Baybanks Inc – ‘8-K’ for 12/22/94 – EX-2.(A)

As of:  Wednesday, 1/4/95   ·   For:  12/22/94   ·   Accession #:  950135-95-2   ·   File #:  0-00959

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Baybanks, Inc.                                         5     16K 
 2: EX-2.(A)    Acquisition Agreement                                 59    265K 
 3: EX-2.(B)    Option Agreement                                      15     58K 

EX-2.(A)   —   Acquisition Agreement
Exhibit Table of Contents

EX-2.(A)
1st Page of 59
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 

    Exhibit 2(a) to Form 8-K

     ACQUISITION AGREEMENT

      BY AND BETWEEN

      BAYBANKS, INC. AND NFS FINANCIAL CORP.

     DATED DECEMBER 22, 1994

EX-2.(A)
2nd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 2nd

                                                        [Enlarge/Download Table]
                                                 TABLE OF CONTENTS                                        

                                                                                                      Page
                                                                                                      ----
                                                                                                          
ARTICLE I                                                                                                 

INCORPORATION BY REFERENCE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1 
         1.1     Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1 
         1.2     Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1 

ARTICLE II                                                                                                

WORDS, TERMS AND PHRASES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2 
         2.1     Number and Gender  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2 
         2.2     Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2 

ARTICLE III                                                                                               

THE MERGER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6 
         3.1     The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6 
         3.2     Consideration for Seller Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .   6 
                 3.2.1  Conversion of Seller Stock  . . . . . . . . . . . . . . . . . . . . . . . . .   6 
                 3.2.2  Adjustment of Merger Consideration  . . . . . . . . . . . . . . . . . . . . .   6 
                 3.2.3  Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7 
                 3.2.4  Cancellation of Unissued and Treasury Shares  . . . . . . . . . . . . . . . .   7 
                 3.2.5  Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7 
         3.3     Seller Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7 
         3.4     Buyer Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8 
         3.5     Acquisition Company Stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8 
         3.6     Buyer Stock Adjustments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8 
         3.7     Exchange of Seller Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8 
         3.7.1  Buyer to Make Merger Consideration Available  . . . . . . . . . . . . . . . . . . . .   8 
         3.7.2  Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8 

ARTICLE IV                                                                                                

REPRESENTATIONS AND WARRANTIES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9 
         4.1     Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . . . .   9 
                 4.1.1   Organization of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . .   9 
                 4.1.2   Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10 
                 4.1.3   Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10 
                 4.1.4   Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11 

EX-2.(A)
3rd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 3rd

                                                        [Enlarge/Download Table]
                                                                                                         
                 4.1.5   Non-Contravention  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 
                 4.1.6   Properties and Assets; Environmental Matters . . . . . . . . . . . . . . . . 11 
                 4.1.7   Books and Records  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
                 4.1.8   Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
                 4.1.9    Absence of Changes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 
                 4.1.10  Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 
                 4.1.11  Certain Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
                 4.1.12  Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
                 4.1.13  Employee Benefit Plans and Matters . . . . . . . . . . . . . . . . . . . . . 15 
                 4.1.14  Compliance with Applicable Laws  . . . . . . . . . . . . . . . . . . . . . . 16 
                 4.1.15  Regulatory Filings and Reports . . . . . . . . . . . . . . . . . . . . . . . 17 
                 4.1.16  Tax Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 
                 4.1.17  Broker's Fees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 
                 4.1.18  Intellectual Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 
                 4.1.19  Takeover Restrictions  . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 
                 4.1.20  Matters Regarding the NFS Banks  . . . . . . . . . . . . . . . . . . . . . . 19 
                 4.1.21  Reserves for Losses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 
                 4.1.22  Loan Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 
                 4.1.23  Investment Securities  . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 
                 4.1.24  Derivative Transactions  . . . . . . . . . . . . . . . . . . . . . . . . . . 20 
                 4.1.25  Deposits and Borrowings  . . . . . . . . . . . . . . . . . . . . . . . . . . 20 
                 4.1.26  Examination Reports  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 
                 4.1.27  Material Interests of Certain Persons  . . . . . . . . . . . . . . . . . . . 21 
                 4.1.28  Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 
                 4.1.29  No Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 
         4.2     Representations and Warranties of Buyer  . . . . . . . . . . . . . . . . . . . . . . 21 
                 4.2.1    Organization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 
                 4.2.2    Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 
                 4.2.3    Capitalization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 
                 4.2.4    Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 
                 4.2.5    Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 
                 4.2.6    Financial Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 
                 4.2.7    Absence of Changes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 
                 4.2.8    Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 
                 4.2.9    Regulatory Filings and Reports  . . . . . . . . . . . . . . . . . . . . . . 24 
                 4.2.10   Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 
                 4.2.11   Beneficial Ownership of Seller Stock  . . . . . . . . . . . . . . . . . . . 24 
                 4.2.12   Matters Regarding Banking Subsidiaries  . . . . . . . . . . . . . . . . . . 24 
                 4.2.13   No Misrepresentation  . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 

ARTICLE V                                                                                                

COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 
         5.1     Regulatory Applications  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 
         5.2     Proxy Statement/Registration Statement . . . . . . . . . . . . . . . . . . . . . . . 25 
         5.3     Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 


EX-2.(A)
4th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 4th

                                                        [Enlarge/Download Table]
                                                                                                         
         5.4     Blue Sky Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 
         5.5     Other Approvals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 
         5.6     Conduct of the Business of Seller and its Subsidiaries . . . . . . . . . . . . . . . 28 
                 5.6.1    Negative Covenants  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 
                 5.6.2    Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 
                 5.6.3    Disclosure Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 
         5.7     Indemnification and Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 
                 5.7.1    Certificate and Bylaws  . . . . . . . . . . . . . . . . . . . . . . . . . . 30 
                 5.7.2    Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 
         5.8     Employee Benefits Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 
                 5.8.1    Insurance Coverages . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 
                 5.8.2    Personnel Policies  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 
                 5.8.3    Qualified Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 
                 5.8.4    No Third-Party Beneficiaries  . . . . . . . . . . . . . . . . . . . . . . . 31 
         5.9     Directors, Officers and Employees  . . . . . . . . . . . . . . . . . . . . . . . . . 32 
         5.10    Access to Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 
         5.11    Confidentiality  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 
         5.12    Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 
         5.13    No Solicitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 
         5.15    Conduct of Buyer and Buyer Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . 34 
         5.16    Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 
         5.17    Liaison  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 
         5.18    System Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 

ARTICLE VI                                                                                               

CONDITIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 
         6.1     Conditions to Obligations of All Parties . . . . . . . . . . . . . . . . . . . . . . 35 
                 6.1.1    Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 
                 6.1.2    Regulatory Approvals  . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 
                 6.1.3    Stockholder Approval  . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 
                 6.1.4    Matters Regarding Buyer Stock . . . . . . . . . . . . . . . . . . . . . . . 36 
                          (a)     Registration Statement  . . . . . . . . . . . . . . . . . . . . . . 36 
                          (b)     Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 
                          (c)     Blue Sky  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 
                 6.1.5    No Orders, Injunctions or Restraints:  Illegality . . . . . . . . . . . . . 36 
         6.2     Conditions to the Obligations of Buyer and Acquisition Company . . . . . . . . . . . 36 
                 6.2.1    Representations and Warranties  . . . . . . . . . . . . . . . . . . . . . . 37 
                 6.2.2    Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 
                 6.2.3    No Material Adverse Change  . . . . . . . . . . . . . . . . . . . . . . . . 37 
                 6.2.4    Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 
                 6.2.5    Accountant's Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 
                 6.2.6    Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 
                 6.2.7    Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 
                 6.2.8    Subsidiary Directors  . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 
                 6.2.9    Key Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 


EX-2.(A)
5th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 5th

                                                        [Enlarge/Download Table]
                                                                                                         
                 6.2.10  Corporate Actions of the NFS Banks . . . . . . . . . . . . . . . . . . . . . 38 
         6.3     Conditions to Obligations of Seller  . . . . . . . . . . . . . . . . . . . . . . . . 38 
                 6.3.1    Representations and Warranties  . . . . . . . . . . . . . . . . . . . . . . 38 
                 6.3.2    No Material Adverse Change  . . . . . . . . . . . . . . . . . . . . . . . . 38 
                 6.3.3    Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 
                 6.3.4    Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 

ARTICLE VII                                                                                              

CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 
         7.1     Time and Place of Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 
         7.2     Buyer Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 
         7.3     Seller Deliveries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 
         7.4     Fees and Closing Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 

ARTICLE VIII                                                                                             

TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 
         8.1     Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 
         8.2     Other Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 
                 8.2.1    Termination By Any Party  . . . . . . . . . . . . . . . . . . . . . . . . . 41 
                 8.2.2    Termination By Buyer  . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 
                 8.2.3    Termination By Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 
         8.3     Termination Fee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 
         8.4     Effect of Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 

ARTICLE IX                                                                                               

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 
         9.1     Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 
         9.2     Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 
         9.3     Amendment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 
         9.4     Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 
         9.5     Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.6     Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.7     Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.8     No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.9     Assignability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.10    Parties Not Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.11    No Survival  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.12    Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 
         9.14    Time of Essence  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 
         9.15    Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 

EX-2.(A)
6th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 6th

 ACQUISITION AGREEMENT
 ---------------------

THIS ACQUISITION AGREEMENT ("this Agreement") is made and entered into          
effective as of December 22, 1994, by and between BAYBANKS, INC., a             
Massachusetts corporation ("Buyer"), and NFS FINANCIAL CORP., a Delaware        
corporation ("Seller").                                                         

RECITALS

      A.     Buyer is a publicly held and traded corporation whose $2.00 par
value per share common stock (the "Buyer Stock") is quoted on the Nasdaq        
National Market (the "Nasdaq NNM").                                             

       B.     Seller is a publicly held and traded corporation whose $0.01 par
value per share common stock (the "Seller Stock") is quoted on the Nasdaq NNM.  
Seller owns all of the issued and outstanding capital stock of NFS Savings Bank,
FSB, Nashua, New Hampshire ("NFS Bank") and Plaistow Co-operative Bank, FSB,    
Plaistow, New Hampshire ("Plaistow"), both of which are federally chartered     
savings banks.  Collectively, NFS Bank and Plaistow are sometimes referred to   
herein as the "NFS Banks".                                                      

       C.     Buyer has agreed to effect the acquisition of Seller through the
merger of a wholly owned subsidiary of Buyer ("Acquisition Company") with and   
into Seller, on the terms and subject to the conditions set forth in this       
Agreement.                                                                      

NOW, THEREFORE, in consideration of the foregoing recitals, the 
representations, warranties, covenants and agreements contained in this         
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby represent, warrant, 
covenant and agree as follows.                                                  

ARTICLE I     

INCORPORATION BY REFERENCE    

   1.1    RECITALS.  The foregoing Recitals are incorporated into this
Agreement by reference as if set forth in full in the body hereof.              

     1.2    EXHIBITS AND SCHEDULES.  Each exhibit and schedule appended to
or required by and delivered with this Agreement is incorporated into this      
Agreement by reference as if set forth in full in the body hereof.              

EX-2.(A)
7th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 7th

ARTICLE II  

WORDS, TERMS AND PHRASES    

     2.1     NUMBER AND GENDER.  When used in this Agreement, all words in
the singular number shall extend to and include the plural number, where the    
context so requires; all words used in the plural number shall extend to and    
include the singular number where the context so requires; and all words used in
any gender, whether male, female or neuter, shall extend to and include all     
genders that may be applicable in any particular context.                       

       2.2     DEFINITIONS.  In addition to any other definitions contained in
this Agreement, the following words, terms and phrases shall have the following 
meanings when utilized in this Agreement:                                       

   "APPLICATION":  Any application, notice, request, correspondence or
other filing, material or communication submitted to any Governmental Authority 
in connection with any Regulatory Approval.                                     

     "BENEFIT ARRANGEMENT":  Any form of current or deferred compensation,
bonus, stock option, stock appreciation right, severance pay, salary            
continuation, retirement or incentive plan or arrangement or any group or       
individual health, disability or life insurance plan or welfare or similar plan 
or arrangement for the benefit of any one or more of the directors, officers and
employees of Seller or any Subsidiary, whether active or retired, by reason of  
their employment by or service with Seller or any Subsidiary, other than        
Employee Plans and plans and agreements providing for base salary and base      
wages.                                                                          

"BHCA":  The Bank Holding Company Act of 1956, as amended.      

"BLUE SKY LAWS":  The securities laws of any applicable state.  

     "BUSINESS DAY":  Any day other than a Saturday, a Sunday, an official
federal or State of New Hampshire holiday, a day on which banks operating in    
Nashua, New Hampshire, generally are not open for business and a day on which   
the OTS and/or the FDIC are not open for business.                              

      "BUYER DISCLOSURE SCHEDULE":  All of the disclosure schedules required
of Buyer pursuant to this Agreement, which disclosure schedules shall be        
cross-referenced to the specific sections and subsections of this Agreement and 
delivered herewith.                                                             

   "BUYER OPTION":  The option granted to Buyer pursuant to the Option
Agreement.                                                                      

    "BUYER SUBSIDIARY":  Each corporation, partnership or other business
enterprise which is consolidated with Buyer for financial reporting purposes or 
of which Buyer owns, directly or indirectly, a majority of the outstanding      
capital stock or other ownership interest.                                      

     "CLOSING":  The consummation of the Merger and any other transactions
contemplated by this Agreement on the Closing Date.                             

- 2 -       

EX-2.(A)
8th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 8th

        "CLOSING CONDITIONS":  All conditions precedent to the obligation of any
one or more parties hereto to consummate the transactions contemplated by this  
Agreement, including, without limitation, those conditions set forth in Article 
VI.                                                                             

     "CLOSING DATE":  The date on which the Closing occurs, which shall be
the fifth Business Day after the satisfaction or waiver of all Closing          
Conditions or such other earlier Business Day as the parties may mutually       
determine after the satisfaction or waiver of all of the Closing Conditions.    

   "CLOSING MARKET VALUE":  The Market Value of the Buyer Stock on the
Closing Date.                                                                   

"CRA":  The Community Reinvestment Act of 1977, as amended.     

"DEFAULT":  A party shall be in Default hereunder if:           

               (i)      any representation or warranty of said party contained
      in this Agreement shall have been incorrect, incomplete or otherwise
       misleading when made or deemed to be made in any material respect; or

             (ii)     such party shall have failed to perform or otherwise
       breached in any material respect any of its covenants and obligations
        contained in this Agreement and,  unless such failure or breach cannot
      by its nature be cured within the specified time period and prior to
      the Closing Date, such failure or breach shall remain uncured for 10
         business days after notice thereof to the defaulting party by any other
party hereto.                                                 

        "DISSENTING SHARES":  The shares of Seller with respect to which holders
thereof have timely and properly perfected their appraisal rights pursuant to   
Section 262 of the DGCL.                                                        

"DGCL":  The General Corporation Law of the State of Delaware.  

 "ERISA":  The Employee Retirement Income Security Act of 1974, as
amended.                                                                        

      "EMPLOYEE PLAN":  Any "employee benefit plan" (as that term is defined
in Section 3(3) of ERISA) that is subject to any provisions of ERISA and covers 
any one or more of the directors, officers and employees of Seller or any       
Subsidiary, whether active or retired, by reason of employment by or service    
with Seller or any Subsidiary.                                                  

 "EXCHANGE ACT":  The Securities Exchange Act of 1934, as amended.

"FDIA":  The Federal Deposit Insurance Act, as amended.         

"FDIC":  The Federal Deposit Insurance Corporation.             

"GAAP":  Generally accepted accounting principles.              

   "GOVERNMENTAL AUTHORITY":  Any federal, state, county, municipal or
other local legislative, regulatory or judicial body or other entity with       
jurisdiction over all or any portion                                            

- 3 -     

EX-2.(A)
9th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 9th

of any one or more of Seller, Buyer, the NFS Banks, or any of their respective  
properties, businesses and affairs.                                             

"HOLA":  The Home Owners' Loan Act of 1933, as amended.         

    "IRC":  The United States Internal Revenue Code of 1986, as amended.

      "KNOWLEDGE":  As to any person, and as of the date of the statement in
question, such person's actual knowledge or what such person should have known  
in the ordinary exercise of that person's duties in the capacity referred to    
herein.                                                                         

    "LAWS":  Any and all statutes, laws, ordinances, rules, regulations,
orders, permits, judgments, injunctions, decrees, case law and other rules of   
law enacted, promulgated or issued by any Governmental Authority.               

   "MARKET VALUE":  As of any day, the average, without respect to the
number of shares traded, of the closing sale price of the Buyer Stock as        
reported on the Nasdaq NNM on each of the ten trading days immediately preceding
the second Business Day prior to such day.                                      

       "MATERIAL ADVERSE CHANGE IN BUYER":  (a) Any material adverse change in
the business, financial condition, or operating results of Buyer and the Buyer  
Subsidiaries taken as a whole (other than from changes in laws and regulations  
and GAAP affecting financial institutions generally) or the occurrence of any   
event or condition that would result in such a change; or (b) the existence of  
any pending or threatened litigation or administrative action which challenges  
any portion of the transactions contemplated hereby, and which, in the          
reasonable opinion of Seller, would be likely to enjoin consummation, or result 
in rescission, of any of such transactions to the detriment of holders of Seller
Stock.                                                                          

        "MATERIAL ADVERSE CHANGE IN SELLER":  (a) any material adverse change in
the business, financial condition, or operating results of Seller and the       
Subsidiaries taken as a whole (other than from changes in laws and regulations  
and GAAP affecting financial institutions generally) or the occurrence of any   
event or condition that would result in such a change; or (b) the existence of  
any pending or threatened litigation or administrative action which (i) creates 
any reasonable possibility that Seller or the Subsidiaries may incur a material 
loss that has not been reserved against (other than as set forth in the Seller  
Disclosure Schedule); or (ii) challenges any portion of the transactions        
contemplated hereby, and which, in the reasonable opinion of Buyer, would be    
likely to enjoin consummation, or result in rescission, of such transactions.   
The expenses of Seller related to the Merger, including those expenses          
contemplated hereby, shall not be taken into consideration in determining if    
there has been a Material Adverse Change in Seller.                             

    "MERGER":  The merger of Acquisition Company with and into Seller in
accordance with the terms and provisions of the Plan of Merger.                 

     "MERGER CONSIDERATION":  Collectively, the Buyer Stock and cash to be
received by the holders of the Seller Stock in accordance with Section 3.2 of   
this Agreement.                                                                 

"NHBCA":  The New Hampshire Business Corporation Act.           

- 4 -         

EX-2.(A)
10th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 10th

  "OPTION AGREEMENT":  The Option Agreement by and between Buyer and
Seller, dated as of the date hereof, in the form of Exhibit A hereto.           

      "PEAT MARWICK":  KPMG Peat Marwick LLP, independent public accountants
with respect to Buyer and with respect to Seller.                               

       "PROXY STATEMENT/PROSPECTUS":  The proxy statement and prospectus to be
used to solicit Seller's stockholders for the approvals required to consummate  
the transactions contemplated by this Agreement, and to offer Buyer Stock in    
connection therewith.                                                           

        "REGISTRATION STATEMENT":  The registration statement filed with the SEC
by Buyer for the purpose of registering the Buyer Stock to be issued as part of 
the Merger Consideration, in the form declared effective by the SEC, together   
with all amendments and supplements thereto, as declared effective by the SEC.  

      "REGULATIONS":  The rules and regulations of the FDIC, the OTS and any
other Governmental Authority.                                                   

        "REGULATORY APPROVALS":  Each and every consent, approval, expiration of
a waiting period and similar action or inaction by any governmental authority   
(including, without limitation, the FDIC, OTS, the United States Federal Trade  
Commission, the United States Department of Justice, the Board of Governors of  
the Federal Reserve System, the Office of the Comptroller of the Currency, the  
Massachusetts Board of Bank Incorporation and the New Hampshire Board of Trust  
Company Incorporation) that is required under any applicable statute, regulation
or other legal or governmental requirement in connection with and as a condition
precedent to the consummation of the Merger and any other transactions          
contemplated by this Agreement.                                                 

"SEC":  The United States Securities and Exchange Commission.   

"SECURITIES ACT":  The Securities Act of 1933, as amended.      

       "SELLER DISCLOSURE SCHEDULE":  All of the disclosure schedules required
by Article IV dated as of the date hereof and referenced to the specific        
sections and subsections of Article IV and delivered herewith.                  

      "SELLER ESOP":  The NFS Financial Corp. Employee Stock Ownership Plan,
effective January 1, 1986, as amended.                                          

     "SELLER OPTIONS":  Options to purchase shares of the Seller Stock, or
any other rights, granted by Seller pursuant to NFS Financial Corp. Stock Option
Plan.                                                                           

"SUBSIDIARY":  Each corporation, partnership or other business  
enterprise, including the NFS Banks, which is consolidated with Seller for      
financial reporting purposes or of which Seller owns, directly or indirectly,   
25% or more of the outstanding capital stock or other ownership interest.       

     "SURVIVING CORPORATION":  Seller, as the surviving corporation of the
Merger.                                                                         

- 5 -         

EX-2.(A)
11th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 11th

     "TAX RETURNS":  All federal, state and local tax returns, reports and
declarations of estimated tax with respect to income and all other applicable   
taxes, and all other tax returns and reports, the filing of which is required by
applicable Laws (including returns and reports with respect to taxes withheld   
from or imposed in respect of employees' wages and with respect to deposit      
accounts, of interest and dividends paid, of interest received, and of all other
payments made or received).                                                     

      "TUCKER ANTHONY":  Tucker Anthony Incorporated, the Seller's financial
adviser.                                                                        

ARTICLE III   

THE MERGER    

      3.1     THE MERGER.  On the Closing Date, Acquisition Company shall be
merged with and into Seller as permitted by and in accordance with applicable   
Laws and on the terms and subject to the conditions contained in this Agreement 
and the Plan of Merger.  Simultaneously with the effectiveness of the Merger,   
(a) the separate existence of Acquisition Company shall cease and (b) Seller, as
the Surviving Corporation, shall continue to exist under and be governed by the 
DGCL.  Upon the effectiveness of the Merger, the certificate of incorporation   
and bylaws of the Surviving Corporation shall be the certificate of             
incorporation and bylaws of Acquisition Company as in effect immediately prior  
to the Merger.  Upon the effectiveness of the Merger, the directors and officers
of the Surviving Corporation shall be those persons who were the directors and  
officers of the Acquisition Company immediately prior to the Merger.  The Merger
shall become effective upon the filing of a Certificate of Merger with the      
Secretary of State of the State of Delaware, unless a different date and time is
specified as the effective time in such Certificate of Merger.                  

   3.2     CONSIDERATION FOR SELLER STOCK.  In order to consummate the
Merger:                                                                         

   3.2.1  CONVERSION OF SELLER STOCK.  On the Closing Date, subject to
adjustment as provided in Section 3.2.2, each issued and outstanding share of   
the Seller Stock, other than Dissenting Shares, shall, by virtue of the Merger, 
automatically and without any action on the part of the holder thereof, be      
converted into the right to receive (i) $20.15 in cash and (ii) 0.2038 share of 
Buyer Stock.  In the event that the Closing Date is after September 1, 1995 and 
the condition in Section 6.1.3 has been satisfied prior to September 1, 1995,   
the per share Merger Consideration shall be increased by a cash amount          
determined by multiplying (x) the number of calendar days from and including    
September 1, 1995 through but excluding the Closing Date by (y) $0.005.         

3.2.2  ADJUSTMENT OF MERGER CONSIDERATION.                      

    (a) If, as a result of the Closing Market Value of Buyer Stock being
less than $43.50, Seller elects to terminate this Agreement pursuant to Section 
8.2.3(d) and Buyer exercises the right to negate such termination as provided   
therein, the per share Merger Consideration shall be increased so that the sum  
of the cash and the Closing Market Value of Buyer Stock comprising the per share
Merger Consideration equals $29.00.  The increase shall take the form of        
additional cash or Buyer Stock valued at the Closing Market Value, as Buyer may 

- 6 -         

EX-2.(A)
12th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 12th

elect, or, alternatively, Buyer may elect to make the per share Merger          
Consideration all cash at $29.00 per share.                                     

      (b) If the Closing Market Value of Buyer Stock is greater than $63.00,
the per share Merger Consideration shall be adjusted by reducing the Buyer Stock
portion so that the sum of the cash and the Closing Market Value of Buyer Stock 
comprising the per share Merger Consideration equals $33.00.                    

        3.2.3  FRACTIONAL SHARES.  Certificates for fractions of shares of Buyer
Stock will not be issued.  In lieu of a fraction of a share of Buyer Stock, each
holder of Seller Stock otherwise entitled to a fraction of a share of Buyer     
Stock shall be entitled to receive an amount of cash equal to (i) the fraction  
of a share of Buyer Stock to which such holder would otherwise be entitled,     
multiplied by (ii) the Closing Market Value of Buyer Stock.  Following          
consummation of the Merger, no holder of Seller Stock shall be entitled to      
dividends or any other rights in respect of any such fraction.                  

      3.2.4  CANCELLATION OF UNISSUED AND TREASURY SHARES.  No payment shall
be made in respect of authorized but unissued shares of the Seller Stock or     
treasury shares of Seller Stock, and such shares shall be canceled upon the     
Closing.                                                                        

   3.2.5  DISSENTING SHARES.  Notwithstanding anything to the contrary
herein, Dissenting Shares shall not be converted into or represent a right to   
receive the consideration specified in Sections 3.2.1 and 3.2.2, but the holder 
thereof (to the extent that such holder, as of the Effective Time of the Merger,
has not effectively withdrawn or lost his dissenters' rights) shall be entitled 
only to such rights as are granted by applicable Law.                           

   3.3     SELLER OPTIONS.  Upon the effectiveness of the Merger, each
Seller Option then outstanding and unexercised shall be converted automatically 
into an option under the Buyer's 1988 Stock Option Plan ("Buyer's Plan") to     
purchase shares of Buyer Stock in an amount and at an exercise price determined 
as provided below and otherwise subject to the terms of the Buyer's Plan:       

           (i)    The number of shares of Buyer Stock to be subject to
             the new option shall be equal to the product of the number of
             shares of Seller Stock subject to the original option and the
                Adjustment Factor, provided, that any fractional shares of Buyer
            Stock resulting from such multiplication shall be rounded to
the nearest share; and                          

            (ii)   The exercise price per share of Buyer Stock under the
            new option shall be equal to the exercise price per share of
                Seller Stock under the original option divided by the Adjustment
                Factor, provided that such exercise price shall be rounded up to
the nearest cent.                               

      The "ADJUSTMENT FACTOR" shall be the factor determined by dividing the
per share Merger Consideration (valuing the Buyer Stock portion of the Merger   
Consideration at the Closing Market Value) by the Closing Market Value of Buyer 
Stock.                                                                          

- 7 -         

EX-2.(A)
13th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 13th

    The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the IRC) shall be and   
is intended to be effected in a manner which is consistent with Section 424(a)  
of the IRC.  The duration and other terms of the new option shall be the same   
as the original option, except that all references to Seller shall be deemed to 
be references to Buyer.                                                         

3.4     BUYER OPTION.  Concurrently with the execution of this  
Agreement, Seller and Buyer shall execute and deliver the Option Agreement.     
Buyer and Seller confirm that the execution and delivery of the Option          
Agreement constitute a material inducement to them to enter into this Agreement 
and that absent the execution and delivery of the Option Agreement, they would  
not enter into this Agreement on the terms and subject to the conditions        
contained herein.                                                               

  3.5     ACQUISITION COMPANY STOCK.  Each share of capital stock of
Acquisition Company issued and outstanding on the Closing Date shall, by virtue 
of the Merger, automatically and without any action on the part of the holder   
thereof, be converted into the same number of shares of common stock of the     
Surviving Corporation.                                                          

    3.6     BUYER STOCK ADJUSTMENTS.  The Buyer Stock portion of the per
share Merger Consideration shall be subject to appropriate adjustments in the   
event that, subsequent to the date of this Agreement but prior to the Closing   
Date, the outstanding Buyer Stock shall have been increased, decreased, changed 
into or exchanged for a different number or kind of shares or securities        
through reorganization, recapitalization, reclassification, stock dividend,     
stock split, or other like changes in Buyer's capitalization.                   

   3.7     EXCHANGE OF SELLER STOCK.  To effect the exchange of Seller
Stock for the Merger Consideration:                                             

     3.7.1   BUYER TO MAKE MERGER CONSIDERATION AVAILABLE.  At or prior to
the Closing Date, Buyer shall deposit, or shall cause to be deposited, with a   
bank or trust company selected by Buyer (and reasonably acceptable to Seller)   
(the "Exchange Agent"), for the benefit of the holders of certificates of       
Seller Stock (the "Certificates"), for exchange in accordance with this Section 
3.7, certificates representing the shares of Buyer Stock and cash which         
together constitute the Merger Consideration (such certificates for shares of   
Buyer Stock and cash, together with any dividends or distributions with respect 
thereto, being hereinafter referred to as the "Exchange Fund") to be issued and 
paid, respectively, pursuant to this Agreement in exchange for outstanding      
shares of Seller Stock.                                                         

3.7.2   EXCHANGE PROCEDURES.                                    

  (a)     As soon as practicable after the Closing Date, Buyer shall
cause the Exchange Agent to mail to each holder of record of a Certificate or   
Certificates at the Closing Date a form letter of transmittal (which shall      
specify that delivery shall be effected, and risk of loss and title to the      
Certificates shall pass, only upon delivery of the Certificates to the Exchange 
Agent) containing instructions for use in effecting the surrender of the        
Certificates.  Seller shall have the right to approve the form of the letter of 
transmittal, which approval shall not unreasonably be withheld.                 

- 8 -         

EX-2.(A)
14th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 14th

     (b)     Upon surrender of a Certificate for exchange and cancellation
to the Exchange Agent, duly executed, the holder of such Certificates shall be  
entitled to receive in exchange therefor (x) a certificate representing that    
number of whole shares of Buyer Stock to which such holder of Seller Stock      
shall have become entitled pursuant to the provisions of this Agreement, and    
(y) a check representing the amount of cash, if any, which such holder has the  
right to receive in respect of the Certificate surrendered pursuant to the      
provisions of this Agreement and the Certificate so surrendered shall forthwith 
be cancelled.  No interest will be paid or accrued on the cash and unpaid       
dividends and distributions, if any, payable to holders of Certificates.        

  (c)     After the Closing Date, there shall be no transfers on the
stock transfer books of Seller of the shares of Seller Stock which were issued  
and outstanding immediately prior to the Closing Date.  If, after the Closing   
Date, Certificates representing such shares are presented for transfer to the   
Exchange Agent, they shall be cancelled and exchanged for certificates          
representing shares of Buyer Stock and cash as provided in this Section 3.7.    

      (d)     Any portion of the Exchange Fund that remains unclaimed by the
shareholders of Seller for 120 days after the Closing Date shall be paid to     
Buyer.  Any shareholders of Seller who have not theretofore complied with this  
Section 3.7 shall thereafter look only to Buyer for payment of their shares of  
Buyer Stock, cash and unpaid dividends and distributions of the Buyer Stock     
deliverable in respect of each share of Seller Stock such shareholder holds as  
determined pursuant to this Agreement, in each case, without any interest       
thereon.  Notwithstanding the foregoing, none of Buyer, Seller, the Exchange    
Agent nor any other person shall be liable to any former holder of shares of    
Seller Stock for any amount properly delivered to a public official pursuant to 
applicable abandoned property, escheat or similar laws.                         

    (e)     In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming  
such Certificate to be lost, stolen or destroyed and, if required by Buyer, the 
posting by such person of a bond in such amount as Buyer may direct as          
indemnity against any claim that may be made against it with respect to such    
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or 
destroyed Certificate, the shares of Buyer Stock and cash deliverable in        
respect thereof pursuant to this Agreement.                                     

ARTICLE IV    

REPRESENTATIONS AND WARRANTIES  

      4.1     REPRESENTATIONS AND WARRANTIES OF SELLER.  Seller hereby makes
the following representations and warranties to Buyer, each of which is being   
relied upon by Buyer as a material inducement to enter into and perform this    
Agreement:                                                                      

4.1.1   ORGANIZATION OF SELLER.  Seller is a corporation duly   
organized, validly existing and in good standing under the laws of the State of 
Delaware.  Seller has full corporate power and authority to own or lease all of 
its properties and assets and to carry on its                                   

- 9 -         

EX-2.(A)
15th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 15th

business as now being conducted, which business is described in Seller's Annual 
Report on Form 10-K for the year ended December 31, 1993 filed with the SEC.    
Seller is duly licensed or qualified to do business and is in good standing in  
each jurisdiction in which the nature of the business conducted by it or the    
character or location of the employees or of the properties or assets owned or  
leased by it makes such licensing or qualification necessary.  The certificate  
of incorporation and bylaws of Seller and all amendments thereto to the date    
hereof (true, correct, and complete copies of which have been filed as          
exhibits to Seller's reports under the Exchange Act) are in full force and      
effect as of the date of this Agreement.  The minute books of Seller reflect    
all meetings held and contain complete and accurate records of all corporate    
actions taken by Seller's board of directors (or any committee thereof) and     
stockholders.                                                                   

4.1.2   SUBSIDIARIES.  (a)        Section 4.1.2(a) of the Seller
Disclosure Schedule contains a true, correct and complete list of the           
Subsidiaries, and sets forth the correct name of each Subsidiary, the           
jurisdiction in which it is incorporated or otherwise organized, each           
jurisdiction in which such Subsidiary is qualified to do business as a foreign  
corporation, the number of shares of capital stock or other ownership interest  
outstanding and the number of such shares or interests and the respective       
ownership percentage held by Seller or any other Subsidiary.  All the shares of 
capital stock or other ownership interest of a Subsidiary that are owned by     
Seller or a Subsidiary are owned free and clear of any liens, claims, charges   
or other encumbrances.  Each Subsidiary is duly organized, validly existing and 
in good standing under the laws of its jurisdiction of incorporation or         
organization, has full corporate power and authority to own or lease its        
properties and assets and to carry on its business as now being conducted and   
is duly licensed or qualified to do business and is in good standing in each    
jurisdiction in which the nature of the business conducted by it or the         
character or location of the employees or of the properties or assets owned or  
leased by it makes such licensing or qualification necessary.  The minute books 
of each Subsidiary reflect all meetings held and contain complete and accurate  
records of all corporate actions taken by such Subsidiary's board of directors  
(or any committee thereof) and stockholder(s).  There is no agreement to which  
Seller or any Subsidiary is subject with respect to the issuance, sale, or      
voting of issued or unissued shares of the capital stock of such Subsidiaries.  

      4.1.3   CAPITALIZATION.  The entire authorized capital stock of Seller
consists of 15,000,000 shares of the Seller Stock, of which 2,770,367 shares    
have been issued and are outstanding as of the date hereof, and 5,000,000       
shares of preferred stock, $.01 par value per share, of which none has been     
issued or is outstanding as of the date hereof.  All the issued and outstanding 
shares of the Seller Stock and the capital stock of each corporate Subsidiary   
have been duly authorized and validly issued and are fully paid and             
non-assessable, free of any preemptive right, and with no personal liability    
attaching to the ownership thereof.  Except for the Seller Options and the      
Buyer Option, there are no options, warrants, calls, preemptive rights or       
commitments of any character relating to the authorized but unissued capital    
stock or treasury stock or any other equity security of Seller or any           
Subsidiary or any securities or obligations convertible into or exchangeable    
for or giving any person any right to subscribe for or acquire from Seller or   
any corporate Subsidiary any shares of such capital stock, nor are there any    
stock appreciation rights, limited rights or other similar rights or            
obligations of Seller or any Subsidiary exercisable upon any circumstance,      
including upon a change in control of Seller or any Subsidiary.  The            

  - 10 -

EX-2.(A)
16th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 16th

Seller Options, in the aggregate, grant to the holders thereof the right to     
acquire up to 204,286 shares of the Seller Stock.  The  Seller Options and the  
Buyer Option have been validly and properly issued.  Section 4.1.3 of the       
Seller Disclosure Schedule contains a true, correct and complete list of the    
holders of all Seller Options, identifying with respect to each such holder the 
number of shares of the Seller Stock subject to such option, the date of grant, 
the exercise price, the vesting schedule and the expiration date.               

    4.1.4   AUTHORIZATION.  Seller has all requisite corporate power and
authority to execute and deliver this Agreement and, subject to the approval of 
this Agreement by the stockholders of Seller entitled to vote thereon and to    
the receipt of all Regulatory Approvals, to consummate the transactions         
contemplated by this Agreement in accordance with the terms hereof.  This       
Agreement has been duly authorized by the board of directors of Seller and,     
except for the approval of the stockholders of Seller as to this Agreement and  
the Merger, no other corporate proceedings on the part of Seller or any         
Subsidiary are necessary to consummate the transactions so contemplated.  This  
Agreement has been duly and validly executed and delivered by Seller and        
constitutes a valid and legally binding obligation of Seller enforceable        
against Seller in accordance with its terms.                                    

4.1.5   NON-CONTRAVENTION.  The execution and delivery of this  
Agreement by Seller does not, and the performance of this Agreement by Seller,  
in accordance with the terms hereof, will not (a) violate any provision of the  
charter or certificate of incorporation or bylaws of Seller or any Subsidiary   
or (b) conflict with or result in a breach of, or default under, or result in   
the creation of any lien, claim, charge or other encumbrance upon any of the    
assets or properties of Seller or any Subsidiary pursuant to the provisions of, 
or right of termination or acceleration under, any agreement, mortgage,         
indenture or other document or instrument to which Seller or any Subsidiary is  
a party or by which Seller, any Subsidiary or any of their respective           
properties or assets is bound.                                                  

4.1.6   PROPERTIES AND ASSETS; ENVIRONMENTAL MATTERS.           

     (a)     Except for (a) items reflected in the financial statements of
Seller as of September 30, 1994, (b) exceptions to title that do not interfere  
materially with any Subsidiary's use and enjoyment of owned or leased real      
property (other than real property acquired through foreclosure or a            
transaction in lieu of foreclosure), (c) liens for current real estate taxes    
not yet delinquent, or being contested in good faith, properly reserved against 
(and reflected on the financial statements referred to in Section 4.1.8 below), 
and (d) properties and assets sold or transferred in the ordinary course of     
business consistent with past practice since September 30, 1994, Seller and the 
Subsidiaries have good and, as to owned real property, marketable and insurable 
title to all their respective properties and assets, including the properties   
and assets reflected in the financial statements of Seller as of September 30,  
1994, whether real, personal, tangible or intangible, free and clear of all     
liens, claims, charges and other encumbrances.  Seller and the Subsidiaries, as 
lessees, have the right under valid and subsisting leases to occupy, use and    
possess all property leased by them.  All properties and assets used by Seller  
and the Subsidiaries are in good operating condition and repair suitable for    
the purposes for which they are currently utilized.                             

(b)     Except as set forth at Section 4.1.6(b) of the Seller   
Disclosure Schedule, to the Knowledge of any of Seller's officers and directors 
and those of its Subsidiaries, none of                                          

- 11 -    

EX-2.(A)
17th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 17th

Seller, any Subsidiary or any predecessor in title of any of them has used any  
real property owned, leased, subject to purchase, or otherwise occupied or to   
be occupied by Seller or any of the Subsidiaries for the manufacture, handling, 
disposal, or storage of hazardous wastes, petroleum products, polychlorinated   
biphenyls, chemicals, pollutants, contaminants, pesticides, radioactive         
substances, or other toxic materials, or other materials or substances (in each 
such case, other than small quantities of such substances in retail containers) 
regulated under the environmental or public health Laws (collectively,          
"Hazardous Substances").  Except as set forth at Section 4.1.6(b) of the Seller 
Disclosure Schedule, to the Knowledge of any of Seller's officers and directors 
and those of its Subsidiaries, no Hazardous Substances have been manufactured,  
stored, or discharged on any property owned, leased, subject to purchase, or    
occupied or to be occupied by Seller or any of the Subsidiaries, and all real   
property owned, leased, subject to purchase, or occupied or to be occupied by   
Seller or any of the Subsidiaries is free from Hazardous Substances and from    
asbestos, and asbestos compounds, except for such Hazardous Substances,         
asbestos and asbestos compounds which are present on or in such real property   
in compliance with applicable Laws.                                             

(c)     Except as set forth at Section 4.1.6(c) of the Seller   
Disclosure Schedule, neither Seller nor any Subsidiary has violated during the  
last five years or is in violation of or liable under any environmental or      
public health laws, including, without limitation, the federal Comprehensive    
Environmental Response, Compensation and Liability Act and its state            
counterparts.                                                                   

      4.1.7   BOOKS AND RECORDS.  Except as set forth at Section 4.1.6(c) of
the Seller Disclosure Schedule, true and complete copies of the charter and     
bylaws, and of the minute books, of Seller and of each Subsidiary, as in effect 
on the date hereof, have been made available to Buyer.                          

4.1.8   FINANCIAL STATEMENTS.                                   

  (a)     Seller has previously delivered or made available to Buyer
accurate and complete copies of the consolidated statements of financial        
condition of Seller as of December 31, 1993, and the related consolidated       
statements of income, stockholders' equity and cash flows for the years ended   
December 31, 1993, 1992 and 1991, in each case accompanied by the audit report  
of Peat Marwick, and the unaudited consolidated statements of financial         
condition of Seller as of September 30, 1994 and 1993, and the related          
unaudited consolidated statements of income, stockholders' equity and cash      
flows for the nine months ended September 30, 1994 and 1993.  The consolidated  
statements of financial condition of Seller referred to herein (including the   
related notes, where applicable) fairly present the consolidated financial      
condition of Seller as of the respective dates set forth therein, and the       
related consolidated statements of income, stockholders' equity and cash flows  
(including the related notes, where applicable) fairly present the consolidated 
results of operations, stockholders' equity and cash flows of Seller for the    
respective periods or as of the respective dates set forth therein.             

(b)     Each of the financial statements referred to in Section 
4.1.8(a) has been prepared in accordance with GAAP consistently applied during  
the periods involved, except as may be noted therein.  The audits of Seller and 
the Subsidiaries have been conducted in                                         

- 12 -  

EX-2.(A)
18th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 18th

accordance with generally accepted auditing standards.  The books and records   
of Seller and the Subsidiaries are being maintained in  material compliance     
with applicable legal and accounting requirements.                              

 (c)     Except (i) as set forth in Section 4.1.8(c) of the Seller
Disclosure Schedule, (ii) for those liabilities that are fully reflected or     
reserved against on the consolidated statement of financial condition of Seller 
as of September 30, 1994 delivered to Buyer and (iii) for liabilities incurred  
in the ordinary course of business consistent with past practice since          
September 30, 1994, neither Seller nor any of its Subsidiaries has or has       
incurred any liability of any nature whatsoever (whether absolute, accrued,     
contingent or otherwise and whether due or to become due) that, either alone or 
when combined with all similar liabilities, is, or could reasonably be expected 
to result in, a Material Adverse Change in Seller or the Surviving Corporation. 

      4.1.9     ABSENCE OF CHANGES.  Except with respect to the transactions
contemplated hereby, since September 30, 1994, (i) the business of Seller and   
each Subsidiary has been conducted only in the ordinary course consistent with  
past practice, (ii) there has not been any Material Adverse Change in Seller    
(except for the effects of adjustments under Statement of Financial Accounting  
Standards No. 115 on the investment securities available for sale and the       
mortgage-backed securities available for sale of Seller or its Subsidiaries     
through November 30, 1994), (iii) there has not been any material change in any 
policy or practice followed by Seller nor any Subsidiary in the ordinary course 
of business, (iv) neither the Seller nor any Subsidiary has incurred any        
material liability, except in the ordinary course of its business consistent    
with prudent banking practices, (v) there has not been any agreement, contract  
or commitment entered into, or agreed to be entered into, except for those in   
the ordinary course of business, none of which has caused a Material Adverse    
Change in Seller; (vi) there has not been any increase in or establishment of   
any bonus, insurance, severance (including severance after a change in          
control), deferred compensation, pension, retirement, profit sharing, stock     
option (including, without limitation, the granting of any stock options, stock 
appreciation rights, performance awards, or restricted stock awards), stock     
purchase, life insurance or split dollar life insurance, retiree medical or     
life insurance, or other employee benefit plan, or any other increase in the    
compensation payable or to become payable to any officers or key employees of   
the Seller or any Subsidiary, except, with respect to cash compensation, in the 
ordinary course of business consistent with past practice; and (vii) there has  
not been any change in any of the accounting methods or practices of the Seller 
or any Subsidiary other than changes required by applicable law or GAAP.        

4.1.10   LEGAL PROCEEDINGS.                                     

     (a)     Section 4.1.10 of the Seller Disclosure Schedule sets forth a
description of all legal, administrative or other claims, actions, suits or     
other proceedings pending, or to the Knowledge of any of Seller's officers and  
directors or those of any Subsidiary, threatened, to which Seller or any        
Subsidiary is a party (other than mortgage foreclosure proceedings on           
single-family residences or other routine legal proceedings) before any court   
or arbitration tribunal or before or by any Governmental Authority.  Neither    
Seller nor any Subsidiary is a party to any pending or, to the Knowledge of any 
of Seller's officers and directors, threatened legal, administrative or other   
claim, action, suit, investigation,                                             

- 13 -  

EX-2.(A)
19th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 19th

arbitration or proceeding challenging the validity or propriety of any of the   
transactions contemplated by this Agreement or the Option Agreement.  Neither   
Seller nor any Subsidiary is subject to any judgment, order, writ, injunction,  
decree or arbitration award.                                                    

(b)     Except as set forth at Section 4.1.10(b) of the Seller  
Disclosure Schedule, there are no claims, actions, suits, or other proceedings  
pending, or, to the Knowledge of any of Seller's officers and directors or      
those of any Subsidiary, threatened by or against any officer, director, agent, 
or employee of Seller or any Subsidiary in connection with the business, assets 
or properties of Seller or any Subsidiary.                                      

4.1.11  CERTAIN CONTRACTS.                                      

      (a)     Except as set forth at Section 4.1.11 of the Seller Disclosure
Schedule or as have been filed as an exhibit to Seller's Annual Report on Form  
10-K for the year ended December 31, 1993 or to subsequent reports filed with   
the SEC under the Exchange Act prior to the date hereof, and except as          
contemplated by this Agreement, neither Seller nor any Subsidiary is a party to 
or is bound or affected by, or receives benefits under (i) any material         
agreement, arrangement or understanding not made in the ordinary course of      
business; (ii) any agreement, arrangement or understanding relating to the      
employment, election, retention in office or severance of any present or former 
director, officer or employee of Seller or any Subsidiary; (iii) any agreement, 
arrangement or understanding pursuant to which any payment (whether of          
severance pay or otherwise) became or may become due to any director, officer   
or employee of Seller or any Subsidiary upon execution of this Agreement or     
upon or following consummation of the transactions contemplated by this         
Agreement (either alone or in connection with the occurrence of any additional  
acts or events); (iv) any agreement, arrangement or understanding with a labor  
union; (v) any assistance agreement, supervisory agreement, memorandum of       
understanding, consent order, cease and desist order or condition of any        
regulatory order or decree with or by the OTS, the FDIC, the SEC or any other   
regulatory agency; or (vi) any other agreement, arrangement or understanding    
which would be required to be filed as an exhibit to Seller's Annual Report on  
Form 10-K under the Exchange Act and which has not been so filed, in each case  
whether written or oral.  True and complete copies of all written contracts,    
arrangements and understandings listed at Section 4.1.11 of the Seller          
Disclosure Schedule, as in effect on the date hereof, have been made available  
to Buyer.                                                                       

      (b)     Neither Seller nor any Subsidiary is in default under, or with
the giving of notice or the lapse of time, or both, would be in default under,  
any of the terms or conditions of any contract, agreement or commitment to      
which Seller or any Subsidiary is a party (including but not limited to the     
matters listed in paragraph (a) above).  To the Knowledge of any of Seller's    
officers and directors, or those of any of the Subsidiaries, there has occurred 
no default or event which, with the giving of notice or the lapse of time, or   
both, would constitute a default by any other party to any such contract,       
agreement, or commitment.                                                       

  4.1.12  INSURANCE.  All insurance policies and bonds maintained by
Seller and the Subsidiaries are in full force and effect and have been in full  
force and effect at all times during which Seller or any Subsidiary had any     
insurable interest in the subject of such insurance policies and bonds.  As of  
the date hereof, neither Seller nor any Subsidiary has                          

- 14 -  

EX-2.(A)
20th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 20th

received any notice of cancellation or amendment of any such policy or bond or  
is in default under any such policy or bond, no coverage thereunder is being    
disputed and all material claims thereunder have been filed in a timely         
fashion.  True and complete copies of all such policies and bonds referred      
to in this Section 4.1.12 have been made available to Buyer.  Section 4.1.12 of 
the Seller Disclosure Schedule sets forth a true and complete list of all       
claims pending under each such policy or bond.                                  

4.1.13  EMPLOYEE BENEFIT PLANS AND MATTERS.                     

(a)     Except as set forth at Section 4.1.13(a) of the Seller  
Disclosure Schedule, neither Seller nor any Subsidiary maintains, administers,  
or otherwise contributes to or has any liability to or under any Employee Plan. 
For purposes of this Section 4.1.13, "Seller" shall include any controlled      
group (within the meaning of Section 414(b) of the IRC) of which Seller is a    
member, all trades or businesses under common control (within the meaning of    
Section 414(c) of the IRC) of which Seller is a member and all affiliated       
service groups (within the meaning of Section 414(m) of the IRC) of which       
Seller is a member.  True, correct and complete copies of each Employee Plan    
identified on the Seller Disclosure Schedule, including amendments and trust    
agreements relating thereto, have been made available to Buyer, together with   
(i) a complete and correct copy of the most recent annual report (Form 5500     
including, if applicable, Schedule B thereto) prepared in connection with any   
such Employee Plan, (ii) a true, correct and complete copy of the most recent   
actuarial valuation report, if any, prepared in connection with any such        
Employee Plan, and (iii) a true, correct and complete copy of the most recent   
summary plan description (including any summaries of material modifications) of 
each such Employee Plan.  None of such Employee Plans is a "multiemployer       
plan," as defined in Section 3(37) of ERISA, and neither Seller nor any         
Subsidiary has been obligated to make a contribution to any such multiemployer  
plan within the past five years.  Since its inception, each such Employee Plan  
which is intended to be qualified under Section 401(a) of the IRC (a "Qualified 
Plan") has been operated and administered in all material respects in           
accordance with the requirements for a qualified plan under Section 401(a) of   
the IRC and each trust maintained in connection with each Qualified Plan has    
been operated and administered in all material respects in accordance with the  
requirements for a qualified trust under Section 401(a) of the IRC and for a    
tax exempt trust under Section 501 of the IRC.  Seller has received from the    
Internal Revenue Service a determination letter with respect to the             
qualification of each such Employee Plan and has delivered to Buyer a true and  
complete copy of the most recent determination letter for each Qualified Plan,  
as well as all correspondence relating to the application therefor.  The        
representations made as a part of the application for each such determination   
letter were true and complete when made and continue to be true and complete.   
Nothing has occurred since the date of the most recent applicable determination 
letter that would adversely affect the qualified status of any Qualified Plan   
and any trust forming a part thereof.                                           

      (b)     True and complete copies of all Benefit Arrangements of Seller
have been made available to Buyer.  Except as set forth at Section 4.1.13(b) of 
the Seller Disclosure Schedule or as set forth in the Seller financial          
statements referred to in Section 4.1.8 above, neither Seller nor any           
Subsidiary has any liability to or under any Benefit Arrangement.               

- 15 -    

EX-2.(A)
21st Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 21st

(c)     Except as set forth at Section 4.1.13(c) of the Seller  
Disclosure Schedule, each of the Employee Plans and Benefit Arrangements of     
Seller and its Subsidiaries is in compliance with the requirements prescribed   
by any and all applicable laws and regulations, including, but not limited to,  
ERISA and the IRC.  Except as set forth at Section 4.1.13(c) of the Seller      
Disclosure Schedule, no Employee Plan of Seller and its Subsidiaries which is   
subject to Title IV of ERISA has been terminated other than in a standard       
termination under Section 4041(b) of ERISA and no condition exists that could   
constitute grounds for the termination of any such Employee Plan under Section  
4042 of ERISA.  Neither Seller nor any Subsidiary has incurred, or reasonably   
expects to incur, any liability to the Pension Benefit Guaranty Corporation,    
except for required premium payments which have been paid when due.  Neither    
Seller nor any Subsidiary nor any Employee Plan of Seller and its Subsidiaries  
has engaged in a "prohibited transaction," as defined in Section 406 of ERISA   
and Section 4975 of the IRC, which could subject any of them or Buyer or        
Acquisition Company to material liability under Section 409 or 502(i) of ERISA  
or Section 4975 of the IRC.  Neither Seller nor any Subsidiary has incurred or  
reasonably expects to incur any material withdrawal liability under Title IV of 
ERISA.  No Employee Plan of Seller and its Subsidiaries subject to Part 3 of    
Subtitle B of Title I of ERISA or Section 412 of the IRC, or both, has any      
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA,     
whether or not waived, or "unfunded current liability" as defined in Section    
412(l) of the IRC, taking into account contributions made within the period     
described in Section 412(c)(10) of the IRC.  Neither Seller nor any Subsidiary  
failed to make any contribution or pay any amount due and owing as required by  
the terms of any Employee Plan or Benefit Arrangement.  No events have occurred 
or are reasonably expected to occur with respect to any Employee Plan of Seller 
or any Subsidiary that would cause a material change in the value of the assets 
(except, with respect to the Seller ESOP, for changes in the market value of    
the Seller Stock) or amount or present value of accrued benefits and other      
liabilities of such Employee Plan.                                              

(d)     Except as set forth at Section 4.1.13(d) of the Seller  
Disclosure Schedule, no assets of any Employee Plan other than the Seller ESOP  
are directly or indirectly invested in any personal or real property used by    
Seller or any stock, obligations or securities issued by Seller.                

      (e)     No Employee Plan, Benefit Arrangement or other agreement, plan
or arrangement, individually or collectively, provides for any payment by       
Seller or any Subsidiary to any employee or independent contractor, in          
connection with or as a result of the transactions contemplated by this         
Agreement, that is not deductible under Section 162(a)(1), 280G or 404 of the   
IRC.                                                                            

    (f)     Neither Seller nor any Subsidiary is a party to, or is bound
by, any collective bargaining agreement, contract, or other agreement or        
understanding with a labor union or labor organization, nor is Seller or any    
Subsidiary the subject of any material proceeding asserting that Seller or any  
such Subsidiary has committed an unfair labor practice or seeking to compel     
Seller or such Subsidiary to bargain with any labor organization as to wages or 
conditions of employment, nor is there any strike involving Seller or any       
Subsidiary pending or, to the Knowledge of any of Seller's directors and        
officers, threatened, nor to their Knowledge is there any activity involving    
its or any Subsidiary's employees seeking to certify a collective bargaining    
unit or engaging in any other organizational activity.                          

- 16 -        

EX-2.(A)
22nd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 22nd

4.1.14  COMPLIANCE WITH APPLICABLE LAWS.  Except as set forth at
Section 4.1.14 of the Seller Disclosure Schedule, each of Seller and the        
Subsidiaries has complied with all Laws applicable to it or to the operation of 
its business and none of them has received any notice of any alleged claim,     
threatened claim or violation of or liability or potential responsibility under 
any such Laws that has not heretofore been cured and for which there is no      
remaining liability.                                                            

       4.1.15  REGULATORY FILINGS AND REPORTS.  Since January 1, 1990, each of
Seller and the Subsidiaries has filed all documents required to be filed by it  
under federal securities Laws or applicable savings and loan and savings bank   
Laws and regulations, and all such documents, as finally amended, were complete 
and accurate, complied in all material respects as to form and substance with   
all applicable Laws and did not contain any untrue statement of a material fact 
or omit to state a material fact required to be stated therein or necessary to  
make the statements therein, in light of the circumstances under which they     
were made, not misleading.                                                      

  4.1.16  TAX MATTERS.  Except as set forth at Section 4.1.16 of the
Seller Disclosure Schedule:                                                     

  (a)     Seller has timely filed on behalf of itself and all of the
Subsidiaries, with the appropriate Governmental Authorities, the Tax Returns.   
All of the Tax Returns are accurate and complete in all material respects.      

   (b)     Seller and the Subsidiaries have collected and withheld all
taxes which they are or have been required to collect or withhold and have      
timely submitted all such collected and withheld amounts to the appropriate     
authorities.  Seller and the Subsidiaries are in compliance with the back-up    
withholding and information reporting requirements under the IRC, and the rules 
and regulations of the Internal Revenue Service thereunder.                     

     (c)     All federal, state and local taxes, due and payable by Seller
or any Subsidiary thereof pursuant to the Tax Returns, or pursuant to any       
assessment with respect to taxes, penalties or interest in any of such          
jurisdictions, have been accrued or paid.                                       

    (d)     The reserves for taxes contained in the financial statements
(including the notes thereto) described in Section 4.1.8 of this Agreement are  
adequate to cover the tax liabilities, including penalties and interest, of     
Seller and the Subsidiaries for all periods up to and including September 30,   
1994.                                                                           

    (e)     Neither Seller nor any Subsidiary has received any notice of
any deficiency or assessment or proposed deficiency or assessment by the        
Internal Revenue Service or any other taxing authority in connection with the   
Tax Returns which, individually or in the aggregate, exceeds $50,000 and which  
has not been resolved.  There is no action, suit, proceeding, audit,            
examination, investigation, or claim pending, or to the Knowledge of any of     
Seller's officers and directors, or those of any of the Subsidiaries,           
threatened, in respect of any taxes for which Seller or any Subsidiary thereof  
is or may become liable if such action, suit, proceeding, audit, examination,   
investigation, or claim were to be resolved, in whole or in part, adversely to  
Seller or any Subsidiary thereof.  To the Knowledge of any of Seller's officers 
and directors, or those of any of the Subsidiaries, no fact exists which        

- 17 -      

EX-2.(A)
23rd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 23rd

constitutes grounds for the assessment of material additional taxes with        
respect to Seller or any Subsidiary.  Seller has made available to Buyer a      
true, correct and complete copy of the agreement for the allocation or sharing  
of taxes among the Seller and the Subsidiaries.                                 

(f)     Except as set forth at Section 4.1.16(f) of the Seller  
Disclosure Schedule, neither Seller nor any Subsidiary has waived any Law       
fixing, or consented to the extension of, any period of time for assessment of  
any tax.  Section 4.1.16(f) of the Seller Disclosure Schedule sets forth a true 
and complete list of all tax returns of Seller and its Subsidiaries which are   
open to audit.                                                                  

     (g)     Each of the NFS Banks is, and for all taxable years for which
the applicable statute of limitations on assessment of taxes has not run on the 
date hereof has been, a "domestic building and loan association" as defined in  
Section 7701(a)(19) of the IRC, with a "qualifying assets test" ratio for       
purposes of such definition of not less than 60 percent.                        

      4.1.17  BROKER'S FEES.  Except for payments due to Tucker Anthony from
Seller as a result of the Merger and pursuant to that certain letter agreement  
between Seller and Tucker Anthony dated as of September 21, 1994 (the "Tucker   
Agreement"), a true, correct and complete copy of which has been provided to    
Buyer, no agent, finder, broker, investment banker or other person or entity    
acting on behalf or under authority of Seller or any Subsidiary is or will be   
entitled to any fee as compensation for services as broker or finder or any     
other commission or similar fee directly or indirectly in connection with this  
Agreement, or any of the transactions contemplated hereby.                      

       4.1.18  INTELLECTUAL PROPERTY.  Except where there would be no Material
Adverse Change in Seller, Seller and each Subsidiary owns or possesses valid    
and binding licenses and other rights to use without payment all material       
patents, copyrights, trade secrets, trade names, servicemarks and trademarks    
used in its businesses and neither Seller nor any Subsidiary has received any   
notice of conflict with respect thereto that asserts the right of others.       
Seller and each Subsidiary have in all material respects performed all the      
obligations required to be performed by them and are not in default in any      
material respect under any contract, agreement, arrangement or commitment       
relating to any of the foregoing, except where such nonperformance or default   
would not, individually or in the aggregate, result in a Material Adverse       
Change in Seller.                                                               

    4.1.19  TAKEOVER RESTRICTIONS.  (a) The Board of Directors of Seller
has approved the transactions contemplated by this Agreement such that the      
supermajority vote provisions and restrictions of Section 203 of the DGCL and   
of Seller's Certificate of Incorporation will not apply to this Agreement or    
any of the transactions contemplated hereby.                                    

    (b)     No "business combination", "moratorium", "control share", or
other federal or state antitakeover or change in control statute or regulation  
(collectively, "Antitakeover Provisions") other than HOLA, FDIA, BHCA or other  
banking regulatory statutes (i) prohibits or restricts Seller's ability to      
perform its obligations under this Agreement, or its ability to consummate the  
transactions contemplated hereby, (ii) would have the effect of invalidating or 
voiding this Agreement, or any provision hereof, (iii) would subject Buyer or   
Acquisition Company to any material impediment or condition in connection with  
the exercise of any                                                             

- 18 -    

EX-2.(A)
24th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 24th

of its rights under this Agreement or the Option Agreement, or (iv) would       
provide severance payments to any employee of Seller or any Subsidiary.         

4.1.20  MATTERS REGARDING THE NFS BANKS.                        

   (a)     The NFS Banks are stock savings banks organized and validly
existing under the laws of the United States of America.  The NFS Banks are     
members in good standing of the Federal Home Loan Bank System.                  

 (b)     All eligible deposit accounts issued by the NFS Banks are
insured by the FDIC to the full extent permitted under applicable Law.          

(c)     Neither of the NFS Banks is a party to any agreements,  
arrangements or understandings with, or is subject to any order or directive    
by, or is a recipient of any extraordinary supervisory letter from, OTS or the  
FDIC which was a result of a violation of any Laws, restricts materially the    
conduct of its business, or relates in any manner to its capital adequacy,      
credit policies or management, nor has it or Seller been informed by the OTS or 
the FDIC that it is issuing or requesting any of the foregoing.                 

     (d)     Each of the NFS Banks is a "qualified thrift lender" (as that
term is used in Section 10(m) of HOLA).                                         

(e)     No action currently is being taken, proposed or, to the 
Knowledge of Seller's directors and officers, threatened by the OTS or the FDIC 
to restrict the operations of the NFS Banks in any way, to issue a capital or   
other directive to the NFS Banks, to subject the NFS Banks to a supervisory,    
management, operating or other written agreement or a cease-and-desist order,   
nor to appoint a manager, conservator or receiver for the NFS Banks.            

(f)     Except as disclosed at Section 4.1.20(f) of the Seller  
Disclosure Schedule, or except as noted in the OTS or FDIC examination reports  
of each of the NFS Banks referred to in Section 4.1.26 below and made available 
to Buyer, each of the NFS Banks has conducted its business in accordance with   
all applicable Laws, including, without limitation, disclosure, usury, equal    
credit opportunity, equal employment, fair credit reporting, antitrust and      
other Laws and the forms, procedures and practices used by each of the NFS      
Banks comply with such Laws.                                                    

     (g)     NFS Bank has a CRA rating of "outstanding" and Plaistow has a
CRA rating of "satisfactory".  To the Knowledge of the officers and directors   
of Seller, since their last Federal regulatory authority examination of CRA     
compliance, there has been no protest of any application of either NFS Bank or  
Plaistow based on CRA compliance.                                               

  4.1.21  RESERVES FOR LOSSES.  All reserves or other allowances for
possible losses reflected in Seller's most recent Quarterly Report on Form 10-Q 
filed with the SEC under the Exchange Act complied with all statutory and       
regulatory requirements, and except as specifically noted in the OTS or FDIC    
examination reports of the NFS Banks referred to in Section 4.1.26 below and    
made available to Buyer, neither Seller nor any Subsidiary has been notified by 
the OTS, the FDIC or Seller's independent auditor, in writing or otherwise,     
that such reserves are inadequate or that the NFS Banks' practices and policies 
in                                                                              

- 19 -

EX-2.(A)
25th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 25th

establishing such reserve and in accounting for delinquent and classified       
assets materially fails to comply with applicable accounting or regulatory      
requirements, or that the OTS, the FDIC or the independent auditors of Seller   
believe such reserves to be inadequate or inconsistent with the NFS Banks'      
historical loss experience.                                                     

     4.1.22  LOAN PORTFOLIO.  Except as set forth in Section 4.1.22 of the
Seller Disclosure Schedule, as of November 30, 1994, neither the Seller nor any 
Subsidiary is a party to any written or oral (a) loan agreement, note or        
borrowing arrangement (including, without limitation, leases and credit         
enhancements) (collectively, "LOANS") the unpaid principal balance of which     
exceeds $100,000 and as to which the obligor was, as of that date, over 90 days 
delinquent in payment of principal or interest, or (b) Loan with any director,  
executive officer or, to the Knowledge of the officers and directors of Seller, 
five percent stockholder of the Seller or any Subsidiary.  Section 4.1.22 of    
the Disclosure Schedule sets forth as of November 30, 1994, (i) all of the      
Loans in original principal amount in excess of $100,000 of the Seller or any   
Subsidiary that as of that date was classified as "Other Loans Specially        
Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss", "Classified", 
"Criticized", "Restructured", "Watch list" or words of similar import, together 
with the principal amount of and accrued and unpaid interest on each such Loan  
and the identity of the obligor thereunder, and (ii) by category of Loan (i.e., 
commercial, consumer, etc.), all of the other Loans of the Seller and the       
Subsidiaries that as of November 30, 1994 were classified as such, together     
with the aggregate principal amount of such Loans by category.  Since November  
30, 1994, there has been no material adverse change in the Loan portfolio of    
Seller and its Subsidiaries.  Seller shall promptly inform Buyer in writing of  
any Loan the original principal balance of which exceeds $100,000 that becomes  
classified in the manner described in this Section 4.1.22, or any Loan the      
classification of which is materially and adversely changed at any time after   
the date of this Agreement.                                                     

4.1.23  INVESTMENT SECURITIES.  Section 4.1.23(a) of the Seller 
Disclosure Schedule sets forth the book and market value as of November 30,     
1994 of the investment securities, mortgage backed securities and securities    
classified as available for sale by the Seller and each Subsidiary.  Section    
4.1.23(b) of the Disclosure Schedule sets forth the names of all the joint      
ventures in which the Seller or any Subsidiary has an investment (whether or    
not such joint ventures remain active).  Except for pledges to secure public    
and trust deposits, borrowings, repurchase agreements and reverse repurchase    
agreements entered into in arms'-length transactions pursuant to normal         
commercial terms and conditions and other pledges required by law, none of the  
investments reflected in the consolidated balance sheet of the Seller included  
in its Quarterly Report on Form 10-Q for the period ended September 30, 1994,   
and none of the material investments made by the Seller or any of its           
Subsidiaries since September 30, 1994, is subject to any restriction            
(contractual, statutory or otherwise) that would materially impair the ability  
of the entity holding such investment freely to dispose of such investment      
within a reasonable time.                                                       

       4.1.24  DERIVATIVE TRANSACTIONS.  Except as set forth in Section 4.1.24
of the Seller Disclosure Schedule, neither the Seller nor any of the            
Subsidiaries has engaged in transactions in or involving structured notes,      
forwards, futures, options on futures, swaps or other derivative instruments.   

- 20 -      

EX-2.(A)
26th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 26th

4.1.25  DEPOSITS AND BORROWINGS.  The deposit accounts and any  
borrowings of the NFS Banks comply in all material respects with all applicable 
Laws.                                                                           

4.1.26  EXAMINATION REPORTS.  The last safety and soundness     
examinations of NFS Bank and Plaistow by the OTS or the FDIC prior to the date  
of this Agreement were performed as of June 27, 1994, and access to true,       
correct and complete copies of the reports of examination related thereto have  
been made available to Buyer.  If either of NFS Bank or Plaistow was notified   
of any deficiencies as a result of said examinations or any prior examinations  
of either of NFS Bank or Plaistow by the OTS or the FDIC, it has taken action   
to correct each such deficiency, which action it believes is to the             
satisfaction of the appropriate agency, and it has not received notice of any   
kind that such action is inadequate, and if any changes in operating methods or 
organization were required by reason of such examinations, or such other        
examinations, such changes have been made.                                      

      4.1.27  MATERIAL INTERESTS OF CERTAIN PERSONS.  Except as disclosed in
Seller's proxy statement for its 1994 annual meeting of shareholders or set     
forth in Section 4.1.27 of the Seller Disclosure Schedule, no officer or        
director of Seller or its Subsidiaries, or any "associate" (as such term is     
defined in Rule 14a-1 under the Exchange Act) of any such officer or director,  
has any material interest in any material contract or property (real or         
personal), tangible or intangible, used in or pertaining to the business of     
Seller or any of Seller's Subsidiaries that would be required to be disclosed   
in a proxy statement to shareholders under Regulation 14A of the Exchange Act.  

     4.1.28  FAIRNESS OPINION.  Seller has received from Tucker Anthony an
opinion, dated the date of or immediately before the date of this Agreement,    
concluding that, in such financial adviser's opinion, the Merger Consideration  
is fair, from a financial point of view, to the Seller's stockholders.          

4.1.29  NO MISREPRESENTATION.  None of the representations and  
warranties of Seller or any Subsidiary set forth in this Agreement, nor any     
matter disclosed in the Seller Disclosure Schedule or in any of the schedules,  
lists, certificates, exhibits or other documents prepared by Seller or any      
Subsidiary and delivered to Buyer hereunder or in connection with the           
transactions contemplated hereby (excluding the informational materials         
supplied to Buyer by Tucker Anthony, with respect to which neither Tucker       
Anthony nor Seller makes any representation except as set forth below) contains 
any untrue statement of a material fact or omits to state a material fact       
necessary to make the statements contained herein or therein, in light of the   
circumstances in which they were made, not misleading.  With respect to the     
informational materials supplied to Buyer by Tucker Anthony, Seller represents  
that such informational materials were prepared in good faith and to the        
Knowledge of Seller's officers and directors they are not, taken as a whole,    
untrue in any material respect.                                                 

    4.2     REPRESENTATIONS AND WARRANTIES OF BUYER.  Buyer hereby makes
the following representations and warranties to Seller, each of which is being  
relied upon by Seller as a material inducement to enter into and perform this   
Agreement:                                                                      

- 21 -        

EX-2.(A)
27th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 27th

4.2.1   ORGANIZATION.                                           

      (a)     Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts.  Buyer has   
full corporate power and authority to own or lease its properties and assets    
and to carry on its business as now being conducted.  Buyer is duly licensed or 
qualified to do business and is in good standing in each jurisdiction in which  
the nature of the business conducted by it or the character or location of the  
employees or of the properties or assets owned or leased by it makes such       
licensing or qualification necessary, except where the failure to be so         
licensed or qualified would not result in a Material Adverse Change in Buyer.   

(b)     Acquisition Company is or will be at the Closing Date a 
corporation duly organized, validly existing and in good standing under the     
laws of the State of Delaware.  Acquisition Company has or will have at the     
Closing Date full corporate power and authority to participate in the Merger.   

   4.2.2   SUBSIDIARIES.  Each Buyer Subsidiary which is a Significant
Subsidiary (within the meaning of Regulation S-X of the SEC) is duly organized, 
validly existing and in good standing under the laws of its state of            
incorporation or organization, has full corporate or similar power and          
authority to own or lease its properties and assets and to carry on its         
business as now being conducted, and is duly licensed or qualified to do        
business and is in good standing in each jurisdiction in which the nature of    
the business conducted by it or the character or location of the employees or   
of the properties or assets owned or leased by it makes such licensing or       
qualification necessary, except where the failure to be so licensed or          
qualified would not result in a Material Adverse Change in Buyer.  The shares   
of capital stock or other ownership interest of each such Buyer Subsidiary are  
owned by Buyer or a Buyer Subsidiary as set forth in Buyer's Annual Report on   
Form 10-K for the year ended December 31, 1993 filed with the SEC.              

4.2.3   CAPITALIZATION.                                         

(a)     The entire authorized capital stock of Buyer consists of
50,000,000 shares of the Buyer Stock, of which 18,999,093 shares were issued    
and outstanding as of September 30, 1994, and 1,000,000 shares of preferred     
stock, $10.00 par value per share, none of which has been issued or are         
outstanding as of the date hereof.  All the issued and outstanding shares of    
Buyer Stock have been duly authorized and validly issued and are fully paid and 
non assessable and were not issued in violation of any preemptive rights.  When 
issued in accordance with the terms of this Agreement, the shares of Buyer      
Stock to be issued pursuant to the Merger will be duly authorized, validly      
issued, fully paid and nonassessable, without liability attaching to the        
ownership thereof, and will not have been issued in violation of any preemptive 
rights.                                                                         

 (b)     All the issued and outstanding shares of capital stock of
Acquisition Company have been or, at the Closing Date, will be duly authorized  
and validly issued, fully paid and nonassessable, will not have been issued in  
violation of any preemptive rights and will be owned by Buyer.                  

- 22 -    

EX-2.(A)
28th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 28th

   4.2.4   AUTHORIZATION.  Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and, subject to receipt of all  
Regulatory Approvals, to consummate the transactions contemplated hereby in     
accordance with the terms hereof.  The execution, delivery and performance of   
this Agreement has been duly authorized by the board of directors of Buyer and  
has been or will be prior to the Closing Date duly authorized by the            
stockholder and board of directors of Acquisition Corporation, and no other     
corporate proceedings or stockholder approvals on the part of Buyer or          
Acquisition Company are necessary to consummate the transactions contemplated   
hereby.  This Agreement has been duly executed and delivered by Buyer and       
constitutes a valid and legally binding obligation of Buyer enforceable against 
Buyer in accordance with its terms.                                             

4.2.5   NON-CONTRAVENTION.  The execution and delivery of this  
Agreement by Buyer does not, and the performance of this Agreement, in          
accordance with the terms hereof, will not (a) violate any provision of the     
articles of incorporation or charter or bylaws of Buyer or Acquisition Company  
or (b) conflict with or result in a breach of, or default under, or result in   
the creation of any lien, claim, charge or other encumbrance upon any of the    
assets or properties of Buyer or Acquisition Company pursuant to the provisions 
of any provision of, any agreement, mortgage, indenture or other document or    
instrument to which Buyer or Acquisition Company is a party or by which it or   
any of their respective properties or assets are bound, or (c) violate any      
existing Laws binding on Buyer or Acquisition Company or any of their           
properties or assets.                                                           

       4.2.6   FINANCIAL MATTERS.  (a)  Buyer has previously delivered or made
available to Seller accurate and complete copies of the consolidated balance    
sheets of Buyer as of December 31, 1993 and 1992, and the related consolidated  
statements of income, changes in stockholders' equity and cash flows for the    
years ended December 31, 1993, 1992 and 1991, in each case accompanied by the   
audit report of Peat Marwick, and the unaudited consolidated balance sheets of  
Buyer as of September 30, 1994 and 1993, and the related unaudited consolidated 
statements of income, changes in stockholders' equity and cash flows for the    
nine months ended September 30, 1994 and 1993.  The consolidated statements of  
financial condition of Buyer referred to herein (including the related notes,   
where applicable), fairly present the consolidated financial condition of Buyer 
as of the respective dates set forth therein, and the related consolidated      
statements of income, stockholders' equity and cash flows (including the        
related notes, where applicable) fairly present the consolidated results of     
operations, stockholders' equity and cash flows of Buyer for the respective     
periods or as of the respective dates set forth therein.                        

(b)     Each of the financial statements referred to in Section 
4.2.6(a) has been prepared in accordance with GAAP consistently applied during  
the periods involved, except as may be noted therein.  The audits of Buyer have 
been conducted in accordance with GAAP.  The books and records of Buyer and     
each Buyer Subsidiary included in such financial statements are being           
maintained in material compliance with applicable legal and accounting          
requirements.                                                                   

  (c)     Buyer has available to it sources of capital and financing
sufficient to fulfill its obligations hereunder, including, without limitation, 
the obtaining of all Regulatory Approvals.                                      

- 23 -      

EX-2.(A)
29th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 29th

      4.2.7   ABSENCE OF CHANGES.  Since September 30, 1994, the business of
Buyer has been conducted only in the ordinary course consistent with past       
practice and there has not been any Material Adverse Change in Buyer, nor has   
there been any material change in any policy or practice followed by Buyer or   
any Buyer Subsidiary in the ordinary course of business.                        

       4.2.8   LEGAL PROCEEDINGS.  Neither Buyer nor any Buyer Subsidiary is a
party to any pending or, to the Knowledge of any of Buyer's officers and        
directors, threatened legal, administrative or other claim, action, suit,       
investigation, arbitration or proceeding challenging the validity or propriety  
of any of the transactions contemplated by this Agreement.                      

       4.2.9   REGULATORY FILINGS AND REPORTS.  Since January 1, 1990, each of
Buyer and the Buyer Subsidiaries has filed all documents required to be filed   
by it under federal securities laws or applicable federal and state savings and 
loan and savings bank laws and regulations, and all such documents, as finally  
amended, were complete and accurate, complied in all material respects as to    
form and substance with all applicable requirements of law and regulation and   
did not contain any untrue statement of a material fact or omit to state a      
material fact required to be stated therein or necessary to make the statements 
therein, in light of the circumstances under which they were made, not          
misleading.                                                                     

       4.2.10  BROKER'S FEES.  Except for payments due to Morgan Stanley & Co.
Incorporated from Buyer as a result of the Merger, no agent, finder, broker,    
investment banker, person or firm acting on behalf or under authority of Buyer  
or Acquisition Company is or will be entitled to any fee as compensation for    
services as broker or finder or any other commission or similar fee directly or 
indirectly in connection with this Agreement or any of the transactions         
contemplated hereby.                                                            

     4.2.11  BENEFICIAL OWNERSHIP OF SELLER STOCK.  As of the date hereof,
neither Buyer nor any Buyer Subsidiary beneficially owns any shares of Seller   
Stock or has any option, warrant or right of any kind to acquire the beneficial 
ownership of any Seller Stock, other than pursuant to this Agreement and the    
Buyer Option.  Section 4.2.11 of the Buyer Disclosure Schedule (which Section   
shall be updated hereafter by Buyer upon the request of Seller) sets forth the  
number of shares of Seller Stock, if any, beneficially owned by Buyer as of the 
date hereof, or the date of such update, as the case may be.                    

      4.2.12  MATTERS REGARDING BANKING SUBSIDIARIES. The Buyer Subsidiaries
which are banks have the CRA ratings set forth in Section 4.2.12 of Buyer       
Disclosure Schedule.  To the Knowledge of the officers and directors of Buyer,  
since their last Federal regulatory authority examination of CRA compliance,    
there has been no protest of any application of such Buyer Subsidiaries based   
on CRA compliance.                                                              

4.2.13  NO MISREPRESENTATION.  None of the representations and  
warranties of Buyer set forth in this Agreement nor any matter disclosed in any 
of the schedules, lists, certificates, exhibits or other documents delivered to 
Seller hereunder or in connection with the transactions contemplated hereby     
contains any untrue statement of a material fact or omits to state a material   
fact necessary to make the statements contained herein or therein, in light of  
the circumstances in which they were made, not misleading.                      

- 24 -    

EX-2.(A)
30th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 30th

ARTICLE V   

COVENANTS   

5.1     REGULATORY APPLICATIONS.                                

      (a)     Upon the execution and delivery of this Agreement, the parties
hereto shall thereupon cause to be prepared and filed, as soon as is reasonably 
practical, but not later than 45 days after the date of this Agreement, all     
required Applications and any other filings with Governmental Authorities that  
are necessary or contemplated for consummation of the Merger and the other      
transactions contemplated by this Agreement.  Such filing deadline is subject   
to receipt by the filing party from the other party hereto of all information   
required in connection with the filing of such Applications and other filings.  
The parties hereto will use their best efforts to supply, on a timely basis, to 
the other party all information required in connection with the preparation and 
filing of such Applications and other filings.  Such Applications and filings   
shall be in such forms as may be prescribed by the respective Governmental      
Authorities and shall contain such information as they may require.  The        
parties hereto will cooperate with each other, including their respective       
attorneys, advisers and other representatives, and will use their best efforts  
to prepare and execute all necessary documentation, to effect all necessary or  
contemplated filings and to obtain all necessary or contemplated permits,       
consents, Regulatory Approvals, and authorizations of Governmental Authorities  
and third parties which are necessary or contemplated to consummate the         
transactions contemplated by this Agreement.  Buyer shall deliver to Seller,    
and Seller shall deliver to Buyer, reasonably in advance of the time it intends 
to file any such Application or other filing, a draft of the proposed           
Application or other filing, and each shall cooperate with the other in         
responding to and considering any reasonable questions or comments regarding    
such draft before it is finalized and filed, provided that such questions or    
comments are received on a timely basis so as to permit response or             
incorporation.  Without limiting the generality of the foregoing, each of the   
parties shall have the right to review and approve in advance all               
characterizations of the information relating to it and any of its subsidiaries 
that appears in any Application to any Governmental Authority in connection     
with the transactions contemplated by this Agreement.  Each party shall deliver 
to the others, promptly after receipt, copies of all written communications     
regarding Applications and Regulatory Approvals and shall immediately advise    
the others of all oral communications regarding Applications and Regulatory     
Approvals.                                                                      

      (b)     If so requested by Buyer and in cooperation with Buyer, Seller
and its directors and officers shall, and shall use their best efforts to cause 
the NFS Banks and their respective directors and officers to, promptly take all 
necessary corporate and other action, prepare and file all necessary            
documentation, make all necessary applications and filings and obtain as        
promptly as practicable all permits, consents, approvals and authorizations of  
all third parties and Governmental Authorities that are necessary to change the 
names of the NFS Banks, to amend the charter and by-laws of the NFS Banks, to   
convert the NFS Banks to a state or national bank charter or to merge the NFS   
Banks into a national banking association controlled by Buyer, so that such     
name changes, amendments, conversions or mergers may be consummated in          
conjunction with the consummation of the Merger, whether effective at the time  
of or immediately before or after the Merger.                                   

- 25 -

EX-2.(A)
31st Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 31st

5.2     PROXY STATEMENT/REGISTRATION STATEMENT.                 

      (a)     Upon the execution and delivery of this Agreement, Buyer shall
thereupon cause to be prepared and filed with the SEC, as soon as reasonably    
practical, but not later than 45 days after the date hereof (provided that      
Seller has given to Buyer all information concerning Seller which is required   
for inclusion in the Registration Statement, including the Proxy                
Statement/Prospectus), a Registration Statement, including the Proxy Statement/ 
Prospectus, complying in form and substance in all material respects with the   
requirements of applicable Laws for the purpose of registering the Buyer Stock  
to be issued as part of the Merger Consideration and will use its best efforts  
to have the Registration Statement declared effective by the SEC upon receipt   
of the Regulatory Approvals, or as soon thereafter as possible and remain       
effective through the Closing Date.                                             

   (b)     Buyer shall deliver to Seller, reasonably in advance of the
time it intends to file the Registration Statement with the SEC, a draft        
Registration Statement for review and comment upon all information relating to  
Seller and any of the Subsidiaries that appears in the Registration Statement.  
Buyer shall cooperate with Seller in responding to and considering any          
reasonable questions or comments regarding such draft Registration Statement    
before it is finalized and filed, provided that such questions or comments are  
received on a timely basis so as to permit response or incorporation.           

      (c)     If at any time after the Registration Statement is first filed
with the SEC, and prior to the Closing Date, any event relating to Seller or    
any of the Subsidiaries should be discovered which should be set forth in an    
amendment of, or a supplement to, the Registration Statement, including the     
Proxy Statement/Prospectus, Seller shall promptly so inform Buyer, and will     
furnish all necessary information to Buyer relating to such event.  Buyer shall 
thereupon cause an amendment to the Registration Statement to be filed with the 
SEC, and upon the effectiveness of such amendment, if appropriate, Seller will  
take any necessary action as promptly as practicable to permit an appropriate   
amendment or supplement to be transmitted to the holders of Seller Stock        
entitled to vote at the Stockholders Meeting, and will transmit such amendment  
or supplement as promptly as practicable.                                       

5.3     STOCKHOLDER APPROVAL.                                   

   (a)     Concurrent with calling the 1995 annual meeting of Seller's
stockholders, or at such other time as Buyer and Seller may reasonably agree,   
but in no event earlier than five Business Days following the date the          
Registration Statement (including any amendments necessitated by Regulatory     
Approvals) is declared effective by the SEC, Seller will (i) duly and properly  
call, and give notice of, and thereafter cause to be convened and held no later 
than 30 days after such notice, a meeting of its stockholders (including any    
adjournment of such meeting which may be necessary), for the purpose of         
approving this Agreement (including the Plan of Merger) and for such other      
purposes as may be necessary to effect the transactions contemplated hereby     
(the "Stockholders Meeting"), and (ii) subject to the fiduciary duty of its     
directors, recommend to its stockholders the approval of this Agreement         
(including the Plan of Merger) and use its best efforts to obtain, as promptly  
as reasonably practical, such approval.  Seller shall mail the Proxy            
Statement/Prospectus to its stockholders who are entitled to vote at the        
Stockholders Meeting.  Seller shall publish such notice or                      

- 26 -      

EX-2.(A)
32nd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 32nd

notices of the Stockholders Meeting as may be required, and at the times and in 
the form and manner required, by applicable provisions of federal and state     
statutes, regulations, rules, and orders.                                       

   (b)     At the time the Proxy Statement/Prospectus is mailed to the
stockholders of Seller for the solicitation of proxies for the approvals        
referred to above and at all times subsequent to such mailing up to and         
including the Closing Date, Buyer shall cause the Proxy Statement/Prospectus    
(including any supplements thereto) and any other documents or notices          
delivered to stockholders in connection therewith:                              

           (i)      to comply in all material respects with applicable
   provisions of the Exchange Act and rules and regulations of the SEC
thereunder and all other applicable Laws; and                   

          (ii)     with respect to all information set forth therein
   relating to Buyer and its subsidiaries, this Agreement, the Merger,
    the Option Agreement, and all other transactions contemplated hereby
and thereby, to not contain any statement which, at the time and
 in light of the circumstances under which it is made, is false or
 misleading with respect to any material fact or omit to state any
    material fact required to be stated therein or necessary in order to
    make the statements therein not false or misleading, or necessary to
     correct any statement in an earlier communication with respect to the
    solicitation of a proxy for the same meeting or subject matter which
has become false or misleading.                                 

       Buyer's obligations hereunder are subject to Seller promptly furnishing
Buyer with the information relating to Seller and the Subsidiaries which is     
required under applicable Laws for inclusion in the Proxy Statement/Prospectus, 
which information Seller represents and warrants to Buyer shall not contain any 
statement which, at the time and in light of the circumstances under which it   
is furnished, is false or misleading with respect to any material fact or omits 
to state any material fact required to be stated therein or necessary in order  
to make the information furnished therein not false or misleading.  Seller      
further represents and warrants to Buyer that it will amend, supplement or      
revise any information so furnished as necessary to make the foregoing sentence 
correct and true in all material respects at and as of all times from the date  
of the mailing of the Proxy Statement/Prospectus to the stockholders of Seller  
to and including the Closing Date.                                              

5.4     BLUE SKY LAWS.                                          

    (a)     Buyer shall take all actions necessary to have the shares of
Buyer Stock to be delivered as part of the Merger Consideration qualified or    
registered for offering and sale, or to identify and perfect an exemption       
therefrom, under the securities or "Blue Sky" laws of each jurisdiction within  
the United States in which stockholders of Seller reside.                       

     (b)     Buyer shall provide all notices and make all filings with the
Nasdaq NNM as may be required in connection with the transactions contemplated  
hereby.                                                                         

   5.5     OTHER APPROVALS.  The parties shall cooperate and use their
best efforts to obtain all written consents and approvals of other persons in   
connection with any lease or                                                    

- 27 -      

EX-2.(A)
33rd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 33rd

other agreement the benefits of which cannot be retained upon consummation of   
the transactions contemplated hereby without such written consent or approval.  

5.6     CONDUCT OF THE BUSINESS OF SELLER AND ITS SUBSIDIARIES. 

      5.6.1   NEGATIVE COVENANTS.  From and after the date of this Agreement
up to and including the Closing Date, none of Seller or the Subsidiaries shall, 
except with the prior written consent of Buyer, do any one or more of the       
following:                                                                      

      (a)     Except for Seller Stock issued upon exercise of Seller Options
existing at the date of this Agreement, issue, sell, pledge, dispose of, grant, 
encumber or authorize the issuance, sale, pledge, disposition, grant or         
encumbrances of any shares of Seller Stock or shares of stock of the NFS Banks  
or securities exercisable for or convertible into any such shares (including    
the grant of additional options or other rights under any option or similar     
plan of Seller) or stock appreciation or similar rights with respect to such    
shares;                                                                         

(b)     (i)  Amend or enter into any agreement with any employee
establishing the terms of employment or severance or termination benefits or    
permit any such agreement to be so renewed or extended except as Buyer may      
otherwise request; (ii) adopt or establish any Employee Plan or Benefit         
Arrangement or, except as reasonably necessary to comply with applicable Law or 
to maintain the qualified status of a Qualified Plan, amend, supplement or      
otherwise modify any existing Employee Plan or Benefit Arrangement; or (iii)    
make additional grants or contributions under any existing Employee Plans or    
Benefit Arrangements except in accordance with past practices or as otherwise   
provided in this Agreement; provided that Seller's and its Subsidiaries         
contributions with respect to the 1994 year under any profit sharing plan or    
employee stock ownership plan shall not exceed the rate at which such           
contributions were accrued on their September 30, 1994 financial statements.    

 (c)     Other than with respect to increases consistent with past
practices, increase the compensation payable to any director, officer or        
employee, or pay any bonuses to any officer or employee, except for salary      
increases for all officers and other employees of Seller and its Subsidiaries,  
as described at Section 5.6.1(c) of the Seller Disclosure Schedule.             

 (d)     Except as otherwise provided in this Agreement, incur any
indebtedness with a maturity of one year or more other than deposits taken in   
the ordinary course of business consistent with past practice;                  

      (e)     Sell, purchase or lease, or commit to sell, purchase or lease,
any material assets, except for (i) transactions pursuant to legally binding    
agreements or commitments entered into or approved before the date hereof and   
disclosed to Buyer before the date hereof and (ii) transactions otherwise       
permitted by this Agreement;                                                    

  (f)     Sell, purchase, open, close or relocate any banking office
except as described at Section 5.6.1(f) of the Seller Disclosure Schedule;      

      (g)     Except as otherwise provided herein, pay any dividend, acquire
any of its capital stock (by repurchase, tender, redemption or otherwise) or    
make any other capital                                                          

- 28 -    

EX-2.(A)
34th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 34th

distribution, except for quarterly cash dividends on the Seller Stock in        
accordance with past practice not exceeding $0.14 per share per quarter and     
except for cash dividends on the capital stock of the NFS Banks consistent with 
past practices;                                                                 

     (h)     Engage in any securities or other trading activity, except in
the ordinary course of business and consistent with past practice, or acquire   
any securities with a final maturity of more than two years, or engage in       
transactions involving structured notes, forwards, futures, options on futures, 
swaps or other derivative instruments;                                          

    (i)     Make any capital expenditure in excess of $50,000, except in
accordance with the budget terms supplied to Buyer by Seller before the date    
hereof, or in accordance with budget terms supplied to Buyer by Seller          
thereafter and specifically approved in writing by Buyer;                       

     (j)     Make any change in its capital stock by split, reverse split,
reclassification, reorganization, subdivision, or other similar action;         

      (k)     Amend its certificate of incorporation or charter (as the case
may be) or by-laws;                                                             

  (l)     Merge, combine, or consolidate with or into, or permit the
merger into it of, any other corporation, association, trust, or entity or      
change in any manner the character of its business;                             

(m)     Change or modify in any way current accounting policy or
practice with respect to Seller's financial statements prepared in accordance   
with GAAP except as may be required by GAAP or Governmental Authorities;        

   (n)     Engage in any other transaction that is not consistent with
past practices and in the ordinary course of the business of Seller or such     
Subsidiary, as the case may be; or                                              

(o)     Make any payment to any director, officer, employee or  
independent contractor, in connection with or as a result of the transactions   
contemplated by this Agreement, or otherwise, that is not deductible under      
either Section 162(a)(1) or 404 of the IRC;                                     

(p)     Make any equity investment or commitment to make such an
investment in equity securities or in real estate or in any real estate         
development project, other than in connection with foreclosures, settlements in 
lieu of foreclosure or troubled loan or debt restructurings in the ordinary     
course of business consistent with past practice;                               

      (q)     Take any action that is intended or reasonably can be expected
to result in any of its representations and warranties set forth in this        
Agreement being or becoming untrue in any material respect as of any time to    
and including the Closing Date, or any of the conditions to the Merger or the   
other transactions contemplated by this Agreement set forth in Article VI not   
being satisfied in any material respect, or in any material violation of any    
provision of this Agreement or the Option Agreement, except, in each case, as   
may be                                                                          

- 29 -    

EX-2.(A)
35th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 35th

expressly permitted by this Agreement or as may be required by applicable law,  
but only after reasonable consultation with Buyer;                              

     (r)     Foreclose upon or take a deed or title to any commercial real
estate without first conducting a Phase I environmental assessment of the       
property or foreclose upon any commercial real estate if such environmental     
assessment indicates the presence of Hazardous Material in amounts which, if    
such foreclosure were to occur, would result in a Material Adverse Change; or   

       (s)     Agree to do any of the foregoing or permit any of the foregoing
to occur.                                                                       

      5.6.2   AFFIRMATIVE COVENANTS.  To the extent not otherwise restricted
or limited by the terms of this Agreement, Seller and each of its Subsidiaries  
shall:                                                                          

       (a)     carry on its business in all material respects in substantially
the same manner as heretofore conducted, except for changes approved in writing 
by Buyer; and                                                                   

      (b)     use its best efforts to preserve intact the business of Seller
and its Subsidiaries, to keep available their present officers and key          
employees, to preserve the current relationships of customers and others having 
business relationships with Sellers and its Subsidiaries, and to comply in all  
material respects with applicable Laws; provided, however, that Buyer           
acknowledges that Seller has not made any representation regarding the          
continued service or employment of any director, officer or other employee of   
Seller or any Subsidiary, and that the retention of any such person is not a    
condition to Buyer's obligations to consummate the Merger.                      

(c)     maintain in full force and effect from the date of this 
Agreement through the Closing Date all insurance policies and bonds identified  
in Section 4.1.12 of the Seller Disclosure Schedule as now being in force with  
coverages and at least at levels now in force.                                  

     5.6.3   DISCLOSURE STATEMENTS.  Prior to the Closing, Seller promptly
will supplement or amend the Seller Disclosure Schedule delivered pursuant      
hereto with respect to any matter hereafter arising which, if existing,         
occurring or known at the date of this Agreement, would have been required to   
be set forth or described in such Schedule or which is necessary to correct any 
information in such Schedule which has been rendered materially inaccurate      
thereby.  No supplement or amendment to the Seller Disclosure Schedule shall    
affect the conditions to Buyer's obligation to consummate the Merger.           

5.7     INDEMNIFICATION AND INSURANCE.                          

5.7.1   CERTIFICATE AND BYLAWS.  Buyer agrees that the rights to
indemnification provided to Seller's and each of the Subsidiary's directors and 
officers by such entities' certificate of incorporation or charter or bylaws as 
in effect on the date of this Agreement, and by applicable law and regulation   
shall survive the Closing Date and continue in full force and effect at least   
until and including the third anniversary of the Closing Date and as otherwise  
specified therein.                                                              

  - 30 -

EX-2.(A)
36th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 36th

  5.7.2   INSURANCE.  Buyer shall use its best efforts to obtain and
maintain for a period of one year after the Closing Date an endorsement         
extending the period in which claims may be made under Seller's directors' and  
officers' liability insurance policy in effect on the date of this Agreement,   
or a policy of such other responsible carrier as Buyer may elect, with respect  
to causes of action that arise out of acts or omissions occurring on or before  
the Closing Date, provided, however, that in no event shall the Buyer be        
required to expend pursuant to this Section 5.7.2 more than an amount per year  
equal to 125% of current annual premiums paid by the Seller for such insurance  
(which premiums the Seller represents and warrants to be approximately $60,000  
per annum in the aggregate).                                                    

5.8     EMPLOYEE BENEFITS MATTERS.                              

 5.8.1   INSURANCE COVERAGES.  (i) For the period from the Closing
through December 31, 1995, Buyer and Buyer Subsidiaries will continue to        
provide the same or similar insurance coverages (medical, dental, life,         
accidental death and dismemberment, short- term disability, and long-term       
disability) to employees who were employees of Seller and/or its Subsidiaries   
on the Closing Date as those covering employees of Seller and its Subsidiaries  
on the date of this Agreement, except for increases in employee premiums        
reflecting any increases charged by insurance carriers and any changes required 
by applicable law.  Effective as of January 1, 1996 or at any time thereafter,  
the foregoing insurance coverages provided by Seller and/or its Subsidiaries    
may at the option of Buyer be discontinued, in which case those employees who   
had been employees of Seller and its Subsidiaries will become eligible for the  
same insurance coverages generally available to the other employees of Buyer    
and Buyer Subsidiaries, subject to the applicable terms and conditions of the   
benefit plans providing such coverages.                                         

 5.8.2   PERSONNEL POLICIES.  Except as otherwise provided in this
Agreement, all personnel policies and procedures of the Seller and/or its       
Subsidiaries will be discontinued as of the Closing Date and employees of the   
Seller and its Subsidiaries will become covered as of the Closing Date under    
the human resources policies and procedures of Buyer.  For all purposes of      
applying the human resources policies and procedures of Buyer, the employees of 
Seller and its Subsidiaries will be treated as new employees as of the          
Effective Date.                                                                 

    5.8.3   QUALIFIED PLANS.  Buyer will maintain the Seller's Qualified
Plans in effect through December 31, 1995.  Thereafter Buyer will either        
maintain Seller's Qualified Plans or permit employees of Seller and its         
Subsidiaries to participate in Buyer's Savings, Profit Sharing and Stock        
Ownership Plan ("Savings Plan") and Buyer's Retirement Plan ("Retirement Plan") 
in accordance with their terms, as in effect from time to time, once such       
employees have satisfied the eligibility requirements under each such plan.  If 
such employees are permitted to participate in Buyer's Savings Plan and         
Retirement Plan, they will receive credit in accordance with each such plan's   
terms for service with the Seller and its Subsidiaries for purposes of          
eligibility and vesting, but not accrual of benefits under such plans.          

  In any plan year in which Buyer is maintaining a Qualified Plan of
Seller that is a profit-sharing plan, the percentage of compensation that is    
contributed on behalf of                                                        

- 31 -      

EX-2.(A)
37th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 37th

participants in such profit sharing plan will not exceed the percentage of      
compensation that Buyer contributes on behalf of its own employees for such     
year under Buyer's Savings Plan.                                                

Nothing in this Section 5.8 or elsewhere in this Agreement will 
preclude Buyer from amending or terminating in its discretion any employee      
benefit plan maintained by Buyer.                                               

    5.8.4   NO THIRD-PARTY BENEFICIARIES.  This Section 5.8 reflects the
agreements of the parties but does not create any rights or obligations except  
as among the parties to this Agreement, and it is specifically agreed that no   
present or future employee of the Seller or its Subsidiaries will be treated as 
a third-party beneficiary of the provisions of this Section 5.8.  Nothing in    
this Section 5.8 or elsewhere in this Agreement will preclude Seller or any of  
its Subsidiaries from terminating the employment of any employee of Seller or   
its Subsidiaries, or preclude Seller from amending or terminating in its        
discretion any employee benefit plan maintained by Seller or any of its         
Subsidiaries.                                                                   

5.9     DIRECTORS, OFFICERS AND EMPLOYEES.                      

    (a)     Buyer will invite at least three of the current directors of
NFS Bank, and such additional number as it may determine after consultation     
with the Board of Directors of such bank, to continue to serve as directors at  
least until the annual meeting of such bank following the Closing Date.         

   (b)     Buyer and the Buyer Subsidiaries shall offer employment, as
employees of Buyer or the Buyer Subsidiaries, immediately following the Closing 
Date, to any persons who, immediately before the Closing Date, are full time    
employees of Seller or any Seller Subsidiary.  To the extent that the           
employment of any full-time employee of Seller or any Seller Subsidiary with at 
least three years of credited service (other than any employee who is party to  
an employment agreement or a severance agreement) or any of the employees       
listed at Section 5.9(b) of the Seller Disclosure Schedule (the "Scheduled      
Employees") is involuntarily terminated within one year following the Closing   
Date as a result of the elimination of a job position and such employee is not  
offered another position with Buyer or the Buyer Subsidiaries, such employee    
will be entitled to receive severance payments equal to two weeks of            
then-current base pay for each year of service (as determined pursuant to the   
Seller's retirement plan) at Seller or any Seller Subsidiary (including         
credited years of service for employees of Plaistow), provided that such        
severance shall not be less than two weeks or greater than six months of        
then-current base pay and, in the case of the Scheduled Employees, shall be two 
weeks.                                                                          

   (c)     Except as otherwise agreed to by the parties, following the
Closing Date, Buyer shall assume all duties, liabilities and obligations of     
Seller under any existing Employment and Severance Agreements described at      
Section 5.9(c) of the Seller Disclosure Schedule.  Seller shall cooperate with  
Buyer and assist it in obtaining such amendments to the existing Employment and 
Severance Agreements as Buyer may reasonably request to assure continuity of    
management following the Merger.                                                

- 32 -

EX-2.(A)
38th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 38th

5.10    ACCESS TO INFORMATION.                                  

    (a)     From the date hereof until the Closing, and subject to legal
requirements and fiduciary and commercial privacy rights and obligations,       
Seller and the Subsidiaries will authorize and permit Buyer, its                
representatives, accountants and counsel, to have access to all of the          
operations and activities of Seller and the Subsidiaries.  From the date hereof 
until the Closing, Seller shall furnish to Buyer and its authorized             
representatives, upon reasonable notice and during ordinary business hours,     
access to all of its respective books, records and properties.  Such            
examination shall be made in a manner that will not unreasonably interfere with 
the conduct of the business of the entity being examined and shall not affect   
or limit in any way any of the representations and warranties hereunder.        

(b)     Simultaneously with the filing of any reports under the 
Exchange Act, Seller and Buyer shall furnish a copy thereof to each other.      
Seller shall likewise promptly furnish to Buyer copies of all of its and any of 
its Subsidiaries quarterly and annual financial reports filed with federal or   
state regulatory authorities, including, but not limited to, the OTS, the FDIC  
and the SEC, as well as access to any examination or similar reports received   
from such authorities, to the extent permitted by applicable law.               

    (c)     Seller shall provide to Buyer complete and correct copies of
all reports presented to Seller or any of its Subsidiaries by their independent 
accountants after the date hereof and for any preceding fiscal years with       
respect to internal accounting controls.  Seller represents and warrants that   
all recommendations made in such prior reports have been implemented.           

      (d)     To the extent permitted by Law, Seller shall provide Buyer, or
its agents, counsel, and representatives access to (i) all examination reports  
of Seller or any Subsidiary, by the OTS or the FDIC from the date hereof        
through the Closing Date; (ii) any correspondence relating to such examination  
reports during such period; and (iii) any written agreements, arrangements or   
understandings entered into as a result of matters raised in such examination   
reports or correspondence;                                                      

       5.11    CONFIDENTIALITY.  Any and all commercial, financial, technical,
or other information regarding Seller, Buyer or their respective subsidiaries   
or their respective businesses, properties, and personnel, or that of their     
respective officers, directors, control persons, or affiliates, including such  
information obtained in accordance with Section 5.11 above (the "Confidential   
Information"), which is derived or results from access by such party (or their  
authorized agents and representatives) to the properties, books, contracts,     
commitments, and records of the other party or its subsidiaries pursuant to the 
provisions of this Agreement, whether obtained before or after the execution of 
this Agreement, shall be held in strict confidence; and the party in possession 
of the Confidential Information shall exercise the same degree of care with     
respect thereto, that it uses to preserve and safeguard its own confidential    
proprietary information.  Such Confidential Information shall not directly or   
indirectly be divulged, disclosed or communicated to any other person or entity 
or used for any purposes other than those expressly contemplated by this        
Agreement, except as otherwise required by judicial or regulatory authorities   
having jurisdiction in respect thereof.  Each party shall cause its authorized  
agents and representatives to maintain the confidentiality of Confidential      
Information.  In the event the transactions contemplated by                     

- 33 -      

EX-2.(A)
39th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 39th

this Agreement are not consummated for any reason, the confidentiality of such  
Confidential Information shall be maintained by such party and its authorized   
agents and representatives (except to the extent that such Confidential         
Information can be shown to be  previously known to such party or later         
acquired by it from legitimate sources or otherwise available to the public).   
Seller and Buyer acknowledge and agree that any prior agreements regarding the  
confidentiality of Confidential Information shall not merge into and shall      
survive the execution and delivery of this Agreement, except that to the extent 
that the terms and provisions of this Section impose more stringent             
restrictions and limitations on the parties, the terms and provisions of this   
Section shall supersede the previously executed and delivered confidentiality   
agreements.                                                                     

      5.12    PUBLIC ANNOUNCEMENTS.  Neither Buyer nor Seller shall make any
press releases, announcements and other public disclosures relating to this     
Agreement, the termination of this Agreement, Regulatory Approvals or otherwise 
relating to any of the transactions contemplated by this Agreement without the  
prior consent of the other party, which consent shall not be unreasonably       
withheld, delayed or conditioned, provided that the foregoing shall not require 
Buyer to obtain Seller's consent for discussions with financial analysts in the 
ordinary course.  Each party shall consult with the other regarding the form,   
substance, timing and method of distribution, and cooperate with each other in  
good faith in the development and distribution of all such public disclosure.   
Nothing contained in this Section shall prohibit any party from making any      
public disclosure which Buyer or Seller deems necessary in order to fulfill its 
respective disclosure obligations imposed by Law; provided, however, that the   
legal obligation to make such disclosure shall not relieve such party from its  
obligations under this Section to cooperate, consult with and seek the consent  
of the other party.                                                             

       5.13    NO SOLICITATIONS.  From the date of this Agreement, through the
Closing Date, neither Seller nor any Subsidiary, nor any of its or their        
directors, officers, advisers or other representatives shall, directly or       
indirectly, without the prior written consent of Buyer, solicit or encourage    
the solicitation from, or, subject to the conditions set forth below, engage in 
negotiations with any third party concerning any possible proposal regarding    
the issuance or sale of Seller Stock or other equity securities of Seller or a  
merger, consolidation, sale of substantial assets or other similar transaction  
involving Seller or any of the Subsidiaries.  Notwithstanding the preceding     
sentence, Seller shall be permitted to engage in such negotiations with any     
third party provided such action is, based upon the written advice of Seller's  
counsel, required in accordance with the fiduciary duties of Seller's board of  
directors.  Seller shall notify Buyer promptly in writing and in reasonable     
detail if any such proposal or offer, or inquiry or contact with respect        
thereto, is made or if any such negotiations occur.  Seller agrees not to       
release any third party from, or waive any provision of, any confidentiality or 
standstill agreement to which Seller is a party.                                

     5.14    AFFILIATE LETTER.  Seller shall use its best efforts to cause
each director, executive officer and other person who is an "affiliate" (for    
purposes of Rule 145 under the Securities Act) of Seller (each an "Affiliate")  
to deliver to Buyer, as soon as practicable after the date of this Agreement,   
and prior to the date of the Stockholders Meeting, a written agreement, in      
substantially the form of Exhibit B hereto.                                     

- 34 -  

EX-2.(A)
40th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 40th

   5.15    CONDUCT OF BUYER AND BUYER SUBSIDIARIES.  To the extent not
otherwise restricted or limited by the terms of this Agreement, Buyer and each  
of the Buyer Subsidiaries shall:                                                

   (a)     Not take any affirmative action which would cause to not be
true as of the Closing Date any of the representations and warranties of Buyer; 
and                                                                             

       (b)     Promptly notify Seller in writing of the existence or happening
of any Material Adverse Change in Buyer, Default, or any event or matter that,  
with notice or passage of time, would constitute a Default.                     

   5.16    BEST EFFORTS.  Each party hereto agrees to use such party's
best efforts to cause the conditions within its control to be satisfied and to  
effect the Merger.  Buyer, as the sole stockholder of Acquisition Company,      
shall cause Acquisition Company to take all such actions as may be required to  
effect the transactions contemplated by this Agreement.                         

      5.17    LIAISON.  During the period from the date of this Agreement to
the Closing Date, Seller will cause one or more of its designated               
representatives (i) to confer on a regular and frequent basis (not less than    
monthly) with representatives of Buyer to report on the general status of the   
ongoing operations of Seller and its Subsidiaries and (ii) to cooperate and     
communicate fully with respect to the manner in which the business of Seller    
will be operated after the Closing Date, the type and mix of products and       
services, personnel matters, branch alignment, the granting of credit, and      
problem loan management, reserve adequacy and accounting.  In order to          
facilitate the foregoing, Seller and Buyer shall promptly establish a liaison   
committee (the "Committee") which will be chaired by representatives of Buyer   
and Seller and which will meet on a regular basis to discuss these matters and  
may establish sub-committees from time-to-time to pursue various issues.        
During the period from the date of this Agreement to the Closing Date, Seller   
shall provide Buyer with timely and sufficient information to review new        
extensions of credit, renewals, and restructurings, securities, transactions    
and information detailing overall asset quality and risk, including interest    
rate risk.                                                                      

      5.18    SYSTEM CONVERSIONS.  From and after the date hereof, Buyer and
Seller and its Subsidiaries shall meet on a regular basis to discuss and plan   
for the conversion of the Seller's data processing and related electronic       
informational systems to those used by Buyer and Buyer Subsidiaries, which      
planning shall include, but not be limited to, discussion of the possible       
termination by Seller and its Subsidiaries of third-party service provider      
arrangements effective at the Closing Date or at a date thereafter, non-        
renewal of personal property leases and software licenses used by Seller and    
its Subsidiaries in connection with its systems operations and outsourcing, as  
appropriate, of proprietary or self-provided system services, it being          
understood that Seller and its Subsidiaries shall not be obligated to take any  
such action and, unless Seller otherwise agrees, no conversion shall in fact    
take place prior to the Closing Date.  In the event that Buyer so requests in   
writing, and Seller or any of its Subsidiaries determines to take, and so       
takes, any action relative to third parties to facilitate the conversion that   
results in the imposition of any termination fees or charges, Buyer shall       
indemnify Seller and such Subsidiary on terms reasonably satisfactory to Seller 
for any such fees and expenses, and the costs of reversing the conversion       
process, if for any reason the Closing does not occur in accordance with the    
terms of this Agreement.                                                        

- 35 -  

EX-2.(A)
41st Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 41st

ARTICLE VI    

CONDITIONS    

     6.1     CONDITIONS TO OBLIGATIONS OF ALL PARTIES.  The obligations of
each party to consummate the transactions contemplated by this Agreement are    
subject to the satisfaction, on or before the Closing Date, of each of the      
following conditions precedent:                                                 

      6.1.1   TERMINATION.  This Agreement shall not have been terminated in
accordance with its terms.                                                      

       6.1.2   REGULATORY APPROVALS.  All Regulatory Approvals shall have been
obtained; no Regulatory Approval shall contain any condition that would require 
any material modification or nonperformance of the terms of this Agreement or   
shall include any non- customary condition or requirement that, in the          
reasonable opinion of Buyer, would so materially and adversely affect the       
economic or business benefit to Buyer of the transactions contemplated by this  
Agreement as to render inadvisable the consummation of the Merger; all          
Regulatory Approvals shall remain in full force and effect and all conditions   
and requirements set forth in any Regulatory Approvals that are required to be  
satisfied on or before the Closing Date, including the expiration of any        
waiting periods, shall have been satisfied or properly waived.                  

       6.1.3   STOCKHOLDER APPROVAL.  This Agreement and the Merger shall have
been approved by the requisite vote of Seller's stockholders in accordance with 
applicable Laws and Seller's certificate of incorporation and bylaws.           

6.1.4   MATTERS REGARDING BUYER STOCK.                          

      (a)     REGISTRATION STATEMENT.  The Registration Statement shall have
been declared effective by the SEC, shall remain effective and shall not be     
subject to a stop order or any threatened stop order.                           

       (b)     LISTING.  The shares of Buyer Stock to be issued as part of the
Merger Consideration shall be approved for listing quotation on Nasdaq NNM.     

     (c)     BLUE SKY.  The shares of Buyer Stock to be issued in exchange
for Seller Stock as part of the Merger Consideration shall have been qualified  
or registered for offering and sale under the securities or "Blue Sky" Laws of  
each jurisdiction within the United States in which stockholders of Seller      
reside, and such qualification or registration is necessary, no order           
suspending the sale of such shares of Buyer Stock in any such jurisdiction      
shall have been issued on or before the Closing Date, such qualification or     
registration shall remain in effect and no proceedings to suspend the sale of   
such shares shall have been instituted or, to the Knowledge of any of Buyer's   
directors and officers, shall be contemplated.                                  

6.1.5   NO ORDERS, INJUNCTIONS OR RESTRAINTS:  ILLEGALITY.  No  
Governmental Authority or federal or state court of competent jurisdiction      
shall have enacted, issued, promulgated, enforced or entered any Law, rule,     
regulation, executive order, decree, injunction or other                        

- 36 -    

EX-2.(A)
42nd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 42nd

order (whether temporary, preliminary or permanent) which is then in effect and 
has the effect of making the Merger illegal or  otherwise restricting,          
preventing or prohibiting consummation of the transactions contemplated by this 
Agreement, including the Merger.                                                

       6.2     CONDITIONS TO THE OBLIGATIONS OF BUYER AND ACQUISITION COMPANY.
The obligations of Buyer and Acquisition Company to consummate the transactions 
contemplated by this Agreement are subject to the satisfaction, on or before    
the Closing Date, of each of the following conditions precedent, any one or     
more of which may be waived by Buyer, in its sole and absolute discretion:      

6.2.1   REPRESENTATIONS AND WARRANTIES.  The representations and
warranties of Seller contained in this Agreement shall be true, correct and     
complete in all material respects when made on the date of this Agreement and   
(except to the extent such representations and warranties speak as of an        
earlier date) as of the Closing Date as though made on and as of the Closing    
Date.  Buyer shall have received a certificate signed on behalf of Seller by    
the Chief Executive Officer and the Chief Financial Officer of Seller to the    
foregoing effect.                                                               

      6.2.2   OTHER APPROVALS.  Except for such consents, approvals, permits
and other authorizations that, if not obtained, would not, individually or in   
the aggregate, have a material adverse effect on the business, financial        
condition, results of operations or prospects of Seller and the Subsidiaries,   
taken as a whole, Seller shall have obtained (i) the consent or approval of     
other persons in connection with any lease, agreement, processing contract or   
other arrangement, the benefits of which cannot be retained upon consummation   
of the transactions contemplated hereby without such consent or approval and    
(ii) all permits or other authorizations other than Regulatory Approvals        
required to consummate the transactions contemplated hereby.                    

  6.2.3   NO MATERIAL ADVERSE CHANGE.  As of the Closing Date, there
shall have been no Material Adverse Change in Seller from that which was        
represented and warranted on the date of this Agreement pursuant to this        
Agreement, it being understood that the update provided pursuant to Section     
5.6.3 of this Agreement does not constitute a waiver or other consent to any    
Material Adverse Change in Seller.                                              

6.2.4   COMPLIANCE.  Seller shall have in all material respects 
performed all obligations and agreements and complied with all covenants        
contained in this Agreement to be performed and complied with by Seller on or   
prior to the Closing Date.  There shall not exist a Default or matter that,     
with notice and/or passage of time, would constitute a Default by Seller under  
this Agreement.                                                                 

 6.2.5   ACCOUNTANT'S LETTER.  Buyer shall have received from Peat
Marwick, independent accountants, a letter dated the date of the Proxy          
Statement/Prospectus and the Closing Date (a) with respect to Seller's          
consolidated financial position and results of operation, which letter shall be 
based upon SAS 72 and certain agreed upon procedures to be specified by Buyer,  
which procedures shall be consistent with applicable professional standards for 
letters delivered by independent accountants in connection with comparable      
transactions, and (b) to the effect that:                                       

- 37 -    

EX-2.(A)
43rd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 43rd

     (i)      with respect to Seller, they are independent
        accountants within the meaning of Rule 101 of the Code of Professional
      Ethics of the American Institute of Certified Public Accountants and
applicable SEC requirements; and                              

       (ii)     it is their opinion that the audited financial
       statements of Seller and the Subsidiaries included or incorporated by
      reference in the Proxy Statement/Prospectus comply as to form in all
       material respects with Regulation S-X and other applicable accounting
requirements.                                                 

      6.2.6   LEGAL OPINION.  Buyer shall have received the opinion of Hogan
& Hartson, L.L.P., counsel to Seller, dated the Closing Date, in a form that is 
customary for transactions of this type.  Such counsel may rely upon the        
certificates of officers and directors of Seller and its Subsidiaries and of    
public officials as to any matter in such opinion which involves matters of     
fact, and upon opinions of local counsel, reasonably acceptable to Buyer.       

     6.2.7   DISSENTING SHARES.  Immediately prior to the Closing not more
than 330,000 Shares of Seller Stock shall be Dissenting Shares.                 

6.2.8   SUBSIDIARY DIRECTORS.  Buyer shall have received the    
resignations of such of the directors of the Subsidiaries, including the NFS    
Banks, as Buyer shall have requested.                                           

  6.2.9   KEY EMPLOYEES.  Each of the key employees of Seller or its
Subsidiaries named at Section 6.2.9(a) of the Seller Disclosure Schedule and at 
least three of the key employees of Seller or its Subsidiaries named in Section 
6.2.9(b) of the Seller Disclosure Schedule shall have been from the date of     
this Agreement through the Closing Date an employee of Seller or its            
Subsidiaries, except as such employee's employment may have terminated as a     
result of death or disability.                                                  

     6.2.10  CORPORATE ACTIONS OF THE NFS BANKS.  Any name change, charter
amendment, by-law amendment, charter conversion, or merger of the NFS Banks     
requested by Buyer shall have been authorized by all necessary corporate action 
and all necessary permits, consents, approvals and authorizations of third      
parties and Governmental Authorities shall have been obtained so that such name 
change, charter amendment, by-law amendment, conversion or merger may be        
consummated in conjunction with consummation of the Merger.                     

       6.3     CONDITIONS TO OBLIGATIONS OF SELLER.  The obligations of Seller
to consummate the transactions contemplated by this Agreement are subject to    
the satisfaction, on or before the Closing Date, of each of the following       
conditions precedent, any one or more which may be waived by Seller, at its     
sole and absolute discretion:                                                   

- 38 -    

EX-2.(A)
44th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 44th

6.3.1   REPRESENTATIONS AND WARRANTIES.  The representations and
warranties of Buyer contained in this Agreement and as of the date of this      
Agreement shall be true, correct and complete in all material respects when     
made on the date of this Agreement and (except to the extent such               
representations and warranties speak as of an earlier date) as of the Closing   
Date as though made on and as of the Closing Date.  Seller shall have received  
a certificate signed on behalf of Buyer by the Chief Executive Officer or the   
Chief Financial Officer of Buyer to the foregoing effect.                       

  6.3.2   NO MATERIAL ADVERSE CHANGE.  As of the Closing Date, there
shall have been no Material Adverse Change in Buyer from that which was         
represented and warranted on the date of this Agreement pursuant to this        
Agreement.                                                                      

    6.3.3   COMPLIANCE.  Buyer and Acquisition Company shall have in all
material respects performed all obligations and agreements and complied with    
all covenants contained in this Agreement to be performed and complied with by  
Buyer and Acquisition Company on or prior to the Closing Date.  There shall not 
exist a Default or matter that, with notice and/or passage of time, would       
constitute a Default by Buyer or Acquisition Company under this Agreement.      

 6.3.4   LEGAL OPINION.  Seller shall have received the opinion of
Palmer & Dodge, counsel to Buyer, dated the Closing Date, in a form that is     
customary for transactions of this type.  Such counsel may rely upon the        
certificates of officers and directors of Buyer and Buyer's Subsidiaries and of 
public officials as to any matter in such opinion which involves matters of     
fact, and upon opinions of local counsel, reasonably acceptable to Seller.      

ARTICLE VII   

CLOSING     

       7.1     TIME AND PLACE OF CLOSING.  The Closing shall take place on the
Closing Date at 9:00 a.m. Boston, Massachusetts Time at Buyer's corporate       
office, located at 175 Federal Street, Boston, Massachusetts, or at such other  
time and place on the Closing Date as the parties may mutually agree.           

      7.2     BUYER DELIVERIES.  On the Closing Date, Buyer shall deliver or
cause to be delivered to Seller or, in the case of the Merger Consideration, to 
an exchange and payment agent, selected by Buyer and reasonably acceptable to   
Seller (the "Agent"), with each instrument being dated as of the Closing Date   
and fully executed, attested, notarized and acknowledged, as appropriate, as    
follows:                                                                        

     7.2.1   The Merger Consideration shall be paid in accordance with the
provisions of Section 3.7.                                                      

   7.2.2   Such certificates, executed by the Chief Executive Officer,
President or any Executive or Senior Vice President and attested by the Clerk   
or any Assistant Clerk of Buyer,                                                

- 39 -      

EX-2.(A)
45th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 45th

as may be reasonably necessary to evidence the satisfaction or waiver of the    
Closing Conditions set forth in Section 6.2.                                    

 7.2.3   Photocopies of all Regulatory Approvals received by Buyer
and/or Acquisition Company certified as true, correct and complete by any       
officer of Buyer.                                                               

    7.2.4   A certificate of the Clerk or Secretary of each of Buyer and
Acquisition Company with respect to all resolutions of their respective Board   
of Directors authorizing the execution, delivery and performance of this        
Agreement and the Merger, the resolutions of Buyer as sole stockholder of       
Acquisition Company approving this Agreement and the Merger, the incumbency and 
specimen signatures of the persons executing on behalf of Buyer or Acquisition  
Company any documents and instruments delivered pursuant to this Agreement, the 
by-laws of Buyer and Acquisition Company and such other similar matters as      
Seller or its counsel may reasonably request.                                   

 7.2.5   A certificate, executed by the Exchange Agent, as to such
matters as may be necessary to evidence the implementation of the Merger.       

       7.2.6   Evidence of the directors' and officers' liability insurance as
provided in Section 5.7.2.                                                      

7.2.7   The certificate as to representations and warranties as 
required by Section 6.3.1 hereof.                                               

7.2.8   Such other documents and instruments as Seller may deem 
reasonably necessary to consummate the Merger and any other transactions        
contemplated by this Agreement, provided that such documents and instruments    
are consistent with the parties' intent as expressed in this Agreement.         

     7.3     SELLER DELIVERIES.  On the Closing Date, Seller shall deliver
or cause to be delivered to Buyer and Acquisition Company, with each document   
and instrument being dated as of the Closing Date and fully executed, attested, 
notarized and acknowledged, as appropriate, the following:                      

    7.3.1   Such certificates executed by the President, Chief Executive
Officer, or any Executive or Senior Vice President and attested by the          
Secretary or any Assistant Secretary of Seller and the NFS Banks, as may be     
reasonably necessary to evidence the satisfaction or waiver of the Closing      
Conditions set forth in Section 6.3.                                            

   7.3.2   Photocopies of all Regulatory Approvals received by Seller,
certified as true, correct and complete by any officer of Seller.               

     7.3.3   A certificate of the Secretary of Seller, with respect to all
resolutions of its Board of Directors authorizing the execution, delivery and   
performance of this Agreement, all resolutions of the stockholders of Seller    
with respect to their approval of this Agreement and the Merger, the incumbency 
and specimen signatures of the persons executing on behalf of Seller any        
documents and instruments delivered pursuant to this Agreement, the             

- 40 -  

EX-2.(A)
46th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 46th

by-laws of Seller and such other similar matters as Buyer or Acquisition        
Company may reasonably request.                                                 

     7.3.4   A certificate, executed by the Seller's transfer agent and in
form and substance reasonably satisfactory to Buyer, stating that, to such      
transfer agent's knowledge, the stock transfer records of Seller are complete   
and correct, reflect all issuances and transfers of the capital stock of Seller 
and have been maintained in accordance with industry standards in the normal    
course of such transfer agent's business, and stating such additional matters   
as may be reasonable and necessary in connection with implementation of the     
Plan of Merger.  The Seller's transfer agent shall further certify that, with   
respect to its duties and responsibilities as Seller's transfer agent, it is    
not aware of any violation of applicable Laws.                                  

7.3.5   The certificate as to representations and warranties as 
required by Section 6.2.1 hereof.                                               

    7.3.6   Such other documents and instruments as Buyer or Acquisition
Company may deem reasonably necessary to consummate the Merger and any other    
transactions contemplated by this Agreement, provided that such documents and   
instruments are consistent with the parties' intent as expressed in this        
Agreement.                                                                      

7.4     FEES AND CLOSING COSTS.                                 

     7.4.1   Each party shall pay all fees and costs of its own attorneys,
accountants, financial advisers and other professionals incurred in connection  
with the transactions contemplated by this Agreement, and Buyer and Acquisition 
Company hereby expressly consent to the payment by Seller, before or            
simultaneously with the Closing, of such fees and costs for which Seller is     
responsible under this Section.                                                 

7.4.2   Except as provided in Section 7.4.1 above, expenses in  
connection with obtaining approval of the transactions contemplated hereby by   
the stockholders of Seller, including, without limitation, expenses in          
connection with the printing and mailing of the Proxy Statement/Prospectus      
shall be paid by Seller.                                                        

      7.4.3   Expenses in connection with obtaining the Regulatory Approvals
shall be paid by Buyer.                                                         

   7.4.4   Expenses in connection with the registration, quotation and
"Blue Sky" registration and approvals of the Buyer Stock shall be paid by       
Buyer.                                                                          

   7.4.5   All other fees and expenses incurred in connection with the
transactions contemplated hereby shall be paid by the party incurring such      
expenses.                                                                       

- 41 -  

EX-2.(A)
47th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 47th
ARTICLE VIII

TERMINATION 

    8.1     MUTUAL CONSENT.  The parties may terminate this Agreement at
any time by mutual written agreement.                                           

       8.2     OTHER TERMINATION.  Provided that there does not then exist any
Default by the party or parties giving such notice, Seller, on the one hand, or 
Buyer, on the other, may terminate this Agreement by giving notice (a           
"Termination Notice") to the other at the time designated in this Section or,   
in the absence of such designation, at any time up to and including the Closing 
Date, if any one or more of the following shall have occurred and be            
continuing:                                                                     

8.2.1   TERMINATION BY ANY PARTY.  Any party may terminate this 
Agreement under any one or more of the following circumstances:                 

     (a)     At any time after December 31, 1995, if the Closing shall not
have occurred for any reason other than a Default by the party giving such      
notice;                                                                         

(b)     This Agreement is not approved by the requisite vote    
of Seller's stockholders at the Stockholders Meeting referred to in Section 5.3 
(including any adjournment thereof);                                            

      (c)     Any Application for Regulatory Approval is denied or withdrawn
and 90 days shall have passed without a petition for rehearing, a request for   
reconsideration or an amended application being filed with the appropriate      
Governmental Authority; or                                                      

(d)     A court or other Governmental Authority of competent    
jurisdiction shall have issued an order, writ, injunction or decree or shall    
have taken any other action permanently restraining or otherwise prohibiting    
the Merger and such order, writ, injunction, decree or other action shall have  
become final and nonappealable.                                                 

       8.2.2   TERMINATION BY BUYER.  Buyer may terminate this Agreement under
any one or more of the following circumstances:                                 

     (a)     At any time if there shall have occurred a Default by Seller;

  (b)     On the Closing Date, if any Closing Condition set forth in
Section 6.1 or Section 6.2 shall not have been satisfied; or                    

(c)     At any time if a Material Adverse Change in Seller has  
occurred.                                                                       

   8.2.3   TERMINATION BY SELLER.  Seller may terminate this Agreement
under any one or more of the following circumstances:                           

      (a)     At any time if there shall have occurred a Default by Buyer or
Acquisition Company;                                                            

- 42 -      

EX-2.(A)
48th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 48th

  (b)     On the Closing Date, if any Closing condition set forth in
Section 6.1 or Section 6.3 shall not have been satisfied;                       

       (c)     At any time if a Material Adverse Change in Buyer has occurred;
or                                                                              

    (d)     Prior to the Closing Date, by notice to Buyer if the Closing
Market Value of Buyer Stock shall be less than $43.50; PROVIDED that Buyer may  
negate such termination by notifying Seller prior to 5:00 p.m., Boston,         
Massachusetts time, on the Closing Date of its election to adjust the Merger    
Consideration as provided in Section 3.2.2 (any notice under this clause to be  
given by personal delivery in writing or by telephone communication confirmed   
by receipted facsimile).                                                        

     8.3     TERMINATION FEE.  In order to induce Buyer to enter into this
Agreement and to reimburse Buyer for incurring the costs and expenses related   
to entering into this Agreement and consummating the transactions contemplated  
by this Agreement, the Seller will make a cash payment to Buyer of $900,000     
(the "TERMINATION FEE") if and only if:                                         

       (a)       (i) Buyer or Seller has terminated this Agreement
              pursuant to Section 8.2.1(b) or (ii) Buyer has
             terminated this Agreement pursuant to Section
8.2.2(a), and                   

             (b)       (i)  within twelve (12) months of any such termination,
                      (A) the Seller shall have entered into an agreement to
                    engage in an Acquisition Transaction with any person
                   other than Buyer or any Buyer Subsidiary or (B) the
                       Board of Directors of the Seller shall have approved an
           Acquisition Transaction or recommended that
                shareholders of the Seller approve or accept any
                  Acquisition Transaction with any person other than
                       Buyer or any Buyer Subsidiary, or (ii) in the case of a
                     termination pursuant to Section 8.2.1(b), at the time
               of such termination it shall have been publicly
                  announced that any person (other than Buyer or any
                      Buyer Subsidiary) shall have (x) made, or disclosed an
             intention to make, a proposal to engage in an
                      Acquisition Transaction or (y) filed an application or
                     notice in draft or final form with the OTS, the Board
                       of Governors of the Federal Reserve System or any other
                  regulatory authority identified in the "Regulatory
                     Approvals" definition of this Agreement, for approval
                     or clearance to engage in an Acquisition Transaction.

Any payment required by the previous sentence will be payable by Seller to      
Buyer (by wire transfer of immediately available funds to an account designated 
by Buyer) within five business days after demand by Buyer.  In the event of a   
termination under circumstances that would trigger a payment under this Section 
8.3, the standstill provisions contained in the Confidentiality Agreement shall 
terminate.                                                                      

    For purposes of this Agreement, "ACQUISITION TRANSACTION" shall mean
(i) a merger, consolidation or other similar transaction with Seller or any of  
it Subsidiaries, (ii) any sale, lease or other disposition of 15% or more of    
the consolidated assets of Seller and its Subsidiaries, taken as a whole, in a  
single transaction or series of transactions, or (iii) any                      

- 43 -

EX-2.(A)
49th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 49th

issuance, sale, transfer, exchange or other disposition of (including by way of 
merger, consolidation, share exchange, acceptance of a tender or exchange       
offer or any similar transaction) securities representing 15% or more of the    
voting power of Seller or any Subsidiary.                                       

      8.4     EFFECT OF TERMINATION.  Except as expressly provided otherwise
herein, termination of this Agreement pursuant to this Article shall not        
relieve any party of any liability for a Default or other breach, default or    
nonperformance under this Agreement.                                            

ARTICLE IX    

MISCELLANEOUS     

9.1     NOTICES.  Unless expressly provided otherwise in this   
Agreement, any notice, request, demand or other communication required to be    
given under this Agreement shall be in writing, shall be deemed to be given or  
delivered (a) on the date of personal delivery of the notice, request, demand   
or other communication at or before 5:00 p.m. Boston, Massachusetts Time, (b)   
on the third Business Day after the day of mailing of such notice, request,     
demand or other communication by United States Registered Mail or United States 
Certified Mail, postage prepaid, or (c) on the next Business Day after mailing  
of such notice, request, demand or other communication by express courier,      
freight charges prepaid, to the parties (including any person or entity         
designated for receipt of a photocopy thereof) at the following addresses or at 
such other address as any of the parties may hereafter specify in the           
aforementioned manner:                                                          

If to Buyer and/or Acquisition Company:                                         
            BayBanks, Inc.
                175 Federal Street
                         Boston, Massachusetts 02110
                            Attention:  Michael W. Vasily,
                                                    Executive Vice President

With a copy to:                        Palmer & Dodge                           
               One Beacon Street
                         Boston, Massachusetts 02108
                              Attention:  Jerry V. Klima, Esq.

If to Seller:                          NFS Financial Corp.                      
             157 Main Street
                          Nashua, New Hampshire  03060
                                  Attention: James H. Adams, President

With a copy to:                        Hogan & Hartson, L.L.P.                  
             Columbia Square
                        555 Thirteenth Street N.W.
                          Washington, D.C.  20004-1109
                                       Attention:  David B. H. Martin, Jr., Esq.

- 44 -  

EX-2.(A)
50th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 50th

    9.2     ENTIRE AGREEMENT.  Except as expressly provided otherwise in
this Agreement, this Agreement, together with the Option Agreement constitutes  
the entire agreement of the parties hereto with respect to the matters          
addressed herein and therein and, except as expressly set forth herein,         
supersedes all prior or contemporaneous contracts, covenants, agreements,       
representations, warranties and statements, whether written or oral, with       
respect to such matters.                                                        

   9.3     AMENDMENT.  Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized   
by their respective Boards of Directors, at any time before or after approval   
of the matters presented in connection with the Merger by Seller's              
stockholders; provided, however, that after any approval of the transactions    
contemplated by this Agreement by Seller's stockholders, there may not be,      
without further approval of such stockholders, any amendment of this Agreement  
which reduces the amount or changes the form of the Merger Consideration other  
than as contemplated by this Agreement.  This Agreement may not be amended,     
changed, modified or terminated, except by written instrument executed by all   
parties to this Agreement.                                                      

      9.4     WAIVER.  Except as expressly provided herein, no waiver by any
party of any failure or refusal of any other party to comply with its           
obligations under this Agreement shall be deemed a waiver of any other or       
subsequent failure or refusal to so comply by such other party.  No waiver      
shall be valid unless in writing signed by the party to be charged and only to  
the extent therein set forth.                                                   

    9.5     SEVERABILITY.  If any term or provision of this Agreement or
application thereof to any person or circumstances shall, to any extent, be     
found by a court of competent jurisdiction to be invalid or unenforceable, the  
remainder of this Agreement, or the application of such term or provision to    
persons or circumstances other than those as to which it is held invalid or     
unenforceable, shall not be affected thereby and each other term or provision   
of this Agreement shall be valid and be enforced to the fullest extent          
permitted by law unless, as a result, the intent of the parties as expressed in 
this Agreement would be violated.                                               

      9.6     CAPTIONS.  The title of this Agreement and the headings of the
various paragraphs of this Agreement have been inserted only for the purposes   
of convenience, and are not part of this Agreement and shall not be deemed in   
any manner to modify, explain, expand or restrict any of the provisions of this 
Agreement.                                                                      

      9.7     GOVERNING LAW.  This Agreement shall be construed and enforced
according to the laws of the State of Delaware applicable to agreements made    
and entirely to be performed within such jurisdiction except to the extent      
federal law may be applicable, unless and to the extent that the laws of the    
United States govern the performance of this Agreement.                         

   9.8     NO THIRD PARTY BENEFICIARIES.  Except as expressly provided
herein, this Agreement is made and entered into for the sole protection and     
benefit of the parties hereto, and no other person or entity shall have any     
right of action hereon, right to claim any right or benefit from the terms      
contained herein or be deemed a third party beneficiary hereunder.              

- 45 -  

EX-2.(A)
51st Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 51st

  9.9     ASSIGNABILITY.  All terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto, and their 
respective transferees, successors and assigns; PROVIDED, HOWEVER, that neither 
this Agreement nor any rights, privileges, duties and obligations of the        
parties hereto may be assigned or delegated by any party hereto without the     
prior written consent of all the parties to this Agreement and any such         
purported or attempted assignment shall be null and void AB INITIO and of no    
force or effect.                                                                

  9.10    PARTIES NOT PARTNERS.  Nothing contained in this Agreement
shall constitute any party as a partner with, agent for or principal of any one 
or more of the other parties or their successors and assigns.                   

9.11    NO SURVIVAL.  None of the representations, warranties,  
covenants or agreements contained herein shall survive the Closing, except to   
the extent that performance thereof is to occur subsequent to Closing Date.  No 
investigation by either of the parties or their respective representatives      
shall affect the representations and warranties of the other set forth in this  
Agreement.                                                                      

   9.12    FURTHER ASSURANCES.  Subject to the terms and conditions of
this Agreement, each of the parties agrees to use its best efforts to take, or  
cause to be taken, all action and do, or cause to be done, all things           
necessary, proper or desirable to satisfy the Closing Conditions and to         
consummate and make effective the Merger and the other transactions             
contemplated by this Agreement.  If, any time after the Closing Date, any       
further action is necessary, proper or desirable to effect the purposes of this 
Agreement, the proper officers and directors of each party of this Agreement    
shall take all such further action.                                             

9.13    ALTERNATIVE STRUCTURE.  Notwithstanding anything to the 
contrary contained in this Agreement, prior to the Closing, Buyer shall be      
entitled to revise the structure of the Merger and related transactions         
provided that each of the transactions comprising such revised structure shall  
(i) not subject any of the stockholders to adverse tax consequences or change   
the amount of Merger Consideration to be received by such stockholders and (ii) 
be capable of consummation without material delay.  This Agreement and any      
related documents shall be appropriately amended in order to reflect any such   
revised structure.                                                              

   9.14    TIME OF ESSENCE.  Time is of the essence of this Agreement.

       9.15    COUNTERPARTS.  This Agreement and the documents and instruments
to be executed and delivered pursuant to this Agreement may be executed in any  
number of counterparts, each of which shall be deemed an original, but all of   
which together shall constitute but one instrument.                             

- 46 -    

EX-2.(A)
52nd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 52nd

       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.                               

                          BAYBANKS, INC.

                                      By:  /s/ Michael W. Vasily
                                              ------------------------
                                         Its: Executive Vice President
                                              ------------------------
ATTEST                                                                          

By:      /s/ Jerry V. Klima                                                     
------------------------                                            
Its:     Assistant Clerk                                                        
------------------------                                            

                               NFS FINANCIAL CORP.

                                   By:  /s/ James H. Adams
                                              ------------------------
                                Its: President / CEO
                                              ------------------------
ATTEST                                                                          

By:   /s/ Albert R. Rietheimer                                                  
-------------------------                                           
Its:  Treasurer / CFO                                                           
------------------------                                            

  - 47 -

EX-2.(A)
53rd Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 53rd

LIST OF EXHIBITS
----------------

EXHIBITS:                                                                       

  EXHIBIT A     Option Agreement [included as Exhibit 2(b) to this
Form 8-K]                         

EXHIBIT B     Affiliate Letter                                

  - 48 -

EX-2.(A)
54th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 54th

                                                                 EXHIBIT B

                                                         December 22, 1994

BayBanks, Inc.                                                                  
175 Federal Street                                                              
Boston, Massachusetts 02110                                                     

Gentlemen:                                                                      

      Each of the undersigned (a "Stockholder") beneficially owns, with sole
voting and/or investment power, the number of shares of the common stock, $.01  
par value per share (the "Shares"), of NFS Financial Corp. (the "Company")      
indicated opposite such Stockholder's name below and/or may be considered an    
"affiliate" of the Company as described below.                                  

     BayBanks, Inc. ("Buyer") and the Company are, simultaneously with the
execution of this letter agreement, entering into or have entered into an       
Acquisition Agreement (the "Agreement") providing, among other things, for the  
merger of a subsidiary of Buyer with the Company (the "Merger").  We understand 
that Buyer has undertaken and will continue to undertake substantial expenses   
in connection with the negotiation and execution of the Agreement and the       
subsequent actions necessary to consummate the Merger and the other             
transactions contemplated by the Agreement.  We also understand that in         
connection with the Merger we may receive shares of common stock, $2.00 par     
value, of Buyer (such shares, together with any securities which may be paid as 
a dividend or otherwise issued or delivered in exchange or substitution         
therefor, hereinafter collectively referred to as the "Buyer Shares") in        
exchange for the Shares owned by the undersigned in accordance with the         
Agreement.                                                                      

     In consideration of, and as a condition to, Buyer's entering into the
Agreement, and in consideration of the expenses incurred and to be incurred by  
Buyer in connection therewith, each Stockholder and Buyer agree as follows:     

A.      STOCKHOLDER AGREEMENTS REGARDING THE SHARES             

 1.       Each Stockholder shall vote or cause to be voted for the
approval of the Agreement and the Merger, and shall vote or cause to be voted   
against the approval of any other agreement providing for a merger,             
consolidation, sale of assets or other business combination of the Company or   
any of its subsidiaries with any person or entity other than Buyer and its      
subsidiaries, all of the Shares that such Stockholder shall be entitled to so   
vote or direct the voting of, whether such Shares are beneficially owned by     
such Stockholder on the date of this letter agreement or are subsequently       
acquired whether pursuant to the exercise of stock options or otherwise.        

EX-2.(A)
55th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 55th

      2.       Each Stockholder will not sell, assign, transfer or otherwise
dispose of (including, without limitation, by the creation of a Lien (as        
defined in paragraph C.1. below)) or permit to be sold, assigned, transferred   
or otherwise disposed of any Shares owned by such Stockholder or the            
disposition of which is under the control of such Stockholder, whether such     
Shares are benefically owned by such Stockholder on the date of this letter     
agreement or are subsequently acquired, whether pursuant to the exercise of     
stock options or otherwise, except (a) for transfers by will or by operation of 
law (in which case this letter agreement shall bind the transferee), (b) for    
transfers to any other Stockholders, and (c) as Buyer may otherwise agree in    
writing.                                                                        

     3.       The agreements contained herein are intended to restrict the
transferability of the Shares and to continue only for such time as may         
reasonably be necessary to obtain Stockholder and regulatory approval of        
Buyer's acquisition of the Shares pursuant to the Merger and thereafter to      
consummate the Merger.                                                          

B.      RULE 145 MATTERS                                        

     1.       Each of the undersigned has been advised that as of the date
the Merger is submitted to stockholders of the Company for approval, the        
undersigned may be an "affiliate" of the Company, as the term is defined for    
purposes of paragraph (c) of Rule 145 of the Securities and Exchange Commission 
(the "SEC") under the Securities Act of 1933, as amended (the "Act"), although  
nothing contained herein shall be construed as an admission of such fact.       

   2.       In connection therewith, each of the undersigned severally
represents warrants and agrees that:                                            

   (a)      The undersigned shall not make any sale, transfer or other
disposition of the Buyer Shares in violation of the registration        
   requirements of the Act or the rules and regulations of the SEC thereunder.

  (b)      The undersigned has been advised that the issuance of the
 Buyer Shares to the undersigned pursuant to the Merger will be registered
under the Act on a registration statement on Form S-4.  However, the    
undersigned has also been advised that if the undersigned is in fact an 
 "affiliate" of the Company at the time the Merger is submitted for a vote
  of the stockholders of the Company and the distribution by the undersigned
 of the Buyer Shares has not been registered under the Act, Rule 145 under
the Act will restrict the undersigned's sale of Buyer Shares received in
the Merger.  The undersigned will not sell or otherwise dispose of any  
Buyer Shares, except pursuant to Rule 145(d) under the Act, an effective
registration statement under the Act or exemption from the registration 
requirements under the Act (provided that the undersigned may make bona 
fide gifts or distributions) without consideration so long as the       
recipients thereof agree not to sell, transfer or otherwise dispose of  
Buyer Shares except as provided herein).                                

     (c)      The undersigned has carefully read this letter agreement and
the Agreement and has discussed the requirements of each and the        
limitations upon the                                                    

- 2 -     

EX-2.(A)
56th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 56th

  disposition of the Buyer Shares received by the undersigned, to the extent
deemed necessary, with the undersigned's counsel or with counsel for the
Company.                                                                

      3.      Each of the undersigned severally understands and agrees that:

  (a)     Buyer is under no further obligation to register the sale,
transfer or other disposition of the Buyer Shares to be received by the 
  undersigned or, except as provided in paragraph B.4.(a) below, to take any
   action necessary in order to make an exemption from registration available.

      (b)     Stop transfer instructions will be given to the transfer agent
   of Buyer with respect to the Buyer Shares the undersigned will receive, and
there will be placed on the certificate representing such stock, or any 
certificates delivered in substitution therefor, a legend stating in    
substance:                                                              

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO 
WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933 (THE "ACT") APPLIES.  THE       
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN           
ACCORDANCE WITH RULE 145(D) OR AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION 
FROM REGISTRATION UNDER THE ACT."                                               

      (c)      Unless the transfer by the undersigned of the Buyer Shares is
a sale made in conformity with the provisions of Rule 145(d), or made   
pursuant to a registration statement under the Act, Buyer reserves the  
right to put an appropriate legend on the certificates issued to a      
transferee.                                                             

     (d)      This agreement shall be binding upon and enforceable against
 administrators, executors, representatives, heirs, legatees, devisees and
successors of the undersigned and any pledgee holding Buyer Shares as   
collateral.                                                             

4.      Buyer represents and agrees as follows:                 

 (a)      For so long as and to the extent necessary to permit the
undersigned to sell the Buyer Shares pursuant to Rule 145 and, to the   
   extent applicable, Rule 144 under the Act, Buyer shall use its best efforts
  to file, on a timely basis, all reports and data required to be filed with
   the SEC by it pursuant to Section 13 of the Securities Exchange Act of 1934
 (the "1934 Act") so long as it is subject to such requirement, furnish to
the undersigned upon request a written statement as to whether Buyer has
complied with such reporting requirements during the 12 months preceding
any proposed sale under Rule 145, and otherwise use its reasonable best 
  efforts to permit such sales pursuant to Rule 145 and Rule 144.  Buyer has
   filed all reports required to be filed with the SEC under Section 13 of the
1934 Act during the preceding 12 months.                                

     (b)      Buyer agrees that the stop transfer instructions and legends
 referred to above shall be terminated or removed if the undersigned shall
have delivered to Buyer                                                 

- 3 -   

EX-2.(A)
57th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 57th

 a copy of a letter from the staff of the SEC, an opinion of counsel in form
  and substance satisfactory to Buyer or other evidence satisfactory to Buyer,
 to the effect that such instructions and legends are no longer required for
the purposes of the Act.                                                  

C.      GENERAL PROVISIONS                                      

             1.    Each of the Stockholders severally represents that such
Stockholder has the complete and unrestricted power and the unqualified right   
to enter into and perform the terms of this letter agreement.  Each of the      
Stockholders further severally represents that this letter agreement            
constitutes a valid and binding agreement with respect to such party,           
enforceable against such party in accordance with its terms.  Each of the       
Stockholders severally represents that such Stockholder beneficially owns the   
number of Shares indicated opposite such Stockholder's name below, free and     
clear of any liens, claims, charges or other encumbrances and restrictions of   
any kind whatsoever ("Liens"), and has sole and unrestricted voting power with  
respect to such Shares.                                                         

          2.    Notwithstanding anything herein to the contrary, the
agreements contained herein shall remain in full force and effect until the     
earlier of (i) the consummation of the Merger and (ii) the termination of the   
Agreement in accordance with Article 8 thereof.                                 

               3.    Each of the Stockholders has signed this letter agreement
intending to be bound severally thereby and not to be bound as joint obligors.  

                4.    This letter agreement is to be governed by the laws of the
State of Delaware, without giving effect to the principles of conflicts of laws 
thereof.  If any provision hereof is deemed unenforceable, the enforceability   
of the other provisions hereof shall not be affected.                           

            5.    This letter agreement may be executed in any number of
counterparts.                                                                   

       Please confirm our agreement with you by signing a copy of this letter.

                                                                [Download Table]
                                                  Very truly yours,           


         Director or                    Number of                             
      Executive Officer                  Shares               Signatures      
      -----------------                 ---------             ----------      
                                                                              
__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________


- 4 - 

EX-2.(A)
58th Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 58th

                                                                [Download Table]
                                                                              
__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________

__________________________           ____________     ________________________


- 5 - 

EX-2.(A)
Last Page of 59
TOC
1st
Previous
Next
↓Bottom
Just 59th

AGREED TO AND ACCEPTED                                                          
THIS 22nd DAY OF DECEMBER, 1994                                                 

BAYBANKS, INC.                                                                  

By:_________________________                                                    

Title:_______________________                                                   

 - 6 -

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		1/1/96		36
		12/31/95		36		47			10-K405
		9/1/95		11
Filed on:		1/4/95
For Period End:		12/22/94		1		54
		11/30/94		18		25
		9/30/94		16		33			10-Q
		9/21/94		23
		6/27/94		26
		12/31/93		15		28			10-K,  11-K/A
		9/30/93		17		28
		12/31/92		17		28
									List all Filings