August 25, 1995

MONOCACY BANCSHARES, INC.
TANEYTOWN, MARYLAND, AS BUYER;

U.S.B. HOLDING CO., INC.
ORANGEBURG, NEW YORK, AS SELLER:

ROYAL OAK SAVINGS BANK, FSB
RANDALLSTOWN, MARYLAND, AS ACQUIREE

August 25, 1995

TABLE OF CONTENTS

Page
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1. THE STOCK PURCHASE. . . . . . . . . . . . . . . . . . . . . . . . 1
(a) Assets and Liabilities Excluded. . . . . . . . . . . . . . . 2
(b) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 2
(c) Estimated Purchase Price . . . . . . . . . . . . . . . . . . 2
(d) Closing Adjustments and Determination
of Final Purchase Price. . . . . . . . . . . . . . . . . . 2

2. REPRESENTATIONS AND WARRANTIES BY BUYER . . . . . . . . . . . . . 3
(a) Organization, Good Standing, Authority,
Insurance, Etc.. . . . . . . . . . . . . . . . . . . . . . 3
(b) Agreement, Authority, Absence of Conflicts . . . . . . . . . 4
(c) Sufficient Resources, Etc. . . . . . . . . . . . . . . . . . 4
(d) Ownership of Acquiree Stock. . . . . . . . . . . . . . . . . 4
(e) Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . 4
(f) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 5
(g) Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . 5
(h) Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 5
(i) Accuracy of Representations. . . . . . . . . . . . . . . . . 5
(j) Compliance with Applicable Laws. . . . . . . . . . . . . . . 5

3. REPRESENTATIONS AND WARRANTIES BY SELLER AND ACQUIREE . . . . . . 6
(a) Organization, Good Standing, Authority, Deposit
Insurance, Etc.. . . . . . . . . . . . . . . . . . . . . . 6
(b) Capitalization, Investments. . . . . . . . . . . . . . . . . 6
(c) Financial Statements . . . . . . . . . . . . . . . . . . . . 6
(d) Absence of Certain Developments. . . . . . . . . . . . . . . 7
(e) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 9
(g) Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(h) Properties . . . . . . . . . . . . . . . . . . . . . . . . . 9
(i) Compliance with Applicable Laws. . . . . . . . . . . . . . . 10
(j) Contracts and Commitments, Etc.. . . . . . . . . . . . . . . 10
(k) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 11
(l) No Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 11
(m) Examination Reports. . . . . . . . . . . . . . . . . . . . . 11
(n) Agreement, Authority, Absence of Conflicts . . . . . . . . . 11
(o) Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . 12
(p) Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . 12
(q) Employee Benefit Plans . . . . . . . . . . . . . . . . . . . 12
(r) Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . 12
(s) Environmental Matters. . . . . . . . . . . . . . . . . . . . 12
(t) Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 14
(u) Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . 14
(v) Financial Institutions Bond. . . . . . . . . . . . . . . . . 14
(w) Not Used . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(x) Assumability of Leases and Contracts . . . . . . . . . . . . 14
(y) Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(z) Not Used . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(aa) Trademarks, Trade Names. . . . . . . . . . . . . . . . . . . 15

(bb) Accuracy of Representations. . . . . . . . . . . . . . . . . 15
(cc) Materiality. . . . . . . . . . . . . . . . . . . . . . . . . 15
(dd) Absence of Questionable Payments . . . . . . . . . . . . . . 15
(ee) Powers of Attorney, Guarantees . . . . . . . . . . . . . . . 16
(ff) Mortgage Servicing Agreements. . . . . . . . . . . . . . . . 16

4. ACCESS TO AND INFORMATION CONCERNING PROPERTIES, RECORDS, ETC.. . 16
(a) Bank Premises. . . . . . . . . . . . . . . . . . . . . . . . 17

5. AFFIRMATIVE COVENANTS OF BUYER. . . . . . . . . . . . . . . . . . 17
(a) Conduct of Business. . . . . . . . . . . . . . . . . . . . . 17
(b) Preservation of Business . . . . . . . . . . . . . . . . . . 18
(c) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Laws, Rules, Etc.. . . . . . . . . . . . . . . . . . . . . . 18
(e) Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(g) Randallstown Property. . . . . . . . . . . . . . . . . . . . 18

6. AFFIRMATIVE COVENANTS OF ACQUIREE . . . . . . . . . . . . . . . . 19
(a) Conduct of Business. . . . . . . . . . . . . . . . . . . . . 19
(b) Preservation of Business . . . . . . . . . . . . . . . . . . 19
(c) Properties . . . . . . . . . . . . . . . . . . . . . . . . . 19
(d) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Contracts, Etc.. . . . . . . . . . . . . . . . . . . . . . . 20
(f) Financial Statements . . . . . . . . . . . . . . . . . . . . 20
(g) Laws, Rules, Etc.. . . . . . . . . . . . . . . . . . . . . . 21
(h) Corporate Existence. . . . . . . . . . . . . . . . . . . . . 21
(i) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(j) Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . 21
(k) Cooperate in Transferring Deposit Accounts to Buyer. . . . . 22

7. NEGATIVE COVENANTS OF SELLER AND ACQUIREE . . . . . . . . . . . . 22

8. CONDITIONS TO THE OBLIGATIONS OF BUYER, SELLER AND ACQUIREE . . . 25
(a) Approval of Regulatory Agencies. . . . . . . . . . . . . . . 25
(b) Suits, Actions . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Statutes, Orders . . . . . . . . . . . . . . . . . . . . . . 25

9. CONDITIONS TO THE OBLIGATIONS OF BUYER. . . . . . . . . . . . . . 25
(a) Representations, Warranties and Covenant . . . . . . . . . . 26
(b) Opinion of Special Counsel . . . . . . . . . . . . . . . . . 26
(c) Suit, Action, Etc. . . . . . . . . . . . . . . . . . . . . . 29
(d) Closing Documents. . . . . . . . . . . . . . . . . . . . . . 29

10. CONDITIONS TO THE OBLIGATIONS OF SELLER AND ACQUIREE. . . . . . . 29
(a) Representations and Warranties . . . . . . . . . . . . . . . 29
(b) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 30
(c) Suit, Action, Etc. . . . . . . . . . . . . . . . . . . . . . 32
(d) Deposit into Payment Fund. . . . . . . . . . . . . . . . . . 32
(e) Closing Documents. . . . . . . . . . . . . . . . . . . . . . 32

11. CERTAIN TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Internal Revenue Code Section 338(h)(10) Election. . . . . . 32
(b) Allocation of Purchase Price . . . . . . . . . . . . . . . . 33
(c) Returns, Indemnification and Liability for Taxes.. . . . . . 34

12. TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . 34

13. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

14. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . . 36

15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.. . . . . . . . . 36

16. CERTAIN POST-MERGER AGREEMENTS. . . . . . . . . . . . . . . . . . 36
(a) Employees. . . . . . . . . . . . . . . . . . . . . . . . . . 37
(b) Indemnification of Buyer . . . . . . . . . . . . . . . . . . 37
(c) Indemnification of Seller. . . . . . . . . . . . . . . . . . 38
(d) FDIC Insurance Premium Adjustment Retroactively. . . . . . . 38

17. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 38

18. PUBLICITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

19. AMENDMENT AND WAIVER. . . . . . . . . . . . . . . . . . . . . . . 39

20. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 39

21. COMMUNICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 39

22. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . 40

23. HEADINGS, ETC.. . . . . . . . . . . . . . . . . . . . . . . . . . 40

24. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 40

25. NO THIRD PARTY BENEFICIARY. . . . . . . . . . . . . . . . . . . . 40

26. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 40

27. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . 40

iii

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT ("Agreement") is made this 25th day of August,
1995, by and among MONOCACY BANCSHARES, INC., a Maryland corporation and bank
holding company having its principal office in Taneytown, Maryland ("Buyer"),
U.S.B. HOLDING CO., INC., a Delaware corporation and savings and loan holding
company having its principal office in Orangeburg, New York ("Seller") and ROYAL
OAK SAVINGS BANK, FSB, a federal savings bank having its principal office in
Randallstown, Maryland ("Acquiree").

W I T N E S S E T H:

WHEREAS, the respective Boards of Directors of Buyer, Seller and Acquiree
have approved and deem it advisable and in the best interests of their
respective companies to consummate the transactions provided in this Agreement;

WHEREAS, Buyer desires to purchase and Seller desires to sell 1,000 shares of
common stock $10.00 par value per share of the Acquiree (the "Acquiree Stock")
comprising all of Acquiree's capital stock issued and outstanding (the
acquisition of the Acquiree Stock is referred to herein as the "Stock
Purchase");

WHEREAS, Buyer may reorganize its corporate structure after the Stock
Purchase in such a way that the Acquiree will continue to be operated as a
separate subsidiary, will be merged with and into a subsidiary of Buyer or will
be liquidated, but for which the Buyer has not yet decided which form of
reorganization that it will effect;

NOW THEREFORE, in consideration of the premises, mutual promises, covenants,
agreements, representations and warranties hereinafter set forth, and of other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:

1. THE STOCK PURCHASE. Upon the terms and subject to the conditions set
forth herein, the Stock Purchase is to be accomplished at a closing (the
"Closing") on the effective date (the "Effective Date"), by means of the
delivery of funds by Buyer against delivery by Seller of the certificates
representing the Acquiree Stock and all rights of ownership of the Acquiree
Stock shall pass from Seller to Buyer, resulting in all outstanding shares of
Acquiree being owned by Buyer at and after the Effective Date. The parties shall
cooperate fully, and shall cause each of their affiliates to cooperate fully, in
the preparation and submission by them, as promptly as reasonably practicable,
of such notices, applications, petitions, and other documents and materials as
any of them may reasonably deem necessary (or desirable) to the Board of
Governors of the Federal Reserve System (the "Federal

Reserve"), the Maryland state bank regulatory authorities, the Federal Deposit
Insurance Corporation ("FDIC"), the Office of Thrift Supervision (the "OTS"),
other regulatory authorities, and any other persons for the purpose of obtaining
any approvals or consents necessary to consummate the transactions contemplated
by this Agreement. Prior to the making of any such filings with any regulatory
authority or any third person (such as mailings to shareholders or press
releases), the parties shall submit to each other the materials to be filed,
mailed or released. Any such materials must be acceptable to the parties (such
acceptance not to be unreasonably withheld) with indications of acceptance
required prior to use, except to the extent that any party is legally required
to proceed (although still provide notice) prior to obtaining the acceptances of
the other parties.

(a) ASSETS AND LIABILITIES EXCLUDED. Prior to the Effective Date,
Acquiree shall transfer to Seller or such other entity as it deems
appropriate, or otherwise remove from its books, those assets and
liabilities described and quantified on Schedule 1(a) and updated as to
dollar amounts on an addendum to Schedule 1(a) prepared immediately prior
to the Effective Date (the "Excluded Assets and Liabilities"). The Excluded
Assets and Liabilities shall pass to the Seller and Buyer shall assume no
rights or obligations directly or indirectly associated with or in any way
related to the Excluded Assets and Liabilities.

(b) PURCHASE PRICE. The purchase price for the Stock Purchase shall
be determined as set forth on Schedule 1(b); provided, however, that such
purchase price shall be adjusted in accordance with the provisions of
Sections 1(c) and 1(d), hereof.

(c) ESTIMATED PURCHASE PRICE. At least five (5) days prior to the
Effective Date, Seller and Acquiree shall deliver to Buyer Schedule 1(b)
based upon information as of the most recent practicable date (the
"Estimated Purchase Price") together with details reconciling such amounts
with the corresponding amounts previously calculated as of the date hereof
in accordance with paragraph 1(b). The Estimated Purchase Price shall be
paid by Buyer at Closing with the understanding that such Estimated
Purchase Price shall be further adjusted in accordance with paragraph l(d),
hereof and Buyer shall receive a refund, or pay for any shortfall,
resulting from such adjustment.

(d) CLOSING ADJUSTMENTS AND DETERMINATION OF FINAL PURCHASE PRICE. As
soon as reasonably practicable following the Effective Date and in no event
more than ten (10) days thereafter, Seller shall prepare and deliver to
Buyer an unaudited final computation of the purchase price (the "Final
Purchase Price") measured as of the Effective Date, with the individual
amounts purporting to represent unaudited,

unadjusted book values presented thereon having been determined in
accordance with generally accepted accounting principles consistent with
Acquiree's past practices, together with adjustments to reconcile such
amounts to those previously presented on the schedule detailing the
Estimated Purchase Price. The parties shall cooperate in the preparation of
such final schedule and adjustments. Buyer shall provide Seller and its
designees with full access to the books, records, personnel and
representatives of Buyer and such information as Seller may reasonably
request in connection with the preparation of such schedule and
adjustments. The Parties shall cooperate in resolving any disputed amounts
set forth on the schedule and shall commence good faith negotiations with a
view toward promptly resolving any disagreement that arises. If Buyer and
Seller are unable to resolve their differences within 30 days following the
preparation of the Final Purchase Price and related adjustments, such
disagreement shall be referred to a firm of independent accountants
mutually agreed upon by Seller and Buyer for resolution of such
disagreement in accordance with the provisions of this Agreement. If Buyer
and Seller do not promptly agree on the selection of an independent
accounting firm, the respective independent public accountants of Buyer and
Seller shall select such firm. Buyer and Seller shall use their best
efforts to cause any independent accounting firm selected to render its
determination as soon as practicable after referral of the disagreement to
such firm, and each shall cooperate with such firm and provide such firm
with access to the books, records, personnel and representatives as such
firm may require in order to render its determination. All of the fees and
expenses of such independent accounting firm shall be paid one half by
Buyer and one half by Seller. The determinations of the parties or, if
required, the independent accounting firm with respect to any disagreement,
shall be final and binding upon the parties and the resulting amounts shall
be used to calculate any excess or deficiency. Seller shall promptly remit
to or collect from Buyer such excess or deficiency, as appropriate.

2. REPRESENTATIONS AND WARRANTIES BY BUYER. Buyer represents and warrants
to Acquiree and Seller as follows:

(a) ORGANIZATION, GOOD STANDING, AUTHORITY, INSURANCE, ETC. Buyer is a
Maryland corporation organized, validly existing and in good standing under
the laws of the State of Maryland. Buyer has all requisite corporate power
and authority to conduct its business as it is now conducted, to own and
operate its properties and assets and to lease properties used in its
business. Buyer has all requisite corporate power and authority to enter
into this Agreement and, subject to obtaining any required regulatory
approvals, to perform

and carry out the provisions of and all its obligations under this
Agreement.

(b) AGREEMENT, AUTHORITY, ABSENCE OF CONFLICTS. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein, have been duly and validly authorized by
the Board of Directors of Buyer. No other corporate action on the part of
Buyer is necessary for Buyer to authorize this Agreement or to consummate
the transactions contemplated herein. This Agreement has been duly executed
and delivered by Buyer and, assuming due authorization, execution and
delivery by Seller and Acquiree, constitutes a valid and binding obligation
of Buyer, enforceable in accordance with its terms. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein, will not constitute a violation or breach or a default
under the Articles of Incorporation or Bylaws of Buyer, any statute, rule,
regulation, order, writ, injunction, decree, or directive applicable to
Buyer, or any agreement, indenture or other instrument to which Buyer is a
party.

(c) SUFFICIENT RESOURCES, ETC. Buyer has and will have available at
the Effective Date available financial resources to enable it to lawfully
satisfy its obligations pursuant to this Agreement without the need to
borrow funds or to raise additional equity capital, unless otherwise
mandated by a regulatory authority after the date hereof. Prior to the
Effective Date, Buyer has and will have sufficient management and financial
resources to process the required regulatory and other applications to
consummate the transactions contemplated by this Agreement. On the date of
this Agreement, there is no pending or, to the knowledge of Buyer,
threatened legal or governmental proceeding against Buyer or any subsidiary
or affiliate thereof, and Buyer is unaware of any fact or circumstance
which would affect Buyer's ability to obtain any of the required regulatory
approvals or satisfy any other conditions required to be satisfied in order
to consummate the transactions contemplated by this Agreement.

(d) OWNERSHIP OF ACQUIREE STOCK. As of the date hereof, neither Buyer
nor its subsidiaries directly or indirectly own, or have any rights to
acquire, any shares of Acquiree Stock, other than pursuant to this
Agreement.

(e) FULL DISCLOSURE. None of the information with respect to Buyer or
Buyer's subsidiaries which has been furnished to Seller or Acquiree or
included in any application to, or filing with, any regulatory authority
made in connection with the transactions contemplated

hereby will, at the respective time it is furnished or filed, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein not misleading in
light of the circumstances under which they were made.

(f) LITIGATION. There is no material action, suit, claim,
counterclaim, or other litigation or proceeding or to the best knowledge of
Buyer, any investigation pending or known by the executive officers of
Buyer to be threatened, against Buyer before any court or governmental or
administrative agency, domestic or foreign, that could materially and
adversely affect the Buyer's ability to complete the Stock Purchase or the
transactions contemplated by this Agreement. There is no outstanding order,
writ, injunction, judgment, decree, directive, consent agreement or
memorandum of understanding involving Buyer and any federal regulatory
agency, state or local or governmental authority or arbitration tribunal
that could materially and adversely affect Buyer's ability to complete the
Stock Purchase or the transactions contemplated by this Agreement. Buyer is
unaware of any fact or condition presently existing that might give rise to
any litigation, investigation, or proceeding which, if determined adversely
to Buyer, would materially and adversely affect Buyer's ability to complete
the Stock Purchase or the transactions contemplated by this Agreement.

(g) BROKERAGE. There is no claim for brokerage commission, finders
fee or similar compensation arising out of or due to any act of Buyer in
connection with the transactions contemplated by this Agreement or based on
any agreement or arrangement made by or on behalf of Buyer.

(h) PROCEEDINGS. As of the date of this Agreement there is no pending
or, to the best knowledge of Buyer, threatened, legal or governmental
proceeding against Buyer and Buyer is unaware of any fact or circumstance
which could adversely affect Buyer's ability to obtain any required
regulatory approvals applicable to it or satisfy any of the other
conditions required to be satisfied by it in order to consummate the
transactions contemplated by this Agreement.

(i) ACCURACY OF REPRESENTATIONS. Until Closing, Buyer will promptly
notify Seller and Acquiree if any of the representations contained in this
Section 2 ceases to be true and correct subsequent to the date hereof.

(j) COMPLIANCE WITH APPLICABLE LAWS. Buyer is in compliance in all
material respects with all statutes, laws, ordinances, rules, regulations,
judgements, orders, decrees, directives, consent agreements, memoranda of
understanding, permits, concessions, grants, franchises, licenses and other
governmental authorizations or approvals applicable to Buyer,

which are necessary to complete the Stock Purchase or the transactions
contemplated by this Agreement.

3. REPRESENTATIONS AND WARRANTIES BY SELLER AND ACQUIREE. Seller and
Acquiree represent and warrant to Buyer as follows:

(a) ORGANIZATION, GOOD STANDING, AUTHORITY, DEPOSIT INSURANCE, ETC.
Seller is a savings and loan holding company organized, validly existing
and in good standing under the laws of the state of Delaware. Acquiree is a
wholly-owned subsidiary of Seller and is a federal savings bank organized
and validly subsisting and, to the knowledge of Acquiree, is in good
standing under federal law. Acquiree has no subsidiary. Acquiree has all
requisite corporate power and authority to conduct its business as it is
now conducted, to own and operate its properties and assets and to lease
properties used in its business. Acquiree has all requisite corporate power
and authority to enter into this Agreement and, subject to obtaining any
required regulatory and shareholder approvals, to perform and carry out the
provisions of and all of its respective obligations under this Agreement.
The customer deposits held by Acquiree are insured by the Savings
Association Insurance Fund ("SAIF") administered by the FDIC in accordance
with the Federal Deposit Insurance Act. Acquiree has paid all assessments
and filed all reports required by the Federal Deposit Insurance Act.

(b) CAPITALIZATION, INVESTMENTS. As of the date hereof, the
authorized capital stock of Acquiree consists solely of the Acquiree Stock
which shares are validly issued and outstanding, fully paid and
non-assessable. There are no authorized, issued or outstanding options,
convertible securities, warrants or other rights to purchase or acquire any
Acquiree Stock and there is no commitment of Seller or Acquiree to issue
same and, other than by operation of law, there are no outstanding
agreements, restrictions, contracts, commitments or demands of any
character to which Seller or Acquiree is a party, which relate to the
transfer or restrict the transfer of any shares of Acquiree Stock. To the
knowledge of Seller and Acquiree, there are no shareholder agreements,
understandings or commitments relating to the right of Acquiree to vote or
dispose of Acquiree Stock. No share of Acquiree Stock has been issued in
violation of the preemptive rights of any person.

(c) FINANCIAL STATEMENTS. Seller has furnished Buyer with unaudited
statements of financial condition, operations and various supporting
financial schedules as of, and for the periods ending on, each of the last
two

fiscal quarters, all as included in the Thrift Financial Reports ("TFR's")
provided to the OTS. Seller and Acquiree have also provided Buyer with all
management letters from Seller's independent certified public accountants
since January 1, 1992, to the extent such letters or portions thereof
related to Acquiree. For purposes of this Agreement, the "Acquiree
Statement" shall mean the unaudited statements of financial condition for
Acquiree as of June 30, 1995 as included in the TFR's (but excluding the
amounts associated with Excluded Assets and Liabilities). The above
unaudited statements of financial condition and operations (excluding the
amounts associated with Excluded Assets and Liabilities) present fairly the
financial condition and results of operations of Acquiree at the dates
thereof, in accordance with the instructions for preparing TFR's and, where
applicable, with generally accepted accounting principles consistently
applied. Except as and to the extent reflected or reserved against in the
Acquiree Statement, or as otherwise disclosed pursuant to this Agreement
Acquiree had, at the date thereof, no material liabilities or obligations,
or any other liabilities or obligations which in the aggregate would be
material, secured or unsecured (whether accrued, absolute, contingent or
otherwise), which should be reflected in the Acquiree Statement in
accordance with the instructions for preparing TFR's and, where applicable,
with generally accepted accounting principles consistently applied. The
books and records of Acquiree are maintained in accordance with generally
accepted accounting principles consistently applied.

(d) ABSENCE OF CERTAIN DEVELOPMENTS. Since June 30, 1995, except as
set forth on Schedule 3(d) hereto, and as contemplated by Section l(a) or
any other provision hereof, there has been (i) no material adverse change
in the financial condition, business or results of operations of Acquiree
excluding changes resulting from or attributable to (a) any changes since
such date in any federal or state law, rule or regulation or in generally
accepted accounting principles that affect savings institutions or their
holding companies generally, or (b) reasonable expenses incurred since such
date in connection with the transactions contemplated by this Agreement,
(ii) no declaration, setting aside or payment of any dividend or other
distribution with respect to the stock of Acquiree other than cash
dividends, the timing and amounts of which are consistent with those
declared and paid in the prior fiscal year; (iii) no material loss,
destruction, or damage to the properties of Acquiree which loss,
destruction, or damage is not adequately covered by insurance; (iv) no
agreement, contract or commitment entered into or agreed to be entered into
except for those in the ordinary course of

business and except for this Agreement; (v) no amendment or termination of
any material contract, lease, license, or other agreement to which Acquiree
is a party except in the ordinary course of business; and (vi) no change in
any of the accounting methods or practices or revaluation of any of the
assets of Acquiree, except as required by changes in generally accepted
accounting principles, or applicable laws, rules or regulations. Since such
date, Acquiree has conducted its business only in the ordinary course.

(e) TAXES. As of the date of this Agreement Acquiree is a "domestic
building and loan association" as defined in Section 7701(a)(19) of the
Internal Revenue Code of 1986, as amended (the "Code"). Except as set forth
on Schedule 3(e) hereto, (i) Acquiree has filed all tax returns (as
described below) that it is required to file and all taxes (as described
below) of Acquiree to be due from Acquiree have been duly paid, other than
taxes or charges which are not as yet due, delinquent or have not been
finally determined, and no extensions for the time of payment have been
requested; (ii) no additional assessments of tax have been proposed, are
pending or, to the best knowledge of Acquiree, threatened by any
governmental authority; and (iii) no waivers of statutes of limitation
concerning taxes associated with the Acquiree are in effect as of the date
hereof. Except as set forth on Schedule 3(e), Acquiree has properly made
all accruals and reserves for tax liabilities for the payment of any of
Acquiree's respective federal, state, county, municipal, local and foreign
tax liabilities, including interest and penalties, whether proposed,
pending, threatened or disputed, for any period ended on or prior to the
date hereof and for which Acquiree may, at said date, have been liable,
except as a result of the transactions contemplated by this Agreement.
Internal Revenue Service audits of Acquiree have never been conducted.
Copies of all returns (or portions thereof relating to Acquiree) filed as
well as all related material correspondence and documents concerning
federal, state, county, municipal or local income, capital stock,
franchise, or other similar taxes in respect of the two most recently
completed tax years have been made available to Buyer. Except as set forth
on Schedule 3(e), Acquiree has not executed or filed with the Internal
Revenue Service any agreement extending the period for assessment and
collection of any federal tax.

The Internal Revenue Service has not, to the knowledge of Acquiree,
commenced, or given notice of its intention to commence, any examination or
audit of the federal income tax returns of Acquiree for any year subsequent
to the year ended December 31, 1991.

(f) LITIGATION. Except as set forth on Schedule 3(f) hereto, no
material action, suit, claim, counterclaim or other litigation or
proceeding, or to the best knowledge of Acquiree investigation, is pending,
or is known by the executive officers of Acquiree to be threatened, against
Acquiree before any court or governmental or administrative agency,
domestic or foreign. There are no outstanding orders, writs, injunctions,
judgments, decrees, directives, consent agreements or memoranda of
understanding involving Acquiree and any federal regulatory agency, state
or local court or governmental authority or arbitration tribunal that could
materially and adversely affect the condition, financial or otherwise,
assets, liabilities, business, operations or future prospects of Acquiree
or that in any manner restrict the right of Acquiree to conduct its
business as presently conducted. Acquiree is unaware of any fact or
condition presently existing that might give rise to any litigation,
investigation, or proceeding which, if determined adversely to Acquiree
would materially and adversely affect the condition, financial or
otherwise, of the assets, liabilities, business operations or future
prospects of Acquiree.

(g) BROKERAGE. Except as set forth on Schedule 3(g) hereto, there are
no claims for brokerage commissions, finder's fees or similar compensation
arising out of or due to any act of Acquiree in connection with the
transactions contemplated by this Agreement or based on any agreement or
arrangement made by or on behalf of Acquiree.

(h) PROPERTIES. Except as set forth on Schedule 3(h) hereto, Acquiree
has good and marketable title, free and clear of any mortgage, pledge,
lien, charge or other encumbrance, to all of its real or personal property
which is being retained by Acquiree pursuant to the terms of the Agreement,
except for (i) liens for current taxes not yet due; (ii) such imperfections
of title, encumbrances and easements, if any, as are not individually or in
the aggregate substantial or material in character, amount or extent and do
not materially detract from the value, or interfere with the present or
proposed use, of such properties; and (iii) dispositions of such property
or assets in the ordinary course of business. The structure and other
improvements to real estate, furniture, fixtures and equipment which is
being retained by Acquiree pursuant to the terms of the Agreement, are in
good operating condition and repair (ordinary wear and tear excepted) and
comply in all material respects with all applicable laws, ordinances and
regulations, including, without limitation, all building codes, zoning
ordinances and other similar laws. Except as set forth on Schedule 3(h),
Acquiree owns or has the right to use all real and personal property which
is being retained by Acquiree pursuant to the

terms of the Agreement. Except as set forth on Schedule 3(h), each lease
pursuant to which Acquiree as lessee, leases real or personal property is
valid and in effect in accordance with its respective terms, and there is
not, under any of such leases, on the part of the lessee any material
existing default or any event which with notice or lapse of time, or both,
would constitute such a default, other than defaults which would not
individually or in the aggregate have a material adverse effect on the
financial condition, business, prospects, or operating results of Acquiree
taken as a whole. Except as set forth on Schedule 3(h), each of such leases
is assumable by Buyer or its assigns in accordance with the transactions
contemplated by this Agreement and without payment of any penalty or
special assessment.

(i) COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed on Schedule
3(i) hereto, Acquiree is in compliance in all material respects with all
statutes, laws, ordinances, rules, regulations, judgments, orders, decrees,
directives, consent agreements, memoranda of understanding, permits,
concessions, grants, franchises, licenses, and other governmental
authorizations or approvals applicable to Acquiree's depository or other
liabilities, and all permits, concessions, grants, franchises, licenses,
certificates of authority, and other governmental authorizations and
approvals necessary for the conduct of the business of Acquiree as
presently conducted have been duly obtained and are in full force and
effect and there are no proceedings pending, or to the knowledge of
Acquiree threatened, which may result in the revocation, cancellation,
suspension or material adverse modification of any such permits,
concessions, grants, franchises, licenses, and other governmental
authorizations and approvals, and all filings, applications and
registrations have been made with federal, state, local, and foreign
governmental or regulatory bodies that are required in order to permit it
to carry on its business as it is presently conducted.

(j) CONTRACTS AND COMMITMENTS. ETC. Each written or oral contract
(other than loans to or contracts with customers reasonably incurred by
Acquiree in the ordinary course of business) which involves aggregate
payments or receipts in excess of $10,000 per year to which Acquiree is a
party, or by which Acquiree is bound, including without limitation every
employment benefit plan, agreement, lease, license and other commitment to
which Acquiree is a party or by which Acquiree or its properties may be
bound ("Material Contracts"), is identified in Schedule 3(j) hereto. Except
as disclosed on Schedule 3(j), all such Material Contracts are valid and in
full force and effect, and all parties thereto have in all material
respects performed all obligations required to be performed by them to date
and are not in

default in any material respect and no event has occurred which, with the
lapse of time or notice by a third party or both could result in a default
by-Acquiree under such Material Contract, Charter or Bylaws of Acquiree.
Schedule 3(j) identifies each such Material Contract that requires the
consent or approval of third parties to the execution and delivery of this
Agreement or to the consummation of the transactions contemplated herein.

(k) INSURANCE. Set forth on Schedule 3(k) is a listing of all
insurance policies owned by Acquiree. Such policies are in effect and full
force pursuant to their terms. No notices of cancellation have been
received in connection therewith.

(l) NO GUARANTEES. Except as disclosed in Schedule 3(l) hereto,
Acquiree is not obligated as guarantor, co-signer or surety (or otherwise
in a secondary liability capacity) for any obligation of any kind of any
other person or entity.

(m) EXAMINATION REPORTS. Neither Seller nor Acquiree is subject to
any cease and desist order, written agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of, federal or state governmental
authorities charged with the supervision or regulation of savings and loan
associations or savings and loan holding companies or engaged in the
insurance of savings and loan deposits (collectively "Thrift Regulators"
and individually "Thrift Regulator"), nor has it been advised by any Thrift
Regulator that it is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, directive,
written agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter, board resolutions or similar undertaking.

(n) AGREEMENT, AUTHORITY, ABSENCE OF CONFLICTS. The execution,
delivery and performance of this Agreement have been duly and validly
authorized by the Boards of Directors of Seller and Acquiree, as the case
may be, and do not and, subject to obtaining all required authorizations
and approvals, will not violate (i) any of the provisions of, or constitute
a default under or give any person or party the right to accelerate payment
or performance under any Material Contract; (ii) the Charter or Bylaws of
Seller or Acquiree; or (iii) any order, writ, injunction, decree, statute,
rule or regulation applicable to Seller or Acquiree. This Agreement has
been duly executed and delivered by Seller and Acquiree

and constitutes, assuming the due authorization, execution and delivery
thereof by Buyer, a valid and binding obligation of Seller and Acquiree,
respectively, enforceable in accordance with its terms except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws effecting the enforcement of creditor's rights generally or by
general principles of equity (whether applied in a proceeding in equity or
at law).

(o) REPORTING. Acquiree has timely filed all reports required to be
filed by it pursuant to rules and regulations of federal bank regulatory
authorities and all such reports when filed were complete and correct in
all material respects.

(p) FULL DISCLOSURE. None of the information with respect to Acquiree
which has been furnished to Buyer or included in any application to, or
filing with, any regulatory agency made in connection with the transactions
contemplated hereby will, at the respective time it is furnished,
distributed, mailed or filed, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to
make the statements therein not misleading in light of the circumstances
under which they were made.

(q) EMPLOYEE BENEFIT PLANS. All employee fringe or other benefits
applicable to Acquiree's employees are listed and described on Schedule
3(q).

(r) LABOR MATTERS. Acquiree is not a party to, or bound by, any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is Acquiree the
subject of a proceeding asserting that Acquiree has committed an unfair
labor practice or seeking to compel Acquiree to bargain with any labor
organization as to wages and conditions of employment, nor is there any
strike or other labor dispute involving Acquiree pending, or, to the best
knowledge of Acquiree, threatened, that might materially or adversely
affect the condition, financial or otherwise, assets, liabilities, business
or operations of Acquiree. Except as set forth on Schedule 3(r) hereto,
Acquiree is not subject to or a party in any complaint or action before any
state human relations commission, Equal Employment Opportunity Commission
or the Department of Labor.

(s) ENVIRONMENTAL MATTERS. For purposes of this paragraph (s), the
following terms shall have the indicated meaning:

"Environmental Law" means any federal, state or local law,
statute, ordinance, rule, regulation or code, license, permit,
authorization, approval relating to (1) the protection, preservation
or restoration of the environment (including, without limitation, air,
water vapor, surface water, groundwater, drinking water supply,
surface soil, subsurface soil, plant and animal life or any other
natural resource), and (2) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances. The term
Environmental Law includes without limitation (1) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42
U.S.C. Section 9601, ET SEQ.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6901, ET SEQ.; the Clean Air Act, as
amended, 42 U.S.C. Section 7401, ET SEQ.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1251, ET SEQ.,; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 9601, ET SEQ.;
the Emergency Planning and Community Right to Know Act, 42 U.S.C.
Section 11001, ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section
300f, ET SEQ.; and all comparable state and local laws, and (2) any
common law (including without limitation common law that may impose
strict liability) that may impose liability or obligation for injuries
or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Substance.

"Hazardous Substance" means any substance presently listed,
defined, designated or classified as hazardous, toxic, radioactive or
dangerous or otherwise regulated under any Environmental Law, whether
by type or by quantity, including any material containing any such
substance as a component. Hazardous Substances include without
limitation petroleum or any derivative or by-product thereof,
asbestos, radioactive material, and polychlorinated biphenyls.

Except as set forth on Schedule 3(s) (i) Acquiree has not received
notice of any violation of, or claim, citation, assessment, proposed
assessment or demand for abatement in connection with any Environmental
Laws, or generated, stored, or disposed of any Hazardous Substance, and to
the actual knowledge of Acquiree is not subject to any claim or lien under
any Environmental Laws; and (ii) no real estate to be

retained by Acquiree pursuant to the terms of the Agreement, whether owned,
operated or leased by Acquiree, has been designated to Acquiree as
requiring any environmental cleanup or response action to comply with
Environmental Laws, or to the actual knowledge of Acquiree, has been the
site of release of any Hazardous Substance.

(t) PROCEEDINGS. As of the date of this Agreement, there is no
pending or, to the best knowledge of Acquiree, threatened, legal or
governmental proceeding against Acquiree and Acquiree and Seller are
unaware of any fact or circumstance which would adversely affect Seller's
or Acquiree's, ability to obtain any required regulatory approvals
applicable to them or satisfy any of the other conditions required to be
satisfied by them in order to consummate the transactions contemplated by
this Agreement.

(u) UNDISCLOSED LIABILITIES. Acquiree has incurred no liabilities or
obligations (whether absolute, contingent or otherwise) of any nature not
recorded or otherwise disclosed, except liabilities or obligations incurred
in the ordinary course of business or which would not have a material
adverse effect on the financial condition, business, prospects or operating
results of Acquiree taken as a whole.

(v) FINANCIAL INSTITUTIONS BOND. Since January 1, 1994, Acquiree has
continuously maintained in full force and effect a financial institutions
bond with coverage equal to or greater than that provided for on a "Form
24" insuring against acts of dishonesty by each of its employees. Except as
disclosed on Schedule 3(v) hereto, no claim has been made under any such
bond, and Seller and Acquiree are unaware of any fact or condition
presently existing which might form the basis of a claim under any such
bond. Seller and Acquiree have no reason to believe that Acquiree's present
financial institutions bond will not be renewed by its carrier on
substantially the same basis and terms as those now in effect.

(w) (NOT USED.)

(x) ASSUMABILITY OF LEASES AND CONTRACTS. Except as disclosed on
Schedule 3(x) hereto, all Material Contracts are assumable and assignable
and do not contain any term or provision that would accelerate or increase
payments that would otherwise be due by Acquiree to such person or entity
or change or modify the provisions or terms of such contract by reason of
this Agreement or the transactions contemplated hereby.

(y) LOANS. Except as disclosed on Schedule 3(y) hereto, each loan to
be retained by the Acquiree pursuant

to the terms of the Agreement is, to Acquiree's knowledge, the legal, valid
and binding obligation of the obligor named therein, enforceable in
accordance with its terms, subject to bankruptcy, insolvency and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles. All such loans, and the collateral and other
security therefor, and the documentation for the same, meets the
requirements, rules, regulations or directives of the OTS, FDIC, or other
applicable governmental authorities.

(z) (NOT USED.)

(aa) TRADEMARKS, TRADE NAMES. Set forth in Schedule 3(aa) hereto is an
accurate and complete list and brief description of all trademarks, either
registered or common, trade names and copyrights and all applications and
licenses therefor owned by Acquiree or in which it has an interest.
Acquiree owns, or has the right to use, all trademarks, trade names and
copyrights used in or necessary for the ordinary conduct of its existing
business as heretofore conducted, and the consummation of the transactions
contemplated hereby will not alter or impair any such rights. Except as set
forth in Schedule 3(aa), no claims are pending for the use of any
trademarks, trade names or copyrights or challenging or questioning the
validity or effectiveness of any license or agreement relating to the same
nor is there any valid basis for any such claim, challenge or question,
and, to the best knowledge of Acquiree, the use of such trademarks, trade
names and copyrights by Acquiree does not infringe on the rights of any
person.

(bb) ACCURACY OF REPRESENTATIONS. Until Closing, Acquiree will
promptly notify Buyer if any of the representations contained in this
Section 3 ceases to be true and correct subsequent to the date hereof.

(cc) MATERIALITY. For purposes of this Section 3, unless otherwise
defined, the term "material" or "materially" refers to amounts in excess of
$200,000.

(dd) ABSENCE OF QUESTIONABLE PAYMENTS. From and after July 1, 1991,
Acquiree has not, nor, to the best knowledge of Seller and Acquiree, has
any director, officer, agent, employee, consultant or other person
associated with, or acting on behalf of, Acquiree (i) used any Acquiree
corporate funds for unlawful contributions, gifts, entertainment or
unlawful expenses relating to political activity; or (ii) made any direct
or indirect unlawful payments to governmental officials from any Acquiree
corporate funds, or established or maintained any unlawful or unrecorded
accounts with funds received from Acquiree.

(ee) POWERS OF ATTORNEY, GUARANTEES. Except as set forth on Schedule
3(ee), Acquiree has no power of attorney outstanding, or any obligation or
liability, either actual, accruing or contingent, as guarantor, surety,
cosigner, endorser, comaker or indemnitor in respect of the obligation of
any person, corporation, partnership, joint venture, association,
organization or other entity, except for letters of credit issued in the
ordinary course of business which are listed on Schedule 3(ee).

(ff) MORTGAGE SERVICING AGREEMENTS. Acquiree has previously provided
Buyer true and complete copies of all mortgage servicing agreements to
which Acquiree is a party as of the date hereof (the "Mortgage Servicing
Agreements") and shall, by separate instrument, executed within ten (10)
days hereof enter into a servicing agreement pursuant to which Buyer will
service loans for Seller. Except as set forth in Schedule 3(ff), the
Mortgage Servicing Agreements set forth all applicable terms and conditions
and have not been modified in any material respect. Each Mortgage Servicing
Agreement is a valid and binding obligation of Acquiree and to Acquiree's
knowledge of all of the other parties thereto and is in full force and
effect, enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding in equity or at law).
Except as set forth in Schedule 3(ff), there is no default or claim of
default by any party under any such Mortgage Servicing Agreement, and
except for the consummation of the transactions contemplated by this
Agreement, no event has occurred which with the passage of time or the
giving of notice or both would constitute a default by any party under any
such Mortgage Servicing Agreement or would result in any such Mortgage
Servicing Agreement being terminable by any party thereto. As of the date
of this Agreement, there is no pending or, to the best knowledge of
Acquiree, threatened cancellation of any Mortgage Servicing Agreement.
Except as set forth in Schedule 3(ff), no material sanctions or penalties
have been imposed upon Acquiree under any Mortgage Servicing Agreement or
under any applicable regulation relating thereto.

4. ACCESS TO AND INFORMATION CONCERNING PROPERTIES, RECORDS, ETC. Seller
and Acquiree shall, to the extent permitted by law, give to Buyer, its counsel,
accountants, financial advisors and other representatives full access, at
reasonable times and upon reasonable notice (so as not to interfere unreasonably
with the ordinary course and conduct of business of Acquiree) throughout the

period prior to the Closing, access to all of Acquiree's properties, books,
contracts, commitments and records, including, but not limited to, minute books,
Charter and Bylaws, and shall furnish to Buyer during such period all such
information concerning Acquiree and its affairs as Buyer may reasonably request.
In addition, Acquiree shall make its officers available at reasonable times and
upon reasonable notice to discuss with Buyer's designated representatives the
substance of all documents, financial statements and other information provided
by Acquiree, and other matters as Buyer shall reasonably deem pertinent to the
transactions contemplated by this Agreement. All information disclosed by any
party hereto or by any affiliate of a party hereto pursuant to this Section 4
shall be subject to Section 14 hereof (regarding confidential treatment of
confidential or non-public information).

(a) BANK PREMISES. Buyer shall be entitled to possession of the
branch facilities acquired in connection with this Agreement upon and after
the Effective Date. Seller shall coordinate with Buyer to have Acquiree's
signs, logos and related equipment removed from such branch premises as
soon as possible following the Effective Date at Seller's expense. Within
one (1) business day following the Effective Date, Seller shall remove all
of Acquiree's personal property not being transferred hereunder, including,
but not limited to, stationery, forms, labels, shipping material, brochures
and advertising material. Seller shall provide Buyer with reasonable access
to such premises at Buyer's request prior to the Closing to facilitate
Buyer's occupation of such premises and the smooth transition of the
transfer.

5. AFFIRMATIVE COVENANTS OF BUYER. Buyer covenants and agrees that,
throughout the period commencing on the date hereof and ending on the date of
Closing, except for specific proposed actions or inaction as shall be consented
to in writing by Acquiree, Buyer will for its own part:

(a) CONDUCT OF BUSINESS. Conduct its business and that of its
subsidiaries in a manner that will not adversely affect Buyer's ability to
obtain all necessary regulatory approvals for the transactions contemplated
hereby or Buyer's ability to perform its obligations under this Agreement
and conduct its and its subsidiaries businesses in the ordinary course;
provided that Buyer may undertake activities which are not in the ordinary
course on the condition that such activities will not result in a material
adverse change in the financial condition of Buyer and its subsidiaries
taken as a whole or impair Buyer's ability to consummate the transaction
contemplated by this Agreement;

(b) PRESERVATION OF BUSINESS. Use its best efforts to maintain and
preserve its and its subsidiaries businesses;

(c) INSURANCE. Maintain in full force and effect insurance customary
with industry practices for the businesses conducted by Buyer and its
subsidiaries;

(d) LAWS, RULES, ETC. Comply with and perform in all material respects
all obligations and duties imposed upon it by all federal and state laws
and all rules, regulations and orders imposed by federal or state
governmental authorities, except in respects not materially adverse to the
financial condition of Buyer and its subsidiaries or which would not
materially impair the ability of Buyer to consummate the transactions
contemplated hereby;

(e) BEST EFFORTS. Use its best efforts to assure, to the extent
reasonably within its control, as soon as it is reasonably practicable, the
satisfaction of the conditions to the effectiveness of the transactions
contemplated hereunder and the transactions contemplated by this Agreement
including without limiting the generality of the foregoing, the Buyer shall
take all steps necessary to prepare, promptly file and prosecute all
required applications for regulatory approval of the transactions
contemplated by this Agreement;

(f) NOTICES. Notify Acquiree of (i) any fact or circumstance of which
the executive officers of Buyer or its subsidiaries have knowledge which
would, absent disclosure by Buyer to Acquiree and Acquiree's subsequent
consent to such fact or circumstance, not permit Buyer to satisfy the
conditions set forth in Section 9(a)(i) of this Agreement, (ii) any breach
of any of its covenants and agreements contained herein, and (iii) any
material adverse change in its financial condition on a consolidated basis;
and

(g) RANDALLSTOWN PROPERTY. Promptly obtain, at its own expense, a
building inspection report ("Inspection Report") and a Phase I
environmental study ("Phase I Study") for the Randallstown, Maryland branch
property. The Inspection Report and Phase I Study shall be conducted by
parties selected by Buyer and approved by Seller, which approval shall not
be unreasonably withheld. The results of the Inspection Report and the
Phase I Study shall be submitted to both Buyer and Seller and shall be
satisfactory to Buyer, in its sole discretion. Provided, however, that in
the event Buyer shall deem either the Inspection Report or the Phase I
Study, or both, to contain evidence of defects in the property that are
unacceptable to Buyer, the Buyer shall,

within five (5) business days of receiving the respective written copies
thereof, notify Seller in writing describing any objectionable defects. In
such event, Seller shall be entitled to cure such defects provided that
such cure is effected or, with the Agreement of Buyer, initiated within
twenty (20) business days of receiving notice from Buyer. Such cure shall
be acceptable to Buyer in Buyer's sole discretion. In the event such cure
is unsatisfactory to Buyer or in the event Seller does not attempt to cure
any such defect, Buyer shall not be obligated to purchase the Randallstown,
Maryland branch property as part of this Agreement, or otherwise, but shall
proceed with the Stock Purchase and the remaining transactions contemplated
by this Agreement. In such event, the parties shall proceed in good faith
to enter into a lease agreement the provisions of which, exclusive of
price, shall, in all material respects, be substantially the same as the
lease agreement involving the Eldersburg, Maryland branch also entered into
as part of this Agreement.

6. AFFIRMATIVE COVENANTS OF ACQUIREE. Seller and Acquiree covenant and
agree that, throughout the period commencing on the date hereof and ending on
the date of Closing, except for specific proposed actions or inaction as shall
otherwise be consented to in writing by Buyer, Acquiree will for its own part,
and Seller will cause the Acquiree to:

(a) CONDUCT OF BUSINESS. Conduct Acquiree's business, including
extensions of credit, only in the ordinary course consistent with past
practices and written policies except as may be contemplated by Section
1(a) or any other provision hereof;

(b) PRESERVATION OF BUSINESS. Except as may be contemplated by
Section 1(a) hereof use their best efforts to maintain and preserve
Acquiree's business, including, but not limited to, maintaining goodwill
and relationships with customers and others having business dealings with
Acquiree, preserving and collecting all material claims and causes of
action belonging to Acquiree, and maintaining its books of account and
other records;

(c) PROPERTIES. Except as may be contemplated by Section 1(a) hereof
maintain and keep Acquiree's properties, both real property and tangible
personal property, in as good repair and condition in all material respects
as they presently exist, except for depreciation due to ordinary wear and
tear and damage due to unavoidable casualty;

(d) INSURANCE. Maintain in full force and effect all insurance
policies presently in effect;

(e) CONTRACTS, ETC. Except as may be contemplated by Section 1(a)
hereof perform all material obligations under agreements, contracts,
leases, documents and instruments relating to or affecting Acquiree's
assets, properties and business;

(f) FINANCIAL STATEMENTS. Furnish to Buyer:

(i) As soon as practicable and in any event within
forty-five (45) days after the end of each of the fiscal quarters
beginning July 1, 1995 and ending prior to Closing, unaudited
statements of operations of Acquiree for the period beginning at the
commencement of the fiscal year and ending at the end of such
quarterly period, and an unaudited balance sheet of Acquiree as of the
end of such quarterly period;

(ii) As soon as practicable, copies of all such financial
statements and reports as it shall send to or file with the OTS or any
other banking regulatory authority;

(iii) Promptly upon any executive officer of Acquiree
obtaining knowledge of any condition or event which would constitute a
material violation of the terms and conditions of this Agreement or
which would constitute a material default under any material
indenture, mortgage, agreement or other instrument securing or
relating to any indebtedness of Acquiree for borrowed money, a
certificate of the Chairman of Acquiree, specifying the nature of such
material violation or default and what action Acquiree has taken or is
taking or proposes to take with respect thereto;

(iv) Promptly upon becoming aware that any person has given
notice to Acquiree or taken any other action with respect to a claimed
violation or default of the type referred to in subsection (iii) of
this Subsection (f), a written notice describing the notice given or
action taken by such person, the nature of such violation or default
and what action Acquiree has taken or is taking or proposes to take
with respect thereto; and

(v) With reasonable promptness, such additional financial
data as Buyer may reasonably request;

(g) LAWS, RULES, ETC. Comply with and perform in all material
respects all material obligations and duties imposed upon it by all
federal, state, county, local and municipal laws and all rules,
regulations, directives, decrees, orders, and ordinances imposed by
federal, state, county, local or municipal governmental authorities,
including, but not by way of limitation of the above, compliance with
examination reports, regulations and rulings of the OTS;

(h) CORPORATE EXISTENCE. Maintain its existence as a savings bank
validly subsisting under the laws of the United States of America;

(i) NOTICES. Notify Buyer of (i) any fact or circumstance of which
the executive officers of Acquiree have knowledge which would, absent
disclosure by Acquiree to Buyer and Buyer's subsequent consent to such fact
or circumstance, not permit Acquiree to satisfy the conditions set forth in
Section 10(a)(i) of this Agreement and (ii) any material breach of any of
its covenants and agreements contained herein;

(j) BEST EFFORTS. Use its best efforts to assure, to the extent
reasonably within its control, as soon as it is reasonably practicable, the
satisfaction of the conditions to the effectiveness of the transactions
contemplated by this Agreement. Acquiree shall cooperate with Buyer and
shall use its best efforts to do or cause to be done all things reasonably
necessary or appropriate on its part in order to fulfill the conditions
precedent relating to it set forth in this Agreement and to consummate this
Agreement. In particular, without limiting the generality of the foregoing,
Acquiree shall:

(i) cooperate with Buyer in the preparation of all required
applications for regulatory approval of the transactions contemplated
by this Agreement;

(ii) take all actions which are necessary or appropriate on
its part in order to secure the approval and adoption of this
Agreement by its sole shareholder;

(iii) cooperate with Buyer in making the employees of Acquiree
reasonably available for training by Buyer prior to the Effective

Date, to the extent such training is deemed reasonably necessary by
Buyer; and

(k) COOPERATE IN TRANSFERRING DEPOSIT ACCOUNTS TO BUYER. Acquiree
shall cooperate in marketing and promotional efforts directed at Acquiree's
depositors and customers for the purpose of inducing them to transfer their
existing depository accounts to, and open new accounts with Buyer.
Provided, however, that no promotional efforts shall be undertaken prior to
the receipt of all regulatory approvals, excluding any statutory waiting
periods, contemplated by this Agreement. Any promotional efforts undertaken
prior to the Effective Date shall be within Buyer's discretion, subject to
Seller's rights as contemplated by this Section 6(k). If Buyer engages in
promotional efforts prior to the Effective Date then, notwithstanding the
method of calculating the Final Purchase Price, as contemplated by Section
1(d), Buyer shall be responsible for the payment of a premium on the
deposits it assumes pursuant to this Agreement, in an amount that is no
less than the amount that would result from calculating such premium based
on the amount of deposits existing as of the close of business on the day
such promotional efforts are first undertaken, it being understood that
such day will be deemed to be the first day on which any promotional
materials are mailed or any direct advertising or solicitation is first
undertaken, whichever occurs first. In the event this Agreement is
terminated after Buyer engages in promotional efforts then Buyer shall be
responsible for the payment of a premium measured by the amount of
decrease, if any, in Acquiree's deposits between the day on which the
promotional efforts begin and the close of business on the date of
termination. Acquiree shall have the right to review and approve any
promotional material directed toward depositors as well as any letter
simply advising them of the transactions contemplated by this Agreement.

7. NEGATIVE COVENANTS OF SELLER AND ACQUIREE. Seller and Acquiree
covenant and agree that, throughout the period commencing on the date hereof and
ending on the date of Closing, except for proposed specific actions as shall
otherwise be consented to in writing by Buyer, they will not (subject to the
fiduciary obligations of Seller's and Acquiree's Boards of Directors with
respect to Sections 7(b), (d) and (i)):

(a) Amend Acquiree's charter or bylaws;

(b) Issue, sell or otherwise dispose of (or authorize or agree to
issue, sell or dispose of) any share of capital stock of Acquiree or any
securities or documents convertible into or representing a right or option
to purchase any such shares, or enter into any other agreements to issue or
sell any shares of capital stock or change the presently outstanding shares
of

capital stock into a greater or lesser number of shares either by way of a
recapitalization, reorganization, consolidation of shares or the like, or
by a stock split, stock dividend, or by way of a merger or consolidation;

(c) Purchase, redeem, retire or otherwise acquire, or hypothecate,
pledge or otherwise encumber, any shares of capital stock of Acquiree;

(d) Merge Acquiree into, consolidate Acquiree with, or permit Acquiree
to be purchased or acquired by, any other corporation, entity or person (or
agree to any such merger, consolidation, affiliation, purchase or
acquisition), or permit (or agree to permit) any other corporation, entity
or person to be merged, consolidated or affiliated with Acquiree or be
purchased or acquired by it, or, except to realize upon collateral and
except for purchases or sales of loans in the ordinary course of its
business, permit Acquiree to acquire (or agree to acquire) all or
substantially all of the assets of any other corporation, entity or person
or except as contemplated by Section 1(a) hereof, sell or dispose (or agree
to sell or dispose) all or any substantial part of Acquiree's assets in
each case;

(e) Make, declare or pay any dividend on the Acquiree Stock or declare
or make any distribution on any shares of Acquiree's capital stock except
as contemplated by the terms of the Agreement;

(f) Enter into any employment contract, deferred compensation
arrangement, or other agreement affecting compensation or benefits, or pay
any bonus to, or increase the rate of compensation of any director,
officer, employee or consultant of Acquiree other than in the ordinary
course;

(g) Except for the payments of reasonable severance to employees who
do not remain with the Acquiree or Seller as of the Closing or within 30
days thereafter enter into or modify (except as may be required by
applicable law or to effect the transactions contemplated by this
Agreement) any pension, retirement, stock option, stock purchase,
severance, profit sharing, deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of any
current or former directors, officers or other employees of Acquiree;

(h) Except for indebtedness and contingent liabilities incurred in the
ordinary course of business (e.g., deposit liabilities, Federal Home Loan
Bank advances, or advances from Seller or Seller's affiliates)

incur any indebtedness or liability for borrowed money evidenced by notes,
bonds, debentures or other similar obligations;

(i) Solicit or encourage inquiries or proposals with respect to, or
furnish any information relating to, or participate in any negotiations or
discussions concerning, any acquisition or purchase of all or a material
portion of Acquiree's assets (except as contemplated in Section l(a)
hereof) or of a substantial equity interest in Acquiree or any business
combination with Acquiree and except with respect to transactions
contemplated by Section 1(a) hereof Acquiree shall notify Buyer immediately
if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated with, Acquiree; and Seller and Acquiree shall not permit any
officer, director, agent, advisor, or affiliate to do any of the above and
shall instruct their respective officers, directors, agents, advisors and
affiliates to comply with the above;

(j) Except in the ordinary course of business, enter into or assume
any material contract, incur any material liability or obligation, make any
material commitment, acquire or dispose of any property or asset (except as
contemplated in Section 1(a) hereof) or engage in a transaction or subject
any of Acquiree's properties or assets to any material lien, claim, charge,
or encumbrance of any kind whatsoever;

(k) Take or permit to be taken any action which would constitute a
breach of any representation, warranty or covenant set forth in this
Agreement;

(l) Enter into any related party transaction involving Acquiree except
such related party transactions relating to extensions of credit made in
accordance with applicable laws, regulations and rules and in the ordinary
course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable arm's
length transactions with other persons that do not involve more than the
normal risk of collectability or present other unfavorable features;

(m) Waive, release, grant or transfer any rights of value or modify or
change in any material respect any existing agreement to which Acquiree is
a party, other than the ordinary course of business, consistent with past
practice or as otherwise contemplated by the terms of this Agreement;

(n) Except as is consistent with past practice, enter into, renew,
extend or modify any other transaction involving Acquiree and any
affiliate;

(o) Knowingly take any action that would, under any statute,
regulation or administrative practice of the Federal Reserve, the FDIC, the
state banking regulators, or the OTS, materially or adversely affect the
ability to obtain any required approvals for consummation of the
transactions contemplated by this Agreement; or

(p) materially alter or vary Acquiree's methods or policies of buying
or selling rights to service mortgage loans.

8. CONDlTIONS TO THE OBLIGATIONS OF BUYER, SELLER AND ACQUIREE. The
Closing shall be expressly conditioned upon the following:

(a) APPROVAL OF REGULATORY AGENCIES. All required consents and
approvals of all regulatory agencies and other authorities having
jurisdiction over the transactions contemplated by this Agreement,
including without limitation the FDIC, OTS and state banking regulators,
shall have been granted and obtained, all applicable notice and waiting
periods shall have expired or passed, it being expressly understood that no
term or provision of any regulatory approval or consent shall have imposed
any materially burdensome condition or requirement which is nonstandard for
a transaction such as the transaction contemplated by this Agreement and,
in the opinion of Buyer, renders consummation of this Agreement, or the
transactions contemplated therein or thereby, inadvisable. Provided,
however, that no issue concerning federal deposit insurance shall be deemed
nonstandard for these purposes;

(b) SUITS, ACTIONS. No party hereto shall be subject to any action,
suit, proceeding, order, decree or injunction of a court or agency of
competent jurisdiction which is intended to enjoin or prohibit the
consummation of the transaction contemplated by this Agreement; and

(c) STATUTES, ORDERS. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, promulgated or
enforced by any governmental authority which prohibits, restricts or
makes illegal the consummation of the transactions contemplated by this
Agreement.

9. CONDITIONS TO THE OBLIGATIONS OF BUYER. Consummation by Buyer of the
transactions contemplated hereby is subject to the following conditions
precedent, any of which, however, may be

waived, to the extent permitted by applicable law or regulation, by the consent
in writing of Buyer.

(a) REPRESENTATIONS, WARRANTIES AND COVENANTS.

(i) The representations and warranties of Seller and
Acquiree contained herein (A) shall have been true and correct in all
material respects on the date hereof, and (B) other than as disclosed
by Acquiree to, and approved by, Buyer in writing prior to or at the
Closing, shall be true and correct in all material respects as of the
Closing, except as otherwise provided or permitted by this Agreement
and except as to any representation or warranty which specifically
relates to an earlier date.

(ii) Acquiree shall have duly performed or complied in all
material respects with all covenants, not otherwise waived by Buyer in
writing, required by this Agreement to be performed by Acquiree prior
to or at the Closing.

(iii) Buyer shall have received certificates of Seller and
Acquiree dated as of the Closing, signed by the Chairman and Chief
Financial Officer of each of Acquiree and Seller, certifying in such
detail as Buyer may reasonably request the fulfillment of the
conditions set forth in Sections 9(a)(i) and (ii) above.

(b) OPINION OF SPECIAL COUNSEL. All proceedings and legal details
incident to this Agreement shall be satisfactory to Buyer based on advice
of special counsel for Buyer and Buyer shall have received an opinion
reasonably satisfactory to it from Acquiree's counsel dated as of the date
of the Closing and addressed to Buyer, to the effect that:

(i) Acquiree is a savings bank organized and validly
subsisting under federal law and has the corporate power and authority
to execute, deliver and perform all transactions contemplated by the
Agreement and has the corporate power and authority to own and hold
its properties as of the Closing.

(ii) The authorized capital stock of Acquiree consists of
1,000 shares of common stock, par value $10.00 per share ("Acquiree
Stock") of which 1,000 shares are issued and

outstanding on the Effective Date and no shares are held as treasury
shares. Each of the outstanding shares of Acquiree Stock has been
validly issued and is fully paid and nonassessable. None of such
outstanding shares of Acquiree Stock have been issued in violation of
any preemptive rights. To such counsel's actual knowledge, after
reasonable investigation, no unissued shares of Acquiree Stock or any
other securities of Acquiree are subject to any warrants, options,
commitments, preemptive or other rights of any kind or nature, and
Acquiree is not obligated to issue any additional shares of capital
stock or any other securities of any kind or nature.

(iii) Seller has the corporate power and authority to
execute, deliver and perform all transactions relating to it
contemplated by this Agreement.

(iv) The execution and delivery of the Agreement and
performance of all transactions contemplated by the Agreement have
been duly authorized by the Boards of Directors of Seller and of
Acquiree and do not violate any of the provisions of, or constitute a
default under or give any person or party the right to accelerate
payment or performance under, the articles of incorporation or bylaws
of Seller or Acquiree or to such counsel's actual knowledge, after
reasonable investigation, any material agreement, document or
instrument to which Acquiree is a party or by which it or any of its
properties or assets is bound.

(v) The Agreement has been duly authorized, executed and
delivered by Seller and Acquiree and constitutes valid and binding
obligations of Seller and Acquiree enforceable against Seller and
Acquiree in accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereafter in effect relating
to or affecting the enforcement of creditors' rights generally or the
rights of creditors of federal savings institutions or their holding
companies, (ii) general equitable principles, and (iii) laws relating
to the safety and soundness of insured depository institutions, except
that no opinion need be expressed as to the effect or

availability of equitable remedies or injunctive relief (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).

(vi) To the actual knowledge of such counsel, after
reasonable investigation, the execution, delivery and performance of
the Agreement and the transactions contemplated thereunder by Seller
and Acquiree do not violate any provision of federal banking law,
regulation or rule applicable to Seller or Acquiree.

(vii) All consents and approvals of (and filings with) all
federal regulatory agencies or other authorities having jurisdiction
over the transactions contemplated by this Agreement required by law
to have been obtained or made by Seller and Acquiree have been
obtained or made; [such opinion to express those agencies or
authorities whose approvals have been obtained.]

(viii) To the actual knowledge of such counsel, after
reasonable investigation, there is no action, suit or proceeding
pending or threatened against Acquiree before any federal, state or
local court or governmental authority or before any arbitration
tribunal which seeks to modify, enjoin or prohibit or otherwise
adversely and materially affect the transactions contemplated by the
Agreement.

The opinion of Acquiree's special counsel shall be governed by the
Legal Opinion Accord ("Accord") of the American Bar Association Section of
Business Law (1991). The term "actual knowledge" as used herein shall have
the meaning set forth in the Accord. In addition, such opinion may be
limited to present statutes, regulations, rulings, and formal agency and
judicial interpretations and to facts as they presently exist; in rendering
such opinion, such counsel need assume no obligation to revise or
supplement it should the present laws be changed by legislative or
regulatory action, judicial decision or otherwise after such opinion is
rendered. Such counsel may assume that any agreement is the valid and
binding obligation of any parties to such agreement other than Seller or
Acquiree. In giving such opinion, such counsel may rely as to all matters
of fact on certificates of officers or directors of Seller or Acquiree and
certificates of public officials, so long as such reliance and the facts
thereunder are expressly stated.

Such counsel's opinion shall be limited to matters governed by federal law.
With respect to matters involving the application of the law of other
jurisdictions, such counsel may rely, to the extent it deems proper and as
specified in its opinion, upon the opinion of local counsel.

(c) SUIT, ACTION, ETC. No suit, action or other proceeding shall be
pending or directly threatened by any federal, state or other governmental
agency, commission or authority having jurisdiction or authority over
Seller, Acquiree, or Buyer, or by any other person, in which it is sought
to restrain or prohibit consummation of the transactions contemplated by
this Agreement and which in the reasonable and good faith judgment of the
management of Buyer, in consultation with counsel, is meritorious and
adversely affects the prospects of such consummation.

(d) CLOSING DOCUMENTS. Seller and Acquiree shall have delivered to
Buyer (i) all consents and authorizations of landlords and other persons
that are necessary to permit this Agreement to be consummated without
violation of any lease or other agreement to which Acquiree is a party or
by which Acquiree or any of its properties are bound; and (ii) such other
certificates and documents as Buyer and their counsel may reasonably
request (all of the foregoing certificates and other documents being herein
referred to as "Acquiree Closing Documents").

10. CONDITIONS TO THE OBLIGATIONS OF SELLER AND ACQUIREE. Consummation by
Seller and Acquiree of the transactions contemplated hereby is subject to the
following conditions precedent, any of which, however, may be waived, to the
extent permitted by applicable law or regulation, by the consent in writing of
Seller and Acquiree.

(a) REPRESENTATIONS AND WARRANTIES.

(i) The representations and warranties of Buyer contained
herein (A) shall have been true and correct in all material respects
on the date hereof, and (B) other than as disclosed by Buyer to, and
approved by, Seller and Acquiree in writing prior to or at the
Closing, shall be true and correct in all material respects as of the
Closing, except as otherwise permitted by this Agreement and except as
to any representation or warranty which specifically relates to an
earlier date.

(ii) Buyer shall have duly performed or complied in all
material respects with all covenants, not otherwise waived by Seller
and Acquiree in writing, required by this Agreement to be performed by
Buyer prior to or at the Closing.

(iii) Seller and Acquiree shall have received a certificate
of Buyer dated as of the Closing, signed by the President and the
Chief Financial Officer of Buyer, certifying in such detail as
Acquiree may reasonably request the fulfillment of the conditions set
forth in Sections 10(a)(i) and (ii) above.

(b) OPINION OF COUNSEL. All proceedings and legal details incident to
this Agreement shall be satisfactory to Seller and Acquiree on advice of
special counsel and Seller and Acquiree shall have received an opinion
reasonably satisfactory to it from Buyer's counsel dated as of the date of
the Closing and addressed to Seller and Acquiree to the effect that:

(i) Buyer is a corporation and is organized, validly
existing and in good standing under the laws of the State of Maryland
and has the corporate power and authority to execute, deliver and
perform all transactions contemplated by this Agreement.

(ii) The execution, delivery and performance of all
transactions contemplated by the Agreement have been duly authorized
by the Board of Directors of Buyer and do not and will not violate any
of the provisions of, or constitute a default under, or give any
person or party the right to accelerate payment or performance under
the Articles of Incorporation or Bylaws of Buyer or to such counsel's
knowledge, after reasonable investigation, any material agreement,
document or instrument to which Buyer is a party or by which it or any
of its properties or assets is bound.

(iii) The Agreement has been duly authorized, executed and
delivered by Buyer and constitutes a valid and binding obligation of
Buyer enforceable against Buyer in accordance with its terms, except
as may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership or other similar laws now or
hereafter in effect relating to or affecting

the enforcement of creditors' rights generally; (ii) general equitable
principles; and (iii) laws relating to the safety and soundness of
insured depository institutions, except that no opinion need be
expressed as to the effect or availability of equitable remedies or
injunctive relief (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

(iv) To the actual knowledge of such counsel, after
reasonable investigation, the execution, delivery and performance as
of the date of the opinion of the Agreement and the transactions
contemplated thereunder by Buyer does not violate any provision of
law, regulation, rule, order or decree applicable to Buyer.

(v) All consents and approvals of (and filings with) all
federal or state regulatory agencies or other authorities having
jurisdiction over the transactions contemplated by the Agreement
required by law for Buyer to have been obtained or made have been
obtained or made; such opinion to express those agencies or
authorities whose approvals have been obtained or accomplished.

(vi) To the actual knowledge of such counsel, after
reasonable investigation, there is no action, suit or proceeding
pending or threatened against Buyer before any federal, state or local
court or government authority or before any arbitration tribunal which
seeks to modify, enjoin or prohibit or otherwise adversely and
materially affect the transactions contemplated by the Agreement.

The opinion of Buyer's special counsel shall be governed by the Legal
Opinion Accord ("Accord") of the American Bar Association Section of
Business Law (1991). The term "actual knowledge" as used herein shall have
the meaning set forth in the Accord. In addition, such opinions may be
limited to present statutes, regulation, rulings, and formal agency and
judicial interpretations and to facts as they presently exist; in rendering
such opinion, such counsel need assume no obligation to revise or
supplement it should the present laws be changed by legislation or
regulatory action, judicial decision or otherwise, after such opinion has
been rendered. Such counsel may assume that any agreement is the valid and
binding obligation of any parties to such agreement, other than Buyer. In
giving such opinion, such counsel

officers or directors of Buyer and certificates of public officials, so
long as such reliance and the facts thereunder are expressly stated. Such
counsel's opinion shall be limited to matters governed by federal laws and
by the laws of the State of Maryland.

(c) SUIT, ACTION, ETC. No suit, action or other proceeding shall be
pending, or directly threatened by any federal, state or other governmental
agency, commission or authority having jurisdiction or authority over
Seller, Acquiree, or Buyer or by any other person, in which it is sought to
restrain or prohibit consummation of the transactions contemplated by this
Agreement.

(d) DEPOSIT INTO PAYMENT FUND. On or prior to the Effective Date,
Buyer shall have deposited cash into a payment fund in an amount sufficient
to enable Buyer to satisfy its obligations to pay the aggregate
consideration under this Agreement.

(e) CLOSING DOCUMENTS. Buyer shall have delivered to Seller and
Acquiree (i) all consents and authorizations necessary to permit this
Agreement to be consummated; and (ii) such other certificates and documents
as Seller and Acquiree and their counsel may reasonably request (all of the
foregoing certificates and other documents being herein referred to as
"Buyer Closing Documents").

11. CERTAIN TAX MATTERS. Seller, Acquiree and Buyer hereby covenant and
agree with respect to certain tax matters as follows:

(a) INTERNAL REVENUE CODE SECTION 338 (h)(10) ELECTION. With respect
to the Stock Purchase hereunder, Buyer shall make a timely election Section
338 (g) of the Code and Seller and Buyer shall jointly make an election
under Section 338 (h)(10) of the Code (and any corresponding elections
under state or local tax laws) (collectively, a "Section 338 (h)(10)
Election"). Seller and Buyer shall (i) cooperate with each other to take
all actions necessary and appropriate (including filing such forms,
returns, elections, schedules and other documents as may be required) to
effect and preserve a timely Section 338 (h)(10) Election in accordance
with Section 338 of the Code and the temporary regulations thereunder, or
any successor provisions, as promptly as practicable following the Closing
Date, but not later than the latest date on which such Section 338 (h)(10)
Election is permitted to be made, and from time to time thereafter, and
(ii) Seller and Buyer shall report the Stock Purchase pursuant to this
Agreement consistent with Section 338

(h)(10) Election and shall take no position contrary thereto or
inconsistent therewith in any tax return, any discussion with or proceeding
before any a taxing authority, or otherwise.

(b) ALLOCATION OF PURCHASE PRICE. Schedule 11(a) sets forth the
tentative allocation (the "Tentative Allocation Schedule") of the purchase
price among the assets acquired and liabilities assumed. Buyer, Seller and
Acquiree acknowledge that the allocation contained in the Tentative
Allocation Schedule is based upon the purchase price calculated in
accordance with paragraph l(b). Buyer, Seller and Acquiree further
acknowledge that the Final Purchase Price determined in accordance with
Paragraph l(d) shall serve as the basis for a final revised allocation (the
"Final Allocation Schedule") of the Final Purchase Price among the assets
acquired and liabilities assumed by Buyer in connection with this
Agreement. All allocations utilized in connection with the determination of
the Final Allocation Schedule shall be prepared in accordance with Section
338(h)(10) of the Code and the applicable regulations promulgated
thereunder. Seller shall have the right to review the Final Allocation
Schedule and Seller and Buyer shall consult and resolve in good faith any
issues arising as a result of Seller's review of such schedule. If the
parties are unable to resolve any dispute within five business days of the
receipt by Seller of the Final Allocation Schedule, the parties shall
jointly request an independent accounting firm, selected in the same manner
as described in paragraph l(d), to resolve any dispute as promptly as
possible, with one half of the cost of such resolution to be borne by each
of Seller and Buyer. If such independent accounting firm is unable to make
a determination with respect to any dispute prior to the due date for the
filing of any required tax return for which such determination is
necessary, Buyer and Seller shall file such return without such
determination having been made, subject, however, to the parties'
obligation thereafter to file amended returns reflecting the final decision
by the independent accounting firm. Seller and Buyer (i) shall be bound by
the allocation contained in the Final Allocation Schedule for purposes of
determining any and all consequences with respect to income taxes
associated with the transactions contemplated herein; (ii) shall prepare
and file all returns required to be filed with any taxing authority in a
manner consistent with such allocations; (iii) shall take no position
inconsistent with such allocation in any return, in any discussion with or
preceding before any taxing authority, or otherwise. In the event such
allocation is disputed by any taxing authority and in the event that the
applicable statute of limitations has not expired with respect to either
party, the party receiving notice of such dispute shall promptly notify and
consult with the other party hereto concerning resolution of such dispute,
and no such dispute shall be finally settled or compromised

without the mutual consent of Seller and Buyer, which consent shall not be
unreasonably withheld.

(c) RETURNS, INDEMNIFICATION AND LIABILITY FOR TAXES. Seller and
Acquiree shall prepare and file or caused to be prepared and filed on a
timely basis, without extension, all returns with respect to Acquiree for
all taxable periods ending on or before the Effective Date and, subject to
the terms and conditions of this Agreement, shall pay and shall indemnify
and hold Buyer and each affiliate of Buyer, harmless against and from, on
an after-tax basis, (i) all the taxes of Acquiree for all taxable years or
periods which end on or before the Effective Date which are not paid prior
to the Effective Date and for which adequate reserve was not made; (ii) all
taxes of all members of any Affiliated Group which Acquiree is or has been
a member prior to the Effective Date; (iii) all taxes of Acquiree due or
accrued or subsequently determined to be due through the Effective Date in
respect of any taxable year or period commencing before the Effective Date
and ending after the Effective Date to the extent that such taxes relate to
the period prior to the Effective Date; (iv) all taxes on income or gain
for the period up to and including the Effective Date imposed on Buyer by
any state or local taxing authority; and (v) Buyer shall prepare and file
or cause to be prepared and filed on a timely basis, without extension, all
returns and shall pay and shall indemnify and hold Seller and Acquiree
harmless against and from, on an after-tax basis, (i) all taxes of Buyer
and Acquiree for any taxable year or period commencing after the Effective
Date; and (ii) all taxes of Buyer and Acquiree which accrue after the
Effective Date and which relate to periods after such date.

12. TERMINATION OF AGREEMENT. This Agreement may be terminated at any time
prior to the Effective Date, whether before or after the receipt of required
approvals only if one or more of the following events shall occur:

(a) By any party to the Agreement, if the Closing shall not have
occurred on or before December 29, 1995, unless the failure to so
consummate by such time is due to the breach of this Agreement by the party
seeking to terminate, or such later date as shall have been agreed to by
the parties hereto (the "Termination Date").

(b) At any time by the mutual written agreement of the parties
hereto.

(c) Immediately upon the expiration of thirty (30) days from the date
that Buyer has given notice to Seller or Acquiree of their material
misrepresentation or breach of any warranty or representation or breach in
any material respect, individually or collectively, of any

covenant or agreement herein; provided, however, that no such termination
shall take effect unless it is reasonably evident that Seller or Acquiree
cannot or will not fully and completely correct the grounds for termination
as specified in the aforementioned notice on or before the date of Closing.

(d) Immediately upon the expiration of thirty (30) days from the date
that Seller or Acquiree has given notice to Buyer of Buyer's material
misrepresentation or breach of any warranty or representation or breach in
any material respect, individually or collectively, of any covenant or
agreement herein; provided, however, that no such termination shall take
effect unless it is reasonably evident that Buyer cannot or will not fully
and completely correct the grounds for termination as specified in the
aforementioned notice on or before the date of Closing.

(e) By any party who has been informed in writing by the OTS or state
regulator that a required approval or consent will not be granted and the
time period for all appeals and reconsideration has expired.

13. EXPENSES.

(a) Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby in
the event of termination of this Agreement pursuant to Section 12 then this
Agreement shall thereafter become void and there shall be no liability on
the part of any party hereto or their respective officers or directors,
except as provided in Sections 13(b) and 14 hereof, and except that any
such termination shall be without prejudice to the rights of any party
hereto arising out of the willful breach of any covenant or willful
misrepresentation contained in this Agreement by any other party hereto.

(b) In the event any party shall default in its obligations
hereunder, any non-defaulting party may pursue any remedy available at law
or in equity to enforce its rights and shall be paid by the defaulting
party for all damages (except consequential damages), costs and expenses,
including legal, accounting, printing and mailing expenses, incurred or
suffered by the non-defaulting party in connection herewith or in the
enforcement of its rights hereunder. Any negligent misrepresentation or
negligent omission of information which is not material to this Agreement
is not grounds for default or rescission of this Agreement.

14. CONFIDENTIALITY. Any non-public or confidential information disclosed
by either Seller or Acquiree or by Buyer to the other parties pursuant to this
Agreement or as a result of the discussions and negotiations leading to this
Agreement, or otherwise disclosed, or to which any other party has acquired or
may acquire access, and indicated (either expressly, in writing or orally, or by
the context of the disclosure or access) by the disclosing party to be
non-public or confidential, or which by the context thereof reasonably appears
to be non-public or confidential, shall be kept strictly confidential and shall
not be used in any manner by the recipient except in connection with the
transactions contemplated by this Agreement. To that end, the parties hereto
will each, to the maximum extent practicable, restrict knowledge of and access
to non-public or confidential information of the other party to its officers,
directors, employees and professional advisors who are directly involved in the
transactions contemplated hereby and reasonably need to know such information.
Further to that end, all non-public or confidential documents (including all
copies thereof) obtained or created hereunder by any party shall be returned as
soon as practicable after any termination of this Agreement.

15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. No representation,
warranty or covenant contained in this Agreement, or in any exhibit, certificate
or other instrument referred to in this Agreement, and which are delivered or
made pursuant to this Agreement (or in connection with any transaction
contemplated by this Agreement) shall survive the Closing except for the
provisions of Sections 1, 14, and 16 hereof.

16. CERTAIN POST-MERGER AGREEMENTS. The parties hereto agree that:

(a) EMPLOYEES.

(i) On or before the Effective Date Buyer shall negotiate
individual employment agreements and arrangements with those of
Acquiree's employees that Buyer proposes to employ on an "at will"
basis or otherwise. Seller shall then notify each employee of Acquiree
that Buyer has not arranged to employ that it will offer to employ
such person or that their employment with Acquiree is terminated, as
Seller deems appropriate. Seller shall, if it so chooses, pay
termination benefits, as determined solely by Seller or Acquiree, to
each person who is terminated. Any employee who is employed by Buyer
but who is subsequently terminated within ninety (90) days of the
Effective Date may likewise be paid such termination benefits

by Seller if, and to the extent determined by Seller. Nothing in this
Agreement shall obligate or require Buyer to hire or employ any of
Seller's or Acquiree's employees or to assume responsibility for any
vested benefit or claim, right or entitlement of any employee of
Acquiree or Seller relating to the period of employment preceding the
Effective Date.

(b) INDEMNIFICATION OF BUYER. On and after the Effective Date, Seller
shall indemnify, defend and hold harmless all former and then existing
directors, officers, employees and agents of Buyer and each subsidiary of
Buyer against all losses, claims, damages, costs, expenses, liabilities or
judgments or amounts that are paid in settlement (with the approval of
Seller, which approval shall not be unreasonably withheld) in connection
with any claim, action, suit, proceeding or investigation based in whole or
in part or arising in whole or in part due to the operation of Acquiree's
business prior to the Effective Date. The foregoing shall be deemed to
encompass, but shall not be limited to any loss claim, action, suit,
proceeding or investigation concerning or resulting from: (i) the failure
or alleged failure of any individual retirement account, Xxxxx plan account
or other depository account maintained by Acquiree prior to the Effective
Date to comply with applicable laws and regulations; (ii) any employment
related claim by any person employed or claiming to have been employed by
Acquiree prior to the Effective Date unless such claim is based wholly on
facts or events which relate to the period after the Effective Date; and
(iii) with respect to mortgage servicing rights being transferred by Seller
pursuant to this Agreement, any failure by Acquiree, prior to the Effective
Date, to comply with any applicable provision of any Mortgage Servicing
Agreement including any covenant, representation, warranty or any
applicable documentation requirement, regulation, directive, bulletin or
users guide related thereto.

(c) INDEMNIFICATION OF SELLER. On and after the Effective Date, Buyer
shall indemnify, defend and hold harmless all former and then existing
directors, officers, employees and agents of Seller and Acquiree and each
subsidiary of Seller against all losses, claims, damages, costs, expenses,
liabilities or judgements or amounts that are paid in settlement (with the
approval of Buyer which approval shall not be unreasonably withheld) in
connection with any claim, action, suit, proceeding or investigation based
in whole or in part or arising in whole or in part due to the operation of
the business of Acquiree subsequent to the Effective Date. The foregoing
shall be deemed to encompass, but shall not be limited to, any loss, claim,
action, suit, proceeding or investigation concerning or resulting from (i)
the failure or alleged failure of any individual retirement account, Xxxxx
plan account or other depository account

maintained by Acquiree subsequent to the Effective Date to comply with
applicable laws and regulations; (ii) any employment related claim by any
person employed or claiming to have been employed by Acquiree or Buyer
subsequent to the Effective Date unless such claim is based wholly on facts
or events which relate to the period before the Effective Date; (iii) with
respect to mortgage servicing rights being transferred by Seller pursuant
to this Agreement, any failure by Acquiree or Buyer, subsequent to the
Effective Date, to comply with any applicable provision of any Mortgage
Servicing Agreement including any covenant, representation, warranty or any
applicable documentation requirement, rule, regulation, directive, bulletin
or users guide related thereto.

(d) FDIC INSURANCE PREMIUM ADJUSTMENTS APPLIED RETROACTIVELY. Any
adjustment in the deposit insurance premium, excluding any special
assessment to recapitalize the federal deposit insurance fund, applied by
the FDIC to Acquiree's deposits subsequent to the date hereof shall be
allocated to either Buyer or Seller depending on the time period of
coverage involved in relation to the Effective Date. By way of
illustration, any adjustment relating to the period prior to the Effective
Date shall be the Seller's responsibility, or benefit, depending on whether
such adjustment comprises an increase, or decrease, respectively. Likewise
any adjustment relating to the period on or subsequent to the Effective
Date shall be the Buyer's responsibility, or benefit, depending on whether
such adjustment comprises an increase, or decrease, respectively. Seller
and Acquiree shall be responsible for paying any special assessment to
recapitalize the federal deposit insurance fund unless (i) the assessment
is levied after November 30, 1995, regardless of when federal legislation
relating thereto is enacted into law or what date is chosen in such law for
purposes of determining deposit levels; and (ii) the Stock Purchase is
consummated, in which case Buyer shall be responsible for paying such
assessment.

17. ENTIRE AGREEMENT. This Agreement, and all exhibits and schedules
attached hereto, embody the entire agreement among the parties hereto with
respect to the matters agreed to herein. All prior negotiations, discussions and
agreements by and among the parties hereto with respect to matters agreed to in
this Agreement, or the exhibits or schedules hereto, are hereby superseded and
shall have no force or effect.

18. PUBLICITY. The content and timing of all publicity and announcements
concerning this Agreement, and all transactions contemplated by this Agreement,
shall be subject to joint consultation and approval of the parties hereto,
subject, however, to the legal obligations applicable to public companies.

19. AMENDMENT AND WAIVER. Neither this Agreement, nor any term, covenant,
condition or other provision hereof, may be amended, modified, supplemented,
waived, discharged or terminated except by a document in writing signed by
responsible officers and duly authorized by the respective boards of directors
of the parties hereto.

20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland except to the extent that
federal law is controlling.

21. COMMUNICATIONS. All notices, claims, requests, demands, consents and
other communications which are required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given if hand delivered,
sent by recognized overnight delivery service, sent by certified or registered
mail, postage prepaid, return receipt requested, or by confirmed telecopy as
follows:
(a) IF TO BUYER, to:

Xxxxx X. Xxxxxxxx, President
MONOCACY BANCSHARES, INC.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000

or to such other person or place as shall be designated to Seller and Acquiree
in writing, and with a copy to:

Xxxx X. Xxxxx, Esquire
XXXXXXXX XXXXXXXX, P.C.
0000 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000

(b) IF TO SELLER AND ACQUIREE, to:

Xxxxxx X. Xxxxx, President
U.S.B. HOLDING CO., INC.
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000

or to such other person or place as shall be designated to buyer in writing, and
with a copy to:

Xxxxxx X. Xxxxxxx, Esquire
ELIAS, MATZ, XXXXXXX XXXXXXX L.L.P.
00xx Xxxxx
000 00xx Xxxxxx XX
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000

Any such notice or other communication so addressed shall be deemed to have been
received by the addressee (i) if hand-delivered or sent by overnight delivery,
on the next business day following the date so delivered or sent, (ii) if sent
by registered or certified mail, five (5) business days following the date sent,
or (iii) if sent by telecopy, upon verbal telephone confirmation of receipt
thereof by an individual authorized to accept telecopy communications at the
above-specified telecopy number as of the date of such receipt or confirmation.

22. SUCCESSORS AND ASSIGNS. The rights and obligations of the parties
hereto shall inure to the benefit of and shall be binding upon the successors
and assigns of each of them; provided, however, that neither this Agreement nor
any of the rights, interest or obligations hereunder shall be assigned by any
party hereto without the prior written consent of the other party.

23. HEADINGS, ETC. The headings of the Sections and Subsections of this
Agreement have been inserted for convenience only and shall not be deemed to be
a part of this Agreement.

24. SEVERABILITY. In the event that any one or more provisions of this
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, by any court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement and the
parties shall use their best efforts to substitute a valid, legal and
enforceable provision which, insofar as practicable, implements the purposes and
intents of this Agreement.

25. NO THIRD PARTY BENEFICIARY. Except as expressly provided for herein,
nothing in this Agreement is intended to confer upon any person who is not a
party hereto any rights or remedies of any nature whatsoever under or by reason
of this Agreement.

26. COUNTERPARTS. To facilitate execution, this Agreement may be executed
in as many counterparts as may be required; and it shall not be necessary that
the signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.

27. FURTHER ASSURANCES. Each party will execute and deliver such
instruments and take such other actions as the other party hereto may reasonably
request in order to carry out the intent and purposes of this Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be duly executed, as of the date set forth
above.

ATTEST: MONOCACY BANCSHARES, INC.

By: /s/ By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------- -------------------------------
Xxxxx X. Xxxxxxxx, President

ATTEST: U.S.B. HOLDING COMPANY, INC.

By: /s/ By: /s/ Xxxxxx X. Xxxxx
------------------------------------ -------------------------------
Xxxxxx X. Xxxxx, Chairman
of the Board, President
and Chief Executive
Officer

ATTEST: ROYAL OAK SAVINGS BANK, FSB

By: /s/ By: /s/ Xxxxxx X. Xxxxx
----------------------------------- -------------------------------
Xxxxxx X. Xxxxx, Chairman
of the Board and Chief
Executive Officer

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT DATED AUGUST 25, 1995
SCHEDULE 1(a)
EXCLUDABLE ASSETS

PAGE 1

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

Book Value
as of
December 31, 1995
-----------------

CASH:

Due from Bank - Time Accounts (listing attached) $ 886,101.21

Due from Bank - Demand - IBAA $ 52,920.00

INVESTMENTS AND RELATED RECEIVABLES (listing attached) $20,644,103.50

FEDERAL FUNDS SOLD - USB $(1,415,225.55)

LOANS:

Credit Cards (including unused lines) (listing attached) $ 37,563.42

Commercial Mortgages (listing attached) $ 1,683,913.00

Residential Mortgage Loans (listing attached) $16,538,918.81

Home Equity Loans (including unused lines) $ 3,557,114.33
(listing attached)

Installment Loans (listing attached) $ 288,998.16

Less: Allowance for Loan Losses (318,820.18)
--------------

$21,787,687.54

(1) Excludes 5% FHLMC participation in the amount of $96,948.60 that will be
retained by Royal Oak.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT DATED AUGUST 25, 1995
SCHEDULE 1(a)
EXCLUDABLE ASSETS

PAGE 2
--------------------------------------------------------------------------------

FIXED ASSETS:

Building & Property located at 0000 Xxxxxxx Xxxx $ 356,878.00

Less: Accumulated Depreciation (45,556.00)
--------------
311,322.00

Furniture & Equipment (net) (listing attached) $ 4,611.00

OTHER ASSETS:

Accrued Interest Receivable (listing attached) $ 269,033.47

Reimbursable foreclosure related expense $ 7,514.69

EXCLUDABLE LIABILITIES:

Other Liabilities - Escrow balances loans servicing purchased $ 7,841.54

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 1(a)
EXCLUDABLE F.F.&E.

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

NET BOOK
VALUE
AS OF
DECEMBER 31, 1995
-----------------

CREDIT CARD OFFICE

1 - Executive Chair
$ 497
2 - Side Chairs

CREDIT CARD OFFICE

1 - Personal Computer and
associated Printer 2,216

EXECUTIVE VICE PRESIDENT OFFICE

Contura Notebook 1,898

2 - Desks (Executive Officer's Offices) 0

1 - Four Drawer File (Xxx Xxxx Office) 0

4 - Three Drawer File Cabinets (Credit Card Office) 0

1 - Photocopier (Credit Card Dept.) 0

1 - Conference Table (Credit Card Dept.) 0

6 - Side Chairs (Credit Card Dept.) 0
---------

$ 4,611
---------

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT DATED AUGUST 25, 1995
SCHEDULE 1(b)
PURCHASE PRICE CALCULATION
AS OF DECEMBER 31, 1995
SUMMARY

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

Current Adjustments for Acquired
Balance Transaction Value
------- --------------- ---------
Category
--------

Assets:
Cash and cash items $45,210,824.71 $ - $ 45,210,824.71
Passbook and overdraft
loans (5) 352,210.45 $ - 352,210.45

FHLB Stock 226,800.00 226,800.00
FHLMC 5% participation 96,948.60 - 96,948.60
Mortgage Servicing Rights (5):
Sold to FHLMC ($23,825mm)
On-Balance Sheet Loans
($16,218mm)
Total Servicing
($40,043mm) - 281,943.00 (3) 281,943.00

Property:
Personal Property (6) 43,998.21 - 43,998.21
Randallstown Real
Property (6) 465,660.14 45,389.86 (1) 511,050.00
Certain Other Assets (5) 343,963.16 - 343,963.16
------------- ------------- -------------

Total Assets 46,740,396.27 327,332.86 47,067,729.13

Deposits (Including
escrows) (5) 42,329,079.87 3,595,932.00 (2) 38,733,147.87
(8)
Certain Other Liabilities 511,016.41 - 511,016.41
(5) ------------- ------------- -------------
Net Assets Acquired (7) $ 3,900,299.99 $3,923,264.86 $ 7,823,564.85
------------- ------------- -------------

(1) Excess of agreed price over book value ($59,339.86), less amount of agreed
"repair" credit $13,950.00.

(2) 8.5% of deposits.

(3) .7041% of serviced balances.

(4) Aggregate premium:
Deposits $ 3,595,932.00
Servicing 281,943.00
Randallstown 45,389.86
--------------
$ 3,923,264.86
--------------

(5) Current balance per December 31, 1995 general ledger trial balance. In the
case of other assets and liabilities only applicable items are included.

(6) Current balance per fixed asset records.

(7) Current balance per December 31, 1995 general ledger trial balance.
Represents common stock, surplus and undivided profits.

(8) Excludes premium on $24,000 of escheatable deposits.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3(d)
CERTAIN DEVELOPMENTS
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (e)
TAX RETURNS NOT FILED, ACCRUALS NOT MADE, EXTENSIONS,
ASSESSMENTS OR WAIVERS
AS OF THE CLOSING,
DECEMBER 29, 1995

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

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (f)
MATERIAL LEGAL OR ADMINISTRATIVE ACTIONS,
SUITS, CLAIMS, ETC.
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (g)
BROKERAGE
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (h)
PROPERTIES
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

There are no disclosures required to be made pursuant to this schedule 3 (h).

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (i)
NON-COMPLIANCE ISSUES
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE, except with respect to certain Share Loans and Money Magic loans - see
schedule 3(y).

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (j)
CONTRACTS AND COMMITMENTS, ETC.
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

- Royal Oak Savings Bank, F.S.B. has entered into a contract
with AT&T Global Information Solutions in which AT&T
provides data processing services.

- Royal Oak Savings Bank, F.S.B. has entered into a contract
with Internet, Inc. for ATM service.

- Royal Oak Savings Bank, F.S.B. has entered into a contract
to provide VISA card service to the Ancient Free and
Accepted Masons of Maryland(1).

- Royal Oak Savings Bank, F.S.B. has entered into a contract to provide
VISA card service to the Free and Accepted Masons of New Hampshire(1).

- Royal Oak Savings Bank, F.S.B. has entered into a contract with IBAA
Bancard in which IBAA Bancard processes credit card activity(1).

See schedule 3(x).

(1) To be retained by seller, and subsequently assigned to Union State Bank,
or cancelled.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (k)
INSURANCE
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

See attached listing included in Schedule 3(K) as included in the
Stock Purchase Agreement dated August 25, 1995.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (l)
NO GUARANTEES
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

None, see schedule 3(ee)

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3(q)
EMPLOYEE BENEFITS
AS OF THE CLOSING,
DECEMBER 29, 1995

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

- Medical Insurance: Empire BlueCross and BlueShield

- Short-Term Disability: The First Rehabilitation Insurance
Company of America

- Long-Term Disability: Provident Life and Casualty
Insurance Company

- Life Insurance: C.U. Life Insurance Company
of New York

All contracts have been or will be cancelled as of December 31, 1995.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (r)
LABOR MATTERS
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (s)
ENVIRONMENTAL MATTERS
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (v)
FINANCIAL INSTITUTIONS BOND - CLAIMS
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3 (aa)
LIST OF TRADEMARKS, COPYRIGHTS, ALL LICENSES, ETC.
AS OF THE CLOSING
DECEMBER 29, 1995.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Royal Oak Savings Bank, F.S.B.

The above is based on common usage and is not a registered trademark.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3(x)
NON-ASSUMABLE CONTRACTS
AS OF THE CLOSING,
DECEMBER 29, 1995

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

- AT&T Global Information Solutions
- Data Processing
- Subject to cancellation penalties (1)

- Internet, Inc.
- ATM Participant Service Agreement
Includes: Internet sponsored Plus access, VISA Net
access and authorization processor

(1) AT&T has agreed to continue this contract and Buyer will make any
arrangements necessary directly with AT&T.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3(y)
LOAN EXCEPTIONS
AS OF THE CLOSING,
DECEMBER 29, 1995

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

None, except as follows:

Loan No. Loan Balance*
-------- -------------
SHARE LOANS
00-00-0000000 $10,709
00-00-0000000 2,250
00-00-0000000 2,007
00-00-0000000 4,051
00-00-0000000 1,227
00-00-0000000 3,441
00-00-0000000 5,385
00-00-0000000 6,932
00-00-0000000 2,927
00-00-0000000 81,000
00-00-0000000 17,500
--------

Total $137,429
--------

MONEY MAGIC

10006 $ 992
10019 0
10024 0
10025 451
10026 0
10027 504
10028 0
10029 0
10031 0
10033 0
10036 451
--------
Total $ 2,398
--------

* - AMOUNTS AS OF DECEMBER 26, 1995

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3(ee)
POWERS OF ATTORNEY, GUARANTEES
AS OF THE CLOSING,
DECEMBER 29, 1995

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

None, except for the guarantee of 131 (1) residential mortgage loans with
unpaid principal balances totalling $1,852,136 which were sold to FHLMC.

(1) Amount is as of December 22, 1995.

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 3(ff)
MORTGAGE SERVICING AGREEMENTS
EXCEPTIONS, DEFAULTS, ETC.
AS OF THE CLOSING,
DECEMBER 29, 1995

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

NONE

ROYAL OAK SAVINGS BANK, F.S.B.
STOCK PURCHASE AGREEMENT
SCHEDULE 11(a)
TENTATIVE PURCHASE PRICE ALLOCATION
AS OF THE CLOSING,
DECEMBER 29, 1995
Amounts Presented in Thousands

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

Buyer expects to allocate amounts to assets acquired and liabilities assumed
based on Acquiree's respective book values with the following exceptions:

Mortgage Servicing Rights $ 283
Randallstown Real Property Premium 45
Deposit Premium 3,570
------

Total Premium Applied $3,898
------

Document Metadata

Table of Contents

August 25, 1995

Document Metadata