UNITED NATIONAL BANCORP
8-K, 1996-11-22
NATIONAL COMMERCIAL BANKS
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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 12, 1996


                             UNITED NATIONAL BANCORP
             (Exact name of registrant as specified in its charter)


                                   New Jersey
                 (State or other jurisdiction of incorporation)

         000-16931                         22-2894827
- ------------------------        --------------------------------- 
(Commission File Number)        (IRS Employer Identification No.)

     1130 Route 22 East, Bridgewater, New Jersey  08807-0010
            (Address of principal executive offices)

                         (908) 429-2200
      (Registrant's telephone number, including area code)


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<PAGE>



Item 5.  Other Events.

                  On November  13, 1996,  United  National  Bancorp  ("United"),
issued  a  press  release  announcing  that it and  United  National  Bank,  its
commercial  bank subsidiary  ("UNB"),  had entered into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which United will acquire Farrington
Bank  ("Farrington"),  a $62 million asset,  single-office bank headquartered in
North  Brunswick,  New Jersey.  The press  release and the Merger  Agreement are
annexed as Exhibits to this Form 8-K. The  acquisition  is  anticipated  to be a
tax-free  merger in which the  shareholders  of Farrington  will receive  0.7647
shares of United's  common stock,  no par value ("United Common Stock") for each
share of Farrington's common stock, $5.00 par value ("Farrington Common Stock"),
subject to possible  adjustments in certain  circumstances.  The  acquisition is
expected to be accounted for as a pooling of interests.

                  Farrington  presently has 665,392 shares of Farrington  Common
Stock  outstanding.  In addition,  Farrington has outstanding  stock options for
60,051 shares of  Farrington  Common  Stock.  Pursuant to the Merger  Agreement,
holders of options to acquire  Farrington  Common Stock will have their  options
converted  into options to acquire  0.7647 shares of United Common Stock or into
shares of United Common Stock with a value equal to the  difference  between the
option exercise price and the value of 0.7647 shares of United Common Stock.

                  In connection with the Merger  Agreement,  Farrington  granted
United an option to  acquire  133,000  shares  of  Farrington's  authorized  but
unissued  common stock for an exercise price of $14.00 per share,  in accordance
with the terms and conditions set forth in the Stock Option  Agreement  which is
attached as an Exhibit to this Form 8-K.

                  The announced  merger is subject to necessary bank  regulatory
approvals,   the  approval  of  Farrington   shareholders  and  other  customary
conditions.

                  The  description of the Merger  Agreement and the terms of the
merger  contained in this Form 8-K are qualified in their  entirety by reference
to the Merger Agreement. 





Item 7.   Exhibits.

     

     99(a)     Press Release dated November 13, 1996

     99(b)     Agreement and Plan of Merger dated November 12, 1996

     99(c)     Stock Option Agreement dated as of November 12, 1996




                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                   UNITED NATIONAL BANCORP

Dated: November 21, 1996           By: RALPH L. STRAW, JR.
                                       -------------------------
                                       RALPH L. STRAW, JR.
                                       Executive Vice President

 
<PAGE>

                                INDEX TO EXHIBITS


Exhibit No.    Description
- - -----------    -----------

   99(a)       Press Release dated November 13, 1996

   99(b)       Agreement and Plan of Merger dated November 12, 1996

   99(c)       Stock Option Agreement dated as of November 12, 1996





                                                                       Immediate




               UNITED NATIONAL BANCORP TO ACQUIRE FARRINGTON BANK


Bridgewater, NJ - November 13, 1996 -- United National Bancorp (NASDAQ-UNBJ) and
Farrington Bank jointly announced today that they have entered into a definitive
agreement  in which  United  National  will  acquire  Farrington  in a  tax-free
exchange  of  stock.  Farrington  is a $62  million  asset,  single-office  bank
headquartered in North Brunswick,  New Jersey. The transaction will be accounted
for as a pooling of interests.

Thomas C. Gregor, chairman and chief executive officer of United National, said,
"We believe that in-market  acquisitions of quality institutions like Farrington
are  important  to our  strategy of improving  our  competitive  position in key
markets.  This acquisition will enhance United National's  presence in Middlesex
County. In addition,  Farrington's  secured credit card and SBA lending programs
will  complement  the strong  credit card and  Preferred  SBA programs at United
National."

Dr. Joseph C. Zullo,  the Chairman of Farrington  said, "The opportunity to join
United  National  will be  beneficial  to our  stockholders,  customers  and our
customers."  John E.  Pellizarri,  President  and  Chief  Executive  Officer  of
Farrington,  added,  "United National has a fine reputation and the resources to
bring an  expanded  line of  products  and  services  to our  customers  and our
community." 

The merger agreement provides that each share of Farrington common stock will be
exchanged for 0.7647 shares of United National. Farrington presently has 665,392
shares of common stock  outstanding.  In addition,  Farrington  has  outstanding
stock options for 60,051 shares of its common stock,  with an exercise  price of
$8.33 per share. The merger agreement provides that each option for one share of
Farrington  common stock will be converted  into an option for 0.7647  shares of
United National common stock or into shares of United National common stock with
a value equal to the difference between the option exercise price and the value,
measured  at a period  near the  closing,  of 0.7647  shares of United  National
common stock.

The acquisition is conditioned upon satisfactory  completion of due diligence by
United  National,  necessary  bank  regulatory  approvals,  the  approval of the
shareholders  of Farrington and other  customary  conditions.  It is anticipated
that the  merger  will be  consummated  late in the first or early in the second
quarter of 1997.

In connection with the merger agreement,  Farrington  granted United National an
option to purchase 133,000 shares of Farrington's authorized but unissued common
stock.

United  National  Bancorp  is a  $1  billion  holding  company  whose  principal
subsidiary is United  National  Bank. The Bank operates 18 offices in New Jersey
throughout Hunterdon,  Middlesex,  Somerset, Union and Warren counties.  Through
its Lending,  Trust and Banking  divisions,  United National offers products and
services to match virtually any need.

CONTACT:   Media:   Donald  E.  Reinhard,   Vice   President,   908-429-2370  or
Analyst/Investors:  Donald W. Malwitz,  Executive Vice President,  908-429-2405,
both of United National;  or John E.  Pellizarri,  President and Chief Executive
Officer of Farrington, 908-247-8200.



 








                          AGREEMENT AND PLAN OF MERGER




                                      AMONG





                             UNITED NATIONAL BANCORP
                                       AND
                              UNITED NATIONAL BANK




                                       AND



                                 FARRINGTON BANK








                            Dated: November 12, 1996




    1 Articles of Association of United  National Bank as they will exist on the
Effective Date. The Articles may be amended prior to the Effective Date.


<PAGE>

                             TABLE OF CONTENTS
                                                                       Page
                                                                       ----
ARTICLE I
THE MERGER...............................................................1
  1.1.  The Merger.......................................................1
  1.2.  Effect of the Merger.............................................1
  1.3.  Articles of Association..........................................2
  1.4.  Bylaws...........................................................2
  1.5.  Directors and Officers...........................................2
  1.6.  Effective Time and Closing.......................................2
  1.7.  Capital Stock....................................................2

ARTICLE II
CONVERSION OF FARRINGTON SHARES..........................................3
  2.1.  Conversion of Farrington Common Stock............................3
           (a)  Exchange Ratio...........................................3
           (b)  Fractional Shares; Average Closing Price.................3
           (c)  Capital Changes..........................................3
           (d)  Cancellation of Farrington Certificates..................3
           (e)  Farrington Stock Options.................................4
  2.2.  Exchange of Shares...............................................4
  2.3.  Dissenting Shares................................................6
  2.4   UNB Common Stock.................................................6
  2.5   Certain Farrington Shares Retired................................6

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FARRINGTON.............................6
  3.1.  Organization.....................................................7
  3.2.  Capitalization...................................................7
  3.3.  Authority; No Violation..........................................8
  3.4.  Financial Statements.............................................9
  3.5.  Financial Advisor; Broker's and Other Fees......................10
  3.6.  Absence of Certain Changes or Events............................10
  3.7.  Legal Proceedings...............................................10
  3.8.  Taxes and Tax Returns...........................................10
  3.9.  Employee Benefit Plans..........................................11
  3.10. Reports.........................................................12
  3.11. Farrington Information..........................................12
  3.12. Compliance with Applicable Law..................................13
            (a) General.................................................13
                  (b) CRA  13
  3.13.  Certain Contracts..............................................13
  3.14.  Properties and Insurance.......................................14
  3.15.  Minute Books...................................................14
  3.16.  Environmental Matters..........................................14
  3.17.  Reserves.......................................................15
  3.18.  Disclosure.....................................................15

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF UNB AND UNITED.......................................................15
  4.1.  Corporate Organization..........................................15
  4.2.  Capitalization..................................................16
  4.3.  Authority; No Violation.........................................17
  4.4.  Financial Statements............................................18
  4.5.  Brokerage and Other Fees........................................18
  4.6.  Absence of Certain Changes or Events............................19
  4.7.  United Information..............................................19
  4.8.  Capital Adequacy................................................19
  4.9.  United Common Stock.............................................19
  4.10. Legal Proceedings...............................................19
  4.11. Taxes and Tax Returns...........................................20
  4.12. Employee Benefit Plans..........................................20
  4.13. Reports.........................................................20
  4.14. Compliance with Applicable Law..................................20
  4.15. Properties and Insurance........................................21
  4.16. Minute Books....................................................21
  4.17. Environmental Matters...........................................21
  4.18. Reserves........................................................22
  4.19. Disclosures.....................................................22

ARTICLE V
COVENANTS OF THE PARTIES................................................22
   5.1. Conduct of the Business of Farrington...........................22
   5.2. Negative Covenants and Dividend Covenants.......................22
   5.3. No Solicitation.................................................23
   5.4. Current Information.............................................24
   5.5. Access to Properties and Records; Confidentiality...............24
   5.6. Regulatory Matters..............................................26
   5.7. Approval of Stockholders........................................27
   5.8. Further Assurances..............................................28
   5.9. Public Announcements............................................28
   5.10. Failure to Fulfill Conditions..................................28
   5.11. Disclosure Supplements.........................................28
   5.12. Indemnification................................................29
   5.13. Pooling and Tax-Free Reorganization Treatment..................29
   5.14. Affiliates.....................................................30
   5.15. Compliance with the Industrial Site Recovery Act...............30
   5.16  Farrington Options.............................................30
   5.17  Employment Agreement...........................................30

ARTICLE VI
CLOSING CONDITIONS......................................................31
   6.1.  Conditions of Each Party's Obligations Under this 
         Agreement......................................................31
            (a)  Approval of Stockholders; SEC Registration.............31
            (b)  Regulatory Filings.....................................31
            (c)  Suits and Proceedings..................................31
            (d)  Tax Free Exchange......................................31
            (e)  Form S-8 For Stock Options.............................32
   6.2.  Conditions to the Obligations of United Under this 
         Agreement......................................................32
            (a)  Representations and Warranties; Performance 
                 of Obligations of Farrington...........................32
            (b)  Consents...............................................32
            (c)  Opinion of Counsel.....................................32
            (d)  Pooling of Interests...................................32
            (e)  Certificates...........................................32
   6.3.  Conditions to the Obligations of Farrington Under this 
                 Agreement..............................................33
            (a)  Representations and Warranties; Performance of
                 Obligations of United..................................33
            (b)  Opinion of Counsel to United...........................33
            (c)  Fairness Opinion.......................................33
            (d)  Certificates...........................................33

ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER.......................................33
  7.1.  Termination.....................................................33
  7.2.  Effect of Termination...........................................35
  7.3.  Amendment.......................................................35
  7.4.  Extension; Waiver...............................................35

ARTICLE VIII
MISCELLANEOUS...........................................................35
  8.1.  Expenses........................................................35
  8.2.  Notices.........................................................35
  8.3.  Parties in Interest.............................................36
  8.4.  Entire Agreement................................................37
  8.5.  Counterparts....................................................37
  8.6.  Governing Law...................................................37
  8.7.  Descriptive Headings............................................37

EXHIBITS
  Certificate of Farrington  Directors 
  Schedule 5.14 - Form of Farrington  Affiliate  Letter
  Schedule 6.2  -  Form  of  Opinion  of  Counsel  to  Farrington 
  Schedule 6.3 - Form of Opinion of Counsel to United 
  Schedule 1.3 - Articles of Association of United National Bank

<PAGE>


                         AGREEMENT AND PLAN OF MERGER


                  THIS  AGREEMENT  AND PLAN OF MERGER,  dated as of November 12,
1996  ("Agreement"),  is among United National Bancorp, a corporation  chartered
under the laws of the State of New Jersey  ("United"),  United  National Bank, a
national  banking  association and subsidiary of United ("UNB"),  and Farrington
Bank,  a  commercial  bank  chartered  under the laws of the State of New Jersey
("Farrington").

                  WHEREAS,  United  and UNB  desire to  acquire  Farrington  and
Farrington's  Board of  Directors  has  determined,  based  upon the  terms  and
conditions  hereinafter set forth, that the acquisition is in the best interests
of  Farrington  and  its  stockholders,  each  of  the  Board  of  Directors  of
Farrington, United and UNB have duly adopted and approved this Agreement and the
Board of Directors of  Farrington  has directed that  immediately  after the Due
Diligence Period (as hereafter defined), it be submitted to its shareholders for
approval; and

                  WHEREAS,  the  acquisition  will be  accomplished  by  merging
Farrington into UNB with UNB as the surviving bank, and Farrington  shareholders
receiving the consideration hereinafter set forth; and

                  WHEREAS,  simultaneously with the execution of this Agreement,
Farrington  is issuing  an option to United to  purchase  133,000  shares of the
authorized  and unissued  Farrington  Common Stock (as hereafter  defined) at an
option price of $14.00 per share,  subject to the terms and conditions set forth
in the Stock Option Agreement (the "United Stock Option").

                  NOW,  THEREFORE,  in  consideration  of the  forgoing  and the
mutual covenants and agreements  herein  contained,  and intending to be legally
bound, the parties hereto agree as follows:

                                    ARTICLE I

                                   THE MERGER

                  1.1. The Merger.  Subject to the terms and  conditions of this
Agreement,  at the Effective Time (as defined in Section 1.6),  Farrington shall
be  merged  with  and into UNB  under  the  charter  of UNB  (the  "Merger")  in
accordance with the National Bank Act and the New Jersey Banking Act of 1948, as
amended, and UNB shall be the surviving bank (the "Surviving Bank").

                  1.2.  Effect  of  the  Merger.  At  the  Effective  Time,  the
Surviving  Bank shall be considered  the same  business and corporate  entity as
each of  Farrington  and UNB and  thereupon  and  thereafter,  all the property,
rights,  powers and  franchises of each of Farrington  and UNB shall vest in the
Surviving  Bank and the Surviving Bank shall be subject to and be deemed to have
assumed  all of the  debts,  liabilities,  obligations  and  duties  of  each of
Farrington   and  UNB  and  shall  have  succeeded  to  all  of  each  of  their
relationships,  fiduciary  or  otherwise,  as fully and to the same extent as if
such property rights, privileges, powers, franchises, debts, obligations, duties
and relationships had been originally acquired,  incurred or entered into by the
Surviving Bank.

                  1.3.  Articles of Association.  The Articles of Association of
UNB as they exist  immediately prior to the Effective Time shall continue as the
Articles of  Association  of the  Surviving  Bank, as set forth in Schedule 1.3,
until otherwise  amended as provided by law;  provided  however,  that UNB shall
have the right,  between the date hereof and the Closing,  to amend its Articles
of  Association  and  upon  the  acceptance  of  such  amendment  by the OCC (as
hereafter  defined),  the  Articles  of  Association  as  so  amended  shall  be
substituted for Schedule 1.3.

                  1.4. Bylaws. The Bylaws of UNB as they exist immediately prior
to the Effective  Time shall  continue as the Bylaws of the Surviving Bank until
otherwise amended as provided by law.

                  1.5. Directors and Officers. The directors and officers of UNB
as of the  Effective  Time shall  continue as the  directors and officers of the
Surviving Bank.

                  1.6.  Effective  Time and  Closing.  The Merger  shall  become
effective  (and be  consummated)  upon the  date  specified  in a notice  to the
Comptroller  of the  Currency  (the  "OCC")  filed by UNB with the  approval  of
Farrington,  which approval shall not be unreasonably  withheld or delayed.  The
date and time specified in such notice shall be the "Effective  Time". A closing
(the "Closing") shall take place prior to the Effective Time at 10:00 a.m., on a
day  mutually  agreed  to by  United  and  Farrington  within  thirty  (30) days
following the receipt of all necessary regulatory and governmental approvals and
consents and the expiration of all statutory  waiting periods in respect thereof
and the  satisfaction  or waiver of the  conditions to the  consummation  of the
Merger  specified in Article VI hereof (other than the delivery of certificates,
opinions and other instruments and documents to be delivered at the Closing), at
the office of Pitney, Hardin, Kipp & Szuch, Florham Park, New Jersey, or at such
other place,  time or date as UNB and  Farrington  may mutually  agree upon. The
notice  from UNB to the OCC shall  specify  as the  Effective  Time the close of
business on the date of the Closing as agreed to by UNB and Farrington.

                  1.7.  Capital Stock. As of September 30, 1996, UNB had capital
of $79,221,000,  divided into 512,778 shares of common stock,  each of $2.50 par
value,  $39,149,000  of surplus,  and undivided  profits of  $34,908,000.  As of
September 30, 1996,  Farrington had capital of $8,979,839,  divided into 665,392
shares of common  stock,  each of $5.00 par value,  $3,284,592  of surplus,  and
$2,368,287 of undivided  profits.  At the Effective  Time, the amount of capital
stock of UNB  shall be  $88,200,839,  divided  into  1,843,562  shares of common
stock,  each of $2.50 par value, and UNB shall have a surplus of $42,433,592 and
undivided  profits,  including  capital  reserves,  which when combined with the
capital and surplus will be equal to the combined capital  structures of UNB and
Farrington as stated in the  preceding  two  sentences,  adjusted  however,  for
earnings and  expenses and  dividends  declared and paid by  Farrington  between
September 30, 1996 and the Effective Time.

                                   ARTICLE II

                         CONVERSION OF FARRINGTON SHARES

                  2.1.  Conversion  of Farrington  Common  Stock.  Each share of
common  stock,  par value $5.00 per share,  of  Farrington  ("Farrington  Common
Stock"),  issued and outstanding  immediately prior to the Effective Time (other
than  shares of  Farrington  Common  Stock  retired  pursuant to Section 2.5 and
Dissenting  Shares as defined in Section 2.3) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted as follows:

                  (a) Exchange Ratio.  Subject to the provisions of this Section
2.1, each share of Farrington  Common Stock issued and  outstanding  immediately
prior to the Effective Time (excluding shares of Farrington Common Stock retired
pursuant  to  Section  2.5 and  Dissenting  Shares)  shall be  converted  at the
Effective Time into the right to receive .7647 shares (the "Exchange  Ratio") of
common stock, $2.50 par value, of United ("United Common Stock").

                  (b) Fractional  Shares;  Average  Closing Price. No fractional
shares of United  Common  Stock shall be issued,  and, in lieu  thereof,  a cash
payment shall be made based on the Average  Closing Price.  The Average  Closing
Price of United  Common  Stock  shall  mean the  Average  Price (as  hereinafter
defined)  calculated  based upon the Closing Price (as  hereinafter  defined) of
United  Common  Stock  during the first 20 of the 25  consecutive  trading  days
immediately  preceding the date of the Closing. The Closing Price shall mean the
closing price of United Common Stock as supplied by the National  Association of
Securities Dealers Automated Quotation National Market System ("NASDAQ/NMS") and
published in The Wall Street  Journal  during the first 20 of the 25 consecutive
trading days  immediately  preceding the date of the Closing.  The Average Price
shall be  determined  by taking  the  average  of  Closing  Prices in the 20 day
period.  A trading day shall mean a day for which a Closing Price is so supplied
and published.

                  (c) Capital Changes. If between the date of this Agreement and
the Effective Time the outstanding shares of United Common Stock shall have been
changed into a different number of shares or a different class, by reason of any
stock dividend, stock split, reclassification,  recapitalization, combination or
exchange of shares,  the  Exchange  Ratio shall be  correspondingly  adjusted to
reflect such stock dividend,  stock split,  reclassification,  recapitalization,
combination or exchange of shares;  provided,  however, that no adjustment shall
be made for the 6% stock  dividend  declared by United on September  18, 1996 to
holders of record October 15, 1996 (the "September Stock Dividend").

                  (d)  Cancellation  of  Farrington   Certificates.   After  the
Effective  Time,  each such share of Farrington  Common Stock shall no longer be
outstanding and shall  automatically be cancelled,  and each of the certificates
(the "Certificates")  previously evidencing any such shares of Farrington Common
Stock outstanding  immediately prior to the Effective Time (other than shares of
Farrington  Common Stock retired pursuant to Section 2.5 and Dissenting  Shares)
shall thereafter  represent the right to receive the  consideration  pursuant to
Section 2.1(a) and 2.1(b) hereof. The holders of the Certificates shall cease to
have any rights with respect to such shares of Farrington Common Stock except as
otherwise  provided  herein or by law. The  Certificates  shall be exchanged for
certificates  evidencing  shares of United Common Stock issued  pursuant to this
Article II, upon the  surrender of such  Certificates  in  accordance  with this
Article II.

                  (e) Farrington  Stock  Options.  At the Effective  Time,  each
outstanding option to purchase  Farrington Common Stock (a "Farrington  Option")
granted under the stock option plans for directors or the plans for officers and
employees of Farrington (both the "Farrington  Option Plans") shall be converted
as  follows,  at the  election  of the  holder  of such  Farrington  Option  (an
"optionee");  provided,  however,  that  optionees who have received  Farrington
Options under the Farrington Option Plan for non-employee directors must receive
the   consideration   under  paragraph  (ii)  below  and  may  not  receive  the
consideration under paragraph (i) below:

                           (i) into an option to purchase  United  Common Stock,
         wherein (x) the right to purchase  shares of  Farrington  Common  Stock
         pursuant to the Farrington  Option shall be converted into the right to
         purchase that same number of shares of United  Common Stock  multiplied
         by the Exchange Ratio (as adjusted),  (y) the option exercise price per
         share of United  Common  Stock shall be the  previous  option  exercise
         price per share of the Farrington  Common Stock divided by the Exchange
         Ratio (as adjusted) and (z) in all other  material  respects the option
         shall be subject  to the same  terms and  conditions  as  governed  the
         Farrington  Option on which it was based,  including the length of time
         within which the option may be exercised; or

                           (ii) if the Farrington  Option is fully vested at the
         Closing, into the right to receive immediately after the Effective Time
         a number of whole  shares of United  Common Stock which is the quotient
         obtained by dividing:

                           (A)  the  excess  of  (x)  the  product  obtained  by
                  multiplying  (i) the  number of shares  of  Farrington  Common
                  Stock  covered  by  the  Farrington  Option,  times  (ii)  the
                  Exchange Ratio (as adjusted),  times (iii) the Average Closing
                  Price,   less  (y)  the  aggregate   exercise  price  for  the
                  Farrington Option; by

                           (B) the Average Closing Price.

         No fractional shares of United Common Stock shall be issued pursuant to
         this Section 2.1(e)(ii),  and in lieu thereof,  each optionee who would
         otherwise be entitled to a fractional  interest  will receive an amount
         in cash  determined  by  multiplying  such  fractional  interest by the
         Average Closing Price.

                  2.2.  Exchange of Shares.

                  (a) Farrington and United hereby appoint United National Bank,
Trust  Department or such other bank as United shall  designate  (the  "Exchange
Agent") as the  Exchange  Agent for  purposes of  effecting  the  conversion  of
Farrington  Common Stock and  Farrington  Options.  All fees and expenses of the
Exchange  Agent  shall  be paid by  United.  As soon as  practicable  after  the
Effective  Time,  the  Exchange  Agent  shall  mail to each  holder of record (a
"Record Holder") of a Certificate or Certificates, a mutually agreed upon 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),  and instructions for use in effecting the
surrender of the  Certificates  in exchange for United Common Stock (and cash in
lieu of fractional  shares).  Upon  surrender of a Certificate  for exchange and
cancellation  to the Exchange  Agent,  together with such letter of transmittal,
duly  executed,  the Record  Holder  shall be entitled  to  promptly  receive in
exchange  for such  Certificate  the  consideration  as  provided in Section 2.1
hereof and the  Certificates  so  surrendered  shall be cancelled.  The Exchange
Agent shall not be  obligated  to deliver or cause to be delivered to any Record
Holder the consideration to which such Record Holder would otherwise be entitled
until such Record Holder  surrenders the Certificate for exchange or, in default
thereof, an appropriate  Affidavit of Loss and Indemnity Agreement and/or a bond
as may be reasonably  required in each case by United.  Notwithstanding the time
of  surrender  of the  Certificates,  Record  Holders  (other  than  holders  of
Dissenting Shares) shall be deemed  shareholders of United for all purposes from
the Effective  Time,  except that United shall withhold the payment of dividends
from any  Record  Holder  until such  Record  Holder  effects  the  exchange  of
Certificates  for United  Common  Stock.  (Such Record Holder shall receive such
withheld dividends,  without interest,  upon effecting the share exchange.) With
respect to each outstanding Farrington Option, the Exchange Agent shall, 30 days
prior to Closing,  distribute  option  election forms to each optionee and, upon
receipt from the optionee of a properly completed option election,  shall, after
the  Effective  Time,  distribute  to the  optionee  United  Common  Stock or an
amendment  to the option  grant  evidencing  the  conversion  of the grant to an
option to purchase United Common Stock in accordance with Section 2.1 hereof.

                  (b) After the Effective  Time,  there shall be no transfers on
the stock transfer books of Farrington of the shares of Farrington  Common Stock
which were  outstanding  immediately  prior to the  Effective  Time and,  if any
Certificates  representing such shares are presented for transfer, they shall be
cancelled and exchanged for the consideration pursuant to Section 2.1 hereof.

                  (c) If payment of the  consideration  pursuant  to Section 2.1
hereof  is to be  made  in a name  other  than  that in  which  the  Certificate
surrendered in exchange therefor is registered,  it shall be a condition of such
payment  that the  Certificate  so  surrendered  shall be properly  endorsed (or
accompanied  by an  appropriate  instrument of transfer) and otherwise in proper
form for transfer,  and that the person requesting such payment shall pay to the
Exchange  Agent in advance any transfer or other taxes required by reason of the
payment to a person other than that of the registered  holder of the Certificate
surrendered,  or  required  for any  other  reason,  or shall  establish  to the
reasonable  satisfaction of the Exchange Agent that such tax has been paid or is
not payable.

                  (d) No certificates or scrip evidencing  fractional  shares of
United  Common  Stock  shall  be  issued  upon the  surrender  for  exchange  of
Certificates  and such  fractional  share  interests  will not entitle the owner
thereof to vote or to any rights of a stockholder of United.  Cash shall be paid
in lieu of  fractional  shares of United  Common  Stock,  based upon the Average
Closing Price of United Common Stock.

                  2.3.  Dissenting  Shares.  Notwithstanding  anything  in  this
Agreement to the contrary,  any holder of Farrington Common Stock shall have the
right to dissent in the manner  provided  in the  National  Bank Act,  12 U.S.C.
Section  215a,  and if all necessary  requirements  of the National Bank Act are
met, such shares shall be entitled to payment in cash from UNB of the fair value
of such shares as  determined  in  accordance  with the  National  Bank Act. All
shares of  Farrington  Common  Stock as to which the holder  properly  exercises
dissenters'  rights in accordance  with the National  Bank Act shall  constitute
"Dissenting  Shares"  unless  and  until  such  rights  are  waived by the party
initially seeking to exercise such rights.

                  2.4 UNB  Common  Stock.  The  shares  of  common  stock of UNB
outstanding immediately prior to the Effective Time shall not be affected by the
Merger but shall be the same number of shares of the Surviving Bank.

                  2.5  Certain   Farrington   Shares  Retired.   Each  share  of
Farrington  Common  Stock  that is either  (a) owned by United or any  direct or
indirect  wholly-owned  subsidiary  of United  (other  than shares held in trust
accounts, managed accounts or in any similar manner as trustee or in a fiduciary
capacity  and  shares  held  as  collateral  or in  lieu  of a  debt  previously
contracted)  or (b) held in the treasury of  Farrington  shall be cancelled  and
retired and no capital  stock of United,  cash or other  consideration  shall be
paid or delivered in exchange therefor.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF FARRINGTON

                  References  herein to "Farrington  Disclosure  Schedule" shall
mean all of the disclosure  schedules  required by this Article III, dated as of
the date hereof and  referenced  to the  specific  sections and  subsections  of
Article III of this  Agreement,  which have been delivered on the date hereof or
will be delivered within 15 days of the date hereof pursuant to Section 5.11(a),
by Farrington to United and UNB.  Farrington  hereby  represents and warrants to
United and UNB as follows:

                  3.1.  Organization.

                  (a)  Farrington  is a New  Jersey  banking  corporation  whose
deposits are insured by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation  ("FDIC") to the fullest extent permitted by law. Farrington is duly
organized,  validly existing and in good standing under the laws of the State of
New Jersey. Farrington has the corporate power and authority to own or lease all
of its  properties  and assets and to carry on its  business  as it is 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  properties and assets owned or leased by
it makes such licensing or qualification necessary,  except where the failure to
be so licensed,  qualified or in good standing would not have a material adverse
effect on the business, operations, assets or financial condition of Farrington.

                  (b)  The  only  subsidiary  of  Farrington  is  listed  in the
Farrington  Disclosure  Schedule.  The  term  "Subsidiary",  when  used  in this
Agreement  with respect to  Farrington,  means any  corporation,  joint venture,
association,  partnership,  trust  or other  entity  in  which  Farrington  has,
directly  or  indirectly,  at least a 50 percent  interest  or acts as a general
partner. The Farrington  Disclosure Schedule sets forth true and complete copies
of the Certificate of Incorporation and Bylaws of Farrington as in effect on the
date  hereof.  Except  as set  forth  in  the  Farrington  Disclosure  Schedule,
Farrington does not own or control, directly or indirectly,  any equity interest
in any corporation,  company, association,  partnership,  joint venture or other
entity  and  owns no real  estate,  except  real  estate  used  for its  banking
premises.

                  (c)  Each  Subsidiary  of  Farrington  is duly  organized  and
validly  existing and in good standing under the laws of the jurisdiction of its
incorporation.  Each  Subsidiary  of  Farrington  has the  corporate  power  and
authority to own or lease all of its  properties  and assets and to carry on its
business as it is 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  properties  and
assets owned or leased by it makes such  licensing or  qualification  necessary,
except where the failure to be so licensed,  qualified or in good standing would
not have a  material  adverse  effect  on the  business,  operations,  assets or
financial  condition of Farrington or any of its  Subsidiaries.  The  Farrington
Disclosure  Schedule  sets forth true and  complete  copies of the  Articles  of
Association and Bylaws of the Subsidiary as in effect on the date hereof.

                  3.2.   Capitalization.   The   authorized   capital  stock  of
Farrington  consists of  2,000,000  shares of  Farrington  Common  Stock.  As of
October 31, 1996,  there were 665,392  shares of Farrington  Common Stock issued
and outstanding and no shares issued and held in the treasury. As of October 31,
1996, there were 60,051 shares of Farrington Common Stock issuable upon exercise
of outstanding  options granted  pursuant to the Farrington  Stock Option Plans.
All issued and outstanding shares of Farrington Common Stock, and all issued and
outstanding shares of capital stock of Farrington's  Subsidiary,  have been duly
authorized and validly issued, are fully paid and nonassessable.  The authorized
but unissued  shares of Farrington  Common Stock are not subject to  pre-emptive
rights.  All  of  the  outstanding  shares  of  capital  stock  of  Farrington's
Subsidiary  are owned by Farrington  free and clear of any liens,  encumbrances,
charges,  restrictions  or rights of third parties.  Except for the United Stock
Option and options granted under the Farrington Option Plans, neither Farrington
nor the Farrington Subsidiary has nor is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the transfer,  purchase or issuance of any shares of capital stock of Farrington
or the  Farrington  Subsidiary  or any  securities  representing  the  right  to
purchase or otherwise receive any shares of such capital stock or any securities
convertible into or representing the right to subscribe for any such shares, and
there are no  agreements  or  understandings  with respect to voting of any such
shares.

                  3.3.  Authority; No Violation.

                  (a)  Subject  to  the  approval  of  this  Agreement  and  the
transactions contemplated hereby by the stockholders of Farrington,  and subject
to the parties obtaining all necessary regulatory approvals, Farrington has full
corporate  power and  authority  to execute and deliver  this  Agreement  and to
consummate the  transactions  contemplated  hereby in accordance  with the terms
hereof. The execution and delivery of this Agreement and the consummation of the
transactions  contemplated  hereby  have been duly and  validly  approved by the
Board  of  Directors  of  Farrington.  Except  for the  approvals  described  in
paragraph (b) below,  no other  corporate  proceedings on the part of Farrington
are necessary to consummate the transactions contemplated hereby. This Agreement
has been duly and validly  executed and delivered by Farrington and  constitutes
the valid and binding obligation of Farrington,  enforceable  against Farrington
in accordance with its terms.

                  (b) Neither the  execution  and delivery of this  Agreement by
Farrington,  nor the consummation by Farrington of the transactions contemplated
hereby in accordance with the terms hereof, or compliance by Farrington with any
of  the  terms  or  provisions  hereof,   will  (i)  violate  any  provision  of
Farrington's  Certificate  of  Incorporation  or other  governing  instrument or
Bylaws,  (ii)  assuming that the consents and approvals set forth below are duly
obtained,  violate any statute,  code, ordinance,  rule,  regulation,  judgment,
order,  writ,  decree  or  injunction  applicable  to  Farrington  or any of its
properties or assets, or (iii) except as set forth in the Farrington  Disclosure
Schedule,  violate,  conflict  with,  result in a breach of any  provisions  of,
constitute a default (or an event which,  with notice or lapse of time, or both,
would constitute a default) under,  result in the termination of, accelerate the
performance  required  by,  or  result in the  creation  of any  lien,  security
interest,  charge or other  encumbrance  upon any of the properties or assets of
Farrington  under any of the terms,  conditions or provisions of any note, bond,
mortgage,   indenture,  deed  of  trust,  license,  lease,  agreement  or  other
instrument or obligation to which  Farrington is a party,  or by which it or any
of its  properties  or assets may be bound or affected  except,  with respect to
(ii) and (iii) above,  such as individually and in the aggregate will not have a
material  adverse  effect  on the  business,  operations,  assets  or  financial
condition of Farrington and the Farrington  Subsidiary on a consolidated  basis,
or the ability of Farrington to consummate the transactions contemplated hereby.
Except for consents and approvals of or filings or registrations with or notices
to the third parties listed in the Farrington Disclosure Schedule,  the OCC, the
Commissioner  of Banking of the State of New Jersey  (the  "Commissioner"),  the
Securities  and  Exchange  Commission  (the  "SEC"),  and  the  stockholders  of
Farrington,  no consents or  approvals  of or filings or  registrations  with or
notices to any third  party or any public body or  authority  are  necessary  on
behalf of  Farrington  in  connection  with (x) the  execution  and  delivery by
Farrington  of  this  Agreement  and  (y)  the  consummation  by  Farrington  of
transactions contemplated hereby.

                  3.4.  Financial Statements.

                  (a) The  Farrington  Disclosure  Schedule sets forth copies of
the  statements  of condition of  Farrington  as of December 31, 1993,  1994 and
1995, and the related statements of income,  stockholders' equity and cash flows
for the periods ended  December 31 in each of the three years 1993 through 1995,
in each  case  accompanied  by the  audit  report  of KPMG  Peat  Marwick,  LLP,
independent  public  accountants  with respect to Farrington,  and the unaudited
statements of condition and related statements of income,  stockholders'  equity
and cash  flows of  Farrington  for the  periods  ended  March 31,  June 30, and
September  30,  1996,  as filed  with the FDIC  (collectively,  the  "Farrington
Financial  Statements").  The  Farrington  Financial  Statements  (including the
related  notes)  have  been  prepared  in  accordance  with  generally  accepted
accounting  principles  consistently applied during the periods involved (except
as approved by such independent public accountants and disclosed  therein),  and
fairly present the financial  condition of Farrington as of the respective dates
set forth therein,  and the related statements of income,  stockholders'  equity
and cash flows  fairly  present  the  results of the  operations,  stockholders'
equity  and cash  flows of  Farrington  for the  respective  periods  set  forth
therein.

                  (b) The  books and  records  of  Farrington  have been and are
being  maintained in material  compliance with  applicable  legal and accounting
requirements, and reflect only actual transactions.

                  (c)  Except  as and  to the  extent  reflected,  disclosed  or
reserved  against in the Farrington  Financial  Statements  (including the notes
thereto),   as  of  September  30,  1996  neither  Farrington  nor  any  of  its
Subsidiaries had or has, as the case may be, any liabilities,  whether absolute,
accrued,   contingent  or  otherwise,   which  are  material  to  the  business,
operations,  assets or  financial  condition  of  Farrington  or any  Farrington
Subsidiary.  Since September 30, 1996 and to the date hereof, neither Farrington
nor any  Farrington  Subsidiary  has  incurred  any  liabilities  except  in the
ordinary course of business and consistent with prudent  banking  practice,  and
except as  specifically  contemplated  by this  Agreement  or  relating to other
matters disclosed in this Agreement.

                  (d) As of September  30, 1996,  Farrington  had  stockholder's
equity  of  $8,979,839,  665,392  Shares of Common  Stock  outstanding,  Options
(granted under the Farrington Option Plans)  outstanding  permitting the holders
to purchase  60,051  shares of Common Stock for an aggregate  exercise  price of
$500,000,  and an  Allowance  for  Possible  Loan  Losses of  $803,435.  Without
limiting or qualifying the materiality of any other representation,  warranty or
covenant in this  Agreement,  the  representations  contained in this  paragraph
3.4(d) were a material  inducement to United in  determining  the Exchange Ratio
and if these numbers were  inaccurate when made and such inaccuracy is material,
United shall have the right to terminate this  Agreement due to material  breach
of a representation by Farrington.

                  3.5.  Financial Advisor;  Broker's and Other Fees.  Farrington
has retained Finpro  Financial  Services,  Inc.  ("Finpro") to render a fairness
opinion.  Neither  Farrington  nor any of its directors or officers has employed
any broker or finder or incurred any liability for any broker's or finder's fees
or commissions in connection with any of the  transactions  contemplated by this
Agreement.  Except as set forth in the Farrington Disclosure Schedule, there are
no fees (other than time charges billed at usual and customary rates) payable to
any  consultants,  including  lawyers and  accountants,  in connection with this
transaction or which would be triggered by consummation  of this  transaction or
the termination of the services of such consultants by Farrington.

                  3.6.  Absence of Certain Changes or Events.

                  (a) Except as set forth in the Farrington Disclosure Schedule,
there has not been any  material  adverse  change in the  business,  operations,
assets or financial  condition of Farrington and the Farrington  Subsidiary on a
consolidated  basis since  September 30, 1996,  and to the best of  Farrington's
knowledge,  no facts or conditions exist which Farrington believes will cause or
is likely to cause such a material adverse change in the future.

                  (b) Except as set forth in the Farrington Disclosure Schedule,
Farrington  has not taken or  permitted  any of the actions set forth in Section
5.2 hereof between September 30, 1996 and the date hereof and each of Farrington
and the  Farrington  Subsidiary  has conducted its business only in the ordinary
course, consistent with past practice.

                  3.7. Legal Proceedings.  Except as disclosed in the Farrington
Disclosure Schedule, neither Farrington nor any Farrington Subsidiary is a party
to any,  and there are no  pending  or, to the best of  Farrington's  knowledge,
threatened,  material  legal,  administrative,  arbitral  or other  proceedings,
claims, actions or governmental  investigations of any nature against Farrington
or any Farrington Subsidiary or against any present or former Farrington officer
or director in their  capacity as a Farrington  officer or  director.  Except as
disclosed in the  Farrington  Disclosure  Schedule,  neither  Farrington nor any
Farrington  Subsidiary  is a party to any  material  order,  judgment  or decree
entered  against  Farrington  or any  Farrington  Subsidiary  in any  lawsuit or
proceeding.

                  3.8.  Taxes and Tax Returns.

                  (a) Farrington and each  Farrington  Subsidiary has duly filed
(and until the Effective Time will so file) all returns, declarations,  reports,
information  returns and  statements  ("Returns")  required to be filed by it in
respect of any  federal,  state and local taxes  (including  withholding  taxes,
penalties or other payments required) and has duly paid (and until the Effective
Time will so pay) all such  taxes due and  payable,  other  than  taxes or other
charges which are being contested in good faith.  Farrington and each Farrington
Subsidiary has established  (and until the Effective Time will establish) on its
books and records  reserves  that it  reasonably  believes  are adequate for the
payment of all federal,  state and local taxes not yet due and payable,  but are
anticipated  to be  incurred  in  respect  of  Farrington  and  each  Farrington
Subsidiary  through the Effective  Time.  Except as set forth in the  Farrington
Disclosure  Schedule,  the  federal  income tax returns of  Farrington  and each
Farrington  Subsidiary  have been examined by the Internal  Revenue Service (the
"IRS") (or are closed to  examination  due to the  expiration of the  applicable
statute of limitations)  and no  deficiencies  were asserted as a result of such
examinations  which have not been resolved and paid in full. Except as set forth
in the Farrington  Disclosure Schedule,  the applicable state income tax returns
of  Farrington  and  each  Farrington  Subsidiary  have  been  examined  by  the
applicable  authorities  (or are closed to examination  due to the expiration of
the statute of  limitations)  and no  deficiencies  were asserted as a result of
such  examinations  which have not been  resolved and paid in full.  To the best
knowledge of Farrington,  there are no audits or other  administrative  or court
proceedings presently pending, or claims asserted, for taxes or assessments upon
Farrington or any  Farrington  Subsidiary  nor has  Farrington or any Farrington
Subsidiary  given any  currently  outstanding  waivers  or  comparable  consents
regarding  the  application  of the statute of  limitations  with respect to any
taxes or tax Returns.

                  (b) Except as set forth in the Farrington Disclosure Schedule,
neither Farrington nor any Farrington Subsidiary (i) has requested any extension
of time  within  which to file any tax  Return  which  Return has not since been
filed, (ii) is a party to any agreement  providing for the allocation or sharing
of taxes,  (iii) is  required  to include in income any  adjustment  pursuant to
Section 481(a) of the Internal Revenue Code of 1986, as amended (the "Code"), by
reason of a voluntary  change in accounting  method initiated by Farrington (nor
does Farrington have any knowledge that the IRS has proposed any such adjustment
or change of accounting method) and (iv) has filed a consent pursuant to Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply.

                  3.9.  Employee Benefit Plans.

                  (a) Except as set forth in the Farrington Disclosure Schedule,
neither Farrington nor any Farrington Subsidiary maintains or contributes to any
"employee  pension  benefit plan",  within the meaning of Section 3(2)(A) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), "employee
welfare benefit plan", within the meaning of Section 3(1) of ERISA, stock option
plan, stock purchase plan,  deferred  compensation  plan,  severance plan, bonus
plan,  employment  agreement  or other  similar  plan,  program or  arrangement.
Neither  Farrington nor any Farrington  Subsidiary has, since September 2, 1974,
contributed to any  "Multiemployer  Plan",  within the meaning of Sections 3(37)
and 4001(a)(3) of ERISA.

                  (b) Except with  respect to  customary  health and  disability
benefits, there are no unfunded benefits obligations which are not accounted for
by reserves shown on the Farrington  Financial  Statements and established under
generally accepted accounting principles,  or otherwise noted on such Farrington
Financial Statements.

                  (c)  Except as agreed to by United in  writing or set forth in
the  Farrington  Disclosure  Schedule,  the  consummation  of  the  transactions
contemplated  by this  Agreement  will not (i)  entitle  any  current  or former
employee of  Farrington  or any  Farrington  Subsidiary  to severance pay or any
similar payment or (ii) accelerate the time of payment, vesting, or increase the
amount,  of any compensation due to any current or former employee of Farrington
or any Farrington Subsidiary under any Farrington benefit plan.

                  (d)  No  officer;  director,  employee  or  agent  (or  former
officer, director, employee or agent) of Farrington or any Farrington Subsidiary
is entitled now, or will be entitled as a consequence  of this  Agreement or the
Merger,  to any payment or benefit from Farrington,  United or UNB which if paid
or  provided  would  constitute  an "excess  parachute  payment",  as defined in
Section 280G of the Code or regulations promulgated thereunder.

                  3.10.  Reports.

                  (a) Each  communication  mailed  by  Farrington  to all of its
stockholders  since  January  1, 1993,  and each  annual,  quarterly  or special
report, and proxy statement,  as of its date,  complied in all material respects
with all applicable  statutes,  rules and regulations enforced or promulgated by
the applicable  regulatory  agency and did not contain any untrue statement of a
material fact or omit to state any material  fact required to be stated  therein
or  necessary  in order to make the  statements  made  therein,  in light of the
circumstances  under  which  they  were  made,  not  misleading;  provided  that
disclosures  as of a later date shall be deemed to modify  disclosures  as of an
earlier date.

                  (b) Farrington has, since January 1, 1993, duly filed with the
FDIC in correct form the quarterly and annual reports required to be filed under
applicable laws and  regulations,  and Farrington  promptly will deliver or make
available to United accurate and complete copies of such reports. The Farrington
Disclosure Schedule lists all examinations of Farrington conducted by either the
FDIC or the New Jersey Department of Banking since January 1, 1993 and the dates
of any responses thereto submitted by Farrington.

                  3.11.  Farrington  Information.  The  information  relating to
Farrington  to be  contained  in the Proxy  Statement/Prospectus  (as defined in
Section  5.6(a)  hereof)  to be  delivered  to  stockholders  of  Farrington  in
connection  with the  solicitation  of their  approval of this Agreement and the
transactions contemplated hereby, as of the date the Proxy  Statement/Prospectus
is mailed to stockholders of Farrington, and up to and including the date of the
meeting of stockholders to which such Proxy  Statement/Prospectus  relates, will
not contain any untrue  statement of a material fact or omit to state a material
fact necessary to make the  statements  therein,  in light of the  circumstances
under  which  they were  made,  not  misleading.  The  information  relating  to
Farrington in the Registration  Statement (as defined in Section 5.6(a) hereof),
as of the date of the filing thereof, will not contain any untrue statement of a
material fact or omit to state a material fact  necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

                  3.12.  Compliance with Applicable Law.

                  (a) General.  Except as set forth in the Farrington Disclosure
Schedule, Farrington and its Subsidiary hold all material licenses,  franchises,
permits and authorizations  necessary for the lawful conduct of their respective
businesses  under and  pursuant  to each,  and has  complied  with and is not in
default  in any  respect  under  any,  applicable  law,  statute,  order,  rule,
regulation,  policy and/or guideline of any federal, state or local governmental
authority  relating  to  Farrington  and its  Subsidiary  (other than where such
defaults or  non-compliances  will not, alone or in the  aggregate,  result in a
material  adverse  effect  on the  business,  operations,  assets  or  financial
condition of Farrington and its Subsidiary on a consolidated  basis) and neither
Farrington  nor any Farrington  Subsidiary has received  notice of violation of,
nor does it know of any violations  (other than violations which will not, alone
or in the  aggregate,  result in a  material  adverse  effect  on the  business,
operations,  assets or financial condition of Farrington and its Subsidiary on a
consolidated basis) of, any of the above.

                  (b) CRA. Without  limiting the foregoing,  except as set forth
in the Farrington  Disclosure Schedule,  Farrington has complied in all material
respects with the Community  Reinvestment  Act ("CRA") and received a CRA rating
of "satisfactory"  as of its last  examination,  and Farrington has not received
any written  notice from any persons  asserting that such person would object to
the  consummation  of this  Merger  due to the CRA  performance  of or rating of
Farrington.

                  3.13.  Certain Contracts.

                  (a) Except as disclosed in the Farrington Disclosure Schedule,
(i) neither  Farrington nor any Farrington  Subsidiary is a party to or bound by
any contract or understanding (whether written or, to the best of its knowledge,
oral) with respect to the  employment  or  termination  of any present or former
officers,  employees,   directors  or  consultants.  The  Farrington  Disclosure
Schedule sets forth true and correct copies of all written employment agreements
or termination agreements with officers, employees, directors, or consultants to
which either Farrington or any Farrington Subsidiary is a party.

                  (b) Except as disclosed in the Farrington Disclosure Schedule,
(i) as of the date of this  Agreement,  neither  Farrington  nor any  Farrington
Subsidiary  is a  party  to or  bound  by any  commitment,  agreement  or  other
instrument  which is material to the  business  operations,  assets or financial
condition of either Farrington or its Subsidiary, (ii) no commitment,  agreement
or other instrument to which Farrington or any Farrington  Subsidiary is a party
or by which it is bound  limits the  freedom  of  Farrington  or any  Farrington
Subsidiary  to compete in any line of  business  or with any  person,  and (iii)
neither  Farrington nor any  Farrington  Subsidiary is a party to any collective
bargaining agreement.

                  (c) Except as disclosed in the Farrington Disclosure Schedule,
neither  Farrington nor any Farrington  Subsidiary nor, to the best knowledge of
Farrington, any other party thereto, is in default in any material respect under
any material lease,  contract,  mortgage,  promissory note, deed of trust,  loan
agreement or other commitment or arrangement.

                  3.14.  Properties and Insurance.

                  (a) Farrington  and its Subsidiary  have good and, as to owned
real property,  if any,  marketable title to all material assets and properties,
whether  real or personal,  tangible or  intangible,  reflected in  Farrington's
consolidated  balance  sheet as of  December  31,  1995,  or owned and  acquired
subsequent  thereto  (except to the extent that such assets and properties  have
been  disposed  of for fair  value in the  ordinary  course  of  business  since
December 31,  1995),  subject to no  encumbrances,  liens,  mortgages,  security
interests or pledges,  except (i) those items that secure  liabilities  that are
reflected in such balance sheet or the notes thereto or incurred in the ordinary
course of business  after the date of such balance sheet,  (ii) statutory  liens
for amounts not yet delinquent or which are being contested in good faith, (iii)
such  encumbrances,  liens,  mortgages,  security  interests,  pledges and title
imperfections   that  are  not  in  the  aggregate  material  to  the  business,
operations,  assets,  and financial  condition of Farrington  and its Subsidiary
taken as a whole and (iv) with  respect to owned real  property,  if any,  title
imperfections  noted in title  reports  delivered  to  United  prior to the date
hereof.  Farrington and its Subsidiary,  as lessees,  have the right under valid
and  subsisting  leases to occupy,  use,  possess and  control,  in all material
respects,  all real  property  leased  by them,  as  presently  occupied,  used,
possessed and controlled by them.

                  (b) The Farrington  Disclosure  Schedule lists all policies of
insurance and bonds covering  business  operations and insurable  properties and
assets of Farrington  and its  Subsidiary,  all risks insured  against,  and the
amount  thereof and  deductibles  relating  thereto.  Except as set forth in the
Farrington  Disclosure Schedule,  as of the date hereof,  neither Farrington nor
any Farrington Subsidiary has received any notice of cancellation or notice of a
material  amendment of any such insurance  policy or bond and neither of them is
in default in any material  respect under such policy or bond,  and, to the best
of  Farrington's  knowledge,  no coverage  thereunder is being  disputed and all
material claims thereunder have been filed in a timely fashion.

                  3.15.  Minute Books.  The minute books of  Farrington  and its
Subsidiary  contain  accurate records of all meetings and other corporate action
held of  their  respective  stockholders  and  Boards  of  Directors  (including
committees of their respective Boards of Directors).

                  3.16.  Environmental  Matters.  Except  as  disclosed  in  the
Farrington Disclosure Schedule, neither Farrington nor any Farrington Subsidiary
has  received  any  written  notice,  citation,   claim,  assessment,   proposed
assessment or demand for abatement  alleging that  Farrington or any  Farrington
Subsidiary (either directly or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as collateral
for  outstanding  loans) is  responsible  for the  correction or clean-up of any
condition material to the business, operations, assets or financial condition of
Farrington or its Subsidiary.  Except as disclosed in the Farrington  Disclosure
Schedule,  Farrington has no knowledge that any toxic or hazardous substances or
materials  have been emitted,  generated,  disposed of or stored on any property
owned or leased by  Farrington or any  Farrington  Subsidiary in any manner that
violates  or,  after  the  lapse of time may  violate,  any  presently  existing
federal,  state or local  law or  regulation  governing  or  pertaining  to such
substances and materials.

                  3.17.  Reserves.  The  allowance  for possible  loan and lease
losses in the September 30, 1996 Farrington Financial Statements was adequate at
the time  based  upon past loan loss  experiences  and  potential  losses in the
portfolio at the time to cover all known or reasonably anticipated loan losses.

                  3.18.  Disclosure.  There are no material facts concerning the
business, operations, assets or financial condition of Farrington which have not
been  disclosed  to United  which  would have a material  adverse  effect on the
business,  operations or financial condition of Farrington. No representation or
warranty  contained  in  Article  III of  this  Agreement  contains  any  untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein not misleading.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                                OF UNB AND UNITED

                  References  herein to the "United  Disclosure  Schedule" shall
mean all of the  disclosure  schedules  required by this Article IV, dated as of
the date hereof and  referenced  to the  specific  sections and  subsections  of
Article IV of this  Agreement,  which have been  delivered on the date hereof by
United to  Farrington.  United hereby  represents  and warrants to Farrington as
follows:

                  4.1.  Corporate Organization.

                  (a)  United  is  a  corporation  duly  organized  and  validly
existing and in good standing under the laws of the State of New Jersey.  United
has the corporate  power and authority to own or lease all of its properties and
assets and to carry on its  business as it is 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  properties  and assets owned or leased by it makes
such  licensing or  qualification  necessary,  except where the failure to be so
licensed, qualified or in good standing would not have a material adverse effect
on the business,  operations,  assets or financial condition of United or any of
its Subsidiaries (defined below). United is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHCA").

                  (b) Each of the  Subsidiaries  of  United  are  listed  in the
United  Disclosure  Schedule.  The term "Subsidiary" when used in this Agreement
with  reference to United means any  corporation,  joint  venture,  association,
partnership,  trust or other entity in which United has, directly or indirectly,
at least a 50 percent interest or acts as a general partner.  Each Subsidiary of
United is duly  organized and validly  existing and in good  standing  under the
laws of the  jurisdiction  of its  incorporation.  UNB is a national  bank whose
deposits  are  insured  by the Bank  Insurance  Fund of the FDIC to the  fullest
extent  permitted by law. Each  Subsidiary of United has the corporate power and
authority to own or lease all of its  properties  and assets and to carry on its
business as it is 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  properties  and
assets owned or leased by it makes such  licensing or  qualification  necessary,
except where the failure to be so licensed,  qualified or in good standing would
not have a  material  adverse  effect  on the  business,  operations,  assets or
financial condition of United or any of its Subsidiaries.  The United Disclosure
Schedule sets forth true and complete  copies of the Articles of Association and
Bylaws of UNB as in effect on the date hereof.

                  4.2.  Capitalization.  The authorized  capital stock of United
consists  of  5,000,000  shares of United  Common  Stock and  300,000  shares of
preferred  stock  ("Preferred  Stock").  As of September  30,  1996,  there were
3,854,964 (including the September Stock Dividend) shares of United Common Stock
issued and  outstanding,  including  43,995  treasury shares and 5,623 shares of
restricted stock granted under the United National Bancorp Long-Term Stock Based
Incentive  Plan (the "United Option Plan") and there were no shares of Preferred
Stock outstanding.  Since such date, and from time to time hereafter, United may
repurchase  shares  of its  Common  Stock.  Since  September  30,  1996,  to and
including  the date of this  Agreement,  no  additional  shares of United Common
Stock have been issued except in connection with the exercise of options granted
under the United  Stock  Option  Plan or grants of  restricted  stock  under the
United  Option Plan.  As of September  30,  1996,  except for 145,231  shares of
United Common Stock issuable upon exercise of outstanding  stock options granted
pursuant to the United Option Plan and the  Non-Employee  Director  Stock Option
Plan (the "United Director Option Plan"),  there were no shares of United Common
Stock issuable upon the exercise of outstanding stock options or otherwise.  All
issued  and  outstanding  shares of United  Common  Stock,  and all  issued  and
outstanding  shares of capital  stock of United's  Subsidiaries,  have been duly
authorized  and  validly  issued,  are  fully  paid,  nonassessable  and free of
preemptive rights, and are free and clear of all liens,  encumbrances,  charges,
restrictions  or  rights  of third  parties.  All of the  outstanding  shares of
capital stock of United's Subsidiaries are owned by United free and clear of any
liens,  encumbrances,  charges,  restrictions or rights of third parties. Except
for the  options  referred  to above under the United  Option  Plan,  the United
Director Option Plan and the September Stock Dividend, neither United nor any of
United's Subsidiaries has or is bound by any outstanding subscriptions, options,
warrants,  calls,  commitments  or agreements  of any character  calling for the
transfer,  purchase  or  issuance  of any shares of  capital  stock of United or
United's  Subsidiaries  or any  securities  representing  the right to otherwise
receive any shares of such capital stock or any securities  convertible  into or
representing  the right to purchase or subscribe for any such shares,  and there
are no agreements or  understandings  with respect to voting of any such shares.
No additional  grants of awards, or exercises of outstanding  awards,  under the
United Option Plan or United Director Option Plan, or exercises of Warrants,  or
repurchases  of  United  Common  Stock,  prior to the  Effective  Time  shall be
required to be disclosed or reported to Farrington  to keep the  representations
in this section true or correct.

                  4.3.  Authority; No Violation.

                  (a) United and UNB have full corporate  power and authority to
execute  and  deliver  this  Agreement  and  to  consummate   the   transactions
contemplated  hereby in  accordance  with the terms  hereof.  The  execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly  approved by the Board of  Directors of United
and UNB.  Except  for the  approval  of  United as a  shareholder  of UNB and as
required by the NASDAQ/NMS listing rules, no other corporate  proceedings on the
part of United and UNB are necessary to consummate the transactions contemplated
hereby.  This  Agreement  has been duly and validly  executed  and  delivered by
United and UNB and constitutes a valid and binding obligation of United and UNB,
enforceable against United and UNB in accordance with its terms.

                  (b) Neither the  execution or delivery of this  Agreement  nor
the  consummation by United and UNB of the transactions  contemplated  hereby in
accordance  with  the  terms  hereof,  will (i)  violate  any  provision  of the
Certificate  of  Incorporation,  Articles  of  Association  or  other  governing
instrument  or Bylaws of United or UNB,  (ii)  assuming  that the  consents  and
approvals  set  forth  below  are duly  obtained,  violate  any  statute,  code,
ordinance,  rule,  regulation,  judgment,  order,  writ,  decree  or  injunction
applicable to United or UNB or any of their respective  properties or assets, or
(iii) violate, conflict with, result in a breach of any provision of, constitute
a default  (or an event  which,  with  notice or lapse of time,  or both,  would
constitute  a default)  under,  result in the  termination  of,  accelerate  the
performance  required  by,  or  result in the  creation  of any  lien,  security
interest,  charge or other  encumbrance  upon any of the properties or assets of
United or UNB under,  any of the terms,  conditions  or  provisions of any note,
bond, mortgage,  indenture,  deed of trust, license,  lease,  agreement or other
instrument or  obligation to which United or UNB is a party,  or by which United
or UNB or any of their  properties  or assets may be bound or affected,  except,
with respect to (ii) and (iii) above,  such as individually and in the aggregate
will not have a material adverse effect on the business,  operations,  assets or
financial condition of United and United's Subsidiaries on a consolidated basis,
or the ability of United and UNB to  consummate  the  transactions  contemplated
hereby. Except for consents and approvals of or filings or registrations with or
notices to the OCC,  the  Commissioner,  the SEC,  applicable  state  securities
bureaus or  commissions,  and the National  Association  of Securities  Dealers,
Inc., no consents or approvals of or filings or registrations with or notices to
any third  party or any public  body or  authority  are  necessary  on behalf of
United or UNB in connection with (a) the execution and delivery by United or UNB
of this Agreement and (b) the consummation by United of the Merger and the other
transactions  contemplated hereby. To the best of United's knowledge, no fact or
condition  exists which United has reason to believe will prevent it or UNB from
obtaining  the  aforementioned  consents  and  approvals  within  the time frame
contemplated hereby.

                  4.4.  Financial Statements.

                  (a) United has  previously  delivered to Farrington  copies of
the consolidated  statements of financial condition of United as of December 31,
1993, 1994 and 1995, the related consolidated  statements of income,  changes in
stockholders' equity and of cash flows for the periods ended December 31 in each
of the three fiscal years 1993 through  1995,  in each case  accompanied  by the
audit  report  of  KPMG  Peat  Marwick,  LLP,  the  current  independent  public
accountants  with  respect to United or Arthur  Andersen,  LLP,  previously  the
independent  public  accountants  with  respect  to  United,  and the  unaudited
consolidated  statements  of  condition  of United as of March 31,  June 30, and
September 30, 1996, and the related unaudited consolidated statements of income,
changes in  stockholders'  equity and cash flows for the three months then ended
as reported in United's Quarterly Reports on Form 10-Q, filed with the SEC under
the   Securities  and  Exchange  Act  of  1934,  as  amended  (the  "1934  Act")
(collectively,   the  "United  Financial  Statements").   The  United  Financial
Statements  (including the related notes), have been prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved  (except  as  approved  by  such  independent  public  accountants  and
disclosed  therein),  and fairly present the consolidated  financial position of
United and its  consolidated  subsidiaries as of the respective  dates set forth
therein,  and  the  related  consolidated   statements  of  income,  changes  in
stockholders'  equity and of cash flows  (including  the  related  notes,  where
applicable)  fairly  present  the  results of the  consolidated  operations  and
changes in stockholders' equity and of cash flows of United and its consolidated
subsidiaries for the respective fiscal periods set forth therein.

                  (b) The books and  records  of United  have been and are being
maintained  in  material   compliance  with  applicable   legal  and  accounting
requirements, and reflect only actual transactions.

                  (c)  Except  as and  to the  extent  reflected,  disclosed  or
reserved  against  in the  United  Financial  Statements  (including  the  notes
thereto),  as of September 30, 1996 neither  United nor any of its  Subsidiaries
had or has, as the case may be, any obligation or liability,  whether  absolute,
accrued,   contingent  or  otherwise,   which  are  material  to  the  business,
operations,  assets or financial condition of United or any of its Subsidiaries.
Since  September  30,  1996,  neither  United nor any of its  Subsidiaries  have
incurred  any  liabilities,  except  in the  ordinary  course  of  business  and
consistent with prudent banking practice.

                  4.5.  Brokerage and Other Fees. Neither United nor UNB nor any
of their  respective  directors or officers has employed any broker or finder or
incurred any  liability  for any  broker's or finder's  fees or  commissions  in
connection with any of the transactions contemplated by this Agreement.

                  4.6. Absence of Certain Changes or Events.  There has not been
any material  adverse  change in the business,  operations,  assets or financial
condition  of United and United's  Subsidiaries  on a  consolidated  basis since
September 30, 1996 and to the best of United's  knowledge,  no fact or condition
exists  which United  believes  will cause or is likely to cause such a material
adverse change in the future.

                  4.7. United Information.  The information  relating to United,
this  Agreement  and  the   transactions   contemplated   hereby  in  the  Proxy
Statement/Prospectus  (as defined in Section 5.6(a)  hereof),  as of the date of
the mailing of the Proxy Statement/Prospectus,  and up to and including the date
of  the   meeting   of   stockholders   of   Farrington   to  which  such  Proxy
Statement/Prospectus  relates,  will  not  contain  any  untrue  statement  of a
material fact or omit to state a material fact  necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.   The  information  relating  to  United,  this  Agreement  and  the
transactions  contemplated  hereby in the Registration  Statement (as defined in
Section 5.6(a) hereof),  as of the date of the filing thereof,  will not contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading.

                  4.8.  Capital  Adequacy.  At the Effective Time,  after taking
into effect the Merger and the transactions contemplated hereunder,  United will
have   sufficient   capital  to  satisfy  all  applicable   regulatory   capital
requirements.

                  4.9.  United Common Stock.  At the Effective  Time, the United
Common Stock to be issued  pursuant to the terms of Section 2.1, when so issued,
shall be duly authorized,  validly issued, fully paid, and non-assessable,  free
of  preemptive  rights  and  free  and  clear  of  all  liens,  encumbrances  or
restrictions created by or through United.

                  4.10.  Legal  Proceedings.  Except as  disclosed in the United
Disclosure  Schedule,  neither United nor any of its  Subsidiaries is a party to
any,  and there are no material  pending or, to the best of United's  knowledge,
threatened,  legal,  administrative,  arbitral  or  other  proceedings,  claims,
actions or  governmental  investigations  of any nature against United or any of
its  Subsidiaries  which,  if  decided  adversely  to  United,  or  any  of  its
Subsidiaries,  would have a material adverse effect on the business, operations,
assets or financial  condition of United and its  Subsidiaries on a consolidated
basis. Except as disclosed in the United Disclosure Schedule, neither United nor
any of United's Subsidiaries is a party to any order, judgment or decree entered
against United or any such  Subsidiary in any lawsuit or proceeding  which would
have a material adverse affect on the business,  operations, assets or financial
condition of United and its Subsidiaries on a consolidated basis.

                  4.11.   Taxes  and  Tax  Returns.   United  and  each  of  its
Subsidiaries  has duly  filed (and  until the  Effective  Time will so file) all
Returns  required to be filed by it in respect of any  federal,  state and local
taxes (including  withholding  taxes,  penalties or other payments required) and
has duly paid (and until the Effective  Time will so pay) all such taxes due and
payable,  other than taxes or other  charges  which are being  contested in good
faith.  United  and each of its  Subsidiaries  have  established  (and until the
Effective  Time  will  establish)  on its  books and  records  reserves  that it
reasonably believes are adequate for the payment of all federal, state and local
taxes not yet due and  payable,  but  anticipated  to be  incurred in respect of
United and its Subsidiaries through the Effective Time. No deficiencies exist or
have been asserted  based upon the federal income tax returns of United and UNB.
To the best knowledge of United,  there are no audits or other administrative or
court  proceedings  pending,  or claims asserted,  for taxes or assessments upon
United or any of its Subsidiaries.

                  4.12.  Employee Benefit Plans.

                  (a) United and its  Subsidiaries  maintain  or  contribute  to
certain "employee  pension benefit plans" (the "United Pension Plans"),  as such
term is defined in Section 3 of ERISA, and "employee welfare benefit plans" (the
"United Welfare  Plans"),  as such term is defined in Section 3 of ERISA.  Since
September 2, 1974,  neither United nor its Subsidiaries  have contributed to any
"Multiemployer Plan", as such term is defined in Section 3(37) of ERISA.

                  (b) Each of the  United  Pension  Plans and each of the United
Welfare Plans has been operated in compliance in all material  respects with the
provisions  of ERISA,  the Code,  all  regulations,  rulings  and  announcements
promulgated or issued thereunder, and all other applicable governmental laws and
regulations.

                  4.13.  Reports.

                  (a)  Each  communication  mailed  by  United  to  all  of  its
stockholders  since  January  1, 1993,  and each  annual,  quarterly  or special
report,  and proxy statement as of its date,  complied in all material  respects
with all applicable  statutes,  rules and regulations enforced or promulgated by
the applicable  regulatory  agency and did not contain any untrue statement of a
material fact or omit to state any material  fact required to be stated  therein
or  necessary  in order to make the  statements  made  therein,  in light of the
circumstances  under  which  they  were  made,  not  misleading;  provided  that
disclosures  as of a later date shall be deemed to modify  disclosures  as of an
earlier date.

                  (b) United  and UNB have,  since  January 1, 1993,  duly filed
with the SEC, OCC and the FRB in correct form the monthly,  quarterly and annual
reports required to be filed under applicable laws and regulations,  and United,
upon request, promptly will deliver or make available to Farrington accurate and
complete copies of such reports.

                  4.14.   Compliance   with   Applicable  Law.  United  and  its
Subsidiaries hold all material licenses,  franchises, permits and authorizations
necessary  for the  lawful  conduct  of their  respective  businesses  under and
pursuant  to each,  and has  complied  with and is not in default in any respect
under any,  applicable law,  statute,  order,  rule,  regulation,  policy and/or
guideline  of  any  federal,  state  or  local  governmental  authority  or  the
NASDAQ/NMS  relating  to United  and its  Subsidiaries  (other  than  where such
default or  non-compliance  will not result in a material  adverse effect on the
business,   operations,   assets  or  financial  condition  of  United  and  its
Subsidiaries  on a  consolidated  basis),  and  neither  United  nor  any of its
Subsidiaries  has  received  notice  of  violation  of,  nor does it know of any
violations  (other than  violations  which will not,  alone or in the aggregate,
result in a  material  adverse  effect  on the  business  operations,  assets or
financial  condition of United and its Subsidiaries on a consolidated basis) of,
any of the above.

                  4.15.  Properties and Insurance.

                  (a) United  and its  Subsidiaries  have good and,  as to owned
real property,  marketable title to all material assets and properties,  whether
real or personal,  tangible or  intangible,  reflected in United's  consolidated
balance sheet as of December 31, 1995, or owned and acquired  subsequent thereto
(except to the extent that such assets and properties  have been disposed of for
fair value in the ordinary  course of business since December 31, 1995).  United
and its Subsidiaries as lessees have the right under valid and subsisting leases
to occupy, use, possess and control in all material respects,  all real property
leased by them as presently occupied, used, possessed and controlled by them.

                  (b) The business  operations and all insurable  properties and
assets of United and its  Subsidiaries are insured for their benefit against all
risks which,  in the  reasonable  judgment of the management of United should be
insured against,  with such deductibles and against such risks and losses as are
in the opinion of the management of United adequate for the business  engaged in
by United and its Subsidiaries.  As of the date hereof,  United has not received
any notice of cancellation of or material amendment to any such insurance policy
or bond and is not in default in any material  respect  under any such policy or
bond,  and,  to the  best of its  knowledge,  no  coverage  thereunder  is being
disputed and all material claims thereunder have been filed in a timely fashion.

                  4.16.  Minute  Books.  The  minute  books  of  United  and its
Subsidiaries contain accurate records of all meetings and other corporate action
held of  their  respective  stockholders  and  Boards  of  Directors  (including
committees of their respective Boards of Directors).

                  4.17. Environmental Matters. Except as disclosed in the United
Disclosure Schedule, neither United nor any of its Subsidiaries has received any
written notice, citation,  claim, assessment,  proposed assessment or demand for
abatement alleging that United or any of its Subsidiaries (either directly or as
a  successor-in-interest  in  connection  with the  enforcement  of  remedies to
realize the value of properties  serving as collateral for outstanding loans) is
responsible  for the  correction  or clean-up of any  condition  material to the
business,   operations,   assets  or  financial   condition  of  United  or  its
Subsidiaries.  Except as disclosed in the United Disclosure Schedule, United has
no knowledge  that any toxic or  hazardous  substances  or  materials  have been
emitted,  generated,  disposed of or stored on any  property  owned or leased by
United or any of its  Subsidiaries  in any manner that  violates  or,  after the
lapse of time may violate, any presently existing federal, state or local law or
regulation  governing  or  pertaining  to such  substances  and  materials,  the
violation  of which  would  have a  material  adverse  effect  on the  business,
operations,  assets or financial  condition of United and its  Subsidiaries on a
consolidated basis.

                  4.18.  Reserves.  The  allowance  for possible  loan and lease
losses in the September 30, 1996 United Financial  Statements was adequate based
at the time  upon  past  loan  loss  experiences  and  potential  losses  in the
portfolio at the time to cover all known or reasonably anticipated loan losses.

                  4.19. Disclosures.  Except for other acquisition  transactions
which have not yet been  publicly  disclosed  by United,  there are no  material
facts  concerning  the business,  operations,  assets or financial  condition of
United which would have a material adverse effect on the business, operations or
financial  condition  of United  which  have not been  disclosed  to  Farrington
directly or  indirectly by access to any filing by United under the 1934 Act. No
representation  or warranty  contained in Article IV of this Agreement  contains
any  untrue  statement  of a  material  fact or omits to state a  material  fact
necessary to make the statements herein not misleading.

                                    ARTICLE V

                            COVENANTS OF THE PARTIES

                  5.1. Conduct of the Business of Farrington.  During the period
from the date of this Agreement to the Effective Time,  Farrington shall conduct
its business and engage in transactions permitted hereunder only in the ordinary
course and  consistent  with  prudent  banking  practice,  except with the prior
written  consent of United,  which  consent will not be  unreasonably  withheld.
Farrington  also  shall  use its  best  efforts  to (i)  preserve  its  business
organization  intact,  (ii) keep available to itself the present services of its
employees and (iii) preserve for itself and United the goodwill of its customers
and others with whom business  relationships  exist,  in each case provided that
Farrington shall not be required to take any  unreasonable or extraordinary  act
or any action which would conflict with any other term of this Agreement.

                  5.2.  Negative  Covenants and Dividend  Covenants.  Farrington
agrees  that from the date hereof to the  Effective  Time,  except as  otherwise
approved by United in writing,  or as permitted or required by this Agreement or
as contained in the Farrington Disclosure Schedule, it will not:

                  (a) change any provision of its  Certificate of  Incorporation
or Bylaws or any similar governing documents;

                  (b)  change  the  number of shares of its  authorized  capital
stock or issue any more shares of  Farrington  Common Stock (other than pursuant
to the exercise of options  granted under the Farrington  Option Plans as of the
date hereof) or other capital stock or issue or grant any option, warrant, call,
commitment,  subscription,  right to  purchase  or  agreement  of any  character
relating  to the  authorized  or  issued  capital  stock  of  Farrington  or any
securities  convertible  into  shares  of  such  stock,  or  split,  combine  or
reclassify  any shares of its capital  stock,  or declare,  set aside or pay any
dividend,  or other  distribution  (whether  in cash,  stock or  property or any
combination  thereof) in respect of its capital  stock,  or redeem or  otherwise
acquire any shares of such capital stock;

                  (c)  grant  any  severance  or  termination  pay  (other  than
pursuant to policies of Farrington in effect on the date hereof and disclosed to
United  in the  Farrington  Disclosure  Schedule  or as  agreed  to by United in
writing) to, or enter into or amend any  employment  agreement  with, any of its
directors,  officers  or  employees;  adopt  any new  employee  benefit  plan or
arrangement of any type or amend any such existing  benefit plan or arrangement;
or award any increase in compensation or benefits to its directors,  officers or
employees  except with respect to salary  increases and bonuses for employees in
the ordinary course of business and consistent with past practices and policies;

                  (d) sell or  dispose  of any  substantial  amount of assets or
incur any significant  liabilities other than in the ordinary course of business
consistent with past practices and policies;

                  (e) make any  capital  expenditures  outside  of the  ordinary
course of business  other than pursuant to binding  commitments  existing on the
date hereof and other than expenditures necessary to maintain existing assets in
good repair;

                  (f) file any applications or make any contract with respect to
branching or site location or relocation;

                  (g) agree to acquire in any manner  whatsoever  (other than to
realize upon collateral for a defaulted loan) any business or entity;

                  (h) make any  material  change in its  accounting  methods  or
practices,  other than changes  required in accordance  with generally  accepted
accounting principles; or

                  (i)  agree to do any of the foregoing.

                  5.3.  No  Solicitation.  Farrington  shall  not,  directly  or
indirectly,  encourage or solicit or hold  discussions or negotiations  with, or
provide any  information  to, any person,  entity or group  (other than  United)
concerning  any merger or sale of shares of capital stock or sale of substantial
assets or  liabilities  not in the  ordinary  course  of  business,  or  similar
transactions    involving    Farrington    (an    "Acquisition    Transaction").
Notwithstanding  the  foregoing,  Farrington  may (i) enter into  discussions or
negotiations or provide  information in connection with an unsolicited  possible
Acquisition  Transaction  if  the  Board  of  Directors  of  Farrington,   after
consulting with counsel, determines that such discussions or negotiations should
be  commenced  in  the  exercise  of  its  fiduciary  responsibilities  or  such
information   should   be   furnished   in  the   exercise   of  its   fiduciary
responsibilities;  and (ii) respond to inquiries  from its  shareholders  in the
ordinary course of business.  Farrington will immediately  communicate to United
the terms of any  proposal,  whether  written or oral,  which it may  receive in
respect  of  any  Acquisition  Transaction  and  the  fact  that  it  is  having
discussions or negotiations with, or supplying  information to, a third party in
connection with a possible Acquisition Transaction.

                  5.4. Current  Information.  During the period from the date of
this Agreement to the Effective Time, Farrington will, at the request of United,
cause one or more of its  designated  representatives  to confer on a monthly or
more  frequent  basis  with  representatives  of United  regarding  Farrington's
business,  operations,  properties,  assets and financial  condition and matters
relating to the  completion of the  transactions  contemplated  herein.  Without
limiting  the  foregoing,  after  granting  any loan or  extension  of credit by
renewal or otherwise, Farrington will send to United a description (i.e., a copy
of the  loan  documents)  for each new loan or  extension  of  credit,  and each
renewal of an existing  loan or  extension of credit,  in excess of $50,000.  As
soon as reasonably available, but in no event more than 45 days after the end of
each fiscal  quarter  (other than the last fiscal  quarter of each fiscal  year)
ending  after the date of this  Agreement,  Farrington  will  deliver  to United
Farrington's  call  reports  filed  with the FDIC and  United  will  deliver  to
Farrington  United's quarterly reports on Form 10-Q, as filed with the SEC under
the 1934 Act. As soon as reasonably available, but in no event more than 90 days
after the end of each fiscal year,  Farrington will deliver to United and United
will deliver to Farrington their respective Annual Reports.

                  5.5.  Access to Properties and Records; Confidentiality.

                  (a)  Farrington   shall  permit  United  and  its  agents  and
representatives,  including, without limitation, officers, directors, employees,
attorneys, accountants and financial advisors (collectively, "Representatives"),
and United and UNB shall permit  Farrington and its  Representatives  reasonable
access to their respective properties,  and shall disclose and make available to
United and its  Representatives  or Farrington and its  Representatives,  as the
case may be, all books,  papers and records relating to their respective assets,
stock ownership, properties, operations, obligations and liabilities, including,
but not limited to, all books of account  (including  the general  ledger),  tax
records, minute books of directors' and stockholders'  meetings,  organizational
documents,   bylaws,  material  contracts  and  agreements,   filings  with  any
regulatory authority,  independent auditors' work papers (subject to the receipt
by such auditors of a standard access representation letter),  litigation files,
plans  affecting  employees,  and any other business  activities or prospects in
which United and its  representatives or Farrington and its  representatives may
have a reasonable interest. Neither party shall be required to provide access to
or to disclose  information  where such access or  disclosure  would  violate or
prejudice  the  rights  of any  customer  or would  contravene  any  law,  rule,
regulation, order or judgment. The parties will use their best efforts to obtain
waivers of any such  restriction  and in any event make  appropriate  substitute
disclosure  arrangements  under  circumstances  in which the restrictions of the
preceding sentence apply. Farrington acknowledges that United may be involved in
discussions  concerning  other  potential  acquisitions  and United shall not be
obligated to disclose such information to Farrington  except as such information
is publicly disclosed by United.

                  (b) All information furnished by the parties hereto previously
in  connection  with  transactions  contemplated  by this  Agreement or pursuant
hereto  shall  be  used  solely  for  the  purpose  of  evaluating   the  Merger
contemplated  hereby  and shall be  treated  as the sole  property  of the party
delivering the information until consummation of the Merger  contemplated hereby
and, if such Merger shall not occur, each party and each party's Representatives
shall  return to the other party all  documents or other  materials  containing,
reflecting or referring to such information,  will not retain any copies of such
information,  shall  keep  confidential  all such  information,  and  shall  not
directly or indirectly use such  information  for any  competitive or commercial
purposes or any other purpose not expressing permitted hereby. Each party hereto
shall inform its Representatives of the terms of this Section 5.5. Any breach of
this Section 5.5 by a  Representative  of a party hereto shall  conclusively  be
deemed  to be a breach  thereof  by such  party.  In the event  that the  Merger
contemplated  hereby  does  not  occur  or this  Agreement  is  terminated,  all
documents,  notes  and  other  writings  prepared  by  a  party  hereto  or  its
Representatives based on information furnished by the other party, and all other
documents and records obtained from another party hereto in connection herewith,
shall  be  promptly   destroyed.   The  obligation  to  keep  such   information
confidential shall continue for five (5) years from the date the proposed Merger
is  abandoned  but shall not  apply to (i) any  information  which (A) the party
receiving the  information  can establish by convincing  evidence was already in
its possession prior to the disclosure thereof to it by the other party; (B) was
then generally known to the public other than as a result of a disclosure by any
party hereto or its  Representative;  (C) became known to the public  through no
fault of the party receiving such information; or (D) was disclosed to the party
receiving  such  information  by a third  party  not bound by an  obligation  of
confidentiality;  or  (ii)  disclosures  pursuant  to  a  legal,  regulatory  or
examination  requirement or in accordance  with an order of a court of competent
jurisdiction,  provided  that in the event of any  disclosure  required  by this
clause (ii), the disclosing party will give at least ten (10) days prior written
notice of such  disclosure  to the other parties and shall not disclose any such
information  without an opinion of counsel  supporting  its  position  that such
information must be disclosed.

                  (c) In addition to all other remedies that may be available to
any party hereto in connection with a breach by any other party hereto of its or
its Representative's  obligations hereunder, each party hereto shall be entitled
to specific  performance and injunctive and other equitable  relief.  Each party
hereto waives,  and agrees to use its best efforts to cause its  Representatives
to waive,  any  requirement to secure or post a bond in connection with any such
relief.

                  (d) Without limiting the foregoing,  United and UNB,  directly
or through agents, for a period of 30 calendar days (the "Due Diligence Period")
following  the date of this  Agreement,  shall  have the  right to  perform  due
diligence on Farrington and a complete  acquisition audit of Farrington.  Within
the Due  Diligence  Period,  United  shall  have  the  right to  terminate  this
Agreement  if the due  diligence  review by United or any  Disclosure  Schedules
provided by Farrington after the date hereof causes United to reach a conclusion
about  the  financial  condition,   business,  assets  or  the  quality  of  the
representations and warranties of Farrington, adverse from conclusions about the
same matters which United's  senior  executives held at the time United executed
this Agreement. 122513A01110696
                  5.6.  Regulatory Matters.

                  (a) For the  purposes  of holding  the  meeting of  Farrington
stockholders and registering or otherwise  qualifying  under applicable  federal
and state  securities laws United Common Stock to be issued to Record Holders in
connection  with  the  Merger,   the  parties  hereto  shall  cooperate  in  the
preparation and filing by United of a Registration  Statement with the SEC which
shall include an  appropriate  proxy  statement and  prospectus  satisfying  all
applicable  requirements  of applicable  state and federal  laws,  including the
Securities Act of 1933, as amended (the "1933 Act"), the 1934 Act and applicable
state  securities  laws and the rules and  regulations  thereunder.  (Such proxy
statement and  prospectus  in the form mailed by  Farrington  to the  Farrington
shareholders and optionees, together with any and all amendments and supplements
thereto,  is herein  referred  to as the  "Proxy  Statement/Prospectus"  and the
various  documents  to be filed  by  United  under  the 1933 Act with the SEC to
register  for sale the United  Common  Stock to be issued to Record  Holders and
optionees, including the Proxy Statement/Prospectus, and the Proxy Statement for
United  stockholders,  if necessary,  together with any and all  amendments  and
supplements thereto, are referred to herein as the "Registration Statement").

                  (b) United shall furnish  information  concerning United as is
necessary  in order to  cause  the  Proxy  Statement/Prospectus,  insofar  as it
relates to United, to comply with Section 5.6(a) hereof.  United agrees promptly
to advise Farrington if at any time prior to the Farrington  shareholder meeting
referred  to in Section 5.7 hereof,  any  information  provided by United in the
Proxy  Statement/Prospectus  becomes  incorrect  or  incomplete  in any material
respect and to provide  Farrington with the  information  needed to correct such
inaccuracy or omission.  United shall furnish  Farrington with such supplemental
information    as   may   be   necessary   in   order   to   cause   the   Proxy
Statement/Prospectus,  insofar as it relates to United,  to comply with  Section
5.6(a) after the mailing thereof to Farrington shareholders.

                  (c)  Farrington  shall  furnish  United with such  information
concerning   Farrington   as  is   necessary   in  order  to  cause   the  Proxy
Statement/Prospectus  and  Registration  Statement,  insofar  as it  relates  to
Farrington,  to comply with Section 5.6(a) hereof. Farrington agrees promptly to
advise  United if, at any time  prior to the  Farrington  shareholder's  meeting
referred to in Section 5.7 hereof,  information  provided by  Farrington  in the
Proxy  Statement/Prospectus  becomes  incorrect  or  incomplete  in any material
respect  and to provide  United  with the  information  needed to  correct  such
inaccuracy or omission.  Farrington shall furnish United with such  supplemental
information as may be necessary in order to cause the Proxy Statement/Prospectus
and Registration Statement,  insofar as it relates to Farrington, to comply with
Section 5.6(a) after the mailing thereof to Farrington shareholders.

                  (d) United shall  promptly  make such filings as are necessary
in connection with the offering of the United Common Stock with applicable state
securities agencies and shall use all reasonable efforts to qualify the offering
of the  United  Common  Stock  under  applicable  state  securities  laws at the
earliest  practicable  date.  Farrington shall promptly furnish United with such
information  regarding the Farrington  shareholders as United requires to enable
it to  determine  what  filings are required  hereunder.  Farrington  authorizes
United to utilize in such filings the information concerning Farrington provided
to United in connection with, or contained in, the Proxy Statement/  Prospectus.
United shall furnish  Farrington with drafts of all such filings,  shall provide
Farrington the opportunity to comment thereon, and shall keep Farrington advised
of the status  thereof.  United and Farrington  shall as promptly as practicable
file the Registration Statement containing the Proxy  Statement/Prospectus  with
the SEC and the OCC, and each of United and Farrington shall promptly notify the
other of all  communications,  oral or written,  with the SEC and OCC concerning
the Registration Statement and the Proxy Statement/Prospectus.

                  (e) United shall cause the United Common Stock to be issued in
connection with the Merger to be listed on the NASDAQ/NMS.

                  (f) The parties  hereto will cooperate with each other and use
their  best  efforts  to  prepare  all  necessary  documentation,  to effect all
necessary filings and to obtain all necessary permits,  consents,  approvals and
authorizations  of all  third  parties  and  governmental  bodies  necessary  to
consummate the transactions  contemplated by this Agreement as soon as possible,
including, without limitation, those required by the OCC. The parties shall each
have the right to review in advance and comment on all  information  relating to
the other, as the case may be, which appears in any filing made with, or written
material  submitted to, any third party or governmental  body in connection with
the  transactions  contemplated  by this  Agreement.  United and UNB shall cause
their  application to the OCC to be filed (i) within 60 days of the date hereof,
so long as  Farrington  provides  all  information  necessary  to  complete  the
application  within 45 days of the date hereof, or (ii) within 15 days after all
such  information  is  provided,   if  Farrington  does  not  provide  all  such
information within such 45 day period. United shall provide to Farrington drafts
of all filings and  applications  referred to in this  Section  5.6(f) and shall
give Farrington the opportunity to comment thereon prior to their filing.

                  (g) Each of the parties will promptly  furnish each other with
copies of written  communications  received  by them or any of their  respective
Subsidiaries  from, or delivered by any of the  foregoing  to, any  governmental
body in respect of the transactions contemplated hereby.

                  5.7.  Approval of  Stockholders.  Farrington will (a) take all
steps  reasonably  necessary  duly to call,  give notice of,  convene and hold a
meeting of the stockholders of Farrington as soon as reasonably  practicable for
the purpose of securing the approval by such stockholders of this Agreement, (b)
subject to the qualification  set forth in Section 5.3 hereof,  recommend to the
stockholders  of Farrington the approval of this Agreement and the  transactions
contemplated  hereby  and use  its  best  efforts  to  obtain,  as  promptly  as
practicable,  such  approval,  and (c)  cooperate  and consult  with United with
respect to each of the foregoing matters.  Except as set forth in the Farrington
Disclosure  Schedule,  in  connection  therewith,  it is  anticipated  that each
director of  Farrington  shall vote his or her shares of  Farrington in favor of
the Merger.

                  5.8. Further  Assurances.  Subject to the terms and conditions
herein  provided,  each of the parties  hereto agrees to use its best efforts to
take,  or cause to be taken,  all  actions  and to do, or cause to be done,  all
things  reasonably  necessary,  proper or advisable  under  applicable  laws and
regulations  to satisfy the  conditions  to Closing and to  consummate  and make
effective the transactions  contemplated by this Agreement,  including,  without
limitation,  using  reasonable  efforts to lift or  rescind  any  injunction  or
restraining order or other order adversely  affecting the ability of the parties
to consummate the transactions contemplated by this Agreement and using its best
efforts  to prevent  the breach of any  representation,  warranty,  covenant  or
agreement  of such party  contained  or  referred  to in this  Agreement  and to
promptly remedy the same.  Nothing in this section shall be construed to require
any party to participate in any  threatened or actual legal,  administrative  or
other proceedings (other than proceedings, actions or investigations to which it
is otherwise a party or subject or  threatened to be made a party or subject) in
connection with consummation of the transactions  contemplated by this Agreement
unless such party shall consent in advance and in writing to such  participation
and the other party agrees to reimburse and indemnify such party for and against
any and all costs and damages related thereto.

                  5.9. Public Announcements.  The parties hereto shall cooperate
with each other in the  development  and  distribution  of all news releases and
other  public  disclosures  with  respect  to  this  Agreement  or  any  of  the
transactions  contemplated hereby, except as may be otherwise required by law or
regulation or as to which the party releasing such information has used its best
efforts to discuss with the other party in advance.

                  5.10. Failure to Fulfill Conditions.  In the event that United
or  Farrington  determines  that  a  material  condition  to its  obligation  to
consummate the transactions  contemplated hereby cannot be fulfilled on or prior
to August 1, 1997, and that it will not waive that  condition,  it will promptly
notify the other party.  Except for any acquisition or merger discussions United
may enter into with other parties,  Farrington  and United will promptly  inform
the other of any facts  applicable  to Farrington  or United,  respectively,  or
their respective  directors,  officers or Subsidiaries,  that would be likely to
prevent or materially delay approval of the Merger by any governmental authority
or which would otherwise prevent or materially delay completion of the Merger.

                  5.11.  Disclosure Supplements.

                  (a)  Farrington  has delivered to United as of the date hereof
certain items which  presently  constitute the Farrington  Disclosure  Schedule.
Farrington  shall  have  the  right  to  provide   supplements,   additions  and
corrections to the Farrington  Disclosure  Schedules for a period of 15 calendar
days after the date hereof and such  supplements  and  additions or  corrections
provided  within that 15-day period shall be deemed to have been provided on the
date hereof and to qualify the  representations  and warranties of Farrington as
of such date.  However,  during the Due Diligence Period,  United shall have the
right, as hereafter  provided,  to exercise its termination right based upon the
supplements, additions and corrections so provided.

                  (b) In addition to Farrington's rights during the first 15-day
period under  Section  5.11(a)  above,  from time to time prior to the Effective
Time, each party hereto will promptly  supplement or amend (by written notice to
the other) its respective  Disclosure  Schedules  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 Schedules or which is necessary to correct any  information in
such Schedules which has been rendered materially  inaccurate  thereby.  For the
purpose of determining  satisfaction  of the conditions set forth in Article VI,
no supplement or amendment to such Schedules  shall correct or cure any warranty
which was  untrue  when  made,  but  supplements  or  amendments  may be used to
disclose  subsequent  facts  or  events  to  maintain  the  truthfulness  of any
warranty.

                  5.12. Indemnification. United agrees that it will, or if it is
not  permitted  to do so under  applicable  law, it will cause UNB to, after the
Effective Time, and to the extent  permitted by applicable  law,  provide to the
former and then current  directors  and officers of  Farrington  indemnification
equivalent to that provided by the Certificate of  Incorporation  and By-laws of
Farrington  with respect to acts or omissions  occurring  prior to the Effective
Time,  whether asserted prior to or after the Effective Time,  including without
limitation,   the   authorization   of  this  Agreement  and  the   transactions
contemplated  hereby,  for a period of six years from the Effective  Time, or in
the case of matters  occurring  prior to the Effective  Time which have not been
resolved  prior to the sixth  anniversary  of the  Effective  Time,  until  such
matters are finally resolved.  To the extent permitted by applicable law, United
or UNB (as applicable) shall advance expenses to former and current officers and
directors of Farrington in connection with the foregoing indemnification.

                  5.13. Pooling and Tax-Free Reorganization  Treatment.  Neither
United nor  Farrington  shall  intentionally  take,  fail to take or cause to be
taken or not be taken,  any action within its control,  whether  before or after
the  Effective  Time,  which  would  disqualify  the  Merger  as a  "pooling  of
interests" for accounting  purposes or as a "reorganization"  within the meaning
of Section  368(a) of the Code.  United and Farrington  acknowledge  that United
expects the transaction to be accounted for as a "purchase" transaction.

                  5.14.  Affiliates.

                  (a)  Promptly,  but in any event  within two weeks,  after the
execution and delivery of this Agreement, (i) Farrington shall deliver to United
(x) a letter identifying all persons who, to the knowledge of Farrington, may be
deemed  to be  "affiliates"  of  Farrington  under  Rule  145 of the  1933  Act,
including without  limitation all directors and executive officers of Farrington
and (y) a letter  identifying  all persons who, to the knowledge of  Farrington,
may be deemed to be "affiliates" of Farrington as that term is used for purposes
of qualifying for "pooling of interests" accounting  treatment;  and (ii) United
shall identify to Farrington all persons who, to the knowledge of United, may be
deemed  "affiliates"  of United as that term is used for purposes of  qualifying
for "pooling of interests" accounting treatment.

                  (b) Each person who may be deemed an affiliate  of  Farrington
(under either Rule 145 of the 1933 Act or the accounting  treatment rules) shall
execute a letter  substantially  in the form of Schedule 5.14 hereto agreeing to
be bound by the  restrictions  of Rule 145,  as set forth in  Schedule  5.14 and
agreeing  to be bound by the rules  which  permit  the Merger to be treated as a
pooling of interests for accounting  purposes.  In addition,  United shall cause
its  affiliates  (as that term is used for purposes of qualifying for pooling of
interests)  to execute a letter  within two weeks of the date  hereof,  in which
such  persons  agree to be bound by the  rules  which  permit  the  Merger to be
treated as a pooling of interests for accounting treatment.

                  5.15.  Compliance  with  the  Industrial  Site  Recovery  Act.
Farrington,  at its sole cost and expense,  shall obtain prior to the  Effective
Time, either: (a) a Letter of  Non-Applicability  from the New Jersey Department
of  Environmental  Protection  and Energy  ("NJDEPE")  stating  that none of the
facilities  located in New Jersey  owned or  operated  by  Farrington  (each,  a
"Facility") is an "industrial  establishment," as such term is defined under the
Industrial Site Recovery Act ("ISRA"); (b) a Remediation Agreement issued by the
NJDEPE  pursuant  to  ISRA  authorizing  the  consummation  of the  transactions
contemplated by this Agreement; or (c) a Negative Declaration approval, Remedial
Action  Workplan  approval,  No  Further  Action  letter  or other  document  or
documents  issued by the NJDEPE advising that the requirements of ISRA have been
satisfied with respect to each Facility subject to ISRA. In the event Farrington
obtains  a  Remediation  Agreement,  Farrington  will  post  or have  posted  an
appropriate  Remediation  Funding  Source or will  have  obtained  the  NJDEPE's
approval to self-guaranty any Remediation Funding Source required under any such
Remediation Agreement.

                  5.16  Farrington  Options.  From and after the Effective Time,
each Farrington Option which is converted to an option to purchase United Common
Stock under Section 2.1(e)(i) shall be administered, operated and interpreted by
a committee  comprised of members of the Board of Directors of United  appointed
by the Board of  Directors  of United.  United  shall  reserve for  issuance the
number of shares of United  Common  Stock  issuable  upon the  exercise  of such
converted  Farrington  Options.  United shall also register  promptly  after the
Effective  Time,  if not  previously  registered  pursuant to the 1933 Act,  the
shares of United  Common  Stock  authorized  for issuance  under the  Farrington
Options so  converted  for the benefit of each person who becomes an employee of
United or UNB,  but shall not be  obligated  to  register  the  shares of United
Common Stock under the 1933 Act for  directors of  Farrington or for persons who
do not become employees of United or UNB.

                  5.17 Employment  Agreement.  Within 30 days of the Closing, in
cancellation  of his  employment  agreement  and as a full release for all other
severance  and  similar  payments  due him from  Farrington  or  claims  against
Farrington,  United shall pay John E.  Pellizzari  an amount equal to 2.99 times
the annual  average of his base salary,  cash  incentive  compensation  and cash
bonus paid to Pellizzari  during the five calendar years  preceding the Closing.
In no event  shall the  amount  paid to  Pellizzari  cause a breach  of  Section
3.9(d).   Prior  to  any  payment,   Pellizzari  or  Farrington   shall  provide
documentation  reasonably  satisfactory  to United with respect to  Pellizzari's
base salary,  cash incentive  compensation  and cash bonus during such five year
period.



                                   ARTICLE VI

                               CLOSING CONDITIONS

                  6.1.   Conditions  of  Each  Party's  Obligations  Under  this
Agreement.  The  respective  obligations  of each party under this  Agreement to
consummate  the  Merger  shall  be  subject  to  the  satisfaction,   or,  where
permissible  under  applicable  law, waiver at or prior to the Effective Time of
the following conditions:

                  (a) Approval of Stockholders; SEC Registration. This Agreement
and the  transactions  contemplated  hereby  shall  have  been  approved  by the
requisite vote of the stockholders of Farrington and, if necessary,  United. The
Registration  Statement shall have been declared  effective by the SEC and shall
not be subject to a stop order or any threatened stop order, and the issuance of
the United  Common  Stock  shall have been  qualified  in every state where such
qualification is required under the applicable state securities laws. The United
Common  Stock to be  issued  in  connection  with the  Merger,  shall  have been
approved for listing on the NASDAQ/NMS.

                  (b)   Regulatory   Filings.   All   necessary   regulatory  or
governmental  approvals and consents  (including without limitation any required
approval of the OCC) required to consummate the transactions contemplated hereby
shall have been obtained  without any term or condition  which would  materially
impair the value of  Farrington,  taken as a whole,  to United.  All  conditions
required  to be  satisfied  prior  to the  Effective  Time by the  terms of such
approvals and consents  shall have been  satisfied;  and all  statutory  waiting
periods in respect thereof shall have expired.

                  (c) Suits and Proceedings.  No order, judgment or decree shall
be  outstanding  against a party  hereto or a third  party  that  would have the
effect  of  preventing  completion  of the  Merger;  no  suit,  action  or other
proceeding shall be pending or threatened by any  governmental  body in which it
is sought to  restrain  or  prohibit  the  Merger  and no suit,  action or other
proceeding shall be pending before any court or governmental  agency in which it
is sought to  restrain  or  prohibit  the  Merger  or obtain  other  substantial
monetary or other relief against one or more parties  hereto in connection  with
this  Agreement and which United or Farrington  determines in good faith,  based
upon the advice of their  respective  counsel,  makes it  inadvisable to proceed
with the Merger  because any such suit,  action or proceeding  has a significant
potential  to be resolved in such a way as to deprive the party  electing not to
proceed of any of the material benefits to it of the Merger.

                  (d) Tax  Free  Exchange.  United  and  Farrington  shall  have
received an opinion,  satisfactory to United and Farrington,  of Pitney, Hardin,
Kipp  &  Szuch,  counsel  for  United,  to  the  effect  that  the  transactions
contemplated  hereby  will  result in a  reorganization  (as  defined in Section
368(a) of the Code),  and  accordingly  no gain or loss will be  recognized  for
federal income tax purposes to United,  Farrington or UNB or to the shareholders
of Farrington  who exchange  their shares of Farrington  for United Common Stock
(except to the extent  that cash is  received  in lieu of  fractional  shares of
United Common Stock).

                  (e) Form S-8 For Stock  Options.  United  shall have agreed to
file, no later than 15 days after the Closing, a Registration  Statement on Form
S-8 to cover any  Farrington  Stock  Options which will continue as United Stock
Options,  except for Farrington Stock Options held by persons who were directors
of Farrington or who will not become employees of United or UNB.

                  6.2.  Conditions  to the  Obligations  of  United  Under  this
Agreement.  The  obligations  of United  under this  Agreement  shall be further
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:

                  (a) Representations and Warranties; Performance of Obligations
of Farrington.  The  representations  and warranties of Farrington  contained in
this Agreement shall be true and correct in all material respects on the Closing
Date as  though  made  on and as of the  Closing  Date.  Farrington  shall  have
performed in all material  respects the  agreements,  covenants and  obligations
necessary to be performed by it prior to the Closing  Date.  With respect to any
representation  or  warranty  which  as of  the  Closing  Date  has  required  a
supplement  or amendment to the  Farrington  Disclosure  Schedule to render such
representation  or  warranty  true  and  correct  as of the  Closing  Date,  the
representation  and warranty  shall be deemed true and correct as of the Closing
Date only if (i) the information contained in the supplement or amendment to the
Disclosure  Schedule related to events occurring following the execution of this
Agreement and (ii) the facts disclosed in such supplement or amendment would not
either  alone,  or together  with any other  supplements  or  amendments  to the
Farrington  Disclosure Schedule,  materially adversely effect the representation
as to which the supplement or amendment relates.

                  (b) Consents.  United shall have received the written consents
of any person whose consent to the transactions  contemplated hereby is required
under the applicable instrument.

                  (c) Opinion of Counsel.  United shall have received an opinion
of counsel to Farrington,  dated the date of the Closing,  in form and substance
reasonably  satisfactory  to United  covering  the matters set forth in Schedule
6.2.

                  (d) Pooling of Interests.  The Merger shall be qualified to be
treated by United as a pooling-of-interests for accounting purposes.

                  (e) Certificates.  Farrington shall have furnished United with
such  certificates  of its officers or others (without  personal  liability) and
such other documents to evidence fulfillment of the conditions set forth in this
Section 6.2 as United may reasonably request.

                  6.3.  Conditions to the  Obligations of Farrington  Under this
Agreement.  The obligations of Farrington  under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:

                  (a) Representations and Warranties; Performance of Obligations
of United.  The  representations  and  warranties  of United  contained  in this
Agreement shall be true and correct in all material respects on the Closing Date
as  though  made  on and as of the  Closing  Date.  United  and UNB  shall  have
performed in all material respects, the agreements, covenants and obligations to
be  performed  by  them  prior  to  the  Closing  Date.   With  respect  to  any
representation  or  warranty  which  as of  the  Closing  Date  has  required  a
supplement  or  amendment  to the  United  Disclosure  Schedule  to render  such
representation  or  warranty  true  and  correct  as of the  Closing  Date,  the
representation  and warranty  shall be deemed true and correct as of the Closing
Date only if (i) the information contained in the supplement or amendment to the
Disclosure  Schedule related to events occurring following the execution of this
Agreement and (ii) the facts disclosed in such supplement or amendment would not
either alone, or together with any other supplements or amendments to the United
Disclosure Schedule,  materially adversely effect the representation as to which
the supplement or amendment relates.

                  (b)  Opinion  of  Counsel  to  United.  Farrington  shall have
received an opinion of counsel to United, dated the date of the Closing, in form
and substance  reasonably  satisfactory to Farrington,  covering the matters set
forth in Schedule 6.3.

                  (c)  Fairness  Opinion.  Farrington  shall  have  received  an
opinion from Finpro as of the date the Proxy  Statement/Prospectus  is mailed to
Farrington's stockholders, to the effect that, in its opinion, the consideration
to be paid to stockholders of Farrington hereunder is fair to such stockholders.

                  (d) Certificates.  United shall have furnished Farrington with
such  certificates  of its officers or others (without  personal  liability) and
such other documents to evidence fulfillment of the conditions set forth in this
Section 6.3 as Farrington may reasonably request.

                                   ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

                  7.1.  Termination.  This Agreement may be terminated  prior to
the Effective  Time,  whether  before or after approval of this Agreement by the
stockholders of Farrington:

                  (a)  By mutual written consent of the parties hereto.

                  (b) By United or Farrington  (i) if the  Effective  Time shall
not have  occurred  on or  prior to  August  1,  1997,  or (ii) if a vote of the
stockholders  of  Farrington  or, if  necessary,  of  United,  is taken and such
stockholders  fail to approve this Agreement at the meeting (or any  adjournment
thereof)  held  for such  purpose,  unless  in each  case  the  failure  of such
occurrence  shall be due to the failure of the party  seeking to terminate  this
Agreement to perform or observe its  agreements set forth herein to be performed
or observed by such party at or before the Effective Time.

                  (c) By United or Farrington  upon written  notice to the other
if  any  application  for  regulatory  or  governmental  approval  necessary  to
consummate the Merger and the other transactions  contemplated hereby shall have
been denied or  withdrawn  at the request or  recommendation  of the  applicable
regulatory agency or governmental  authority or by United upon written notice to
Farrington if any such  application is approved with conditions which materially
impair the value of  Farrington,  taken as a whole,  to United,  unless any such
occurrence  shall be due to the failure of the party  seeking to terminate  this
Agreement to perform or observe its  agreements set forth herein to be performed
or observed by such party at or before the Effective Date.

                  (d) By United if (i) there  shall  have  occurred  a  material
adverse change in the business,  operations,  assets, or financial  condition of
Farrington from that disclosed by Farrington on the date of this  Agreement,  or
(ii)  there was a material  breach in any  representation,  warranty,  covenant,
agreement or obligation of Farrington hereunder.

                  (e) By Farrington, if (i) there shall have occurred a material
adverse  change in the business,  operations,  assets or financial  condition of
United,  UNB or United and its  Subsidiaries  on a consolidated  basis from that
disclosed by United on the date of this Agreement;  or (ii) there was a material
breach in any  representation,  warranty,  covenant,  agreement or obligation of
United hereunder.

                  (f) By  United  or  Farrington  if any  condition  to  Closing
specified under Article VI hereof  applicable to such party cannot reasonably be
met after  giving  the other  party a  reasonable  opportunity  to cure any such
condition.

                  (g) By  United  during  the Due  Diligence  Period  if the due
diligence  review by United or any Disclosure  Schedules  provided by Farrington
after the date hereof  causes  United to reach a conclusion  about the financial
condition, business, assets or the quality of the representations and warranties
of Farrington,  adverse from  conclusions  about the same matters which United's
senior executives held at the time United executed this Agreement; or

                  (h) By  Farrington  if the Average  Closing Price is less than
$28.50 per share. This amount shall be adjusted for any capital change after the
date hereof, as provided in Section 2.1(c).  Provided,  however, that (i) United
shall have the right to increase the Exchange  Ratio to a number  (taken to four
decimal places) such that each Share of Farrington Common Stock is exchanged for
United  Common Stock which has a value,  based upon the Average  Closing  Price,
which is as high as the value  which  would have been  received  if the  Average
Closing  Price had been  $28.50  and (ii) if United  agrees  in  writing  to the
increased  Exchange Ratio, at or before the Closing,  Farrington  shall not have
the right to terminate this Agreement under this paragraph  7.1(h).  In order to
calculate the required  increase in the Exchange Ratio, the Exchange Ratio shall
be  multiplied  by a  fraction,  the  numerator  of  which  is  $28.50  and  the
denominator of which is the Average Closing Price.
122513A01110696
                  7.2.  Effect of  Termination.  In the event of the termination
and  abandonment  of this  Agreement by either United or Farrington  pursuant to
Section 7.1, this  Agreement  (except the  provisions of Section  5.5(b) hereof)
shall  forthwith  become void and have no effect,  without any  liability on the
part of any party or its officers, directors or stockholders.  Nothing contained
herein,  however,  shall  relieve any party from any liability for any breach of
this Agreement.

                  7.3. Amendment. This Agreement may be amended by mutual action
taken by the  parties  hereto  at any time  before  or  after  adoption  of this
Agreement by the  stockholders  of Farrington  but, after any such adoption,  no
amendment  shall be made  which  reduces  or  changes  the amount or form of the
consideration  to be delivered to the  shareholders  of  Farrington  without the
approval of such  stockholders.  This  Agreement may not be amended except by an
instrument in writing signed on behalf of United and Farrington.

                  7.4. Extension;  Waiver. The parties may, at any time prior to
the Effective Time of the Merger, (i) extend the time for the performance of any
of the  obligations  or other acts of the other parties  hereto;  (ii) waive any
inaccuracies in the  representations  and warranties  contained herein or in any
document delivered  pursuant thereto;  or (iii) waive compliance with any of the
agreements  or  conditions  contained  herein.  Any agreement on the part of any
party to any such  extension  or waiver  shall be valid  only if set forth in an
instrument in writing signed on behalf of such party against which the waiver is
sought to be enforced.

                                  ARTICLE VIII

                                  MISCELLANEOUS

                  8.1.  Expenses.  All costs and expenses incurred in connection
with this Agreement and the transactions  contemplated  hereby (including legal,
accounting and investment banking fees and expenses) shall be borne by the party
incurring such costs and expenses.

                  8.2. Notices.  All notices or other  communications  which are
required or permitted  hereunder shall be in writing and sufficient if delivered
personally  or sent by  telecopier  with  confirming  copy  sent the same day by
registered or certified mail, postage prepaid, as follows:

                  If to United:
                           United National Bancorp
                           1130 Route 22 East
                           P.O. Box 6000
                           Bridgewater, New Jersey 08807-0010
                           Attn.:  Thomas C. Gregor, Chairman, President & CEO

                  With a copy to:

                           Pitney, Hardin, Kipp & Szuch
                           200 Campus Drive
                           Florham Park, New Jersey 07932-0950

                           P.O. Box 1945
                           Morristown, New Jersey 07962-1945
                           Attn.:  Ronald H. Janis, Esq.

                  If to Farrington:

                           Farrington Bank
                           630 Georges Road
                           North Brunswick, New Jersey 08902
                           Attn.:  John E. Pellizzari, President & CEO

                  With a copy to:

                           Norris, McLaughlin & Marcus
                           721 Route 202-206
                           P.O. Box 1018
                           Somerville, New Jersey  08876
                           Attn.:  Peter Hutcheon, Esq.

or such other  addresses as shall be furnished in writing by any party,  and any
such notice or  communication  shall be deemed to have been given as of the date
so delivered or telecopied and mailed.

                  8.3. Parties in Interest. This Agreement shall be binding upon
and shall  inure to the  benefit  of the  parties  hereto  and their  respective
successors  and permitted  assigns.  No assignment of this Agreement may be made
except upon the written consent of the other parties hereto. No person or entity
shall be deemed a  third-party  beneficiary  under  this  Agreement,  other than
current and former  directors and officers of Farrington with respect to Section
5.12 hereof.

                  8.4.  Entire  Agreement.  This  Agreement,  which includes the
Disclosure Schedules hereto and the other documents,  agreements and instruments
executed  and  delivered  pursuant  to or in  connection  with  this  Agreement,
contains  the entire  Agreement  between the parties  hereto with respect to the
transactions   contemplated   by  this   Agreement  and   supersedes  all  prior
negotiations,  arrangements  or  understandings,  written or oral,  with respect
thereto.

                  8.5.  Counterparts.  This  Agreement may be executed in one or
more  counterparts,  all of which shall be considered one and the same agreement
and each of which shall be deemed an original.

                  8.6.  Governing Law. This  Agreement  shall be governed by the
laws of the State of New Jersey,  without  giving  effect to the  principles  of
conflicts of laws thereof.

                  8.7.  Descriptive  Headings.  The descriptive headings of this
Agreement are for  convenience  only and shall not control or affect the meaning
or construction of any provision of this Agreement.

                  IN WITNESS  WHEREOF,  United,  UNB and Farrington  have caused
this  Agreement to be executed by their duly  authorized  officers as of the day
and year first above written.

ATTEST:                                  UNITED NATIONAL BANCORP


By: /S/ RALPH L. STRAW, JR.                  /S/ THOMAS C. GREGOR    
    --------------------------------     By: -----------------------
    Ralph L. Straw, Jr., Secretary           Thomas C. Gregor,
                                             Chairman, President and CEO

ATTEST:                                  FARRINGTON BANK


By: /S/ VINCENT J. DINO                      /S/ JOHN E. PELLIZZARI
    --------------------------------     By: -----------------------
    Vincent J. Dino, Secretary               John E. Pellizzari,
                                             President and CEO

ATTEST:                                  UNITED NATIONAL BANK


By: /S/ RALPH L. STRAW, JR.                  /S/ THOMAS C. GREGOR
    --------------------------------     By: -----------------------
    Ralph L. Straw, Jr. Cashier               Thomas C. Gregor,
                                              Chairman, President and CEO



                                      -37-
<PAGE>



                       CERTIFICATE OF FARRINGTON DIRECTORS

                  Reference is made to the Agreement  and Plan of Merger,  dated
November 12, 1996 (the  "Agreement"),  among  United  National  Bancorp,  United
National  Bank and  Farrington  Bank.  Capitalized  terms used  herein  have the
meanings given to them in the Agreement.

                  Each of the following  persons,  being all of the directors of
Farrington  Bank,  agrees to vote or cause to be voted all shares of  Farrington
Common Stock which are held by such person,  or over which such person exercises
full voting control, in favor of the Merger.



/S/ JOSEPH C. ZULLO
- --------------------------
Joseph C. Zullo, M.D.

/S/  CARMELO R. IARIA
- --------------------------
Carmelo R. Iaria

/S/ VINCENT J. DINO
- --------------------------
Vincent J. Dino

/S/ MSGR. FRANCIS J. CRUPI
- --------------------------
Msgr. Francis J. Crupi

/S/ STEPHEN M. DEIXLER
- --------------------------
Stephen M. Deixler

/S/ WILLIAM A. MACARO
- --------------------------
William A. Macaro

/S/ JOHN E. PACKENHAM, JR.
- --------------------------
John E. Packenham, Jr.

/S/ JOHN E. PELLIZZARI
- --------------------------
John E. Pellizzari

/S/ HENRY ROSENZWEIG
- --------------------------
Henry Rosenzweig


                             STOCK OPTION AGREEMENT


                  THIS STOCK OPTION AGREEMENT ("Agreement") dated as of November
12, 1996, is by and between United National  Bancorp,  a New Jersey  corporation
and  registered  bank  holding  company  ("United"),   and  Farrington  Bank,  a
commercial bank organized under the laws of New Jersey ("Farrington").

                                   BACKGROUND

         1. United, United National Bank ("UNB"), and Farrington, as of the date
hereof,  have  executed a definitive  agreement  and plan of merger (the "Merger
Agreement") pursuant to which United will acquire Farrington through a merger of
Farrington with and into UNB (the "Merger").

         2. As an inducement to United to enter into the Merger Agreement and in
consideration for such entry, Farrington desires to grant to United an option to
purchase  authorized  but unissued  shares of common stock of  Farrington  in an
amount and on the terms and conditions hereinafter set forth.

                                    AGREEMENT

         In  consideration  of  the  foregoing  and  the  mutual  covenants  and
agreements set forth herein and in the Merger Agreement,  United and Farrington,
intending to be legally bound hereby, agree:

         1. Grant of Option.  Farrington  hereby  grants to United the option to
purchase 133,000 shares of common stock, $5.00 par value (the "Common Stock") of
Farrington at a price of $14.00 per share (the "Option Price"), on the terms and
conditions set forth herein (the "Option").

         2. Exercise of Option.  This Option shall not be exercisable  until the
occurrence of a Triggering Event (as such term is hereinafter defined).  Upon or
after  the  occurrence  of a  Triggering  Event  (as  such  term is  hereinafter
defined),  United may exercise the Option,  in whole or in part,  at any time or
from time to time.

         The  term  "Triggering  Event"  means  the  occurrence  of  any  of the
following events:

         A person or group (as such terms are defined in the Securities Exchange
Act of 1934,  as amended (the  "Exchange  Act"),  and the rules and  regulations
thereunder) other than United or an affiliate of United:

         a. acquires beneficial ownership (as such term is defined in Rule 13d-3
as promulgated  under the Exchange Act) of at least 10% of the then  outstanding
shares of Common Stock;

         b.  enters  into a letter of intent or an  agreement,  whether  oral or
written,  with Farrington pursuant to which such person or any affiliate of such
person  would (i) merge or  consolidate,  or enter into any similar  transaction
with  Farrington,  (ii)  acquire all or a  significant  portion of the assets or
liabilities of Farrington,  or (iii) acquire beneficial  ownership of securities
representing, or the right to acquire beneficial ownership or to vote securities
representing 10% or more of the then outstanding shares of Common Stock;

         c. makes a filing  with any bank or thrift  regulatory  authorities  or
publicly  announces  a bona fide  proposal  (a  "Proposal")  for (i) any merger,
consolidation  or acquisition of all or a significant  portion of all the assets
or  liabilities  of  Farrington  or any  other  business  combination  involving
Farrington, or (ii) a transaction involving the transfer of beneficial ownership
of securities  representing,  or the right to acquire beneficial ownership or to
vote securities  representing,  10% or more of the outstanding  shares of Common
Stock, and thereafter, if such Proposal has not been Publicly Withdrawn (as such
term  is  hereinafter  defined)  at  least  15  days  prior  to the  meeting  of
stockholders  of  Farrington  called  to  vote  on the  Merger  and  Farrington'
stockholders  fail to approve the Merger by the vote required by applicable  law
at the meeting of stockholders called for such purpose;

         d. makes a bona fide Proposal and thereafter,  but before such Proposal
has been Publicly Withdrawn, Farrington willfully takes any action in any manner
which  would  materially  interfere  with its  desire or ability to enter into a
definitive  Merger  Agreement  or  its  ability  to  consummate  the  Merger  or
materially reduce the value of the transaction to United; or

         e.  which is the holder of more than 5% of the  Common  Stock  solicits
proxies in opposition to approval of the Merger.

         Provided,  however,  that for these  purposes the Board of Directors of
Farrington  shall not be  considered  to be a "group"  merely  because  of their
service on the Board and their  ownership  of Common  Stock and no action by the
estate or heirs of any  director  who  deceases  after  October 1,  1996,  shall
constitute a Triggering Event. The term "Triggering Event" also means the taking
of any direct or indirect action by Farrington or any of its directors, officers
or agents to invite,  encourage or solicit any proposal which has as its purpose
a  tender  offer  for  the  shares  of  Farrington   Common  Stock,   a  merger,
consolidation,  plan of  exchange,  plan of  acquisition  or  reorganization  of
Farrington,  or a sale of shares of Farrington  Common Stock or any  significant
portion of its assets or liabilities.

         The term  "significant  portion" means 10% of the assets or liabilities
of Farrington.

         "Publicly Withdrawn",  for purposes of clauses (c) and (d) above, shall
mean an unconditional bona fide withdrawal of the Proposal coupled with a public
announcement  of no further  interest in pursuing  such Proposal or in acquiring
any controlling influence over Farrington or in soliciting or inducing any other
person (other than United or any affiliate) to do so.

         Notwithstanding  the foregoing,  the Option may not be exercised at any
time (i) in the absence of any required  governmental or regulatory  approval or
consent  necessary  for  Farrington  to issue  the  Option  Shares  or United to
exercise the Option or prior to the  expiration  or  termination  of any waiting
period required by law, or (ii) so long as any injunction or other order, decree
or ruling issued by any federal or state court of competent  jurisdiction  is in
effect which prohibits the sale or delivery of the Option Shares.

         Farrington shall notify United promptly in writing of the occurrence of
any Triggering  Event known to it, it being  understood  that the giving of such
notice by Farrington shall not be a condition to the right of United to exercise
the Option.  Farrington  will not take any action which would have the effect of
preventing or disabling  Farrington  from delivering the Option Shares to United
upon exercise of the Option or otherwise  performing its obligations  under this
Agreement.

         In the event United wishes to exercise the Option,  United shall send a
written notice to Farrington  (the date of which is  hereinafter  referred to as
the "Notice  Date")  specifying  the total number of Option  Shares it wishes to
purchase and a place and date for the closing of such a purchase (a  "Closing");
provided,  however,  that a Closing  shall not occur prior to two days after the
later of receipt of any necessary regulatory approvals and the expiration of any
legally required notice or waiting period, if any.

         3. Payment and Delivery of Certificates.  At any Closing  hereunder (a)
United will make payment to  Farrington  of the  aggregate  price for the Option
Shares so  purchased  by wire  transfer  of  immediately  available  funds to an
account designated by Farrington,  (b) Farrington will deliver to United a stock
certificate  or  certificates  representing  the  number  of  Option  Shares  so
purchased,  free and clear of all liens, claims, charges and encumbrances of any
kind or nature whatsoever  created by or through  Farrington,  registered in the
name of United or its  designee,  in such  denominations  as were  specified  by
United in its notice of  exercise  and,  if  necessary,  bearing a legend as set
forth below and (c) United  shall pay any  transfer  or other taxes  required by
reason of the issuance of the Option Shares so purchased.

         If required under applicable  federal securities laws, a legend will be
placed on each stock  certificate  evidencing  Option Shares issued  pursuant to
this Agreement, which legend will read substantially as follows:

            The  shares of stock  evidenced  by this  certificate  have not been
         registered  for sale under the Securities Act of 1933 (the "1933 Act").
         These  shares may not be sold,  transferred  or  otherwise  disposed of
         unless a registration statement with respect to the sale of such shares
         has been filed  under the 1933 Act and  declared  effective  or, in the
         opinion of counsel reasonably  acceptable to Farrington,  said transfer
         would be exempt from registration  under the provisions of the 1933 Act
         and the regulations promulgated thereunder.

No such  legend  shall be  required  if a  registration  statement  is filed and
declared effective under Section 4 hereof.

         4.  Registration  Rights.  Upon or after the occurrence of a Triggering
Event and upon receipt of a written  request from United,  Farrington  shall, if
necessary for the resale of the Option or the Option  Shares by United,  prepare
and file a registration  statement with the Securities and Exchange  Commission,
the Federal  Deposit  Insurance  Corporation  and any state  securities  bureau,
covering the Option and such number of Option  Shares as United shall specify in
its  request,   and  Farrington  shall  use  its  best  efforts  to  cause  such
registration  statement to be declared  effective in order to permit the sale or
other  disposition  of the Option and the Option  Shares,  provided  that United
shall  in no event  have  the  right  to have  more  than one such  registration
statement become effective.

         In connection with such filing,  Farrington  shall use its best efforts
to cause to be delivered  to United such  certificates,  opinions,  accountant's
letters  and other  documents  as United  shall  reasonably  request  and as are
customarily  provided in connection with  registrations  of securities under the
Securities  Act of 1933,  as amended.  All expenses  incurred by  Farrington  in
complying with the provisions of this Section 4, including  without  limitation,
all registration and filing fees,  printing expenses,  fees and disbursements of
counsel  for  Farrington  and  blue  sky  fees  and  expenses  shall  be paid by
Farrington.  Underwriting  discounts  and  commissions  to brokers  and  dealers
relating to the Option Shares,  fees and  disbursements of counsel to United and
any other expenses incurred by United in connection with such registration shall
be borne by United.  In connection with such filing,  Farrington shall indemnify
and hold harmless  United against any losses,  claims,  damages or  liabilities,
joint or several,  to which United may become  subject,  insofar as such losses,
claims,  damages or liabilities (or actions in respect  thereof) arise out of or
are based upon any untrue  statement or alleged untrue statement of any material
fact  contained  in any  preliminary  or  final  registration  statement  or any
amendment or supplement  thereto, or arise out of a material fact required to be
stated therein or necessary to make the statements  therein not misleading;  and
Farrington  will  reimburse  United  for any legal or other  expense  reasonably
incurred by United in connection with  investigating or defending any such loss,
claim, damage, liability or action; provided,  however, that Farrington will not
be  liable  in any case to the  extent  that any such  loss,  claim,  damage  or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement  of omission or alleged  omission  made in such  preliminary  or final
registration  statement or such amendment or supplement thereto in reliance upon
and in conformity with written  information  furnished by or on behalf of United
specifically for use in the preparation thereof.  United will indemnify and hold
harmless Farrington to the same extent as set forth in the immediately preceding
sentence but only with reference to written information  specifically  furnished
by or on behalf of United  for use in the  preparation  of such  preliminary  or
final registration statement or such amendment or supplement thereto; and United
will reimburse  Farrington for any legal or other expense reasonably incurred by
Farrington in connection with  investigating or defending any such loss,  claim,
damage, liability or action.

         5.  Adjustment  Upon  Changes  in  Capitalization.  In the event of any
change in the Common  Stock by reason of stock  dividends,  split-ups,  mergers,
recapitalizations,  combinations,  conversions, exchanges of shares or the like,
then  the  number  and kind of  Option  Shares  and the  Option  Price  shall be
appropriately adjusted.

         In the event any  capital  reorganization  or  reclassification  of the
Common Stock, or any consolidation,  merger or similar transaction of Farrington
with another entity, or in the event any sale of all or substantially all of the
assets of Farrington  shall be effected in such a way that the holders of Common
Stock shall be entitled to receive  stock,  securities or assets with respect to
or in exchange for Common Stock,  then,  as a condition of such  reorganization,
reclassification,  consolidation, merger or sale, lawful and adequate provisions
(in form reasonably satisfactory to the holder hereof) shall be made whereby the
holder hereof shall  thereafter  have the right to purchase and receive upon the
basis and upon the  terms and  conditions  specified  herein  and in lieu of the
Common Stock immediately theretofore purchasable and receivable upon exercise of
the rights  represented  by this  Option,  such shares of stock,  securities  or
assets as may be issued or payable with respect to or in exchange for the number
of shares of Common Stock  immediately  theretofore  purchasable  and receivable
upon exercise of the rights represented by this Option had such  reorganization,
reclassification,  consolidation,  merger  or sale not  taken  place;  provided,
however,  that if such  transaction  results  in the  holders  of  Common  Stock
receiving only cash, the holder hereof shall be paid the difference  between the
Option  Price and such  cash  consideration  without  the need to  exercise  the
Option.

         6. Filings and  Consents.  Each of United and  Farrington  will use its
best  efforts to make all filings  with,  and to obtain  consents  of, all third
parties  and  governmental  authorities  necessary  to the  consummation  of the
transactions contemplated by this Agreement.

         Exercise of the Option herein  provided  shall be subject to compliance
with all applicable  laws  including,  in the event United is the holder hereof,
approval of the Board of Governors of the Federal  Reserve System and Farrington
agrees to cooperate with and furnish to the holder hereof such  information  and
documents as may be reasonably required to secure such approvals.

         7.  Representations  and  Warranties of Farrington.  Farrington  hereby
represents and warrants to United as follows:

            a. Due  Authorization.  Farrington  has  full  corporate  power  and
authority  to execute,  deliver and perform  this  Agreement  and all  corporate
action  necessary for execution,  delivery and performance of this Agreement has
been duly taken by Farrington.

            b.  Authorized  Shares.  Farrington  has taken  and,  as long as the
Option is outstanding, will take all necessary corporate action to authorize and
reserve for issuance  all shares of Common Stock that may be issued  pursuant to
any exercise of the Option.

            c.  No  Conflicts.  Neither  the  execution  and  delivery  of  this
Agreement nor consummation of the transactions contemplated hereby (assuming all
appropriate  regulatory  approvals)  will violate or result in any  violation or
default of or be in conflict  with or constitute a default under any term of the
certificate  of  incorporation  or  by-laws  of  Farrington  or  any  agreement,
instrument, judgment, decree, statute, rule or order applicable to Farrington.

         8. Specific  Performance.  The parties hereto  acknowledge that damages
would be an  inadequate  remedy  for a  breach  of this  Agreement  and that the
obligations   of  the  parties   hereto  shall  be   specifically   enforceable.
Notwithstanding the foregoing, United shall have the right to seek money damages
against Farrington for a breach of this Agreement.

         9. Entire  Agreement.  This Agreement  constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior  agreements  and  understandings,  both written and oral,  among the
parties or any of them with respect to the subject matter hereof.

         10.  Assignment or Transfer.  United may not sell,  assign or otherwise
transfer  its  rights and  obligations  hereunder,  in whole or in part,  to any
person or group of persons other than to an affiliate of United,  except upon or
after  the  occurrence  of a  Triggering  Event.  United  represents  that it is
acquiring the Option for United's own account and not with a view to or for sale
in connection with any  distribution of the Option or the Option Shares.  United
shall have the right to assign this  Agreement to any party it selects after the
occurrence of a Triggering Event.

         11.  Amendment of Agreement.  By mutual consent of the parties  hereto,
this  Agreement  may be  amended  in  writing  at any time,  for the  purpose of
facilitating  performance  hereunder or to comply with any applicable regulation
of any  governmental  authority or any applicable  order of any court or for any
other purpose.

         12. Validity.  The invalidity or  unenforceability  of any provision of
this  Agreement  shall not affect the  validity or  enforceability  of any other
provisions of this Agreement, which shall remain in full force and effect.

         13. Notices. All notices,  requests,  consents and other communications
required or permitted  hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally,  by express service,  cable, telegram
or telex,  or by registered or certified mail (postage  prepaid,  return receipt
requested) to the respective parties as follows:

                  If to United:

                         United National Bancorp
                         1130 Route 22 East
                         P.O. Box 6000
                         Bridgewater, New Jersey  08807-0010
                         Attn.: Thomas C. Gregor, Chairman, President and CEO

                  With a copy to:

                         Pitney, Hardin, Kipp & Szuch
                         200 Campus Drive
                         Florham Park, New Jersey  07932-0950

                         P.O. Box 1945
                         Morristown, New Jersey  07962-1945
                         Attn.:  Ronald H. Janis, Esq.

                  If to Farrington:

                         Farrington Bank
                         630 Georges Road
                         North Brunswick, New Jersey 08902
                         Attn.:  John E. Pellizzari,
                                    President and CEO

                  With a copy to:

                           Norris, McLaughlin & Marcus
                           721 Route 202-206
                           P.O. Box 1018
                           Somerville, New Jersey  08876
                           Attn.:  Peter Hutcheon, Esq.

or to such other  address  as the person to whom  notice is to be given may have
previously  furnished  to the others in  writing  in the manner set forth  above
(provided  that  notice of any change of address  shall be  effective  only upon
receipt thereof).

         14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.

         15. Captions.    The  captions  in   the  Agreement  are  inserted  for
convenience and reference purposes,  and shall not limit or otherwise affect any
of the terms or provisions hereof.

         16. Waivers and Extensions.  The parties hereto may, by mutual consent,
extend  the time for  performance  of any of the  obligations  or acts of either
party hereto.  Each party may waive (i) compliance  with any of the covenants of
the other  party  contained  in this  Agreement  and/or  (ii) the other  party's
performance of any of its obligations set forth in this Agreement.

         17. Parties in Interest. This Agreement shall be binding upon and inure
solely to the  benefit  of each party  hereto,  and  nothing in this  Agreement,
express or implied,  is  intended to confer upon any other  person any rights or
remedies of any nature  whatsoever under or by reason of this Agreement,  except
as provided in Section 10 permitting United to assign its rights and obligations
hereunder.

         18.  Counterparts.  This  Agreement  may be  executed  in  two or  more
counterparts,  each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

         19.  Termination.  This  Agreement  shall  terminate  upon  either  the
termination of the Merger  Agreement as provided  therein or the consummation of
the transactions contemplated by the Merger Agreement;  provided,  however, that
if  termination  of the  Merger  Agreement  occurs  after  the  occurrence  of a
Triggering  Event (as  defined in Section 2 hereof),  this  Agreement  shall not
terminate until the later of 18 months  following the date of the termination of
the Merger  Agreement or the  consummation  of any proposed  transactions  which
constitute the Triggering Event.

                  IN WITNESS  WHEREOF,  each of the parties hereto,  pursuant to
resolutions  adopted by its Board of Directors,  has caused this Agreement to be
executed by its duly authorized officer,  all as of the day and year first above
written.

                                            FARRINGTON BANK


                                            By:  /S/ JOHN E. PELLIZZARI
                                                 ----------------------
                                                 John E. Pellizzari,
                                                 President & CEO

                                            UNITED NATIONAL BANCORP


                                            By:  /S/ THOMAS C. GREGOR
                                                 -----------------------
                                                 Thomas C. Gregor,
                                                 Chairman, President & CEO




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