STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT

by and among

WASHINGTON TRUST BANCORP, INC.,

WESTON FINANCIAL GROUP, INC.

and

The Individual Shareholders Party Hereto

Dated as of: March 18, 2005

TABLE OF CONTENTS

Section 1.1.    Definitions. 

(a)    For all purposes in this Agreement, the following terms have the respective meanings set forth in this Section 1.1:

(i)    The aggregate Annual Investment Advisory Revenue of all Retained Client Accounts shall be increased to reflect the effect of each account with the Company that (A) is opened by a Retained Client who is not a Related Person between January 1, 2005 and the close of business on the third Business Day prior to the Closing Date and (B) is managed by a Manager, by multiplying (1) the result obtained by adding the fair market value of any assets contributed to that account and reduced by the fair market value of any assets withdrawn from that account, in each case between January 1, 2005 and the close of business on the third Business Day prior to the Closing Date (with appropriate netting adjustments being made with respect to those contributions and withdrawals and with fair market value determined as of the date of the applicable contribution or withdrawal, as the case may be), times (2) the product of (x) the result of dividing (a) the total revenues of the Company during the most recent billing cycle of the Manager of that account ending prior to the close of business on the third Business Day prior to the Closing Date that are derived from all Client Accounts managed by the Manager of that account by (b) the total assets under management of all those Clients Accounts as of the end of that billing cycle times (y) an appropriate annualization factor that is based on the frequency of the billing cycle for that Manager, subject to adjustment

(ii)    For each Retained Client Account that is not owned by a Related Person, Base Date Account Value will be increased by the fair market value of any assets contributed to that Retained Client Account and reduced by the fair market value of any assets withdrawn from that Retained Client Account, in each case between January 1, 2005 and the close of business on the third Business Day prior to the Closing Date (with appropriate netting adjustments being made with respect to those contributions and withdrawals and with fair market value determined in each case as of the date of the applicable contribution or withdrawal, as the case may be); provided that in the case of the Client identified by the code C001679 on Schedule 3.6(a) , if that Client is a Retained Client, there shall not be taken into account the effect of the withdrawal by that Client on or about January 11, 2005 of an aggregate amount of $3,899,172 from that Client’s Client Accounts, unless, between the Base Date and the close of business on the third Business Day prior to the Closing Date, that Client reduces the annual retainer fee that Client pays to the Company below $35,000, in which case the effect of that $3,889,172 withdrawal shall be taken into account in the same proportion that the reduction in the retainer fee bears to $35,000.

(iii)    For each Retained Client Account, the Applicable Rate will be the product of (A) the result of dividing (1) the total revenues of the Company during the most recent billing cycle of the Manager of that Client Account ending prior to the close of business on the third Business Day prior to the Closing Date that are derived from all Client Accounts managed by the Manager of that Client Account by (2) the total assets under management of all those Clients Accounts as of the end of that billing cycle times (B) an appropriate annualization factor that is based on the frequency of the billing cycle for that Manager, subject to adjustment in the case of any event that occurs subsequent to the end of that billing cycle that would have changed this calculation of Applicable Rate if it had occurred during that billing cycle.

(iv)    For each Mutual Fund that is a Retained Client, Base Date Account Value will be increased by the fair market value of any assets contributed to that Mutual Fund by its shareholders who are not Related Persons and reduced by the fair market value of any assets withdrawn from that Mutual Fund, in each case between January 1, 2005 and the close of business on the third Business Day prior to the Closing Date (with appropriate netting adjustments being made with respect to those contributions and withdrawals and with fair market value determined in each case as of the date of the applicable contribution or withdrawal, as the case may be).

(v)    For each Mutual Fund that is a Retained Client, the Applicable Rate will be the product of (A) the result obtained by dividing (1) the total revenues of the Company during the most recent billing cycle of that Mutual Fund ending prior to the close of business on the third Business Day prior to the Closing Date that are derived from that Mutual Fund by (2) the Net Asset Value of that Mutual Fund as of the end of that billing cycle times (B) an appropriate annualization factor that is based on the frequency of the billing cycle for that Mutual Fund, subject to adjustment in the case of

(i)    are disclosed on the Base Balance Sheet;

(ii)    are for taxes or assessments that are not yet due and payable (and for which adequate reserves or accruals are established on the Base Balance Sheet); or

(iii)    do not materially detract from the value of, or materially interfere with the present or intended use of, the assets or property affected by those Encumbrances.

(b)    The following terms have the meaning specified in the indicated section of this Agreement:

Section 2.1.    Purchase and Sale of the Shares . Upon the terms and subject to the conditions of this Agreement, the Shareholders agree to sell to the Buyer, and the Buyer agrees to purchase from the Shareholders, the Shares at the Closing. The purchase price for the Shares is $20,000,000 less the Closing Revenue Adjustment Amount (as calculated by the Company in accordance with Section 2.2(a)) (the amount equal to that difference, the “ Purchase Price ”). The Buyer shall pay the Purchase Price as provided in Section 2.3, and the Purchase Price is subject to adjustment as provided in Sections 2.2(b), 2.5, 2.6, 2.7 and 2.8.

Section 2.2.    Closing Revenue Adjustment .

(a)    Two Business Days prior to the Closing Date, the Company shall deliver to the Buyer a revised version of Schedule 3.6(a) (the “ Revised Client Account Revenue Schedule” ) that identifies (i) each Lost Client Account, (ii) each Retained Client Account, (iii) each New Client Account and (iv) the Closing Revenue Ratio. If the Closing Revenue Ratio is less than 0.95, then the Company shall include on the Revised Client Revenue Schedule (and based on the information set forth therein) its calculation of the Closing Revenue Adjustment Amount.

(b)    If the Buyer disagrees with any information set forth in the Revised Client Revenue Schedule, it will so notify the Shareholders’ Representative no later than 30 days after the Closing and specify the items as to which the Buyer disagrees and provide to Shareholders’ Representative the Buyer’s calculation of the Closing Revenue Adjustment Amount (“ Buyer’s Revenue Adjustment Amount ”). If the Buyer and Shareholders’ Representative are not able to resolve the disputed items within 15 days thereafter, then they shall refer the disputed items to an independent accounting firm of nationally recognized standing mutually acceptable to the Buyer

(c)    If the Final Closing Revenue Adjustment Amount is greater than the amount of the Closing Revenue Adjustment Amount as set forth in the Revised Client Revenue Schedule, then the Principals shall pay to the Buyer, as an adjustment to the Purchase Price, the amount of such excess in the manner provided and with interest as set forth in Section 2.5(b).

Section 2.3.    Closing . Subject to Section 11.1, the closing of the purchase and sale of the Shares hereunder (the “ Closing ”) shall take place at the offices of Goodwin Procter LLP, Exchange Place, 53 State Street, Boston, Massachusetts 02109, as soon as possible, but in no event later than 5 Business Days, after satisfaction of the conditions set forth in Article VIII, or at such other time or place as the Buyer and the Shareholders’ Representative may agree. At the Closing:

(a)    The Buyer shall deliver to the Shareholders, in accordance with the allocations set forth on Schedule 2.3(a) , cash in an aggregate amount equal to $20,000,000 less the Closing Revenue Adjustment Amount, if any (as calculated by the Company under Section 2.2(a)), in each case in immediately available funds by wire transfer to accounts of the Shareholders designated by the Principals in written notices to the Buyer not later than two Business Days prior to the Closing Date. If the Principals do not deliver those notices, then the Buyer may make the payments required under this Section 2.3(a) by certified or official bank check payable in immediately available funds; and

(b)    The Shareholders shall deliver to Buyer valid title to the Shares, free and clear of any Encumbrances and any other limitation or restriction (including any right to vote, sell or otherwise dispose of the Shares), together with certificates for the Shares duly endorsed or accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed thereto.

Section 2.4.    Closing Balance Sheet .

(a)    As promptly as practicable, but no later than 60 days, after the Closing Date, the Buyer will cause to be prepared and delivered to the Shareholders’ Representative a consolidated balance sheet of the Company and its Subsidiaries as of the close of business on the Closing Date (the “ Closing Balance Sheet ”), and a certificate based on the Closing Balance Sheet setting forth the Buyer’s calculation of Closing Working Capital. The Closing Balance Sheet will (i) fairly present the consolidated financial position of the Company and the Subsidiaries as at the close of business on the Closing Date (without giving effect to the transactions contemplated by this Agreement other than the Real Estate Separation and the contribution of the shares of capital stock of Park to the Company) in accordance with GAAP, (ii) include line items substantially consistent with those in the Base Balance Sheet; and (iii) be prepared in accordance with accounting policies and practices consistent with those used in the preparation of the Base Balance Sheet, but in all instances in accordance with GAAP. “ Closing Working Capital ”   means the excess of the consolidated current assets over the consolidated current liabilities of the Company and the Subsidiaries (which current liabilities, for the avoidance of doubt, will include an accrual for all unpaid fees, costs, expenses and Taxes incurred or to be incurred by the Company and its Subsidiaries in connection with the transactions contemplated by this Agreement, including to the extent applicable, any such costs and expenses relating to the Special Transaction Bonus that is identified and described in Schedule 3.22 ), in each case as shown on the Closing Balance Sheet, plus , except to the extent reflected in the Closing Balance Sheet, any Unbooked Brokerage Commissions actually received by the Company in the 30 days following the Closing, up to a maximum of $60,000.

(b)    If the Shareholders’ Representative disagrees with the Buyer’s calculation of Closing Working Capital delivered pursuant to Section 2.4(a), the Shareholders’ Representative may, within 15 days after delivery of the documents referred to in Section 2.4(a), deliver a notice to the Buyer disagreeing with such calculation and setting forth the Shareholders’ Representative’s calculation of such amount. Any such notice of disagreement shall specify those items or amounts as to which the Shareholders’ Representative disagrees, and the Shareholders’ Representative shall be deemed to have agreed with all other items and amounts contained in the Closing Balance Sheet and the calculation of Closing Working Capital delivered pursuant to Section 2.4(a).

(c)    If a notice of disagreement shall be duly delivered pursuant to Section 2.4(b), the Buyer and the Shareholders’ Representative shall, during the 15 days following such delivery, use their reasonable best efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Working Capital, which amount shall not be less than the amount thereof shown in the Buyer’s calculations delivered pursuant to Section 2.4(a) nor more than the amount thereof shown in the Shareholders’ Representative’s calculation delivered pursuant to Section 2.4(b). If, during such period, the Buyer and the Shareholders’ Representative are unable to reach such agreement, they shall promptly thereafter cause an Accounting Referee (as defined in Section 2.2(b)) promptly to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Working Capital. In making such calculation, the Accounting Referee must consider only those items or amounts in the Closing Balance Sheet or the Buyer’s calculation of Closing Working Capital as to which the Shareholders’ Representative has disagreed. The Accounting Referee shall deliver to the Buyer

(d)    The Buyer and the Shareholders’ Representative agree that they shall, and agree to cause the Company and each Subsidiary of the Company to, cooperate and assist in the preparation of the Closing Balance Sheet and the calculation of Closing Working Capital and in the conduct of the audits and reviews referred to in this Section 2.4, including by making available, to the extent necessary, books, records, work papers and personnel.

Section 2.5.    Adjustment to the Purchase Price .

(a)    If Target Working Capital exceeds Final Working Capital, the Principals shall pay to the Buyer, as an adjustment to the Purchase Price, in the manner and with interest as provided in Section 2.5(b), the amount of such excess. If Final Working Capital exceeds Target Working Capital, the Buyer shall pay to the Shareholders, in the manner and with interest as provided in Section 2.5(b), the amount of such excess. “ Target Working Capital ”   means $450,000. “ Final Working Capital ”   means Closing Working Capital (i) as shown in the Buyer’s calculation delivered pursuant to Section 2.4(a), if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.4(b); or (ii) if such a notice of disagreement is delivered, (A) as agreed by the Buyer and the Shareholders’ Representative pursuant to Section 2.4(c) or (B) in the absence of such agreement, as shown in the Accounting Referee’s calculation delivered pursuant to Section 2.4(c); provided that in no event shall Final Working Capital be less than the Buyer’s calculation of Closing Working Capital delivered pursuant to Section 2.4(a) or more than the Shareholders’ Representative’s calculation of Closing Working Capital delivered pursuant to Section 2.4(b).

(b)    Any payment pursuant to Section 2.5(a) shall be made within 10 days after Final Working Capital has been determined, by delivery by the Buyer or the Principals, as the case may be, of a certified or official bank check payable in immediately available funds or by causing such payments to be credited to such account, as may be designated by the parties receiving any such payments. The amount of any payment to be made pursuant to this Section 2.5 shall bear interest from and including the Closing Date to but excluding the date of payment at a rate per annum equal to the Prime Rate as published in the Wall Street Journal, Eastern Edition (the “ Prime Rate ”) in effect from time to time during the period from the Closing Date to the date of payment. The interest is payable at the same time as the payment to which it relates and is to be calculated daily on the basis of a year of 365 days and the actual number of days elapsed.

Section 2.6.    Contingent Payments .

(a)    On or before the earlier of (i) 15 Business Days after the date the Buyer files with the SEC its annual report on Form 10-K for the fiscal year ending December 31, 2006, and (ii) April 15, 2007, the Buyer shall pay to the Shareholders an aggregate amount in cash equal to the First Contingent Payment.

(b)    On or before the earlier of (i) 15 Business Days after the date the Buyer files with the SEC its annual report on Form 10-K for the fiscal year ending December 31, 2007, and (ii) April 15, 2008, the Buyer shall pay to the Shareholders an aggregate amount in cash equal to the Second Contingent Payment.

(c)    On or before the earlier of (i) 15 Business Days after the date the Buyer files with the SEC its annual report on Form 10-K for the fiscal year ending December 31, 2008, and (ii) April 15, 2009, the Buyer shall pay to the Shareholders an aggregate amount in cash equal to the Third Contingent Payment.

(d)    For purposes of Sections 2.6, 2.7 and 2.8, the following terms have the following meanings:

(i)    “ First Contingent Payment ” means an amount based on 2006 EBITDA determined according to the table and principles set forth in Schedule 2.6 ; provided that in no event will the First Contingent payment be less than $2,000,000.

(ii)    “ Second Contingent Payment ” means an amount based on 2007 EBITDA determined according to the table and principles set forth in Schedule 2.6 ; provided that in no event will the Second Contingent Payment be less than $2,000,000.

(iii)    “ Third Contingent Payment ” means an amount based on 2008 EBITDA determined according to the table and principles set forth in Schedule 2.6 ; provided that in no event will the Third Contingent Payment be less than $2,000,000.

(iv)    “ 2006 EBITDA ” means EBITDA for the fiscal year ending December 31, 2006.

(v)    “ 2007 EBITDA ” means EBITDA for the fiscal year ending December 31, 2007.

(vi)    “ 2008 EBITDA ” means EBITDA for the fiscal year ending December 31, 2008.

(vii)    “ EBITDA ” means, with respect to a specific time period, the excess of Qualifying Revenues over Expenses.

(viii)     “ Qualifying Revenues ” means, with respect to a specified time period, that portion of the consolidated revenues of the Acquired Business (as determined in accordance with GAAP applied on a consistent basis) that are generated by the Acquired Business during that period from Investment Management Services, Insurance Services and Brokerage Services (regardless of where in the Combined Buyer Group they are generated).

(ix)    “ Expenses ” means, with respect to a specific time period, all consolidated expenses, costs and charges of any nature (as determined on an accrual basis in accordance with GAAP applied on a consistent basis) of the Acquired Business (regardless of where in the Combined Buyer Group they are incurred) including (A) any incentive compensation, profit sharing or bonus expense payable to persons employed by a member of the Combined Buyer Group in connection with the Acquired Business (including, to the extent required by GAAP, expenses relating to the granting of stock options or other equity instruments), but excluding (B) (1) the payment of interest expense on indebtedness for borrowed money, (2) the payment of federal, state, local and foreign taxes based on or measured by gross or net income, (3) the effect of any depreciation or amortization with respect to any property or assets of the Acquired Business and (4) any amount paid to any Principal as severance and any amount paid for the continuation of that Principal’s health and dental benefits following the termination of that Principal’s employment with the Company by the Company without cause or by the Principal for good reason under his employment agreement with the Company that is then in effect; provided further that Expenses shall not include any allocation to the Acquired Business of general corporate or administrative costs or other similar overhead costs of the Buyer and its Affiliates, except to the extent they represent costs actually incurred by the Buyer and its Affiliates in connection with services or expenses requested by, or undertaken for the benefit of, the Acquired Business, including services or expenses that are jointly requested by, or undertaken for the joint benefit of, the Acquired Business and other businesses of the Buyer and its Affiliates, in which case there shall be allocated to the Acquired Business its proportionate share of those costs.

(e)    During the period commencing on the Closing Date and ending at the close of business on December 31, 2008 (the “ Earnout Period ”), without the mutual written consent of the Parent and the Shareholders’ Representative, no member of the Combined Buyer Group may effect (i) any transfer or partial transfer to or from any other member of the Combined Buyer Group of, or (ii) any internal reorganization or partial reorganization of the Combined Buyer Group relating to, any client or customer account (or any assets therein or services with respect thereto) or business division, product or service of the Acquired Business or of the Buyer and its Affiliates, as the case may be, in each case that existed prior to the Closing (any such transfer or reorganization, an “ Existing-Business Transfer ”).

Section 2.7.    Calculation of Contingent Payments .

(a)    At the time of the payment of the First Contingent Payment, the Buyer shall deliver to the Shareholders’ Representative a statement setting forth the Buyer’s calculation of 2006 EBITDA (the “ Preliminary Statement ”). If the Shareholders’ Representative disagrees with any item or amount contained in the Preliminary Statement or with the Buyer’s calculation of 2006 EBITDA set forth therein, the Shareholders’ Representative may, within 15 days after delivery of the Preliminary Statement, deliver a notice to the Buyer disagreeing with such calculation and setting forth the Shareholders’ Representative’s calculation of 2006 EBITDA. Any notice of disagreement shall specify those items or amounts as to which the Shareholders’ Representative disagrees, and the Shareholders’ Representative will be deemed to have agreed with all other items and amounts. If the Buyer and the Shareholders’ Representative are not able to resolve such dispute within 15 days after the delivery of such notice, they shall promptly

(b)    If the Buyer’s calculation of 2006 EBITDA as set forth in the Preliminary Statement was less than Final 2006 EBITDA, then the Buyer shall pay to the Shareholders an amount equal to the excess of (i) the amount that would have been paid as the First Contingent Payment if the Buyer had based its calculation of the First Contingent Payment on an amount equal to Final 2006 EBITDA over (ii) the amount paid by the Buyer as the First Contingent Payment under Section 2.6(a); provided that in no event will any interest be incurred on any such excess. As used herein, “ Final 2006 EBITDA ” means 2006 EBITDA (A) as shown in the Preliminary Statement, if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.7(a); or (B) if such a notice of disagreement is delivered, (1) as agreed by the Buyer and the Shareholders’ Representative pursuant to Section 2.7(a) or (2) in the absence of such agreement, as shown in the Accounting Referee’s calculation delivered pursuant to Section 2.7(a); provided that in no event shall Final 2006 EBITDA be less than the amount as shown in the Preliminary Statement or more than the Shareholders’ Representative’s calculation in the notice of disagreement delivered pursuant to Section 2.7(a).

(c)    At the time of the payment of the Second Contingent Payment and the Third Contingent Payment, the Buyer shall deliver to the Shareholders’ Representative a statement setting forth the Buyer’s respective calculations of 2007 EBITDA and 2008 EBITDA (those statements, the “ Second Preliminary Statement ” and the “ Third Preliminary Statement ”). If the Shareholders’ Representative disagrees with any item or amount contained in the Second Preliminary Statement or the Third Preliminary Statement or with the Buyer’s calculation of 2007 EBITDA or 2008 EBITDA, then, in each case the Shareholders’ Representative may, within 15 days after delivery of the Secondary Preliminary Statement or the Third Preliminary Statement, as applicable, deliver a notice to the Buyer disagreeing with the applicable calculation and setting forth the Shareholders’ Representative’s calculation of 2007 EBITDA or 2008 EBITDA, as applicable. Upon delivery of such a notice, all matters in dispute shall be resolved in a manner consistent with the process described in Sections 2.7(a) and 2.7(b) with respect to 2006 EBITDA and the Preliminary Statement.

Section 2.8.    Acceleration of Contingent Payments .

(a)    If at any time during the Earnout Period:

(i)    the Buyer consummates (A) a merger or consolidation of the Acquired Business with or into another Person pursuant to which, immediately following the consolidation or merger, a majority of the outstanding voting power of the surviving or consolidated Person is owned by a Person other than the Buyer or one or more of its Affiliates or (B) the sale, of all or substantially all of the properties and assets of the Acquired Business to any Person other than the Buyer or one or more of its Affiliates;

(ii)    the Buyer or one or more of its Affiliates consummates the sale of a majority of the voting power of the Acquired Business to Persons other than the Buyer or one or more of its Affiliates; or

(iii)    the Buyer or one or more of its Affiliates terminates all or substantially all of the business operations of the Acquired Business relating to Investment Management Services, Brokerage Services and Insurance Services, taken as a whole, and does not then cause the Acquired Business to provide any products or services that are comparable to the terminated business operations (any of the events described by clauses (i), (ii) or (iii) of this Section 2.8(a), a “ Trigger Event ”);

(b)    then the Buyer shall immediately (and, in any event, within five Business Days) (A) deliver to the Shareholders’ Representative a report setting forth a reasonably detailed calculation of the present discounted value of all Contingent Payments that, at the time of the occurrence of Trigger Event, the Principals have not already received or with respect to which the rights of the Principals have not otherwise lapsed (those Contingent Payments, the “ Open Contingent Payments ”) and (B) pay to the Principals an aggregate amount in cash equal to that value.

(c)    If the Shareholders’ Representative disagrees with the Buyer’s calculation of the present discounted value of the Open Contingent Payments delivered pursuant to Section 2.8(a), the Shareholders’ Representative may, within 10 days after delivery of the report referred to in Section 2.8(a), deliver a notice to the Buyer disagreeing with that calculation and requesting that the Buyer engage an independent investment banking firm of nationally recognized standing that is reasonably acceptable to the Shareholders’ Representative. Within 10 days of its engagement, the investment banking firm must deliver a report setting forth a calculation of the present discounted value of the Open Contingent Payments that incorporates the principles set forth in Section 2.8(a) that will be final and binding upon all of the parties. If the investment banking firm’s calculation is greater than the amount the Buyer paid to the Principals pursuant to

Section 2.9.    Payment Procedures . The Buyer shall make any payment due to the Shareholders under Section 2.6, 2.7 or 2.8 in accordance with the allocations set forth on Schedule 2.3(a) , in each case in immediately available funds by wire transfer to accounts of the Principals designated by the Shareholders in written notices not later than two Business Days prior to the anticipated payment date. If the Principals do not deliver those notices, then the Buyer may make any such payment by certified or official bank check payable in immediately available funds. Any payment made by the Buyer under Section 2.6, 2.7 or 2.8 is to be treated as an adjustment to the Purchase Price.

Section 2.10.    Setoff . The Buyer may set off (a) the amount of any Damages (as defined in Section 8.2(a)) for which it or any other Buyer Indemnified Party (as defined in Section 8.2(a)) is entitled to indemnification under Section 9.2 and (b) any other amounts to which it may be entitled under this Agreement, including under Sections 2.2(c), 2.5(a) or 9.2, against any amounts otherwise owed by the Buyer to the Shareholders with respect Contingent Payments under Sections 2.6, 2.7 or 2.8.

Section 2.11.    Spinout of Real Estate Partnerships and Subsidiaries . Prior to the Closing the Company shall complete the Real Estate Separation and shall take such other actions as may be necessary or appropriate to divest itself of all interests, direct or indirect, that the Company may have in the Real Estate Partnerships. Within 15 Business Days of the Closing Date, the Principals shall (i) prepare and obtain all necessary corporate or similar authorizations to change the corporate and partnership names of the Real Estate Subsidiaries and Real Estate Partnerships to names that do not contain the name “Weston” and (ii) deliver to the Buyer copies of any applicable certificates of amendment to the articles of organization or certificates of partnership of the Real Estate Subsidiaries and Real Estate Partnerships filed in connection with those name changes, in each case certified by the secretaries of state of the respective jurisdictions in which those entities are organized.

Section 2.12.    Park Insurance Agency . Prior to the Closing each Principal who holds shares of capital stock of Park shall contribute such shares to the Company so that at the Closing Park will be a wholly owned subsidiary of the Company. At the Closing, any Principal who is entitled to receive any commissions or similar payments with respect to insurance policies sold by Park or such Principal shall assign all of such Principal’s rights with respect to such payments to Park.

Section 3.1.    Organization and Qualification of the Company . The Company is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, and has all necessary power and authority to own or lease its properties and to conduct its business in the manner and in the places where such properties are owned or leased or such business is currently conducted. A copy of the Company’s articles of organization, as amended to date, certified by the Secretary of State of the Commonwealth of Massachusetts (the “ Charter ”), and by-laws, as amended to date, certified by the clerk of the Company (the “ By-laws ,” and together with the Charter, the “ Company Organizational Documents ”), all of which were heretofore delivered to the Buyer’s counsel, are complete and correct, and no amendments thereto are pending. The Company is not in violation of any term of the Company Organizational Documents. The Company is duly qualified to do business as a foreign corporation under the laws of each jurisdiction in which the nature of its business, activities or other contacts in that jurisdiction or the ownership or leasing of its properties requires such qualification, except where the failure to be so licensed or qualified could not reasonably be expected to have a Material Adverse Effect.

Section 3.2.    Capitalization; Beneficial Ownership.

(a)    The authorized capital stock of the Company consists of (i) 1,500,000 shares of Common Stock, of which 1,399,998 shares are issued and outstanding, (ii) 3,000,000 shares of Class AA Stock, of which 800 shares are issued and outstanding and (iii) 2,000 shares of Series A Preferred Stock, of which 375 shares are issued and outstanding. As of the Closing, the only issued and outstanding shares of capital stock of the Company will be the Shares.

(b)    All outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. Except as set forth in Section 3.2(a), there are no outstanding (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options, warrants or other rights to acquire from the Company, or any other obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company or (iv) stock appreciation, phantom stock, profit participation or similar rights with respect to shares of capital stock or voting securities of the Company (the items in Sections 3.2(b)(i) through 3.2(b)(iv) being referred to collectively as “ Company Securities ”).   There are no, and in the last ten (10) years there have not been any, obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities.

(c)    As of the date hereof, the Principals and the Other Shareholders own beneficially and of record the Common Shares and Other Shares, as applicable, set forth opposite their names on Schedule 3.2(c) , free and clear of any Encumbrances and any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of the Company Shares). At the Closing, the Principals shall transfer and deliver to the Buyer valid title to the Shares free and clear of any Encumbrances and any such limitation or restriction.

Section 3.3.    Subsidiaries and Investments . 

(a)    Schedule 3.3(a)  contains a complete and accurate list of each Subsidiary of the Company. Each Subsidiary of the Company is a corporation duly authorized and validly existing in the laws of the state of its incorporation, with all necessary power and authority to own or lease its properties and to conduct its business in the manner and in the places where such properties are owned or leased or such business is currently conducted. Copies of the charter, bylaws and similar organization documents for each Subsidiary of the Company, all of which were heretofore delivered to the Buyer’s counsel, are complete and correct, and no amendments thereto are pending. Each Subsidiary is duly qualified to do business as a foreign corporation under the laws of each jurisdiction in which the nature of its business or the ownership or leasing of its properties requires such qualification, except where the failure to be so licensed or qualified could not reasonably be expected to have a material adverse effect on that Subsidiary.

(b)    All of the outstanding capital stock or other voting securities of each Subsidiary is owned by the Company, directly or indirectly, free and clear of any Encumbrances and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or any other voting securities). There are no outstanding (i) securities of the Company or any Subsidiary convertible into or exchangeable for shares of capital stock or voting securities of any Subsidiary, (ii) options, warrants or other rights to acquire from the Company or any Subsidiary, or other obligation of the Company or any Subsidiary to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of any Subsidiary or (iii) stock appreciation, phantom stock, profit participation or similar rights with respect to shares of capital stock or voting securities of any Subsidiary (the items in Sections 3.3(c)(i) through 3.3(c)(iii) being referred to collectively as “ Subsidiary Securities ”).   There are no, and in the past ten (10) years there have not been any, obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

(c)    Except for the Subsidiaries of the Company or as set forth on Schedule 3.3(c) , neither the Company nor any of its Subsidiaries owns, directly or indirectly, any shares of capital stock, other securities or ownership interests or investment in any other Person (collectively, “ Third Party Interests ”). Schedule 3.3(c) sets forth a complete description of each Third Party Interest, including the name of each record and beneficial owner of the Third Party Interest, its percentage interest with respect to the Person to which the Third Party Interest relates and any voting or similar rights with respect thereto. Except as expressly provided in the contracts listed on Schedule 3.3(c) , neither the Company nor any of its Subsidiaries have any rights to, or are bound by any commitment or obligation to, acquire by any means, directly or indirectly, any Third Party Interests or make any further investment in, or contribution or advance with respect to, any Third Party Interest or to any other Person. Except as expressly provided in the contracts listed on Schedule 3.3(c) , neither the Company nor any of its Subsidiaries has any obligation (whether as guarantor, controlling person or otherwise) for the present, future or contingent liabilities or obligations of any Person set forth (or required to be set forth) on Schedule 3.3(c) .

Section 3.4.    Authority; No Violation by the Company .

(a)    The Company has full right, authority and power to enter into this Agreement and each agreement, document and instrument to be executed and delivered by the Company pursuant to, or as contemplated by, this Agreement and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance by the Company of this Agreement and each such other agreement, document and instrument have been duly authorized by all necessary action of the Company and its shareholders, and no other action on the part of the Company, any Subsidiary of the Company or any shareholder of the Company is required in connection therewith. No Other Shareholder has objected to any of the transactions contemplated hereby. This Agreement and each agreement, document and instrument executed and delivered by the Company pursuant to, or as contemplated by, this Agreement constitutes, or when executed and delivered will constitute, valid and binding obligations of the Company enforceable against it in accordance with their terms, except as enforceability may be restricted, limited or delayed by applicable bankruptcy or other laws affecting creditors’ rights generally or by equitable principles. The execution, delivery and performance by the Company of this Agreement and each such other agreement, document and instrument and consummation of the transactions contemplated hereby and thereby:

(i)    does not and will not violate any provision of the Company Organizational Documents, any of the Mutual Fund Governing Documents or the Representation Agreements, in each case as amended to date;

(ii)    does not and will not violate any Applicable Laws or require the Company, any of its Subsidiaries or any Mutual Fund to obtain any approval, consent or waiver of, or make any filing with, any Person or Governmental Authority, except as provided for elsewhere in this Agreement regarding the Mutual Funds or as specifically identified on Schedule 3.4 hereto, which approvals, consents and waivers identified in such Schedule will, when obtained as of the Closing, conform in all material respects to, and otherwise satisfy in all material respects, all Applicable Laws; and

(iii)    except as specifically identified on Schedule 3.4 hereto, does not and will not result in a breach of, constitute a default under, accelerate any obligation under, or give rise to a right of termination of, any agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which the Company, any of its Subsidiaries or any of the Mutual Funds is a party or by which the property of the Company, any of its Subsidiaries or any of the Mutual Funds is bound or affected, or result in the creation or imposition of any mortgage, pledge, lien, security interest or other charge or encumbrance on (A) any of assets of the Company, any of its Subsidiaries or any of the Mutual Funds or (B) any Person’s interest in the Company, any of its Subsidiaries or any of the Mutual Funds.

Section 3.5.    Real and Personal Property .

(a)    Neither the Company nor any of its Subsidiaries owns, or has at any time, owned, directly or indirectly, any interest in real property. All of the real property leased by the Company and its Subsidiaries is identified on Schedule 3.5(a) (the “ Leased Real Property ”). All leases with respect to the Leased Real Property are identified on Schedule 3.5(a) (the “ Leases ”),

(b)    Except as set forth on Schedule 3.5(b) , the Company and its Subsidiaries own good and marketable title to, or, in the case of leased property or assets, have valid leasehold interest in, all of the property and assets reflected in the Base Balance Sheet (as defined in Section 3.7(c)) or acquired after the Balance Sheet Date (as defined in Section 3.7(c)), in each case free and clear of all Encumbrances other than Permitted Encumbrances. There are no developments affecting any such property or assets pending or, to the knowledge of the Company threatened, that might materially detract from the value, materially interfere with any present or intended use or materially adversely affect the marketability of any such property or assets. Except as disclosed on Schedule 3.5(b) , the property, assets and rights owned by the Company and its Subsidiaries constitute all of the property, assets and rights used or held for use in connection with the businesses of the Company and its Subsidiaries and are sufficient to conduct those businesses as currently conducted and as planned to be conducted following the Closing.

Section 3.6.    Clients and Client Accounts . 

(a)    Schedule 3.6(a) is a list as of the Base Date of all Client Accounts and all Mutual Funds, setting forth with respect to each Client Account or Mutual Fund, as the case may be:

(i)    (A) in the case of a Client Account, the name of each Client that is (x) a Shareholder or a director, officer or employee of the Company or any of its Subsidiaries, (y) an Immediate Family member or Affiliate of any of the Persons described in clause (x), or (z) a trust or collective investment vehicle in which any of the Persons described in clause (x) or (y) is a holder of a beneficial interest (any of those Persons described in clause (x), (y) or (z), a “ Related Person ”), and (B) in the case of the Mutual Funds, the name of the Mutual Fund and any Related Person who had an investment in the Mutual Fund as of the Base Date;

(ii)    the state (or, if the Client is not a U.S. citizen, the country) of which the Client is a citizen or resident (in the case of individuals) or domiciled (in the case of entities);

(iii)    the Base Date Account Value, Applicable Rate and Annual Investment Advisory Revenue for that Client Account or Mutual Fund.

(b)    Each Client (other than the Mutual Funds, which have entered into advisory agreements with the Company that are listed on Schedule 3.18(b) ) has entered into an Advisory Contract with the Company with respect to each Client Account owned by such Client in each case containing the terms and conditions of one of the forms of agreement attached as Exhibit 3.6 . All Client Account assets which are subject to Advisory Contracts are managed by one of the fifteen Managers listed on Schedule 3.6(a) hereto. As of the date hereof, except as set forth in Schedule 3.6(b) and expressly described thereon, there are no contracts, agreements, arrangements or understandings pursuant to which the Company, any of its Subsidiaries, or any of their respective officers, employees, or other representatives including the Principals has undertaken or agreed to cap, waive, offset, reimburse or otherwise reduce any or all fees or charges payable by or with respect to any of the Clients or pursuant to any Advisory Contract. As of the date hereof, except as set forth in Schedule 3.6(b) , no Client or, in the case of the Mutual Funds, any underlying shareholder therein, as applicable, has notified or otherwise communicated to the Company or any of the Principals regarding an intention to terminate or reduce its business relationship with the Company, or adjust the fee schedule with respect to any Advisory Contract in a manner that would reduce the fees of the Company or any of its Subsidiaries in connection with such Client relationship.

(c)    Except for the Advisory Contracts between the Company and the Mutual Funds, none of the Advisory Contracts will terminate according to its terms or as a result of any provisions of Applicable Law in connection with the transactions contemplated by this Agreement.

(d)    Neither the Company nor any of its Subsidiaries has any clients or customers with respect to which fees payable to the Company or any of its Subsidiaries are based on performance or otherwise provide for compensation on the basis of a share of capital gains or appreciation in respect of the funds (or any portion thereof) of any client or customer.

(e)    Except as disclosed in Schedule 3.6(e) , the Company does not provide Investment Management Services through (i) any issuer or other Person that is an investment company (within the meaning of the Investment Company Act), (ii) any issuer or other Person that would be an investment company (within the meaning of the Investment Company Act) but for the exemptions contained in the Investment Company Act, or (iii) any issuer or other Person that is not required to be registered under the laws of the appropriate securities regulatory authority in the jurisdiction in which the issuer or other Person is domiciled (other than the United States), that is or holds itself out as engaged primarily in the business of investing or trading in securities.

(f)    No circumstances exist regarding the relationship between the Company and any of its Subsidiaries, on the one hand, and any of their respective clients or customers, on the other hand, that has had or could reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, there is no client or customer of the Company or its Subsidiaries or Insurance Client whose investment or other activities, reputation or credit history

(g)    Except as set forth in Schedule 3.6(g) , no exemptive orders, “no-action” letters or similar exemptions or regulatory relief have been obtained, or are any requests pending therefor, by or with respect to the Company, its Subsidiaries or any Principals or any officer, director, partner or employee of the Company or its Subsidiaries, in connection with the business of the Company or any of its Subsidiaries, or with respect to any client or customer of the Company or its Subsidiaries in connection with the provision of Investment Management Services to such client or customer by the Company or its Subsidiaries.

Section 3.7.    Financial Statements .

(a)    The Company has delivered to the Buyer the following financial statements, copies of which are attached as Schedule 3.7(a) :

(i)    audited consolidated balance sheets of the Company and its Subsidiaries at February 28, 2002, February 28, 2003 and February 29, 2004, and audited consolidated statements of income and shareholders’ equity and cash flows for each of the three years then ended, in each case together with the audit reports thereon of the Company’s independent certified public accountants; and

(ii)    an unaudited consolidated balance sheet of the Company and its Subsidiaries at December 31, 2004, and unaudited consolidated statements of income and shareholders’ equity and cash flows for the ten month period then ended, in each case certified by the Company’s treasurer;

(iii)    unaudited balance sheets of Park at February 28, 2002, February 28, 2003 and February 29, 2004, and unaudited statements of income and shareholders’ equity and cash flows for each of the three years then ended, and the unaudited balance sheet of Park at December 31, 2004;

(b)    The financial statements set forth in Schedule 3.7(a) present fairly the financial condition of the Company, Park and its Subsidiaries at the dates of those financial statements and the results of its operations for the periods covered thereby in accordance with GAAP using the accrual method of accounting, applied consistently during the periods covered thereby (except that the Company’s and Park’s unaudited financial statements do not include footnote disclosure and are subject to normal year-end audit adjustments that are not in the aggregate material).

(c)    The unaudited consolidated balance sheet of the Company at December 31, 2004 (the “ Balance Sheet Date ”) (including any notes thereto) is referred to hereinafter as the “ Base Balance Sheet ”. As of the Balance Sheet Date, the Company and its Subsidiaries did not have any liabilities of any nature, whether accrued, absolute, contingent or otherwise, asserted or unasserted, known or unknown (including, without limitation, liabilities as guarantor or otherwise with respect to obligations of others, liabilities for Taxes due or then accrued or to become due, or contingent or potential liabilities relating to activities of the

Section 3.8.    Taxes .

(a)    The Company and each of its Subsidiaries have paid or caused to be paid all federal, provincial, territorial, state, municipal, local, foreign or other taxes, imposts, rates, levies, assessments and other charges including, without limitation, all income, franchise, gains, capital, real property, goods and services, transfer, value added, gross receipts, windfall profits, severance, ad valorem, personal property, production, sales, use, license, stamp, documentary stamp, mortgage recording, excise, employment, payroll, social security, unemployment, disability, estimated or withholding taxes, and all customs and import duties, together with any interest, additions, fines or penalties with respect thereto or in respect of any failure to comply with any requirement regarding Tax Returns and any interest in respect of such additions, fines or penalties (collectively, “ Taxes ”), required to have been paid by any of them through the date hereof.

(b)    The Company and each of its Subsidiaries have withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other third party.

(c)    The Company and each of its Subsidiaries have, in accordance with Applicable Law, filed all federal, state, material local and foreign Tax Returns required to be filed by it. All such Tax Returns were correct and complete in all respects (including, without limitation, after having taken into account its payroll, property or receipts, and other factors used in any state’s apportionment or allocation formula). A list of all federal, state, local and foreign income Tax Returns filed with respect to the Company and its Subsidiaries for taxable periods ended on or after February 28, 1999, is set forth in Schedule 3.8(c) , and Schedule 3.8(c) indicates those Tax Returns that have been audited or currently are the subject of an audit. For each taxable period of the Company and its Subsidiaries ended on or after February 28, 1999, the Company delivered to the Buyer correct and complete copies of all federal, state, local and foreign income Tax Returns, examination reports and statements of deficiencies assessed against or agreed to by the Company and any of its Subsidiaries.

(d)    Neither the IRS nor any other Governmental Authority is now asserting or, to the Company’s knowledge, threatening to assert against the Company or any of its Subsidiaries any deficiency or claim for additional Taxes. No claim has ever been made by a Governmental Authority in a jurisdiction where the Company or any of its Subsidiaries does not file reports and returns that the Company or one or more of its Subsidiaries is or may be subject to taxation by that jurisdiction. There are no Encumbrances on any of the assets of the Company or any of its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any

(e)    There has not been any audit of any Tax Return filed by the Company or any of its Subsidiaries, no such audit is in progress, and neither the Company nor any of its Subsidiaries has been notified by any Tax Authority that any such audit is contemplated or pending. Except as set forth in Schedule 3.8(e) , no extension of time with respect to any date on which a Tax Return was or is to be filed by the Company or any of its Subsidiaries is in force, and no waiver or agreement by the Company or any of its Subsidiaries is in force for the extension of time for the assessment or payment of any Taxes.

(f)    Neither the Company nor any of its Subsidiaries is a party to any agreement, contract, arrangement or plan that has resulted or could result, separately or in the aggregate, in the payment of any “excess parachute payment” within the meaning of Code Section 280G (or any corresponding provision of state, local or foreign Tax law). Neither the Company nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii). Each of the Company and its Subsidiaries have disclosed on their federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662. Neither the Company nor any of its Subsidiaries is a party to or bound by any Tax allocation or sharing agreement. Neither the Company nor any of its Subsidiaries (i) has been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) or (ii) has any liability for the Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

(g)    Schedule 3.8(g) sets forth the following information with respect to each of the Company and its Subsidiaries (or, in the case of clause (ii) below, with respect to each of the Company’s Subsidiaries) as of the most recent practicable date (as well as on an estimated pro forma basis as of the Closing giving effect to the consummation of the transactions contemplated hereby): (i) the basis of the Company or its Subsidiary in its assets; (ii) the basis of the Principals in the Shares and the basis of the Company in the shares of stock of each Subsidiary (or the amount of any excess loss account); (iii) the amount of any net operating loss, net capital loss, unused investment or other credit, unused foreign tax, or excess charitable contribution allocable to the Company or any of its Subsidiaries; and (iv) the amount of any deferred gain or loss allocable to the Company or any of its Subsidiary arising out of any intercompany transaction.

(h)    The unpaid Taxes of the Company and its Subsidiaries (A) did not, as of the Balance Sheet Date, exceed the reserve for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Base Balance Sheet (rather than in any notes thereto) and (B) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company and its Subsidiaries in filing their Tax Returns. Since the date of the Base Balance Sheet, neither the Company nor any of its Subsidiaries has incurred any

(i)    Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:

(i)    change in method of accounting for a taxable period ending on or prior to the Closing Date;

(ii)    “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date;

(iii)    intercompany transaction or excess loss account described