exhibit10-1.htm


    Exhibit
10.1

     

    SHARE
PURCHASE AGREEMENT

     

    This
Share Purchase Agreement (this “Agreement”)
is dated as of October 2, 2008, by and among Washington Trust Bancorp, Inc., a
Rhode Island corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).

     

    RECITALS

     

    A.           The
Company and each Purchaser is executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by Section 4(2) of
the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the
“Commission”)
under the Securities Act.

     

    B.           Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
to sell, upon the terms and conditions stated in this Agreement, that aggregate
number of shares of common stock, par value $0.0625 per share (the “Common
Stock”), of the Company, set forth below such Purchaser’s name on the
signature page of this Agreement (which aggregate amount for all Purchasers
together shall be 2,500,000 shares of Common Stock and shall be collectively
referred to herein as the “Shares”).

     

    
      C.           The
Company has engaged Keefe, Bruyette and Woods as its exclusive placement agent
(the “Placement
Agent”) for the offering of the Shares on a “reasonable efforts”
basis.

       

      
        D.             Contemporaneously
with the execution and delivery of this Agreement, the parties hereto are
executing and delivering a Registration Rights Agreement, substantially in the
form attached hereto as Exhibit A
(the “Registration
Rights Agreement”), pursuant to which, among other things, the Company
will agree to provide certain registration rights with respect to the Shares
under the Securities Act and the rules and regulations promulgated thereunder
and applicable state securities laws.

         

      

    

                NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchasers hereby agree as
follows:

     

    ARTICLE
I.

    DEFINITIONS

     

                    1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms shall have the meanings indicated in this
Section 1.1:

     

                         “Action”
means any action, suit, inquiry, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation pending or, to the
Company’s Knowledge, threatened in writing against the Company, any Subsidiary
or any of their respective properties or any officer, director or employee of
the Company or any Subsidiary acting in his or her capacity as an officer,
director or employee before or by any federal, state, county, local or foreign
court, arbitrator, governmental or administrative agency, regulatory authority,
stock market, stock exchange or trading facility.

     

                         “Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, Controls, is controlled by or is under
common control with such Person, as such terms are used in and construed under
Rule 405 under the Securities Act. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same
investment manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.

     

                         “Agreement”
shall have the meaning ascribed to such term in the Preamble.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
         


         

                             “Business
Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of
business.

      

    

     

                         “Buy-In”
has the meaning set forth in Section 4.1(f).

     

                         “Buy-In
Price” has the meaning set forth in Section 4.1(f).

     

                         “Closing”
means the closing of the purchase and sale of the Shares pursuant to this
Agreement.

     

                        “Closing
Bid Price” means, for any security as of any date, the last closing price
for such security on the Principal Trading Market, as reported by Bloomberg, or,
if the Principal Trading Market begins to operate on an extended hours basis and
does not designate the closing bid price then the last bid price of such
security prior to 4:00:00 p.m., New York City Time, as reported by
Bloomberg, or, if the Principal Trading Market is not the principal securities
exchange or trading market for such security, the last closing price of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the holder. If the Company and the holder are
unable to agree upon the fair market value of such security, then the Company
shall, within two Business Days submit via facsimile (a) the disputed
determination to an independent, reputable investment bank selected by the
Company and approved by the holder or (b) the disputed arithmetic calculation to
the Company’s independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the holder of the
results no later than ten Business Days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period.

     

                         “Closing
Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all of the
conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied, or
such other date as the parties may agree.

     

                         “Commission”
has the meaning set forth in the Recitals.

     

                         “Common
Stock” has the meaning set forth in the Recitals, and also includes any
securities into which the Common Stock may hereafter be reclassified or
changed.

     

                         “Common
Stock Equivalents” means any securities of the Company or any Subsidiary
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.

     

                         “Company
Counsel” means Goodwin Procter LLP.

     

                         “Company
Deliverables” has the meaning set forth in
Section 2.2(a).

     

                         “Company’s
Knowledge” means with respect to any statement made to the knowledge of
the Company, that the statement is based upon the actual knowledge of the
executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement.

     

                         “Control”
(including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

      


                           “Disclosure
Materials” has the meaning set forth in
Section 3.1(h).

    

     

                         “Effective
Date” means the date on which the initial Registration Statement required
by Section 2(a) of the Registration Rights Agreement is first declared effective
by the Commission.

     

                         “Effectiveness
Deadline” means the date on which the initial Registration Statement is
required to be declared effective by the Commission under the terms of the
Registration Rights Agreement.

     

                         “Environmental
Laws” has the meaning set forth in Section 3.1(l).

     

                         “Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated
thereunder.

     

                         “GAAP”
means U.S. generally accepted accounting principles, as applied by the
Company.

     

                         “Indemnified
Person” has the meaning set forth in Section 4.9(b).

     

                         “Intellectual
Property” has the meaning set forth in Section 3.1(r).

     

                         “Irrevocable
Transfer Agent Instructions” means, with respect to the Company, the
Irrevocable Transfer Agent Instructions, in the form of Exhibit E,
executed by the Company and delivered to and acknowledged in writing by the
Transfer Agent.

     

                         “Lien”
means any lien, charge, claim, encumbrance, security interest, right of first
refusal, preemptive right or other restrictions of any kind.

     

                         “Material
Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document , (ii) a
material and adverse effect on the results of operations, assets, business or
financial condition of the Company and the Subsidiaries, taken as a whole, or
(iii) any adverse impairment to the Company's ability to perform in any material
respect on a timely basis its obligations under any Transaction Document, except
that any of the following, either alone or in combination, shall not be deemed a
Material Adverse Effect: (A) effects caused by changes or circumstances
affecting general market conditions in the U.S. economy or which are generally
applicable to the industry in which the Company operates, which do not affect
the Company in a materially disproportionate manner, (B) effects resulting from
or relating to the announcement or disclosure of the sale of the Shares or other
transactions contemplated by this Agreement, or (C) effects caused by any event,
occurrence or condition resulting from or relating to the taking of any action
in accordance with this Agreement.

     

                         “Material
Contract” means any contract of the Company that was filed as an exhibit
to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation
S-K.

     

                         “Material
Permits” has the meaning set forth in Section 3.1(p).

     

                         “New
York Courts” means the state and federal courts sitting in the City of
New York, Borough of Manhattan.

     

                         “Outside
Date” means the thirtieth day following the date of this Agreement;
provided that if such day is not a Business Day, the first day following such
day that is a Business Day.

     

                         “Person”
means an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.

     

                         “Principal
Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the NASDAQ Global Market.

     

                         “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     

                         “Purchase
Price” means $20.00 per Share.

     

                         “Purchaser
Deliverables” has the meaning set forth in
Section 2.2(b).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

           


                           “Purchaser
Party” has the meaning set forth in
Section 4.9(a).

    

     

                         “Registration
Rights Agreement” has the meaning set forth in the Recitals.

     

                         “Registration
Statement” means a registration statement meeting the requirements set
forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Registrable Securities (as defined in the Registration Rights
Agreement).

     

                         “Required
Approvals” has the meaning set forth in Section 3.1(e).

     

                         “Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

     

                         “SEC
Reports” has the meaning set forth in Section 3.1(h).

     

                         “Secretary’s
Certificate” has the meaning set forth in
Section 2.2(a)(vi).

     

                         “Securities
Act” means the Securities Act of 1933, as amended.

     

                         “Short
Sales” include, without limitation, all “short sales” as defined in
Rule 200 promulgated under Regulation SHO under the Exchange Act,
whether or not against the box, and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act)
and similar arrangements (including
on a total return basis), and sales and other transactions through non-U.S.
broker dealers or foreign regulated brokers.

     

    
                           “Special
Counsel” means Adler Pollock & Sheehan P.C.

    

     

                         “Subscription
Amount” means with respect to each Purchaser, the aggregate amount to be
paid for the Shares purchased hereunder as indicated on such Purchaser’s
signature page to this Agreement next to the heading “Aggregate Purchase Price
(Subscription Amount)”.

     

                         “Subsidiary”
means any entity in which the Company, directly or indirectly, owns sufficient
capital stock or holds a sufficient equity or similar interest such that it is
consolidated with the Company in the financial statements of the
Company.

     

                         “Trading
Affiliate” has the meaning set forth in Section 3.2(h).

     

                         “Trading
Day” means (i) a day on which the Common Stock is listed or quoted
and traded on its Principal Trading Market (other than the OTC Bulletin Board),
or (ii) if the Common Stock is not listed on a Trading Market (other than
the OTC Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if
the Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided
, that in the event that the Common Stock is not listed or quoted as set forth
in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.

     

                         “Trading
Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is
listed or quoted for trading on the date in question.

     

                         “Transaction
Documents” means this Agreement, the schedules and exhibits attached
hereto, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions and any other documents or agreements executed in connection with
the transactions contemplated hereunder.

     

                         “Transfer
Agent” means American Stock Transfer & Trust Company, or any
successor transfer agent for the Company.

     

    ARTICLE
II.

    PURCHASE
AND SALE

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.1           Closing.

     

    (a)           Amount.  Subject
to the terms and conditions set forth in this Agreement, at the Closing the
Company shall issue and sell to each Purchaser, and each Purchaser shall,
severally and not jointly, purchase from the Company, such number of Shares
equal to the quotient resulting from dividing (i) the Subscription Amount for
such Purchaser by (ii) the Purchase Price, rounded down to the nearest whole
Share.

     

    (b)           Closing.  The
Closing of the purchase and sale of the Shares shall take place at the offices
of Goodwin Procter LLP, 53 State Street, Boston, Massachusetts, on the Closing
Date or at such other locations or remotely by facsimile transmission or other
electronic means as the parties may mutually agree.

     

    (c)           Form
of Payment; Escrow.  Unless otherwise agreed to by the Company
and a Purchaser (as to itself only), on or prior to the Business Day immediately
prior to the Closing Date, each Purchaser shall wire its Subscription Amount, in
United States dollars and in immediately available funds, to a non-interest
bearing escrow account established by the Company and the Placement Agent with
JPMorgan Chase Bank, N.A. (the “Escrow
Agent”) as set forth on Exhibit
G hereto (the aggregate amounts received being held in escrow by the
Escrow Agent are referred to herein as the “Escrow
Amount”).  Unless otherwise agreed to by the Company and a
Purchaser (as to itself only), on the Closing Date, (a) the Company and the
Placement Agent shall instruct the Escrow Agent to deliver, in immediately
available funds, the Escrow Amount constituting the aggregate purchase price as
follows: (1) to the Placement Agent, the fees and reimbursable expenses payable
to the Placement Agent (which fees and expenses shall be set forth in such
instructions), and (2) the balance of the aggregate purchase price to the
Company and (b) the Company shall irrevocably instruct the Transfer Agent to
deliver to each Purchaser one or more stock certificates, free and clear of all
restrictive and other legends (except as expressly provided in Section 4.1(b)
hereof), evidencing the number of Shares such Purchaser is purchasing as is set
forth on such Purchaser’s signature page to this Agreement next to the heading
“Number of Shares to be Acquired”, within three (3) Business Days after the
Closing.

     

    2.2           Closing
Deliveries.   

     

                             (a)         On
or prior to the Closing, the Company shall issue, deliver or cause to be
delivered to each Purchaser the following (the “Company
Deliverables”):

     

    
      	
                             

            	
              (i) 

            	
              this
      Agreement, duly executed by the
Company;

            


    

     

    
      	
                             

            	
              (ii) 

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

            


    

     

    
      	
                             

            	
              (iii) 

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

            


    

     

    
      	
                             

            	
              (iv) 

            	
              a
      legal opinion of Special Counsel, dated as of the Closing Date and in the
      form attached hereto as Exhibit C-2,
      executed by such counsel and addressed to the
  Purchasers;

            
	 	 	 
	 	(v)	the
      Registration Rights Agreement, duly executed by the
  Company;


    

     

    
      	
                             

            	
              (vi) 

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

            


    

     

    
      	
                             

            	
              (vii) 

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

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
                            

            	
               

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

            
	 	 	 


    

    
      	
                             

            	
              (viii) 

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

            


    

     

    
      	
                             

            	
              (ix) 

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

            


    

     

    
      	
                             

            	
              (x) 

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

            


    

     

                             (b)            On
or prior to the Closing, each Purchaser shall deliver or cause to be delivered
to the Company the following (the “Purchaser
Deliverables”):

     

    
      	
                             

            	
              (i) 

            	
              this
      Agreement, duly executed by such
Purchaser;

            


    

     

    
      	
                             

            	
              (ii) 

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

            


    

     

    
      	
                             

            	
              (iii) 

            	
              the
      Registration Rights Agreement, duly executed by such
      Purchaser;

            


    

     

    
      	
                             

            	
              (iv) 

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

            


    

     

    
      	
                             

            	
              (v) 

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

            


    

     

    ARTICLE
III.

    REPRESENTATIONS
AND WARRANTIES

     

                    3.1           Representations
and Warranties of the Company. The Company hereby represents and warrants
as of the date hereof and the Closing Date (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date), to each of the Purchasers that:

     

                                    (a)           Subsidiaries.
The Company has no direct or indirect Subsidiaries other than those listed in
Schedule 3.1(a)
hereto. Except as disclosed in Schedule 3.1(a)
hereto, the Company owns, directly or indirectly, all of the capital stock or
comparable equity interests of each Subsidiary free and clear of any and all
Liens, and all the issued and outstanding shares of capital stock or comparable
equity interest of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.

     

                                    (b)           Organization
and Qualification. The
Company and each of its “Significant Subsidiaries” (as defined in Rule 1-02 of
Regulation S-X) is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own or lease and use its properties and assets and to carry on its
business as currently conducted. Neither the Company nor any Significant
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents. The Company and each of its Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not in
the reasonable judgment of the Company be expected to have a Material Adverse
Effect.  The Company is duly registered as a financial holding
company under the Bank Holding Company Act of 1956, as


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    amended.  Each
of the Company’s depository institution Subsidiaries’ deposit accounts are
insured up to applicable limits by the Federal Deposit Insurance Corporation,
and all premiums and assessments required to be paid in connection therewith
have been paid when due. The Company has conducted its business in compliance
with all applicable federal, state and foreign laws, orders, judgments, decrees,
rules, regulations and applicable stock exchange requirements, including all
laws and regulations restricting activities of bank holding companies and
banking organizations, except for any noncompliance that, individually or in the
aggregate, has not had and would not be reasonably expected to have a Material
Adverse Effect.

     

                                    (c)           Authorization;
Enforcement; Validity. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents to which it is a party and otherwise to carry out
its obligations hereunder and thereunder. The Company’s execution and delivery
of each of the Transaction Documents to which it is a party and the consummation
by it of the transactions contemplated hereby and thereby (including, but not
limited to, the sale and delivery of the Shares) have been duly authorized by
all necessary corporate action on the part of the Company, and no further
corporate action is required by the Company, its Board of Directors or its
stockholders in connection therewith other than in connection with the Required
Approvals. Each of the Transaction Documents to which it is a party has been (or
upon delivery will have been) duly executed by the Company and is, or when
delivered in accordance with the terms hereof, will constitute the legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (i) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application,
(ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited
by applicable law. Except for Material Contracts, there are no stockholder
agreements, voting agreements, or other similar arrangements with respect to the
Company’s capital stock to which the Company is a party or, to the Company’s
Knowledge, between or among any of the Company’s stockholders.

     

                                    (d)           No
Conflicts. The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party and the consummation by the Company
of the transactions contemplated hereby or thereby (including, without
limitation, the issuance of the Shares) do not and will not (i) conflict
with or violate any provisions of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or otherwise result in a violation of the
organizational documents of the Company or any Subsidiary, (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would result in a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations and the
rules and regulations, assuming the correctness of the representations and
warranties made by the Purchasers herein, of any self-regulatory organization to
which the Company or its securities are subject, including all applicable
Trading Markets), or by which any property or asset of the Company is bound or
affected, except in the case of clauses (ii) and (iii) such as would
not have or reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

     

                                    (e)           Filings,
Consents and Approvals. Neither the Company nor any of its Subsidiaries
is required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents (including, without limitation, the issuance of the Shares), other
than (i) the filing with the Commission of one or more Registration
Statements in accordance with the requirements of the Registration Rights
Agreement, (ii) filings required by applicable state securities laws,
(iii) the filing of a Notice of Sale of 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Securities
on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filing of any requisite notices and/or application(s) to the
Principal Trading Market for the issuance and sale of the Common Stock and the
listing of the Common Stock for trading or quotation, as the case may be,
thereon in the time and manner required thereby, (v) the filings required in
accordance with Section 4.6 of this Agreement and (vi) those that have
been made or obtained prior to the date of this Agreement (collectively, the
“Required
Approvals”).

     

                                    (f)           Issuance
of the Shares. The Shares have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents, will be duly
and validly issued, fully paid and nonassessable and free and clear of all
Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights.   Assuming the accuracy of the
representations and warranties of the Purchasers in this Agreement, the Shares
will be issued in compliance with all applicable federal and state securities
laws.

     

                                    (g)           Capitalization.
The number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of
the Company) has been set forth in the SEC Reports and has changed since the
date of such SEC Reports only due to stock grants or other equity awards or
stock option and warrant exercises that do not, individually or in the
aggregate, have a material effect on the issued and outstanding capital stock,
options and other securities. All of the outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and non-assessable,
have been issued in compliance in all material respects with all applicable
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase any capital stock of the Company. Except as specified in the SEC
Reports: (i) no shares of the Company’s outstanding capital stock are
subject to preemptive rights or any other similar rights; (ii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company, other than those issued or granted pursuant to
Material Contracts or equity or incentive plans or arrangements described in the
SEC Reports; (iii) there are no material outstanding debt securities,
notes, credit
agreements, credit facilities or other agreements, documents or instruments
evidencing indebtedness of the Company or by which the Company is bound;
(iv) except as identified in Schedule
3.1(y) hereto and the Registration Rights Agreement, there are no
agreements or arrangements under which the Company is obligated to register the
sale of any of their securities under the Securities Act; (v) there are no
outstanding securities or instruments of the Company or which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company; (vi) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Shares; (vii) the Company does not have any
stock appreciation rights or “phantom stock” plans or agreements or any similar
plan or agreement; and (viii) the Company has no liabilities or obligations
required to be disclosed in the SEC Reports but not so disclosed in the SEC
Reports, which, individually or in the aggregate, do not or would not have or
reasonably be expected to have a Material Adverse
Effect.

     

                                    (h)           SEC
Reports; Disclosure Materials. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the twelve months preceding the date hereof (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC
Reports” and together with this Agreement and the Schedules to this
Agreement, the “Disclosure
Materials”), on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective filing dates, or, to the extent corrected
by a subsequent restatement or subsequent filings, the time of filing of such


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    subsequent
restatement or subsequent filings, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, and, except
as corrected by subsequent filings, none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

     

                                    (i)           
Financial
Statements. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing (or, to the extent corrected by a subsequent
restatement, at the time of the filing of such restatement). Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the balance sheet of the Company and its consolidated
subsidiaries taken as a whole as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments, which would not be
material, either individually or in the aggregate.

     

                                    (j)         
  Tax
Matters. The Company (i) has prepared and filed all foreign, federal
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have been
set aside on the books of the Company and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure
to so pay or file any such tax, assessment, charge or return would not have or
reasonably be expected to have a Material Adverse Effect.

     

                                    (k)           Material
Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as disclosed in subsequent SEC Reports
filed prior to the date hereof, (i) there have been no events, occurrences
or developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the
Company has not incurred any material liabilities (contingent or otherwise)
other than (A) trade payables, accrued expenses and other liabilities
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered materially its method of
accounting or the manner in which it keeps its accounting books and records,
(iv) other than dividends disclosed on the Company’s press releases
available on its website, the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock (other than in connection with repurchases of unvested stock issued to
employees of the Company), (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except Common Stock (A) issued
in the ordinary course as dividends on outstanding preferred stock or (B) issued
pursuant to existing Company stock option or stock purchase plans or executive
and director corporate arrangements disclosed in the SEC Reports or (C) issued
pursuant to other existing agreements disclosed in the SEC Reports and
(vi) there has not been any material change or amendment to, or any waiver
of any material right by the Company under, any Material Contract under which
the Company or any of its Subsidiaries is bound or subject. Except for the
transactions contemplated by this Agreement, no event, liability or development
has occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the
time this representation is made that has not been publicly disclosed at least
one Trading Day prior to the date that this representation is made.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
                                      (l)           
Environmental
Matters. Neither the Company nor any of its Subsidiaries (i) is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental
Laws”), (ii) owns or operates any real property contaminated with
any substance that is in violation of any Environmental Laws, (iii) is
liable for any off-site disposal or contamination pursuant to any Environmental
Laws, or (iv) is subject to any claim relating to any Environmental Laws;
which violation, contamination, liability or claim has had or would reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; and, to the Company’s Knowledge, there is no pending or threatened
investigation that might lead to such a claim.

    

     

                                    (m)           Litigation.
There is no Action which (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or the Shares or
(ii) except as disclosed in the SEC Reports, is reasonably likely to have a
Material Adverse Effect, individually or in the aggregate, if there were an
unfavorable decision. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim
of violation of or liability under federal or state securities laws or a claim
of breach of fiduciary duty.  There has not been, and to the Company’s
knowledge there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of
the Company.  The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Company or any of its Subsidiaries under the Exchange Act or the Securities
Act.

     

                                    (n)           Employment
Matters. No material labor dispute exists or, to the Company’s Knowledge,
is imminent with respect to any of the employees of the Company which would have
or reasonably be expected to have a Material Adverse Effect. None of the
Company’s employees is a member of a union that relates to such employee’s
relationship with the Company, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company
and each Subsidiary believes that its relationship with its employees is good.
To the Company’s Knowledge, no executive officer is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant in favor of a third
party, and to the Company’s Knowledge, the continued employment of each such
executive officer does not subject the Company or any Subsidiary to any
liability with respect to any of the foregoing matters. The Company is in
compliance with all U.S. federal, state, local and foreign laws and regulations
relating to employment and employment practices, terms and conditions
of employment
and wages and hours, except where the failure to be in compliance would not have
or reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

     

                                    (o)           Compliance.
Neither the Company nor any of its Subsidiaries (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company or any
of its Subsidiaries under), nor has the Company or any of its Subsidiaries
received written notice of a claim that it is in default under or that it is in
violation of, any Material Contract (whether or not such default or violation
has been waived), (ii) is in violation of any order of which the Company
has been made aware in writing of any court, arbitrator or governmental body
having jurisdiction over the Company or its properties or assets, or
(iii) is in violation of, or in receipt of written notice that it is in
violation of, any statute, rule or regulation of any governmental authority
applicable to the Company, or which would have the effect of revoking or
limiting FDIC deposit insurance, except in each case as would not have or
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

     

                                    (p)           Regulatory
Permits. The Company and each of its Subsidiaries possess or have applied
for all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as currently conducted and as described in the SEC
Reports, except where the failure to possess such permits, individually or in
the aggregate, has not and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect (“Material
Permits”), and (i) neither the Company nor any of its Subsidiaries
has received 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
notice in writing of proceedings relating to the revocation or material adverse
modification of any such Material Permits and (ii) the Company is unaware
of any facts or circumstances that would give rise to the revocation or material
adverse modification of any Material Permits.

     

                                    (q)           Title
to Assets. The Company and its Subsidiaries have good and marketable
title to all real property and tangible personal property owned by them which is
material to the business of the Company and its Subsidiaries, taken as a whole,
in each case free and clear of all Liens except such as do not materially affect
the value of such property or do not interfere with the use made and proposed to
be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.

     

                                    (r)       
    Patents
and Trademarks. The Company and its Subsidiaries own, possess, license or
have other rights to use all foreign and domestic patents, patent applications,
trade and service marks, trade and service mark registrations, trade names,
copyrights, inventions, trade secrets, technology, Internet domain names,
know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of their respective businesses as
now conducted or as proposed to be conducted in the SEC Reports except where the
failure to own, possess, license or have such rights would not have or
reasonably be expected to have a Material Adverse Effect. Except as set forth in
the SEC Reports and except where such violations or infringements would not have
or reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, (a) there are no rights of third parties to any
such Intellectual Property; (b) there is no infringement by third parties
of any such Intellectual Property; (c) there is no pending or threatened
action, suit, proceeding or claim by others challenging the Company’s and its
Subsidiaries’ rights in or to any such Intellectual Property; (d) there is no
pending or threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property; and (e) there is
no pending or threatened action, suit, proceeding or claim by others that the
Company and/or any Subsidiary infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others.

     

                                    (s)           Insurance.
The Company and each of the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
the Company believes to be prudent and customary in the businesses and locations
in which the Company and the Subsidiaries are engaged. Neither the Company nor
any of its Subsidiaries has received any notice of cancellation of any such
insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable
to renew their respective existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.

     

                                    (t)        
   Transactions
With Affiliates and Employees. Except as set forth in the SEC Reports and
other than the grant of stock options or other equity awards that are not
individually or in the aggregate material in amount, none of the officers or
directors of the Company and, to the Company’s Knowledge, none of the employees
of the Company, is presently a party to any transaction with the Company or to a
presently contemplated transaction (other than for services as employees,
officers and directors) that would be required to be disclosed pursuant to
Item 404 of Regulation S-K promulgated under the Securities
Act.

     

                                    (u)           Internal
Accounting Controls. The Company maintains internal control over
financial reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including
that (i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
differences.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                                    (v)           Sarbanes-Oxley;
Disclosure Controls. The Company is in compliance in all material
respects with all of the provisions of the Sarbanes-Oxley Act of 2002 which are
applicable to it. The Company maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange
Act), and such disclosure controls and procedures are
effective.

     

                                    (w)          Certain
Fees. No person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or a Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Company, other than the Placement Agent with respect to the offer
and sale of the Shares (which placement agent fees are being paid by the
Company). The Company shall indemnify, pay, and hold each Purchaser harmless
against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such
right, interest or claim.

     

                                    (x)           Private
Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2 of this Agreement and the accuracy of
the information disclosed in the Accredited Investor Questionnaires, no
registration under the Securities Act is required for the offer and sale of the
Shares by the Company to the Purchasers under the Transaction
Documents.  The issuance and sale of the Shares hereunder does not
contravene the rules and regulations of the Principal Trading
Market.

     

                                    (y)           Registration
Rights. Other than as set forth in the SEC Reports and other than each of
the Purchasers or as set forth in Schedule 3.1(y)
hereto, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company other than those
securities which are currently registered on an effective registration statement
on file with the Commission.

     

                                    (z)           No
Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, none of the
Company, its Subsidiaries nor, to the Company’s Knowledge,
any of its Affiliates or any Person acting on its behalf has, directly or
indirectly, at any time within the past six months, made any offers or sales of
any Company security or solicited any offers to buy any security under
circumstances that would (i) eliminate the availability of the exemption
from registration under Regulation D under the Securities Act in connection
with the offer and sale by the Company of the Shares as contemplated hereby or
(ii) cause the offering of the Shares pursuant to the Transaction Documents to
be integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without
limitation, under the rules and regulations of any Trading Market on which any
of the securities of the Company are listed or
designated.

     

                                    (aa)          Listing
and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to terminate the registration of the Common Stock under
the Exchange Act nor has the Company received any notification that the
Commission is contemplating terminating such registration. The Company has not,
in the 12 months preceding the date hereof, received written notice from
any Trading Market on which the Common Stock is listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no
reason  to believe that it will not in the foreseeable future continue
to be, in compliance in all material respects with the listing and maintenance
requirements for continued trading of the Common Stock on the Principal Trading
Market.

     

                                    (bb)         Investment
Company. Neither the Company nor any of its Subsidiaries is required to
be registered as, and is not an Affiliate of, and immediately following the
Closing will not be required to register as, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

     

                                    (cc)         Questionable
Payments. Neither the Company nor any of its Subsidiaries, nor any
directors, officers, nor to the Company’s Knowledge, employees, agents or other
Persons acting at the direction of or on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the
Company: (a) directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
foreign or domestic political activity; (b) made any direct or indirect unlawful
payments to any foreign or domestic governmental officials or employees or to


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
foreign or domestic political parties or campaigns from corporate funds;
(c) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or (d) made any other unlawful bribe, rebate, payoff, influence
payment, kickback or other material unlawful payment to any foreign or domestic
government official or employee.

     

                                    (dd)         Application
of Takeover Protections; Rights Agreements. Except as disclosed in the
SEC Reports, the Company has not adopted any stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of Common Stock or
a change in control of the Company.  The Company and its board of
directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation or
other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise which is or could become applicable to any Purchaser
solely as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Shares and any
Purchaser’s ownership of the Shares.

     

                                    (ee)          Disclosure.
The Company confirms that neither it nor any of its officers or directors nor
any other Person acting on its or their behalf has provided, and it has not
authorized the Placement Agent to provide, any Purchaser or its respective
agents or counsel with any information that it believes constitutes or could
reasonably be expected to constitute material, non-public information except
insofar as the existence, provisions and terms of the Transaction Documents and
the proposed transactions hereunder may constitute such information, all of
which will be disclosed by the Company in the Press Release(s) as contemplated
by Section 4.6 hereof. The Company understands and confirms that each of the
Purchasers will rely on the foregoing representations in effecting transactions
in securities of the Company. No event or circumstance has occurred or
information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed, except
for the announcement
of this Agreement and related transactions and as may be disclosed on the Form
8-K filed pursuant to Section 4.6.

     

                                    (ff)           Off
Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company (or any Subsidiary) and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the
Company in its Exchange Act filings and is not so disclosed and would have or
reasonably be expected to have a Material Adverse Effect.

     

                                    (gg)         Acknowledgment
Regarding Purchasers’ Purchase of Shares.  The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an
arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby.  The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Shares. 

     

                                    (hh)         Regulation M
Compliance.  In the last thirty days, the Company has not, and to
the Company’s Knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
securities of the Company or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the
Company, other than, in the case of clauses (ii) and (iii) compensation
paid to the Placement Agent in connection with the placement of the
Shares.

     

                                    (ii)           OFAC.
Neither the Company nor any Subsidiary nor, to the Company’s Knowledge, any
director, officer, agent, employee, Affiliate or Person acting on behalf of the
Company or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Treasury
Department (“OFAC”);
and the Company will not knowingly directly or indirectly use the proceeds of
the sale of the Shares, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, joint venture partner or other Person or entity,
towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any
other country sanctioned by OFAC or for the purpose of financing the activities
of any Person currently subject to any U.S. sanctions administered by
OFAC.

     

                                    (jj)           Money
Laundering Laws. The operations of each of the Company and any Subsidiary
are and have been conducted at all times in compliance with the money laundering
statutes of applicable jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or
enforced by any applicable governmental agency (collectively, the “Money
Laundering Laws”) and to the Company’s Knowledge, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company and/or any Subsidiary with respect to the
Money Laundering Laws is pending or threatened.

     

                                    (kk)         
No
Additional Agreements. The Company does not have any agreement or
understanding with any Purchaser with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction
Documents.

     

    
                                      (ll)          
Reports,
Registrations and
Statements.  Since December 31, 2007, the Company and each
Subsidiary have filed all material reports, registrations and statements,
together with any required amendments thereto, that it was required to file with
the Board of Governors of the Federal Reserve System (the “Federal Reserve”),
the Office of the Comptroller of the Currency (the “OCC”), and any other
applicable federal or state securities or banking authorities, except where the
failure to file any such report, registration or statement would not have or
reasonably be expected to have a Material Adverse Effect. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the “Company Reports.” As of their respective dates, the
Company Reports complied as to form in all material respects with all the rules
and regulations promulgated by the Federal Reserve, the OCC and any other
applicable foreign, federal or state securities or banking authorities, as the
case may be.

       

      
                                        (mm)      
Adequate
Capitalization.  As of December 31, 2007, the Company’s
Subsidiary insured depository institutions meet or exceed the standards
necessary to be considered “adequately capitalized” under the Federal Deposit
Insurance Company’s regulatory framework for prompt corrective
action.

      

    

     

     

    
                                      (nn)         Agreements
with Regulatory Agencies; Compliance with Certain Banking
Regulations.  Neither the Company nor any Subsidiary is subject
to any cease-and-desist or other similar order or enforcement action issued by,
or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any capital directive by, or since December 31,
2006, has adopted any board resolutions at the request of, any governmental
entity that currently restricts in any material respect the conduct of its
business or that in any material manner relates to its capital adequacy, its
liquidity and funding policies and practices, its ability to pay dividends, its
credit, risk management or compliance policies, its internal controls, its
management or its operations or business (each item in this sentence, a
“Regulatory Agreement”), nor has the Company or any Subsidiary been advised
since December 31, 2006 by any governmental entity that it is considering
issuing, initiating, ordering, or requesting any such Regulatory
Agreement.

    

     

    The Company has no
knowledge of any facts and circumstances, and has no reason to believe that any
facts or circumstances exist, that would cause any of its Subsidiary banking
institutions: (i) to be deemed not to be in satisfactory compliance with the
Community Reinvestment Act and the regulations promulgated thereunder or to be
assigned a CRA rating by federal or state banking regulators of lower than
“satisfactory”; (ii) to be deemed to be operating in violation, in any material
respect, of the Bank Secrecy Act, the Patriot Act, any order issued with respect
to anti-money laundering by the U.S. Department of the Treasury’s Office of
Foreign Assets Control, or any other anti-money laundering statute, rule or
regulation; or (iii) to be deemed not to be in satisfactory compliance, in any
material respect, with all applicable privacy 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    of
customer information requirements contained in any federal and state privacy
laws and regulations as well as the provisions of all information security
programs adopted by the Subsidiaries.

     

    Except as would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, each of the Company and each Subsidiary has properly
administered all accounts for which it acts as a fiduciary, including accounts
for which it serves as a trustee, agent, custodian, personal representative,
guardian, conservator or investment advisor, in accordance with the terms of the
governing documents, applicable federal and state law and regulation and common
law.  None of the Company, any Subsidiary or any director, officer or
employee of the Company or any Subsidiary has committed any breach of trust or
fiduciary duty with respect to any such fiduciary account that would reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the accountings for each such fiduciary
account are true and correct and accurately reflect the assets of such fiduciary
account.

     

    
       

      
                                        (oo)         No
General Solicitation or General Advertising.  Neither the
Company nor any person acting on its behalf has engaged or will engage in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with any offer or sale of
the Shares.

      

    

     

    
      
                                        (pp)         Mortgage
Banking Business.  Except as has not had and would not
reasonably be expected to have a Material Adverse Effect:

         

      

    

    
      
        
                                          (i)           The
Company and each of its Subsidiaries has complied with, and all documentation in
connection with the origination, processing, underwriting and credit approval of
any mortgage loan originated, purchased or serviced by the Company or any of its
Subsidiaries satisfied, (A) all applicable federal, state and local laws, rules
and regulations with respect to the origination, insuring, purchase, sale,
pooling, servicing, subservicing, or filing of claims in connection with
mortgage loans, including all laws relating to real estate settlement
procedures, consumer credit protection, truth in lending laws, usury
limitations, fair housing, transfers of servicing, collection practices, equal
credit opportunity and adjustable rate mortgages, (B) the responsibilities and
obligations relating to mortgage loans set forth in any agreement between the
Company or any of its Subsidiaries and any Agency, Loan Investor or Insurer, (C)
the applicable rules, regulations, guidelines, handbooks and other requirements
of any Agency, Loan Investor or Insurer and (D) the terms and provisions of any
mortgage or other collateral documents and other loan documents with respect to
each mortgage loan; and

          
            
               

              
                                                (ii)           No
Agency, Loan Investor or Insurer has (A) claimed in writing that the Company or
any of its Subsidiaries has violated or has not complied with the applicable
underwriting standards with respect to mortgage loans sold by the Company or any
of its Subsidiaries to a Loan Investor or Agency, or with respect to any sale of
mortgage servicing rights to a Loan Investor, (B) imposed in writing
restrictions on the activities (including commitment authority) of the Company
or any of its Subsidiaries or (C) indicated in writing to the Company or any of
its Subsidiaries that it has terminated or intends to terminate its relationship
with the Company or any of its Subsidiaries for poor performance, poor loan
quality or concern with respect to the Company’s or any of its Subsidiaries’
compliance with laws,

              

            

          

        

      

    

     

        For purposes
of this Section 3(pp):  (A) “Agency” means the Federal Housing
Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home
Administration (now known as Rural Housing and Community Development Services),
the Federal National Mortgage Association, the Federal National Mortgage
Association, the United States Department of Veterans’ Affairs, the Rural
Housing Service of the U.S. Department of Agriculture or any other federal or
state agency with authority to (i) determine any investment, origination,
lending or servicing requirements with regard to mortgage loans originated,
purchased or serviced by the Company or any of its Subsidiaries or (ii)
originate, purchase, or service mortgage loans, or otherwise promote mortgage
lending, including state and local housing finance authorities; (B) “Loan
Investor” means any person (including an Agency) having a 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      beneficial
interest in any mortgage loan originated, purchased or serviced by the Company
or any of its Subsidiaries or a security backed by or representing an interest
in any such mortgage loan; and (C) “Insurer” means a person who insures or
guarantees for the benefit of the mortgagee all or any portion of the risk of
loss upon borrower default on any of the mortgage loans originated, purchased or
serviced by the Company or any of its Subsidiaries, including the Federal
Housing Administration, the United States Department of Veterans’ Affairs, the
Rural Housing Service of the U.S. Department of Agriculture and any private
mortgage insurer, and providers of hazard, title or other insurance with respect
to such mortgage loans or the related collateral.

       

      
                                        (qq)         ERISA.  The
Company is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (herein
called “ERISA”); no “reportable event” (as defined in ERISA) has occurred with
respect to any “pension plan” (as defined in ERISA) for which the Company would
have any liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan”; or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “Code”); and each “Pension Plan” for
which the Company would have liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification.

         

        
                                          (rr)           Shell
Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).

           

          
             

            
                                              (ss)          Registration
Eligibility. The Company is eligible to register the resale of the Shares
by the Purchasers using Form S-3 promulgated under the Securities
Act

            

          

        

      

    

     

     

                    3.2           Representations
and Warranties of the Purchasers. Each Purchaser hereby, for itself and
for no other Purchaser, represents and warrants as of the date hereof and as of
the Closing Date to the Company as follows:

     

                                    (a)           Organization;
Authority. If such Purchaser is an entity, it is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the applicable
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. If such purchaser is an entity, the execution, delivery and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or, if such Purchaser is
not a corporation, such partnership, limited liability company or other
applicable like action, on the part of such Purchaser. If such Purchaser is an
entity, each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

     

                                    (b)           No
Conflicts. The execution, delivery and performance by such Purchaser of
this Agreement and the Registration Rights Agreement and the consummation by
such Purchaser of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of such Purchaser
(if such Purchaser is an entity), (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
such Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (including
federal and state securities laws) applicable to such Purchaser, except in the
case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ability of such
Purchaser to perform its obligations hereunder.

     

                                    (c)           Investment
Intent. Such Purchaser understands that the Shares are “restricted
securities” and have not been registered under the Securities Act or any
applicable state securities law and is acquiring the Shares as principal for its
own account and not with a view to, or for distributing or reselling such Shares
or any part thereof in violation of the Securities Act or any applicable state
securities laws, provided,
however, that by making the representations herein, such Purchaser does
not agree to hold any of the Shares for any minimum period of time and reserves
the right, subject to the provisions of this Agreement and the Registration
Rights Agreement, at all times to sell or otherwise dispose of all or any part
of such Shares
pursuant to an effective registration statement under the Securities Act or
under an exemption from such registration and in compliance with applicable
federal and state securities laws. Such Purchaser is acquiring the Shares
hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Shares
(or any securities which are derivatives thereof) to or through any person or
entity.

     

                                    (d)           Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and at
the date hereof it is, an “accredited investor” as defined in Rule 501(a) under
the Securities Act.

     

                                    (e)           General
Solicitation. Such Purchaser is not purchasing the Shares as a result of
any advertisement, article, notice or other communication regarding the Shares
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
advertisement.

     

                                    (f)           Experience
of Such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares, and has so evaluated the merits and
risks of such investment. Such Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.

     

                                    (g)           Access
to Information. Such Purchaser acknowledges that it has had the
opportunity to review the Disclosure Materials and has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company concerning the terms
and conditions of the offering of the Shares and the merits and risks of
investing in the Shares; (ii) access to information about the Company and
the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed decision with respect to its acquisition of the
Shares.

     

                                    (h)           Certain
Trading Activities. Other than with respect to the transactions
contemplated herein, since the time that such Purchaser was first contacted by
the Company, the Placement Agent or any other Person regarding the transactions
contemplated hereby, neither the Purchaser nor any Affiliate of such Purchaser
which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Purchaser’s investments or
trading or information concerning such Purchaser’s investments, including in
respect of the Shares, and (z) is subject to such Purchaser’s review or
input concerning such Affiliate’s investments or trading (collectively, “Trading
Affiliates”) has directly or indirectly, nor has any Person acting on
behalf of or pursuant to any understanding with such Purchaser or Trading
Affiliate, 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    effected or agreed
to effect any purchases or sales of the securities of the Company (including,
without limitation, any Short Sales involving the Company’s securities).
Notwithstanding the foregoing, in the case of a Purchaser and/or Trading
Affiliate that is, individually or collectively, a multi-managed investment bank
or vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s or Trading Affiliate’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s or Trading Affiliate’s assets,
the representation set forth above shall apply only with respect to
the portion of assets managed by the portfolio manager that have knowledge about
the financing transaction contemplated by this Agreement. Other than to other
Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction).

     

                                    (i)           Brokers
and Finders. Other than the Placement Agent with respect to the Company,
no Person will have, as a result of the transactions contemplated by this
Agreement, any valid right, interest or claim against or upon the Company or any
Purchaser for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the
Purchaser.

     

                                    (j)           Independent
Investment Decision. Such Purchaser has independently evaluated the
merits of its decision to purchase Shares pursuant to the Transaction Documents,
and such Purchaser confirms that it has not relied on the advice of any other
Purchaser’s business and/or legal counsel in making such decision. Such
Purchaser understands that nothing in this Agreement or any other materials
presented by or on behalf of the Company to the Purchaser in connection with the
purchase of the Shares constitutes legal, tax or investment advice. Such
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares. Such Purchaser understands that the Placement Agent has
acted solely as the agent of the Company in this placement of the Shares and
such Purchaser has not relied on the business or legal advice of the Placement
Agent or any of its agents, counsel or Affiliates in making its investment
decision hereunder, and confirms that none of such Persons has made any
representations or warranties to such Purchaser in connection with the
transactions contemplated by the Transaction Documents.

     

                                   (k)           Reliance
on Exemptions. Such Purchaser understands that the Shares being offered
and sold to it in reliance on specific exemptions from the registration
requirements of U.S. federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such Purchaser’s compliance
with, the representations, warranties, agreements, acknowledgements and
understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Shares.

     

                                    (l)           No
Governmental Review. Such Purchaser understands that no U.S. federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Shares or the fairness or
suitability of the investment in the Shares nor have such authorities passed
upon or endorsed the merits of the offering of the Shares.

     

                                    (m)          Regulation M.
Such Purchaser is aware that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of Common Stock and other activities
with respect to the Common Stock by the Purchasers.

     

                                    (n)           Residency.
Such Purchaser’s residence (if an individual) or office in which its investment
decision with respect to the Shares was made (if an entity) are located at the
address immediately below such Purchaser’s name on its signature page
hereto.

     

                                  
(o)           Beneficial
Ownership.  The purchase by such Purchaser of the Shares
issuable to it at the Closing will not result in such Purchaser (individually or
together with any other Person with whom such Purchaser has identified, or will
have identified, itself as part of a “group” in a public filing made with the
Commission involving the Company’s securities) acquiring, or obtaining the right
to acquire, in excess of 19.999% of the outstanding shares of Common Stock or
the voting power of the Company on a post transaction basis that assumes that
such Closing shall have occurred.  Such Purchaser does not presently
intend to, alone or together with others, make a public filing with the
Commission to disclose that it has (or that it together with such other Persons
have) acquired, or obtained the right to acquire, as a result of such


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Closing
(when added to any other securities of the Company that it or they then own or
have the right to acquire), in excess of 19.999% of the outstanding shares of
Common Stock or the voting power of the Company on a post transaction basis that
assumes that each Closing shall have occurred

     

    The Company and
each of the Purchasers acknowledge and agree that no party to this Agreement has
made or makes any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this
Article III and the Transaction Documents.

     

    ARTICLE
IV.

    OTHER
AGREEMENTS OF THE PARTIES

     

                    4.1           Transfer
Restrictions.

     

                                    (a)           Compliance
with Laws. Notwithstanding any other provision of this Article IV, each
Purchaser covenants that the Shares may be disposed of only pursuant to an
effective registration statement under, and in compliance with the requirements
of, the Securities Act, or pursuant to an available exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act,
and in compliance with any applicable state, federal or foreign securities
laws.  In connection with any transfer of the Shares other than (i)
pursuant to an effective registration statement, (ii) to the Company or (iii)
pursuant to Rule 144 (provided that the transferor provides the Company with
reasonable assurances (in the form of seller and broker representation letters)
that the securities may be sold pursuant to such rule), the Company may require
the transferor thereof to provide to the Company and the Transfer Agent, at the
transferor’s expense, an opinion of counsel selected by the transferor and
reasonably acceptable to the Company and the Transfer Agent, the form and
substance of which opinion shall be reasonably satisfactory to the Company and
the Transfer Agent, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act.  As
a condition of transfer (other than pursuant to clauses (i), (ii) or (iii) of
the preceding sentence), any such transferee shall agree in writing to be bound
by the terms of this Agreement and shall have the rights of a Purchaser under
this Agreement and the Registration Rights Agreement with respect to such
transferred Shares.

     

                                    (b)           Legends.
Certificates evidencing the Shares shall bear any legend as required by the
“blue sky” laws of any state and a restrictive legend in substantially the
following form, until such time as they are not required under Section 4.1(c) or
applicable law:

     

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED
THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM
OF SELLER AND BROKER REPRESENTATION LETTERS) THAT THE SECURITIES MAY BE SOLD
PURSUANT TO SUCH RULE).  NO REPRESENTATION IS MADE BY THE ISSUER AS TO
THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
FOR RESALES OF THESE SECURITIES.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

                                    (c)           Removal
of Legends. The restrictive legend set forth in Section 4.1(b) above
shall be removed and the Company shall issue a certificate without such
restrictive legend or any other restrictive legend to the holder of the
applicable Shares upon which it is stamped or issue to such holder by electronic
delivery at the applicable balance account at the Depository Trust Company
(“DTC”),
if (i) such Shares are registered for resale under the Securities Act (provided
that, if the Purchaser is selling pursuant to the effective registration
statement registering the Shares for resale, the Purchaser agrees to only sell
such Shares during such time that such registration statement is effective and
such Purchaser is not aware or has not been notified by the Company that such
registration statement has been withdrawn or suspended, and only as permitted by
such registration statement), (ii) such Shares are sold or transferred pursuant
to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii)
such Shares are eligible for sale under Rule 144, without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 as to such securities and without volume or manner-of-sale
restrictions.  Following the earlier of (i) the Effective Date or (ii)
Rule 144 becoming available for the resale of Shares, without the requirement
for the Company to be in compliance with the current public information required
under Rule 144 as to the Shares and without volume or manner-of-sale
restrictions, the Company shall cause Company Counsel to issue to the Transfer
Agent the legal opinion referred to in the Irrevocable Transfer Agent
Instructions.  Any fees (with respect to the Transfer Agent, Company
Counsel or otherwise) associated with the issuance of such opinion or the
removal of such legend shall be borne by the Company.  Following the
Effective Date, or at such earlier time as a restrictive legend is no longer
required for certain Shares, the Company will no later than three (3) Trading
Days following the delivery by a Purchaser to the Company or the Transfer Agent
(with notice to the Company) of a legended certificate representing such Shares
(endorsed or with stock powers attached, signatures guaranteed, and otherwise in
form necessary to affect the reissuance and/or transfer) and an opinion of
counsel to the extent required by Section 4.1(a), (such third Trading Day, the
“Legend
Removal Date”) deliver or cause to be delivered to such Purchaser a
certificate representing such Shares that is free from all restrictive
legends.  The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4.1(c).  Certificates for Shares free from all
restrictive legends may be transmitted by the Transfer Agent to the Purchasers
by crediting the account of the Purchaser’s prime broker with DTC as directed by
such Purchaser.

     

                                    (d)           Irrevocable
Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its Transfer Agent, and any subsequent transfer agent in the
form of Exhibit
D attached hereto (the “Irrevocable
Transfer Agent Instructions”). The Company represents and warrants that
no instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 4.1(d) or instructions that are not contradictory
therewith will be given by the Company to its transfer agent in connection with
this Agreement, and that the Shares shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the other Transaction Documents and applicable law. The Company
acknowledges that a breach by it of its obligations under this
Section 4.1(d) will cause irreparable harm to a Purchaser. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 4.1(d) will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this
Section 4.1(d), that a Purchaser shall be entitled, in addition to all
other available remedies, to an order and/or injunction restraining any breach
and requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being
required.

     

                                    (e)           Acknowledgement.
Each Purchaser hereunder acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer the Shares or
any interest therein without complying with the requirements of the Securities
Act. Except as otherwise provided below, while the above-referenced registration
statement remains effective, each Purchaser hereunder may sell the Shares in
accordance with the plan of distribution contained in the registration statement
and if it does so it will comply therewith and with the related prospectus
delivery requirements unless an exemption therefrom is
available.  Each Purchaser, severally and not jointly with the other
Purchasers, agrees that if it is notified by the Company in writing at any time
that the registration statement registering the resale of the Shares is not
effective or that the prospectus included in such registration statement no
longer complies with the requirements of Section 10 of the Securities Act,
the Purchaser will refrain from selling such Shares until 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such time
as the Purchaser is notified by the Company that such registration statement is
effective or such prospectus is compliant with Section 10 of the Exchange
Act, unless such Purchaser is able to, and does, sell such Shares pursuant to an
available exemption from the registration requirements of Section 5 of the
Securities Act. Both the Company and its Transfer Agent, and their respective
directors, officers, employees and agents, may rely on this subsection
(e) and each Purchaser hereunder will indemnify and hold harmless each of
such persons from any breaches or violations of this paragraph.

     

                                    (f)           Buy-In.
If the Company shall fail for any reason or for no reason to issue to a
Purchaser unlegended certificates within three (3) Trading Days of receipt
of all documents necessary for the removal of the legend set forth above (the
“Deadline
Date”), then, in addition to all other remedies available to such
Purchaser, if on or after the Trading Day immediately following such three
(3) Trading Day period, such Purchaser purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the holder of shares of Common Stock that such Purchaser anticipated
receiving from the Company without any restrictive legend (a “Buy-In”),
then the Company shall, within three (3) Trading Days after such
Purchaser’s request and in such Purchaser’s sole discretion, either (i) pay
cash to the Purchaser in an amount equal to such Purchaser’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such shares of Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to such Purchaser a
certificate or certificates representing such shares of Common Stock and pay
cash to the Purchaser in an amount equal to the excess (if any) of the Buy-In
Price over the product of (a) such number of shares of Common Stock, times
(b) the Closing Bid Price on the Deadline Date.

     

                    4.2           Acknowledgment
of Dilution.  The Company acknowledges that the issuance of the
Shares may result in dilution of the outstanding shares of Common Stock. 
The Company further acknowledges that its obligations under the Transaction
Documents, including without limitation its obligation to issue the Shares
pursuant to the Transaction Documents, are unconditional and absolute and not
subject to any right of set off, counterclaim, delay or reduction, regardless of
the effect of any such dilution or any claim the Company may have against any
Purchaser and regardless of the dilutive effect that such issuance may have on
the ownership of the other stockholders of the Company.

     

                    4.3           Furnishing
of Information. In order to enable the Purchasers to sell the Shares
under Rule 144 of the Securities Act, for a period of one year from the Closing,
the Company shall maintain the registration of the Shares under Section 12(b) or
12(g) of the Exchange Act and to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange
Act.  During such one year period, if the Company is not required to
file reports pursuant to such laws, it will prepare and furnish to the
Purchasers and make publicly available the information described in Rule
144(c)(2), if the provision of such information will allow resales of the Shares
pursuant to Rule 144.

     

                    4.4           Form D
and Blue Sky. The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D.  The
Company, on or before the Closing Date, shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for or
to qualify the Shares for sale to the Purchasers at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification). The Company
shall make all filings and reports relating to the offer and sale of the Shares
required under applicable securities or “Blue Sky” laws of the states of the
United States following the Closing Date.

     

                    4.5           No
Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that will be
integrated with the offer or sale of the Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the
Purchasers, or that will be integrated with the offer or sale of the Shares for
purposes of the rules and regulations of any Trading Market such that it would
require stockholder approval prior to the closing of such other transaction
unless stockholder approval is obtained before the closing of such subsequent
transaction.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                    4.6           Securities
Laws Disclosure; Publicity. By 9:00 a.m., New York City time, on the
Trading Day immediately following the execution of this Agreement, the Company
shall issue one or more press releases (each, a “Press
Release”) reasonably acceptable to the Placement Agent disclosing all
material terms of the transactions contemplated hereby and any other material,
nonpublic information that the Company may have provided any Purchaser at any
time prior to the filing of the Press Release.  On or before 9:00
a.m., New York City time, on the second Trading Day immediately following the
execution of this Agreement, the Company will file a Current Report on Form 8-K
with the Commission describing the terms of the Transaction Documents (and
including as exhibits to such Current Report on Form 8-K the material
Transaction Documents (including, without limitation, this Agreement and the
Registration Rights Agreement)). Notwithstanding the foregoing, the Company
shall not publicly disclose the name of any Purchaser or any Affiliate or
investment adviser of any Purchaser, or include the name of any Purchaser or any
Affiliate or investment adviser of any Purchaser in any press release or filing
with the Commission (other than the Registration Statement) or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser,
except (i) as required by federal securities law in connection with
(A) any registration statement contemplated by the Registration Rights
Agreement and (B) the filing of final Transaction Documents (including
signature pages thereto) with the Commission and (ii) to the extent such
disclosure is required by law, at the request of the Staff of the Commission or
Trading Market regulations, in which case the Company shall provide the
Purchasers with prior written notice of such disclosure permitted under this
subclause (ii).  From and after the issuance of the Press Release(s),
no Purchaser shall be in possession of any material, non-public information
received from the Company, any Subsidiary or any of their respective officers,
directors or employees, that is not disclosed in the Press Release(s). Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 4.6, such Purchaser
will maintain the confidentiality of all disclosures made to it in connection
with this transaction (including the existence and terms of this
transaction).

     

                    4.7           Non-Public
Information. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, and except with the
express written consent of such Purchaser and unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information, the Company shall not, and shall cause each
Subsidiary and each of their respective officers, directors, employees and
agents, not to, and each Purchaser shall not directly solicit the Company, any
of its Subsidiaries or any of their respective officers, directors, employees or
agents to provide any Purchaser with any material, non-public information
regarding the Company or any of its Subsidiaries from and after the filing of
the Press Release(s).

     

                    4.8           Indemnification.

     

                                    (a)           Indemnification
of Purchasers. In addition to the indemnity provided in the Registration
Rights Agreement, the Company will indemnify and hold each Purchaser and its
directors, officers, stockholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such
titles notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers,
stockholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of (i) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other
Transaction Documents or (ii) any action instituted against a Purchaser Party in
any capacity, or any of them or their respective affiliates, by any stockholder
of the Company who is not an affiliate of such Purchaser Party, with respect to
any of the transactions contemplated by this Agreement.  The Company will
not be liable to any Purchaser Party under this Agreement to the extent, but
only to the extent that a loss, claim, damage or liability is attributable to
any Purchaser Party’s breach of any of the representations, warranties,
covenants or 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    agreements
made by such Purchaser Party in this Agreement or in the other Transaction
Documents; provided that such a claim for indemnification relating to any breach
of any of the representations or warranties made by the Company in this
Agreement is made within 18 months from the Closing.

     

                                    (b)           Conduct
of Indemnification Proceedings.
Promptly after receipt by any Person (the "Indemnified
Person”) of notice of any demand, claim or circumstances which would or
might give rise to a claim or the commencement of any action, proceeding or
investigation in respect of which indemnity may be sought pursuant to
Section 4.8(a), such Indemnified Person shall promptly notify the Company
in writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Person, and
shall assume the payment of all fees and expenses; provided,
however , that the failure of any Indemnified Person so to notify the
Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is actually and materially and adversely prejudiced by
such failure to notify. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless: (i) the
Company and the Indemnified Person shall have mutually agreed to the retention
of such counsel; (ii) the Company
shall have failed promptly to assume the defense of such proceeding and to
employ counsel reasonably satisfactory to such Indemnified Person in such
proceeding; or (iii) in the reasonable judgment of counsel to such
Indemnified Person, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
delayed or conditioned. Without the prior written consent of the Indemnified
Person, which consent shall not be unreasonably withheld, delayed or
conditioned, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such
proceeding.

     

                    4.9           Listing
of Common Stock. The Company will use its reasonable best efforts to list
the Shares for quotation on the Nasdaq Global Market and maintain the listing of
the Shares on the Nasdaq Global Market.

     

                    4.10           Use
of Proceeds. The Company intends to use the net proceeds from the sale of
the Shares hereunder for general corporate purposes and to support strategic
growth initiatives in its commercial and wealth management business
lines.

     

    
       

                      4.11           Short
Sales After The Date Hereof.  Such Purchaser shall not, and
shall cause its Trading Affiliates not to, engage, directly or indirectly, in
any transactions in the Company’s securities (including, without limitation, any
Short Sales involving the Company’s securities) during the period from the date
hereof until the earlier of such time as (i) the transactions contemplated by
this Agreement are first required to be publicly announced as described in
Section 4.6 or (ii) this Agreement is terminated in full pursuant to Section
6.17.  Each Purchaser severally and not jointly with the other
Purchasers covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company as described in Section
4.6, such Purchaser will maintain the confidentiality of the existence and terms
of this Agreement and the transactions contemplated
hereby.  Notwithstanding the foregoing, no Purchaser makes any
representation, warranty or covenant hereby that it will not engage in Short
Sales in the securities of the Company after the time that the transactions
contemplated by this Agreement are publicly disclosed by the Company as
described in Section 4.6.  Notwithstanding the foregoing, in the event
that a Purchaser is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser's assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser's assets, the
representation set forth above shall apply only with respect to the portion of
assets managed by the portfolio manager that have knowledge about the financing
transaction contemplated by this Agreement.  Each Purchaser
understands and acknowledges, severally and not jointly with any other
Purchaser, that the Commission currently takes the position that covering a
short position established prior to effectiveness of a resale registration
statement with shares included in such registration statement would be a
violation of Section 5 of the Securities Act, as set 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

      forth in
Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated July 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance.

    

     

    ARTICLE
V.

    CONDITIONS
PRECEDENT TO CLOSING

     

    5.1           Conditions
Precedent to the Obligations of the Purchasers to Purchase Shares. The
obligation of each Purchaser to acquire Shares at the Closing is subject to the
fulfillment to such Purchaser’s satisfaction, on or prior to the Closing Date,
of each of the following conditions, any of which may be waived by such
Purchaser (as to itself only):

     

                                    (a)           Representations
and Warranties. The representations and warranties of the Company
contained herein shall be true and correct in all material respects (except for
those representations and warranties which are qualified as to materiality, in
which case such representations and warranties shall be true and correct in all
respects) as of the date when made and as of the Closing Date, as though made on
and as of such date, except for such representations and warranties that speak
as of a specific date.

     

                                    (b)           Performance.
The Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing.

     

                                    (c)           No
Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents.

     

                                    (d)           Consents.
The Company shall have obtained in a timely fashion any and all consents,
permits, approvals, registrations and waivers necessary for consummation of the
purchase and sale of the Shares at the Closing (including all Required
Approvals), all of which shall be and remain so long as necessary in full force
and effect.

     

                                    (e)           No
Suspensions of Trading in Common Stock; Listing . The Common Stock
(i) shall be designated for quotation or listed on the Principal Trading
Market and (ii) shall not have been suspended, as of the Closing Date, by
the Commission or the Principal Trading Market from trading on the Principal
Trading Market nor shall suspension by the Commission or the Principal Trading
Market have been threatened, as of the Closing Date, either (A) in writing
by the Commission or the Principal Trading Market or (B) by falling below
the minimum listing maintenance requirements of the Principal Trading
Market.

     

                                    (f)           Company
Deliverables . The Company shall have delivered the Company Deliverables
in accordance with Section 2.2(a).

     

                                    (g)           Compliance
Certificate . The Company shall have delivered to each Purchaser a
certificate, dated as of the Closing Date and signed by its Chief Executive
Officer or its Chief Financial Officer, dated as of the Closing Date, certifying
to the fulfillment of the conditions specified in Sections 5.1(a) and
(b) in the form attached hereto as Exhibit F.

     

                                    (h)           Termination
.. This Agreement shall not have been terminated as to such Purchaser in
accordance with Section 6.17 herein.

     

    
       

      5.2           Conditions
Precedent to the Obligations of the Company to sell Shares. The Company’s
obligation to sell and issue the Shares at the Closing is subject to the
fulfillment to the satisfaction of the Company on or prior to the Closing Date
of the following conditions, any of which may be waived by the Company:

    

     

                                    (a)           Representations
and Warranties. The representations and warranties made by the Purchaser
in Section 3.2 hereof shall be true and correct in all material respects as
of the date when made, and as of the Closing Date as though made on and as of
such date, except for representations and warranties that speak as of a specific
date.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                                    (b)           Performance.
Such Purchaser shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by such
Purchaser at or prior to the Closing Date.

     

                                    (c)           No
Injunction. No statute, rule, regulation, executive order, decree, ruling
or injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by the Transaction
Documents.

     

                                    (d)           Consents.
The Company shall have obtained in a timely fashion any and all consents,
permits, approvals, registrations and waivers necessary for consummation of the
purchase and sale of the Shares, all of which shall be and remain so long as
necessary in full force and effect.

     

                                    (e)           Purchasers
Deliverables. Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).

     

                                    (f)           Termination.
This Agreement shall not have been terminated as to such Purchaser in accordance
with Section 6.17 herein.

     

    ARTICLE
VI.

    MISCELLANEOUS

     

    6.1           Fees
and Expenses.  The Company and the Purchasers shall each pay
the fees and expenses of their respective advisers, counsel, accountants and
other experts, if any, and all other expenses incurred by such party in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement.  The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in connection with the
sale and issuance of the Shares to the Purchasers.

     

     

    6.2           Entire
Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the
Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.

     

    
       

      6.3           Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice
or communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 5:00 p.m., New York City time, on a
Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that is not
a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day,
(c) the Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service with next day delivery
specified, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:

    

     

    
       

      
        
          	
                   
      

                	
                  If
      to the Company:  

                	
                  Washington
      Trust Bancorp, Inc.

                


        

        
          	
                   
      

                	
                  23
      Broad Street

                


        

        
          	
                   
      

                	
                  Westerly,
      Rhode Island 02891

                


        

        
          	
                   
      

                	
                  Telephone
      No.: (401) 348-1200

                


        

        
          	
                   
      

                	
                  
                    Facsimile
      No.: (401) 348-1565

                  

                


        

        
          	
                   
      

                	
                  Attention:  Chief
      Executive Officer

                


        

      

    

       

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 
      

              	
                With
      a copy to:

              	
                Keefe,
      Bruyette and Woods

              


      

      
        	
                 
      

              	
                787
      Seventh Avenue, Fourth Floor

              


      

      
        	
                 
      

              	
                New
      York, New York 10019

              


      

      
        	
                 
      

              	
                Telephone
      No.: (212) 887-7777

              


      

      
        	
                 
      

              	
                Facsimile
      No.: (212) 541-6644

              


      

      
        	
                 
      

              	
                Attention:  Patricia
      A. Murphy

              


      

       

      
        
          	
                   
      

                	
                  If
      to a Purchaser:

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

                


        

         

      

    

    or such
other address as may be designated in writing hereafter, in the same manner, by
such Person.

     

                    6.4           Amendments;
Waivers; No Additional Consideration. No provision of this Agreement may
be waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each of the Purchasers holding or having the right
to acquire at least two-thirds of the Shares on a fully-diluted basis at the
time of such amendment or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid
to any Purchaser to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to all Purchasers who then hold Shares.

     

                    6.5           Construction.
The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction
Documents.

     

                    6.6           Successors
and Assigns. The provisions of this Agreement shall inure to the benefit
of and be binding upon the parties and their successors and permitted assigns.
This Agreement, or any rights or obligations hereunder, may not be assigned by
the Company without the prior written consent of the Purchasers. Any Purchaser
may assign its rights hereunder in whole or in part to any Person to whom such
Purchaser assigns or transfers any Shares in compliance with the Transaction
Documents and applicable law, provided
such transferee shall agree in writing to be bound, with respect to the
transferred Shares, by the terms and conditions of this Agreement that apply to
the “Purchasers”.

     

                    6.7           No
Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

                    6.8           Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all
Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York Courts. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such New York Court, or
that such Proceeding has been commenced in an improper or inconvenient forum.
Each party hereto hereby irrevocably waives personal service of process and
consents to process being served in any such Proceeding by mailing a copy
thereof via registered or 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

     

                    6.9           Survival.
Subject to applicable statute of limitations, the representations, warranties,
agreements and covenants contained herein shall survive the Closing and the
delivery of the Shares, except that the representations and warranties contained
herein shall terminate upon the 18 month anniversary of the Closing
Date.

     

                    6.10           Execution.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.

     

                    6.11           Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

     

                    6.12           Replacement
of Shares.  If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause
to be issued in exchange and substitution for and upon cancellation thereof, or
in lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company and the Transfer
Agent of such loss, theft or destruction and the execution by the holder thereof
of a customary lost certificate affidavit of that fact and an agreement to
indemnify and hold harmless the Company and the Transfer Agent for any losses in
connection therewith or, if required by the Transfer Agent, a bond in such form
and amount as is required by the Transfer Agent. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares. If a
replacement certificate or instrument evidencing any Shares is requested due to
a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

     

                    6.13           Remedies.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Purchasers and the Company
will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agree to waive in any action for specific performance of any
such obligation (other than in connection with any action for a temporary
restraining order) the defense that a remedy at law would be
adequate.

     

                    6.14           Payment
Set Aside. To the extent that the Company makes a payment or payments to
any Purchaser pursuant to any Transaction Document or a Purchaser enforces or
exercises its rights thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.

     

                    6.15           Adjustments
in Common Stock Numbers and Prices . In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof and prior to
the Closing, each reference in any Transaction Document to a number of shares or
a price per share shall be deemed to be amended to appropriately account for
such event.

     

                    6.16           Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance of the obligations of any other Purchaser under any
Transaction Document.  The decision of each Purchaser to purchase
Shares pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and any of its agents or employees shall have any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statement or opinions.  Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser acknowledges that no other
Purchaser has acted as agent for such Purchaser in connection with making its
investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Shares or
enforcing its rights under the Transaction Documents.  Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction
Documents.  The Company has elected to provide all Purchasers with the
same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by any Purchaser.

     

                    6.17           Termination.
This Agreement may be terminated and the sale and purchase of the Shares
abandoned at any time prior to the Closing by either the Company or any
Purchaser (with respect to itself only) upon written notice to the other, if the
Closing has not been consummated on or prior to 5:00 p.m., New York City time,
on the Outside Date; provided,
however , that the right to terminate this Agreement under this
Section 6.17 shall not be available to any Person whose failure to comply
with its obligations under this Agreement has been the cause of or resulted in
the failure of the Closing to occur on or before such time.  Nothing
in this Section 6.17 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Transaction Documents or to impair the right of any party
to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents. In the event of a termination
pursuant to this Section, the Company shall promptly notify all non-terminating
Purchasers and the Escrow Agent. Upon a termination in accordance with this
Section, the Company and the terminating Purchaser(s) shall not have any further
obligation or liability (including arising from such termination) to the other,
and no Purchaser will have any liability to any other Purchaser under the
Transaction Documents as a result therefrom.

     

                    6.18           Waiver
of Conflicts. Each party to this Agreement acknowledges that Company
Counsel, outside general counsel to the Company, and Special Counsel has in the
past performed and is or may now or in the future represent one or more
Purchasers or their affiliates or investment advisers (the “Conflicted Purchaser
Parties”) in matters unrelated to the transactions contemplated by the
Transaction Documents, including representation of such Conflicted Purchaser
Parties in matters of a similar nature to the transactions 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    contemplated by
the Transaction Documents. The applicable rules of professional conduct require
that Company Counsel and Special Counsel inform the parties hereunder of this
representation and obtain their consent. Company Counsel has served as outside
general counsel to the Company and has negotiated the terms of the transactions
contemplated by the Transaction Documents solely on behalf of the Company.
Special Counsel has served a special counsel to the company in connection with
delivering their opinion letter to the Purchasers.  The Company and
each Purchaser hereby (a) acknowledge that they have had an opportunity to
ask for and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledge that with respect to the transactions
contemplated by the Transaction Documents, Company Counsel and Special Counsel
has represented solely the Company, and not any Purchaser or any stockholder,
director or employee of the Company or any Purchaser; and (c) gives its informed
consent to Company Counsel’s and Special Counsel’s representation of the Company
in the transactions contemplated by the Transaction Documents.  The
Company and the Conflicted Purchaser Parties are willing to waive such conflict
of interest and to consent to Company Counsel’s and Special Counsel’s
representation of the Company and the Conflicted Purchaser Parties on the
condition that in the event that any litigation between the Company and any
Conflicted Purchaser Party ensues from the transactions contemplated hereby,
Company Counsel and Special Counsel shall be precluded from representing either
party in such litigation against the other.

     

                    6.19           Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained
in (and without limiting any similar provisions of) the Transaction Documents,
whenever any Purchaser exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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

     

     

     

     

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


    

     

     

     

     

     

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    [SIGNATURE
PAGES FOR PURCHASERS FOLLOW]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

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


      

       

       

    

     

    
       

       

       

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