  Subsequent  Change.   Subsequent  to  the  execution  of  this
              ----------------------
Agreement,  there shall not have been any change, or any development involving a
prospective  change,  in  or  affecting  the  condition  (financial  or  other),
earnings,  business,  prospects  or assets of the Company and its  subsidiaries,
whether or not occurring in the ordinary course of business, the effect of which
is,  in the  Purchaser's  judgment,  so  material  and  adverse  as to  make  it
impractical  or  inadvisable  to  proceed  with the  purchase  of the  Preferred
Securities.

            3.5 Purchase  Permitted by Applicable  Laws; Legal  Investment.  The
                ----------------------------------------------------------
purchase  of and payment  for the  Preferred  Securities  as  described  in this
Agreement  shall (a) not be prohibited  by any  applicable  law or  governmental
regulation,  (b) not subject the Purchaser to any penalty or, in the  reasonable
judgment of the  Purchaser,  other onerous  conditions  under or pursuant to any
applicable law or governmental regulation,  and (c) be permitted by the laws and
regulations of the jurisdictions to which the Purchaser is subject.

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

            3.7 Information.  Prior to or on the Closing Date, the Sellers shall
                -----------
have  furnished  to the  Purchaser  and its counsel  such  further  information,
certificates,  opinions  and  documents  as the  Purchaser  or its  counsel  may
reasonably request.

         Each  certificate  signed by any trustee of the Trust or any officer of
the Company and delivered to the Purchaser or its counsel in connection with the
Operative  Documents and the transactions  contemplated hereby and thereby shall
be deemed to be a  representation  and warranty of the Trust and/or the Company,
as the  case  may be,  and not by such  trustee  or  officer  in any  individual
capacity.

            Section  4.  Representations  and  Warranties  of the  Sellers.  The
                         -------------------------------------------------
Sellers  jointly and severally  represent and warrant to the Purchaser as of the
date hereof and as of the Closing Date as follows:

            4.1   Securities Laws Matters:
                  -----------------------

            (a) Neither the Company nor the Trust, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on any of their behalf  (except for the  Introducing
Agent,  as to which  neither the Company nor the Trust make any  representation)
has, directly or indirectly,  made offers or sales of any security, or solicited
offers  to  buy  any  security,  under  circumstances  that  would  require  the
registration under the Securities Act of any of the Securities.

                                       5
<PAGE>

            (b) Neither the Company nor the Trust, nor any of their  Affiliates,
nor any person  acting on its or their behalf  (except for the Purchaser and the
Introducing  Agent,  as to which  neither  the  Company  nor the Trust  make any
representation)  has (i) offered for sale or  solicited  offers to purchase  the
Securities,  (ii)  engaged  in any  form  of  general  solicitation  or  general
advertising (within the meaning of Regulation D) in connection with any offer or
sale  of any of the  Securities,  or  (iii)  engaged  in any  "directed  selling
efforts"   within  the  meaning  of  Regulation  S  under  the   Securities  Act
("Regulation S") with respect to the Securities.

            (c) The  Securities  (i)  are not and  have  not  been  listed  on a
national  securities  exchange  registered  under  Section  6 of the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  or quoted on a U.S.
automated  interdealer  quotation  system  and  (ii)  are  not  of  an  open-end
investment  company,  unit investment trust or face-amount  certificate  company
that are, or are required to be,  registered  under Section 8 of the  Investment
Company  Act of  1940,  as  amended  (the  "Investment  Company  Act"),  and the
Securities  otherwise  satisfy the  eligibility  requirements of Rule 144A(d)(3)
promulgated pursuant to the Securities Act ("Rule 144A(d)(3)").

            (d) Neither the Company nor the Trust is, and, immediately following
consummation of the transactions  contemplated hereby and the application of the
net  proceeds  therefrom,  neither  the  Company  nor  the  Trust  will  be,  an
"investment  company" or an entity  "controlled" by an "investment  company," in
each case within the meaning of Section 3(a) of the Investment Company Act.

            (e)  Neither  the Company nor the Trust has paid or agreed to pay to
any person or entity, directly or indirectly, any fees or other compensation for
soliciting another to purchase any of the Securities,  except for the Fee and/or
any other fee payable to the Company's  Introducing Agent;  provided,  that such
Introducing Agent has an agreement with the Purchaser.

            4.2 Standing and Qualification of the Trust. The Trust has been duly
                ---------------------------------------
created and is validly  existing in good standing as a statutory trust under the
Delaware Statutory Trust Act, 12 Del. C. ss.3801,  et seq. (the "Statutory Trust
Act") with all requisite  power and authority to own property and to conduct the
business it transacts and proposes to transact and to enter into and perform its
obligations  under the Operative  Documents to which it is a party. The Trust is
duly qualified to transact  business as a foreign entity and is in good standing
in each jurisdiction in which such qualification is necessary,  except where the
failure to so qualify or be in good standing  would not have a material  adverse
effect on the condition (financial or otherwise),  earnings, business, prospects
or assets of the  Trust,  whether or not  occurring  in the  ordinary  course of
business.  The Trust is not a party to, or  otherwise  bound by,  any  agreement
other than the  Operative  Documents.  The Trust is, and under  current law will
continue to be,  classified  for federal  income tax purposes as a grantor trust
and  not  as  an  association  or  publicly  traded  partnership  taxable  as  a
corporation.

            4.3 Trust Agreement. The Trust Agreement has been duly authorized by
                ---------------
the Company  and, on the Closing Date  specified in Section 2.2,  will have been
duly  executed and delivered by the Company and the  Administrative  Trustees of
the Trust,  and,  assuming  due  authorization,  execution  and  delivery by the
Property Trustee and the Delaware  Trustee,  will be a

                                       6
<PAGE>

legal,  valid and  binding  obligation  of the  Company  and the  Administrative
Trustees,  enforceable  against them in  accordance  with its terms,  subject to
applicable  bankruptcy,  insolvency and similar laws affecting creditors' rights
generally  and to  general  principles  of  equity.  Each of the  Administrative
Trustees of the Trust is an employee of the Company or its  subsidiary  bank and
has been duly  authorized  by the  Company  to  execute  and  deliver  the Trust
Agreement. To the knowledge of the Administrative  Trustees, the Trust is not in
violation of any provision of the Statutory Trust Act.

            4.4  Guarantee  Agreement and the  Indenture.  Each of the Guarantee
                 ---------------------------------------
Agreement and the Indenture has been duly  authorized by the Company and, on the
Closing Date,  will have been duly  executed and delivered by the Company,  and,
assuming due authorization,  execution and delivery by the Guarantee Trustee, in
the  case of the  Guarantee,  and by the  Indenture  Trustee  in the case of the
Indenture,  will  be a  legal,  valid  and  binding  obligation  of the  Company
enforceable  against  it in  accordance  with its terms,  subject to  applicable
bankruptcy,  insolvency and similar laws affecting  creditors'  rights generally
and to general principles of equity.

            4.5  Preferred  Securities  and  Common  Securities.  The  Preferred
                 ----------------------------------------------
Securities and the Common Securities have been duly authorized by the Trust and,
when issued and delivered  against  payment  therefor on the Closing Date to the
Purchaser  in  accordance  with  this  Agreement,  in the case of the  Preferred
Securities,  and to  the  Company  in  accordance  with  the  Common  Securities
Subscription  Agreement  between  the  Company  and the  Trust,  dated as of the
Closing  Date,  in the case of the Common  Securities,  will be validly  issued,
fully paid and nonassessable and will represent undivided  beneficial  interests
in the assets of the Trust  entitled  to the  benefits  of the Trust  Agreement,
enforceable  against  the Trust in  accordance  with  their  terms,  subject  to
applicable  bankruptcy,  insolvency and similar laws affecting creditors' rights
generally and to general principles of equity. The issuance of the Securities is
not subject to preemptive or other similar  rights.  On the Closing Date, all of
the issued and  outstanding  Common  Securities  will be  directly  owned by the
Company free and clear of any pledge,  security  interest,  claim, lien or other
encumbrance (each, a "Lien").

            4.6 Junior  Subordinated  Notes. The Junior  Subordinated Notes have
                ---------------------------
been duly  authorized  by the Company and, on the Closing  Date,  will have been
duly  executed and  delivered to the  Indenture  Trustee for  authentication  in
accordance with the Indenture and, when authenticated in the manner provided for
in the  Indenture  and  delivered  to the  Trust  against  payment  therefor  in
accordance with the Junior Subordinated Note Subscription  Agreement between the
Company and the Trust,  dated as of the Closing  Date,  will  constitute  legal,
valid and binding  obligations  of the Company  entitled to the  benefits of the
Indenture  enforceable  against  the  Company in  accordance  with their  terms,
subject  to  applicable  bankruptcy,   insolvency  and  similar  laws  affecting
creditors' rights generally and to general principles of equity.

            4.7 Purchase  Agreement.  This  Agreement has been duly  authorized,
                -------------------
executed and delivered by the Company and the Trust and  constitutes  the legal,
valid and binding obligation of the Company and the Trust,  enforceable  against
the Company and the Trust in  accordance  with its terms,  subject to applicable
bankruptcy,  insolvency and similar laws affecting  creditors'  rights generally
and to general principles of equity.

                                       7
<PAGE>

            4.8 Defaults.  Neither the issue and sale of the Common  Securities,
                --------
the Preferred  Securities or the Junior  Subordinated Notes, nor the purchase of
the Junior  Subordinated  Notes by the Trust,  the execution and delivery of and
compliance  with the  Operative  Documents  by the Company or the Trust,  to the
extent a party thereto, the consummation of the transactions contemplated herein
or therein,  or the use of the proceeds  therefrom,  (i) will  conflict  with or
constitute a breach of, or a default under,  the Trust  Agreement or the charter
or bylaws of the Company or any subsidiary of the Company or any applicable law,
statute,  rule, regulation,  judgment,  order, writ or decree of any government,
governmental authority, agency or instrumentality or court, domestic or foreign,
having jurisdiction over the Trust or the Company or any of its subsidiaries, or
their respective properties or assets (collectively,  "Governmental  Entities"),
(ii) will  conflict with or constitute a violation or breach of, or a default or
Repayment  Event  (as  defined  below)  under,  or  result  in the  creation  or
imposition of any Lien upon any property or assets of the Trust,  the Company or
any of its  subsidiaries  pursuant to any contract,  indenture,  mortgage,  loan
agreement,  note, lease or other agreement or instrument to which (A) the Trust,
the Company or any of its  subsidiaries is a party or by which it or any of them
may be bound, or (B) any of the property or assets of any of them is subject, or
any judgment,  order or decree of any court,  Governmental Entity or arbitrator,
except,  in the  case  of  this  clause  (ii),  for  such  conflicts,  breaches,
violations,  defaults,  Repayment  Events (as defined  below) or Liens which (X)
would not, singly or in the aggregate,  adversely affect the consummation of the
transactions  contemplated by the Operative  Documents and (Y) would not, singly
or in the aggregate,  have a material adverse effect on the condition (financial
or otherwise), earnings, business, liabilities, prospects and assets (taken as a
whole) or business  prospects  of the Company  and its  subsidiaries  taken as a
whole,  whether or not occurring in the ordinary course of business (a "Material
Adverse Effect") or (iii) require the consent, approval,  authorization or order
of any court or Governmental  Entity.  As used herein, a "Repayment Event" means
any event or  condition  which gives the holder of any note,  debenture or other
evidence of  indebtedness  (or any person  acting on such  holder's  behalf) the
right to require the repurchase,  redemption or repayment of all or a portion of
such  indebtedness by the Trust or the Company or any of its subsidiaries  prior
to its scheduled maturity.

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

            4.10  Subsidiaries  of the Company.  The Company has no subsidiaries
                  ----------------------------
that are material to its business,  financial  condition or earnings  other than
those  subsidiaries  listed in  Schedule I  attached  hereto  (the  "Significant
Subsidiaries").  Each  Significant  Subsidiary  has been duly  organized  and is
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is chartered or organized,  with all  requisite  power and authority to
own its  properties  and  conduct  the  business it  transacts  and  proposes to
transact. Each Significant Subsidiary is duly qualified to transact business and
is in good standing as a foreign entity in each jurisdiction where the nature of
its activities requires such qualification, except where the

                                       8
<PAGE>

failure of any such Significant  Subsidiary to be so qualified would not, singly
or in the aggregate, have a Material Adverse Effect.

            4.11 Government  Licenses;  Laws. Each of the Trust, the Company and
                 ---------------------------
each of its subsidiaries hold all necessary approvals,  authorizations,  orders,
licenses, certificates and permits (collectively,  "Government Licenses") of and
from Governmental  Entities necessary to conduct its respective  business as now
being conducted,  and neither the Trust, the Company nor any of its subsidiaries
has  received  any  notice  of   proceedings   relating  to  the  revocation  or
modification of any such Government  License,  except where the failure to be so
licensed  or  approved  or the  receipt of an  unfavorable  decision,  ruling or
finding, would not, singly or in the aggregate,  have a Material Adverse Effect;
all of the  Government  Licenses are valid and in full force and effect,  except
where the  invalidity or the failure of such  Government  Licenses to be in full
force and effect, would not, singly or in the aggregate, have a Material Adverse
Effect;  and the  Company  and  its  subsidiaries  are in  compliance  with  all
applicable laws, rules,  regulations,  judgments,  orders, decrees and consents,
except  where  the  failure  to be in  compliance  would  not,  singly or in the
aggregate, have a Material Adverse Effect.

            4.12  Stock.  All of the  issued and  outstanding  shares of capital
                  -----
stock of the Company and each of its subsidiaries are validly issued, fully paid
and  nonassessable;  all of the issued  and  outstanding  capital  stock of each
subsidiary  of  the  Company  is  owned  by the  Company,  directly  or  through
subsidiaries,  free and clear of any Lien, claim or equitable right; and none of
the issued and  outstanding  capital stock of the Company or any  subsidiary was
issued in violation of any  preemptive or similar rights arising by operation of
law, under the charter or by-laws of such entity or under any agreement to which
the Company or any of its subsidiaries is a party.

            4.13 Property. Each of the Trust, the Company and each subsidiary of
                 --------
the  Company has good and  marketable  title to all of its  respective  real and
personal  properties,  in each case  free and  clear of all  Liens and  defects,
except for those that would  not,  singly or in the  aggregate,  have a Material
Adverse Effect;  and all of the leases and subleases under which the Trust,  the
Company or any subsidiary of the Company holds  properties are in full force and
effect,  except  where the  failure of such leases and  subleases  to be in full
force and effect would not, singly or in the aggregate,  have a Material Adverse
Effect and none of the Trust,  the Company or any  subsidiary of the Company has
any notice of any claim of any sort that has been asserted by anyone  adverse to
the rights of the Trust,  the Company or any subsidiary of the Company under any
such leases or subleases,  or affecting or questioning the rights of such entity
to the continued  possession of the leased or subleased  premises under any such
lease or  sublease,  except for such  claims  that  would not,  singly or in the
aggregate, have a Material Adverse Effect.

            4.14 Conflicts,  Authorizations  and Approvals.  Neither the Company
                 -----------------------------------------
nor any of its  subsidiaries  is (i) in  violation  of its  respective  charter,
bylaws or similar organizational documents or (ii) in default in the performance
or observance of any obligation,  agreement,  covenant or condition contained in
any  contract,  indenture,  mortgage,  loan  agreement,  note,  lease  or  other
agreement or instrument to which either the Company or any such  subsidiary is a
party or by which it or any of them may be bound or to which any of the property
or assets of any of them is subject,  except,  in the case of clause (ii), where
such default  would not,  singly or in the  aggregate,  have a Material  Adverse
Effect. No filing with, or authorization,  approval,  consent,  license,  order,
registration,  qualification or decree of, any Governmental  Entity,  other than
those

                                       9
<PAGE>

that have been made or obtained, is necessary or required for the performance by
the Trust or the Company of their  respective  obligations  under the  Operative
Documents,  as applicable,  or the  consummation by the Trust and the Company of
the transactions contemplated by the Operative Documents.

            4.15 Holding Company Registration and Deposit Insurance. The Company
                 --------------------------------------------------
is duly  registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "Bank Holding Company Act"), and the regulations of the
Board of Governors of the Federal  Reserve System (the "Federal  Reserve"),  and
the deposit  accounts of the Company's  subsidiary  depository  institutions are
insured by the Federal  Deposit  Insurance  Corporation  ("FDIC") to the fullest
extent  permitted  by law and the rules  and  regulations  of the  FDIC,  and no
proceeding  for the  termination  of  such  insurance  are  pending  or,  to the
knowledge of the Company or the Trust after due inquiry, threatened.

            4.16 Financial Statements.
                 --------------------

            (a) The audited  consolidated  financial  statements  (including the
notes thereto) and schedules of the Company and its consolidated subsidiaries at
and for  the  three  fiscal  years  ended  December  31,  2005  (the  "Financial
Statements") and the interim unaudited  consolidated financial statements of the
Company and its consolidated subsidiaries at and for the quarter ended March 31,
2006,  (the "Interim  Financial  Statements")  provided to the Purchaser are the
most recently available audited and unaudited  consolidated financial statements
of the  Company  and its  consolidated  subsidiaries,  respectively,  and fairly
present in all material  respects,  in accordance with U.S.  generally  accepted
accounting  principles  ("GAAP"),  the financial position of the Company and its
consolidated  subsidiaries,  and  the  results  of  operations  and  changes  in
financial  condition  as of the dates  and for the  periods  therein  specified,
subject, in the case of Interim Financial  Statements,  to year-end  adjustments
(which are expected to consist  solely of normal  recurring  adjustments).  Such
consolidated financial statements and schedules have been prepared in accordance
with GAAP  consistently  applied  throughout  the  periods  involved  (except as
otherwise noted therein).

            (b) The  Company's  report on FRY-9C,  dated  December 31, 2005 (the
"FRY-9C"), provided to the Purchaser is the most recently available such report,
and the  information  therein  fairly  presents  in all  material  respects  the
financial  position of the Company and its subsidiaries.  None of the Company or
any  of  its  subsidiaries  has  been  requested  by a  Governmental  Entity  to
republish, restate or refile any regulatory or financial report.

            (c) Since the respective dates of the Financial Statements,  Interim
Financial Statements and the FRY-9C, there has not been (A) any material adverse
change or  development  with respect to the condition  (financial or otherwise),
earnings,  business,  assets  or  business  prospects  of the  Company  and  its
subsidiaries,  taken as a whole, whether or not occurring in the ordinary course
of business or (B) any dividend or  distribution  of any kind declared,  paid or
made by the  Company  on any  class of its  capital  stock  other  than  regular
quarterly dividends on the Company's common stock.

            (d) The  accountants  of the Company  who  certified  the  Financial
Statements  are   independent   public   accountants  of  the  Company  and  its
subsidiaries  within  the  meaning  of

                                       10
<PAGE>

the Securities Act and the rules and  regulations of the Securities and Exchange
Commission ("SEC") thereunder.

            4.17 Regulatory  Enforcement Matters. None of the Trust, the Company
                 -------------------------------
nor any of its subsidiaries,  nor any of their respective  officers,  directors,
employees  or  representatives,  is subject or is party to, or has  received any
notice  from any  Regulatory  Agency (as  defined  below)  that any of them will
become   subject  or  party  to  any   investigation   with   respect   to,  any
cease-and-desist  order, agreement,  civil monetary penalty,  consent agreement,
memorandum of understanding or other regulatory  enforcement action,  proceeding
or  order  with  or by,  or is a  party  to any  commitment  letter  or  similar
undertaking  to, or is subject to any  directive  by, or has been a recipient of
any supervisory letter from, or has adopted any board resolutions at the request
or  suggestion  of, any  Regulatory  Agency  that,  in any such case,  currently
restricts in any material  respect the conduct of their  business or that in any
material manner relates to their capital adequacy,  their credit policies, their
management or their business (each, a "Regulatory  Action"),  nor has the Trust,
the Company or any of its  subsidiaries  been advised by any  Regulatory  Agency
that it is considering  issuing or requesting any such  Regulatory  Action;  and
there is no  unresolved  violation,  criticism or  exception  by any  Regulatory
Agency with respect to any report or statement  relating to any  examinations of
the Trust, the Company or any of its subsidiaries,  except where such unresolved
violation,  criticism or exception would not, singly or in the aggregate, have a
Material  Adverse  Effect.  If the  Company is a bank  holding  company  that is
subject to the Bank Holding Company Act, it is a "well-run" bank holding company
that  satisfies the criteria of the Federal  Reserve's  regulations at 12 C.F.R.
ss.225.14(c).   Each  of  the  Company's   subsidiaries  that  is  a  depository
institution,   the   accounts   of  which  are   insured  by  the  FDIC  (i)  is
"well-capitalized"  within the  meaning  of 12 U.S.C.  ss.1831o  and  applicable
implementing regulations thereunder;  and (ii) is not, and has not been notified
by any Regulatory Agency that it is, in "troubled  condition" within the meaning
of 12 U.S.C. ss.1831i and applicable  implementing  regulations  thereunder.  As
used  herein,  the term  "Regulatory  Agency"  means any federal or state agency
charged with the supervision or regulation of depositary institutions or holding
companies of depositary institutions,  or engaged in the insurance of depositary
institution deposits, or any court, administrative agency or commission or other
governmental  agency,   authority  or  instrumentality   having  supervisory  or
regulatory  authority  with  respect  to the  Trust,  the  Company or any of its
subsidiaries.

            4.18 No Undisclosed Liabilities.  None of the Trust, the Company nor
                 --------------------------
any of its  subsidiaries has any material  liability,  whether known or unknown,
whether asserted or unasserted,  whether absolute or contingent, whether accrued
or unaccrued,  whether liquidated or unliquidated,  and whether due or to become
due,  including  any  liability for taxes (and there is no past or present fact,
situation,  circumstance,  condition  or other  basis for any  present or future
action, suit, proceeding,  hearing, charge,  complaint,  claim or demand against
the  Company or its  subsidiaries  that could give rise to any such  liability),
except for (i) liabilities set forth in the Financial  Statements or the Interim
Financial  Statements  and  (ii)  normal  fluctuations  in  the  amount  of  the
liabilities  referred to in clause (i) above occurring in the ordinary course of
business of the Trust, the Company and all of its subsidiaries since the date of
the most recent balance sheet included in such Financial Statements.

            4.19 Litigation. There is no action, suit or proceeding before or by
                 ----------
any Governmental Entity,  arbitrator or court,  domestic or foreign, now pending
or, to the  knowledge

                                       11
<PAGE>

of the Company or the Trust after due inquiry,  threatened  against or affecting
the Trust or the Company or any of its  subsidiaries,  except for such  actions,
suits or proceedings that, if adversely determined,  would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated by
the Operative  Documents or have a Material Adverse Effect; and the aggregate of
all pending legal or governmental  proceedings to which the Trust or the Company
or any of its  subsidiaries  is a party  or of  which  any of  their  respective
properties  or  assets  is  subject,   including   ordinary  routine  litigation
incidental  to the  business,  are not expected to result in a Material  Adverse
Effect.

            4.20 No Labor  Disputes.  No labor dispute with the employees of the
                 ------------------
Trust, the Company or any of its subsidiaries exists or, to the knowledge of the
executive officers of the Trust or the Company, is imminent,  except those which
would not, singly or in the aggregate, have a Material Adverse Effect.

            4.21 Filings with the SEC. The  documents of the Company  filed with
                 --------------------
the SEC in accordance with the Exchange Act, from and including the commencement
of the fiscal year covered by the  Company's  most recent  Annual Report on Form
10-K,  at the time they were or hereafter  are filed by the Company with the SEC
(collectively, the "1934 Act Reports"), complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC  thereunder  (the "1934 Act  Regulations"),  and did not, and, at the
date of this  Agreement  and on the Closing Date, do not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein,  in the light of
the  circumstances  under which they were made, not  misleading;  and other than
such  instruments,  agreements,  contracts  and other  documents as are filed as
exhibits to the Company's Annual Report on Form 10-K,  Quarterly Reports on Form
10-Q or  Current  Reports  on Form 8-K,  there are no  instruments,  agreements,
contracts or documents of a character  described in Item 601 of  Regulation  S-K
promulgated  by the SEC to which the  Company  or any of its  subsidiaries  is a
party. The Company is in compliance with all currently  applicable  requirements
of the  Exchange  Act and the  1934  Act  Regulations  that  were  added  by the
Sarbanes-Oxley Act of 2002.

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

            4.23  Tax  Returns.   The  Company  and  each  of  the   Significant
                  ------------
Subsidiaries have timely and duly filed all Tax Returns (defined below) required
to be filed by them, and all such Tax Returns are true,  correct and complete in
all material respects. The Company and each of the Significant Subsidiaries have
timely  and duly paid in full all  material  Taxes  required  to be

                                       12
<PAGE>

paid by them  (whether or not such  amounts are shown as due on any Tax Return).
There are no  federal,  state,  or other Tax  audits or  deficiency  assessments
proposed  or  pending  with  respect to the  Company  or any of the  Significant
Subsidiaries,  and no such audits or assessments are threatened. As used herein,
the terms  "Tax" or "Taxes"  mean (i) all  federal,  state,  local,  and foreign
taxes,  and other  assessments of a similar nature (whether  imposed directly or
through  withholding),  including any  interest,  additions to tax, or penalties
applicable thereto, imposed by any Governmental Entity, and (ii) all liabilities
in  respect  of such  amounts  arising  as a result  of  being a  member  of any
affiliated,  consolidated, combined, unitary or similar group, as a successor to
another person or by contract.  As used herein, the term "Tax Returns" means all
federal,  state,  local,  and foreign  Tax  returns,  declarations,  statements,
reports,  schedules,  forms, and information  returns and any amendments thereto
filed or required to be filed with any Governmental Entity.

         4.24 Taxes.  The Trust is not subject to United States  federal  income
              -----
tax with respect to income received or accrued on the Junior Subordinated Notes,
interest payable by the Company on the Junior  Subordinated  Notes is deductible
by the  Company,  in whole or in part,  for  United  States  federal  income tax
purposes,  and the Trust is not,  or will not be within  ninety (90) days of the
date hereof,  subject to more than a de minimis amount of other taxes, duties or
other  governmental  charges.  There are no  rulemaking  or similar  proceedings
before the United States Internal Revenue Service or comparable federal,  state,
local or foreign  government  bodies which  involve or affect the Company or any
subsidiary, which, if the subject of an action unfavorable to the Company or any
subsidiary, could result in a Material Adverse Effect.

         4.25 Books and Records.  The books, records and accounts of the Company
              -----------------
and its subsidiaries  accurately and fairly reflect,  in reasonable  detail, the
transactions  in,  and  dispositions  of,  the  assets  of,  and the  results of
operations  of, the  Company and its  subsidiaries.  The Company and each of its
subsidiaries  maintains a system of internal  accounting  controls sufficient to
provide  reasonable  assurances that (i) transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
accordance  with GAAP and to  maintain  asset  accountability,  (iii)  access to
assets is permitted  only in accordance  with  management's  general or specific
authorization and (iv) the recorded  accountability  for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

         4.26  Insurance.  The  Company  and the  Significant  Subsidiaries  are
               ---------
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such amounts in all material  respects as are  customary in the
businesses in which they are engaged or propose to engage after giving effect to
the transactions  contemplated  hereby,  including,  but not limited to, real or
personal  property owned or leased against theft,  damage,  destruction,  act of
vandalism  and all other risks  customarily  insured  against.  All  policies of
insurance  and  fidelity  or surety  bonds  insuring  the  Company or any of the
Significant Subsidiaries,  the Company's or Significant Subsidiaries' respective
businesses,  assets,  employees,  officers and  directors  are in full force and
effect.  The Company and each of the Significant  Subsidiaries are in compliance
with the  terms of such  policies  and  instruments  in all  material  respects.
Neither the Company nor any Significant Subsidiary has reason to believe that it
will not be able to renew  its  existing  insurance  coverage  as and when  such
coverage  expires or to obtain similar  coverage from similar insurers as may be

                                       13
<PAGE>

necessary  to  continue  its  business  at a cost that would not have a Material
Adverse  Effect.  Within the past  twelve  months,  neither  the Company nor any
Significant  Subsidiary  has been  denied any  insurance  coverage  which it has
sought or for which it has applied.

         4.27 Corporate  Funds.  The Company and its  subsidiaries or any person
              ----------------
acting  on  behalf  of the  Company  and  its  subsidiaries  including,  without
limitation,  any  director,  officer,  agent or employee  of, the Company or its
subsidiaries  has not,  directly or  indirectly,  while  acting on behalf of the
Company  and  its  subsidiaries  (i)  used  any  corporate  funds  for  unlawful
contributions,  gifts,  entertainment  or other  unlawful  expenses  relating to
political  activity;  (ii) made any  unlawful  payment to  foreign  or  domestic
government officials or employees or to foreign or domestic political parties or
campaigns  from  corporate  funds;  (iii)  violated any provision of the Foreign
Corrupt  Practices  Act of 1977,  as  amended;  or (iv) made any other  unlawful
payment.

         4.28 OSHA  Compliance.  Neither the Company nor any of its subsidiaries
              ----------------
is in  violation  of  any  federal  or  state  law  or  regulation  relating  to
occupational  safety  and  health  and the  Company  and its  subsidiaries  have
received  all  permits,  licenses  or other  approvals  required  of them  under
applicable  federal and state  occupational  safety and health and environmental
laws and regulations to conduct their respective businesses, and the Company and
each of its  subsidiaries  is in compliance with all terms and conditions of any
such  permit,  license  or  approval,  except  any  such  violation  of  law  or
regulation,  failure to receive required permits, licenses or other approvals or
failure to comply with the terms and  conditions  of such  permits,  licenses or
approvals  which  would  not,  singly or in the  aggregate  result in a Material
Adverse Effect.

         4.29 Information. The information provided by the Company and the Trust
              -----------
pursuant to this Agreement does not, as of the date hereof,  and will not, as of
the Closing  Date,  contain any untrue  statement of a material  fact or omit to
state any material fact necessary to make the statements  therein,  in the light
of the circumstances under which they were made, not misleading.

            Section 5.  Representations  and  Warranties of the  Purchaser.  The
Purchaser represents and warrants to, and agrees with, the Company and the Trust
as follows:

            5.1 The Purchaser  understands and  acknowledges  that the Preferred
Securities,  the Junior  Subordinated  Notes and the Guarantee (i) have not been
registered  under the Securities  Act, or any other  applicable  securities law,
(ii) are being offered for sale by the Trust or the Company, as the case may be,
in transactions  not requiring  registration  under the Securities Act and (iii)
may not be offered,  sold,  pledged or otherwise  transferred  by the  Purchaser
except in compliance with the registration requirements of the Securities Act or
any other applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.

            5.2 The Purchaser is purchasing the Preferred Securities for its own
account  and not with a view to, or for offer or sale in  connection  with,  any
distribution  thereof in violation  of the  Securities  Act or other  applicable
securities  laws,  subject to any requirement of law that the disposition of its
property be at all times within its control and subject to its ability to

                                       14
<PAGE>

resell such Preferred Securities pursuant to an effective registration statement
under  the  Securities  Act or  under  Rule  144A or any  other  exemption  from
registration  available  under  the  Securities  Act  or  any  other  applicable
securities law. The Purchaser  understands  that no public market exists for any
of the Preferred  Securities,  and that it is unlikely that a public market will
ever exist for the Preferred Securities.

            5.3 The Purchaser  represents and warrants that (a) it has consulted
with  its own  legal,  regulatory,  tax,  business,  investment,  financial  and
accounting  advisers  in  connection  herewith  to  the  extent  it  has  deemed
necessary;  (b) it has had a  reasonable  opportunity  to ask  questions  of and
receive  answers from  officers and  representatives  of the Sellers  concerning
their respective  financial condition and results of operations and the purchase
of the Preferred  Securities  and any such  questions  have been answered to its
satisfaction;  (c) it has had the  opportunity to review all publicly  available
records and filings  concerning  the Sellers and it has carefully  reviewed such
records and filings that it considers relevant to making an investment decision;
and (d) it has made its own  investment  decisions  based upon its own judgment,
due diligence  and advice from such advisers as it has deemed  necessary and not
upon any view expressed by the Sellers.

            5.4 The Purchaser is an institutional  "accredited  investor" within
the meaning of subparagraph  (a)(1), (2), (3) or (7) of Rule 501 of Regulation D
under the Securities Act.

            Section 6. Covenants of the Sellers.  The Sellers covenant and agree
                       ------------------------
with the Purchaser as follows:

            6.1  Compliance  with  Representations  and  Warranties.  During the
                 --------------------------------------------------
period from the date of this  Agreement to the Closing  Date,  the Sellers shall
use their best  efforts and take all action  necessary or  appropriate  to cause
their representations and warranties contained in Section 4 hereof to be true as
of the Closing Date,  after giving effect to the  transactions  contemplated  by
this Agreement, as if made on and as of the Closing Date.

            6.2 Sale and Registration of Securities. Neither the Company nor the
                -----------------------------------
Trust will, nor will either of them permit any of their  Affiliates to, nor will
any of them  permit any person  acting on its or their  behalf  (other  than the
Introducing Agent and its affiliates) to, directly or indirectly, (i) resell any
Preferred  Securities that have been acquired by any of them,  (ii) sell,  offer
for sale or  solicit  offers to buy or  otherwise  negotiate  in  respect of any
security (as defined in the  Securities  Act) that would or could be  integrated
with the sale of the  Preferred  Securities in any manner that would require the
registration of the Securities  under the Securities Act or (iii) make offers or
sales of any such Security,  or solicit  offers to buy any such Security,  under
any circumstances  that would require the registration of any of such Securities
under the Securities Act.

            6.3  Clearing  and  Settlement.  The  Company  and  the  Trust  will
                 -------------------------
cooperate with the Purchaser (or any holder of the Preferred Securities) and use
all commercially  reasonable efforts to make the Preferred  Securities  eligible
for clearance and settlement as book-entry  securities through the facilities of
the Depository  Trust Company  ("DTC") and listed for trading through the PORTAL
Market ("PORTAL"), and will execute, deliver and comply with all

                                       15
<PAGE>

representations  made to, and agreements with, DTC and PORTAL.  This Section 6.3
will survive delivery of and payment for the Preferred Securities.

            6.4  Integration.  Neither the Company nor the Trust will, until one
                 -----------
hundred  eighty (180) days following the Closing Date,  without the  Purchaser's
prior  written  consent,  offer,  sell,  contract  to sell,  grant any option to
purchase or otherwise  dispose of,  directly or  indirectly,  (i) any  Preferred
Securities or other  securities of the Trust other than as  contemplated by this
Agreement or (ii) any other  securities  convertible  into,  or  exercisable  or
exchangeable for, any Preferred Securities or other securities of the Trust.

            6.5  Qualification  of  Securities.  The  Company and the Trust will
                 -----------------------------
arrange for the  qualification  of the Preferred  Securities  for sale under the
laws of such jurisdictions as the Purchaser may designate and will maintain such
qualifications  in  effect  so long as  required  for the sale of the  Preferred
Securities.  The Company or the Trust,  as the case may be, will promptly advise
the Purchaser of the receipt by the Company or the Trust, as the case may be, of
any  notification  with respect to the  suspension of the  qualification  of the
Preferred  Securities  for  sale  in  any  jurisdiction  or  the  initiation  or
threatening of any proceeding for such purpose.

            6.6 Use of Proceeds.  The Trust shall use the proceeds from the sale
                ---------------
of the  Preferred  Securities  and the Common  Securities to purchase the Junior
Subordinated Notes from the Company.

            6.7  Investment  Company.  So  long  as any of  the  Securities  are
                 -------------------
outstanding,  (i) the  Securities  shall not be listed on a national  securities
exchange  registered  under  Section 6 of the  Exchange  Act or quoted in a U.S.
automated  interdealer  quotation system, (ii) neither the Company nor the Trust
shall be an open-end  investment  company,  unit investment trust or face-amount
certificate company that is, or is required to be, registered under Section 8 of
the Investment  Company Act, and, the  Securities  shall  otherwise  satisfy the
eligibility  requirements  of Rule  144A(d)(3) and (iii) neither the Company nor
the Trust shall  engage,  or permit any  subsidiary  to engage,  in any activity
which would cause it or any subsidiary to be an  "investment  company" under the
provisions of the Investment Company Act.

            6.8 Solicitation and Advertising.  Neither the Company nor the Trust
                ----------------------------
will,  nor will  either of them  permit  any of their  Affiliates  or any person
acting on their behalf (other than the Introducing Agent and its affiliates), to
(i) engage in any "directed  selling efforts" within the meaning of Regulation S
under the Securities Act or (ii) engage in any form of "general  solicitation or
general advertising" (within the meaning of Regulation D) in connection with any
offer or sale of any of the Securities.

            6.9 Compliance  with Rule  144A(d)(4)  under the Securities  Act. So
                ------------------------------------------------------------
long as any of the Securities are outstanding  and are  "restricted  securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Sellers will,
during  any  period in which  they are not  subject  to and in  compliance  with
Section 13 or 15(d) of the Exchange Act, or the Sellers are not exempt from such
reporting  requirements  pursuant to and in compliance with Rule 12g3-2(b) under
the Exchange Act,  provide to each holder of such  restricted  securities and to
each  prospective  purchaser (as  designated by such holder) of such  restricted
securities,  upon  the  request  of such  holder  or  prospective  purchaser  in
connection with any proposed transfer,  any

                                       16
<PAGE>

information required to be provided by Rule 144A(d)(4) under the Securities Act,
if applicable.  The information provided by the Sellers pursuant to this Section
6.9 will not, at the date  thereof,  contain any untrue  statement of a material
fact or omit to  state  any  material  fact  necessary  to make  the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  If the  Company and the Trust are  required  to register  under the
Exchange  Act, such reports filed in  compliance  with Rule  12g3-2(b)  shall be
sufficient  information as required  above.  This covenant is intended to be for
the benefit of the Purchaser, the holders of the Securities, and the prospective
purchasers designated by such holders, from time to time, of the Securities.

            6.10 Reports. The Company shall furnish to (i) the Purchaser and any
                 -------
subsequent  holder  of the  Securities,  and  (ii) any  beneficial  owner of the
Securities  reasonably  identified to the Company (which  identification  may be
made by either such beneficial owner or by the Purchaser),  a duly completed and
executed  certificate  in the form attached  hereto as Exhibit B,  including the
financial statements referenced in such Exhibit, which certificate and financial
statements  shall be so furnished by the Company not later than  forty-five (45)
days after the end of each of the first  three  fiscal  quarters  of each fiscal
year of the  Company  and not later than  ninety (90) days after the end of each
fiscal year of the Company.

            Section 7. Payment of Expenses.  The Company  hereby  covenants  and
                       -------------------
agrees that it shall pay or cause to be paid (directly or by reimbursement)  all
costs and expenses incident to the performance of the obligations of the Sellers
under this Agreement,  whether or not the transactions  contemplated  herein are
consummated  or this  Agreement  is  terminated,  including  (i) all  costs  and
expenses  incident  to the  authorization,  issuance,  sale and  delivery of the
Preferred  Securities  and any taxes payable in connection  therewith;  (ii) the
fees and expenses of qualifying  the Preferred  Securities  under the securities
laws of the several jurisdictions as provided in Section 6.5; (iii) the fees and
expenses  of the  counsel,  the  accountants  and any other  experts or advisors
retained by the Company or the Trust,  which counsel fees and expenses  incurred
in connection with the closing of the transactions  contemplated  hereby,  in an
amount up to $10,000,  shall be reimbursed by the Purchaser on the Closing Date;
(iv) the fees and all reasonable expenses of the Guarantee Trustee, the Property
Trustee,  the Delaware  Trustee,  the Indenture Trustee and any other trustee or
paying agent appointed under the Operative  Documents  except for any acceptance
fee and  annual  administrative  fees of any  such  trustee  and  the  fees  and
disbursements  of counsel  to such  trustees  incurred  in  connection  with the
closing of the  transactions  contemplated  hereby,  which  shall be paid by the
Purchaser.

                                       17
<PAGE>

            Section 8.   Indemnification & Contribution.
                         ------------------------------

            8.1   Indemnification.
                  ---------------

         8.1.1  Except  as  otherwise  prohibited  by  any  applicable  statute,
regulation,  rule or case law  (federal,  state or local),  the  Company and the
Trust agree jointly and severally to indemnify and hold harmless the  Purchaser,
a  Subsequent  Purchaser  and their  respective  affiliates  (collectively,  the
"Indemnified  Parties")  and  the  Indemnified  Parties'  respective  directors,
officers,  employees and agents and each person who "controls"  the  Indemnified
Parties  within the meaning of either the  Securities  Act or the  Exchange  Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may  become  subject  under the  Securities  Act,  the
Exchange Act or other federal or state  statutory law or  regulation,  at common
law or otherwise,  insofar as such losses,  claims,  damages or liabilities  (or
actions  in  respect  thereof)  arise  out of or are based  upon (i) any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
information  or documents  furnished or made available to the Purchaser by or on
behalf of the Company,  (ii) the omission or alleged omission to state therein a
material fact required to be stated  therein or necessary to make the statements
therein  not  misleading,   or  (iii)  the  breach  or  alleged  breach  of  any
representation,  warranty or agreement of either Seller  contained  herein,  and
agrees to reimburse each such Indemnified  Party, as incurred,  for any legal or
other expenses  reasonably  incurred by them in connection with investigating or
defending any such loss,  claim,  damage,  liability or action.  This  indemnity
agreement  will be in addition to any  liability  which the Company or the Trust
may otherwise have.

         8.1.2 Promptly after receipt by an Indemnified Party under this Section
8 of notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the commencement
thereof;  but the  failure  so to  notify  the  indemnifying  party (i) will not
relieve the  indemnifying  party from liability under Section 8.1.1 above unless
and  to  the  extent  that  such  failure  results  in  the  forfeiture  by  the
indemnifying  party of material  rights and  defenses  and (ii) will not, in any
event,  relieve the  indemnifying  party from any obligations to any Indemnified
Party other than the indemnification obligation provided in Section 8.1.1 above.
The Purchaser  shall be entitled to appoint counsel to represent the Indemnified
Party in any action for which  indemnification  is sought. An indemnifying party
may participate at its own expense in the defense of any such action;  provided,
however,  that  counsel to the  indemnifying  party shall not  (except  with the
consent of the Indemnified  Party) also be counsel to the Indemnified  Party. In
no event shall the indemnifying  parties be liable for fees and expenses of more
than one counsel  (in  addition to any local  counsel)  separate  from their own
counsel  for all  Indemnified  Parties  in  connection  with any one  action  or
separate but similar or related actions in the same jurisdiction  arising out of
the same general  allegations or circumstances.  An indemnifying party will not,
without  the  prior  written  consent  of the  Indemnified  Parties,  settle  or
compromise  or consent to the entry of any judgment  with respect to any pending
or  threatened   claim,   action,   suit  or  proceeding  in  respect  of  which
indemnification  may be sought hereunder (whether or not the Indemnified Parties
are actual or  potential  parties to such  claim,  action,  suit or  proceeding)
unless such settlement,  compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim,  action,
suit or proceeding.

                                       18
<PAGE>

            8.2   Contribution.
                  ------------

         8.2.1 In order to  provide  for  just  and  equitable  contribution  in
circumstances under which the indemnification provided for in Section 8.1 hereof
is for any reason held to be  unenforceable  for the  benefit of an  Indemnified
Party in  respect  of any  losses,  liabilities,  claims,  damages  or  expenses
referred to  therein,  then each  indemnifying  party  shall  contribute  to the
aggregate  amount of such  losses,  liabilities,  claims,  damages and  expenses
incurred by such  Indemnified  Party, as incurred,  (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers, on the one
hand, and the Purchaser,  on the other hand, from the offering of the Securities
or (ii) if the allocation  provided by clause (i) is not permitted by applicable
law, in such  proportion  as is  appropriate  to reflect  not only the  relative
benefits  referred to in clause (i) above,  but also the  relative  fault of the
Sellers,  on the one hand, and the  Purchaser,  on the other hand, in connection
with the  statements,  omissions  or  breaches,  which  resulted in such losses,
liabilities,  claims,  damages  or  expenses,  as  well  as any  other  relevant
equitable considerations.

         8.2.2 The relative benefits  received by the Sellers,  on the one hand,
and the  Purchaser,  on the other hand, in  connection  with the offering of the
Securities shall be deemed to be in the same respective proportions as the total
net  proceeds  from the  offering of the  Securities  (net of the Fee but before
deducting  expenses)  received  by the  Sellers  and  the  Fee  received  by the
Purchaser bear to the aggregate of such net proceeds and the Fee.

         8.2.3 The Sellers and the Purchaser agree that it would not be just and
equitable if  contribution  pursuant to this Section 8.2 were  determined by pro
rata allocation or by any other method of allocation which does not take account
of the  equitable  considerations  referred to above in this  Section  8.2.  The
aggregate amount of losses,  liabilities,  claims, damages and expenses incurred
by an  Indemnified  Party and  referred  to above in this  Section  8.2 shall be
deemed  to  include  any legal or other  expenses  reasonably  incurred  by such
Indemnified  Party  in   investigating,   preparing  or  defending  against  any
litigation,  or any  investigation or proceeding by any  governmental  agency or
body,  commenced  or  threatened,  or any claim  whatsoever  based upon any such
untrue or alleged untrue  statement,  omission or alleged  omission or breach or
alleged breach.

         8.2.4  Notwithstanding any provision of this Section 8 to the contrary,
the Purchaser  shall not be required to  contribute  any amount in excess of the
amount of the Fee.

         8.2.5 No person  guilty of  fraudulent  misrepresentation  (within  the
meaning  of  Section  11(f)  of  the  Securities   Act)  shall  be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

         8.2.6 For  purposes of this  Section  8.2,  each  person,  if any,  who
controls the Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and the respective partners, directors, officers,
employees and agents of the Purchaser or any such controlling  person shall have
the same  rights to  contribution  as the  Purchaser,  while  each  officer  and
director of the Company,  each trustee of the Trust and each person, if any, who
controls the Company  within the meaning of Section 15 of the  Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Sellers.

                                       19
<PAGE>

            8.3 Additional Remedies.  The indemnity and contribution  agreements
                -------------------
contained  in this Section 8 are in addition to any  liability  that the Sellers
may otherwise have to any Indemnified Party.

            8.4 Additional Indemnification. The Company shall indemnify and hold
                --------------------------
harmless  the Trust  against  all loss,  liability,  claim,  damage and  expense
whatsoever, as due from the Trust under Sections 8.1 through 8.3 hereof.

            Section 9.  Rights and Responsibilities of Purchaser.
                        ----------------------------------------

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

            9.2 Rights of Purchaser.  In connection  with the performance of its
                -------------------
duties under this Agreement,  the Purchaser shall not be liable for any error of
judgment or any action  taken or omitted to be taken  unless the  Purchaser  was
grossly  negligent  or engaged in willful  misconduct  in  connection  with such
performance or non-performance. No provision of this Agreement shall require the
Purchaser  to  expend  or risk its own funds or  otherwise  incur any  financial
liability in connection with the performance of any of its duties hereunder.

            Section  10.  Termination.   This  Agreement  shall  be  subject  to
                          -----------
termination in the absolute discretion of the Purchaser,  by notice given to the
Company  and the  Trust  prior to  delivery  of and  payment  for the  Preferred
Securities,  if prior to such time (i) a downgrading  shall have occurred in the
rating  accorded  the  Company's  debt  securities  or  preferred  stock  by any
"nationally recognized statistical rating organization," as that term is used by
the SEC in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization
shall have publicly  announced that it has under  surveillance  or review,  with
possible negative  implications,  its rating of the Company's debt securities or
preferred  stock,  (ii) the Trust  shall be unable  to sell and  deliver  to the
Purchaser at least $3,000,000  stated aggregate  liquidation  value of Preferred
Securities,  (iii) the  Company  or any of its  subsidiaries  that is an insured
depository  institution  shall cease to be  "adequately-capitalized"  within the
meaning of 12 U.S.C. Section 1831 and applicable regulations adopted thereunder,
or any formal  administrative  or  judicial  action is taken by any  appropriate
federal  banking agency  against the Company or any such insured  subsidiary for
unsafe and unsound banking practices, or violations of law, (iv) a suspension or
material  limitation in trading in securities  generally  shall have occurred on
the New York Stock Exchange,  (v) a suspension or material limitation in trading
in any of the  Company's  securities  shall have  occurred  on the  exchange  or
quotation system upon which the Company's  securities are traded, if any, (vi) a
general  moratorium on commercial  banking  activities  shall have been declared
either by federal or Delaware authorities or (vii) there shall have occurred any
outbreak or escalation of hostilities,  or declaration by the United States of a
national  emergency  or war or other  calamity  or crisis the effect of which on
financial  markets  is  such  as  to  make  it,  in  the  Purchaser's  judgment,
impracticable  or  inadvisable  to proceed  with the offering or delivery of the
Preferred Securities.

                                       20
<PAGE>

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

            11.1 Disclosure  Schedule.  The term "Disclosure  Schedule," as used
                 --------------------
herein,  means the schedule,  if any, attached to this Agreement that sets forth
items the disclosure of which is necessary or appropriate as an exception to one
or more  representations  or  warranties  contained  in  Section 4  hereof.  The
Disclosure Schedule shall be arranged in paragraphs corresponding to the section
numbers  contained in Section 4.  Nothing in the  Disclosure  Schedule  shall be
deemed  adequate to disclose an exception to a  representation  or warranty made
herein unless the Disclosure  Schedule  identifies the exception with reasonable
particularity  and describes the relevant  facts in reasonable  detail.  Without
limiting the generality of the immediately preceding sentence,  the mere listing
(or inclusion of a copy) of a document or other item in the Disclosure  Schedule
shall not be deemed  adequate to disclose an  exception to a  representation  or
warranty  made herein unless the  representation  or warranty has to do with the
existence  of the  document or other item  itself.  Information  provided by the
Company in response to any due diligence  questionnaire shall not be deemed part
of the Disclosure  Schedule and shall not be deemed to be an exception to one or
more  representations  or  warranties  contained in Section 4 hereof unless such
information is  specifically  included on the Disclosure  Schedule in accordance
with the provisions of this Section 11.1.

            11.2 Notices.  All  communications  hereunder will be in writing and
                 -------
effective only on receipt,  and will be mailed,  delivered by hand or courier or
sent by facsimile and confirmed:

If to the Purchaser, to:

                             TWE, Ltd.
                             c/o Maples Finance Limited
                             P.O. Box 1093 GT
                             Queensgate House
                             South Church Street
                             George Town
                             Grand Cayman, Cayman Islands
                             Facsimile: (345) 945-7100
                             Attention: The Directors



with a copy to:

                             Thacher Proffitt & Wood LLP
                             Two World Financial Center
                             New York, New York 10281
                             Facsimile:  (212) 912-7751
                             Telephone:  (212) 912-7400
                             Attention:  Mark I. Sokolow, Esq.


                                       21
<PAGE>

if to the Sellers, to:

                             First Litchfield Financial Corporation
                             First Litchfield Statutory Trust II
                             13 North Street, Box #578
                             Litchfield, CT 06759
                             Facsimile: (860) 567-9412
                             Telephone:  (860) 567-8752
                             Attention:  Chief Financial Officer

with a copy to:

                             Cranmore, FitzGerald & Meaney
                             49 Wethersfield Avenue
                             Hartford, Connecticut 06114-1102
                             Facsimile: (860) 522-3379
                             Telephone:  (860) 522-9100
                             Attention: Patricia D. Anderson, Esq.

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

            11.3 Parties in Interest,  Successors  and Assigns.  This  Agreement
                 ---------------------------------------------
will inure to the benefit of and be binding  upon the  parties  hereto and their
respective  successors and permitted assigns.  Nothing expressed or mentioned in
this  Agreement  is intended or shall be construed to give any person other than
the parties hereto and the affiliates,  directors,  officers,  employees, agents
and  controlling  persons  referred  to in Section 8 hereof,  their  successors,
assigns,  heirs and legal  representatives,  and any Subsequent  Purchaser,  any
right or obligation  hereunder.  The rights or  obligations of the Sellers under
this Agreement may be assigned in connection  with any  transaction,  subject to
compliance  by the Company with Article  VIII of the  Indenture.  The rights and
obligations of the Purchaser  under this Agreement may be assigned by such party
without the Sellers' consent; provided that the assignee assumes the obligations
of such party under this Agreement.

            11.4 No recourse shall be had to any subscriber,  officer, director,
employee,  trustee, equity holder, certificate holder,  incorporator or agent of
the Purchaser or its successors or assigns for any  obligations  hereunder.  The
Sellers,  severally  and  jointly,  further  agree (i) not to take any action in
respect of any claims  hereunder  against  any  subscriber,  officer,  director,
employee,  trustee, equity holder, certificate holder,  incorporator or agent of
the Purchaser or any of its successors or assigns that is an investment  vehicle
issuing  collateralized  debt obligations

                                       22
<PAGE>

and (ii) not to institute  against any successor or assign of the Purchaser that
is an investment vehicle issuing collateralized debt obligations any insolvency,
bankruptcy,   reorganization,   liquidation   or  similar   proceedings  in  any
jurisdiction until one year and one day or, if longer, the applicable preference
period then in effect,  as the case may be, shall have  elapsed  since the final
payments to the holders of the securities issued by such investment vehicle.

            11.5  Amendments.  This  Agreement  may  not be  modified,  amended,
                  ----------
altered or  supplemented,  except upon the  execution  and delivery of a written
agreement by each of the parties hereto.

            11.6  Counterparts and Facsimile.  This Agreement may be executed by
                  --------------------------
any one or more of the  parties  hereto in any number of  counterparts,  each of
which  shall  be  deemed  to be an  original,  but all such  counterparts  shall
together constitute one and the same instrument.  This Agreement may be executed
by any one or more of the parties  hereto by facsimile  which shall be effective
as delivery of a manually executed counterpart hereof.

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

            11.8 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
                 -------------
AND  ENFORCED  IN  ACCORDANCE  WITH THE LAW OF THE  STATE  OF NEW  YORK  WITHOUT
REFERENCE TO  PRINCIPLES  OF CONFLICTS OF LAW (OTHER THAN SECTION  5-1401 OF THE
GENERAL OBLIGATIONS LAW).

            11.9 Submission to  Jurisdiction.  ANY LEGAL ACTION OR PROCEEDING BY
                 ---------------------------
OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS  AGREEMENT
MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK,  IN AND FOR
THE COUNTY OF NEW YORK,  OR OF THE UNITED  STATES OF  AMERICA  FOR THE  SOUTHERN
DISTRICT  OF NEW YORK (IN EACH CASE  SITTING IN THE  BOROUGH OF  MANHATTAN).  BY
EXECUTION AND DELIVERY OF THIS AGREEMENT,  EACH PARTY ACCEPTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,  THE JURISDICTION OF THE
AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

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

                                       23
<PAGE>

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

            11.12   Survival.   The  respective   agreements,   representations,
                    --------
warranties,  indemnities  and other  statements of the Company and the Trust and
their respective  officers or trustees and of the Purchaser set forth in or made
pursuant to this Agreement  will remain in full force and effect,  regardless of
any  investigation  made by or on behalf of the  Purchaser,  the  Company or the
Trust or any of their respective  officers,  directors,  trustees or controlling
persons, and will survive delivery of and payment for the Preferred  Securities.
The  provisions  of  Sections  2.1, 7 and 8 shall  survive  the  termination  or
cancellation of this Agreement.

                     Signatures appear on the following page



                                       24
<PAGE>

         IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of
the date first written above.


                                       FIRST LITCHFIELD FINANCIAL CORPORATION

                                       By:
                                              -------------------------------
                                              Name:
                                              Title:


                                       FIRST LITCHFIELD STATUTORY TRUST II
                                       By: First Litchfield Financial
                                       Corporation, as Depositor

                                       By:
                                              -------------------------------
                                              Name:
                                              Title:


                                       TWE, LTD., as Purchaser,
                                       By: Trapeza Capital Management, LLC as
                                       Portfolio Manager

                                       By:
                                              -------------------------------
                                              Name:
                                              Title:  Managing Director



                                       25
<PAGE>


                                                                      Schedule I

                        List of Significant Subsidiaries

The First National Bank of Litchfield




                                       26
<PAGE>

                                                                     EXHIBIT A-1

                   FORM OF THACHER PROFFITT & WOOD LLP OPINION

         Pursuant to Section 3.2(a) of the Purchase Agreement,  Thacher Proffitt
& Wood LLP,  special counsel for the Purchaser,  shall deliver an opinion to the
effect that:

(i)      the Company and each  Significant  Subsidiary is validly  existing as a
         corporation  in good  standing  under the laws of the  jurisdiction  in
         which it is chartered or organized;

(ii)     the  Company  has  corporate  power and  authority  to (a)  execute and
         deliver,  and to perform its obligations under, the Operative Documents
         to which it is a party and (b) issue and perform its obligations  under
         the Notes;

(iii)    neither  the issue and sale of the  Common  Securities,  the  Preferred
         Securities or the Junior  Subordinated  Notes,  nor the purchase by the
         Trust of the Junior  Subordinated Notes, nor the execution and delivery
         of, and  compliance  with,  the Operative  Documents to which each is a
         party,  by the  Company  or the  Trust,  nor  the  consummation  of the
         transactions contemplated thereby will constitute a breach or violation
         of the Trust Agreement or the charter or by-laws of the Company;

(iv)     the Amended and  Restated  Trust  Agreement  has been duly  authorized,
         executed and  delivered by the Company and duly  executed and delivered
         by the Administrative Trustees;

(v)      each of the  Guarantee  and the  Indenture  has been  duly  authorized,
         executed and  delivered  by the Company and,  assuming it has been duly
         authorized,  executed and  delivered by the  Guarantee  Trustee and the
         Indenture Trustee, respectively, constitutes a legal, valid and binding
         obligation  of  the  Company,   enforceable   against  the  Company  in
         accordance with its terms, subject to applicable bankruptcy, insolvency
         and similar laws affecting  creditors'  rights generally and to general
         principles of equity;

(vi)     the Junior Subordinated Notes have been duly authorized and executed by
         the Company and delivered to the Indenture  Trustee for  authentication
         in accordance with the Indenture and, when  authenticated in accordance
         with the provisions of the Indenture and delivered to the Trust against
         payment therefor,  will constitute legal, valid and binding obligations
         of  the  Company   entitled  to  the  benefits  of  the  Indenture  and
         enforceable against the Company in accordance with their terms, subject
         to  applicable  bankruptcy,   insolvency  and  similar  laws  affecting
         creditors' rights generally and to general principles of equity;

(vii)    the  Trust  is  not,  and,  following  the  issuance  of the  Preferred
         Securities and the consummation of the transactions contemplated by the
         Operative Documents and the application of the proceeds therefrom,  the
         Trust will not be, an "investment company" or an entity "controlled" by
         an  "investment  company,"  in each  case  within  the  meaning  of the
         Investment Company Act;

(viii)   assuming (a) the accuracy of the  representations  and warranties,  and
         compliance with the agreements  contained in the Purchase Agreement and
         (b) that the Preferred Securities are sold in a manner contemplated by,
         and in  accordance  with the  Purchase  Agreement  and the  Amended and
         Restated Trust  Agreement,  it is not necessary in connection  with the

                                     A-1-1
<PAGE>

         offer,  sale and delivery of the  Preferred  Securities by the Trust to
         the Purchaser,  to register any of the Securities  under the Securities
         Act or to  require  qualification  of the  Indenture  under  the  Trust
         Indenture Act of 1939, as amended;

(ix)     the Purchase Agreement has been duly authorized, executed and delivered
         by the Company and the Trust; and,

(x)      the  Indenture  constitutes  a  valid  and  binding  instrument  of the
         Indenture  Trustee,   enforceable  against  the  Indenture  Trustee  in
         accordance   with  its  terms,   except  as  rights  to  indemnity  and
         contribution  thereunder may be limited under  applicable law or public
         policy, and subject to the qualifications  that (i) enforcement thereof
         may be limited by bankruptcy, insolvency, receivership, reorganization,
         liquidation,  voidable preference,  moratorium or other laws (including
         the laws of fraudulent  conveyance and transfer) or judicial  decisions
         affecting  the  enforcement  of  creditors'  rights  generally  or  the
         reorganization of financial institutions and (ii) the enforceability of
         the Indenture  Trustee's  obligations  thereunder is subject to general
         principles  of equity  (regardless  of whether such  enforceability  is
         considered  in a  proceeding  in equity or at law) and to the effect of
         certain  laws  and  judicial   decisions  upon  the   availability  and
         enforceability of certain remedies,  including the remedies of specific
         performance and self-help.

In  rendering  such  opinions,  such  counsel  may (A) state that its opinion is
limited to the laws of the State of New York, the Delaware  General  Corporation
Law and the federal laws of the United States;  (B) as to matters  involving the
application of laws of any jurisdiction other than the State of New York and the
Delaware General  Corporation Law or the federal laws of the United States,  (i)
rely,  to the extent  deemed  proper and  specified  in such  opinion,  upon the
opinion of other  counsel of good  standing  believed to be reliable and who are
satisfactory to the Purchaser or (ii) assume such law is  substantially  similar
to the law of the State of New York and, (C) as to matters of fact,  rely to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials.

                                     A-1-2
<PAGE>

                                                                     EXHIBIT A-2

                         FORM OF COMPANY COUNSEL OPINION
                            OR OFFICERS' CERTIFICATE

         Pursuant  to  Section  3.2(b) of the  Purchase  Agreement,  either  (i)
counsel  for  the  Company  shall  deliver  an  opinion,  or (ii)  the  [General
Counsel/Chief Legal Officer] of the Company shall deliver an opinion,  or, (iii)
if the  Company  does not have a General  Counsel or Chief  Legal  Officer,  the
[Chief   Executive   Officer/President/Executive   Vice  President]  and  [Chief
Financial Officer/Treasurer/Assistant Treasurer] of the Company shall provide an
Officers' Certificate, to the effect that:

(i)      all of the  issued  and  outstanding  shares of  capital  stock of each
         Significant  Subsidiary  are owned of record  by the  Company,  and the
         issuance of the Preferred  Securities and the Common  Securities is not
         subject   to  any   contractual   preemptive   rights   known  to  such
         [counsel/officer];

(ii)     no  consent,   approval,   authorization  or  order  of  any  court  or
         governmental authority is required for the issue and sale of the Common
         Securities,  the Preferred Securities or the Junior Subordinated Notes,
         the  purchase  by the  Trust  of the  Junior  Subordinated  Notes,  the
         execution and delivery of and compliance  with the Operative  Documents
         by the  Company or the Trust or the  consummation  of the  transactions
         contemplated  in  the  Operative   Documents,   except  such  approvals
         (specified in such [opinion/certificate]) as have been obtained;

(iii)    to the knowledge of such [counsel/officer], there is no action, suit or
         proceeding before or by any government,  governmental  instrumentality,
         arbitrator  or court,  domestic or foreign,  now pending or  threatened
         against  or  affecting  the  Trust or the  Company  or any  Significant
         Subsidiary  that  could  adversely   affect  the  consummation  of  the
         transactions  contemplated  by the Operative  Documents or could have a
         Material Adverse Effect;

(iv)     the Company is duly registered as a bank holding company under the Bank
         Holding  Company  Act and the  regulations  thereunder  of the  Federal
         Reserve  Board,  and the  deposit  accounts  of the  Company's  banking
         subsidiary are insured by the FDIC to the fullest  extent  permitted by
         law and the rules and  regulations  of the FDIC,  and no proceeding for
         the  termination  of such  insurance  are pending or, to such  person's
         knowledge, threatened;

(v)      The execution,  delivery and performance of the Operative Documents, as
         applicable,  by the Company and the Trust and the  consummation  by the
         Company and the Trust of the transactions contemplated by the Operative
         Documents,  as applicable,  (a) will not result in any violation of the
         charter  or  bylaws  of the  Company,  the  charter  or  bylaws  of any
         Significant Subsidiary, the Amended and Restated Trust Agreement or the
         Certificate  of Trust,  and (b) will not conflict  with, or result in a
         breach of any of the terms or  provisions  of, or  constitute a default
         (or an event  which,  with  notice  or  lapse  of time or  both,  would
         constitute a default) under, or result in the creation or imposition of
         any lien,  charge and encumbrance  upon any assets or properties of the
         Company  or  any  Significant  Subsidiary  under,  (A)  any  agreement,
         indenture,  mortgage or instrument  that the Company or any Significant
         Subsidiary is a party to or by which it may be bound or to which any of
         its

                                     A-2-1
<PAGE>

         assets or  properties  may be subject,  or (B) any existing  applicable
         law,  rule or  administrative  regulation  [for General  Counsel  only:
         except that I express no opinion with respect to the securities laws of
         the State of Delaware] of any court or governmental agency or authority
         having  jurisdiction over the Company or any Significant  Subsidiary or
         any of their  respective  assets or properties,  except in case of (b),
         where any such violation,  conflict,  breach,  default, lien, charge or
         encumbrance,  would not have a material  adverse  effect on the assets,
         properties,  business,  results of operations or financial condition of
         the Company and its subsidiaries, taken as whole.

         All terms used but not defined herein shall have the meanings  assigned
to them in the Purchase Agreement.  A Subsequent  Purchaser shall be entitled to
rely on this [opinion/certificate].

         [Applies only to in-house counsel opinion] [In rendering such opinions,
such  counsel  may (A) state that the above is limited to the laws of the States
of  [Jurisdiction  of bar  admission],  (B) rely as to matters  of fact,  to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials.]


                                     A-2-2
<PAGE>

                                                                     EXHIBIT A-3


                           FORM OF TAX COUNSEL OPINION

         Pursuant to Section 3.2(c) of the Purchase Agreement,  Thacher Proffitt
& Wood LLP,  special tax counsel for the Purchaser,  shall deliver an opinion to
the effect that:

(i)      the Trust will be  classified  for  United  States  federal  income tax
         purposes  as a grantor  trust and not as an  association  or a publicly
         traded partnership taxable as a corporation; and

(ii)     for United States federal income tax purposes,  the Junior Subordinated
         Notes will constitute indebtedness of the Company.

         In rendering such opinions, such counsel may (A) state that its opinion
is  limited  to the laws of the  State of New York and the  federal  laws of the
United States and (B) rely as to matters of fact,  to the extent deemed  proper,
on certificates of responsible officers of the Company and public officials.


                                     A-3-1
<PAGE>

                                                                     EXHIBIT A-4

                                      A-4-1

                     FORM OF DELAWARE COUNSEL TRUST OPINION

         Pursuant to Section 3.2(d) of the Purchase  Agreement,  Morris,  James,
Hitchens & Williams LLP, special  Delaware counsel for the Trust,  shall deliver
an opinion to the effect that:

(i)      The  Trust  has been  duly  created  and is  validly  existing  in good
         standing as a statutory  trust under the Delaware  Statutory Trust Act,
         and all filings  required  under the laws of the State of Delaware with
         respect to the creation and valid existence of the Trust as a statutory
         trust have been made.

(ii)     Under the  Delaware  Statutory  Trust Act and the Amended and  Restated
         Trust Agreement, the Trust has the trust power and authority (i) to own
         property and conduct its business,  all as described in the Amended and
         Restated Trust Agreement,  (ii) to execute and deliver,  and to perform
         its  obligations  under,  each of the  Purchase  Agreement,  the Common
         Securities  Subscription   Agreement,   the  Junior  Subordinated  Note
         Subscription  Agreement,   the  Preferred  Securities  and  the  Common
         Securities,  and (iii) to  purchase  and hold the  Junior  Subordinated
         Notes.

(iii)    Under the Delaware Statutory Trust Act, the certificate attached to the
         Amended and Restated  Trust  Agreement  as Exhibit C is an  appropriate
         form of certificate to evidence ownership of the Preferred  Securities.
         The Preferred  Securities  have been duly authorized by the Amended and
         Restated  Trust  Agreement  and,  when  issued in  accordance  with the
         Amended and Restated  Trust  Agreement  and delivered  against  payment
         therefor in accordance  with the Amended and Restated  Trust  Agreement
         and the Purchase  Agreement,  the Preferred  Securities will be validly
         issued and (subject to the  qualifications set forth in this paragraph)
         fully paid and  nonassessable and will represent  undivided  beneficial
         interests  in the  assets  of the  Trust,  and the  Preferred  Security
         Holders  will be entitled to the  benefits of the Amended and  Restated
         Trust Agreement. The Preferred Security Holders as beneficial owners of
         the  Trust,  will  be  entitled  to the  same  limitation  of  personal
         liability  extended to stockholders of private  corporations for profit
         organized  under the General  Corporation Law of the State of Delaware.
         The  Preferred  Security  Holders may be obligated to make  payments or
         provide  indemnity or security as set forth in the Amended and Restated
         Trust Agreement.

(iv)     The Common  Securities  have been duly  authorized  by the  Amended and
         Restated  Trust  Agreement  and,  when  issued in  accordance  with the
         Amended and Restated  Trust  Agreement  and delivered  against  payment
         therefor in accordance  with the Amended and Restated  Trust  Agreement
         and the  Common  Securities  Subscription  Agreement,  will be  validly
         issued and will represent undivided  beneficial interests in the assets
         of the Trust,  and the Common  Security  Holder will be entitled to the
         benefits of the Amended and Restated Trust Agreement.

(v)      Under the  Delaware  Statutory  Trust Act and the Amended and  Restated
         Trust  Agreement,   the  issuance  of  the  Preferred  and  the  Common
         Securities is not subject to preemptive or other similar rights.

                                     A-4-1
<PAGE>

(vi)     Under the  Delaware  Statutory  Trust Act and the Amended and  Restated
         Trust  Agreement,  the  execution  and  delivery  by the  Trust  of the
         Purchase Agreement,  the Common Securities  Subscription  Agreement and
         the  Junior   Subordinated   Note  Subscription   Agreement,   and  the
         performance by the Trust of its obligations thereunder,  have been duly
         authorized by all necessary trust action on the part of the Trust.

(vii)    The Amended and Restated Trust Agreement constitutes a legal, valid and
         binding obligation of the Company and the Trustees, enforceable against
         the Company and the Trustees in accordance with its terms.

(viii)   The issuance and sale by the Trust of the Preferred  Securities and the
         Common Securities, the purchase by the Trust of the Junior Subordinated
         Notes,  the  execution,  delivery and  performance  by the Trust of the
         Purchase Agreement,  the Common Securities  Subscription  Agreement and
         the Junior Subordinated Note Subscription  Agreement,  the consummation
         by  the  Trust  of  the  transactions   contemplated  by  the  Purchase
         Agreement,  the Common Securities Subscription Agreement and the Junior
         Subordinated Note Subscription  Agreement,  and compliance by the Trust
         with  its  obligations   thereunder  are  not  prohibited  by  (i)  the
         Certificate  of Trust or the Amended and Restated Trust  Agreement,  or
         (ii) any law or regulation  of the State of Delaware  applicable to the
         Trust.

(ix)     No filing with, or authorization,  approval,  consent,  license, order,
         registration,  qualification  or  decree  of,  any  Delaware  court  or
         Delaware  governmental  authority or Delaware agency is required solely
         in  connection  with the  issuance  and sale by the  Trust of the Trust
         Securities, the purchase by the Trust of the Junior Subordinated Notes,
         the  execution,  delivery and  performance by the Trust of the Purchase
         Agreement,  the Common Securities Subscription Agreement and the Junior
         Subordinated Note Subscription Agreement, the consummation by the Trust
         of the transactions  contemplated by the Purchase Agreement, the Common
         Securities  Subscription  Agreement  and the Junior  Subordinated  Note
         Subscription Agreement and compliance by the Trust with its obligations
         thereunder.

(x)      The Preferred  Security  Holders (other than those  Preferred  Security
         Holders who reside or are domiciled in the State of Delaware) will have
         no liability for income taxes  imposed by the State of Delaware  solely
         as a result of their  participation in the Trust and the Trust will not
         be liable for any income tax imposed by the State of Delaware.

         In rendering such opinions, such counsel may (A) state that its opinion
is  limited to the laws of the State of  Delaware  and (B) rely as to matters of
fact, to the extent deemed proper,  on certificates  of responsible  officers of
the Company and public officials.

                                     A-4-2
<PAGE>

                                                                     EXHIBIT A-5

                         FORM OF TRUSTEE COUNSEL OPINION

         Pursuant to Section 3.2(e) of the Purchase  Agreement,  Morris,  James,
Hitchens & Williams LLP, special counsel for the Property Trustee, the Guarantee
Trustee,  the  Delaware  Trustee and the  Indenture  Trustee,  shall  deliver an
opinion to the effect that:

(i)      Wilmington Trust Company is duly incorporated and validly existing as a
         Delaware  banking  corporation  in good standing  under the laws of the
         State of Delaware with trust powers and its principal place of business
         in the State of Delaware.

(ii)     Wilmington Trust Company has requisite corporate power and authority to
         execute and deliver,  and to perform its obligations under, the Amended
         and  Restated  Trust  Agreement,   the  Guarantee   Agreement  and  the
         Indenture.


(iii)    The execution, delivery, and performance by Wilmington Trust Company of
         the Amended and Restated Trust Agreement,  the Guarantee  Agreement and
         the Indenture  have been duly  authorized  by all  necessary  corporate
         action on the part of  Wilmington  Trust  Company,  and the Amended and
         Restated  Trust  Agreement,  the Guarantee  Agreement and the Indenture
         have been duly executed and delivered by Wilmington Trust Company.

(iv)     The Amended and Restated Trust Agreement is a legal,  valid and binding
         obligation of Wilmington Trust Company,  enforceable against Wilmington
         Trust Company, in accordance with its terms.

(v)      No approval,  authorization  or other  action by, or filing  with,  any
         governmental  authority  or agency under any law or  regulation  of the
         State of Delaware or the United  States of America  governing the trust
         powers of  Wilmington  Trust  Company is required  solely in connection
         with the  execution,  delivery  and  performance  by  Wilmington  Trust
         Company of the Amended and  Restated  Trust  Agreement,  the  Guarantee
         Agreement and the Indenture,  except for the filing of the  Certificate
         of Trust with the Secretary of State,  which  Certificate  of Trust has
         been duly filed with the Secretary of State.

(vi)     The  execution,  delivery and  performance  of the Amended and Restated
         Trust  Agreement,   the  Guarantee   Agreement  and  the  Indenture  by
         Wilmington  Trust  Company  are not  prohibited  by (i) the  Charter or
         Bylaws of Wilmington  Trust Company,  (ii) any law or regulation of the
         State of Delaware or the United  States of America  governing the trust
         powers of Wilmington  Trust Company,  or (iii) to our knowledge  (based
         and relying  solely on the Officer  Certificates),  any  agreements  or
         instruments  to which  Wilmington  Trust Company is a party or by which
         Wilmington  Trust Company is bound or any judgment or order  applicable
         to Wilmington Trust Company.

(vii)    The Junior  Subordinated  Notes  delivered on the date hereof have been
         authenticated  by due  execution  thereof and  delivered by  Wilmington
         Trust Company,  as Indenture  Trustee,  in accordance  with the Company
         Order. The Preferred  Securities delivered on

                                     A-5-1
<PAGE>

         the date hereof have been  authenticated  by due execution  thereof and
         delivered  by  Wilmington  Trust  Company,   as  Property  Trustee,  in
         accordance with the Trust Order.

         In rendering such opinions, such counsel may (A) state that its opinion
is  limited to the laws of the State of  Delaware  and the  federal  laws of the
United States  governing  the trust powers of  Wilmington  Trust Company and (B)
rely as to matters of fact,  to the extent deemed  proper,  on  certificates  of
responsible officers of Wilmington Trust Company and public officials.


                                     A-5-2
<PAGE>

                                                                       Exhibit B

                          FORM OF OFFICER'S CERTIFICATE

         The undersigned,  the [Chief Financial Officer] [Treasurer]  [Executive
Vice  President]  hereby  certifies,  pursuant to Section  6.10 of the  Purchase
Agreement,  dated  as  of  June  16,  2006,  among  First  Litchfield  Financial
Corporation (the "Company"),  First Litchfield  Statutory Trust II (the "Trust")
and TWE, Ltd. (the "Purchaser") that as of as of _______,  20__, the Company had
the following ratios and balances:

BANK HOLDING COMPANY

As of [Quarterly Financial Dates]


Tier 1 Risk Weighted Assets                                                    %
                                                                    ----------

Ratio of Double Leverage                                                       %
                                                                    ----------

Non-Performing Assets to Loans and OREO                                        %
                                                                    ----------

Tangible Common Equity as a Percentage of Tangible Assets                      %
                                                                    ----------

Ratio of Reserves to Non-Performing Loans                                      %
                                                                    ----------

Ratio of Net Charge-Offs to Loans                                              %
                                                                    ----------

Return on Average Assets (annualized)                                          %
                                                                    ----------

Net Interest Margin (annualized)                                               %
                                                                    ----------

Efficiency Ratio                                                               %
                                                                    ----------

Ratio of Loans to Assets                                                       %
                                                                    ----------

Ratio of Loans to Deposits                                                     %
                                                                    ----------

Double Leverage (exclude trust preferred as equity)                            %
                                                                    ----------

Total Assets                                                       $
                                                                    ----------

Year to Date Income                                                $
                                                                    ----------

* A table describing the quarterly report calculation procedures is attached.



[FOR FISCAL YEAR END:  Attached  hereto are the audited  consolidated  financial
statements  (including the balance sheet, income statement and statement of cash
flows,  and  notes  thereto,   together  with  the  report  of  the  independent
accountants  thereon) of the Company and its  consolidated  subsidiaries for the
three years ended _______, 20___.]

[FOR FISCAL  QUARTER END:  Attached  hereto are the unaudited  consolidated  and
consolidating  financial  statements  (including  the  balance  sheet and income
statement)  of the  Company  and its  consolidated  subsidiaries  for the fiscal
quarter and [six/nine] month period ended _______, 20___.]

                                      B-1
<PAGE>

         The financial  statements fairly present in all material  respects,  in
accordance with U.S.  generally accepted  accounting  principles  ("GAAP"),  the
financial  position of the Company and its  consolidated  subsidiaries,  and the
results of operations and changes in financial condition as of the date, and for
the  [___  quarter  interim]  [annual]  period  ended  _______,  20__,  and such
financial  statements  have been prepared in accordance  with GAAP  consistently
applied throughout the period involved (expect as otherwise noted therein).

          IN WITNESS  WHEREOF,  the  undersigned  has  executed  this  Officer's
Financial Certificate as of this _____ day of _____________, 20__.



                                         By:
                                             ----------------------------------
                                         Name:
                                               --------------------------------


                                         First Litchfield Financial Corporation
                                         13 North Street, Box #578
                                         Litchfield, CT 06759
                                         Fax: (860) 567-9412



                                      B-2
<PAGE>
<TABLE>
<CAPTION>

                                                        FINANCIAL DEFINITIONS

                                                        BANK HOLDING COMPANY

---------------------------------------------------------------------------------------------------------------------------------
                           Corresponding FRY-9C or LP Line Items with Line
     Report Item                    Item corresponding Schedules                          Description of Calculation
---------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                                                      <C>
Tier 1 Risk            BHCK7206                                                Tier 1 Risk Ratio: Core Capital (Tier 1)/ Risk
Weighted Assets        Schedule HC-R                                           Adjusted Assets
---------------------------------------------------------------------------------------------------------------------------------
Ratio of Double        (BHCP0365)/(BCHCP3210)                                  Total equity investments in subsidiaries divided
Leverage               Schedule PC in the LP                                   by the total equity capital. This field is
                                                                               calculated at the parent company level.
                                                                               "Subsidiaries" include bank, bank holding
                                                                               company, and non-bank subsidiaries.
---------------------------------------------------------------------------------------------------------------------------------
Non-Performing         (BHCK5525-BHCK3506+BHCK5526                             Total Nonperforming Assets (NPLs+Foreclosed
Assets to Loans        BHCK3507+BHCK2744/(BHCK2122+BHCK2744)                   Real Estate+Other Nonaccrual & Repossessed
and OREO               Schedules HC-C, HC-M & HC-N                             Assets)/Total Loans+Foreclosed Real Estate
---------------------------------------------------------------------------------------------------------------------------------
Tangible Common        (BHDM3210-BHCK3163)/(BHCK2170-BHCK3163)                 (Equity Capital - Goodwill)/(Total Assets -
Equity as a            Schedule HC                                             Goodwill)
Percentage of
Tangible Assets
---------------------------------------------------------------------------------------------------------------------------------
Ratio of Reserves      (BHCK3123+BHCK3128)/(BHCK5525                           Total Loan Loss and Allocated Transfer Risk
to Non-Performing      BHCK3506+BHCK5526-BHCK3507)                             Reserves/ Total Nonperforming Loans
Loans                  Schedules HC & HC-N & HC-R                              (Nonaccrual + Restructured)
---------------------------------------------------------------------------------------------------------------------------------
Ratio of Net           (BHCK4635-BHCK4605)/(BHCK3516)                          Net charge offs for the period as a percentage of
Charge-Offs to         Schedules HI-B & HC-K                                   average loans
Loans                                                                          .
---------------------------------------------------------------------------------------------------------------------------------
Return on Average      (BHCK4340/BHCK3368)                                     Net Income as a percentage of Assets.
Assets                 Schedules HI & HC-K
(annualized)
---------------------------------------------------------------------------------------------------------------------------------
Net Interest           (BHCK4519/(BHCK3515+BHCK3365+BHCK3516                   (Net Interest Income Fully Taxable Equivalent,
Margin                 BHCK3401+BHCKB985)                                      if available/Average Earning Assets)
(annualized) Schedules I Memorandum and HC-K
---------------------------------------------------------------------------------------------------------------------------------
Efficiency Ratio       (BHCK4093)/(BHCK4519+BHCK4079)                          (Non-interest Expense)/(Net Interest Income
                       Schedule HI                                             Fully Taxable Equivalent, if available, plus
                                                                               Non-interest Income)
---------------------------------------------------------------------------------------------------------------------------------
Ratio of Loans to      (BHCKB528+BHCK5369)/(BHCK2170)                          Total Loans & Leases (Net of Unearned Income
Assets                 Schedule HC                                             & Gross of Reserve)/Total Assets
---------------------------------------------------------------------------------------------------------------------------------
Ratio of Loans to      (BHCKB528+BHCK5369)/(BHDM6631+BHDM663                   Total Loans & Leases (Net of Unearned Income
Deposits               +BHFN6631+BHFN6636)                                     & Gross of Reserve)/Total Deposits (Includes
                       Schedule HC                                             Domestic and Foreign Deposits)
---------------------------------------------------------------------------------------------------------------------------------
Total Assets           (BHCK2170)                                              The sum of total assets. Includes cash and
                       Schedule HC                                             balances due from depository institutions;
                                                                               securities; federal funds sold and securities
                                                                               purchased under agreements to resell; loans and
                                                                               lease financing receivables; trading assets;
                                                                               premises and fixed assets; other real estate
                                                                               owned; investments in unconsolidated
                                                                               subsidiaries and associated companies;
                                                                               customer's liability on acceptances outstanding;
                                                                               intangible assets; and other assets.
---------------------------------------------------------------------------------------------------------------------------------

</TABLE>