content: UNITED STATES
                         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): August 31, 1999
  
  
  
                           Commission File Number 0-20905
  
  
                       UNITED PAYORS & UNITED PROVIDERS, INC.
               (Exact name of registrant as specified in its charter)
  <TABLE>
        <S>                                              <C>
             Delaware                                       51-0374698
  (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                         Identification Number)
  </TABLE>
  
  
           2275 Research Boulevard, 6th Floor, Rockville, Maryland 20850
                 (Address of principal executive offices, Zip Code)
  
                                   (301) 548-1000
                  (Registrant's phone number, including area code)
  
  
  
                                   Not Applicable
                       ----------------------------------
                (Former name, former address and former fiscal year,
                           if changed since last report)
  
  
  
  
  
  <PAGE>
  
  
  ITEM 1. (Not Applicable)
  
  ITEM 2.  ACQUISITION
  
       On August 31, 1999, United Payors & United Providers, Inc. acquired Quantum
  Financial Holdings, Inc. and its wholly-owned subsidiary, Baltimore American
  Savings Bank, F.S.B., a savings bank in Maryland with total assets of $28
  million for a purchase price of approximately $2.5 million in cash. The purchase
  price was paid from existing working capital. The acquisition will be accounted
  as a purchase, in accordance with generally accepted accounting principles.
  
  
  
  ITEMS 3-6. (Not Applicable)
  
  ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
  
       (a) Financial Statements of the Business Acquired. (To be filed within 60
  days from September 15, 1999)
  
       (b) Pro Forma Consolidated Financial Information.(To be filed within 60
  days from September 15, 1999)
  
       (c) Exhibits.(Filed Herewith)
  
            Exhibit No.         Description
            -----------         -----------
  
               10.16            Agreement and Plan Reorganization by and between
                                Quantum Financial Holdings, Inc. and United Payors
                                & United Providers, Inc. dated as of October 16,
                                1998.
  
               10.17            First Amendment to Agreement and Plan of
                                Reorganization by and between Quantum Financial
                                Holdings, Inc. and United Payors & United
                                Providers, Inc. dated as of June 23, 1999.
  
  
  ITEMS 8-9 (Not Applicable)
  
                                     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 PAYORS & UNITED PROVIDERS, INC.
  
  
  Date: September 15, 1999           By: /s/ EDUARDO V. FEITO
                                         -----------------------------------------
                                         Eduardo V. Feito
                                         Controller and Chief Accounting Officer
  
  
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  <PAGE>
  
  EXHIBIT 10.16
  
                        AGREEMENT AND PLAN OF REORGANIZATION
  
       AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") dated as of October 16,
  1998, by and between QUANTUM FINANCIAL HOLDINGS, INC. ("Quantum"), a Maryland
  corporation having its principal office at 4023 Annapolis Road, Baltimore,
  Maryland 21227, and UNITED PAYORS & UNITED PROVIDERS, INC. ("Acquiror"), a
  Delaware corporation having its principal office at 2275 Research Boulevard,
  Sixth Floor, Rockville, Maryland 20850.
  
                                W I T N E S S E T H
  
       WHEREAS, the parties hereto desire that Quantum shall be merged with a
  corporation to be formed by Acquiror (the "Merger") pursuant to Articles of
  Merger in the form attached hereto as Annex A (the "Articles of Merger") and
  which is an integral part of this Agreement;
  
       WHEREAS, the parties desire to provide for certain undertakings,
  conditions, representations, warranties and covenants in connection with the
  transactions contemplated hereby;
  
       NOW, THEREFORE, in consideration of the premises and of the mutual
  covenants and agreements herein contained, the parties hereto do hereby agree as
  follows:
  
                                     ARTICLE I
                                    DEFINITIONS
  
       "AcquisitionCo" shall mean a corporation to be formed by Acquiror for the
  purpose of effecting the Merger.
  
       "Bank" shall mean Quantum's wholly owned subsidiary, Baltimore American
  Savings Bank, F.S.B., a federal savings bank.
  
       "Code" shall mean the Internal Revenue Code of 1986, as amended.
  
       "Department" shall mean the Department of Assessments and Taxation of the
  State of Maryland.
  
       "Disclosure Statement" shall mean a statement identified as a Disclosure
  Statement and contemplated by various sections of this Agreement and attached as
  an exhibit hereto.
  
       "Effective Date" shall mean the date specified pursuant to Section 2.4
  hereof as the effective date of the Merger.
  
       "Environmental Claim" means any written notice from any governmental
  authority or third party alleging potential liability (including, without
  limitation, potential liability for investigatory costs, cleanup costs,
  governmental response costs, natural resources damages, property damages,
  personal injuries or penalties) arising out of, based on, or resulting from the
  presence, or release into the environment, of any Materials of Environmental
  Concern.
  
       "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
  amended.
  
       "Exchange Agent" shall mean a banking institution with a banking office in
  the State of Maryland appointed by Acquiror and approved by Quantum (which
  approval shall not be unreasonably withheld) to make payment of the Merger
  Consideration after the Effective Date to the holders of certificates which
  formerly represented Quantum Common Stock.
  
       "FHLB" shall mean Federal Home Loan Bank.
  
       "FDIA" shall mean the Federal Deposit Insurance Act.
  
  <PAGE>
  
  
       "FDIC" shall mean the Federal Deposit Insurance Corporation.
  
       "Financial Statements" shall mean: (i) with respect to Quantum and
  Acquiror, their consolidated statements of financial condition (including
  related notes and schedules, if any) as of December 31, 1997 and 1996 and the
  related consolidated statements of operations, stockholders' equity and cash
  flows (including related notes and schedules, if any) for each of the three
  years ended December 31, 1997, 1996 and 1995, and (ii) the consolidated
  statements of financial condition of each (including related notes and
  schedules, if any) and related statements of operations, shareholders' equity
  and cash flows (including related notes and schedules, if any) with respect to
  the quarterly periods ended subsequent to December 31, 1997.
  
       "FIRREA" shall mean the Financial Institutions Reform, Recovery and
  Enforcement Act of 1989.
  
       "HOLA" shall mean the Home Owners' Loan Act, as amended.
  
       "Materials of Environmental Concern" means pollutants, contaminants,
  wastes, toxic substances, petroleum and petroleum products and any other
  materials regulated under Environmental Laws.
  
       "Merger Consideration" shall mean the aggregate consideration to be
  received by holders of outstanding shares of Quantum Common Stock and of options
  to acquire shares of Quantum Common Stock pursuant to Article II hereof.
  
       "MGCL" shall mean the Maryland General Corporation Law
  
       "OTS" shall mean the Office of Thrift Supervision of the U.S. Department of
  the Treasury and its predecessor, the Federal Home Loan Bank Board, or any
  successor thereto.
  
       "Per Share Merger Consideration" shall have the meaning specified in
  Section 2.3.
  
       "Proxy Statement" shall mean the proxy statement together with any
  supplements thereto sent to shareholders of Quantum to solicit their votes in
  connection with the approval of this Agreement and the Articles of Merger.
  
       "Quantum Common Stock" shall mean the shares of common stock, par value
  $.01 per share, of Quantum.
  
       "Quantum Subsidiaries" shall mean the Bank and any other corporation, bank,
  savings association, partnership, joint venture, or other organization more than
  10% of the stock or ownership interest of which is owned, directly or
  indirectly, by Quantum or the Bank.
  
       "Rights" shall mean warrants, options, rights, convertible securities and
  other arrangements or commitments which obligate an entity to issue or dispose
  of any of its capital stock or other ownership interests.
  
       "Stock Option Plan" shall mean the Baltimore American Savings Bank, F.S.B.
  1988 Stock Option and Incentive Plan.
  
       Other terms used herein are defined in the preamble and elsewhere in the
  Agreement.
  
  
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  <PAGE>
  
  
  
                                     ARTICLE 11
                                       MERGER
  
  2.1 THE MERGER
  
       Subject to the terms and conditions of this Agreement and subject to and in
  accordance with the Articles of Merger between Quantum and AcquisitionCo, a copy
  of which is attached hereto as Annex A (the "Articles of Merger") and
  incorporated herein by reference, at the Effective Date (as defined in Section
  2.4 hereof), AcquisitionCo shall be merged with and into Quantum (the "Merger")
  in accordance with applicable laws and regulations, with Quantum as the
  surviving corporation (hereinafter sometimes called the "Surviving
  Corporation"). Each share of Quantum Common Stock outstanding immediately prior
  to the Effective Date (other than any such share directly or indirectly owned by
  Acquiror or AcquisitionCo) shall, by virtue of the Merger and without any
  further action by the holder thereof, be converted into and represent the right
  to receive in cash the Per Share Merger Consideration set forth in Section 2.3.
  Each share of Common Stock, par value $.01 per share, of AcquisitionCo
  ("AcquisitionCo Common Stock") which is issued and outstanding immediately prior
  to the Effective Date shall continue to be an issued and outstanding share of
  Common Stock of the Surviving Corporation.
  
  2.2 STOCK OPTIONS
  
       At or immediately prior to the Effective Date, Quantum shall take such
  actions as are necessary to cause each outstanding option to purchase Quantum
  Common Stock pursuant to the Stock Option Plan to be cancelled, and each holder
  of any such option, whether or not then vested or exercisable, shall be paid by
  Acquiror for each stock option an amount determined by multiplying (i) the
  excess, if any, of the Per Share Merger Consideration over the applicable
  exercise price per share of such option by (ii) the number of shares of Quantum
  Common Stock subject to such option.
  
  2.3 MERGER CONSIDERATION AND PER SHARE MERGER CONSIDERATION
  
       The Merger Consideration shall be $2,500,000.00. The Per Share Merger
  Consideration shall be that amount equal to (i) the Merger Consideration, minus
  the aggregate dollar amount to be paid to holders of outstanding options to
  purchase Quantum Common Stock pursuant to Section 2.2 above, (ii) divided by the
  number of outstanding shares of Quantum Common Stock immediately prior to the
  Effective Date.
  
  2.4 EFFECTIVE DATE
  
       The Merger shall become effective on the date and at the time specified in
  the certificate of merger relating to the Merger issued by the Department
  pursuant to the MGCL, or any successor thereto ("Effective Date"). A closing
  (the "Closing") shall take place immediately prior to the Effective Date at
  10:00 a.m., on the fifth business day following the receipt of all necessary
  regulatory or governmental approvals and consents and the expiration of all
  statutory waiting periods in respect thereof and the satisfaction or waiver, to
  the extent permitted hereunder, of the conditions to the consummation of the
  Merger specified in Article VI of this Agreement (other than the delivery of
  certificates, opinions and other instruments and documents to be delivered at
  the Closing), at the offices of Muldoon, Murphy & Faucette, 5101 Wisconsin
  Avenue, N.W., Suite 500, Washington, D.C. 20016, or at such other place, at such
  other time, or on such other date as the parties may mutually agree upon. At the
  Closing, there shall be delivered to Acquiror and Quantum the opinions,
  certificates and other documents required to be delivered under Article VI
  hereof.
  
  
  
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                                    ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF QUANTUM
  
  Quantum represents and warrants to Acquiror as follows:
  
  3.1 ORGANIZATION, STANDING AND AUTHORITY
  
       Quantum is a corporation duly organized, validly existing and in good
  standing under the MGCL and the Bank is a federal stock savings bank duly
  organized, validly existing under the HOLA, each with full corporate power and
  authority to carry on its business as now conducted and duly qualified to do
  business in each jurisdiction in which its ownership or leasing of property or
  the conduct of its business requires such qualification or where the failure to
  so qualify would have a Material Adverse Effect (as defined in Section 3.8) on
  the financial condition, results of operation, business or prospects of Quantum.
  
  3.2 CAPITAL STRUCTURE
  
       The authorized capital stock of Quantum consists of 3,500,000 shares of
  Quantum Common Stock, par value $.01, and 1,500,000 shares of preferred stock,
  par value $.01. As of August 31, 1998, there were 106,924 shares of Quantum
  Common Stock and no shares of preferred stock issued and outstanding. There are
  no Rights authorized, issued or outstanding with respect to the capital stock of
  Quantum, except as provided for under the Stock Option Plan. As of August 31,
  1998, there were options outstanding under the Stock Option Plan, to acquire,
  upon exercise, 7,700 shares of Quantum Common Stock (the "Option"). All
  outstanding shares of Quantum Common Stock have been duly issued and are validly
  outstanding, fully paid and nonassessable, and all shares of Quantum Common
  Stock which may be issued upon exercise of the Option will be duly issued, and
  validly outstanding, fully paid and nonassessable. None of the shares of Quantum
  Common Stock has been issued and none of the shares of Quantum Common Stock
  which may be issued upon exercise of the Option, will be issued in violation of
  the preemptive rights of any person.
  
  3.3 OWNERSHIP OF QUANTUM SUBSIDIARIES
  
       Except for the Bank and for the Quantum Subsidiaries set forth in
  Disclosure Statement 3.3 provided by Quantum, Quantum has no subsidiaries.
  Except for the Quantum Subsidiaries, stock in the FHLB of Atlanta and securities
  or other interests taken in consideration of debts previously contracted,
  Quantum does not own or have the right to acquire, directly or indirectly, any
  outstanding capital stock or other voting securities or ownership interests of
  any corporation, bank, savings association, partnership, joint venture, or other
  organization. The outstanding shares of capital stock or other ownership
  interests of each of the Quantum Subsidiaries are validly issued and
  outstanding, fully paid and nonassessable and all such shares are directly or
  indirectly owned by Quantum free and clear of all liens, claims and encumbrances
  or preemptive rights of any person. No Rights are authorized, issued or
  outstanding with respect to the capital stock or other ownership interests of
  any Quantum Subsidiaries and there are no agreements, understandings or
  commitments relating to the right of Quantum to vote or to dispose of said
  shares or other ownership interests.
  
  3.4 ORGANIZATION, STANDING AND AUTHORITY OF QUANTUM SUBSIDIARIES
  
       Each of the Quantum Subsidiaries is a corporation or partnership duly
  organized, validly existing and in good standing under the laws of the
  jurisdiction in which it is organized. Each of the Quantum Subsidiaries (i) has
  full power and authority to carry on its business as now conducted, and (ii) is
  duly qualified to do business in each jurisdiction in which its ownership or
  leasing of property or the conduct of its business requires such qualification
  where the failure to so qualify would have a Material Adverse Effect (as defined
  in Section 3.8) on the financial condition, results of operations, business or
  prospects of Quantum.
  
  
  
  
  
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  3.5 AUTHORIZED AND EFFECTIVE AGREEMENT
  
       (a) Quantum has all requisite corporate power and authority to enter into
  this Agreement and (subject to receipt of all necessary governmental approvals
  and the approval of this Agreement and the Articles of Merger by the affirmative
  vote of two-thirds of the shares of Quantum Common Stock outstanding and
  entitled to vote at the time, at a duly called meeting of stockholders) to
  perform all of its obligations under this Agreement and the Articles of Merger.
  The execution and delivery of this Agreement and consummation of the
  transactions contemplated hereby and by the Articles of Merger have been duly
  and validly authorized by all necessary corporate action in respect thereof on
  the part of Quantum, except the approval of this Agreement and the Articles of
  Merger by Quantum's shareholders. This Agreement and the Articles of Merger
  constitute legal, valid and binding obligations of Quantum, each of which is
  enforceable against Quantum in accordance with its respective terms, subject, as
  to enforceability, to bankruptcy, insolvency and other laws of general
  applicability relating to or affecting creditors' rights and to general equity
  principles.
  
       (b) Neither the execution and delivery of this Agreement, nor consummation
  of the transactions contemplated hereby or by the Articles of Merger, nor
  compliance by Quantum with any of the provisions hereof or thereof shall (i)
  conflict with or result in a breach of any provision of the Articles of
  Incorporation or bylaws of Quantum or the equivalent documents of any Quantum
  Subsidiary, (ii) constitute or result in a breach of any term, condition or
  provision of, or constitute a default under, or give rise to any right of
  termination, cancellation or acceleration with respect to, or result in the
  creation of any lien, charge or encumbrance upon any material property or asset
  of Quantum or any Quantum Subsidiary pursuant to, any note, bond, mortgage,
  indenture, license, agreement or other instrument or obligation, or (iii)
  subject to receipt of all required governmental approvals, violate any order,
  writ, injunction, decree, statute, rule or regulation applicable to Quantum or
  any Quantum Subsidiary.
  
       (c) Quantum will cooperate with Acquiror and use its best efforts to
  procure all consents and approvals from all regulatory agencies having
  jurisdiction over the transaction contemplated by this Agreement.
  
       (d) As of the date hereof, Quantum is not aware of any reasons why all
  consents and approvals shall not be procured from all regulatory agencies having
  jurisdiction over the transactions contemplated by this Agreement as shall be
  necessary for consummation of the transactions contemplated by this Agreement.
  As of the date hereof, Quantum is not aware of any reason why all consents and
  approvals shall not be procured from all other persons and entities whose
  consent or approval shall be necessary for consummation of the transactions
  contemplated by this Agreement.
  
  3.6 REPORTS
  
       For the five years preceding the date hereof, Quantum and the Quantum
  Subsidiaries have in all material respects filed all reports required to be
  filed with all applicable governmental authorities, including, without
  limitation, the OTS, the FDIC and the FHLB of Atlanta, and such reports comply
  in all material respects with applicable law and regulations, except as
  disclosed in Disclosure Statement 3.6 provided by Quantum.
  
  3.7 FINANCIAL STATEMENTS
  
       The Financial Statements of Quantum and Quantum Subsidiaries fairly present
  or will fairly present, as the case may be, the consolidated financial position
  of Quantum and the Quantum Subsidiaries as of the dates indicated and the
  consolidated results of operations, changes in shareholders' equity and
  statements of cash flows for the periods then ended in conformity with generally
  accepted accounting principles ("GAAP") applied on a consistent basis (except as
  stated therein). As of their respective dates, neither such financial
  statements, nor any subsequent Quantum or Quantum Subsidiary financial
  statements contained or will contain any untrue statement of a material fact or
  omitted or will omit to state a material fact required to be stated therein or
  necessary to make the statement made therein, in light of the circumstances
  under which they were made, not misleading. Quantum represents that the
  information in Annex C has been taken from the Bank's accounting records and
  presents fairly all of the direct revenues and costs
  
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  of and a good faith estimate of other costs attributable to the Bank's mortgage
  banking activities for the seven months ended July 31, 1998.
  
  3.8 MATERIAL ADVERSE CHANGE
  
       Except as disclosed in Disclosure Statement 3.8 provided by Quantum,
  Quantum has not, on a consolidated basis, suffered any material adverse change
  since December 31, 1997, and there has not been any condition, event, change or
  occurrence that individually or in the aggregate, has had, or is reasonably
  likely to have, a material adverse effect on Quantum. For purposes of this
  Agreement, "Material Adverse Effect" means with respect to Quantum, a material
  adverse effect upon the financial condition, results of operations, assets,
  business or prospects of Quantum and the Quantum Subsidiaries, taken as a whole.
  
  3.9 ABSENCE OF UNDISCLOSED LIABILITIES
  
       Neither Quantum nor any Quantum Subsidiary has any liability (contingent or
  otherwise) that is material to Quantum on a consolidated basis or that, when
  combined with all similar liabilities, would be material to Quantum on a
  consolidated basis, except for liabilities incurred in the ordinary course of
  business since the date of Quantum's most recent Financial Statements, nor are
  there any circumstances that, to the knowledge of Quantum, are reasonably
  expected to result in any such liability.
  
  3.10 ENVIRONMENTAL MATTERS
  
       (a) To the best of their knowledge, Quantum and the Quantum Subsidiaries
  are in substantial compliance with all Environmental Laws. Neither Quantum nor
  any Quantum Subsidiary has received any communication alleging that Quantum or
  any Quantum Subsidiary is not in such compliance and, to the best knowledge of
  Quantum and the Quantum Subsidiaries, there are no present circumstances that
  would prevent or interfere with the continuation of such compliance.
  
       (b) To the best knowledge of Quantum and the Quantum Subsidiaries, there
  are no past or present actions, activities, circumstances, conditions, events or
  incidents that could reasonably form the basis of any Environmental Claim or
  other claim or action or governmental investigation that could result in the
  imposition of any liability that would be material to Quantum on a consolidated
  basis arising under any Environmental Laws against Quantum or any Quantum
  Subsidiary or against any person or entity whose liability for any Environmental
  Claim Quantum or any Quantum Subsidiary has or may have retained or assumed
  either contractually or by operation of law, except as disclosed in Disclosure
  Statement 3.10 provided by Quantum.
  
  3.11 ALLOWANCE FOR LOAN LOSSES
  
       The allowance for loan losses reflected on the consolidated statements of
  financial condition included in the Financial Statements of Quantum is or will
  be adequate in the opinion of Quantum's management based on information
  currently available in all material respects as of their respective dates under
  the requirements of GAAP to provide for reasonably anticipated losses on
  outstanding loans net of recoveries.
  
  3.12 TAX MATTERS
  
       (a) For the past five years, Quantum and the Quantum Subsidiaries, and each
  of their predecessors, have timely filed all federal, state and local (and, if
  applicable, foreign) tax returns required by applicable law to be filed by them
  (including, without limitation, estimated tax returns, income tax returns,
  information returns, and withholding and employment tax returns) and have paid,
  or where payment is not required to have been made, have set up an adequate
  reserve or accrual for the payment of, all taxes required to be paid in respect
  of the periods covered by such returns and, as of the Effective Date, will have
  paid, or where payment is not required to have been made, will have set up an
  adequate reserve or accrual for the payment of, all taxes for any subsequent
  periods ending on or prior to the Effective Date, except as disclosed in
  Disclosure Statement 3.12 provided by Quantum. Neither Quantum nor any of
  
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  the Quantum Subsidiaries will have any material liability for my such taxes in
  excess of the amounts so paid or reserves or accruals so established.
  
       (b) For the past five years, all federal, state and local (and, if
  applicable, foreign) tax returns filed by Quantum and the Quantum Subsidiaries
  have been complete and accurate in all material respects. Neither Quantum nor
  any of the Quantum Subsidiaries is delinquent in the payment of any material
  tax, assessment or governmental charge, and, except as disclosed on Disclosure
  Statement 3.12, none of them has requested any extension of time within which to
  file any tax returns in respect of any fiscal year or portion thereof which have
  not since been filed. No deficiencies for the tax, assessment or governmental
  charge have been proposed, asserted or assessed (tentatively or otherwise)
  against Quantum or any Quantum Subsidiary which have not been settled and paid.
  There are currently no agreements in effect with respect to Quantum or any
  Quantum Subsidiary to extend the period of limitations for the assessment or
  collection of any tax. Except as disclosed on Disclosure Statement 3.12, as of
  the date hereof, no audit, examination or deficiency or refund litigation with
  respect to such return is pending.
  
  3.13 LEGAL PROCEEDINGS
  
       At the date hereof, there are no actions, suits, claims, governmental
  investigations or proceedings instituted, pending or, to the best knowledge of
  Quantum, threatened (or unasserted but considered by Quantum probable of'
  assertion and which if asserted would have at least a reasonable probability of
  a materially unfavorable outcome) against Quantum or any Quantum Subsidiary or
  against any asset, interest, or right of Quantum or any Quantum Subsidiary, or
  against any officer, director or employee of any of them that in any such case,
  if decided adversely, would have a Material Adverse Effect on the financial
  condition, results of operations, business or prospects of Quantum on a
  consolidated basis, except as disclosed in Disclosure Statement 3.13 provided by
  Quantum. To the knowledge of Quantum, there are no actual or threatened actions,
  suits or proceedings which present a claim to restrain or prohibit the
  transactions contemplated herein, or in the Articles of Merger.
  
  3.14 COMPLIANCE WITH LAWS
  
       Each of Quantum and the Quantum Subsidiaries is in compliance in all
  material respects with all statutes and regulations applicable and material to
  the conduct of its business (except for any violations not material to the
  financial condition, results of operations, business or prospects of Quantum on
  a consolidated basis), and neither Quantum nor any Quantum Subsidiary has
  received notification from any agency or department of federal, state or local
  government (i) asserting a violation or possible violation of any such statute
  or regulation and which violation would have a material adverse effect on the
  financial condition, results of operations, business or prospects, of Quantum on
  a consolidated basis, (ii) threatening to revoke any license, franchise, permit
  or government authorization or (iii) restricting or in any way limiting its
  operations. Neither Quantum nor any Quantum Subsidiary is subject to any
  regulatory or supervisory cease and desist order, agreement, written directive,
  memorandum of understanding or written commitment, and none of them has received
  any written communication requesting that they enter into any of the foregoing.
  
  3.15 DEPOSIT INSURANCE AND OTHER REGULATORY MATTERS
  
       (a) The deposit accounts of the Bank are insured by the Savings Association
  Insurance Fund of the FDIC to the maximum extent permitted by law, and the Bank
  has paid all premiums and assessments and filed all reports required under the
  FDIA and under the National Housing Act prior to the enactment of FIRREA.
  
       (b) The Bank is a member in good standing of the FHLB of Atlanta and owns
  the requisite amount of stock in the FHLB of Atlanta.
  
       (c) The Bank is a "qualified thrift lender," as such term is defined in the
  HOLA.
  
  
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       (d) The Bank is a qualified seller and servicer for the Federal National
  Mortgage Association and the Federal Home Loan Mortgage Corporation.
  
  
  3.16 CERTAIN INFORMATION
  
       The information relating to (i) Quantum and the Quantum Subsidiaries and
  (ii) this Agreement and the transactions contemplated hereby, to be contained in
  the proxy statement to be delivered to shareholders of Quantum in connection
  with the solicitation of their approval of this Agreement and the Articles of
  Merger and the transactions contemplated hereby and thereby, as of the date such
  proxy statement is mailed to shareholders of Quantum and up to and including the
  date of the meeting of shareholders to which such proxy statement relates (it
  being understood that any supplement to such proxy statement as of a later date
  shall be deemed to modify information as of an earlier date) 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.
  
  3.17 EMPLOYEE BENEFIT PLANS
  
       (a) Except as disclosed on Disclosure Statement 3.17 provided by Quantum,
  Quantum and the Quantum Subsidiaries have no stock option, employee stock
  purchase and stock bonus plans, qualified pension or profit-sharing plans,
  deferred compensation, consultant, bonus or group insurance contract or any
  other incentive, welfare or employee benefit plan or agreement maintained for
  the benefit of employees or former employees of Quantum or any Quantum
  Subsidiary. Quantum has previously furnished true and complete copies of any
  such plans, contracts or agreements identified on Disclosure Statement 3.17,
  together with (i) the most recent actuarial and financial reports prepared with
  respect to any qualified plans, (ii) the most recent annual reports filed with
  any governmental agency, and (iii) all rulings and determination letters and any
  open requests for rulings or letters that pertain to any qualified plan.
  
       (b) Neither Quantum nor any other Quantum Subsidiary (or any pension plan
  maintained by any of them and qualified under Section 401 of the Code) has
  incurred any material liability to the Pension Benefit Guaranty Corporation or
  the Internal Revenue Service with respect to any pension plan that Quantum or a
  Quantum Subsidiary maintains for or with respect to any of their employees and
  which is qualified under Section 401 of the Code except liabilities to the
  Pension Benefit Guaranty Corporation pursuant to Section 4007 of ERISA, all of
  which have been fully paid. To the best of Quantum's knowledge, no reportable
  event under Section 4043(b) of ERISA has occurred with respect to any such
  pension plan.
  
       (c) Neither Quantum nor any Quantum Subsidiary participates in or has
  incurred any liability under Section 4201 of ERISA for a complete or partial
  withdrawal from, a multi employer plan (as such term is defined in ERISA).
  
       (d) A favorable determination letter has been issued by the Internal
  Revenue Service with respect to each "employee pension plan" (as defined in
  Section 3(2) of ERISA) of Quantum or any Quantum Subsidiary which is intended to
  qualify under Section 401 of the Code to the effect that such plan is qualified
  under Section 401 of the Code and the trust associated with such employee
  pension plan is tax exempt under Section 501 of the Code. To the best of
  Quantum's knowledge, no such letter has been revoked or threatened to be revoked
  and Quantum does not know of any ground on which such revocation may be based.
  Neither Quantum nor any Quantum Subsidiary has a material liability under any
  such plan that is not reflected on the consolidated balance sheet included in
  the Financial Statements of Quantum as of December 31, 1997.
  
       (e) To the best of Quantum's knowledge, no prohibited transaction (which
  shall mean any transaction prohibited by Section 406 of ERISA and not exempt
  under Section 408 of ERISA or Section 4975 of the Code) has occurred with
  respect to any employee benefit plan maintained by Quantum or any Quantum
  Subsidiary (i) which would result in the imposition, directly or indirectly, of
  a material excise tax under Section 4975 of the Code, or (ii) the correction of
  which would have a Material Adverse Effect on the financial condition, results
  of operations, business or prospects of Quantum on a consolidated basis.
  
  
                                         8
  
  <PAGE>
  
  
       (f) Neither Quantum nor any Quantum Subsidiary maintains any defined
  benefit plans.
  
  
  3.18 CERTAIN CONTRACTS
  
       (a) Except for this Agreement and except as disclosed in Disclosure
  Statement 3.18 provided by Quantum, neither Quantum nor any Quantum Subsidiary
  is a party to a written or, to Quantum's knowledge, oral (i) consulting
  agreement not terminable on thirty (30) days' or less notice, and providing for
  payments in excess of $5,000 per annum, (ii) agreement with any director,
  executive officer or other key employee of Quantum or any Quantum Subsidiary the
  benefits of which are contingent, or the terms of which are materially altered,
  upon the occurrence of a transaction involving Quantum or any Quantum Subsidiary
  of the nature contemplated by this Agreement, (iii) agreement with respect to
  any director, executive officer or employee of Quantum or any Quantum Subsidiary
  providing for other than at-will employment, (iv) agreement or plan, including
  any stock option plan, stock appreciation rights plan, restricted stock plan,
  stock purchase plan, or any other non-qualified compensation plan, any of the
  benefits of which will be increased, or the vesting of the benefits of which
  will be accelerated, by the occurrence of any of the transactions contemplated
  by this Agreement or the value of any of the benefits of which will be
  calculated on the basis of any of the transactions contemplated by this
  Agreement, (v) agreement containing covenants that limit the ability of Quantum
  or any Quantum Subsidiary to compete in any line of business or with any person,
  or that involve any restriction on the geographic area in which or method by
  which, Quantum (including any successor thereof) or any Quantum Subsidiary may
  carry on its business (other than as may be required bylaw or any regulatory
  agency), (vi) agreement which by its terms limits the payment of dividends by
  Quantum or any Quantum Subsidiary, (vii) instrument evidencing or related to
  indebtedness for borrowed money, whether directly or indirectly, by way of
  purchase money obligation, conditional sale, lease purchase, guaranty or
  otherwise, in respect of which Quantum or any Quantum Subsidiary is an obligor
  to any person, which instrument evidences or relates to indebtedness (other than
  deposits, bankers acceptances, and "treasury tax and loan" accounts established
  in the ordinary course of business and transactions in "federal funds") or which
  contains financial covenants or other restrictions (other than those relating to
  the payment of principal and interest when due) which would be applicable on or
  after the Effective Date to Acquiror, or any of the Acquiror Subsidiaries;
  (viii) contract (other than this Agreement) limiting the freedom of Quantum or
  Bank to engage in any type of banking or bank-related business permissible under
  law; (ix) contract, plan or arrangement which provides for payments of benefits
  payable to any participant therein or party thereto, and which might render any
  portion of any such payments or benefits subject to disallowance of deduction
  therefor as a result of the application of Code Section 280G; or (x) agreement
  for investment banking services or services related to the sale, merger or
  acquisition of Quantum or any Quantum Subsidiary. Quantum has disclosed on
  Disclosure Statement 3.18 any material contracts not otherwise disclosed
  pursuant to subparagraphs (i)-(x) above.
  
       (b) All the contracts, plans, arrangements and instruments listed in
  Disclosure Statement 3.18 are in full force and effect on the date hereof and
  neither Quantum nor, to the knowledge of Quantum, any other party to any such
  contract, plan, arrangement or instrument, has breached any provisions of, or is
  in material default in any respect under any term of, any such contract, plans,
  arrangement or instrument. Except as otherwise disclosed in Disclosure Statement
  3.18, no plan, employment agreement, termination agreement, or similar agreement
  or arrangement to which Quantum or any Quantum Subsidiary may be liable (i)
  contains provisions which permit an employee or independent contractor to
  terminate it without cause and continue to accrue benefits thereunder; (ii)
  provides for acceleration in the vesting of benefits thereunder upon the
  occurrence of a change in ownership or control of Quantum or any Quantum
  Subsidiary; (iii) provides for benefits which may cause the disallowance of a
  federal income tax deduction under Code Section 280G; or (iv) requires Quantum
  or any Quantum Subsidiary to provide a benefit in the form of Quantum Common
  Stock or determined by reference to the value of Quantum Common Stock.
  
            (iii) Neither Quantum nor any Quantum Subsidiary is in default under
  or in violation of any provision, and is not aware of any fact or circumstance
  that has been or could be alleged to constitute a material default or violation,
  of any note, bond, indenture, mortgage, deed of trust, loan agreement or other
  agreement to which it is a party or by which it is bound or to which its
  respective properties or assets is subject.
  
  
                                         9
  
  <PAGE>
  
  
  
  3.19 BROKERS AND FINDERS
  
       Except as set forth on Disclosure Statement 3.19 provided by Quantum,
  neither Quantum nor any Quantum Subsidiary nor any of their respective officers,
  directors or employees has employed any broker, finder or financial advisor or
  incurred any liability for any fees, commissions or other transaction-based
  compensation in connection with the transactions contemplated herein or in the
  Articles of Merger (other than fees to attorneys, auditors, proxy solicitors and
  similar professionals).
  
  3.20 INSURANCE
  
       Quantum and the Quantum Subsidiaries each currently maintain insurance in
  the amounts and for the coverages set forth on Disclosure Statement 3.20
  provided by Quantum. Within the past three years neither Quantum nor any Quantum
  Subsidiary has received any notice of cancellation with respect to any insurance
  policy or bond, and within the last three years, neither Quantum nor any Quantum
  Subsidiary has been refused any insurance coverage sought or applied for, and
  has no reason to believe that existing insurance coverage cannot be renewed as
  and when the same shall expire, upon terms and conditions as favorable as those
  presently in effect, other than possible increases in premiums or unavailability
  of coverage that do not result from any extraordinary loss experience on the
  part of Quantum or any Quantum Subsidiary.
  
  3.21 LOANS
  
       Each loan on the books and records of Quantum and any Quantum Subsidiary,
  including unfunded portions of outstanding lines of credit and loan commitments,
  was made in all material respects in accordance with customary lending standards
  in the ordinary course of business, is evidenced in all material respects by
  appropriate and sufficient documentation, and constitutes the legal, valid and
  binding obligation of the obligator named therein subject to bankruptcy,
  insolvency, fraudulent conveyance and other laws of general applicability
  relating to or affecting creditors' rights and to general equity principles.
  
  3.22 PROPERTIES
  
       Quantum and the Quantum Subsidiaries have good and marketable title free
  and clear of all liens, encumbrances, charges, defaults or equities (other than
  equities of redemption under applicable foreclosure laws) to all of the material
  properties and assets, real and personal, reflected on the consolidated
  statements of financial condition included in the Financial Statements of
  Quantum as of December 31, 1997 or acquired after such date, except (i) liens
  for current taxes not yet due and payable, (ii) pledges to secure deposits and
  other liens incurred in the ordinary course of its banking business, (iii) such
  imperfections of title, easements and encumbrances, if any, as are not material
  in character, amount or extent, (iv) dispositions and encumbrances for business,
  and (v) as disclosed in the Financial Statements of Quantum. All material leases
  pursuant to which Quantum or any Quantum Subsidiary, as lessee, leases real or
  personal property, are valid and enforceable in accordance with their respective
  terms.
  
  3.23 MATERIAL INTERESTS OF CERTAIN PERSONS
  
       Except as disclosed on Disclosure Statement 3.23 provided by Quantum, to
  Quantum's knowledge, no officer or director of Quantum, or any associate (as
  such term is defined in Rule 14a-1(a) under the Securities Exchange Act of 1934,
  as amended) of any such officer or director, has any interest in any material
  contract or property (real or personal), tangible or intangible, used in or
  pertaining to the business of Quantum or any Quantum Subsidiary that are
  required to be disclosed under Regulation S-K of the Securities and Exchange
  Commission (the "SEC").
  
  3.24 ACCURACY OF INFORMATION
  
       The statements contained in this Agreement, Quantum Disclosure Statements,
  or in any other written document delivered by or on behalf of Quantum pursuant
  to the terms of this Agreement are true and correct, and to the knowledge
  
                                         10
  
  <PAGE>
  
  of Quantum, such statements and documents do not omit any fact necessary to make
  the statements contained therein not misleading.
  
  3.25 BOOKS AND RECORDS
  
       The books and records of Quantum and each Quantum Subsidiary have been, and
  are being, maintained in accordance with applicable legal and accounting
  requirements and reflect in all material respects the substance of material
  events and transactions that should be included therein.
  
  3.26 CORPORATE DOCUMENTS
  
       Quantum has delivered to Acquiror true and complete copies of its Articles
  of Incorporation and bylaws, as amended to date, which are currently in full
  force and effect.
  
  3.27 SHAREHOLDERS' AGREEMENT
  
       Each shareholder of Quantum who is a director or executive officer of
  Quantum or who has or shares the right to vote or dispose of an aggregate of 10%
  or more of the outstanding shares of Quantum Common Stock or who is identified
  on Disclosure Statement 3.27 provided by Quantum, has executed a written
  Shareholders' Agreement in the form attached hereto as Annex B and the aggregate
  number of shares of Quantum Common Stock which such persons are entitled to vote
  represent in the aggregate at least 20% of the outstanding shares of Quantum
  Common Stock.
  
  3.28 YEAR 2000 MATTERS
  
       Quantum has completed a review of Bank's computer systems to identify
  systems that could be affected by the "Year 2000" issue and reasonably believes
  it has identified all such Year 2000 problems. Quantum's management has
  developed and commenced implementation of a plan to respond to this issue which
  is designed to complete any required initial changes to its computer systems and
  to complete testing of those changes by December 31, 1998, or, with respect to
  coordination with a third party provider of computer services, such other data
  that such third party provider mandates; provided, however, that the Bank's Year
  2000 compliance shall be satisfactory to the OTS. Between the date of this
  Agreement and the Effective Date, Quantum shall use commercially practicable
  efforts to implement and/or continue to undertake such plan. Year 2000 issues
  have not had, and are not reasonably expected to have, a Material Adverse Effect
  on Quantum or any Quantum Subsidiary.
  
                                     ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF ACQUIROR
  
  Acquiror represents and warrants to Quantum as follows:
  
  4.1 ORGANIZATION, STANDING AND AUTHORITY OF ACQUIROR AND ACQUISITIONCO.
  
       Acquiror is and, at the Effective Date, AcquisitionCo will be a corporation
  duly organized, validly existing and in good standing under the laws of the
  jurisdiction of their respective incorporation, each with full corporate power
  and authority to carry on its business as it is now conducted and duly qualified
  to do business in each jurisdiction in which its ownership or leasing of
  property or the conduct of its business requires such qualification or where the
  failure to so qualify would have a Material Adverse Effect (as defined in
  Section 4.5) on the financial condition, results of operations, business or
  prospects of Acquiror.
  
  
                                         11
  
  <PAGE>
  
  4.2 AUTHORIZED AND EFFECTIVE AMENDMENT
  
       (a) Acquiror has all requisite corporate power and authority, and, at the
  Effective Date, AcquisitionCo will have all requisite corporate power and
  authority, to enter into this Agreement and (subject to receipt of all necessary
  governmental approvals) to perform all of their obligations under this Agreement
  and the Articles of Merger. The execution and delivery of this Agreement, and
  consummation of the transactions contemplated hereby and by the Articles of
  Merger, will have been duly and validly authorized by all necessary corporate
  action in respect thereof on the part of Acquiror and AcquisitionCo. This
  Agreement and the Articles of Merger constitute legal, valid and binding
  obligations of Acquiror and AcquisitionCo, in each case enforceable against it
  in accordance with their respective terms, subject, as to enforceability, to
  bankruptcy, insolvency and other laws of general applicability relating to or
  affecting creditors' rights and to general equity principles.
  
       (b) Neither the execution and delivery of this Agreement, nor consummation
  of the transactions contemplated hereby or by the Articles of Merger, nor
  compliance by Acquiror or AcquisitionCo with any of the provisions hereof or
  thereof shall (i) conflict with or result in a breach of any provision of the
  Articles of Incorporation or bylaws of Acquiror or AcquisitionCo, (ii)
  constitute or result in a breach of any term, condition or provision of, or
  constitute a default under, or give rise to any right of termination,
  cancellation or acceleration with respect to, or result in the creation of any
  lien, charge or encumbrance upon any property or asset of Acquiror or
  AcquisitionCo pursuant to, any note, bond, mortgage, indenture, license,
  agreement or other instrument or obligation, or (iii) subject to any required
  governmental approvals, violate any order, writ, injunction, decree, statute,
  rule or regulation applicable to Acquiror or AcquisitionCo.
  
       (c) Except for any necessary consents and approvals of, or any necessary
  filings or registrations with, or notices to the SEC, the OTS, the FDIC, the
  Department of Justice ("DOJ"), the Board of Governors of the Federal Reserve
  System ("FRB") and the Federal Trade Commission ("FTC"), no consents or
  approvals of or filings or registrations with, or notices to any public body or
  authority are necessary on behalf of Acquiror and AcquisitionCo in connection
  with (i) the execution and delivery by Acquiror of this Agreement and the
  Articles of Merger by AcquisitionCo, or (ii) the consummation by Acquiror,
  AcquisitionCo or Principal Life Insurance Company ("Principal Life") of the
  transactions contemplated by this Agreement.
  
       (d) As of the date hereof, Acquiror is not aware of any reasons why all
  consents and approvals shall not be procured from all regulatory agencies having
  jurisdiction over the transactions contemplated by this Agreement as shall be
  necessary for consummation of the transactions contemplated by this Agreement.
  As of the date hereof, Acquiror is not aware of any reason why all consents and
  approvals shall not be procured from all other persons and entities whose
  consent or approval shall be necessary for consummation of the transactions
  contemplated by this Agreement.
  
       (e) Acquiror and Acquiror's affiliates are not subject to any "presumptive
  disqualifier" as defined in 12 C.F.R. ss. 574.7(g).
  
  4.3 CERTAIN INFORMATION
  
       The information relating to Acquiror and AcquisitionCo to be provided in
  writing to Quantum for inclusion in the Proxy Statement to be delivered to
  shareholders of Quantum in connection with the solicitation of their approval of
  this Agreement, the Articles of Merger and the transactions contemplated hereby
  and thereby, as of the date such Proxy Statement is mailed to shareholders of
  Quantum and up to and including the date of the meeting of shareholders to which
  such Proxy Statement relates (it being understood that any supplement to such
  Proxy Statement as of a later date shall be deemed to modify information as of
  an earlier date) will not contain any untrue statement of a material fact or
  omit to state a material fact necessary to make the statement therein, in light
  of the circumstances under which they were made, not misleading.
  
  
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  <PAGE>
  
  
  4.4 FINANCIAL STATEMENTS
  
       The Financial Statements of Acquiror fairly present or will fairly present,
  as the case may be, the consolidated financial position of Acquiror and the
  Acquiror's Subsidiaries as of the dates indicated and the consolidated results
  of operations, changes in shareholders' equity and changes in cash flows for the
  periods then ended in conformity with GAAP applied on a consistent basis (except
  as stated therein). As of their respective dates, neither such Financial
  Statements, nor any subsequent Acquiror or Acquiror Subsidiary Financial
  Statements contained or will contain any untrue statement of a material fact or
  omitted or will omit to state a material fact required to be stated therein or
  necessary to make the statement made therein, in light of the circumstances
  under which they were made, not misleading.
  
  4.5 MATERIAL ADVERSE CHANGE
  
       Acquiror has not, on a consolidated basis, suffered any material adverse
  change since December 31, 1997, and there has not been any condition, event,
  change or occurrence that individually or in the aggregate, has had, or is
  reasonably likely to have, a Material Adverse Effect on Acquiror on a
  consolidated basis. For purposes of this Agreement, "Material Adverse Effect,"
  with respect to Acquiror, means a material adverse effect upon the financial
  condition, results of operations, assets, business or prospects of Acquiror and
  the Acquiror Subsidiaries, taken as a whole.
  
  4.6 ABSENCE OF UNDISCLOSED LIABILITIES
  
       Acquiror does not have any liability (contingent or otherwise) that is
  material to Acquiror on a consolidated basis or that, when combined with all
  similar liabilities, would be material to Acquiror on a consolidated basis,
  except as disclosed in the Financial Statements of Acquiror and except for
  liabilities incurred in the ordinary course of its business since the date of
  Acquiror's most recent Financial Statements, nor are there any such
  circumstances, that, to the knowledge of Acquiror, are reasonably expected to
  result in any such liability.
  
  4.7 TAX MATTERS
  
       (a) For the five years preceding the date hereof, Acquiror has timely filed
  all federal, state and local (and, if applicable, foreign) tax returns required
  by applicable law to be filed by Acquiror (including, without limitation,
  estimated tax returns, income tax returns, information returns, and withholding
  and employment tax returns) and have paid, or where payment is not required to
  have been made, have set up an adequate reserve or accrual for the payment of,
  all taxes required to be paid in respect of the periods covered by such returns
  and, as of the Effective Date, will have paid, or where payment is not required
  to have been made, will have set up an adequate reserve or accrual for the
  payment of, all taxes for any subsequent periods ending on or prior to the
  Effective Date which are not being contested in good faith. Acquiror will not
  have any material liability for any such taxes in excess of the amounts so paid
  or reserves or accruals so established.
  
       (b) For the five years preceding the date hereof, all federal, state and
  local (and, if applicable, foreign) tax returns filed by Acquiror have been
  complete and accurate in all material respects. Acquiror is not delinquent in
  the payment of any tax, assessment or governmental charge. No deficiencies for
  any tax, assessment or governmental charge have been proposed, asserted or
  assessed (tentatively or otherwise) against Acquiror which have not been settled
  and paid. There are currently no agreements in effect with respect to Acquiror
  to extent the period of limitations for the assessment or collection of any tax.
  
  4.8 LEGAL PROCEEDINGS
  
       At the date hereof, there are no actions, suits, claims, governmental
  investigations or proceedings instituted, pending or, to the best knowledge of
  Acquiror, threatened (or unasserted but considered by Acquiror probable of
  assertion and which if asserted would have a reasonable probability of a
  materially unfavorable outcome) against Acquiror or any of its affiliates or
  
  
  
                                         13
  
  <PAGE>
  
  against any asset, interest or right of Acquiror or any of its affiliates, or
  against any officer, director or employee of any of them that, if decided
  adversely, might have an adverse effect on the ability of the Acquiror to pay
  the Merger Consideration. To the knowledge of Acquiror, there are no actual or
  threatened actions, suits or proceedings which present a claim to restrain or
  prohibit the transactions contemplated herein, or in the Articles of Merger.
  
  
  4.9 COMPLIANCE WITH LAWS
  
       Acquiror is in material compliance with all statutes and regulations
  applicable and material to the conduct of its business (except for any
  violations not material to the financial condition, results of operations,
  business or prospects of Acquiror on a consolidated basis), and Acquiror has not
  received notification from any agency or department of federal, state or local
  government (i) asserting a violation or possible violation of any such statute
  or regulation, and which violations would have a Material Adverse Effect on the
  financial condition, results of operations, business or prospects of Acquiror,
  (ii) threatening to revoke any license, franchise, permit or government
  authorization or (iii) restricting or in any way limiting its operations.
  
  4.10 BROKERS AND FINDERS
  
       Except as disclosed in Disclosure Statement 4.10 provided by Acquiror,
  Acquiror has not employed any broker, finder or financial advisor or incurred
  any liability for any fees, commissions or other transaction-based compensation
  in connection with the transactions contemplated herein or in the Articles of
  Merger (other than fees to attorneys, auditors, proxy solicitors and similar
  professionals).
  
                                     ARTICLE V
                                     COVENANTS
  
  5.1 SHAREHOLDER MEETING
  
       Quantum shall take all action necessary, including the preparation of the
  Proxy Statement, to properly call and convene a meeting of its shareholders as
  soon as practicable, and not later than 60 days, after the date that any
  required filing with respect to the divestiture of control of Acquiror by
  Principal Life is filed with the OTS, as contemplated by Section 5.3(b) hereof.
  At such meeting, Quantum shall submit for the approval of its shareholders this
  Agreement and the Articles of Merger.
  
  5.2 RECOMMENDATIONS TO SHAREHOLDERS
  
       Subject to compliance with the legal and fiduciary duties of such directors
  and the receipt of an opinion from RP Financial, LLC dated on or immediately
  prior to the date of mailing of the Proxy Statement for the meeting of
  shareholders at which this Agreement and the Articles of Merger will be
  considered and not subsequently withdrawn prior to such meeting of shareholders
  to the effect that the Merger Consideration is fair to such shareholders from a
  financial point of view, the Board of Directors of Quantum shall recommend that
  its shareholders approve this Agreement and the Articles of Merger.
  
  5.3 APPLICATIONS
  
       (a)  As promptly as practicable, Acquiror shall incorporate and organize
  AcquisitionCo and shall submit applications for prior approval of the
  transactions contemplated herein and in the Articles of Merger to the OTS, the
  FDIC or any other federal, state or local government agency, department or body
  the approval of which is required for consummation of the Merger. Quantum shall
  have the right to review and comment on the portions of such applications and
  amendments that relate directly to Quantum prior to their filing with any
  regulatory agencies, and Acquiror promptly shall furnish Quantum with copies of
  the non-confidential portions of such applications after filing of applications
  
  
                                         14
  
  <PAGE>
  
  with these or any other regulatory agencies. Quantum and Acquiror each represent
  and warrant to the other that all information concerning it and its directors,
  officers, shareholders and subsidiaries included (or submitted for inclusion) in
  any such application shall be true, correct and complete in all material
  respects.
  
       (b)  Acquiror's application to the OTS will disclose an intention by
  Principal Life to divest control, within the meaning of HOLA, and the
  regulations promulgated thereunder, of Acquiror and requisite banking regulatory
  applications required in connection with such proposed divestiture of control by
  Principal Life will be filed within 45 days of the date Acquiror files the
  necessary banking regulatory applications for prior approval of the transactions
  contemplated herein and in the Articles of Merger.
  
  5.4 BEST EFFORTS
  
       Acquiror and Quantum shall each use its best efforts in good faith, and
  each of them shall cause its subsidiaries to use their best efforts in good
  faith, to (i) furnish such information as may be required in connection with and
  otherwise cooperate in the preparation and filing of the documents referred to
  in Sections 5.1 and 5.3 herein, and (ii) take or cause to be taken all actions
  necessary or desirable on its part so as to permit consummation of the
  transactions contemplated by this Agreement and the Articles of Merger at the
  earliest possible date. Neither Acquiror nor Quantum shall take, or cause, or to
  the best of its ability permit to be taken, any action that would substantially
  delay or impair the prospects of consummating the transactions contemplated by
  this Agreement and the Articles of Merger.
  
  5.5 INVESTIGATION AND CONFIDENTIALITY
  
       Quantum will keep Acquiror advised of all material developments relevant to
  its business and to consummation of the Merger, and Acquiror will advise Quantum
  of any material adverse change in its financial condition, results of
  operations, business or prospects and all material developments that are likely
  adversely to affect consummation of the Merger. Acquiror and Quantum each may
  make or cause to be made such investigation of the financial and legal condition
  of the other as such party reasonably deems necessary or advisable in connection
  with the transactions contemplated herein, provided, however, that such
  investigation shall be reasonably related to such transactions and shall not
  interfere unnecessarily with the other and the other's advisors with such
  financial data and other information with respect to its business and properties
  as such other party shall from time to time reasonably request. No investigation
  pursuant to this Section 5.5 shall affect or be deemed to modify any
  representation or warranty made by, or the conditions to the obligations
  hereunder of, either party hereto. Each party hereto shall, and shall cause its
  directors, officers, attorneys, and advisors to, maintain the confidentiality of
  all information obtained in such investigation which is not otherwise publicly
  disclosed by the other party, said undertaking with respect to confidentiality
  to survive any termination of this Agreement pursuant to Section 7.1 hereof.
  
  5.6 PRESS RELEASE
  
       Acquiror and Quantum shall agree with each other as to the form and
  substance of any press release related to this Agreement and the Articles of
  Merger or the transactions contemplated hereby and thereby, and consult with
  each other as to the form and substance of other public disclosures related
  thereto, provided, however, that nothing contained herein shall prohibit either
  party, following notification to the other party, from making any disclosure
  which its counsel deems necessary. Notwithstanding the above, Quantum shall not
  issue any press release that names Acquiror, Principal Life, or their affiliates
  without the approval of Acquiror, which approval shall not be unreasonably
  withheld.
  
  5.7 FORBEARANCE OF QUANTUM
  
       Except with the prior written consent of Acquiror, which consent shall not
  be unreasonably withheld, or as expressly contemplated herein, between the date
  hereof and the Effective Date, Quantum shall not, and shall cause each Quantum
  Subsidiary not to:
  
  
  
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  <PAGE>
  
       (a)  carry on its business, including the continued expansion of mortgage
  banking activities, other than in the usual, regular and ordinary course in
  substantially the same manner as heretofore conducted or with respect to
  continued expansion of mortgage banking activities consistent with the trend in
  such expansion over the preceding 12 month period (and in the case of Bank other
  than in accordance with prudent banking practices), or establish or acquire any
  new subsidiary or cause to permit any subsidiary to engage in any new activity
  or materially expand any existing activities;
  
       (b)  declare, set aside, make or pay any dividend or other distribution in
  respect of its capital stock;
  
       (c ) issue any shares of its capital stock other than pursuant to the
  exercise of options granted under the Stock Option Plan to purchase no more than
  7,700 shares of Quantum Common Stock Options which are outstanding at the date
  of this Agreement;
  
       (d)  issue, grant or authorize any Rights or effect any recapitalization,
  reclassification, stock dividend, stock split or like change in capitalization;
  
       (e)  amend its Articles of Incorporation or bylaws or equivalent documents;
  impose, or suffer the imposition, on any share of stock held by Quantum or any
  Quantum Subsidiary of any material lien, charge or encumbrance or permit any
  such lien to exist; or waive or release any material right or cancel or comprise
  any material debt or claim other than in the ordinary course of its business;
  
       (g)  fail to comply in any material respect with any laws, regulations,
  ordinances, or governmental actions applicable to it and to the conduct of its
  business except where Quantum or any Quantum Subsidiary is in good faith
  contesting the validity of any of the foregoing, or where the failure to so
  comply will not have a Material Adverse Effect on the financial condition,
  results of operations, business or prospects of Quantum;
  
       (h)  increase the rate of compensation of any of its officers or employees,
  or pay or agree to pay any bonus to, or provide any other employee benefit or
  incentive to, any of its officers or employees, except in the normal course of
  business and in a manner consistent with past practice; provided, however, that
  no such increase shall be paid or provided to the President and Chief Executive
  Officer except to the extent specifically identified in Disclosure Statement
  5.7(h) provided by Quantum;
  
       (i)  enter into or substantially modify (except as may be required by
  applicable law) any pension, retirement, stock option, stock purchase, stock
  appreciation right, savings, profit sharing, deferred compensation, employment,
  consulting, bonus, group insurance or other employee benefit, incentive or
  welfare contract, plan or arrangement, or any trust agreement related thereto,
  in respect of any of its directors, officers or other employees;
  
       (j)  solicit or encourage inquiries or proposals with respect to, furnish
  any information relating to, or participate in any negotiations or discussions
  concerning, any acquisition or purchase of all or a substantial portion of the
  assets of, or a substantial equity interest in, Quantum or any Quantum
  Subsidiary or any business combination with Quantum or any Quantum Subsidiary
  other than as contemplated by this Agreement (except where the failure to
  furnish such information or participate in such negotiations or discussions
  would constitute a breach of the fiduciary or legal obligations of Quantum's
  Board of Directors to its shareholders) or otherwise agreed to by the parties;
  or authorize or permit any officer, director, agent or affiliate of it to do any
  of the above; or fail to notify Acquiror immediately if any such inquiries or
  proposals are received by, any such information is required from, or any such
  negotiations or discussions are sought to be initiated with, Quantum or any
  Quantum Subsidiary;
  
       (k)  enter into or renew (i) any material agreement, arrangement or
  commitment not made in the ordinary course of business consistent with historic
  and prudent banking practices, other than agreements or memoranda of
  understanding with regulatory authorities, or as set forth in Disclosure
  Statement 5.7(k) provided by Quantum, (ii) any agreement, indenture or other
  instrument relating to the borrowing of money by Quantum or any Quantum
  Subsidiary or guarantee by Quantum or any Quantum Subsidiary or any such
  obligation, except as disclosed in Disclosure Statement 5.7(k), and for deposits
  
  
  
                                         16
  
  <PAGE>
  
  and advances from the FHLB of Atlanta in a manner consistent with past practice,
  (iii) any agreement, arrangement or commitment relating to the employment of, or
  severance of, a consultant (except such agreements, arrangements or commitment
  with consultants as may be required to consummate the transactions contemplated
  herein or to enforce Quantum's rights and remedies hereunder) or the employment,
  severance, election or retention in office of any present or former director,
  officer or employee, except as disclosed in Disclosure Statement 5.7(k), or (iv)
  any contract, agreement or understanding with a labor union;
  
       (l)  change its lending, investment or asset liability management policies
  in any material respect except as may be required by applicable law;
  
       (m)  change its method of accounting in effect at December 31, 1997, except
  as required by changes in regulation or GAAP concurred in by its independent
  certified public accountants, or change any of its methods of reporting income
  and deductions for federal income tax purposes from those employed in the
  preparation of its federal income tax returns for the year ended December 31,
  1997, except as required by changes in law or regulation;
  
       (n)  take or cause to be taken any action which would disqualify the Merger
  as a tax-free reorganization under Section 368 of the Code with respect to each
  of the corporate partners to this Agreement and to the Articles of Merger; or
  
       (n)  agree to do any of the foregoing.
  
  5.8 CONDUCT OF QUANTUM'S BUSINESS PRIOR TO THE EFFECTIVE DATE
  
       Except with the written consent of Acquiror, which consent shall not be
  unreasonably withheld, or as expressly contemplated herein, between the date
  hereof and the Effective Date, Quantum shall, and shall cause each Quantum
  Subsidiary to:
  
       (a)  conduct their business, maintain their properties and operate only in
  the ordinary course of business consistent with past practices and maintain
  Quantum's financial statements and reports in accordance with GAAP and maintain
  Quantum Bank's regulatory reports in accordance with applicable requirements;
  
       (b)  conduct their business and operate only in accordance with sound
  banking practices, including charging off all loans required to be charged off
  by bank regulators and regulations, statutes and sound banking practices;
  
       (c)  remain in good standing with all applicable bank regulatory agencies
  and preserve each of their existing banking locations;
  
       (d)  use their commercially reasonable efforts to maintain and preserve
  intact their business organization, properties, leases and advantageous business
  relationships and maintain good relationships with employees, and the goodwill
  and business relationships with customers and others;
  
       (e)  maintain in full force and effect all of the insurance policies and
  bonds covering the directors, officers, employees, properties, businesses and
  employee plans of Quantum and the Quantum Subsidiaries;
  
       (f)  not knowingly take any action which would materially adversely affect
  or delay the ability of Quantum, Bank or any other Quantum Subsidiary, Acquiror,
  or AcquisitionCo to obtain any necessary approvals, consents or waivers of any
  governmental authority or any other entity required for the transactions
  contemplated hereby; and
  
       (i)  take such actions in the ordinary course of business consistent with
  past practices to protect Bank's deposit base and prevent any excessive
  withdrawals of deposits, provided, however, Bank shall not pay any interest on
  
  
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  <PAGE>
  
  deposits which would exceed the maximum amount paid on like accounts with
  comparable institutions in Bank's marketplace.
  
  5.9 FORBEARANCES OF ACQUIROR
  
       Except with the prior written consent of Quantum, which consent will not be
  unreasonably withheld, between the date hereof and the Effective Date, Acquiror
  shall not:
  
       (a)  enter into any agreement, understanding or commitment, written or
  oral, with any other party which would impede in any material respect the
  ability of Acquiror to perform the undertakings, commitments and obligations
  arising under this Agreement and the Articles of Merger; or
  
       (b)  sell or lease any material portion of the assets and business of
  Acquiror or any of its affiliates, except where any such sale or lease will not
  materially and adversely affect the ability of Acquiror to pay the Merger
  Consideration.
  
  5.10 INDEMNIFICATION AND INSURANCE
  
       (a)  From and after the Effective Date, Acquiror shall indemnify, defend
  and hold harmless each person who is now, or has been at any time prior to the
  (date hereof or who becomes prior to the Effective Date, an officer, director or
  employee of Quantum (the "Indemnified Parties") against all losses, claims,
  damages, costs, expenses (including attorney's fees), liabilities or judgments
  or amounts that are paid in settlement of or in connection with any claim,
  action, suit, proceeding or investigation (each a "Claim") in which an
  Indemnified Party is, or is threatened to be made, a party or a witness based in
  whole or in part on or arising in whole or in part out of the fact that such
  person is or was a director, officer or employee of Quantum or any Quantum
  Subsidiary if such Claim pertains to any matter or fact arising, existing or
  occurring prior to the Effective Date (including, without limitation, the Merger
  and other transactions contemplated by this Agreement), regardless of whether
  such Claim is asserted or claimed prior to, or at or after, the Effective Date
  (the "Indemnified Liabilities") to the full extent permitted under applicable
  state or federal law in effect as of the date hereof or as amended applicable to
  a time prior to the Effective Date and under Quantum's Articles of Incorporation
  and Bylaws (and Acquiror shall pay expenses in advance of the final disposition
  of any such action or proceeding to each Indemnified Party to the full extent
  permitted by applicable state or federal law in effect as of the date hereof or
  as amended applicable to a time prior to the Effective Date upon receipt of any
  undertaking required by applicable law). Any Indemnified Party wishing to claim
  indemnification under this Section 5.9(a) upon learning of any Claim shall
  notify Acquiror (but the failure to notify Acquiror shall not relieve Acquiror
  from any liability which they may have under this Section 5.10(a) shall except
  to the extent such failure prejudices Acquiror) and shall deliver to Acquiror
  the undertaking, if any, required by applicable law. The obligations of Acquiror
  described in this Section 5.10(a) shall continue in full force and effect,
  without any amendment thereto, for a period of not less than three years from
  the Effective Date; provided, however, that all rights to indemnification in
  respect of any Claim asserted or made within such period shall continue until
  the final disposition of such Claim.
  
       (b)  From and after the Effective Date, the directors, officers and
  employees of Quantum who become directors, officers or employees of Acquiror or
  any of the Acquiror Subsidiaries, except for the indemnification rights set
  forth in paragraph (a) of this Section 5.10, shall have indemnification rights
  having prospective application only. The prospective indemnification rights
  shall consist of such rights to which directors, officers and employees of
  Acquiror are entitled under the provisions of the Certificate of Incorporation,
  or similar governing documents, of Acquiror and the Acquiror Subsidiaries, as in
  effect from time to time after the Effective Date, as applicable, and provisions
  of applicable state and federal law as in effect from time to time after the
  Effective Date.
  
       (c)  The obligations of Acquiror provided under paragraphs (a) and (b) of
  this Section 5.10 are intended to benefit, and be enforceable against Acquiror
  directly by, the Indemnified Parties, and shall be binding on all respective
  successors and permitted assigns of Acquiror.
  
  
  
  
  
                                         18
  
  <PAGE>
  
  
       (d)  For a period of three years following the Effective Date, Acquiror
  shall permit Quantum to purchase and keep in force, or at Acquiror's option to
  provide comparable coverage, directors' and officers' liability insurance to
  provide coverage for acts or omissions of the type and in the amount currently
  covered by Quantum's existing directors' and officers' liability insurance for
  acts or omissions occurring on or prior to the Effective Date, but only to the
  extent such insurance may be purchased or kept in force on commercially
  reasonable terms taking into account the cost hereof and the benefits provided
  thereby.
  
  5.11 EMPLOYEES
  
       (a)  Unless the employee is entitled to a larger payment under an
  employment or severance agreement, or pursuant to paragraph (b) of this Section
  5.11, each employee of Bank who is terminated by Acquiror during the first year
  after the Effective Date for a reason other than cause and has been employed by
  the Bank for a continuous period of (i) more than seven years prior to the
  Effective Date, shall be entitled to receive a lump sum severance payment equal
  to 40 weeks base salary as in effect at the time of this Agreement, (ii) more
  than two years and up to seven years prior to the Effective Date, shall be
  entitled to receive a lump sum severance payment equal to six months base salary
  as in effect at the time of this Agreement, and (iii) less than two years prior
  to the Effective Date, shall be entitled to receive a lump sum severance payment
  equal to one week of base salary for each one month of continuous service, but
  not to exceed two months base salary, as in effect at the time of this
  Agreement.
  
       (b)  The employment agreement dated February 13, 1996 by and between Mr.
  Richard W. Kraus, Quantum and the Bank (the "Employment Agreement") shall
  terminate and be of no further force and effect as of the Closing. On or prior
  to the Closing, Mr. Kraus shall furnish his written consent to such termination
  of the Employment Agreement. Assuming such consent of Mr. Kraus is received by
  Acquiror on or prior to Closing, at the Closing, Acquiror shall pay to Mr. Kraus
  the full amount of payments to which Mr. Kraus is entitled under that Employment
  Agreement upon a termination in connection with a change in control.
  
  5.12 EMPLOYEE BENEFIT PLANS
  
       (a)  Each employee of Bank who becomes an employee of Acquiror or the
  Acquiror Subsidiaries subsequent to the Merger shall be immediately entitled to
  participate in all employee benefit plans sponsored by Acquiror or the Acquiror
  Subsidiaries on the same terms and to the same extent as similarly situated
  employees. Such employees shall receive credit for their period of service to
  Bank for purposes of determining participation and vesting in all Acquiror
  employee benefit plans.
  
       (b)  In the event Acquiror merges or consolidates any defined contribution
  or defined benefit plan maintained by or for Quantum or a Quantum Subsidiary
  into an Acquiror defined contribution or defined benefit plan, each
  participating employee shall have an accrued benefit immediately after the
  merger or consolidation which is equal to or greater than the employee's accrued
  benefit immediately before the merger or consolidation. To the extent
  permissible under the applicable provisions of the Code, in the event that on or
  after the Effective Date, Acquiror terminates any defined contribution or
  defined benefit plan maintained by or for Quantum or a Quantum Subsidiary, each
  participating employee shall have the right or option either to receive a single
  lump-sum payment equal to the benefits to which he or she is entitled under the
  terminating plan, or to "roll over" such benefits to a defined contribution plan
  maintained by Acquiror. In the event of any merger, consolidation or termination
  of any defined benefit pension plan maintained by or for Quantum or a Quantum
  Subsidiary, any excess funding shall be allocated to the accounts of
  participating employees and shall in no event revert to Acquiror.
  
  5.13 DIRECTORS
  
       At the Effective Date, all of the directors of Bank shall resign and be
  replaced by the directors of Acquisition Corp.
  
  5.14 NOTIFICATION OF CERTAIN MATTERS
  
       The Acquiror and Acquisition Co, on the one hand, and Quantum and Bank, on
  the other hand, shall give prompt notice to the other of (a) the occurrence or
  its knowledge of any event or condition that would cause any of its
  
  
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  <PAGE>
  
  representations or warranties set forth in this Agreement not to be true and
  correct in all material respects as of the date of this Agreement or as of the
  Effective Date (except as to any representation or warranty which specifically
  relates to an earlier date), or any of its obligations set forth in this
  Agreement required to be performed at or prior to the Effective Date not to be
  performed in all material respects at or prior to the Effective Date, including
  without limitation, any event, condition, change or occurrence which
  individually or in the aggregate has, or which, so far as reasonably can be
  foreseen at the time of its occurrence, is reasonably likely to result in a
  Material Adverse Effect on it; and (b) any action of a third party of which it
  receives notice that might reasonably be expected to prevent or materially delay
  the consummation of the transactions contemplated hereby, including, without
  limitation, any notice or other communication from any third party alleging that
  the consent of such third party is or may be required in connection with the
  transactions contemplated by this Agreement.
  
  
  5.15 DISSENTER'S RIGHTS
  
       Any holder of Quantum Common Stock otherwise entitled to receive the Merger
  Consideration for each of his or her shares shall be entitled to demand payment
  of the fair cash value of such shares as specified in the laws of the State of
  Maryland if the holder follows the procedures specified in the statutes. Those
  shares shall hereafter be specified as "Dissenting Shares." Any Dissenting
  Shares shall not, after the Effective Date, be entitled to vote for any purpose
  or receive any dividends or other distributions and shall not be converted into
  cash as provided in Section 2.1 hereof; provided, however, that shares of
  Quantum Common Stock held by a dissenting shareholder who subsequently withdraws
  a demand for payment, fails to comply fully with the requirements of the laws of
  the State of Maryland, or otherwise fails to establish the right of such
  shareholder to be paid the fair cash value of such shareholder's shares under
  the laws of the State of Maryland shall be deemed to be converted into cash
  pursuant to the terms and conditions specified herein. Quantum shall give
  Acquiror prompt notice of any written demands for appraisal of any shares of
  Quantum Common Stock, attempted withdrawals of any such demands, and any other
  instruments served pursuant to the laws of the State of Maryland and received by
  Quantum relating to shareholders' rights of appraisal. Quantum shall not, except
  with the prior written consent of Acquiror, voluntarily make any payment with
  respect to any demands for appraisals of any shares of Quantum Common Stock,
  offer to settle or settle any such demands or approve any withdrawal of any such
  demands.
  
  5.16 CONTINUATION OF LEASES
  
       Quantum shall use best efforts to ensure that all action is taken to enable
  Acquiror to assume the leases currently held by Quantum and any Quantum
  Subsidiary on its principal and branch office facilities. Quantum shall
  cooperate with Acquiror to secure any approvals from the lessors that may be
  required.
  
  5.17 SUBSEQUENT FINANCIAL STATEMENTS
  
       As soon as reasonably available, but in no event more than 20 days after
  the end of each month ending after the date of this Agreement, Quantum will
  deliver to Acquiror and Acquiror will deliver to Quantum their respective
  monthly financial statements.
  
  5.18 CURRENT INFORMATION
  
       During the period from the date of this Agreement to the Effective Date,
  Quantum will cause one or more of Bank's designated representatives to confer on
  a regular and frequent basis (not less than monthly) with representatives of
  Acquiror and to report (i) the general status of the ongoing operations of
  Quantum and all Quantum Subsidiaries and (ii) the status of, and the action
  proposed to be taken with respect to, loans held by Quantum or Bank which,
  individually or in combination with one or more other Loans to the same borrower
  thereunder, have an unpaid principal amount of $250,000 or more and are
  non-performing assets. Quantum will promptly notify Acquiror of any material
  
  
  
  
                                         20
  
  <PAGE>
  
  change in the normal course of business or in the operation of the properties of
  Quantum or any of Quantum Subsidiaries and of any governmental complaints,
  investigations or hearings (or communication indicating that the same may be
  contemplated), or the institution or the threat of significant litigation
  involving Quantum and the Quantum Subsidiaries, and will keep Acquiror fully
  informed of such events.
  
  
                                     ARTICLE VI
                                CONDITIONS PRECEDENT
  
  6.1 CONDITIONS PRECEDENT -- ACQUIROR AND QUANTUM
  
       The respective obligations of Acquiror and Quantum to effect the
  transactions contemplated by this Agreement shall be subject to satisfaction or
  waiver of the following conditions at or prior to the Effective Date:
  
       (a)  The requisite approval by the shareholders of Quantum of this
  Agreement and of the Articles of Merger.
  
       (b)  All approvals of the transactions contemplated herein from the OTS,
  the FDIC and any other state or federal government agency, department or body,
  the approval of which is required for the consummation of the Merger shall have
  been received and all notice periods and waiting periods required after the
  granting of any such approvals shall have passed and all such approvals shall be
  in effect;
  
       (c)  Neither Acquiror, any affiliate of Acquiror, AcquisitionCo, Quantum or
  any Quantum Subsidiary shall be subject to any order, decree or injunction of a
  court or agency of competent jurisdiction which enjoins or prohibits
  consummation of the transactions contemplated by this Agreement.
  
  6.2 CONDITIONS PRECEDENT -- QUANTUM
  
       The obligations of Quantum to effect the transactions contemplated by this
  Agreement shall be subject to satisfaction of the following additional
  conditions at or prior to the Effective Date unless waived by Quantum pursuant
  to Section 7.4 hereof;
  
       (a)  The representations and warranties of Acquiror set forth in Article IV
  hereof shall be true and correct in all material respects as of the date of this
  Agreement and as of the Effective Date as though made on and as of the Effective
  Date (or on the date when made in the case of any representation and warranty
  which specifically relates to an earlier date), except as otherwise contemplated
  by this Agreement or consented to in writing by Quantum (which consent shall not
  be unreasonably withheld) and except for changes, none of which individually or
  in the aggregate has a Material Adverse Effect on the financial condition,
  results of operations, business or prospects of Acquiror;
  
       (b)  Acquiror shall have deposited with the Exchange Agent an amount of
  immediately available funds equal to the aggregate Merger Consideration to be
  paid hereunder.
  
       (c)  Acquiror shall have in all material respects performed all obligations
  and complied with all covenants required to be performed by it on or prior to
  the Effective Date;
  
       (d)  Acquiror shall have delivered to Quantum a certificate, dated the
  Effective Date and signed by a senior officer, to the effect that the conditions
  set forth in Section 6.1 (c), 6.2(a) and 6.2(b), to the extent applicable to
  Acquiror, have been satisfied;
  
       (e)  There shall not have been a material adverse change in the ability of
  the Acquiror to pay the Merger Consideration;
  
  
  
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  <PAGE>
  
  
       (f)  Quantum shall have received an opinion from counsel for Acquiror,
  dated as of the Effective Date and which may be governed by and interpreted in
  accordance with the Legal Opinion Accord of the American Bar Association Section
  of Business Law (1991), to the effect that:
  
            (i)   Acquiror is a corporation validly existing and in good standing
  under the laws of the State of Delaware;
  
            (ii)   the Agreement has been duly authorized, executed and delivered
  by Acquiror and constitutes the valid and binding obligation of Acquiror,
  subject to, as to enforceability, bankruptcy, insolvency and other laws of
  general applicability relating to or affecting creditors' rights and to general
  equity principles;
  
            (iii)  except as disclosed in such opinion, to the knowledge of such
  counsel there are no actions, suits, proceedings or investigations (public or
  private) of any nature pending or threatened that challenge the validity or
  propriety of the transactions contemplated by the Agreement and Articles of
  Merger or which seek or threaten to restrain, enjoin or prohibit (or to obtain
  substantial damages in connection with) the consummation of such transactions;
  and
  
            (iv)   all regulatory and governmental approvals and consents which
  are necessary to be obtained by Acquiror and the Acquiror Subsidiaries to permit
  the execution, delivery and performance of the Agreement have been obtained.
  
       (g)  Acquiror and AcquisitionCo shall have furnished Quantum with such
  certificates of their respective officers or others and such other documents to
  evidence fulfillment of the conditions set forth in Section 6.1 and 6.2 as
  Quantum may reasonably request.
  
  6.3 CONDITIONS PRECEDENT -- ACQUIROR AND ACQUISITIONCO.
  
       The obligations of Acquiror and AcquisitionCo to effect the transactions
  contemplated by this Agreement shall be subject to satisfaction of the following
  additional conditions at or prior to the Effective Date unless waived by
  Acquiror pursuant to Section 7.4 hereof:
  
       (a)  The representations and warranties of Quantum set forth in Article III
  hereof shall be true and correct in all material respects as of the date of this
  Agreement and as of the Effective Date as though made on and as of the Effective
  Date (or on the date when made in the case of any representation and warranty
  which specifically relates to an earlier date), except as otherwise contemplated
  by this Agreement or consented to in writing by Acquiror (which consent shall
  not be unreasonably withheld) and except for changes, none of which individually
  or in the aggregate has a Materially Adverse Effect on the financial condition,
  results of operations, business or prospects of Quantum;
  
       (b)  Quantum shall have in all material respects performed all obligations
  and complied with all covenants required to be performed by it on or prior to
  the Effective Date;
  
       (c)  Quantum shall have delivered to Acquiror a certificate, dated the
  Effective Date and signed by its Chairman or President, to the effect that the
  conditions set forth in Sections 6.1(c), 6.3(a), and 6.3(b), to the extent
  applicable to Quantum, have been satisfied;
  
       (d)  There shall not have been a material adverse change in the financial
  condition, results of operations, business or prospects of Quantum on a
  consolidated basis since December 31, 1997 (other than changes in banking or
  savings and loan laws or regulations, GAAP, or interpretations thereof, that
  affect the banking or savings and loan industries generally or changes in
  general economic conditions that uniformly affect the banking and savings and
  loan industries on a nationwide basis, including changes in the general level of
  interest rates);
  
  
  
  
                                         22
  
  <PAGE>
  
       (e)  Acquiror shall have received an opinion or opinions from counsel to
  Quantum, dated the Effective Date and which may be governed by and interpreted
  in accordance with the Legal Opinion Accord of the American Bar Association
  Section of Business Law (1991), to the effect that:
  
            (i)   Quantum is a corporation validly existing and in good standing
  corporation under the laws of the State of Maryland and Bank is a federal
  savings association duly incorporated and validly existing under the HOLA;
  
            (ii)   this Agreement and the Articles of Merger have been duly
  authorized and approved by Quantum and this Agreement and the Articles of Merger
  and the transactions contemplated thereby have been approved by the requisite
  vote or consent of Quantum's shareholders and duly authorized, executed and
  delivered by Quantum and this Agreement and Articles of Merger constitute the
  valid and binding obligation of Quantum, subject to, as to enforceability,
  bankruptcy, insolvency and other laws of general applicability relating to or
  affecting creditors' rights and to general equity principles;
  
            (iii)   the authorized capitalization of Quantum is as set forth in
  Section 3.2 hereof;
  
            (iv)   to the knowledge of such counsel, except as otherwise disclosed
  in such opinion, there are no actions, suits, proceedings or investigations of
  any nature pending or threatened that challenge the validity or legality of the
  transactions contemplated by this Agreement or Articles of Merger which seek or
  threaten to restrain, enjoin or prohibit (or obtain substantial damages in
  connection with) the consummation of such transactions;
  
            (v)   to the knowledge of such counsel, there is no litigation,
  appraisal or other proceeding or governmental investigation pending or
  threatened against or relating to the business or property of Quantum or any
  Quantum Subsidiary which would have a Materially Adverse Effect on the financial
  condition of Quantum, or of any legal impediment to the continued operation of
  the properties and business of Quantum or any Quantum Subsidiary in the ordinary
  course after the consummation of the transactions contemplated by this Agreement
  and Articles of Merger; and
  
            (vi)   all regulatory and governmental approvals and consents which
  are necessary to be obtained by Quantum and its Subsidiaries to permit the
  execution, delivery and performance of the Agreement have been obtained.
  
       (f)  Quantum shall have furnished Acquiror with such certificates of its
  officers or others and such other documents to evidence fulfillment of the
  conditions set forth in Section 6.1 and 6.3 as Acquiror may reasonably request;
  
       (g)  There shall not have been any change in law or regulatory condition
  imposed in connection with any required approval that would have the effect of
  requiring Acquiror or any Acquiror Subsidiary to cease, terminate or divest any
  of its activities or investments in order to acquire and/or maintain control of
  the Bank.
  
                                    ARTICLE VII
                         TERMINATION, WAIVER AND AMENDMENT
  
  7.1 TERMINATION
  
       This Agreement may be terminated:
  
       (a)  at any time on or prior to the Effective Date, by the mutual consent
  in writing of the parties hereto;
  
       (b)  at any time on or prior to the Effective Date, by Acquiror in writing
  if Quantum has, or by Quantum in writing if Acquiror has, in any material
  respect, breached (i) any covenant or undertaking contained herein or in the
  Articles of Merger, or (ii) any representation or warranty contained herein,
  which breach, in the case of a breach by Quantum, has a Material Adverse Effect
  
                                         23
  
  <PAGE>
  
  on the financial condition, results of operations, business or prospects of
  Quantum or the ability of Quantum to effect the transactions contemplated by
  this Agreement, or in the case of a breach by Acquiror materially and adversely
  affects the ability of the Acquiror to pay the Merger Consideration or
  consummate the transactions contemplated by this Agreement, in any case if such
  breach has not been cured by the earlier of 30 days after the date on which
  written notice of such breach is given to the party committing such breach or
  the Effective Date; provided that it is understood and agreed that either party
  may terminate this Agreement on the basis of any such material breach of any
  representation or warranty contained herein, notwithstanding any qualification
  therein, relating to the knowledge of the other party; and provided further that
  a party seeking termination is not then in material breach of any
  representation, covenant or other agreement contained herein;
  
       (c)  by either party in writing, if Acquiror or Principal Life is notified
  by the OTS that the proposed method of divestiture of Principal Life's control
  of Acquiror is not acceptable to the OTS as a divestiture of such control or the
  OTS denies or furnishes written objection to an application to accomplish such
  divestiture, and such action is not rescinded within 45 days;
  
       (d)  on the Effective Date, by either party hereto in writing, if any of
  the conditions precedent to the obligations of such party to consummate the
  transactions contemplated hereby have not been satisfied or fulfilled;
  
       (e)  by either party hereto in writing, if the Effective Date has not
  occurred by the close of business on June 30, 1999; provided that this right to
  terminate shall not be available to any party whose failure to perform an
  obligation under this Agreement has been the cause of, or resulted in, the
  failure of the Merger to be consummated by June 30, 1999;
  
       (f)  at any time by either party hereto in writing, if such party
  determines in good faith that any condition precedent to such party's
  obligations to consummate the Merger is or would be impossible to satisfy and
  such condition is not waived by the other party.
  
  7.2 EFFECT OF TERMINATION
  
       In the event this Agreement is terminated pursuant to Section 7.1 hereof,
  both this Agreement and the Articles of Merger shall become void and have no
  effect, except that (i) the provisions relating to confidentiality and expenses
  set forth in Section 5.5 and 8.1, respectively, shall survive any such
  termination, (ii) a termination pursuant to Section 7.1(b) shall not relieve the
  breaching party from liability for an uncured willful breach of the covenant,
  undertaking, representation or warranty giving rise to such termination, and
  (iii) if this Agreement is terminated pursuant to Section 7.1(c) hereof, then
  Acquiror agrees to pay $100,000 to Quantum and such amount shall constitute the
  sole amount to which Quantum shall be entitled as a result of the termination of
  this Agreement.
  
  7.3 SURVIVAL OF REPRESENTATIONS; WARRANTIES AND COVENANTS
  
       All representations, warranties and covenants in this Agreement or the
  Articles of Merger or in any instrument delivered pursuant hereto or thereto
  shall expire on, and be terminated and extinguished at, the Effective Date other
  than covenants that by their terms are to be performed after the Effective Date,
  provided that no such representations, warranties or covenants shall be deemed
  to be terminated or extinguished so as to deprive Acquiror or Quantum (or any
  director, officer or controlling person thereof) of any defense at law or in
  equity which otherwise would be available against the claims of any person,
  including, without limitation, any shareholder or former shareholder of either
  Acquiror or Quantum, the aforesaid representations, warranties and covenants
  being material inducements to consummation by Acquiror and Quantum of the
  transactions contemplated herein.
  
  
  
  
                                         24
  
  <PAGE>
  
  
  7.4 WAIVER
  
       Each party hereto by written instrument signed by an executive officer of
  such party, may at any time (whether before or after approval of this Agreement
  and the Articles of Merger by the shareholders of Quantum) extend the time for
  the performance of any of the obligations or other acts of the other party
  hereto and may waive (i) any inaccuracies of the other party in the
  representations or warranties contained in this Agreement, the Articles of
  Merger or any document delivered pursuant hereto, (ii) compliance with any of
  the covenants, undertakings or agreements of the other party, or satisfaction of
  any of the conditions precedent to its obligations, contained herein or in the
  Articles of Merger or (iii) the performance by the other party of any of its
  obligations set out herein or therein; provided that no such waiver or amendment
  or supplement pursuant to Section 7.5 hereof executed after shareholders of
  Quantum have approved the Merger shall reduce the Merger Consideration. Nothing
  in this Section 7.4 will permit any party to waive any required regulatory
  approvals or other conditions that cannot be waived as a matter of law.
  
  
  7.5 AMENDMENT OR SUPPLEMENT
  
       This Agreement and the Articles of Merger may be amended or supplemented at
  any time by mutual agreement of Acquiror and Quantum subject to the provison to
  Section 7.4 hereof. Any such amendment or supplement must be in writing and
  approved by their respective boards of directors; provided that Acquiror may
  unilaterally elect to modify the structure of the transaction so long as the
  Merger Consideration is not reduced in amount due to such modification and such
  modification is not likely to materially delay or jeopardize receipt of any
  required regulatory approvals.
  
                                    ARTICLE VIII
                                   MISCELLANEOUS
  
  8.1 EXPENSES
  
       Each party hereto shall bear and pay all costs and expenses incurred by it
  in connection with the transactions contemplated in this Agreement, including
  fees and expenses of its own financial consultants, accountants and counsel.
  
  8.2 ENTIRE AGREEMENT
  
       This Agreement contains the entire agreement between the parties with
  respect to the transactions contemplated hereunder and supersedes all prior
  arrangements or understandings with respect thereto, written or oral, other than
  documents referred to herein or therein. The terms and conditions of this
  Agreement shall inure to the benefit of and be binding upon the parties hereto
  and thereto and their respective successors. Nothing in this Agreement,
  expressed or implied, is intended to confer upon any party, other than the
  parties hereto and thereto, and their respective successors, any rights,
  remedies, obligations or liabilities other than as set forth in Sections 5.11
  and 5.12 hereof.
  
  8.3 NO ASSIGNMENT
  
       Neither of the parties hereto may assign any of its rights or obligations
  under this Agreement to any other person.
  
  8.4 NOTICES
  
       All notices or other communications which are required or permitted
  hereunder shall be in writing and sufficient if delivered personally or sent by
  overnight express or by registered or certified mail, postage prepaid, addressed
  as follows:
  
  
  
                                         25
  
  <PAGE>
  
  If to Quantum:
  
       Quantum Financial Holdings, Inc.
       4023 Annapolis Road
       Baltimore, Maryland 21227
       Attn: Richard W. Kraus
  
  With a required copy to:
  
       Housley Kantarian & Bronstein, P.C.
       1220 19th Street, N.W.
       Suite 700
       Washington, D.C. 20036
       Attention: James C. Stewart, Esquire
  
  
  If to Acquiror
  
       United Payors & United Providers, Inc.
       2275 Research Boulevard
       Sixth Floor
       Rockville, Maryland 20850
       Attention: S. Joseph Bruno
  
  
  With a required copy to:
  
       Muldoon, Murphy & Faucette
       5101 Wisconsin Avenue, N.W.
       Washington, D.C. 20016
       Attention: Thomas J. Haggerty, Esquire
  
  8.5 CAPTIONS
  
       The captions contained in this Agreement are for reference purposes only
  and are not part of this Agreement.
  
  8.6 COUNTERPARTS
  
       This Agreement may be executed in any number of counterparts, and each such
  counterpart shall be deemed to be an original instrument, but all such
  counterparts together shall constitute but one agreement.
  
  8.7 GOVERNING LAW
  
       This Agreement shall be governed by and construed in accordance with the
  laws of the State of Maryland applicable to agreements made and entirely to be
  performed within such jurisdiction except to the extent federal law may be
  applicable.
  
                                     * * * * *
  
       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
  executed in counterparts by their duly authorized officers and their corporate
  seal to be hereunto affixed and attested by their officers thereunto duly
  authorized, all as of the day and year first above written.
  
  
                                         26
  
  <PAGE>
  
  
  Attest                                  UNITED PAYORS & UNITED PROVIDERS, INC.
  
  
  
  /s/ Joseph Mott                         By: /s/ Michael A. Smith
  --------------------------                  --------------------------------
  (SEAL)                                      Michael A. Smith
  
  
  Attest                                  QUANTUM FINANCIAL HOLDINGS, INC.
  
  
  /s/ Margaret A. McManus                 By: /s/ Richard W. Kraus
  --------------------------                  --------------------------------
  (SEAL)                                      Richard W. Kraus
                                              President
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                         27
  
  <PAGE>
  
  
  EXHIBIT 10.17
  
  
                                 FIRST AMENDMENT TO
                        AGREEMENT AND PLAN OF REORGANIZATION
  
       This FIRST AMENDMENT, to the AGREEMENT AND PLAN OF REORGANIZATION, dated
  October 16, 1998 (the "Agreement"), by and between QUANTUM FINANCIAL HOLDINGS,
  INC. ("Quantum") and UNITED PAYORS & UNITED PROVIDERS, INC.
  ("Acquiror") is dated as of June 23, 1999.
  
       WHEREAS, Quantum and Acquiror have entered into the Agreement providing for
  the acquisition of Quantum by Acquiror, for an aggregate purchase price of $2.5
  million (the "Merger Consideration") with each holder of Quantum Common Stock to
  receive a per Share Merger Consideration equal to (i) the Merger Consideration,
  minus the aggregate dollar amount to be paid to holders of outstanding options
  to purchase Quantum Common Stock, (ii) divided by the number of outstanding
  shares of Quantum Common Stock immediately prior to the Effective Date;
  
       WHEREAS, a condition to the parties' obligations under the Agreement is the
  receipt of all required regulatory approvals by Acquiror and the expiration of
  all applicable waiting periods and as of the date hereof such regulatory
  approvals have not been received;
  
       WHEREAS, Section 7.1(e) of the Agreement provides that it may be terminated
  by either party if the Effective Date has not occurred by the close of business
  on June 30,1999 (the "Termination Date");
  
       WHEREAS, the parties have determined that it will not be feasible to close
  the Merger by the Termination Date and desire to extend the Termination Date in
  order to allow additional time in which to secure regulatory approvals and in
  consideration thereof Acquiror agrees to pay interest on the per Share Merger
  Consideration for each day subsequent to June 30, 1999 until the Effective Date
  and to make a loan to Quantum in the amount of $250,000 to be used to infuse
  capital into its wholly owned subsidiary, Baltimore American Savings Bank,
  F.S.B., (the "Bank"); and
  
       WHEREAS, pursuant to Section 7.5 of the Agreement, the Agreement may be
  amended by mutual agreement of the parties provided that no amendment executed
  after the shareholders of Quantum have approved the Merger shall reduce the
  Merger Consideration.
  
       NOW, THEREFORE, in consideration of the mutual covenants and conditions
  herein contained, the parties hereto hereby mutually agree to amend the
  Agreement as follows and to undertake the other obligations described herein:
  
       1. The first sentence of Section 2.3 of the Agreement is hereby deleted and
  replaced by the following:
  
       The Merger Consideration shall be $2,500,000 provided that if the Effective
  Date shall not have occurred by the close of business on June 30, 1999, the
  Merger Consideration shall accrue interest for each day that elapses from June
  30, 1999 until the Effective Date at thefollowing rates per annum:
  
  <PAGE>
  
  <TABLE>
  <CAPTION>
                   If the Effective Date Occurs:               The Rate Per
               After             Up to and Including           Annum Shall Be:
  
               <S>               <C>                           <C>
               June 30, 1999     July 31, 1999                      7.5%
               July 31, 1999     August 31, 1999                    8.0%
               August 31, 1999   September 30, 1999                 8.5%
  </TABLE>
  
  
  and the sum of $2,500,000 plus the interest so accrued shall be the Merger
  Consideration.
  
       2.   Paragraph (e) of Section 7.1 of the Agreement is hereby deleted and
  replaced by the following:
  
            (e) by either party hereto in writing, if the Effective Date has not
  occurred by the close of business on September 30, 1999; provided that this
  right to terminate shall not be available to any party whose failure to perform
  an obligation under this Agreement has been the cause of, or resulted in, the
  failure of the Merger to be consummated by September 30, 1999.
  
       3.   If the Effective Date shall not have occurred on or before June 30,
  1999, the Acquiror agrees to loan Quantum the sum of $250,000 on an unsecured
  basis to provide funds for a capital infusion by Quantum into the Bank. Such
  loan shall not bear interest and shall not be due and payable until June 30,
  2000.
  
       4.   Except as specifically set forth herein, the Agreement remains in full
  force and effect. Should there by any ambiguity or conflict between the matters
  expressed in this Amendment and the terms and conditions of the Agreement, the
  parties intend that the provisions of this Amendment shall prevail and supercede
  any such ambiguity or conflict. This Amendment may be executed in two or more
  counterparts, all of which shall be considered one and the same agreement.
  
       IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
  be executed by its duly authorized officers as of the day and year written
  above.
  
                                           QUANTUM FINANCIAL HOLDINGS, INC.
  
  
                                           By:  /s/ Richard W. Kraus
                                                ----------------------------------
                                           Its: Presidend and CEO
  
  
                                           UNITED PAYORS & UNITED PROVIDERS, INC.
  
  
                                           By:  /s/ Edward S. Civera
                                                ----------------------------------
                                           Its: Co-CEO and President
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text: UNITED STATES
                         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): August 31, 1999
  
                           Commission File Number 0-20905
  
                       UNITED PAYORS & UNITED PROVIDERS, INC.
               (Exact name of registrant as specified in its charter)
  Delaware                                       51-0374698
  (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                         Identification Number)
  2275 Research Boulevard, 6th Floor, Rockville, Maryland 20850
                 (Address of principal executive offices, Zip Code)
  
                                   (301) 548-1000
                  (Registrant's phone number, including area code)
  
                                   Not Applicable
                       ----------------------------------
                (Former name, former address and former fiscal year,
                           if changed since last report)
  ITEM 1. (Not Applicable)
  
  ITEM 2.  ACQUISITION
  
       On August 31, 1999, United Payors & United Providers, Inc. acquired Quantum
  Financial Holdings, Inc. and its wholly-owned subsidiary, Baltimore American
  Savings Bank, F.S.B., a savings bank in Maryland with total assets of $28
  million for a purchase price of approximately $2.5 million in cash. The purchase
  price was paid from existing working capital. The acquisition will be accounted
  as a purchase, in accordance with generally accepted accounting principles.
  
  ITEMS 3-6. (Not Applicable)
  
  ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
  
       (a) Financial Statements of the Business Acquired. (To be filed within 60
  days from September 15, 1999)
  
       (b) Pro Forma Consolidated Financial Information.(To be filed within 60
  days from September 15, 1999)
  
       (c) Exhibits.(Filed Herewith)
  
            Exhibit No.         Description
            -----------         -----------
  
               10.16            Agreement and Plan Reorganization by and between
                                Quantum Financial Holdings, Inc. and United Payors
                                & United Providers, Inc. dated as of October 16,
                                1998.
  
               10.17            First Amendment to Agreement and Plan of
                                Reorganization by and between Quantum Financial
                                Holdings, Inc. and United Payors & United
                                Providers, Inc. dated as of June 23, 1999.
  
  ITEMS 8-9 (Not Applicable)
  
                                     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 PAYORS & UNITED PROVIDERS, INC.
  
  Date: September 15, 1999           By: /s/ EDUARDO V. FEITO
                                         -----------------------------------------
                                         Eduardo V. Feito
                                         Controller and Chief Accounting Officer
  
                                         1
  EXHIBIT 10.16
  
                        AGREEMENT AND PLAN OF REORGANIZATION
  
       AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") dated as of October 16,
  1998, by and between QUANTUM FINANCIAL HOLDINGS, INC. ("Quantum"), a Maryland
  corporation having its principal office at 4023 Annapolis Road, Baltimore,
  Maryland 21227, and UNITED PAYORS & UNITED PROVIDERS, INC. ("Acquiror"), a
  Delaware corporation having its principal office at 2275 Research Boulevard,
  Sixth Floor, Rockville, Maryland 20850.
  
                                W I T N E S S E T H
  
       WHEREAS, the parties hereto desire that Quantum shall be merged with a
  corporation to be formed by Acquiror (the "Merger") pursuant to Articles of
  Merger in the form attached hereto as Annex A (the "Articles of Merger") and
  which is an integral part of this Agreement;
  
       WHEREAS, the parties desire to provide for certain undertakings,
  conditions, representations, warranties and covenants in connection with the
  transactions contemplated hereby;
  
       NOW, THEREFORE, in consideration of the premises and of the mutual
  covenants and agreements herein contained, the parties hereto do hereby agree as
  follows:
  
                                     ARTICLE I
                                    DEFINITIONS
  
       "AcquisitionCo" shall mean a corporation to be formed by Acquiror for the
  purpose of effecting the Merger.
  
       "Bank" shall mean Quantum's wholly owned subsidiary, Baltimore American
  Savings Bank, F.S.B., a federal savings bank.
  
       "Code" shall mean the Internal Revenue Code of 1986, as amended.
  
       "Department" shall mean the Department of Assessments and Taxation of the
  State of Maryland.
  
       "Disclosure Statement" shall mean a statement identified as a Disclosure
  Statement and contemplated by various sections of this Agreement and attached as
  an exhibit hereto.
  
       "Effective Date" shall mean the date specified pursuant to Section 2.4
  hereof as the effective date of the Merger.
  
       "Environmental Claim" means any written notice from any governmental
  authority or third party alleging potential liability (including, without
  limitation, potential liability for investigatory costs, cleanup costs,
  governmental response costs, natural resources damages, property damages,
  personal injuries or penalties) arising out of, based on, or resulting from the
  presence, or release into the environment, of any Materials of Environmental
  Concern.
  
       "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
  amended.
  
       "Exchange Agent" shall mean a banking institution with a banking office in
  the State of Maryland appointed by Acquiror and approved by Quantum (which
  approval shall not be unreasonably withheld) to make payment of the Merger
  Consideration after the Effective Date to the holders of certificates which
  formerly represented Quantum Common Stock.
  
       "FHLB" shall mean Federal Home Loan Bank.
  
       "FDIA" shall mean the Federal Deposit Insurance Act.
  "FDIC" shall mean the Federal Deposit Insurance Corporation.
  
       "Financial Statements" shall mean: (i) with respect to Quantum and
  Acquiror, their consolidated statements of financial condition (including
  related notes and schedules, if any) as of December 31, 1997 and 1996 and the
  related consolidated statements of operations, stockholders' equity and cash
  flows (including related notes and schedules, if any) for each of the three
  years ended December 31, 1997, 1996 and 1995, and (ii) the consolidated
  statements of financial condition of each (including related notes and
  schedules, if any) and related statements of operations, shareholders' equity
  and cash flows (including related notes and schedules, if any) with respect to
  the quarterly periods ended subsequent to December 31, 1997.
  
       "FIRREA" shall mean the Financial Institutions Reform, Recovery and
  Enforcement Act of 1989.
  
       "HOLA" shall mean the Home Owners' Loan Act, as amended.
  
       "Materials of Environmental Concern" means pollutants, contaminants,
  wastes, toxic substances, petroleum and petroleum products and any other
  materials regulated under Environmental Laws.
  
       "Merger Consideration" shall mean the aggregate consideration to be
  received by holders of outstanding shares of Quantum Common Stock and of options
  to acquire shares of Quantum Common Stock pursuant to Article II hereof.
  
       "MGCL" shall mean the Maryland General Corporation Law
  
       "OTS" shall mean the Office of Thrift Supervision of the U.S. Department of
  the Treasury and its predecessor, the Federal Home Loan Bank Board, or any
  successor thereto.
  
       "Per Share Merger Consideration" shall have the meaning specified in
  Section 2.3.
  
       "Proxy Statement" shall mean the proxy statement together with any
  supplements thereto sent to shareholders of Quantum to solicit their votes in
  connection with the approval of this Agreement and the Articles of Merger.
  
       "Quantum Common Stock" shall mean the shares of common stock, par value
  $.01 per share, of Quantum.
  
       "Quantum Subsidiaries" shall mean the Bank and any other corporation, bank,
  savings association, partnership, joint venture, or other organization more than
  10% of the stock or ownership interest of which is owned, directly or
  indirectly, by Quantum or the Bank.
  
       "Rights" shall mean warrants, options, rights, convertible securities and
  other arrangements or commitments which obligate an entity to issue or dispose
  of any of its capital stock or other ownership interests.
  
       "Stock Option Plan" shall mean the Baltimore American Savings Bank, F.S.B.
  1988 Stock Option and Incentive Plan.
  
       Other terms used herein are defined in the preamble and elsewhere in the
  Agreement.
  
                                         2
  ARTICLE 11
                                       MERGER
  
  2.1 THE MERGER
  
       Subject to the terms and conditions of this Agreement and subject to and in
  accordance with the Articles of Merger between Quantum and AcquisitionCo, a copy
  of which is attached hereto as Annex A (the "Articles of Merger") and
  incorporated herein by reference, at the Effective Date (as defined in Section
  2.4 hereof), AcquisitionCo shall be merged with and into Quantum (the "Merger")
  in accordance with applicable laws and regulations, with Quantum as the
  surviving corporation (hereinafter sometimes called the "Surviving
  Corporation"). Each share of Quantum Common Stock outstanding immediately prior
  to the Effective Date (other than any such share directly or indirectly owned by
  Acquiror or AcquisitionCo) shall, by virtue of the Merger and without any
  further action by the holder thereof, be converted into and represent the right
  to receive in cash the Per Share Merger Consideration set forth in Section 2.3.
  Each share of Common Stock, par value $.01 per share, of AcquisitionCo
  ("AcquisitionCo Common Stock") which is issued and outstanding immediately prior
  to the Effective Date shall continue to be an issued and outstanding share of
  Common Stock of the Surviving Corporation.
  
  2.2 STOCK OPTIONS
  
       At or immediately prior to the Effective Date, Quantum shall take such
  actions as are necessary to cause each outstanding option to purchase Quantum
  Common Stock pursuant to the Stock Option Plan to be cancelled, and each holder
  of any such option, whether or not then vested or exercisable, shall be paid by
  Acquiror for each stock option an amount determined by multiplying (i) the
  excess, if any, of the Per Share Merger Consideration over the applicable
  exercise price per share of such option by (ii) the number of shares of Quantum
  Common Stock subject to such option.
  
  2.3 MERGER CONSIDERATION AND PER SHARE MERGER CONSIDERATION
  
       The Merger Consideration shall be $2,500,000.00. The Per Share Merger
  Consideration shall be that amount equal to (i) the Merger Consideration, minus
  the aggregate dollar amount to be paid to holders of outstanding options to
  purchase Quantum Common Stock pursuant to Section 2.2 above, (ii) divided by the
  number of outstanding shares of Quantum Common Stock immediately prior to the
  Effective Date.
  
  2.4 EFFECTIVE DATE
  
       The Merger shall become effective on the date and at the time specified in
  the certificate of merger relating to the Merger issued by the Department
  pursuant to the MGCL, or any successor thereto ("Effective Date"). A closing
  (the "Closing") shall take place immediately prior to the Effective Date at
  10:00 a.m., on the fifth business day following the receipt of all necessary
  regulatory or governmental approvals and consents and the expiration of all
  statutory waiting periods in respect thereof and the satisfaction or waiver, to
  the extent permitted hereunder, of the conditions to the consummation of the
  Merger specified in Article VI of this Agreement (other than the delivery of
  certificates, opinions and other instruments and documents to be delivered at
  the Closing), at the offices of Muldoon, Murphy & Faucette, 5101 Wisconsin
  Avenue, N.W., Suite 500, Washington, D.C. 20016, or at such other place, at such
  other time, or on such other date as the parties may mutually agree upon. At the
  Closing, there shall be delivered to Acquiror and Quantum the opinions,
  certificates and other documents required to be delivered under Article VI
  hereof.
  
                                         3
  ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF QUANTUM
  
  Quantum represents and warrants to Acquiror as follows:
  
  3.1 ORGANIZATION, STANDING AND AUTHORITY
  
       Quantum is a corporation duly organized, validly existing and in good
  standing under the MGCL and the Bank is a federal stock savings bank duly
  organized, validly existing under the HOLA, each with full corporate power and
  authority to carry on its business as now conducted and duly qualified to do
  business in each jurisdiction in which its ownership or leasing of property or
  the conduct of its business requires such qualification or where the failure to
  so qualify would have a Material Adverse Effect (as defined in Section 3.8) on
  the financial condition, results of operation, business or prospects of Quantum.
  
  3.2 CAPITAL STRUCTURE
  
       The authorized capital stock of Quantum consists of 3,500,000 shares of
  Quantum Common Stock, par value $.01, and 1,500,000 shares of preferred stock,
  par value $.01. As of August 31, 1998, there were 106,924 shares of Quantum
  Common Stock and no shares of preferred stock issued and outstanding. There are
  no Rights authorized, issued or outstanding with respect to the capital stock of
  Quantum, except as provided for under the Stock Option Plan. As of August 31,
  1998, there were options outstanding under the Stock Option Plan, to acquire,
  upon exercise, 7,700 shares of Quantum Common Stock (the "Option"). All
  outstanding shares of Quantum Common Stock have been duly issued and are validly
  outstanding, fully paid and nonassessable, and all shares of Quantum Common
  Stock which may be issued upon exercise of the Option will be duly issued, and
  validly outstanding, fully paid and nonassessable. None of the shares of Quantum
  Common Stock has been issued and none of the shares of Quantum Common Stock
  which may be issued upon exercise of the Option, will be issued in violation of
  the preemptive rights of any person.
  
  3.3 OWNERSHIP OF QUANTUM SUBSIDIARIES
  
       Except for the Bank and for the Quantum Subsidiaries set forth in
  Disclosure Statement 3.3 provided by Quantum, Quantum has no subsidiaries.
  Except for the Quantum Subsidiaries, stock in the FHLB of Atlanta and securities
  or other interests taken in consideration of debts previously contracted,
  Quantum does not own or have the right to acquire, directly or indirectly, any
  outstanding capital stock or other voting securities or ownership interests of
  any corporation, bank, savings association, partnership, joint venture, or other
  organization. The outstanding shares of capital stock or other ownership
  interests of each of the Quantum Subsidiaries are validly issued and
  outstanding, fully paid and nonassessable and all such shares are directly or
  indirectly owned by Quantum free and clear of all liens, claims and encumbrances
  or preemptive rights of any person. No Rights are authorized, issued or
  outstanding with respect to the capital stock or other ownership interests of
  any Quantum Subsidiaries and there are no agreements, understandings or
  commitments relating to the right of Quantum to vote or to dispose of said
  shares or other ownership interests.
  
  3.4 ORGANIZATION, STANDING AND AUTHORITY OF QUANTUM SUBSIDIARIES
  
       Each of the Quantum Subsidiaries is a corporation or partnership duly
  organized, validly existing and in good standing under the laws of the
  jurisdiction in which it is organized. Each of the Quantum Subsidiaries (i) has
  full power and authority to carry on its business as now conducted, and (ii) is
  duly qualified to do business in each jurisdiction in which its ownership or
  leasing of property or the conduct of its business requires such qualification
  where the failure to so qualify would have a Material Adverse Effect (as defined
  in Section 3.8) on the financial condition, results of operations, business or
  prospects of Quantum.
  
                                         4
  3.5 AUTHORIZED AND EFFECTIVE AGREEMENT
  
       (a) Quantum has all requisite corporate power and authority to enter into
  this Agreement and (subject to receipt of all necessary governmental approvals
  and the approval of this Agreement and the Articles of Merger by the affirmative
  vote of two-thirds of the shares of Quantum Common Stock outstanding and
  entitled to vote at the time, at a duly called meeting of stockholders) to
  perform all of its obligations under this Agreement and the Articles of Merger.
  The execution and delivery of this Agreement and consummation of the
  transactions contemplated hereby and by the Articles of Merger have been duly
  and validly authorized by all necessary corporate action in respect thereof on
  the part of Quantum, except the approval of this Agreement and the Articles of
  Merger by Quantum's shareholders. This Agreement and the Articles of Merger
  constitute legal, valid and binding obligations of Quantum, each of which is
  enforceable against Quantum in accordance with its respective terms, subject, as
  to enforceability, to bankruptcy, insolvency and other laws of general
  applicability relating to or affecting creditors' rights and to general equity
  principles.
  
       (b) Neither the execution and delivery of this Agreement, nor consummation
  of the transactions contemplated hereby or by the Articles of Merger, nor
  compliance by Quantum with any of the provisions hereof or thereof shall (i)
  conflict with or result in a breach of any provision of the Articles of
  Incorporation or bylaws of Quantum or the equivalent documents of any Quantum
  Subsidiary, (ii) constitute or result in a breach of any term, condition or
  provision of, or constitute a default under, or give rise to any right of
  termination, cancellation or acceleration with respect to, or result in the
  creation of any lien, charge or encumbrance upon any material property or asset
  of Quantum or any Quantum Subsidiary pursuant to, any note, bond, mortgage,
  indenture, license, agreement or other instrument or obligation, or (iii)
  subject to receipt of all required governmental approvals, violate any order,
  writ, injunction, decree, statute, rule or regulation applicable to Quantum or
  any Quantum Subsidiary.
  
       (c) Quantum will cooperate with Acquiror and use its best efforts to
  procure all consents and approvals from all regulatory agencies having
  jurisdiction over the transaction contemplated by this Agreement.
  
       (d) As of the date hereof, Quantum is not aware of any reasons why all
  consents and approvals shall not be procured from all regulatory agencies having
  jurisdiction over the transactions contemplated by this Agreement as shall be
  necessary for consummation of the transactions contemplated by this Agreement.
  As of the date hereof, Quantum is not aware of any reason why all consents and
  approvals shall not be procured from all other persons and entities whose
  consent or approval shall be necessary for consummation of the transactions
  contemplated by this Agreement.
  
  3.6 REPORTS
  
       For the five years preceding the date hereof, Quantum and the Quantum
  Subsidiaries have in all material respects filed all reports required to be
  filed with all applicable governmental authorities, including, without
  limitation, the OTS, the FDIC and the FHLB of Atlanta, and such reports comply
  in all material respects with applicable law and regulations, except as
  disclosed in Disclosure Statement 3.6 provided by Quantum.
  
  3.7 FINANCIAL STATEMENTS
  
       The Financial Statements of Quantum and Quantum Subsidiaries fairly present
  or will fairly present, as the case may be, the consolidated financial position
  of Quantum and the Quantum Subsidiaries as of the dates indicated and the
  consolidated results of operations, changes in shareholders' equity and
  statements of cash flows for the periods then ended in conformity with generally
  accepted accounting principles ("GAAP") applied on a consistent basis (except as
  stated therein). As of their respective dates, neither such financial
  statements, nor any subsequent Quantum or Quantum Subsidiary financial
  statements contained or will contain any untrue statement of a material fact or
  omitted or will omit to state a material fact required to be stated therein or
  necessary to make the statement made therein, in light of the circumstances
  under which they were made, not misleading. Quantum represents that the
  information in Annex C has been taken from the Bank's accounting records and
  presents fairly all of the direct revenues and costs
  
                                         5
  of and a good faith estimate of other costs attributable to the Bank's mortgage
  banking activities for the seven months ended July 31, 1998.
  
  3.8 MATERIAL ADVERSE CHANGE
  
       Except as disclosed in Disclosure Statement 3.8 provided by Quantum,
  Quantum has not, on a consolidated basis, suffered any material adverse change
  since December 31, 1997, and there has not been any condition, event, change or
  occurrence that individually or in the aggregate, has had, or is reasonably
  likely to have, a material adverse effect on Quantum. For purposes of this
  Agreement, "Material Adverse Effect" means with respect to Quantum, a material
  adverse effect upon the financial condition, results of operations, assets,
  business or prospects of Quantum and the Quantum Subsidiaries, taken as a whole.
  
  3.9 ABSENCE OF UNDISCLOSED LIABILITIES
  
       Neither Quantum nor any Quantum Subsidiary has any liability (contingent or
  otherwise) that is material to Quantum on a consolidated basis or that, when
  combined with all similar liabilities, would be material to Quantum on a
  consolidated basis, except for liabilities incurred in the ordinary course of
  business since the date of Quantum's most recent Financial Statements, nor are
  there any circumstances that, to the knowledge of Quantum, are reasonably
  expected to result in any such liability.
  
  3.10 ENVIRONMENTAL MATTERS
  
       (a) To the best of their knowledge, Quantum and the Quantum Subsidiaries
  are in substantial compliance with all Environmental Laws. Neither Quantum nor
  any Quantum Subsidiary has received any communication alleging that Quantum or
  any Quantum Subsidiary is not in such compliance and, to the best knowledge of
  Quantum and the Quantum Subsidiaries, there are no present circumstances that
  would prevent or interfere with the continuation of such compliance.
  
       (b) To the best knowledge of Quantum and the Quantum Subsidiaries, there
  are no past or present actions, activities, circumstances, conditions, events or
  incidents that could reasonably form the basis of any Environmental Claim or
  other claim or action or governmental investigation that could result in the
  imposition of any liability that would be material to Quantum on a consolidated
  basis arising under any Environmental Laws against Quantum or any Quantum
  Subsidiary or against any person or entity whose liability for any Environmental
  Claim Quantum or any Quantum Subsidiary has or may have retained or assumed
  either contractually or by operation of law, except as disclosed in Disclosure
  Statement 3.10 provided by Quantum.
  
  3.11 ALLOWANCE FOR LOAN LOSSES
  
       The allowance for loan losses reflected on the consolidated statements of
  financial condition included in the Financial Statements of Quantum is or will
  be adequate in the opinion of Quantum's management based on information
  currently available in all material respects as of their respective dates under
  the requirements of GAAP to provide for reasonably anticipated losses on
  outstanding loans net of recoveries.
  
  3.12 TAX MATTERS
  
       (a) For the past five years, Quantum and the Quantum Subsidiaries, and each
  of their predecessors, have timely filed all federal, state and local (and, if
  applicable, foreign) tax returns required by applicable law to be filed by them
  (including, without limitation, estimated tax returns, income tax returns,
  information returns, and withholding and employment tax returns) and have paid,
  or where payment is not required to have been made, have set up an adequate
  reserve or accrual for the payment of, all taxes required to be paid in respect
  of the periods covered by such returns and, as of the Effective Date, will have
  paid, or where payment is not required to have been made, will have set up an
  adequate reserve or accrual for the payment of, all taxes for any subsequent
  periods ending on or prior to the Effective Date, except as disclosed in
  Disclosure Statement 3.12 provided by Quantum. Neither Quantum nor any of
  
                                         6
  the Quantum Subsidiaries will have any material liability for my such taxes in
  excess of the amounts so paid or reserves or accruals so established.
  
       (b) For the past five years, all federal, state and local (and, if
  applicable, foreign) tax returns filed by Quantum and the Quantum Subsidiaries
  have been complete and accurate in all material respects. Neither Quantum nor
  any of the Quantum Subsidiaries is delinquent in the payment of any material
  tax, assessment or governmental charge, and, except as disclosed on Disclosure
  Statement 3.12, none of them has requested any extension of time within which to
  file any tax returns in respect of any fiscal year or portion thereof which have
  not since been filed. No deficiencies for the tax, assessment or governmental
  charge have been proposed, asserted or assessed (tentatively or otherwise)
  against Quantum or any Quantum Subsidiary which have not been settled and paid.
  There are currently no agreements in effect with respect to Quantum or any
  Quantum Subsidiary to extend the period of limitations for the assessment or
  collection of any tax. Except as disclosed on Disclosure Statement 3.12, as of
  the date hereof, no audit, examination or deficiency or refund litigation with
  respect to such return is pending.
  
  3.13 LEGAL PROCEEDINGS
  
       At the date hereof, there are no actions, suits, claims, governmental
  investigations or proceedings instituted, pending or, to the best knowledge of
  Quantum, threatened (or unasserted but considered by Quantum probable of'
  assertion and which if asserted would have at least a reasonable probability of
  a materially unfavorable outcome) against Quantum or any Quantum Subsidiary or
  against any asset, interest, or right of Quantum or any Quantum Subsidiary, or
  against any officer, director or employee of any of them that in any such case,
  if decided adversely, would have a Material Adverse Effect on the financial
  condition, results of operations, business or prospects of Quantum on a
  consolidated basis, except as disclosed in Disclosure Statement 3.13 provided by
  Quantum. To the knowledge of Quantum, there are no actual or threatened actions,
  suits or proceedings which present a claim to restrain or prohibit the
  transactions contemplated herein, or in the Articles of Merger.
  
  3.14 COMPLIANCE WITH LAWS
  
       Each of Quantum and the Quantum Subsidiaries is in compliance in all
  material respects with all statutes and regulations applicable and material to
  the conduct of its business (except for any violations not material to the
  financial condition, results of operations, business or prospects of Quantum on
  a consolidated basis), and neither Quantum nor any Quantum Subsidiary has
  received notification from any agency or department of federal, state or local
  government (i) asserting a violation or possible violation of any such statute
  or regulation and which violation would have a material adverse effect on the
  financial condition, results of operations, business or prospects, of Quantum on
  a consolidated basis, (ii) threatening to revoke any license, franchise, permit
  or government authorization or (iii) restricting or in any way limiting its
  operations. Neither Quantum nor any Quantum Subsidiary is subject to any
  regulatory or supervisory cease and desist order, agreement, written directive,
  memorandum of understanding or written commitment, and none of them has received
  any written communication requesting that they enter into any of the foregoing.
  
  3.15 DEPOSIT INSURANCE AND OTHER REGULATORY MATTERS
  
       (a) The deposit accounts of the Bank are insured by the Savings Association
  Insurance Fund of the FDIC to the maximum extent permitted by law, and the Bank
  has paid all premiums and assessments and filed all reports required under the
  FDIA and under the National Housing Act prior to the enactment of FIRREA.
  
       (b) The Bank is a member in good standing of the FHLB of Atlanta and owns
  the requisite amount of stock in the FHLB of Atlanta.
  
       (c) The Bank is a "qualified thrift lender," as such term is defined in the
  HOLA.
  
                                         7
  (d) The Bank is a qualified seller and servicer for the Federal National
  Mortgage Association and the Federal Home Loan Mortgage Corporation.
  
  3.16 CERTAIN INFORMATION
  
       The information relating to (i) Quantum and the Quantum Subsidiaries and
  (ii) this Agreement and the transactions contemplated hereby, to be contained in
  the proxy statement to be delivered to shareholders of Quantum in connection
  with the solicitation of their approval of this Agreement and the Articles of
  Merger and the transactions contemplated hereby and thereby, as of the date such
  proxy statement is mailed to shareholders of Quantum and up to and including the
  date of the meeting of shareholders to which such proxy statement relates (it
  being understood that any supplement to such proxy statement as of a later date
  shall be deemed to modify information as of an earlier date) 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.
  
  3.17 EMPLOYEE BENEFIT PLANS
  
       (a) Except as disclosed on Disclosure Statement 3.17 provided by Quantum,
  Quantum and the Quantum Subsidiaries have no stock option, employee stock
  purchase and stock bonus plans, qualified pension or profit-sharing plans,
  deferred compensation, consultant, bonus or group insurance contract or any
  other incentive, welfare or employee benefit plan or agreement maintained for
  the benefit of employees or former employees of Quantum or any Quantum
  Subsidiary. Quantum has previously furnished true and complete copies of any
  such plans, contracts or agreements identified on Disclosure Statement 3.17,
  together with (i) the most recent actuarial and financial reports prepared with
  respect to any qualified plans, (ii) the most recent annual reports filed with
  any governmental agency, and (iii) all rulings and determination letters and any
  open requests for rulings or letters that pertain to any qualified plan.
  
       (b) Neither Quantum nor any other Quantum Subsidiary (or any pension plan
  maintained by any of them and qualified under Section 401 of the Code) has
  incurred any material liability to the Pension Benefit Guaranty Corporation or
  the Internal Revenue Service with respect to any pension plan that Quantum or a
  Quantum Subsidiary maintains for or with respect to any of their employees and
  which is qualified under Section 401 of the Code except liabilities to the
  Pension Benefit Guaranty Corporation pursuant to Section 4007 of ERISA, all of
  which have been fully paid. To the best of Quantum's knowledge, no reportable
  event under Section 4043(b) of ERISA has occurred with respect to any such
  pension plan.
  
       (c) Neither Quantum nor any Quantum Subsidiary participates in or has
  incurred any liability under Section 4201 of ERISA for a complete or partial
  withdrawal from, a multi employer plan (as such term is defined in ERISA).
  
       (d) A favorable determination letter has been issued by the Internal
  Revenue Service with respect to each "employee pension plan" (as defined in
  Section 3(2) of ERISA) of Quantum or any Quantum Subsidiary which is intended to
  qualify under Section 401 of the Code to the effect that such plan is qualified
  under Section 401 of the Code and the trust associated with such employee
  pension plan is tax exempt under Section 501 of the Code. To the best of
  Quantum's knowledge, no such letter has been revoked or threatened to be revoked
  and Quantum does not know of any ground on which such revocation may be based.
  Neither Quantum nor any Quantum Subsidiary has a material liability under any
  such plan that is not reflected on the consolidated balance sheet included in
  the Financial Statements of Quantum as of December 31, 1997.
  
       (e) To the best of Quantum's knowledge, no prohibited transaction (which
  shall mean any transaction prohibited by Section 406 of ERISA and not exempt
  under Section 408 of ERISA or Section 4975 of the Code) has occurred with
  respect to any employee benefit plan maintained by Quantum or any Quantum
  Subsidiary (i) which would result in the imposition, directly or indirectly, of
  a material excise tax under Section 4975 of the Code, or (ii) the correction of
  which would have a Material Adverse Effect on the financial condition, results
  of operations, business or prospects of Quantum on a consolidated basis.
  
                                         8
  (f) Neither Quantum nor any Quantum Subsidiary maintains any defined
  benefit plans.
  
  3.18 CERTAIN CONTRACTS
  
       (a) Except for this Agreement and except as disclosed in Disclosure
  Statement 3.18 provided by Quantum, neither Quantum nor any Quantum Subsidiary
  is a party to a written or, to Quantum's knowledge, oral (i) consulting
  agreement not terminable on thirty (30) days' or less notice, and providing for
  payments in excess of $5,000 per annum, (ii) agreement with any director,
  executive officer or other key employee of Quantum or any Quantum Subsidiary the
  benefits of which are contingent, or the terms of which are materially altered,
  upon the occurrence of a transaction involving Quantum or any Quantum Subsidiary
  of the nature contemplated by this Agreement, (iii) agreement with respect to
  any director, executive officer or employee of Quantum or any Quantum Subsidiary
  providing for other than at-will employment, (iv) agreement or plan, including
  any stock option plan, stock appreciation rights plan, restricted stock plan,
  stock purchase plan, or any other non-qualified compensation plan, any of the
  benefits of which will be increased, or the vesting of the benefits of which
  will be accelerated, by the occurrence of any of the transactions contemplated
  by this Agreement or the value of any of the benefits of which will be
  calculated on the basis of any of the transactions contemplated by this
  Agreement, (v) agreement containing covenants that limit the ability of Quantum
  or any Quantum Subsidiary to compete in any line of business or with any person,
  or that involve any restriction on the geographic area in which or method by
  which, Quantum (including any successor thereof) or any Quantum Subsidiary may
  carry on its business (other than as may be required bylaw or any regulatory
  agency), (vi) agreement which by its terms limits the payment of dividends by
  Quantum or any Quantum Subsidiary, (vii) instrument evidencing or related to
  indebtedness for borrowed money, whether directly or indirectly, by way of
  purchase money obligation, conditional sale, lease purchase, guaranty or
  otherwise, in respect of which Quantum or any Quantum Subsidiary is an obligor
  to any person, which instrument evidences or relates to indebtedness (other than
  deposits, bankers acceptances, and "treasury tax and loan" accounts established
  in the ordinary course of business and transactions in "federal funds") or which
  contains financial covenants or other restrictions (other than those relating to
  the payment of principal and interest when due) which would be applicable on or
  after the Effective Date to Acquiror, or any of the Acquiror Subsidiaries;
  (viii) contract (other than this Agreement) limiting the freedom of Quantum or
  Bank to engage in any type of banking or bank-related business permissible under
  law; (ix) contract, plan or arrangement which provides for payments of benefits
  payable to any participant therein or party thereto, and which might render any
  portion of any such payments or benefits subject to disallowance of deduction
  therefor as a result of the application of Code Section 280G; or (x) agreement
  for investment banking services or services related to the sale, merger or
  acquisition of Quantum or any Quantum Subsidiary. Quantum has disclosed on
  Disclosure Statement 3.18 any material contracts not otherwise disclosed
  pursuant to subparagraphs (i)-(x) above.
  
       (b) All the contracts, plans, arrangements and instruments listed in
  Disclosure Statement 3.18 are in full force and effect on the date hereof and
  neither Quantum nor, to the knowledge of Quantum, any other party to any such
  contract, plan, arrangement or instrument, has breached any provisions of, or is
  in material default in any respect under any term of, any such contract, plans,
  arrangement or instrument. Except as otherwise disclosed in Disclosure Statement
  3.18, no plan, employment agreement, termination agreement, or similar agreement
  or arrangement to which Quantum or any Quantum Subsidiary may be liable (i)
  contains provisions which permit an employee or independent contractor to
  terminate it without cause and continue to accrue benefits thereunder; (ii)
  provides for acceleration in the vesting of benefits thereunder upon the
  occurrence of a change in ownership or control of Quantum or any Quantum
  Subsidiary; (iii) provides for benefits which may cause the disallowance of a
  federal income tax deduction under Code Section 280G; or (iv) requires Quantum
  or any Quantum Subsidiary to provide a benefit in the form of Quantum Common
  Stock or determined by reference to the value of Quantum Common Stock.
  
            (iii) Neither Quantum nor any Quantum Subsidiary is in default under
  or in violation of any provision, and is not aware of any fact or circumstance
  that has been or could be alleged to constitute a material default or violation,
  of any note, bond, indenture, mortgage, deed of trust, loan agreement or other
  agreement to which it is a party or by which it is bound or to which its
  respective properties or assets is subject.
  
                                         9
  3.19 BROKERS AND FINDERS
  
       Except as set forth on Disclosure Statement 3.19 provided by Quantum,
  neither Quantum nor any Quantum Subsidiary nor any of their respective officers,
  directors or employees has employed any broker, finder or financial advisor or
  incurred any liability for any fees, commissions or other transaction-based
  compensation in connection with the transactions contemplated herein or in the
  Articles of Merger (other than fees to attorneys, auditors, proxy solicitors and
  similar professionals).
  
  3.20 INSURANCE
  
       Quantum and the Quantum Subsidiaries each currently maintain insurance in
  the amounts and for the coverages set forth on Disclosure Statement 3.20
  provided by Quantum. Within the past three years neither Quantum nor any Quantum
  Subsidiary has received any notice of cancellation with respect to any insurance
  policy or bond, and within the last three years, neither Quantum nor any Quantum
  Subsidiary has been refused any insurance coverage sought or applied for, and
  has no reason to believe that existing insurance coverage cannot be renewed as
  and when the same shall expire, upon terms and conditions as favorable as those
  presently in effect, other than possible increases in premiums or unavailability
  of coverage that do not result from any extraordinary loss experience on the
  part of Quantum or any Quantum Subsidiary.
  
  3.21 LOANS
  
       Each loan on the books and records of Quantum and any Quantum Subsidiary,
  including unfunded portions of outstanding lines of credit and loan commitments,
  was made in all material respects in accordance with customary lending standards
  in the ordinary course of business, is evidenced in all material respects by
  appropriate and sufficient documentation, and constitutes the legal, valid and
  binding obligation of the obligator named therein subject to bankruptcy,
  insolvency, fraudulent conveyance and other laws of general applicability
  relating to or affecting creditors' rights and to general equity principles.
  
  3.22 PROPERTIES
  
       Quantum and the Quantum Subsidiaries have good and marketable title free
  and clear of all liens, encumbrances, charges, defaults or equities (other than
  equities of redemption under applicable foreclosure laws) to all of the material
  properties and assets, real and personal, reflected on the consolidated
  statements of financial condition included in the Financial Statements of
  Quantum as of December 31, 1997 or acquired after such date, except (i) liens
  for current taxes not yet due and payable, (ii) pledges to secure deposits and
  other liens incurred in the ordinary course of its banking business, (iii) such
  imperfections of title, easements and encumbrances, if any, as are not material
  in character, amount or extent, (iv) dispositions and encumbrances for business,
  and (v) as disclosed in the Financial Statements of Quantum. All material leases
  pursuant to which Quantum or any Quantum Subsidiary, as lessee, leases real or
  personal property, are valid and enforceable in accordance with their respective
  terms.
  
  3.23 MATERIAL INTERESTS OF CERTAIN PERSONS
  
       Except as disclosed on Disclosure Statement 3.23 provided by Quantum, to
  Quantum's knowledge, no officer or director of Quantum, or any associate (as
  such term is defined in Rule 14a-1(a) under the Securities Exchange Act of 1934,
  as amended) of any such officer or director, has any interest in any material
  contract or property (real or personal), tangible or intangible, used in or
  pertaining to the business of Quantum or any Quantum Subsidiary that are
  required to be disclosed under Regulation S-K of the Securities and Exchange
  Commission (the "SEC").
  
  3.24 ACCURACY OF INFORMATION
  
       The statements contained in this Agreement, Quantum Disclosure Statements,
  or in any other written document delivered by or on behalf of Quantum pursuant
  to the terms of this Agreement are true and correct, and to the knowledge
  
                                         10
  of Quantum, such statements and documents do not omit any fact necessary to make
  the statements contained therein not misleading.
  
  3.25 BOOKS AND RECORDS
  
       The books and records of Quantum and each Quantum Subsidiary have been, and
  are being, maintained in accordance with applicable legal and accounting
  requirements and reflect in all material respects the substance of material
  events and transactions that should be included therein.
  
  3.26 CORPORATE DOCUMENTS
  
       Quantum has delivered to Acquiror true and complete copies of its Articles
  of Incorporation and bylaws, as amended to date, which are currently in full
  force and effect.
  
  3.27 SHAREHOLDERS' AGREEMENT
  
       Each shareholder of Quantum who is a director or executive officer of
  Quantum or who has or shares the right to vote or dispose of an aggregate of 10%
  or more of the outstanding shares of Quantum Common Stock or who is identified
  on Disclosure Statement 3.27 provided by Quantum, has executed a written
  Shareholders' Agreement in the form attached hereto as Annex B and the aggregate
  number of shares of Quantum Common Stock which such persons are entitled to vote
  represent in the aggregate at least 20% of the outstanding shares of Quantum
  Common Stock.
  
  3.28 YEAR 2000 MATTERS
  
       Quantum has completed a review of Bank's computer systems to identify
  systems that could be affected by the "Year 2000" issue and reasonably believes
  it has identified all such Year 2000 problems. Quantum's management has
  developed and commenced implementation of a plan to respond to this issue which
  is designed to complete any required initial changes to its computer systems and
  to complete testing of those changes by December 31, 1998, or, with respect to
  coordination with a third party provider of computer services, such other data
  that such third party provider mandates; provided, however, that the Bank's Year
  2000 compliance shall be satisfactory to the OTS. Between the date of this
  Agreement and the Effective Date, Quantum shall use commercially practicable
  efforts to implement and/or continue to undertake such plan. Year 2000 issues
  have not had, and are not reasonably expected to have, a Material Adverse Effect
  on Quantum or any Quantum Subsidiary.
  
                                     ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF ACQUIROR
  
  Acquiror represents and warrants to Quantum as follows:
  
  4.1 ORGANIZATION, STANDING AND AUTHORITY OF ACQUIROR AND ACQUISITIONCO.
  
       Acquiror is and, at the Effective Date, AcquisitionCo will be a corporation
  duly organized, validly existing and in good standing under the laws of the
  jurisdiction of their respective incorporation, each with full corporate power
  and authority to carry on its business as it is now conducted and duly qualified
  to do business in each jurisdiction in which its ownership or leasing of
  property or the conduct of its business requires such qualification or where the
  failure to so qualify would have a Material Adverse Effect (as defined in
  Section 4.5) on the financial condition, results of operations, business or
  prospects of Acquiror.
  
                                         11
  4.2 AUTHORIZED AND EFFECTIVE AMENDMENT
  
       (a) Acquiror has all requisite corporate power and authority, and, at the
  Effective Date, AcquisitionCo will have all requisite corporate power and
  authority, to enter into this Agreement and (subject to receipt of all necessary
  governmental approvals) to perform all of their obligations under this Agreement
  and the Articles of Merger. The execution and delivery of this Agreement, and
  consummation of the transactions contemplated hereby and by the Articles of
  Merger, will have been duly and validly authorized by all necessary corporate
  action in respect thereof on the part of Acquiror and AcquisitionCo. This
  Agreement and the Articles of Merger constitute legal, valid and binding
  obligations of Acquiror and AcquisitionCo, in each case enforceable against it
  in accordance with their respective terms, subject, as to enforceability, to
  bankruptcy, insolvency and other laws of general applicability relating to or
  affecting creditors' rights and to general equity principles.
  
       (b) Neither the execution and delivery of this Agreement, nor consummation
  of the transactions contemplated hereby or by the Articles of Merger, nor
  compliance by Acquiror or AcquisitionCo with any of the provisions hereof or
  thereof shall (i) conflict with or result in a breach of any provision of the
  Articles of Incorporation or bylaws of Acquiror or AcquisitionCo, (ii)
  constitute or result in a breach of any term, condition or provision of, or
  constitute a default under, or give rise to any right of termination,
  cancellation or acceleration with respect to, or result in the creation of any
  lien, charge or encumbrance upon any property or asset of Acquiror or
  AcquisitionCo pursuant to, any note, bond, mortgage, indenture, license,
  agreement or other instrument or obligation, or (iii) subject to any required
  governmental approvals, violate any order, writ, injunction, decree, statute,
  rule or regulation applicable to Acquiror or AcquisitionCo.
  
       (c) Except for any necessary consents and approvals of, or any necessary
  filings or registrations with, or notices to the SEC, the OTS, the FDIC, the
  Department of Justice ("DOJ"), the Board of Governors of the Federal Reserve
  System ("FRB") and the Federal Trade Commission ("FTC"), no consents or
  approvals of or filings or registrations with, or notices to any public body or
  authority are necessary on behalf of Acquiror and AcquisitionCo in connection
  with (i) the execution and delivery by Acquiror of this Agreement and the
  Articles of Merger by AcquisitionCo, or (ii) the consummation by Acquiror,
  AcquisitionCo or Principal Life Insurance Company ("Principal Life") of the
  transactions contemplated by this Agreement.
  
       (d) As of the date hereof, Acquiror is not aware of any reasons why all
  consents and approvals shall not be procured from all regulatory agencies having
  jurisdiction over the transactions contemplated by this Agreement as shall be
  necessary for consummation of the transactions contemplated by this Agreement.
  As of the date hereof, Acquiror is not aware of any reason why all consents and
  approvals shall not be procured from all other persons and entities whose
  consent or approval shall be necessary for consummation of the transactions
  contemplated by this Agreement.
  
       (e) Acquiror and Acquiror's affiliates are not subject to any "presumptive
  disqualifier" as defined in 12 C.F.R. ss. 574.7(g).
  
  4.3 CERTAIN INFORMATION
  
       The information relating to Acquiror and AcquisitionCo to be provided in
  writing to Quantum for inclusion in the Proxy Statement to be delivered to
  shareholders of Quantum in connection with the solicitation of their approval of
  this Agreement, the Articles of Merger and the transactions contemplated hereby
  and thereby, as of the date such Proxy Statement is mailed to shareholders of
  Quantum and up to and including the date of the meeting of shareholders to which
  such Proxy Statement relates (it being understood that any supplement to such
  Proxy Statement as of a later date shall be deemed to modify information as of
  an earlier date) will not contain any untrue statement of a material fact or
  omit to state a material fact necessary to make the statement therein, in light
  of the circumstances under which they were made, not misleading.
  
                                         12
  4.4 FINANCIAL STATEMENTS
  
       The Financial Statements of Acquiror fairly present or will fairly present,
  as the case may be, the consolidated financial position of Acquiror and the
  Acquiror's Subsidiaries as of the dates indicated and the consolidated results
  of operations, changes in shareholders' equity and changes in cash flows for the
  periods then ended in conformity with GAAP applied on a consistent basis (except
  as stated therein). As of their respective dates, neither such Financial
  Statements, nor any subsequent Acquiror or Acquiror Subsidiary Financial
  Statements contained or will contain any untrue statement of a material fact or
  omitted or will omit to state a material fact required to be stated therein or
  necessary to make the statement made therein, in light of the circumstances
  under which they were made, not misleading.
  
  4.5 MATERIAL ADVERSE CHANGE
  
       Acquiror has not, on a consolidated basis, suffered any material adverse
  change since December 31, 1997, and there has not been any condition, event,
  change or occurrence that individually or in the aggregate, has had, or is
  reasonably likely to have, a Material Adverse Effect on Acquiror on a
  consolidated basis. For purposes of this Agreement, "Material Adverse Effect,"
  with respect to Acquiror, means a material adverse effect upon the financial
  condition, results of operations, assets, business or prospects of Acquiror and
  the Acquiror Subsidiaries, taken as a whole.
  
  4.6 ABSENCE OF UNDISCLOSED LIABILITIES
  
       Acquiror does not have any liability (contingent or otherwise) that is
  material to Acquiror on a consolidated basis or that, when combined with all
  similar liabilities, would be material to Acquiror on a consolidated basis,
  except as disclosed in the Financial Statements of Acquiror and except for
  liabilities incurred in the ordinary course of its business since the date of
  Acquiror's most recent Financial Statements, nor are there any such
  circumstances, that, to the knowledge of Acquiror, are reasonably expected to
  result in any such liability.
  
  4.7 TAX MATTERS
  
       (a) For the five years preceding the date hereof, Acquiror has timely filed
  all federal, state and local (and, if applicable, foreign) tax returns required
  by applicable law to be filed by Acquiror (including, without limitation,
  estimated tax returns, income tax returns, information returns, and withholding
  and employment tax returns) and have paid, or where payment is not required to
  have been made, have set up an adequate reserve or accrual for the payment of,
  all taxes required to be paid in respect of the periods covered by such returns
  and, as of the Effective Date, will have paid, or where payment is not required
  to have been made, will have set up an adequate reserve or accrual for the
  payment of, all taxes for any subsequent periods ending on or prior to the
  Effective Date which are not being contested in good faith. Acquiror will not
  have any material liability for any such taxes in excess of the amounts so paid
  or reserves or accruals so established.
  
       (b) For the five years preceding the date hereof, all federal, state and
  local (and, if applicable, foreign) tax returns filed by Acquiror have been
  complete and accurate in all material respects. Acquiror is not delinquent in
  the payment of any tax, assessment or governmental charge. No deficiencies for
  any tax, assessment or governmental charge have been proposed, asserted or
  assessed (tentatively or otherwise) against Acquiror which have not been settled
  and paid. There are currently no agreements in effect with respect to Acquiror
  to extent the period of limitations for the assessment or collection of any tax.
  
  4.8 LEGAL PROCEEDINGS
  
       At the date hereof, there are no actions, suits, claims, governmental
  investigations or proceedings instituted, pending or, to the best knowledge of
  Acquiror, threatened (or unasserted but considered by Acquiror probable of
  assertion and which if asserted would have a reasonable probability of a
  materially unfavorable outcome) against Acquiror or any of its affiliates or
  
                                         13
  against any asset, interest or right of Acquiror or any of its affiliates, or
  against any officer, director or employee of any of them that, if decided
  adversely, might have an adverse effect on the ability of the Acquiror to pay
  the Merger Consideration. To the knowledge of Acquiror, there are no actual or
  threatened actions, suits or proceedings which present a claim to restrain or
  prohibit the transactions contemplated herein, or in the Articles of Merger.
  
  4.9 COMPLIANCE WITH LAWS
  
       Acquiror is in material compliance with all statutes and regulations
  applicable and material to the conduct of its business (except for any
  violations not material to the financial condition, results of operations,
  business or prospects of Acquiror on a consolidated basis), and Acquiror has not
  received notification from any agency or department of federal, state or local
  government (i) asserting a violation or possible violation of any such statute
  or regulation, and which violations would have a Material Adverse Effect on the
  financial condition, results of operations, business or prospects of Acquiror,
  (ii) threatening to revoke any license, franchise, permit or government
  authorization or (iii) restricting or in any way limiting its operations.
  
  4.10 BROKERS AND FINDERS
  
       Except as disclosed in Disclosure Statement 4.10 provided by Acquiror,
  Acquiror has not employed any broker, finder or financial advisor or incurred
  any liability for any fees, commissions or other transaction-based compensation
  in connection with the transactions contemplated herein or in the Articles of
  Merger (other than fees to attorneys, auditors, proxy solicitors and similar
  professionals).
  
                                     ARTICLE V
                                     COVENANTS
  
  5.1 SHAREHOLDER MEETING
  
       Quantum shall take all action necessary, including the preparation of the
  Proxy Statement, to properly call and convene a meeting of its shareholders as
  soon as practicable, and not later than 60 days, after the date that any
  required filing with respect to the divestiture of control of Acquiror by
  Principal Life is filed with the OTS, as contemplated by Section 5.3(b) hereof.
  At such meeting, Quantum shall submit for the approval of its shareholders this
  Agreement and the Articles of Merger.
  
  5.2 RECOMMENDATIONS TO SHAREHOLDERS
  
       Subject to compliance with the legal and fiduciary duties of such directors
  and the receipt of an opinion from RP Financial, LLC dated on or immediately
  prior to the date of mailing of the Proxy Statement for the meeting of
  shareholders at which this Agreement and the Articles of Merger will be
  considered and not subsequently withdrawn prior to such meeting of shareholders
  to the effect that the Merger Consideration is fair to such shareholders from a
  financial point of view, the Board of Directors of Quantum shall recommend that
  its shareholders approve this Agreement and the Articles of Merger.
  
  5.3 APPLICATIONS
  
       (a)  As promptly as practicable, Acquiror shall incorporate and organize
  AcquisitionCo and shall submit applications for prior approval of the
  transactions contemplated herein and in the Articles of Merger to the OTS, the
  FDIC or any other federal, state or local government agency, department or body
  the approval of which is required for consummation of the Merger. Quantum shall
  have the right to review and comment on the portions of such applications and
  amendments that relate directly to Quantum prior to their filing with any
  regulatory agencies, and Acquiror promptly shall furnish Quantum with copies of
  the non-confidential portions of such applications after filing of applications
  
                                         14
  with these or any other regulatory agencies. Quantum and Acquiror each represent
  and warrant to the other that all information concerning it and its directors,
  officers, shareholders and subsidiaries included (or submitted for inclusion) in
  any such application shall be true, correct and complete in all material
  respects.
  
       (b)  Acquiror's application to the OTS will disclose an intention by
  Principal Life to divest control, within the meaning of HOLA, and the
  regulations promulgated thereunder, of Acquiror and requisite banking regulatory
  applications required in connection with such proposed divestiture of control by
  Principal Life will be filed within 45 days of the date Acquiror files the
  necessary banking regulatory applications for prior approval of the transactions
  contemplated herein and in the Articles of Merger.
  
  5.4 BEST EFFORTS
  
       Acquiror and Quantum shall each use its best efforts in good faith, and
  each of them shall cause its subsidiaries to use their best efforts in good
  faith, to (i) furnish such information as may be required in connection with and
  otherwise cooperate in the preparation and filing of the documents referred to
  in Sections 5.1 and 5.3 herein, and (ii) take or cause to be taken all actions
  necessary or desirable on its part so as to permit consummation of the
  transactions contemplated by this Agreement and the Articles of Merger at the
  earliest possible date. Neither Acquiror nor Quantum shall take, or cause, or to
  the best of its ability permit to be taken, any action that would substantially
  delay or impair the prospects of consummating the transactions contemplated by
  this Agreement and the Articles of Merger.
  
  5.5 INVESTIGATION AND CONFIDENTIALITY
  
       Quantum will keep Acquiror advised of all material developments relevant to
  its business and to consummation of the Merger, and Acquiror will advise Quantum
  of any material adverse change in its financial condition, results of
  operations, business or prospects and all material developments that are likely
  adversely to affect consummation of the Merger. Acquiror and Quantum each may
  make or cause to be made such investigation of the financial and legal condition
  of the other as such party reasonably deems necessary or advisable in connection
  with the transactions contemplated herein, provided, however, that such
  investigation shall be reasonably related to such transactions and shall not
  interfere unnecessarily with the other and the other's advisors with such
  financial data and other information with respect to its business and properties
  as such other party shall from time to time reasonably request. No investigation
  pursuant to this Section 5.5 shall affect or be deemed to modify any
  representation or warranty made by, or the conditions to the obligations
  hereunder of, either party hereto. Each party hereto shall, and shall cause its
  directors, officers, attorneys, and advisors to, maintain the confidentiality of
  all information obtained in such investigation which is not otherwise publicly
  disclosed by the other party, said undertaking with respect to confidentiality
  to survive any termination of this Agreement pursuant to Section 7.1 hereof.
  
  5.6 PRESS RELEASE
  
       Acquiror and Quantum shall agree with each other as to the form and
  substance of any press release related to this Agreement and the Articles of
  Merger or the transactions contemplated hereby and thereby, and consult with
  each other as to the form and substance of other public disclosures related
  thereto, provided, however, that nothing contained herein shall prohibit either
  party, following notification to the other party, from making any disclosure
  which its counsel deems necessary. Notwithstanding the above, Quantum shall not
  issue any press release that names Acquiror, Principal Life, or their affiliates
  without the approval of Acquiror, which approval shall not be unreasonably
  withheld.
  
  5.7 FORBEARANCE OF QUANTUM
  
       Except with the prior written consent of Acquiror, which consent shall not
  be unreasonably withheld, or as expressly contemplated herein, between the date
  hereof and the Effective Date, Quantum shall not, and shall cause each Quantum
  Subsidiary not to:
  
                                         15
  (a)  carry on its business, including the continued expansion of mortgage
  banking activities, other than in the usual, regular and ordinary course in
  substantially the same manner as heretofore conducted or with respect to
  continued expansion of mortgage banking activities consistent with the trend in
  such expansion over the preceding 12 month period (and in the case of Bank other
  than in accordance with prudent banking practices), or establish or acquire any
  new subsidiary or cause to permit any subsidiary to engage in any new activity
  or materially expand any existing activities;
  
       (b)  declare, set aside, make or pay any dividend or other distribution in
  respect of its capital stock;
  
       (c ) issue any shares of its capital stock other than pursuant to the
  exercise of options granted under the Stock Option Plan to purchase no more than
  7,700 shares of Quantum Common Stock Options which are outstanding at the date
  of this Agreement;
  
       (d)  issue, grant or authorize any Rights or effect any recapitalization,
  reclassification, stock dividend, stock split or like change in capitalization;
  
       (e)  amend its Articles of Incorporation or bylaws or equivalent documents;
  impose, or suffer the imposition, on any share of stock held by Quantum or any
  Quantum Subsidiary of any material lien, charge or encumbrance or permit any
  such lien to exist; or waive or release any material right or cancel or comprise
  any material debt or claim other than in the ordinary course of its business;
  
       (g)  fail to comply in any material respect with any laws, regulations,
  ordinances, or governmental actions applicable to it and to the conduct of its
  business except where Quantum or any Quantum Subsidiary is in good faith
  contesting the validity of any of the foregoing, or where the failure to so
  comply will not have a Material Adverse Effect on the financial condition,
  results of operations, business or prospects of Quantum;
  
       (h)  increase the rate of compensation of any of its officers or employees,
  or pay or agree to pay any bonus to, or provide any other employee benefit or
  incentive to, any of its officers or employees, except in the normal course of
  business and in a manner consistent with past practice; provided, however, that
  no such increase shall be paid or provided to the President and Chief Executive
  Officer except to the extent specifically identified in Disclosure Statement
  5.7(h) provided by Quantum;
  
       (i)  enter into or substantially modify (except as may be required by
  applicable law) any pension, retirement, stock option, stock purchase, stock
  appreciation right, savings, profit sharing, deferred compensation, employment,
  consulting, bonus, group insurance or other employee benefit, incentive or
  welfare contract, plan or arrangement, or any trust agreement related thereto,
  in respect of any of its directors, officers or other employees;
  
       (j)  solicit or encourage inquiries or proposals with respect to, furnish
  any information relating to, or participate in any negotiations or discussions
  concerning, any acquisition or purchase of all or a substantial portion of the
  assets of, or a substantial equity interest in, Quantum or any Quantum
  Subsidiary or any business combination with Quantum or any Quantum Subsidiary
  other than as contemplated by this Agreement (except where the failure to
  furnish such information or participate in such negotiations or discussions
  would constitute a breach of the fiduciary or legal obligations of Quantum's
  Board of Directors to its shareholders) or otherwise agreed to by the parties;
  or authorize or permit any officer, director, agent or affiliate of it to do any
  of the above; or fail to notify Acquiror immediately if any such inquiries or
  proposals are received by, any such information is required from, or any such
  negotiations or discussions are sought to be initiated with, Quantum or any
  Quantum Subsidiary;
  
       (k)  enter into or renew (i) any material agreement, arrangement or
  commitment not made in the ordinary course of business consistent with historic
  and prudent banking practices, other than agreements or memoranda of
  understanding with regulatory authorities, or as set forth in Disclosure
  Statement 5.7(k) provided by Quantum, (ii) any agreement, indenture or other
  instrument relating to the borrowing of money by Quantum or any Quantum
  Subsidiary or guarantee by Quantum or any Quantum Subsidiary or any such
  obligation, except as disclosed in Disclosure Statement 5.7(k), and for deposits
  
                                         16
  and advances from the FHLB of Atlanta in a manner consistent with past practice,
  (iii) any agreement, arrangement or commitment relating to the employment of, or
  severance of, a consultant (except such agreements, arrangements or commitment
  with consultants as may be required to consummate the transactions contemplated
  herein or to enforce Quantum's rights and remedies hereunder) or the employment,
  severance, election or retention in office of any present or former director,
  officer or employee, except as disclosed in Disclosure Statement 5.7(k), or (iv)
  any contract, agreement or understanding with a labor union;
  
       (l)  change its lending, investment or asset liability management policies
  in any material respect except as may be required by applicable law;
  
       (m)  change its method of accounting in effect at December 31, 1997, except
  as required by changes in regulation or GAAP concurred in by its independent
  certified public accountants, or change any of its methods of reporting income
  and deductions for federal income tax purposes from those employed in the
  preparation of its federal income tax returns for the year ended December 31,
  1997, except as required by changes in law or regulation;
  
       (n)  take or cause to be taken any action which would disqualify the Merger
  as a tax-free reorganization under Section 368 of the Code with respect to each
  of the corporate partners to this Agreement and to the Articles of Merger; or
  
       (n)  agree to do any of the foregoing.
  
  5.8 CONDUCT OF QUANTUM'S BUSINESS PRIOR TO THE EFFECTIVE DATE
  
       Except with the written consent of Acquiror, which consent shall not be
  unreasonably withheld, or as expressly contemplated herein, between the date
  hereof and the Effective Date, Quantum shall, and shall cause each Quantum
  Subsidiary to:
  
       (a)  conduct their business, maintain their properties and operate only in
  the ordinary course of business consistent with past practices and maintain
  Quantum's financial statements and reports in accordance with GAAP and maintain
  Quantum Bank's regulatory reports in accordance with applicable requirements;
  
       (b)  conduct their business and operate only in accordance with sound
  banking practices, including charging off all loans required to be charged off
  by bank regulators and regulations, statutes and sound banking practices;
  
       (c)  remain in good standing with all applicable bank regulatory agencies
  and preserve each of their existing banking locations;
  
       (d)  use their commercially reasonable efforts to maintain and preserve
  intact their business organization, properties, leases and advantageous business
  relationships and maintain good relationships with employees, and the goodwill
  and business relationships with customers and others;
  
       (e)  maintain in full force and effect all of the insurance policies and
  bonds covering the directors, officers, employees, properties, businesses and
  employee plans of Quantum and the Quantum Subsidiaries;
  
       (f)  not knowingly take any action which would materially adversely affect
  or delay the ability of Quantum, Bank or any other Quantum Subsidiary, Acquiror,
  or AcquisitionCo to obtain any necessary approvals, consents or waivers of any
  governmental authority or any other entity required for the transactions
  contemplated hereby; and
  
       (i)  take such actions in the ordinary course of business consistent with
  past practices to protect Bank's deposit base and prevent any excessive
  withdrawals of deposits, provided, however, Bank shall not pay any interest on
  
                                         17
  deposits which would exceed the maximum amount paid on like accounts with
  comparable institutions in Bank's marketplace.
  
  5.9 FORBEARANCES OF ACQUIROR
  
       Except with the prior written consent of Quantum, which consent will not be
  unreasonably withheld, between the date hereof and the Effective Date, Acquiror
  shall not:
  
       (a)  enter into any agreement, understanding or commitment, written or
  oral, with any other party which would impede in any material respect the
  ability of Acquiror to perform the undertakings, commitments and obligations
  arising under this Agreement and the Articles of Merger; or
  
       (b)  sell or lease any material portion of the assets and business of
  Acquiror or any of its affiliates, except where any such sale or lease will not
  materially and adversely affect the ability of Acquiror to pay the Merger
  Consideration.
  
  5.10 INDEMNIFICATION AND INSURANCE
  
       (a)  From and after the Effective Date, Acquiror shall indemnify, defend
  and hold harmless each person who is now, or has been at any time prior to the
  (date hereof or who becomes prior to the Effective Date, an officer, director or
  employee of Quantum (the "Indemnified Parties") against all losses, claims,
  damages, costs, expenses (including attorney's fees), liabilities or judgments
  or amounts that are paid in settlement of or in connection with any claim,
  action, suit, proceeding or investigation (each a "Claim") in which an
  Indemnified Party is, or is threatened to be made, a party or a witness based in
  whole or in part on or arising in whole or in part out of the fact that such
  person is or was a director, officer or employee of Quantum or any Quantum
  Subsidiary if such Claim pertains to any matter or fact arising, existing or
  occurring prior to the Effective Date (including, without limitation, the Merger
  and other transactions contemplated by this Agreement), regardless of whether
  such Claim is asserted or claimed prior to, or at or after, the Effective Date
  (the "Indemnified Liabilities") to the full extent permitted under applicable
  state or federal law in effect as of the date hereof or as amended applicable to
  a time prior to the Effective Date and under Quantum's Articles of Incorporation
  and Bylaws (and Acquiror shall pay expenses in advance of the final disposition
  of any such action or proceeding to each Indemnified Party to the full extent
  permitted by applicable state or federal law in effect as of the date hereof or
  as amended applicable to a time prior to the Effective Date upon receipt of any
  undertaking required by applicable law). Any Indemnified Party wishing to claim
  indemnification under this Section 5.9(a) upon learning of any Claim shall
  notify Acquiror (but the failure to notify Acquiror shall not relieve Acquiror
  from any liability which they may have under this Section 5.10(a) shall except
  to the extent such failure prejudices Acquiror) and shall deliver to Acquiror
  the undertaking, if any, required by applicable law. The obligations of Acquiror
  described in this Section 5.10(a) shall continue in full force and effect,
  without any amendment thereto, for a period of not less than three years from
  the Effective Date; provided, however, that all rights to indemnification in
  respect of any Claim asserted or made within such period shall continue until
  the final disposition of such Claim.
  
       (b)  From and after the Effective Date, the directors, officers and
  employees of Quantum who become directors, officers or employees of Acquiror or
  any of the Acquiror Subsidiaries, except for the indemnification rights set
  forth in paragraph (a) of this Section 5.10, shall have indemnification rights
  having prospective application only. The prospective indemnification rights
  shall consist of such rights to which directors, officers and employees of
  Acquiror are entitled under the provisions of the Certificate of Incorporation,
  or similar governing documents, of Acquiror and the Acquiror Subsidiaries, as in
  effect from time to time after the Effective Date, as applicable, and provisions
  of applicable state and federal law as in effect from time to time after the
  Effective Date.
  
       (c)  The obligations of Acquiror provided under paragraphs (a) and (b) of
  this Section 5.10 are intended to benefit, and be enforceable against Acquiror
  directly by, the Indemnified Parties, and shall be binding on all respective
  successors and permitted assigns of Acquiror.
  
                                         18
  (d)  For a period of three years following the Effective Date, Acquiror
  shall permit Quantum to purchase and keep in force, or at Acquiror's option to
  provide comparable coverage, directors' and officers' liability insurance to
  provide coverage for acts or omissions of the type and in the amount currently
  covered by Quantum's existing directors' and officers' liability insurance for
  acts or omissions occurring on or prior to the Effective Date, but only to the
  extent such insurance may be purchased or kept in force on commercially
  reasonable terms taking into account the cost hereof and the benefits provided
  thereby.
  
  5.11 EMPLOYEES
  
       (a)  Unless the employee is entitled to a larger payment under an
  employment or severance agreement, or pursuant to paragraph (b) of this Section
  5.11, each employee of Bank who is terminated by Acquiror during the first year
  after the Effective Date for a reason other than cause and has been employed by
  the Bank for a continuous period of (i) more than seven years prior to the
  Effective Date, shall be entitled to receive a lump sum severance payment equal
  to 40 weeks base salary as in effect at the time of this Agreement, (ii) more
  than two years and up to seven years prior to the Effective Date, shall be
  entitled to receive a lump sum severance payment equal to six months base salary
  as in effect at the time of this Agreement, and (iii) less than two years prior
  to the Effective Date, shall be entitled to receive a lump sum severance payment
  equal to one week of base salary for each one month of continuous service, but
  not to exceed two months base salary, as in effect at the time of this
  Agreement.
  
       (b)  The employment agreement dated February 13, 1996 by and between Mr.
  Richard W. Kraus, Quantum and the Bank (the "Employment Agreement") shall
  terminate and be of no further force and effect as of the Closing. On or prior
  to the Closing, Mr. Kraus shall furnish his written consent to such termination
  of the Employment Agreement. Assuming such consent of Mr. Kraus is received by
  Acquiror on or prior to Closing, at the Closing, Acquiror shall pay to Mr. Kraus
  the full amount of payments to which Mr. Kraus is entitled under that Employment
  Agreement upon a termination in connection with a change in control.
  
  5.12 EMPLOYEE BENEFIT PLANS
  
       (a)  Each employee of Bank who becomes an employee of Acquiror or the
  Acquiror Subsidiaries subsequent to the Merger shall be immediately entitled to
  participate in all employee benefit plans sponsored by Acquiror or the Acquiror
  Subsidiaries on the same terms and to the same extent as similarly situated
  employees. Such employees shall receive credit for their period of service to
  Bank for purposes of determining participation and vesting in all Acquiror
  employee benefit plans.
  
       (b)  In the event Acquiror merges or consolidates any defined contribution
  or defined benefit plan maintained by or for Quantum or a Quantum Subsidiary
  into an Acquiror defined contribution or defined benefit plan, each
  participating employee shall have an accrued benefit immediately after the
  merger or consolidation which is equal to or greater than the employee's accrued
  benefit immediately before the merger or consolidation. To the extent
  permissible under the applicable provisions of the Code, in the event that on or
  after the Effective Date, Acquiror terminates any defined contribution or
  defined benefit plan maintained by or for Quantum or a Quantum Subsidiary, each
  participating employee shall have the right or option either to receive a single
  lump-sum payment equal to the benefits to which he or she is entitled under the
  terminating plan, or to "roll over" such benefits to a defined contribution plan
  maintained by Acquiror. In the event of any merger, consolidation or termination
  of any defined benefit pension plan maintained by or for Quantum or a Quantum
  Subsidiary, any excess funding shall be allocated to the accounts of
  participating employees and shall in no event revert to Acquiror.
  
  5.13 DIRECTORS
  
       At the Effective Date, all of the directors of Bank shall resign and be
  replaced by the directors of Acquisition Corp.
  
  5.14 NOTIFICATION OF CERTAIN MATTERS
  
       The Acquiror and Acquisition Co, on the one hand, and Quantum and Bank, on
  the other hand, shall give prompt notice to the other of (a) the occurrence or
  its knowledge of any event or condition that would cause any of its
  
                                         19
  representations or warranties set forth in this Agreement not to be true and
  correct in all material respects as of the date of this Agreement or as of the
  Effective Date (except as to any representation or warranty which specifically
  relates to an earlier date), or any of its obligations set forth in this
  Agreement required to be performed at or prior to the Effective Date not to be
  performed in all material respects at or prior to the Effective Date, including
  without limitation, any event, condition, change or occurrence which
  individually or in the aggregate has, or which, so far as reasonably can be
  foreseen at the time of its occurrence, is reasonably likely to result in a
  Material Adverse Effect on it; and (b) any action of a third party of which it
  receives notice that might reasonably be expected to prevent or materially delay
  the consummation of the transactions contemplated hereby, including, without
  limitation, any notice or other communication from any third party alleging that
  the consent of such third party is or may be required in connection with the
  transactions contemplated by this Agreement.
  
  5.15 DISSENTER'S RIGHTS
  
       Any holder of Quantum Common Stock otherwise entitled to receive the Merger
  Consideration for each of his or her shares shall be entitled to demand payment
  of the fair cash value of such shares as specified in the laws of the State of
  Maryland if the holder follows the procedures specified in the statutes. Those
  shares shall hereafter be specified as "Dissenting Shares." Any Dissenting
  Shares shall not, after the Effective Date, be entitled to vote for any purpose
  or receive any dividends or other distributions and shall not be converted into
  cash as provided in Section 2.1 hereof; provided, however, that shares of
  Quantum Common Stock held by a dissenting shareholder who subsequently withdraws
  a demand for payment, fails to comply fully with the requirements of the laws of
  the State of Maryland, or otherwise fails to establish the right of such
  shareholder to be paid the fair cash value of such shareholder's shares under
  the laws of the State of Maryland shall be deemed to be converted into cash
  pursuant to the terms and conditions specified herein. Quantum shall give
  Acquiror prompt notice of any written demands for appraisal of any shares of
  Quantum Common Stock, attempted withdrawals of any such demands, and any other
  instruments served pursuant to the laws of the State of Maryland and received by
  Quantum relating to shareholders' rights of appraisal. Quantum shall not, except
  with the prior written consent of Acquiror, voluntarily make any payment with
  respect to any demands for appraisals of any shares of Quantum Common Stock,
  offer to settle or settle any such demands or approve any withdrawal of any such
  demands.
  
  5.16 CONTINUATION OF LEASES
  
       Quantum shall use best efforts to ensure that all action is taken to enable
  Acquiror to assume the leases currently held by Quantum and any Quantum
  Subsidiary on its principal and branch office facilities. Quantum shall
  cooperate with Acquiror to secure any approvals from the lessors that may be
  required.
  
  5.17 SUBSEQUENT FINANCIAL STATEMENTS
  
       As soon as reasonably available, but in no event more than 20 days after
  the end of each month ending after the date of this Agreement, Quantum will
  deliver to Acquiror and Acquiror will deliver to Quantum their respective
  monthly financial statements.
  
  5.18 CURRENT INFORMATION
  
       During the period from the date of this Agreement to the Effective Date,
  Quantum will cause one or more of Bank's designated representatives to confer on
  a regular and frequent basis (not less than monthly) with representatives of
  Acquiror and to report (i) the general status of the ongoing operations of
  Quantum and all Quantum Subsidiaries and (ii) the status of, and the action
  proposed to be taken with respect to, loans held by Quantum or Bank which,
  individually or in combination with one or more other Loans to the same borrower
  thereunder, have an unpaid principal amount of $250,000 or more and are
  non-performing assets. Quantum will promptly notify Acquiror of any material
  
                                         20
  change in the normal course of business or in the operation of the properties of
  Quantum or any of Quantum Subsidiaries and of any governmental complaints,
  investigations or hearings (or communication indicating that the same may be
  contemplated), or the institution or the threat of significant litigation
  involving Quantum and the Quantum Subsidiaries, and will keep Acquiror fully
  informed of such events.
  
                                     ARTICLE VI
                                CONDITIONS PRECEDENT
  
  6.1 CONDITIONS PRECEDENT -- ACQUIROR AND QUANTUM
  
       The respective obligations of Acquiror and Quantum to effect the
  transactions contemplated by this Agreement shall be subject to satisfaction or
  waiver of the following conditions at or prior to the Effective Date:
  
       (a)  The requisite approval by the shareholders of Quantum of this
  Agreement and of the Articles of Merger.
  
       (b)  All approvals of the transactions contemplated herein from the OTS,
  the FDIC and any other state or federal government agency, department or body,
  the approval of which is required for the consummation of the Merger shall have
  been received and all notice periods and waiting periods required after the
  granting of any such approvals shall have passed and all such approvals shall be
  in effect;
  
       (c)  Neither Acquiror, any affiliate of Acquiror, AcquisitionCo, Quantum or
  any Quantum Subsidiary shall be subject to any order, decree or injunction of a
  court or agency of competent jurisdiction which enjoins or prohibits
  consummation of the transactions contemplated by this Agreement.
  
  6.2 CONDITIONS PRECEDENT -- QUANTUM
  
       The obligations of Quantum to effect the transactions contemplated by this
  Agreement shall be subject to satisfaction of the following additional
  conditions at or prior to the Effective Date unless waived by Quantum pursuant
  to Section 7.4 hereof;
  
       (a)  The representations and warranties of Acquiror set forth in Article IV
  hereof shall be true and correct in all material respects as of the date of this
  Agreement and as of the Effective Date as though made on and as of the Effective
  Date (or on the date when made in the case of any representation and warranty
  which specifically relates to an earlier date), except as otherwise contemplated
  by this Agreement or consented to in writing by Quantum (which consent shall not
  be unreasonably withheld) and except for changes, none of which individually or
  in the aggregate has a Material Adverse Effect on the financial condition,
  results of operations, business or prospects of Acquiror;
  
       (b)  Acquiror shall have deposited with the Exchange Agent an amount of
  immediately available funds equal to the aggregate Merger Consideration to be
  paid hereunder.
  
       (c)  Acquiror shall have in all material respects performed all obligations
  and complied with all covenants required to be performed by it on or prior to
  the Effective Date;
  
       (d)  Acquiror shall have delivered to Quantum a certificate, dated the
  Effective Date and signed by a senior officer, to the effect that the conditions
  set forth in Section 6.1 (c), 6.2(a) and 6.2(b), to the extent applicable to
  Acquiror, have been satisfied;
  
       (e)  There shall not have been a material adverse change in the ability of
  the Acquiror to pay the Merger Consideration;
  
                                         21
  (f)  Quantum shall have received an opinion from counsel for Acquiror,
  dated as of the Effective Date and which may be governed by and interpreted in
  accordance with the Legal Opinion Accord of the American Bar Association Section
  of Business Law (1991), to the effect that:
  
            (i)   Acquiror is a corporation validly existing and in good standing
  under the laws of the State of Delaware;
  
            (ii)   the Agreement has been duly authorized, executed and delivered
  by Acquiror and constitutes the valid and binding obligation of Acquiror,
  subject to, as to enforceability, bankruptcy, insolvency and other laws of
  general applicability relating to or affecting creditors' rights and to general
  equity principles;
  
            (iii)  except as disclosed in such opinion, to the knowledge of such
  counsel there are no actions, suits, proceedings or investigations (public or
  private) of any nature pending or threatened that challenge the validity or
  propriety of the transactions contemplated by the Agreement and Articles of
  Merger or which seek or threaten to restrain, enjoin or prohibit (or to obtain
  substantial damages in connection with) the consummation of such transactions;
  and
  
            (iv)   all regulatory and governmental approvals and consents which
  are necessary to be obtained by Acquiror and the Acquiror Subsidiaries to permit
  the execution, delivery and performance of the Agreement have been obtained.
  
       (g)  Acquiror and AcquisitionCo shall have furnished Quantum with such
  certificates of their respective officers or others and such other documents to
  evidence fulfillment of the conditions set forth in Section 6.1 and 6.2 as
  Quantum may reasonably request.
  
  6.3 CONDITIONS PRECEDENT -- ACQUIROR AND ACQUISITIONCO.
  
       The obligations of Acquiror and AcquisitionCo to effect the transactions
  contemplated by this Agreement shall be subject to satisfaction of the following
  additional conditions at or prior to the Effective Date unless waived by
  Acquiror pursuant to Section 7.4 hereof:
  
       (a)  The representations and warranties of Quantum set forth in Article III
  hereof shall be true and correct in all material respects as of the date of this
  Agreement and as of the Effective Date as though made on and as of the Effective
  Date (or on the date when made in the case of any representation and warranty
  which specifically relates to an earlier date), except as otherwise contemplated
  by this Agreement or consented to in writing by Acquiror (which consent shall
  not be unreasonably withheld) and except for changes, none of which individually
  or in the aggregate has a Materially Adverse Effect on the financial condition,
  results of operations, business or prospects of Quantum;
  
       (b)  Quantum shall have in all material respects performed all obligations
  and complied with all covenants required to be performed by it on or prior to
  the Effective Date;
  
       (c)  Quantum shall have delivered to Acquiror a certificate, dated the
  Effective Date and signed by its Chairman or President, to the effect that the
  conditions set forth in Sections 6.1(c), 6.3(a), and 6.3(b), to the extent
  applicable to Quantum, have been satisfied;
  
       (d)  There shall not have been a material adverse change in the financial
  condition, results of operations, business or prospects of Quantum on a
  consolidated basis since December 31, 1997 (other than changes in banking or
  savings and loan laws or regulations, GAAP, or interpretations thereof, that
  affect the banking or savings and loan industries generally or changes in
  general economic conditions that uniformly affect the banking and savings and
  loan industries on a nationwide basis, including changes in the general level of
  interest rates);
  
                                         22
  (e)  Acquiror shall have received an opinion or opinions from counsel to
  Quantum, dated the Effective Date and which may be governed by and interpreted
  in accordance with the Legal Opinion Accord of the American Bar Association
  Section of Business Law (1991), to the effect that:
  
            (i)   Quantum is a corporation validly existing and in good standing
  corporation under the laws of the State of Maryland and Bank is a federal
  savings association duly incorporated and validly existing under the HOLA;
  
            (ii)   this Agreement and the Articles of Merger have been duly
  authorized and approved by Quantum and this Agreement and the Articles of Merger
  and the transactions contemplated thereby have been approved by the requisite
  vote or consent of Quantum's shareholders and duly authorized, executed and
  delivered by Quantum and this Agreement and Articles of Merger constitute the
  valid and binding obligation of Quantum, subject to, as to enforceability,
  bankruptcy, insolvency and other laws of general applicability relating to or
  affecting creditors' rights and to general equity principles;
  
            (iii)   the authorized capitalization of Quantum is as set forth in
  Section 3.2 hereof;
  
            (iv)   to the knowledge of such counsel, except as otherwise disclosed
  in such opinion, there are no actions, suits, proceedings or investigations of
  any nature pending or threatened that challenge the validity or legality of the
  transactions contemplated by this Agreement or Articles of Merger which seek or
  threaten to restrain, enjoin or prohibit (or obtain substantial damages in
  connection with) the consummation of such transactions;
  
            (v)   to the knowledge of such counsel, there is no litigation,
  appraisal or other proceeding or governmental investigation pending or
  threatened against or relating to the business or property of Quantum or any
  Quantum Subsidiary which would have a Materially Adverse Effect on the financial
  condition of Quantum, or of any legal impediment to the continued operation of
  the properties and business of Quantum or any Quantum Subsidiary in the ordinary
  course after the consummation of the transactions contemplated by this Agreement
  and Articles of Merger; and
  
            (vi)   all regulatory and governmental approvals and consents which
  are necessary to be obtained by Quantum and its Subsidiaries to permit the
  execution, delivery and performance of the Agreement have been obtained.
  
       (f)  Quantum shall have furnished Acquiror with such certificates of its
  officers or others and such other documents to evidence fulfillment of the
  conditions set forth in Section 6.1 and 6.3 as Acquiror may reasonably request;
  
       (g)  There shall not have been any change in law or regulatory condition
  imposed in connection with any required approval that would have the effect of
  requiring Acquiror or any Acquiror Subsidiary to cease, terminate or divest any
  of its activities or investments in order to acquire and/or maintain control of
  the Bank.
  
                                    ARTICLE VII
                         TERMINATION, WAIVER AND AMENDMENT
  
  7.1 TERMINATION
  
       This Agreement may be terminated:
  
       (a)  at any time on or prior to the Effective Date, by the mutual consent
  in writing of the parties hereto;
  
       (b)  at any time on or prior to the Effective Date, by Acquiror in writing
  if Quantum has, or by Quantum in writing if Acquiror has, in any material
  respect, breached (i) any covenant or undertaking contained herein or in the
  Articles of Merger, or (ii) any representation or warranty contained herein,
  which breach, in the case of a breach by Quantum, has a Material Adverse Effect
  
                                         23
  on the financial condition, results of operations, business or prospects of
  Quantum or the ability of Quantum to effect the transactions contemplated by
  this Agreement, or in the case of a breach by Acquiror materially and adversely
  affects the ability of the Acquiror to pay the Merger Consideration or
  consummate the transactions contemplated by this Agreement, in any case if such
  breach has not been cured by the earlier of 30 days after the date on which
  written notice of such breach is given to the party committing such breach or
  the Effective Date; provided that it is understood and agreed that either party
  may terminate this Agreement on the basis of any such material breach of any
  representation or warranty contained herein, notwithstanding any qualification
  therein, relating to the knowledge of the other party; and provided further that
  a party seeking termination is not then in material breach of any
  representation, covenant or other agreement contained herein;
  
       (c)  by either party in writing, if Acquiror or Principal Life is notified
  by the OTS that the proposed method of divestiture of Principal Life's control
  of Acquiror is not acceptable to the OTS as a divestiture of such control or the
  OTS denies or furnishes written objection to an application to accomplish such
  divestiture, and such action is not rescinded within 45 days;
  
       (d)  on the Effective Date, by either party hereto in writing, if any of
  the conditions precedent to the obligations of such party to consummate the
  transactions contemplated hereby have not been satisfied or fulfilled;
  
       (e)  by either party hereto in writing, if the Effective Date has not
  occurred by the close of business on June 30, 1999; provided that this right to
  terminate shall not be available to any party whose failure to perform an
  obligation under this Agreement has been the cause of, or resulted in, the
  failure of the Merger to be consummated by June 30, 1999;
  
       (f)  at any time by either party hereto in writing, if such party
  determines in good faith that any condition precedent to such party's
  obligations to consummate the Merger is or would be impossible to satisfy and
  such condition is not waived by the other party.
  
  7.2 EFFECT OF TERMINATION
  
       In the event this Agreement is terminated pursuant to Section 7.1 hereof,
  both this Agreement and the Articles of Merger shall become void and have no
  effect, except that (i) the provisions relating to confidentiality and expenses
  set forth in Section 5.5 and 8.1, respectively, shall survive any such
  termination, (ii) a termination pursuant to Section 7.1(b) shall not relieve the
  breaching party from liability for an uncured willful breach of the covenant,
  undertaking, representation or warranty giving rise to such termination, and
  (iii) if this Agreement is terminated pursuant to Section 7.1(c) hereof, then
  Acquiror agrees to pay $100,000 to Quantum and such amount shall constitute the
  sole amount to which Quantum shall be entitled as a result of the termination of
  this Agreement.
  
  7.3 SURVIVAL OF REPRESENTATIONS; WARRANTIES AND COVENANTS
  
       All representations, warranties and covenants in this Agreement or the
  Articles of Merger or in any instrument delivered pursuant hereto or thereto
  shall expire on, and be terminated and extinguished at, the Effective Date other
  than covenants that by their terms are to be performed after the Effective Date,
  provided that no such representations, warranties or covenants shall be deemed
  to be terminated or extinguished so as to deprive Acquiror or Quantum (or any
  director, officer or controlling person thereof) of any defense at law or in
  equity which otherwise would be available against the claims of any person,
  including, without limitation, any shareholder or former shareholder of either
  Acquiror or Quantum, the aforesaid representations, warranties and covenants
  being material inducements to consummation by Acquiror and Quantum of the
  transactions contemplated herein.
  
                                         24
  7.4 WAIVER
  
       Each party hereto by written instrument signed by an executive officer of
  such party, may at any time (whether before or after approval of this Agreement
  and the Articles of Merger by the shareholders of Quantum) extend the time for
  the performance of any of the obligations or other acts of the other party
  hereto and may waive (i) any inaccuracies of the other party in the
  representations or warranties contained in this Agreement, the Articles of
  Merger or any document delivered pursuant hereto, (ii) compliance with any of
  the covenants, undertakings or agreements of the other party, or satisfaction of
  any of the conditions precedent to its obligations, contained herein or in the
  Articles of Merger or (iii) the performance by the other party of any of its
  obligations set out herein or therein; provided that no such waiver or amendment
  or supplement pursuant to Section 7.5 hereof executed after shareholders of
  Quantum have approved the Merger shall reduce the Merger Consideration. Nothing
  in this Section 7.4 will permit any party to waive any required regulatory
  approvals or other conditions that cannot be waived as a matter of law.
  
  7.5 AMENDMENT OR SUPPLEMENT
  
       This Agreement and the Articles of Merger may be amended or supplemented at
  any time by mutual agreement of Acquiror and Quantum subject to the provison to
  Section 7.4 hereof. Any such amendment or supplement must be in writing and
  approved by their respective boards of directors; provided that Acquiror may
  unilaterally elect to modify the structure of the transaction so long as the
  Merger Consideration is not reduced in amount due to such modification and such
  modification is not likely to materially delay or jeopardize receipt of any
  required regulatory approvals.
  
                                    ARTICLE VIII
                                   MISCELLANEOUS
  
  8.1 EXPENSES
  
       Each party hereto shall bear and pay all costs and expenses incurred by it
  in connection with the transactions contemplated in this Agreement, including
  fees and expenses of its own financial consultants, accountants and counsel.
  
  8.2 ENTIRE AGREEMENT
  
       This Agreement contains the entire agreement between the parties with
  respect to the transactions contemplated hereunder and supersedes all prior
  arrangements or understandings with respect thereto, written or oral, other than
  documents referred to herein or therein. The terms and conditions of this
  Agreement shall inure to the benefit of and be binding upon the parties hereto
  and thereto and their respective successors. Nothing in this Agreement,
  expressed or implied, is intended to confer upon any party, other than the
  parties hereto and thereto, and their respective successors, any rights,
  remedies, obligations or liabilities other than as set forth in Sections 5.11
  and 5.12 hereof.
  
  8.3 NO ASSIGNMENT
  
       Neither of the parties hereto may assign any of its rights or obligations
  under this Agreement to any other person.
  
  8.4 NOTICES
  
       All notices or other communications which are required or permitted
  hereunder shall be in writing and sufficient if delivered personally or sent by
  overnight express or by registered or certified mail, postage prepaid, addressed
  as follows:
  
                                         25
  If to Quantum:
  
       Quantum Financial Holdings, Inc.
       4023 Annapolis Road
       Baltimore, Maryland 21227
       Attn: Richard W. Kraus
  
  With a required copy to:
  
       Housley Kantarian & Bronstein, P.C.
       1220 19th Street, N.W.
       Suite 700
       Washington, D.C. 20036
       Attention: James C. Stewart, Esquire
  
  If to Acquiror
  
       United Payors & United Providers, Inc.
       2275 Research Boulevard
       Sixth Floor
       Rockville, Maryland 20850
       Attention: S. Joseph Bruno
  
  With a required copy to:
  
       Muldoon, Murphy & Faucette
       5101 Wisconsin Avenue, N.W.
       Washington, D.C. 20016
       Attention: Thomas J. Haggerty, Esquire
  
  8.5 CAPTIONS
  
       The captions contained in this Agreement are for reference purposes only
  and are not part of this Agreement.
  
  8.6 COUNTERPARTS
  
       This Agreement may be executed in any number of counterparts, and each such
  counterpart shall be deemed to be an original instrument, but all such
  counterparts together shall constitute but one agreement.
  
  8.7 GOVERNING LAW
  
       This Agreement shall be governed by and construed in accordance with the
  laws of the State of Maryland applicable to agreements made and entirely to be
  performed within such jurisdiction except to the extent federal law may be
  applicable.
  
                                     * * * * *
  
       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
  executed in counterparts by their duly authorized officers and their corporate
  seal to be hereunto affixed and attested by their officers thereunto duly
  authorized, all as of the day and year first above written.
  
                                         26
  Attest                                  UNITED PAYORS & UNITED PROVIDERS, INC.
  
  /s/ Joseph Mott                         By: /s/ Michael A. Smith
  --------------------------                  --------------------------------
  (SEAL)                                      Michael A. Smith
  
  Attest                                  QUANTUM FINANCIAL HOLDINGS, INC.
  
  /s/ Margaret A. McManus                 By: /s/ Richard W. Kraus
  --------------------------                  --------------------------------
  (SEAL)                                      Richard W. Kraus
                                              President
  
                                         27
  EXHIBIT 10.17
  
                                 FIRST AMENDMENT TO
                        AGREEMENT AND PLAN OF REORGANIZATION
  
       This FIRST AMENDMENT, to the AGREEMENT AND PLAN OF REORGANIZATION, dated
  October 16, 1998 (the "Agreement"), by and between QUANTUM FINANCIAL HOLDINGS,
  INC. ("Quantum") and UNITED PAYORS & UNITED PROVIDERS, INC.
  ("Acquiror") is dated as of June 23, 1999.
  
       WHEREAS, Quantum and Acquiror have entered into the Agreement providing for
  the acquisition of Quantum by Acquiror, for an aggregate purchase price of $2.5
  million (the "Merger Consideration") with each holder of Quantum Common Stock to
  receive a per Share Merger Consideration equal to (i) the Merger Consideration,
  minus the aggregate dollar amount to be paid to holders of outstanding options
  to purchase Quantum Common Stock, (ii) divided by the number of outstanding
  shares of Quantum Common Stock immediately prior to the Effective Date;
  
       WHEREAS, a condition to the parties' obligations under the Agreement is the
  receipt of all required regulatory approvals by Acquiror and the expiration of
  all applicable waiting periods and as of the date hereof such regulatory
  approvals have not been received;
  
       WHEREAS, Section 7.1(e) of the Agreement provides that it may be terminated
  by either party if the Effective Date has not occurred by the close of business
  on June 30,1999 (the "Termination Date");
  
       WHEREAS, the parties have determined that it will not be feasible to close
  the Merger by the Termination Date and desire to extend the Termination Date in
  order to allow additional time in which to secure regulatory approvals and in
  consideration thereof Acquiror agrees to pay interest on the per Share Merger
  Consideration for each day subsequent to June 30, 1999 until the Effective Date
  and to make a loan to Quantum in the amount of $250,000 to be used to infuse
  capital into its wholly owned subsidiary, Baltimore American Savings Bank,
  F.S.B., (the "Bank"); and
  
       WHEREAS, pursuant to Section 7.5 of the Agreement, the Agreement may be
  amended by mutual agreement of the parties provided that no amendment executed
  after the shareholders of Quantum have approved the Merger shall reduce the
  Merger Consideration.
  
       NOW, THEREFORE, in consideration of the mutual covenants and conditions
  herein contained, the parties hereto hereby mutually agree to amend the
  Agreement as follows and to undertake the other obligations described herein:
  
       1. The first sentence of Section 2.3 of the Agreement is hereby deleted and
  replaced by the following:
  
       The Merger Consideration shall be $2,500,000 provided that if the Effective
  Date shall not have occurred by the close of business on June 30, 1999, the
  Merger Consideration shall accrue interest for each day that elapses from June
  30, 1999 until the Effective Date at thefollowing rates per annum:
  If the Effective Date Occurs:               The Rate Per
               After             Up to and Including           Annum Shall Be:
  June 30, 1999     July 31, 1999                      7.5%
               July 31, 1999     August 31, 1999                    8.0%
               August 31, 1999   September 30, 1999                 8.5%
  and the sum of $2,500,000 plus the interest so accrued shall be the Merger
  Consideration.
  
       2.   Paragraph (e) of Section 7.1 of the Agreement is hereby deleted and
  replaced by the following:
  
            (e) by either party hereto in writing, if the Effective Date has not
  occurred by the close of business on September 30, 1999; provided that this
  right to terminate shall not be available to any party whose failure to perform
  an obligation under this Agreement has been the cause of, or resulted in, the
  failure of the Merger to be consummated by September 30, 1999.
  
       3.   If the Effective Date shall not have occurred on or before June 30,
  1999, the Acquiror agrees to loan Quantum the sum of $250,000 on an unsecured
  basis to provide funds for a capital infusion by Quantum into the Bank. Such
  loan shall not bear interest and shall not be due and payable until June 30,
  2000.
  
       4.   Except as specifically set forth herein, the Agreement remains in full
  force and effect. Should there by any ambiguity or conflict between the matters
  expressed in this Amendment and the terms and conditions of the Agreement, the
  parties intend that the provisions of this Amendment shall prevail and supercede
  any such ambiguity or conflict. This Amendment may be executed in two or more
  counterparts, all of which shall be considered one and the same agreement.
  
       IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
  be executed by its duly authorized officers as of the day and year written
  above.
  
                                           QUANTUM FINANCIAL HOLDINGS, INC.
  
                                           By:  /s/ Richard W. Kraus
                                                ----------------------------------
                                           Its: Presidend and CEO
  
                                           UNITED PAYORS & UNITED PROVIDERS, INC.
  
                                           By:  /s/ Edward S. Civera
                                                ----------------------------------
                                           Its: Co-CEO and President