STOCK PURCHASE AGREEMENT

      This Stock Purchase  Agreement (this "AGREEMENT") is dated as of September
29, 2004,  by and among Center  Bancorp,  Inc.,  a New Jersey  corporation  (the
"COMPANY"), and the purchasers identified on the signature pages hereto (each, a
"PURCHASER" and collectively, the "PURCHASERS").

      WHEREAS,  subject to the terms and  conditions set forth in this Agreement
and pursuant to Section 4(2) of the  Securities  Act (as defined below) and Rule
506  promulgated  thereunder,  the  Company  desires  to  issue  and sell to the
Purchasers,  and the Purchasers,  severally and not jointly,  desire to purchase
from the Company  certain  shares of Common Stock of the Company,  as more fully
described in this Agreement.

      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 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, governmental, administrative agency
or regulatory  authority inquiry,  notice of violation,  proceeding  (including,
without   limitation,   any  partial   proceeding   such  as  a  deposition)  or
governmental,  administrative  agency or  regulatory  investigation  pending  or
threatened in writing against or affecting the Company, any Subsidiary or any of
their respective  properties,  including,  without limitation,  before or by any
court, arbitrator,  governmental or administrative agency,  regulatory authority
(federal,  state,  county,  local or foreign),  stock market,  stock exchange or
trading facility.

            "AFFILIATE"  means any Person that,  directly or indirectly  through
one or more  intermediaries,  controls or is  controlled  by or is under  common
control with a Person, as such terms are used in and construed under Rule 144.

            "BUSINESS  DAY"  means any day except  Saturday,  Sunday and any day
which shall be a federal legal holiday or a day on which banking institutions in
the State of New York are  authorized  or required by law or other  governmental
action to close.

            "CLOSING"  means the closing of the  purchase and sale of the Shares
pursuant to Article II.
<PAGE>

            "CLOSING  DATE"  means  the date  hereof or such  other  date as the
parties may agree.

            "COMMISSION" means the Securities and Exchange Commission.

            "COMMON  STOCK" means the common stock of the Company,  no par value
per share,  and any  securities  into which such common  stock may  hereafter be
reclassified.

            "CONFIDENTIAL  MEMORANDUM" means the Confidential Memorandum,  dated
September  23, 2004  related to the Company and the Shares  being  offered to be
purchased  as  contemplated  by this  Agreement,  in the  form  provided  to the
Purchasers prior to the date hereof.

            "DISCLOSURE MATERIALS" has the meaning set forth in Section 3.1(h).

            "EFFECTIVE  DATE"  means  the  date  that the  initial  Registration
Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.

            "EXCHANGE  ACT"  means  the  Securities  Exchange  Act of  1934,  as
amended.

            "INVESTMENT  AMOUNT"  means,  with  respect to each  Purchaser,  the
investment amount indicated below such Purchaser's name on the signature page of
this Agreement.

            "LIEN" means any lien, charge, encumbrance, security interest, right
of first refusal or other restrictions of any kind.

            "PERSON"  means an individual or  corporation,  partnership,  trust,
incorporated or  unincorporated  association,  joint venture,  limited liability
company,  joint stock company,  government (or an agency or subdivision thereof)
or other entity of any kind.

            "PLACEMENT AGENT" means Cohen Bros. & Company.

            "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).

            "REGISTRATION   RIGHTS  AGREEMENT"  means  the  Registration  Rights
Agreement,  dated as of the date of this  Agreement,  among the  Company and the
Purchasers, in the form of Exhibit A.

            "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.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.


                                      -2-
<PAGE>

            "SHARES"  means the shares of Common Stock issued to the  Purchasers
at the Closing, at a purchase price of $11.25 per share (the "PURCHASE PRICE PER
SHARE").

            "SUBSIDIARY"  means (i) any corporation,  limited liability company,
partnership.  statutory  trust or other  organization,  whether  incorporated or
unincorporated,  which is consolidated with the Company for financial  reporting
purposes,  including,  without  limitation,  Company Bank (as defined below) and
(ii) the Trusts (as defined below).

            "TRADING DAY" means (i) a day on which the Common Stock is traded on
a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market,
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 the OTC  Bulletin  Board,  a day on which the  Common  Stock is quoted in the
over-the-counter   market  as  reported  by  the   National   Quotation   Bureau
Incorporated (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  National  Market or the NASDAQ  SmallCap
Market, on which the Common Stock is listed or quoted for trading on the date in
question.

            "TRANSACTION  DOCUMENTS"  means this Agreement and the  Registration
Rights  Agreement,  the  schedules  hereto and the  certificate  to be delivered
pursuant to Section 2.2(a)(iii).

                                   ARTICLE II.
                               PURCHASE AND SALE

      2.1  Closing.  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,
the Shares  representing such Purchaser's  Investment Amount, up to an aggregate
of  888,888  Shares  for all  Purchasers.  The  Closing  shall take place at the
offices of Morgan,  Lewis & Bockius LLP, 1701 Market  Street,  Philadelphia,  PA
19103 on the Closing  Date or at such other  location or time as the parties may
agree.

      2.2 Closing Deliveries.  (a) At the Closing,  the Company shall deliver or
cause to be delivered to each Purchaser the following:

                  (i) a certificate  evidencing a number of Shares equal to such
Purchaser's   Investment  Amount  divided  by  the  Purchase  Price  Per  Share,
registered in the name of such Purchaser;

                  (ii) the legal  opinion of Lowenstein  Sandler PC,  counsel to
the  Company,  in the form of Exhibit B,  addressed  to the  Purchasers  and the
Placement Agent;

                  (iii) a certificate from a duly authorized  officer certifying
on behalf of the Company  that each of the  conditions  set forth in Section 5.1
has been satisfied; and


                                      -3-
<PAGE>

                  (iv) the  Registration  Rights  Agreement duly executed by the
Company.

            (b) At the Closing (or with respect to such  Purchaser's  Investment
Amount, at such Purchaser's option, prior to the Closing),  each Purchaser shall
deliver or cause to be delivered to the Company the following:

                  (i)  such  Purchaser's  Investment  Amount  in  United  States
dollars  and in  immediately  available  funds,  by wire  transfer to the escrow
account for such purpose identified on Schedule 2.2(b)(i); and

                  (ii) the  Registration  Rights Agreement duly executed by such
Purchaser.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

      3.1  Representations  and  Warranties of the Company.  The Company  hereby
makes the following  representations and warranties to each Purchaser and to the
Placement Agent:

            (a) Subsidiaries. The Company has no direct or indirect Subsidiaries
other  than the  Company  Bank,  the  Trusts  (each as  defined  below)  and the
corporations  identified  on  Schedule  3.1(a).  The Company  owns,  directly or
indirectly,  all of the  capital  stock of the Company  Bank and,  except as set
forth on Schedule 3.1(a),  all of the trust  securities of the Trusts,  free and
clear of any and all Liens, and all the issued and outstanding shares of capital
stock of the Company Bank and all of the trust  securities of the Trusts and all
of the  securities  of each other  Subsidiary  are validly  issued and are fully
paid,  non-assessable  and free of any  preemptive and similar rights granted by
the  Company,  the  Company  Bank,  the Trusts or such other  Subsidiaries.  The
rights, preferences,  privileges and restrictions of the trust securities of the
Trust I (as defined  below) are as set forth in Exhibit  10.14 to the  Company's
Annual  Report on Form 10-K for the fiscal year ended  December  31,  2001.  The
rights, preferences,  privileges and restrictions of the trust securities of the
Trust II (as defined  below) are as set forth in Exhibit  10.17 to the Company's
Annual Report on Form 10-K for the fiscal year ended  December 31, 2003.  Except
as set forth on Schedule 3.1(a), each Subsidiary is "controlled by" the Company,
as the term  "controlled  by" is used in and construed under Rule 144, and there
are no  agreements  or  understandings  in  effect  or, to the  Company  or such
Subsidiary's knowledge,  contemplated, that would cause any Subsidiary not to be
"controlled by" the Company.

            (b)  Organization  and  Qualification.  The Company is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of New Jersey.  Union Center  National Bank, a wholly-owned  subsidiary of
the Company ("COMPANY BANK"), is a national bank validly existing and continuing
to hold a valid certificate from the Office of the Comptroller of the Company to
transact the  business of banking  under the laws of the United  States.  Center
Bancorp  Statutory  Trust I (the  "TRUST  I"),  a  financing  subsidiary  of the
Company,  is a statutory  trust duly  organized,  validly  existing  and in good
standing  (to the extent such concept or a similar  concept,  such as "on record
with," is recognized with respect to such trust) under the Connecticut Statutory
Trust Act.  Center Bancorp  Statutory Trust II (the "TRUST II" and together with
the  Trust I, the  "TRUSTS")),  a  financing  subsidiary  of the  Company,  is a
statutory  trust duly organized,  validly  existing and in good standing (to the
extent such  concept or a similar  concept is  recognized  with  respect to such
trust) under the Delaware  Statutory  Trust Act.  Each other  Subsidiary is duly
incorporated (or, in the case of a limited liability  company,  duly organized),
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which  it was  organized.  Each  of the  Company  and  each  Subsidiary  has the
requisite  power and authority to own and use its  properties  and assets and to
carry on its  business  as  currently  conducted.  Neither  the  Company nor any
Subsidiary  is  in  violation  of  any  of  the  provisions  of  its  respective
certificate or articles of incorporation, bylaws or other organizational,  trust
or charter documents.  Each of the Company and each Subsidiary is duly qualified
to conduct business and is in good standing as a foreign  corporation,  trust 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, could not,
individually  or in the  aggregate,  have or reasonably be expected to result in
(i) an  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  condition  (financial  or  otherwise)  of the
Company and the Subsidiaries,  taken as a whole, or (iii) an adverse  impairment
to the Company's  ability to perform on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a "MATERIAL ADVERSE EFFECT").


                                      -4-
<PAGE>

            (c)  Authorization;  Enforcement.  The  Company  has  the  requisite
corporate  power and authority to enter into and to consummate the  transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations  thereunder.  The execution and delivery of each of the  Transaction
Documents  by  the  Company  and  the  consummation  by it of  the  transactions
contemplated thereby 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 in connection  therewith.  Each  Transaction  Document has been (or upon
delivery  will have been) duly  executed by the Company and,  when  delivered in
accordance  with the  terms  hereof,  will  constitute  the  valid  and  binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws, and except as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as  enforceability  may be subject  to general  principles  of equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).

            (d) No Conflicts.  The  execution,  delivery and  performance of the
Transaction  Documents by the Company and the consummation by the Company of the
transactions  contemplated  thereby  do not and  will not (i)  conflict  with or
violate any  provision  of the  Company's  or any  Subsidiary's  certificate  or
articles  of  incorporation,  bylaws or other  organizational,  trust or charter
documents, or (ii) conflict with, or constitute a default (or an event that 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  (with or
without notice, lapse of time or both) of, any agreement,  credit facility, debt
or other  instrument  (evidencing a Company or Subsidiary  debt or otherwise) or
other  understanding  to which the  Company or any  Subsidiary  is a party or by
which  any  property  or  asset of the  Company  or any  Subsidiary  is bound or
affected,  or (iii) 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 or a Subsidiary  is subject  (including,  without
limitation,  federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in
the case of each of clauses (ii) and (iii),  such as could not,  individually or
in the aggregate, have or reasonably be expected to result in a Material Adverse
Effect.


                                      -5-
<PAGE>

            (e) Filings,  Consents and Approvals. The Company is not 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,
other  than:  (i) the  filing  with the  Commission  of a Form D and one or more
Registration  Statements in accordance with the requirements of the Registration
Rights Agreement,  (ii) the filings required by state securities laws, (iii) the
filings  required in  accordance  with Sections 4.4 and 4.7, and (iv) those that
have been made or obtained prior to the date of this Agreement.

            (f)  Issuance  of the Shares.  The Shares have been duly  authorized
and, when issued and paid for in accordance with the Transaction Documents, will
be validly issued, fully paid and nonassessable, free and clear of all Liens.

            (g) Capitalization. The number of shares and type of all authorized,
issued and outstanding  capital stock of the Company as of the date hereof is as
described in the Company's  Quarterly  Report on Form 10-Q for the Quarter ended
June 30, 2004,  as  supplemented  by Schedule  3.1(g)(i).  No  securities of the
Company are entitled to  preemptive or similar  rights.  Neither the Company nor
any Subsidiary has granted to any Person any right of first refusal,  preemptive
right,  right of  participation,  or any  similar  right to  participate  in the
transactions  contemplated by the Transaction Documents.  Except as disclosed in
Schedule 3.1(g)(ii), there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities,  rights or  obligations  convertible  into or  exchangeable  for, or
giving any Person any right to  subscribe  for or acquire,  any shares of Common
Stock, or contracts,  commitments,  understandings  or arrangements by which the
Company or any Subsidiary is or may become bound to issue  additional  shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. The issue and sale of the Shares will not, immediately or with the
passage of time,  obligate  the Company to issue shares of Common Stock or other
securities  to any Person (other than the  Purchasers)  and will not result in a
right of any holder of Company  securities to adjust the  exercise,  conversion,
exchange or reset price under such securities.


                                      -6-
<PAGE>

            (h) SEC  Reports;  Financial  Statements.  The Company has filed all
reports, proxy statements,  documents and other information required to be filed
by it  under  the  Securities  Act  and the  Exchange  Act,  including,  without
limitation,  pursuant to Section 13(a) or 15(d)  thereof,  for the twelve months
preceding  the  date  hereof  (the  foregoing   materials   including,   without
limitation,  all exhibits and  schedules  thereto,  and all  documents and other
information  incorporated by reference therein,  being collectively  referred to
herein as the "SEC REPORTS" and,  together with the Schedules to this  Agreement
and the Confidential  Memorandum,  the "DISCLOSURE MATERIALS") on a timely basis
or has timely filed a valid  extension of such time of filing on Form 12b-25 and
has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective  dates,  the SEC Reports  complied in all material  respects
with the applicable  requirements of the Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder,  and 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.  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.  Such financial  statements
have been prepared in accordance with generally accepted  accounting  principles
applied on a consistent  basis during the periods involved  ("GAAP"),  except as
may be otherwise  specified in such  financial  statements or the notes thereto,
and fairly  present in all  material  respects  the  financial  position  of the
Company and its  consolidated  Subsidiaries  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,  immaterial,  year-end  audit
adjustments or as otherwise disclosed in the SEC Reports.

            (i) Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports,  except as specifically disclosed in
the Disclosure Materials, (i) there has been no event, occurrence or development
that has had or is  reasonably  likely to result in a Material  Adverse  Effect,
(ii) the  Company has not  incurred  any  material  liabilities  (contingent  or
otherwise)  other  than (A)  liabilities  occurring  in the  ordinary  course of
business  consistent with past practice that could not reasonably be expected to
have a Material Adverse Effect, (B) liabilities associated with the transactions
contemplated  hereby and (C)  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 its method
of  accounting or changed its auditors,  (iv) except for normal  quarterly  cash
dividends,  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,  and (v) the
Company  has not  issued any  equity  securities  to any  officer,  director  or
Affiliate,   except  pursuant  to  existing   Company  stock  option,   dividend
reinvestment or stock purchase  plans.  The Company does not have pending before
the Commission any request for confidential treatment of information.


                                      -7-
<PAGE>

            (j)  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 Disclosure Materials,
could, if there were an unfavorable decision,  individually or in the aggregate,
have or reasonably be expected to result in a Material  Adverse Effect.  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 knowledge of the Company, 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 Subsidiary under the Exchange
Act or the Securities Act.

            (k)  Employment  Matters.  The Company and the  Subsidiaries  are in
compliance  with all  applicable  federal,  state,  local and  foreign  laws and
regulations respecting employment and employment practices, terms and conditions
of employment and wages and hours except where failure to be in compliance would
not have a Material  Adverse  Effect.  Neither the Company nor any Subsidiary is
bound by or subject to (and none of the  Company's  or any of its  Subsidiaries'
assets or properties are bound by or subject to) any written or oral, express or
implied,  contract,  commitment or arrangement with any labor union,  and, since
January 1, 1998, no labor union has  requested  or, to the Company's  knowledge,
has sought to represent any of the employees,  representatives  or agents of the
Company or the Subsidiaries.  There is no strike or other material labor dispute
involving  the  Company  or  the  Subsidiaries  pending,  or  to  the  Company's
knowledge,  threatened,  nor is the  Company  aware  of any  labor  organization
activity involving its or its Subsidiaries'  employees. The Company is not aware
that any current  officer  intends to terminate his or her  employment  with the
Company,  nor does  the  Company  have a  present  intention  to  terminate  the
employment of any current officer.

            (l)  Compliance.  Neither the Company nor any  Subsidiary  (i) is in
default under or in violation of (and no event has occurred that, with notice or
lapse  of  time or  both,  would  result  in a  default  by the  Company  or any
Subsidiary  under),  nor has the Company or any Subsidiary  received notice of a
claim that it is in default under or that it is in violation of, any  indenture,
loan or credit  agreement or any other  agreement or instrument to which it is a
party or by  which it or any of its  properties  is bound  (whether  or not such
default or violation has been waived),  (ii) is in violation of any order of any
court,  arbitrator or governmental body, or (iii) is or has been in violation of
any  statute,  rule or  regulation  of any  governmental  authority,  including,
without  limitation,  all  foreign,  federal,  state and local laws  relating to
taxes, environmental protection, occupational health and safety, product quality
and safety and  employment,  labor  matters,  financial,  banking and depository
institutions,  internal controls, insurance,  community reinvestment, and gaming
matters,  except in each case as could not,  individually  or in the  aggregate,
have or  reasonably  be expected  to result in a Material  Adverse  Effect.  The
Company is in compliance with the applicable  requirements of the Sarbanes-Oxley
Act of  2002  and  the  rules  and  regulations  thereunder  promulgated  by the
Commission,  except where such  noncompliance  could not have or  reasonably  be
expected to result in a Material Adverse Effect.

            (m) Regulatory Permits. The Company and the Subsidiaries possess all
certificates,  authorizations  and permits  issued by the  appropriate  federal,
state,  local or foreign  regulatory  authorities  necessary  to  conduct  their
respective businesses as described in the SEC Reports,  except where the failure
to possess such permits would not,  individually  or in the  aggregate,  have or
reasonably  be  expected  to  result in a  Material  Adverse  Effect  ("MATERIAL
PERMITS"), and neither the Company nor any Subsidiary has received any notice of
Actions relating to the revocation or modification of any Material Permit.


                                      -8-
<PAGE>

            (n) Title to Assets.  The Company and the Subsidiaries have good and
marketable  title in all  personal  property  owned by them that is  material to
their respective  businesses,  in each case free and clear of all Liens,  except
for Liens as do not  materially  affect  the value of such  property  and do not
materially  interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries. Any real property and facilities held under
lease  by the  Company  and the  Subsidiaries  are  held by  them  under  valid,
subsisting  and, to the  Company's  knowledge,  enforceable  leases of which the
Company  and  the  Subsidiaries   are  in  compliance,   except  as  could  not,
individually or in the aggregate,  have or reasonably be expected to result in a
Material Adverse Effect.

            (o) Patents and Trademarks.  The Company and the Subsidiaries  have,
or have rights to use, all patents, patent applications,  trademarks,  trademark
applications, service marks, trade names, copyrights, licenses and other similar
rights  that  are  necessary  or  material  for  use in  connection  with  their
respective  businesses  as  described  in the  SEC  Reports  (collectively,  the
"INTELLECTUAL  PROPERTY  RIGHTS").   Except  as  set  forth  in  the  Disclosure
Materials,  since January 1, 1998,  neither the Company nor any  Subsidiary  has
received a written  notice  that the  Intellectual  Property  Rights used by the
Company or any  Subsidiary  violates or infringes upon the rights of any Person.
Except  as set  forth  in the  Disclosure  Materials,  to the  knowledge  of the
Company,  all such Intellectual  Property Rights are enforceable and there is no
existing  infringement  by another  Person of any of the  Intellectual  Property
Rights  other  than  infringements  which  could  not,  individually  or in  the
aggregate,  have or  reasonably  be  expected  to result in a  Material  Adverse
Effect.

            (p)  Insurance.  The  Company  and the  Subsidiaries  are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such amounts as are prudent and customary in the  businesses in which the
Company and the Subsidiaries  are engaged.  The Company does not believe that it
will be  unable  to renew  its  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 without a material increase in cost.

            (q) Transactions With Affiliates and Employees.  Except as set forth
in the  Disclosure  Materials  or in Schedule  3.1(q),  none of the  officers or
directors  of the Company  and, to the  knowledge  of the  Company,  none of the
employees  of the  Company,  is  presently a party to any  transaction  with the
Company or any  Subsidiary  (other than for services as employees,  officers and
directors,  other than transactions that meet the terms and conditions set forth
in Section 13(k)(2) or (3) of the Exchange Act, and other than transactions that
would not be required to be disclosed under Item 404 of Regulation S-K were such
persons  directors or executive  officers of the  Company),  including,  without
limitation,  any  contract,  agreement or other  arrangement  providing  for the
furnishing  of  services  to or by,  providing  for  rental of real or  personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such  employee or, to the  knowledge  of the Company,  any entity in
which any officer,  director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.


                                      -9-
<PAGE>

            (r)   Internal   Accounting   Controls;   Disclosure   Controls  and
Procedures;  Off-Balance  Sheet  Arrangements.  The Company and the Subsidiaries
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurance  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
generally accepted accounting  principles and to maintain asset  accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific  authorization,  and (iv) the recorded  accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company has established disclosure
controls  and  procedures  (as  defined  in  Exchange  Act Rules  13a-15(e)  and
15d-15(e)) for the Company and designed such disclosure  controls and procedures
to ensure that material information relating to the Company, including,  without
limitation, the Subsidiaries, is made known to the certifying officers by others
within those  entities,  particularly  during the period in which the  Company's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
is  being  prepared.  The  Company's  certifying  officers  have  evaluated  the
effectiveness  of the  Company's  controls and  procedures  as of the end of the
period  covered by the most  recently  filed Company  periodic  report under the
Exchange Act (such date, the "EVALUATION  DATE").  The Company  presented in its
most  recently  filed  Quarterly  Report  on Form  10-Q the  conclusions  of the
certifying  officers  about the  effectiveness  of the  disclosure  controls and
procedures  based on their  evaluations  as of the  Evaluation  Date.  Since the
Evaluation  Date,  there have been no changes in the Company's  internal control
over  financial  reporting  (as such  term is  defined  in  Exchange  Act  Rules
13a-15(f) and 15d-15(f)) that has materially  affected,  or is reasonably likely
to materially  affect the Company's  internal control over financial  reporting.
Except  as  disclosed  in the SEC  Reports,  there is no  material  transaction,
arrangement or other  relationship  between the Company and an unconsolidated or
other off-balance sheet entity.

            (s) Solvency.  Based on the financial condition of the Company as of
the  Closing  (and  assuming  that the  Closing  shall have  occurred),  (i) the
Company's  fair  saleable  value of its assets  exceeds  the amount that will be
required to be paid on or in respect of the Company's  existing  debts and other
liabilities  (including,  without limitation,  known contingent  liabilities) as
they mature;  (ii) the Company's  assets do not  constitute  unreasonably  small
capital  to  carry  on its  business  as now  conducted  and as  proposed  to be
conducted including,  without limitation,  its capital needs taking into account
the particular  capital  requirements of the business  conducted by the Company,
and projected capital requirements and capital  availability  thereof; and (iii)
the current  cash flow of the  Company,  together  with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into account
all anticipated  uses of the cash,  would be sufficient to pay all amounts on or
in respect of its debt when such  amounts are  required to be paid.  The Company
does not  intend to incur  debts  beyond  its  ability to pay such debts as they
mature  (taking  into account the timing and amounts of cash to be payable on or
in respect of its debt).


                                      -10-
<PAGE>

            (t) Certain Fees.  Except for dealings with the Placement  Agent, no
brokerage or finder's fees or commissions  are or will be payable by the Company
to any  broker,  financial  advisor  or  consultant,  finder,  placement  agent,
investment  banker,  bank or  other  Person  with  respect  to the  transactions
contemplated  by this  Agreement.  The Purchasers  shall have no obligation with
respect  to any fees or with  respect  to any  claims  (other  than such fees or
commissions owed by a Purchaser pursuant to written agreements  executed by such
Purchaser,  which fees or commissions  shall be the sole  responsibility of such
Purchaser) made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.

            (u)  Certain  Registration  Matters.  Assuming  the  accuracy of the
Purchasers'  representations  and warranties set forth in Section 3.2(b) to (e),
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
Company is eligible to register the resale of its Common Stock for resale by the
Purchasers  under Form S-3  promulgated  under the Securities Act. No Person has
any rights (including, without limitation,  "piggy-back" registration rights) to
have any securities of the Company  registered  with the Commission or any other
governmental authority.

            (v) Listing and Maintenance Requirements. Except as specified in the
Disclosure  Materials  or in  Schedule  3.1(v),  the Company has not, in the two
years  preceding  the date hereof,  received  notice from any Trading  Market on
which the Common Stock is or has been listed or quoted for trading to the effect
that  the  Company  is  not  in  compliance  with  the  listing  or  maintenance
requirements  thereof.  Except as specified  in the  Disclosure  Materials,  the
Company  is,  and has no reason to believe  that it will not in the  foreseeable
future   continue  to  be,  in  compliance  with  the  listing  and  maintenance
requirements  for continued  listing of the Common Stock on the NASDAQ  National
Market. The issuance and sale of the Shares under the Transaction Documents does
not  contravene  the rules and  regulations  of the Trading  Market on which the
Common Stock is currently listed or quoted,  and no approval of the stockholders
of the Company  thereunder  is required  for the Company to issue and deliver to
the Purchasers the Shares pursuant to this Agreement.

            (w) Investment Company.  The Company is not, and is not an Affiliate
of, an "investment  company" within the meaning of the Investment Company Act of
1940, as amended.

            (x) Application of Takeover  Protections.  The Company has taken all
necessary  action,  if any, in order to render  inapplicable  any control  share
acquisition,  business combination,  poison pill (including, without limitation,
any  distribution  under a  rights  agreement)  or other  similar  anti-takeover
provision under the Company's  Certificate of Incorporation  (or similar charter
documents) or the laws of its state of incorporation that is or could reasonably
be expected to become applicable to the Purchasers as a result of the Purchasers
and the Company  fulfilling  their  obligations or exercising their rights under
the Transaction Documents, including, without limitation, the Company's issuance
of the Shares and the Purchasers' ownership of the Shares.

            (y)  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 this
Agreement.


                                      -11-
<PAGE>

            (z) Taxes.  The  Company  and the  Subsidiaries  have timely made or
filed all federal,  state and foreign income and all other tax returns,  reports
and  declarations  required  by any  jurisdiction  to which the  Company or such
Subsidiaries are subject (unless and only to the extent that the Company or such
Subsidiaries  have set aside on their books provisions  reasonably  adequate for
the payment of all unpaid and  unreported  taxes) and have timely 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,  and
have set aside on their books provisions  reasonably adequate in accordance with
GAAP for the payment of all taxes for periods subsequent to the periods to which
such returns,  reports or declarations apply. To the Company's knowledge,  there
are no unpaid taxes of the Company and the  Subsidiaries  in any material amount
claimed to be due by the  taxing  authority  of any  jurisdiction.  Neither  the
Company nor the Subsidiaries  have executed a waiver with respect to the statute
of limitations relating to the assessment or collection of any foreign, federal,
state  or local  tax.  None of the  Company's  or any of its  Subsidiaries'  tax
returns is presently being audited by any taxing authority.  The Trusts are, and
will,  under  current laws,  rules and  regulations,  be classified  for federal
income  tax  purposes  as  grantor  trusts  and not as  associations  taxable as
corporations.

            (aa) Holding Company and Bank Regulatory Matters.

                  (i) The Company is duly  registered as a bank holding  company
under the Bank Holding  Company Act of 1956,  as amended (the "BHC ACT") and the
regulations  of the  Board of  Governors  of the  Federal  Reserve  System  (the
"FEDERAL  RESERVE  BOARD").  The deposit  accounts of the  Company's  Subsidiary
depository institutions are insured by the Federal Deposit Insurance Corporation
(the  "FDIC")  through  the  Savings  Association  Insurance  Fund  or the  Bank
Insurance  Fund  to the  fullest  extent  permitted  by law and  the  rules  and
regulations of the FDIC, and all premiums and assessments required to be paid in
connection  therewith have been paid when due, and no Actions for the revocation
or termination of such insurance are pending or threatened.

                  (ii) The  Company  and each of its  Subsidiaries  have  timely
filed all reports,  registrations  and statements,  together with any amendments
required to be made with respect thereto,  that they were required to file since
January 1, 1998 with any Regulatory Agency (as defined below), and have paid all
fees and assessments due and payable in connection therewith.  Except for normal
examinations  conducted  by a  Regulatory  Agency in the  regular  course of the
business of the Company and its Subsidiaries, no Regulatory Agency has initiated
any  proceeding  or, to the  knowledge  of the Company,  investigation  into the
business or operations of the Company or any of its Subsidiaries.

                  (iii)  Neither  the  Company  nor any of its  Subsidiaries  is
subject or is party to, or has  received  any notice or advice  that any of them
may  become  subject  or party  to,  any  investigation  with  respect  to,  any
cease-and-desist   order,   agreement,   consent   agreement,    memorandum   of
understanding or other regulatory  enforcement action,  proceeding or order with
or by, or is a party to any commitment  letter or similar  undertaking to, or is
subject to any order or directive by, or has been a recipient of any supervisory
letter  from,  or has  adopted  any board  resolutions  at the  request  of, any
Regulatory  Agency that currently  restricts in any material respect the conduct
of their  business or that in any  material  manner  currently  relates to their
capital  adequacy,  their credit  policies,  their  management or their business
(each, a "REGULATORY AGREEMENT"), nor has the Company or any of its Subsidiaries
been advised by any Regulatory Agency that such Regulatory Agency is considering
issuing or requesting any such Regulatory Agreement.


                                      -12-
<PAGE>

                  (iv) As used herein,  the term  "REGULATORY  AGENCY" means any
federal  or  state  agency  or  self-regulatory  organization  charged  with the
supervision or regulation of depository institutions, bank, financial or savings
and  loan  holding  companies,   or  engaged  in  the  insurance  of  depository
institution deposits, or any court, administrative agency or commission or other
governmental  agency,   authority  or  instrumentality   having  supervisory  or
regulatory  authority  with  respect to the Company or any of its  Subsidiaries,
including,  without  limitation,  the Federal  Reserve  Board,  the FDIC and the
Office of the  Comptroller of the Currency.  The term  "governmental  authority"
when used  throughout  this Agreement  shall include,  without  limitation,  any
Regulatory Agency.

            (bb)  Disclosure.  The  Company  confirms  that  neither  it nor any
officers,  directors or Affiliates,  has provided any of the Purchasers or their
agents or counsel with any  information  that  constitutes  or might  constitute
material,  nonpublic  information (other than (i) the existence and terms of the
issuance  of  Shares,  as  contemplated  by this  Agreement,  and  (ii) any such
information  that will be included in the Current Report on Form 8-K to be filed
within four business days following  execution of this  Agreement).  The Company
understands  and  confirms  that  the  Purchasers  will  rely  on the  foregoing
representations  and  covenants in effecting  transactions  in securities of the
Company.  All disclosure provided to the Purchasers  regarding the Company,  its
business and the transactions  contemplated hereby, furnished by or on behalf of
the Company (including,  without limitation,  the Company's  representations and
warranties  set forth in this  Agreement)  are true and correct in all  material
respects and do not contain any untrue  statement of a material  fact or omit to
state any material fact necessary in order to make the statements  made therein,
in light of the circumstances under which they were made, not misleading.

      3.2  Representations  and  Warranties of the  Purchasers.  Each  Purchaser
hereby,  for itself and for no other  Purchaser,  represents and warrants to the
Company and the Placement Agent as follows:

            (a)  Organization;  Authority.  Such  Purchaser  is an  entity  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  thereunder.  The execution,  delivery and  performance by such
Purchaser  of the  transactions  contemplated  by this  Agreement  has 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.  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 terms hereof, will constitute the
valid and legally binding obligation of such Purchaser,  enforceable  against it
in accordance with its terms, except as rights to indemnity and contribution may
be limited by state or federal  securities laws or the public policy  underlying
such laws,  except as  enforceability  may be limited by applicable  bankruptcy,
insolvency,  reorganization,  moratorium  or similar laws  affecting  creditors'
rights  generally  and  except  as  enforceability  may be  subject  to  general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).


                                      -13-
<PAGE>

            (b)  Investment  Intent.  Such  Purchaser is acquiring the Shares as
principal for its own account for  investment  purposes only and not with a view
to or for  distributing  or reselling  such Shares or any part thereof,  without
prejudice, however, to such Purchaser's 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. Subject to the immediately  preceding  sentence,  nothing contained herein
shall be deemed a  representation  or  warranty  by such  Purchaser  to hold the
Shares for any period of time. Such Purchaser is acquiring the Shares  hereunder
in the  ordinary  course  of its  business.  Such  Purchaser  does  not have any
agreement  or  understanding,   directly  or  indirectly,  with  any  Person  to
distribute any of the Shares.

            (c)  Purchaser  Status.  At the time such  Purchaser was offered the
Securities,  it was, and at the date hereof it is, an  "accredited  investor" as
defined  in Rule  501(a)  under the  Securities  Act.  Such  Purchaser  is not a
registered broker-dealer under Section 15 of the Exchange Act.

            (d) 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.

            (e) Access to Information.  Such Purchaser  acknowledges that it has
reviewed 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.


                                      -14-
<PAGE>

            (f) Reliance;  Legend.  Such Purchaser  understands and acknowledges
that: (i) the Shares are being offered and sold to it without registration under
the Securities Act in a private  placement that is exempt from the  registration
provisions of the  Securities  Act and (ii) the  availability  of such exemption
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing  representations  and such Purchaser  hereby  consents to such
reliance.  Such Purchaser  acknowledges  that the certificate  representing  the
Shares which such  Purchaser  shall acquire  hereunder  shall bear a legend that
will read substantially as set forth in section 4.1(b).

            (g) Residency.  Such Purchaser is a resident of the jurisdiction set
forth immediately below such Purchaser's name on the signature pages hereto.

            (h) Certain Trading  Activities.  Such Purchaser has not directly or
indirectly,  nor  has  any  Person  acting  on  behalf  of or  pursuant  to  any
understanding  with such  Purchaser,  engaged  in (i) any Short  Sales  (defined
below) involving the Company's securities during the 30 Trading Days immediately
preceding  the date hereof or (ii) any  transactions  in any  securities  of the
Company following the date on which such Purchaser was aware of this Transaction
(other than this  Transaction  and other than  transfers  by a Purchaser  to its
affiliated   funds  which   affiliated  funds  have  not  engaged  in  any  such
transactions).  For purposes of this  Section,  "SHORT SALES"  include,  without
limitation,  all  types of direct  and  indirect  stock  pledges,  forward  sale
contracts, options, puts, calls, short sales, swaps and similar arrangements and
sales and other transactions  through non-US broker dealers or foreign regulated
brokers  having the effect of hedging the  securities or  investment  made under
this Agreement.

            (i)  Acknowledgements  Regarding  Placement  Agent.  Such  Purchaser
acknowledges  that the Placement Agent (i) is acting as the Company's  exclusive
placement agent for the sale of the securities  being offered hereby,  (ii) will
be compensated as set forth in the Confidential Memorandum solely by the Company
for its  services  in such  capacity,  (iii)  is not  guaranteeing  or  assuming
responsibility  for the  operation,  management  or  possible  liability  of the
Company,  including,  without  limitation,  compliance  by the Company  with the
Transaction  Documents,  and  (iv)  will not  supervise  or  participate  in the
operation or management of the Company.

            (j) Filings,  Consents and Approvals. Such Purchaser is not 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  such  Purchaser  of the  Transaction
Documents.  Without  limiting the  foregoing,  such Purchaser is not required to
register as a bank  holding  company  under the BHC Act in  connection  with the
execution,  delivery  and  performance  by  such  Purchaser  of the  Transaction
Documents.

The Company acknowledges and agrees that each Purchaser does not make or has not
made  any  representations  or  warranties  with  respect  to  the  transactions
contemplated hereby other than those specifically set forth in this Section 3.2.


                                      -15-
<PAGE>

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

      4.1 (a) The  Shares  may only be  disposed  of  pursuant  to an  effective
registration  statement  under the Securities Act, to the Company 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
securities  laws.  In  connection  with any  transfer  of the Shares  other than
pursuant to an effective registration statement, to the Company, to an Affiliate
of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
the  Company may  require  the  transferor  thereof to provide to the Company an
opinion of counsel  selected by the  transferor  and  acceptable  to the Company
(such  acceptance not to be  unreasonably  withheld),  the form and substance of
which  opinion shall be reasonably  satisfactory  to the Company,  to the effect
that such  transfer does not require  registration  of such  transferred  Shares
under the Securities Act.

            (b)  Certificates  evidencing  the Shares will contain the following
legend, so long as is required by this Section 4.1(b) or Section 4.1(c):

            THESE  SECURITIES  HAVE NOT BEEN  REGISTERED WITH THE SECURITIES AND
            EXCHANGE  COMMISSION  OR THE  SECURITIES  COMMISSION OF ANY STATE IN
            RELIANCE UPON AN EXEMPTION  FROM  REGISTRATION  UNDER THE SECURITIES
            ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),  AND,  ACCORDINGLY,
            MAY  NOT  BE  OFFERED  OR  SOLD  EXCEPT  PURSUANT  TO  AN  EFFECTIVE
            REGISTRATION  STATEMENT  UNDER 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 ACCORDANCE
            WITH  APPLICABLE  STATE  SECURITIES  LAWS  AS  EVIDENCED  BY A LEGAL
            OPINION OF COUNSEL TO THE  TRANSFEROR TO SUCH EFFECT,  THE SUBSTANCE
            OF WHICH  SHALL  BE  REASONABLY  ACCEPTABLE  TO THE  COMPANY.  THESE
            SECURITIES  MAY BE PLEDGED  IN  CONNECTION  WITH A BONA FIDE  MARGIN
            ACCOUNT SECURED BY SUCH SECURITIES.

            The Company  acknowledges  and agrees that a Purchaser may from time
to time pledge,  and/or grant a security  interest in some or all of the Shares,
in accordance with applicable  securities  laws,  pursuant to a bona fide margin
agreement in connection  with a bona fide margin  account and, if required under
the terms of such agreement or account,  such Purchaser may transfer  pledged or
secured  Shares to the  pledgees or secured  parties.  Such a pledge or transfer
would not be subject to approval or consent of the Company and no legal  opinion
of legal  counsel to the pledgee,  secured party or pledgor shall be required in
connection with the pledge, but such legal opinion may be required in connection
with  a  subsequent  transfer,  following  default  by  the  Purchaser,  to  the
transferee  of the pledge.  No notice shall be required of such  pledge.  At the
appropriate  Purchaser's  expense,  the Company  will  execute and deliver  such
reasonable  documentation as a pledgee or secured party of Shares may reasonably
request in  connection  with a pledge or transfer of the  Securities  including,
without  limitation,  the  preparation  and  filing of any  required  prospectus
supplement  under  Rule  424(b)(3)  of the  Securities  Act or other  applicable
provision  of the  Securities  Act to  appropriately  amend the list of  Selling
Stockholders thereunder.


                                      -16-
<PAGE>

            (c) Certificates  evidencing the Shares shall not contain any legend
(including,  without  limitation,  the legend set forth in Section 4.1(b)):  (i)
while a registration statement (including,  without limitation, the Registration
Statement)  covering the resale of such Shares is effective under the Securities
Act or (ii)  following  any sale of such  Shares  pursuant to Rule 144, or (iii)
while such  Shares are  eligible  for sale  under Rule  144(k),  or (iv) if such
legend is not required  under  applicable  requirements  of the  Securities  Act
(including,  without  limitation,  judicial  interpretations  and pronouncements
issued by the Staff of the  Commission).  The Company shall use its best efforts
to cause its counsel to issue any legal opinion or  instruction  required by the
Company's  transfer  agent to  comply  with the  requirements  set forth in this
Section.  At such time as a legend is no longer  required  for the Shares  under
this Section 4.1(c), the Company will, no later than five Trading Days following
the delivery by a Purchaser to the Company or the Company's  transfer agent of a
certificate  representing  Shares  containing a restrictive  legend,  deliver or
cause to be delivered to such Purchaser a certificate  representing  such Shares
that is free from all  restrictive  and other legends.  The Company may not make
any notation on its records or give  instructions  to any transfer  agent of the
Company  that  enlarge the  restrictions  on transfer  set forth in this Section
except as it may  reasonably  determine,  upon  written  advice of counsel,  are
necessary to comply or to ensure  compliance  with  applicable  laws;  provided,
however,  that at such time as such  notation  or enlarged  restrictions  are no
longer  necessary to comply or to ensure  compliance with  applicable  laws, the
Company shall take such actions as are necessary to  immediately  eliminate such
notation or enlarged restrictions.

      4.2 Furnishing of Information.  As long as any Purchaser owns Shares,  the
Company  covenants 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. As long as any
Purchaser owns Shares,  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 in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Shares under Rule 144. The Company further covenants that
it will take such further action as any holder of Shares may reasonably request,
all to the extent  required from time to time to enable such Person to sell such
Shares  without  registration  under the Securities Act within the limitation of
the exemptions provided by Rule 144.

      4.3 Integration.  The Company shall not, and shall use its best 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.


                                      -17-
<PAGE>

      4.4 Securities Laws Disclosure; Publicity. The Company shall, on or before
8:30 a.m., New York time, on the first Business Day following  execution of this
Agreement,  issue  a  press  release  reasonably  acceptable  to the  Purchasers
disclosing the consummation of the transactions  contemplated hereby and, within
four Business Days following execution of this Agreement,  file a Current Report
on Form 8-K disclosing the consummation of the transactions contemplated hereby,
and in connection therewith,  shall be permitted to file true and correct copies
of this  Agreement  and the  Registration  Rights  Agreement.  In addition,  the
Company will make such other filings and notices in the manner and time required
by the  Commission  and the Trading  Market on which the Common Stock is listed.
Notwithstanding the foregoing,  the Company shall not publicly disclose the name
of any  Purchaser,  or include the name of any  Purchaser in any filing with the
Commission  (other than the Registration  Statement,  the Current Report on Form
8-K required in connection  with this  transaction,  and any exhibits to filings
made  in  respect  of  this  transaction  in  accordance  with  periodic  filing
requirements under the Exchange Act) or any regulatory agency or Trading Market,
without the prior written consent of such  Purchaser,  except to the extent such
disclosure is required by law or Trading  Market or Commission  regulations,  in
which case the Company shall provide the Purchasers with reasonable prior notice
of such  disclosure  (other than a disclosure in such Current  Report or in such
exhibits).  The Company  shall not, and shall use its best efforts to cause each
of its Subsidiaries and its and each of their  respective  officers,  directors,
employees and agents not to, provide any Purchaser  with any material  nonpublic
information  regarding the Company or any of its Subsidiaries from and after the
issuance of the above  referenced  press  release  without  the express  written
consent of such Purchaser.

      4.5  Indemnification of Purchasers.  In addition to the indemnity provided
in the Registration  Rights  Agreement,  the Company will indemnify and hold the
Purchasers and their directors, officers, shareholders,  partners, employees and
agents  (each,  a  "PURCHASER   PARTY")   harmless  from  any  and  all  losses,
liabilities,  obligations,  claims, contingencies,  damages, costs and expenses,
including, without limitation, all judgments, amounts paid in settlements, court
costs and reasonable  attorneys' fees and costs of investigation  (collectively,
"LOSSES")  that any such  Purchaser  Party may suffer or incur as a result of or
relating   to  (i)  any   misrepresentation,   breach  or   inaccuracy   of  any
representation,  warranty,  covenant  or  agreement  made by the  Company in any
Transaction Document, or (ii) the failure of the Company to cause its counsel to
issue the legal opinion or instruction  described in Section 4.1(c). In addition
to the indemnity  contained  herein,  the Company will  reimburse each Purchaser
Party  for  its  reasonable  legal  and  other  expenses   (including,   without
limitation, the cost of any investigation,  preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred.

      4.6 Use of Proceeds.  The Company shall use the net proceeds from the sale
of the Shares  hereunder in the manner set forth in the  description  of "Use of
Proceeds" contained in the Confidential  Memorandum.  Such proceeds shall not be
used by the  Company  for  the  satisfaction  of any  portion  of the  Company's
outstanding debt (other than liabilities  incurred in the ordinary course of the
Company's  business and  consistent  with past  practices and other than to make
payments on any outstanding  indebtedness incurred under that certain Indenture,
dated as of December  18,  2001,  between the Company and State  Street Bank and
Trust  Company as  debenture  trustee  for  floating  rate  junior  subordinated
deferrable interest debentures due 2031 and that certain Indenture,  dated as of
December 19, 2003,  between the Company and Wilmington Trust Company relating to
$5.0 million  aggregate  principal  amount of floating rate junior  subordinated
debt  securities  due 2034),  to redeem any  capital  stock of the Company or to
settle any outstanding Action.


                                      -18-
<PAGE>

      4.7 Listing of Securities.  The Company shall:  (i) in the time and manner
required by each Trading Market on which the Common Stock is listed, prepare and
file with such Trading Market an additional shares listing application  covering
the Shares, (ii) take all steps necessary to cause the Shares to be approved for
listing on each  Trading  Market on which the Common  Stock is listed as soon as
possible  thereafter,  (iii) provide to each Purchaser evidence of such listing,
and (iv)  maintain  the  listing  of the Shares on each such  Trading  Market or
another eligible securities market.

                                   ARTICLE V.

                               CLOSING CONDITIONS

      5.1 Conditions  Precedent to the Obligations of the Purchasers to Purchase
Shares on the Closing Date.  The  obligation of each Purchaser to acquire Shares
at the Closing is subject to the satisfaction or waiver by such Purchaser, at or
before the Closing, of each of the following conditions:

            (a)   Representations   and  Warranties.   The  representations  and
warranties  of the  Company  contained  herein  shall be true and correct in all
material  respects as of the date when made and as of the Closing as though made
on and as of such 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; and

            (d) No Suspensions of Trading in Common Stock;  Listing.  Trading in
the Common Stock shall not have been  suspended by the Commission or any Trading
Market at any time since the date of execution of this Agreement, and the Common
Stock  shall  have been at all times  since such date  listed  for  trading on a
Trading Market.

      5.2 Conditions  Precedent to the Obligations of the Company to sell Shares
on the Closing Date. The obligation of the Company to sell Shares at the Closing
is  subject  to the  satisfaction  or waiver by the  Company,  at or before  the
Closing, of each of the following conditions:


                                      -19-
<PAGE>

            (a)   Representations   and  Warranties.   The  representations  and
warranties of each Purchaser  contained  herein 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;

            (b) Performance. Each 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; and

            (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) Escrowed  Funds.  The Company  shall have received an electronic
notification  from the escrow agent  identified  in Schedule  2.2(b)(i),  to the
effect that it has received (in its capacity as depositary for the Company), the
amount set forth on the funds disbursement instructions jointly agreed to by the
Company and the  Placement  Agent,  and that, at the joint  instructions  of the
Company and the Placement Agent, it is prepared to wire transfer the amounts set
forth on such funds  disbursement  instructions,  to the accounts  designated in
such funds disbursement instructions.

                                   ARTICLE VI.
                                  MISCELLANEOUS

      6.1 Fees and Expenses.  At the Closing,  the Company  shall  reimburse the
Placement  Agent up to $50,000 of reasonable fees and  disbursements  of Morgan,
Lewis &  Bockius  LLP in  connection  with the  preparation  of the  Transaction
Documents, it being understood that Morgan, Lewis & Bockius LLP has not rendered
any legal advice to the Company in connection with the transactions contemplated
hereby and that the Company has relied for such matters on the advice of its own
counsel.  Except as specified in this  Agreement or in the  Registration  Rights
Agreement, each party shall pay the fees and expenses of its advisers,  counsel,
accountants and other experts,  if any, and all other expenses  incurred by such
party  incident  to  the  negotiation,   preparation,  execution,  delivery  and
performance of the  Transaction  Documents.  The Company shall pay all stamp and
other taxes and duties levied in connection with the sale of the Shares.

      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 and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.


                                      -20-
<PAGE>

      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 at the facsimile number
specified in this Section  prior to 5:00 p.m. (New York time) on a Business Day,
and  confirmation of such delivery is received,  (b) the next Business 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 Business  Day or later than 5:00 p.m.  (New York time) on any date and earlier
than 11:59 p.m. (New York time) on such date, and  confirmation of such delivery
is received, (c) the Business Day following the date of transmission, if sent by
U.S. nationally recognized overnight courier service, 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:    Center Bancorp, Inc.
                                2455 Morris Avenue
                                Union, NJ  07083
                                Telephone:  (908) 688-9500
                                Facsimile:  (908) 687-4992
                                Attention:  Chief Executive Officer

              With a copy to:   Lowenstein Sandler PC
                                65 Livingston Avenue
                                Roseland, New Jersey 07068
                                Telephone:  (973) 597-2350
                                Facsimile:  (973) 597-2351 (fax)
                                Attention:  Peter H. Ehrenberg, Esquire

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

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

          With a copy (for informational purposes only) to:

                                Schulte Roth & Zabel LLP
                                919 Third Avenue
                                New York, New York 10022
                                Telephone:        (212) 756-2000
                                Facsimile:        (212) 593-5955
                                Attention:        Eleazer Klein, Esq.


                                      -21-
<PAGE>

      6.4 Amendments;  Waivers.  No provision of this Agreement may be waived or
amended except in a written  instrument  signed by the Company and Purchasers of
not less than a majority of the Shares issued or issuable under this  Agreement.
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.

      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. This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors and permitted  assigns.  The
Company  may not assign its rights or  obligations  hereunder  without the prior
written  consent  of  each  Purchaser  except  to  any  surviving  or  successor
corporation  in connection  with a merger or  consolidation  of the Company with
another  corporation,  after notice duly given by the Company in writing to each
Purchaser at least 20 days prior to the  consummation of such  transaction.  Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Shares, provided such transferee
agrees in writing to be bound,  with respect to the transferred  Shares,  by the
provisions hereof 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 except as otherwise  expressly  provided for herein,  is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.


                                      -22-
<PAGE>

      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 Actions 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) may be commenced in the state and federal courts sitting in
the  State of New York  (the  "NEW  YORK  COURTS").  Each  party  hereto  hereby
irrevocably submits to the non-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,   without
limitation,   with  respect  to  the  enforcement  of  any  of  the  Transaction
Documents),  and  hereby  irrevocably  waives,  and  agrees not to assert in any
Action,  any claim that it is not personally  subject to the jurisdiction of any
such New York Court,  or that such Action 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 Action 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 Action
arising out of or relating to this  Agreement or the  transactions  contemplated
hereby.  If either party shall commence an Action to enforce any provisions of a
Transaction  Document,  then  the  prevailing  party  in such  Action  shall  be
reimbursed  by the other  party  for its  attorney's  fees and  other  costs and
expenses  incurred with the  investigation,  preparation and prosecution of such
Action.

      6.9 Survival.  The representations,  warranties,  agreements and covenants
contained herein shall survive the Closing and the delivery of the Shares.

      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,  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 term, provision, covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable,  the remainder of the terms,  provisions,  covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected,  impaired or  invalidated,  and the parties hereto shall use
their reasonable  efforts to find and employ an alternative means to achieve the
same or  substantially  the  same  result  as that  contemplated  by such  term,
provision,  covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining  terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

      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  of such loss,  theft or  destruction  and a  customary  and  reasonable
indemnity  and bond, if  requested.  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.


                                      -23-
<PAGE>

      6.13  Remedies.  In  addition to being  entitled  to  exercise  all rights
provided herein or granted by law, including,  without  limitation,  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 agrees to
waive in any action for specific  performance of any such obligation 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
and to the extent  permitted by law, 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  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.  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 Document.  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  Document,  and it shall not be
necessary  for any other  Purchaser to be joined as an  additional  party in any
Action for such purpose.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGES FOLLOW]


                                      -24-
<PAGE>

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

                                           CENTER BANCORP, INC.


                                           By: /s/ Anthony C. Weagley


                                           Name:  Anthony C. Weagley
                                           Title: Vice President and Treasurer


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


                   SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  this Stock  Purchase
Agreement as of the date first written above.


                                        PURCHASERS:

                                        BANC FUNDS V
                                        By:  /s/

                                        BANC FUNDS VI
                                        By:  /s/

                                        ENDICOTT PARTNERS, L.P.
                                        By:  /s/

                                        ENDICOTT PARTNERS II, L.P.
                                        By:  /s/

                                        ENDICOTT OFFSHORE INVESTORS LTD
                                        By:  /s/

                                        ENGINEERS JOINT PENSION PLAN
                                        By:  /s/

                                        SUNOVA PARTNERS, L.P.
                                        By:  /s/

                                        SUNOVA LONG TERM OPPORTUNITY FUND, L.P.
                                        By:  /s/

                                        SUNOVA OFFSHORE LTD
                                        By:  /s/

                                        FFC MANAGEMENT
                                        By:  /s/


                   SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT