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):  January 6, 1995

                           SHAWMUT NATIONAL CORPORATION         
                (Exact Name of Registrant as Specified in Charter)

        Delaware                  1-10102                   06-1212629
     (State or Other          (Commission File            (IRS Employer
     Jurisdiction of            Number)                    Identification No.)
     Incorporation)

             777 Main Street, Hartford, Connecticut               06115
             One Federal Street, Boston, Massachusetts            02211
             (Address of principal executive offices)          (Zip Codes)

                                                                (203) 986-2000
          Registrant's telephone numbers, including area codes: (617) 292-2000

                               Not Applicable                         
     (Former name or former address, if changed since last report)


          ITEM 5.  OTHER EVENTS

                    Shawmut National Corporation ("SNC") and
          Shawmut Bank Connecticut, National Association (the
          "Bank), entered into a Purchase and Assumption Agreement,
          dated as of November 12, 1994 (the "Asset Purchase
          Agreement"), with Barclays Bank PLC ("Barclays") and
          Barclays Business Credit Inc. ("Business Credit")
          pursuant to which the Bank agreed to purchase
          substantially all of the assets and to assume certain
          liabilities of the Business Finance Division ("Finance
          Division") of Business Credit.  

                    The purchase price is equal to the net book
          value of the assets to be acquired and the liabilities to
          be assumed plus a premium of $290 million.  The book value 
          of the assets to be acquired, totalling approximately $2.1 
          billion at September 30, 1994, include all of the business and 
          operations of Business Credit conducted through the Finance 
          Division, which includes, among other things, loans and loan
          commitments; all property acquired by Business Credit in
          connection with foreclosures on the property securing
          non-performing loans; the leased office facilities at
          which the Finance Division conducts business and
          leasehold improvements thereon; all rights and interests
          under the contracts relating to the Finance Division  to
          which Business Credit is a party; certain investments;
          all books and records relating to the Finance Division;
          and all unearned fees relating to the purchased loans and
          loan commitments.  The book value of the liabilities to
          be assumed was approximately $10.5 million at September
          30, 1994.  SNC anticipates that the total funding
          required for the transaction will be approximately $2.4
          billion.  The Finance Division, based in Glastonbury,
          Connecticut, provides asset-based financing to middle
          market companies throughout the United States through its
          17 nationwide offices.  

                    The Asset Purchase Agreement may be terminated
          by either party if the closing has not taken place by 
          March 31, 1995.  SNC currently anticipates that the acquisition 
          of the Finance Division will close on or before January 31, 
          1995, subject to the satisfaction of certain conditions, including 
          certain regulatory approvals.

                    SNC entered into an agreement with Northeast Federal 
          Corp. ("Northeast"), dated as of June 13, 1994, to acquire 
          Northeast for $172.1 million in SNC common stock (the "Merger 
          Agreement").  Northeast is a unitary savings and loan holding 
          company registered under the Home Owners' Loan Act of 1933, as 
          amended, which provides financial services through its subsidiary,
          Northeast Savings, F.A.  As of September 30, 1994,
          Northeast had assets of $3.3 billion, deposits of $2.4
          billion and stockholders' equity of $135.1 million. 
          Northeast has 33 offices located in Connecticut,
          Massachusetts and the capital region of New York.   Each
          issued and outstanding share of Northeast common stock,
          except for certain shares held by affiliates, will be
          converted into and exchangeable for a number of shares of
          SNC common stock equal to the exchange ratio (the
          "Exchange Ratio") determined as follows:

                    (i)  if the SNC Common Stock Average Price is
                         greater than or equal to $26.235, the
                         Exchange Ratio will be .415;

                    (ii) if the SNC Common Stock Average Price is
                         less than $26.235 but equal to or greater
                         than $21.465, the Exchange Ratio will be
                         (a) $10.875 divided by (b) the SNC Common
                         Stock Average Price; or

                  (iii)  if the SNC Common Stock Average Price
                         is less than $21.465, the Exchange
                         Ratio will be .507; provided,
                         however, that, as described below,
                         under such circumstances Northeast
                         has the right to terminate the Merger
                         Agreement, subject to the right of
                         SNC to avoid such termination by an
                         increase in the Exchange Ratio.

                    The Merger Agreement may be terminated if the 
          transaction is not closed on or before June 30, 1995.  In 
          addition, if the SNC Common Stock Average Price (defined as the 
          average daily closing price of SNC Common Stock as reported 
          on the New York Stock Exchange Composite Transaction reporting
          system for the 15 consecutive full trading days prior to
          the date on which the last regulatory approval is obtained 
          and all statutory waiting periods in respect thereof have 
          expired) is less than $21.465, Northeast's Board of Directors 
          may terminate the Merger Agreement pursuant to its terms, 
          whether before or after the approval of the merger by Northeast's
          stockholders; provided, however, that SNC may avoid such
          termination by increasing the Exchange Ratio so that the
          shares of SNC Common Stock issued in exchange for each
          share of Northeast's common stock have a value (valued at
          the SNC Common Stock Average Price) of $10.875.  At January 6, 
          1995, the closing price of SNC's Common Stock was $17.750 per 
          share.  In addition, the transaction is subject to the 
          satisfaction of certain conditions, including certain regulatory 
          approvals and approval by Northeast stockholders. 


     ITEM 7.   FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION 
               AND EXHIBITS.

               (c)  The following exhibits are filed with this Current
     Report on Form 8-K:

          EXHIBIT
          NUMBER              DESCRIPTION

          99.1                 Agreement and Plan of Merger by and
                               between Shawmut National Corporation
                               and Northeast Federal Corp. dated June
                               11, 1994.

          99.2                 Purchase and Assumption Agreement among
                               Barclays Business Credit Inc., Barclays
                               Bank PLC, Shawmut National Corporation
                               and Shawmut Bank Connecticut, N.A.
                               dated November 12, 1994.



                                 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 hereunto duly authorized.

                                   SHAWMUT NATIONAL CORPORATION


                                  By:                       
                                       Joel B. Alvord
                                       Chairman and Chief Executive Officer

     Dated:  January 6, 1995



                                  EXHIBIT INDEX

     Exhibit        
     Number         Description

     99.1           Agreement and Plan of Merger by and
                    between Shawmut National Corporation
                    and Northeast Federal Corp. dated June
                    11, 1994.

     99.2           Purchase and Assumption Agreement among
                    Barclays Business Credit Inc., Barclays
                    Bank PLC, Shawmut National Corporation
                    and Shawmut Bank Connecticut, N.A.
                    dated November 12, 1994.


                                                               EXHIBIT 99.1



                          AGREEMENT AND PLAN OF MERGER

                                 By and Between 

                          SHAWMUT NATIONAL CORPORATION

                                       and

                             NORTHEAST FEDERAL CORP.

                            Dated as of June 11, 1994


                               TABLE OF CONTENTS  

                                                                       Page

                                    ARTICLE I

                                   THE MERGER

     1.1   The Merger  . . . . . . . . . . . . . . . . . . . . . . . .    
     1.2   Effective Time  . . . . . . . . . . . . . . . . . . . . . .    
     1.3   Effects of the Merger . . . . . . . . . . . . . . . . . . .    
     1.4   Conversion of Target Common Stock;
             Target Preferred Stock  . . . . . . . . . . . . . . . . .    
     1.5   Conversion of Merger Sub Common Stock . . . . . . . . . . .    
     1.6   Options and Warrants  . . . . . . . . . . . . . . . . . . .    
     1.7   Certificate of Incorporation  . . . . . . . . . . . . . . .    
     1.8   By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . .    
     1.9   Directors and Officers  . . . . . . . . . . . . . . . . . .    
     1.10  Tax Consequences  . . . . . . . . . . . . . . . . . . . . .    

                                   ARTICLE II

                               EXCHANGE OF SHARES

     2.1   Parent to Make Shares Available . . . . . . . . . . . . . .    
     2.2   Exchange of Shares  . . . . . . . . . . . . . . . . . . . . .  

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF TARGET

     3.1   Corporate Organization  . . . . . . . . . . . . . . . . . .    
     3.2   Capitalization  . . . . . . . . . . . . . . . . . . . . . . .  
     3.3   Authority; No Violation . . . . . . . . . . . . . . . . . . .  
     3.4   Consents and Approvals  . . . . . . . . . . . . . . . . . . .  
     3.5   Loan Portfolio; Reports . . . . . . . . . . . . . . . . . . .  
     3.6   Financial Statements  . . . . . . . . . . . . . . . . . . . .  
     3.7   Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . .
     3.8   Absence of Certain Changes or Events  . . . . . . . . . . . .
     3.9   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .
     3.10  Taxes and Tax Returns . . . . . . . . . . . . . . . . . . . .
     3.11  Employees . . . . . . . . . . . . . . . . . . . . . . . . . .
     3.12  SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . .
     3.13  Target Information  . . . . . . . . . . . . . . . . . . . . .
     3.14  Compliance with Applicable Law  . . . . . . . . . . . . . . .
     3.15  Certain Contracts . . . . . . . . . . . . . . . . . . . . . .
     3.16  Agreements with Regulatory Agencies . . . . . . . . . . . . .
     3.17  Investment Securities . . . . . . . . . . . . . . . . . . . .
     3.18  Intellectual Property . . . . . . . . . . . . . . . . . . . .
     3.19  Undisclosed Liabilities . . . . . . . . . . . . . . . . . . .
     3.20  Takeover Restrictions . . . . . . . . . . . . . . . . . . . .
     3.21  Administration of Fiduciary Accounts  . . . . . . . . . . . .
     3.22  Environmental Matters . . . . . . . . . . . . . . . . . . . .
     3.23  Derivative Transactions . . . . . . . . . . . . . . . . . . .
     3.24  Accuracy of Information . . . . . . . . . . . . . . . . . . .
     3.25  Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . .
     3.26  Assistance Agreements . . . . . . . . . . . . . . . . . . . .
     3.27  DEPCO Directors . . . . . . . . . . . . . . . . . . . . . . .
     3.28  Qualified Thrift Lender . . . . . . . . . . . . . . . . . . .
     3.29  Knowledge as to Conditions  . . . . . . . . . . . . . . . . .


                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES
                                 OF PARENT

     4.1   Corporate Organization  . . . . . . . . . . . . . . . . . . .
     4.2   Capitalization  . . . . . . . . . . . . . . . . . . . . . . .
     4.3   Authority; No Violation . . . . . . . . . . . . . . . . . . .
     4.4   Consents and Approvals  . . . . . . . . . . . . . . . . . . .
     4.5   Financial Statements  . . . . . . . . . . . . . . . . . . . .
     4.6   Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . .
     4.7   Absence of Certain Changes or Events  . . . . . . . . . . . .
     4.8   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .
     4.9   Compliance with Applicable Law  . . . . . . . . . . . . . . .
     4.10  SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . .
     4.11  Parent Information  . . . . . . . . . . . . . . . . . . . . .
     4.12  Accuracy of Information . . . . . . . . . . . . . . . . . . .
     4.13  Undisclosed Liabilities . . . . . . . . . . . . . . . . . . .
     4.14  Knowledge as to Conditions  . . . . . . . . . . . . . . . . .

                                    ARTICLE V

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

     5.1   Covenants of Target . . . . . . . . . . . . . . . . . . . . .
     5.2   Covenants of Parent . . . . . . . . . . . . . . . . . . . . .

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

     6.1   Regulatory Matters  . . . . . . . . . . . . . . . . . . . . .
     6.2   Access to Information . . . . . . . . . . . . . . . . . . . .
     6.3   Stockholders Meeting  . . . . . . . . . . . . . . . . . . . .
     6.4   Legal Conditions to Merger  . . . . . . . . . . . . . . . . .
     6.5   Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . .
     6.6   Stock Exchange Listing  . . . . . . . . . . . . . . . . . . .
     6.7   Indemnification; Directors' and Officers' Insurance . . . . .
     6.8   Subsequent Financial Statements . . . . . . . . . . . . . . .
     6.9   Additional Agreements . . . . . . . . . . . . . . . . . . . .
     6.10  Advice of Changes . . . . . . . . . . . . . . . . . . . . . .
     6.11  Current Information . . . . . . . . . . . . . . . . . . . . .
     6.12  Termination of Regulatory Agreements  . . . . . . . . . . . .
     6.13  Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . .
     6.14  Employee Benefit Plans; Existing Agreements . . . . . . . . .

                                   ARTICLE VII

                              CONDITIONS PRECEDENT

     7.1   Conditions to Each Party's Obligation To
             Effect the Merger . . . . . . . . . . . . . . . . . . . . .
             (a)  Stockholder Approval   . . . . . . . . . . . . . . . .
             (b)  NYSE Listing   . . . . . . . . . . . . . . . . . . . .
             (c)  Other Approvals  . . . . . . . . . . . . . . . . . . .
             (d)  S-4  . . . . . . . . . . . . . . . . . . . . . . . . .
             (e)  No Injunctions or Restraints;
                    Illegality   . . . . . . . . . . . . . . . . . . . .
             (f)  Federal Tax Opinion  . . . . . . . . . . . . . . . . .
     7.2   Conditions to Obligations of Parent . . . . . . . . . . . . .
             (a)  Representations and Warranties   . . . . . . . . . . .
             (b)  Performance of Obligations of Target   . . . . . . . .
             (c)  Consents Under Agreements  . . . . . . . . . . . . . .
             (d)  No Pending Governmental Actions  . . . . . . . . . . .
             (e)  DEPCO Directors  . . . . . . . . . . . . . . . . . . .
             (f)  Accountant's Letter  . . . . . . . . . . . . . . . . .
     7.3   Conditions to Obligations of Target . . . . . . . . . . . . .
             (a)  Representations and Warranties   . . . . . . . . . . .
             (b)  Performance of Obligations of Parent   . . . . . . . .
             (c)  Consents Under Agreements  . . . . . . . . . . . . . .
             (d)  No Pending Governmental Actions  . . . . . . . . . . .

                                  ARTICLE VIII

                            TERMINATION AND AMENDMENT

     8.1   Termination . . . . . . . . . . . . . . . . . . . . . . . . .
     8.2   Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     8.3   Effect of Termination . . . . . . . . . . . . . . . . . . . .
     8.4   Amendment . . . . . . . . . . . . . . . . . . . . . . . . . .
     8.5   Extension; Waiver . . . . . . . . . . . . . . . . . . . . . .

                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1   Closing . . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.2   Alternative Structure . . . . . . . . . . . . . . . . . . . .
     9.3   Nonsurvival of Representations, Warranties
             and Agreements  . . . . . . . . . . . . . . . . . . . . . .
     9.4   Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.5   Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.6   Interpretation  . . . . . . . . . . . . . . . . . . . . . . .
     9.7   Counterparts  . . . . . . . . . . . . . . . . . . . . . . . .
     9.8   Entire Agreement  . . . . . . . . . . . . . . . . . . . . . .
     9.9   Governing Law . . . . . . . . . . . . . . . . . . . . . . . .
     9.10  Enforcement of Agreement  . . . . . . . . . . . . . . . . . .
     9.11  Severability  . . . . . . . . . . . . . . . . . . . . . . . .
     9.12  Publicity . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.13  Assignment  . . . . . . . . . . . . . . . . . . . . . . . . .


                          AGREEMENT AND PLAN OF MERGER

                AGREEMENT AND PLAN OF MERGER, dated as of June 11, 1994
     (this "Agreement"), by and between Shawmut National Corporation, a
     Delaware corporation ("Parent"), and Northeast Federal Corp., a
     Delaware corporation ("Target").

                WHEREAS, the Boards of Directors of Parent and Target have
     determined that it is in the best interests of their respective
     companies and their shareholders to consummate the business
     combination transaction provided for herein in which a subsidiary of
     Parent ("Merger Sub") will, subject to the terms and conditions set
     forth herein, merge (the "Merger") with and into Target; and

                WHEREAS, the parties desire to make certain
     representations, warranties and agreements in connection with the
     Merger and also to prescribe certain conditions to the Merger.

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

                                    ARTICLE I

                                   THE MERGER

                1.1  The Merger.  Subject to the terms and conditions of
     this Agreement, in accordance with the Delaware General Corporation
     Law (the "DGCL"), at the Effective Time (as defined in Section 1.2
     hereof), Merger Sub shall merge with and into Target.  Target shall be
     the surviving corporation (hereinafter sometimes called the "Surviving
     Corporation") in the Merger, and shall continue its corporate
     existence under the laws of the State of Delaware as a wholly owned
     subsidiary of Parent.  Upon consummation of the Merger, the separate
     corporate existence of Merger Sub shall terminate.

                1.2  Effective Time.  The Merger shall become effective as
     set forth in the certificate of merger (the "Certificate of Merger")
     which shall be filed with the Secretary of State of the State of
     Delaware (the "Secretary") on the Closing Date (as defined in Section
     9.1 hereof).  The term "Effective Time" shall be the date and time
     when the Merger becomes effective, as set forth in the Certificate of
     Merger.

                1.3  Effects of the Merger.  At and after the Effective
     Time, the Merger shall have the effects set forth in Sections 259 and
     261 of the DGCL.

                1.4  Conversion of Target Common Stock; Target Preferred
     Stock.  (a)  At the Effective Time, subject to Section 2.2(e) hereof,
     each share of the common stock, par value $0.01 per share, of Target
     (the "Target Common Stock") issued and outstanding immediately prior
     to the Effective Time (other than shares of Target Common Stock held
     (x) in Target's treasury or (y) directly or indirectly by Parent or
     Target or any of their respective Subsidiaries (as defined below)
     (except for Trust Account Shares and DPC Shares, as such terms are
     defined in Section 1.4(b) hereof)) shall, by virtue of this Agreement
     and without any action on the part of the holder thereof, be converted
     into the number of shares (the "Exchange Ratio") of common stock, par
     value $.01 per share, of Parent ("Parent Common Stock") (together with
     the number of Parent Rights (as defined in Section 4.2 hereof)
     associated therewith) determined as follows:

                  (i)    if the Parent Common Stock Average Price (as
                         defined in Section 8.1(g) hereof) is greater than
                         or equal to $26.235, the Exchange Ratio will be
                         .415;

                 (ii)    if the Parent Common Stock Average Price is less
                         than $26.235 but equal to or greater than $21.465,
                         the Exchange Ratio will be (i) $10.875 divided by
                         (ii) the Parent Common Stock Average Price; or

                (iii)    if the Parent Common Stock Average Price is less
                         than $21.465, the Exchange Ratio will be .507.

                All of the shares of Target Common Stock converted into
     Parent Common Stock pursuant to this Article I shall no longer be
     outstanding and shall automatically be cancelled and shall cease to
     exist, and each certificate (each a "Certificate") previously
     representing any such shares of Target Common Stock shall thereafter
     represent the right to receive (i) a certificate representing the
     number of whole shares of Parent Common Stock and (ii) cash in lieu of
     fractional shares into which the shares of Target Common Stock
     represented by such Certificate have been converted pursuant to this
     Section 1.4(a) and Section 2.2(e) hereof.  Certificates previously
     representing shares of Target Common Stock shall be exchanged for
     certificates representing whole shares of Parent Common Stock and cash
     in lieu of fractional shares issued, in consideration therefor upon
     the surrender of such Certificates in accordance with Section 2.2
     hereof, without any interest thereon.  If prior to the Effective Time
     Parent should split or combine its common stock, or pay a dividend or
     other distribution in such common stock, then the Exchange Ratio shall
     be appropriately adjusted to reflect such split, combination, dividend
     or distribution.

                (b)  At the Effective Time, all shares of Target Common
     Stock that are owned by Target as treasury stock and all shares of
     Target Common Stock that are owned directly or indirectly by Parent or
     Target or any of their respective Subsidiaries (other than shares of
     Target Common Stock held directly or indirectly in trust accounts,
     managed accounts and the like or otherwise held in a fiduciary
     capacity that are beneficially owned by third parties (any such
     shares, and shares of Parent Common Stock which are similarly held,
     whether held directly or indirectly by Parent or Target or any of
     their respective subsidiaries, as the case may be, being referred to
     herein as "Trust Account Shares") and other than any shares of Target
     Common Stock held by Parent or Target or any of their respective
     Subsidiaries in respect of a debt previously contracted (any such
     shares of Target Common Stock, and shares of Parent Common Stock which
     are similarly held, whether held directly or indirectly by Parent or
     Target or any of their respective subsidiaries, being referred to
     herein as "DPC Shares")) shall be cancelled and shall cease to exist
     and no stock of Parent or other consideration shall be delivered in
     exchange therefor.  All shares of Parent Common Stock that are owned
     by Target or any of its Subsidiaries (other than Trust Account Shares
     and DPC Shares) shall become treasury stock of Parent.

                (c) At and after the Effective Time each share of the $8.50
     Cumulative Preferred Stock, Series B, of Target (the "Target Series B
     Preferred Stock"), outstanding shall remain outstanding.

                1.5  Conversion of Merger Sub Common Stock.  Each of the
     100 shares of the common stock, par value $1.00 per share, of Merger
     Sub issued and outstanding immediately prior to the Effective Time
     shall by virtue of this Agreement and without any action on the part
     of the holder thereof, be converted into and exchangeable for one
     share common stock, par value $1.00, of the Surviving Corporation,
     which shall thereafter constitute all of the issued and outstanding
     shares of Common Stock of the Surviving Corporation.

                1.6  Options and Warrants.  At the Effective Time, each
     option and warrant granted by Target to purchase shares of Target
     Common Stock which is outstanding and unexercised immediately prior
     thereto shall be converted automatically into an option or warrant, as
     the case may be, to purchase shares of Parent Common Stock in an
     amount and at an exercise price determined as provided below (and, in
     the case of options, otherwise subject to the terms of the 1983 Stock
     Option Plan of Target, The 1986 Stock Option Plan of Target, the
     Target 1993 Stock Option Plan, or the Target 1993 Stock Option Plan
     for Three Year Term Outside Directors, as the case may be (each a
     "Target Stock Option Plan"; collectively the "Target Stock Option
     Plans") or, in the case of warrants, otherwise subject to the terms of
     the Stock Warrants, each dated April 22, 1992, of Target (the "Target
     Warrants")):

                (a)  The number of shares of Parent Common Stock to be
             subject to the new option or warrant shall be equal to the
             product of the number of shares of Target Common Stock
             subject to the original option or warrant and the Exchange
             Ratio, provided that any fractional shares of Parent Common
             Stock resulting from such multiplication shall be rounded to
             the nearest whole share; and

                (b)  The exercise price per share of Parent Common Stock
             under the new option or warrant shall be equal to the
             exercise price per share of Target Common Stock under the
             original option or warrant divided by the Exchange Ratio,
             provided that such exercise price shall be rounded to the
             nearest cent.

     The adjustment provided herein with respect to any options which are
     "incentive stock options" (as defined in Section 422 of the Internal
     Revenue Code of 1986, as amended (the "Code")) shall be and is
     intended to be effected in a manner which is consistent with Section
     424(a) of the Code.  The duration and other terms of the new option or
     warrant shall be the same as the original option or warrant, except
     that all references to Target shall be deemed to be references to
     Parent.

                1.7  Certificate of Incorporation.  At the Effective Time,
     the Certificate of Incorporation of Target, as in effect at the
     Effective Time, shall be the Certificate of Incorporation of the
     Surviving Corporation.

                1.8  By-Laws.  At the Effective Time, the By-Laws of Merger
     Sub, as in effect immediately prior to the Effective Time, shall be
     the By-Laws of the Surviving Corporation until thereafter amended in
     accordance with applicable law.

                1.9  Directors and Officers.  The directors and officers of
     Merger Sub immediately prior to the Effective Time shall be the
     directors and officers of the Surviving Corporation, each to hold
     office in accordance with the Certificate of Incorporation and By-Laws
     of the Surviving Corporation until their respective successors are
     duly elected or appointed and qualified, provided that so long as the
     Target Series B Preferred Stock is outstanding by the terms thereof,
     and DEPCO or any Nominee (each as defined in Section 3.27) is entitled
     to elect directors of Target pursuant to the terms of the Target
     Series B Preferred Stock, the directors elected by the holders of the
     Target Series B Preferred Stock shall be directors of the Surviving
     Corporation.

                1.10  Tax Consequences.  It is intended that the Merger
     shall constitute a reorganization within the meaning of Section 368(a)
     of the Code, and that this Agreement shall constitute a "plan of
     reorganization" for the purposes of Section 368 of the Code.

                                   ARTICLE II

                               EXCHANGE OF SHARES

                2.1  Parent to Make Shares Available.  As of the Effective
     Time, Parent shall deposit, or shall cause to be deposited, with a
     bank or trust company selected by Parent (which may be a Subsidiary of
     Parent) (the "Exchange Agent"), for the benefit of the holders of
     Certificates, for exchange in accordance with this Article II,
     certificates representing the shares of Parent Common Stock and the
     cash in lieu of fractional shares (such cash and certificates for
     shares of Parent Common Stock, together with any dividends or
     distributions with respect thereto, being hereinafter referred to as
     the "Exchange Fund") to be issued pursuant to Section 1.4 and paid
     pursuant to Section 2.2(a) in exchange for outstanding shares of
     Target Common Stock.

                2.2  Exchange of Shares.  (a)  As soon as practicable after
     the Effective Time, the Exchange Agent shall mail to each holder of
     record of a Certificate or Certificates a form letter of transmittal
     (which shall specify that delivery shall be effected, and risk of loss
     and title to the Certificates shall pass, only upon actual receipt of
     the Certificates by the Exchange Agent) and instructions for use in
     effecting the surrender of the Certificates in exchange for
     certificates representing the shares of Parent Common Stock and cash
     in lieu of fractional shares, if any, into which the shares of Target
     Common Stock previously represented by such Certificate or
     Certificates shall have been converted pursuant to this Agreement. 
     Upon proper surrender to the Exchange Agent of a Certificate for
     exchange and cancellation, together with such properly completed
     letter of transmittal, duly executed, the holder of such Certificate
     shall be entitled to receive in exchange therefor (x) a certificate
     representing that number of whole shares of Parent Common Stock to
     which such holder of Target Common Stock shall have become entitled
     pursuant to the provisions of Article I hereof and (y) a check
     representing the amount of cash in lieu of fractional shares, if any,
     which such holder has the right to receive in respect of the
     Certificate surrendered pursuant to the provisions of this Article II,
     and the Certificate so surrendered shall forthwith be cancelled.  No
     interest will be paid or accrued on the cash in lieu of fractional
     shares and unpaid dividends and distributions, if any, payable to
     holders of Certificates.  Notwithstanding anything to the contrary
     contained herein, no certificate representing Parent Common Stock or
     cash in lieu of a fractional share interest shall be delivered to a
     person who is an Affiliate (as defined in Section 6.5) of Target
     unless such Affiliate has theretofore executed and delivered to Parent
     the agreement referred to in Section 6.5.

                (b)  No dividends or other distributions payable after the
     Effective Time with respect to Parent Common Stock shall be paid to
     the holder of any unsurrendered Certificate until the holder thereof
     shall duly surrender such Certificate in accordance with this Article
     II.  After the surrender of a Certificate in accordance with this
     Article II, the record holder thereof shall be entitled to receive any
     dividends or other distributions, without any interest thereon, which
     became payable with respect to the shares of Parent Common Stock
     represented by such Certificate after the Effective Time but on or
     before the time of such surrender.  No holder of an unsurrendered
     Certificate shall be entitled, until the surrender of such
     Certificate, to vote the shares of Parent Common Stock into which his
     or her Target Common Stock shall have been converted.

                (c)  If any certificate representing shares of Parent
     Common Stock is to be issued in a name other than that in which the
     Certificate surrendered in exchange therefor is registered, it shall
     be a condition of the issuance thereof that the Certificate so
     surrendered shall be properly endorsed (or accompanied by an
     appropriate instrument of transfer) and otherwise in proper form for
     transfer, and that the person requesting such exchange shall pay to
     the Exchange Agent in advance any transfer or other taxes required by
     reason of the issuance of a certificate representing shares of Parent
     Common Stock in any name other than that of the registered holder of
     the Certificate surrendered, or required for any other reason, or
     shall establish to the satisfaction of the Exchange Agent that such
     tax has been paid or is not payable.

                (d)  After the Effective Time, there shall be no transfers
     on the stock transfer books of Target of the shares of Target Common
     Stock which were issued and outstanding immediately prior to the
     Effective Time.  If, after the Effective Time, Certificates
     representing such shares are presented for transfer to the Exchange
     Agent, they shall be cancelled and exchanged for certificates
     representing shares of Parent Common Stock as provided in this Article
     II.

                (e)  Notwithstanding anything to the contrary contained
     herein, no certificates or scrip representing fractional shares of
     Parent Common Stock shall be issued upon the surrender for exchange of
     Certificates, no dividend or distribution with respect to Parent
     Common Stock shall be payable on or with respect to any fractional
     share, and such fractional share interests shall not entitle the owner
     thereof to vote or to any other rights of a shareholder of Target.  In
     lieu of the issuance of any such fractional share, Parent shall pay to
     each former stockholder of Target who otherwise would be entitled to
     receive a fractional share of Parent Common Stock an amount in cash
     determined by multiplying (i) the average of the closing-sale prices
     of Parent Common Stock on the New York Stock Exchange as reported by
     The Wall Street Journal for the five trading days immediately
     preceding the date of the Effective Time by (ii) the fraction of a
     share of Parent Common Stock to which such holder would otherwise be
     entitled to receive pursuant to Section 1.4 hereof.

                (f)  Any portion of the Exchange Fund that remains
     unclaimed by the stockholders of Target for six months after the
     Effective Time shall be paid to Parent.  Any stockholders of Target
     who have not theretofore complied with this Article II shall
     thereafter look only to Parent for payment of their shares of Parent
     Common Stock, cash in lieu of fractional shares and unpaid dividends
     and distributions on the Parent Common Stock deliverable in respect of
     each share of Target Common Stock such stockholder holds as determined
     pursuant to this Agreement, in each case, without any interest
     thereon.  Notwithstanding the foregoing, none of Parent, Target, the
     Exchange Agent or any other person shall be liable to any former
     holder of shares of Target Common Stock for any amount properly
     delivered to a public official pursuant to applicable abandoned
     property, escheat or similar laws.

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

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF TARGET

                Target hereby represents and warrants to Parent and Merger
     Sub as follows:

                3.1  Corporate Organization.  (a)  Target is a corporation
     duly organized, validly existing and in good standing under the laws
     of the State of Delaware.  Target has the corporate power and
     authority to own or lease all of its properties and assets and to
     carry on its business as it is now being conducted, and is duly
     licensed or qualified to do business in each jurisdiction in which the
     nature of the business conducted by it or the character or location of
     the properties and assets owned or leased by it makes such licensing
     or qualification necessary, except where the failure to be so licensed
     or qualified would not have a Material Adverse Effect (as defined
     below) on Target.  As used in this Agreement, the term "Material
     Adverse Effect" means, with respect to Parent, Target or the Surviving
     Corporation, as the case may be, a material adverse effect on the
     business, properties, assets, liabilities, prospects, results of
     operations or financial condition of such party and its Subsidiaries
     taken as a whole or the ability of any party to consummate the
     transactions contemplated hereby on the terms hereof, it being
     understood that a Material Adverse Effect will not include a change
     with respect to, or effect on, such entity resulting from a change in
     law, rule, regulation, generally accepted or regulatory accounting
     principles, or a change with respect to, or effect on, such entity
     resulting from any other matter affecting financial institutions or
     their holding companies generally.  As used in this Agreement, the
     word "Subsidiary" when used with respect to any party means any
     corporation, partnership or other organization, whether incorporated
     or unincorporated, which is consolidated with such party for financial
     reporting purposes or of which the party holds 25% or more of the
     shares.  Target is duly registered as a savings and loan holding
     company under the Home Owners' Loan Act, as amended ("HOLA").  The
     copies of the Certificate of Incorporation and By-laws of Target which
     have previously been delivered to Parent are true, complete and
     correct copies of such documents as in effect as of the date of this
     Agreement.

                (b)  Northeast Savings, F.A. ("Target Bank") is a federal
     savings and loan association or savings bank duly organized, validly
     existing and in good standing under the laws of the United States. 
     The deposit accounts of Target Bank are insured by the Federal Deposit
     Insurance Corporation (the "FDIC") through the Savings Association
     Insurance Fund (the "SAIF") to the fullest extent permitted by law,
     and all premiums and assessments required in connection therewith have
     been paid by Target Bank.  Target Bank is the only direct Subsidiary
     of Target, and is the only Subsidiary of Target that is a "Significant
     Subsidiary" as such term is defined in Regulation S-X promulgated by
     the Securities and Exchange Commission (the "SEC").  Target Bank has
     the corporate power and authority to own or lease all of its
     properties and assets and to carry on its business as it is now being
     conducted and is duly licensed or qualified to do business in each
     jurisdiction in which the nature of the business conducted by it or
     the character or the location of the properties and assets owned or
     leased by it makes such licensing or qualification necessary, except
     where the failure to be so licensed or qualified would not have a
     Material Adverse Effect on Target.  The copies of the Federal Stock
     Charter and By-laws of Target Bank which have previously been
     delivered to Parent are true, complete and correct copies of such
     documents as in effect as of the date of this Agreement.

                (c)  The minute books of Target and Target Bank accurately
     reflect in all material respects all corporate actions held or taken
     since January 1, 1989 of their respective stockholders and Boards of
     Directors (including committees of their respective Boards of
     Directors).

                3.2  Capitalization.  (a)  The authorized capital stock of
     Target consists of 25,000,000 shares of Target Common Stock and
     15,000,000 shares of preferred stock, par value $.01 per share
     ("Target Preferred Stock").  As of March 31, 1994, there are (x)
     13,519,193 shares of Target Common Stock issued and outstanding and no
     shares of Target Common Stock held in Target's treasury and 402,576
     shares of Target Series B Preferred Stock issued and outstanding,
     (y) no shares of Target Common Stock reserved for issuance upon
     exercise of outstanding stock options or warrants or otherwise except
     for (i) 1,497,292 shares of Target Common Stock reserved for issuance
     pursuant to the Target Stock Option Plans and (ii) 800,000 shares of
     Target Common Stock reserved for issuance pursuant to the Target
     Warrants and (z), except for the 402,576 shares of Target Series B
     Preferred Stock issued and outstanding and shares of such stock which
     may be issued in payment for dividends on the Target Series B
     Preferred Stock, no shares of Target Preferred Stock are issued or
     outstanding or reserved for issuance.  All of the issued and
     outstanding shares of Target Common Stock and Target Series B
     Preferred Stock have been duly authorized and validly issued and are
     fully paid, nonassessable and free of preemptive rights, with no
     personal liability attaching to the ownership thereof.  Except as
     referred to above or reflected in Section 3.2(a) of the Disclosure
     Schedule which is being delivered to Parent concurrently herewith (the
     "Target Disclosure Schedule"), Target does not have and is not bound
     by any outstanding subscriptions, options, warrants, calls,
     commitments or agreements of any character calling for the purchase or
     issuance of any shares of Target Common Stock or Target Preferred
     Stock or any other equity security of Target or any securities
     representing the right to purchase or otherwise receive any shares of
     Target Common Stock or any other equity security of Target.  The names
     of the optionees, the date of each option to purchase Target Common
     Stock granted, the number of shares subject to each such option, the
     expiration date of each such option, and the price at which each such
     option may be exercised under the Target Stock Option Plans are set
     forth in Section 3.2(a) of the Target Disclosure Schedule.  Except as
     set forth in Section 3.2(a) of the Target Disclosure Schedule, since
     March 31, 1994, Target has not issued any shares of its capital stock
     or any securities convertible into or exercisable for any shares of
     its capital stock, other than pursuant to the exercise of employee or
     director stock options granted prior to such date and except for
     Series B Preferred Stock issued in payment of dividends on outstanding
     shares of Series B Preferred Stock.  Section 3.2(a) of the Target
     Disclosure Schedule sets forth the number of shares of Target Common
     Stock issued and outstanding as of the date of this Agreement.  Target
     has reserved an adequate number of shares to cover exercise of options
     under the currently outstanding options granted pursuant to the Target
     Stock Option Plans.

                (b)  Section 3.2(b) of the Target Disclosure Schedule sets
     forth a true and correct list of all of the Target Subsidiaries as of
     the date of this Agreement.  Except as set forth in Section 3.2(b) of
     the Target Disclosure Schedule, Target owns, directly or indirectly,
     all of the issued and outstanding shares of capital stock of each of
     the Target Subsidiaries, free and clear of all liens, charges,
     encumbrances and security interests whatsoever, and all of such shares
     are duly authorized and validly issued and are fully paid,
     nonassessable and free of preemptive rights, with no personal
     liability attaching to the ownership thereof.  Each Target Subsidiary
     is duly organized and validly existing as a corporation or partnership
     under the laws of its jurisdiction of organization.  No Target
     Subsidiary has or is bound by any outstanding subscriptions, options,
     warrants, calls, commitments or agreements of any character calling
     for the purchase or issuance of any shares of capital stock or any
     other equity security of such Subsidiary or any securities
     representing the right to purchase or otherwise receive any shares of
     capital stock or any other equity security of such Subsidiary. 
     Assuming compliance by Parent with Section 1.6 hereof and except
     pursuant to the DEPCO Agreement (as defined in Section 3.27), at the
     Effective Time, there will not be any outstanding subscriptions,
     options, warrants, calls, commitments or agreements of any character
     by which Target or any of its Subsidiaries will be bound calling for
     the purchase or issuance of any shares of the capital stock of Target
     or any of its Subsidiaries.

                3.3  Authority; No Violation.  (a)  Target has full
     corporate power and authority to execute and deliver this Agreement
     and to consummate the transactions contemplated hereby.  The execution
     and delivery of this Agreement and the consummation of the
     transactions contemplated hereby have been duly and validly approved
     by the Board of Directors of Target.  The Board of Directors of Target
     has directed that this Agreement and the transactions contemplated
     hereby be submitted to Target's stockholders for approval at a meeting
     of such stockholders and, except for the adoption of this Agreement by
     the requisite vote of Target's stockholders, no other corporate
     proceedings on the part of Target are necessary to approve this
     Agreement and to consummate the transactions contemplated hereby. 
     This Agreement has been duly and validly executed and delivered by
     Target and constitutes a valid and binding obligation of Target.

                (b)  Except as set forth in Section 3.3(b) of the Target
     Disclosure Schedule, neither the execution and delivery of this
     Agreement by Target nor the consummation by Target of the transactions
     contemplated hereby or thereby, nor compliance by Target with any of
     the terms or provisions hereof or thereof, will (i) violate any
     provision of the Certificate of Incorporation or By-Laws of Target or
     the certificate of incorporation, by-laws or similar governing
     documents of Target Bank or (ii) assuming that the consents and
     approvals referred to in Section 3.4 hereof are duly obtained, (x)
     violate any statute, code, ordinance, rule, regulation, judgment,
     order, writ, decree or injunction applicable to Target or Target Bank,
     or any of their respective properties or assets, or (y) violate,
     conflict with, result in a breach of any provision of or the loss of
     any benefit under, constitute a default (or an event which, with
     notice or lapse of time, or both, would constitute a default) under,
     result in the termination of or a right of termination or cancellation
     under, accelerate the performance required by, or result in the
     creation of any lien, pledge, security interest, charge or other
     encumbrance upon any of the respective properties or assets of Target
     or Target Bank under, any of the terms, conditions or provisions of
     any note, bond, mortgage, indenture, deed of trust, license, lease,
     agreement or other instrument or obligation to which Target or Target
     Bank is a party, or by which they or any of their respective
     properties or assets may be bound or affected, except (in the case of
     clause (y) above) for such violations, conflicts, breaches or defaults
     which, either individually or in the aggregate, would not have or be
     reasonably likely to have a Material Adverse Effect on Target.

                3.4  Consents and Approvals.  Except for (a) the filing of
     applications and notices, as applicable, with the Board of Governors
     of the Federal Reserve System (the "Federal Reserve Board") under the
     Bank Holding Company Act of 1956, as amended (the "BHC Act") and
     approval of such applications and notices, (b) the filing of
     applications with the Office of Thrift Supervision (the "OTS") under
     the HOLA and approval of such applications, (c) the filing of any
     required applications or notices with any state agencies  and approval
     of such applications (the "State Approvals"), (d) the filing with the
     SEC of a proxy statement in definitive form relating to any meeting of
     Target's stockholders to be held in connection with this Agreement and
     the transactions contemplated hereby (the "Proxy Statement"), (e) the
     approval of this Agreement by the requisite vote of the stockholders
     of Target, (f) the filing of the Certificate of Merger with the
     Secretary pursuant to the DGCL, and (g) such filings, authorizations
     or approvals as may be set forth in Section 3.4 of the Target
     Disclosure Schedule, no consents or approvals of or filings or
     registrations with any court, administrative agency or commission or
     other governmental authority or instrumentality (each a "Governmental
     Entity") or with any third party are necessary in connection with
     (1) the execution and delivery by Target of this Agreement and (2) the
     consummation by Target of the Merger and the other transactions
     contemplated hereby.

                3.5  Loan Portfolio; Reports.  (a)  Except as set forth in
     Section 3.5(a) of the Target Disclosure Schedule, as of March 31,
     1994, neither Target nor any of its Subsidiaries is a party to any
     written or oral (i) loan agreement, note or borrowing arrangement
     (including, without limitation, leases, credit enhancements,
     commitments, guarantees and interest-bearing assets) (collectively,
     "Loans"), other than Loans the unpaid principal balance of which does
     not exceed $100,000, under the terms of which the obligor was, as of
     March 31, 1994, over 90 days delinquent in payment of principal or
     interest or in default under any other provision, or (ii) Loan to any
     director, executive officer or ten percent stockholder of Target or
     any of its Subsidiaries or, to the knowledge of Target, any person,
     corporation or enterprise controlling, controlled by or under common
     control with any of the foregoing.  Section 3.5(a) of the Target
     Schedule sets forth (i) all of the Loans of Target or any of its
     Subsidiaries the unpaid principal amount in excess of (A) $100,000
     that as of the date of this Agreement are internally classified as
     "Substandard," "Doubtful," "Loss," or "Classified," (B) $100,000 that
     as of the date of this Agreement are internally classified as
     "Criticized," "Other Loans Especially Mentioned" or "Special Mention",
     (C) $750,000 that as of the date of this Agreement are internally
     classified as "Credit Risk Assets," "Concerned Loans," "Watch List" or
     words of similar import, in each case together with the principal
     amount of and accrued and unpaid interest on each such Loan and the
     identity of the borrower thereunder, and (ii) by category of Loan
     (i.e., commercial, consumer, etc.), all of the other Loans of Target
     and its Subsidiaries that as of the date of this Agreement are
     classified as such, together with the aggregate principal amount of
     and accrued and unpaid interest on such Loans by category.  Target
     shall promptly inform Parent of any Loan that becomes classified in
     the manner described in the previous sentence, or any Loan the
     classification of which is changed, at any time after the date of this
     Agreement.  Target and its Subsidiaries have internally classified, in
     the manner described above, all Loans that any auditor or government
     examiner has criticized or classified, and the internal classification
     of such Loans is at least as strict as the criticism or classification
     thereof by an auditor or government examiner.

                (b)  Target and Target Bank have timely filed all reports,
     registrations and statements, together with any amendments required to
     be made with respect thereto, that they were required to file since
     January 1, 1990 with (i) the Federal Reserve Board, (ii) the FDIC,
     (iii) the OTS, (iv) any state regulatory authority (each a "State
     Regulator") and (v) any self-regulatory organization ("SRO")
     (collectively "Regulatory Agencies"), and all other material reports
     and statements required to be filed by them since January 1, 1989,
     including, without limitation, any report or statement required to be
     filed pursuant to the laws, rules or regulations of the United States,
     any state, the Federal Reserve Board, the FDIC, the OTS, any State
     Regulator or any SRO, and have paid all fees and assessments due and
     payable in connection therewith.  Except for normal examinations
     conducted by a Regulatory Agency in the regular course of the business
     of Target and its Subsidiaries, and except as otherwise disclosed in
     Section 3.5(b) of the Target Disclosure Schedule, no Regulatory Agency
     has initiated any proceeding or, to the best knowledge of Target,
     investigation into the business or operations of Target or any of its
     Subsidiaries since January 1, 1989.  Except as otherwise disclosed in
     Section 3.5(b) of the Target Disclosure Schedule, there is no material
     unresolved violation, criticism, or exception by any Regulatory Agency
     with respect to any report or statement relating to any examinations
     of Target or any of its Subsidiaries.

                3.6  Financial Statements.  Target has previously delivered
     to Parent copies of (a) the consolidated balance sheets of Target and
     its Subsidiaries as of December 31, for the fiscal years ended
     December 31, 1992 and 1993, and the related consolidated statements of
     income, changes in stockholders' equity and cash flows for each of the
     fiscal years in the three year period ended December 31, 1993, as
     reported in Target's Annual Report on Form 10-K for the fiscal year
     ended December 31, 1993 filed with the SEC under the Securities
     Exchange Act of 1934, as amended (the "Exchange Act"), accompanied by
     the audit reports of Deloitte & Touche or Coopers & Lybrand,
     independent public accountants with respect to Target, and (b) the
     unaudited consolidated balance sheets of Target and its Subsidiaries
     as of March 31, 1993 and March 31, 1994 and the related unaudited
     consolidated statements of income, cash flows and changes in
     stockholders' equity for the three month periods then ended as
     reported in Target's Quarterly Report on Form 10-Q for the period
     ended March 31, 1994 filed with the SEC under the Exchange Act.  The
     March 31, 1994 consolidated balance sheet of Target (including the
     related notes, where applicable) fairly presents the consolidated
     financial position of Target and its Subsidiaries as of the date
     thereof, and the other financial statements referred to in this
     Section 3.6 (including the related notes, where applicable) fairly
     present, and the financial statements referred to in Section 6.8
     hereof will fairly present (subject, in the case of the unaudited
     statements, to recurring audit adjustments normal in nature and
     amount), the results of the consolidated operations and consolidated
     financial position of Target and its Subsidiaries for the respective
     fiscal periods or as of the respective dates therein set forth; each
     of such statements (including the related notes, where applicable)
     comply, and the financial statements referred to in Section 6.8 hereof
     will comply, in all material respects with applicable accounting
     requirements and with the published rules and regulations of the SEC
     with respect thereto and each of such statements (including the
     related notes, where applicable) has been, and the financial
     statements referred to in Section 6.8 hereof will be, prepared in
     accordance with generally accepted accounting principles ("GAAP")
     consistently applied during the periods involved, except in the case
     of unaudited statements, as permitted by Form 10-Q.  The books and
     records of Target and Target Bank have been, and are being, maintained
     in all material respects in accordance with GAAP and any other
     applicable legal and accounting requirements and reflect only actual
     transactions.

                3.7  Broker's Fees.  Neither Target nor any Target
     Subsidiary nor any of their respective officers or directors has
     employed any broker or finder or incurred any liability for any
     broker's fees, commissions or finder's fees in connection with any of
     the transactions contemplated by this Agreement, except that Target
     has engaged, and will pay a fee or commission to, Lehman Brothers Inc.
     ("Lehman Brothers") in accordance with the terms of a letter agreement
     between Lehman Brothers and Target, a true, complete and correct copy
     of which has been previously delivered by Target to Parent.

                3.8  Absence of Certain Changes or Events.  (a)  Except as
     may be set forth in Section 3.8(a) of the Target Disclosure Schedule
     or as disclosed in Target's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1994, true, complete and correct copies of
     which have previously been delivered to Parent, since December 31,
     1993, (i) neither Target nor any of its Subsidiaries has incurred any
     material liability, except in the ordinary course of its business
     consistent with prudent banking practices, and (ii) no events have
     occurred which have had, individually or in the aggregate, a Material
     Adverse Effect on Target.

                (b) Except as set forth in Section 3.8(b) of the Target
     Disclosure Schedule or as disclosed in Target's Quarterly Report on
     Form 10-Q for the quarter ended March 31, 1994, since December 31,
     1993, Target and its Subsidiaries have carried on their respective
     businesses in the ordinary and usual course consistent with prudent
     banking practices.

                (c) Except as set forth in Section 3.8(c) of the Target
     Disclosure Schedule, since December 31, 1993, neither Target nor any
     of its Subsidiaries has (i) except for normal increases in the
     ordinary course of business consistent with past practice or except as
     required by applicable law, increased the wages, salaries,
     compensation, pension, or other fringe benefits or perquisites payable
     to any executive officer, employee, or director from the amount
     thereof in effect as of December 31, 1993, granted any severance or
     termination pay, entered into any contract to make or grant any
     severance or termination pay, or paid any bonus other than year-end
     bonuses for fiscal 1993 and 1994 as listed in Section 3.8 of the
     Target Disclosure Schedule or (ii) suffered any strike, work stoppage,
     slow-down, or other labor disturbance.

                3.9  Legal Proceedings.  (a)  Except as set forth in
     Section 3.9(a) of the Target Disclosure Schedule, neither Target nor
     any of its Subsidiaries is a party to any, and there are no pending
     or, to the best of Target's knowledge, threatened, legal,
     administrative, arbitral or other proceedings, claims, actions or
     governmental or regulatory investigations of any nature against Target
     or any of its Subsidiaries as to which there is a reasonable
     probability of an adverse determination and (i) which, if adversely
     determined, would, individually or in the aggregate, have a Material
     Adverse Effect on Target or the Surviving Corporation or (ii)
     challenging the validity or propriety of the transactions contemplated
     by this Agreement.

                (b)  Except as otherwise disclosed in Section 3.9(b) of the
     Target Disclosure Schedule, there is no injunction, order, judgment,
     decree, or regulatory restriction imposed upon Target, any of its
     Subsidiaries or the assets of Target or any of its Subsidiaries which
     has had, or might reasonably be expected to have, a Material Adverse
     Effect on Target or the Surviving Corporation.

                (c) Section 3.9(c) of the Target Disclosure Schedule sets
     forth all pending litigation involving any claim against the Target
     Bank or any of its Subsidiaries, whether directly or by counterclaim,
     involving a "lender liability" cause of action.

                3.10  Taxes and Tax Returns.  (a)  Except as may be
     reflected in Section 3.10 of the Target Disclosure Schedule or, in the
     aggregate, otherwise would not have a Material Adverse Effect on
     Target, Parent or the Surviving Corporation, each of Target and its
     Subsidiaries has duly filed all Federal, state, and to the best of its
     knowledge, county, local and foreign Tax returns (including, without
     limitation, information returns and returns of estimated tax) required
     to be filed by it on or prior to the date hereof (all such returns
     being accurate and complete) and has duly paid or made adequate
     provision for the payment of all Taxes (as defined below) that have
     been incurred by it or are due or claimed to be due from it by
     Federal, state, county, local or foreign taxing authorities on or
     prior to the date of this Agreement (including, without limitation, if
     and to the extent applicable, those due in respect of its properties,
     income, business, capital stock, deposits, franchises, licenses, sales
     and payrolls) other than Taxes that are being contested in good faith
     (and which are set forth in Section 3.10 of the Target Disclosure
     Schedule).  The income tax returns of Target and its Subsidiaries have
     been examined by the Internal Revenue Service (the "IRS") for all
     years through and including 1979, and the deficiencies (if any)
     asserted as a result of such examination either, in the aggregate,
     were not material, or have been satisfied.  Except as may be reflected
     in Section 3.10 of the Target Disclosure Schedule there are no
     material disputes pending, or claims asserted for, Taxes or
     assessments upon Target or any of its Subsidiaries, nor does Target or
     any of its Subsidiaries have outstanding any currently effective
     waivers extending the statutory period of limitation applicable to any
     Federal, state, county, local or foreign income tax return for any
     period.  In addition, (i) proper and accurate amounts have been
     withheld by Target and its Subsidiaries from their employees,
     customers, depositors, shareholders and others from whom they are
     required to withhold Tax in compliance with all applicable Federal,
     state, county, local and foreign laws, except where the failures to do
     so would not, in the aggregate, have a Material Adverse Effect on
     Target, Parent or the Surviving Corporation and (ii) there are no Tax
     liens upon any property or assets of the Target or its Subsidiaries
     except liens for current Taxes not yet due.  Except as, in the
     aggregate, would not have a Material Adverse Effect on Target, Parent
     or the Surviving Corporation, or as disclosed in Section 3.10 of the
     Target Disclosure Schedule, to the best of its knowledge, (i) no
     property of Target or any of its Subsidiaries is property that Target
     or any of its Subsidiaries is or will be required to treat as being
     owned by another person pursuant to the provisions of Section
     168(f)(8) of the Internal Revenue Code of 1954, as amended (as in
     effect prior to its amendment by the Tax Reform Act of 1986) or is
     "tax-exempt use property" within the meaning of Section 168(h) of the
     Code; (ii) neither Target nor any of its Subsidiaries has been
     required to include in income any adjustment pursuant to Section 481
     of the Code by reason a voluntary change in accounting method
     initiated by Target or any of its Subsidiaries, and the Internal
     Revenue Service has not initiated or proposed any such adjustment or
     change in accounting method; and (iii) neither Target nor any of its
     Subsidiaries has entered into a transaction which is being accounted
     for as an installment obligation under Section 453 of the Code.

                (b)  As used in this Agreement, the term "Tax" or "Taxes"
     means all Federal, state, county, local, and foreign income, excise,
     gross receipts, ad valorem, profits, gains, transfer gains, property,
     sales, transfer, use, payroll, employment, severance, withholding,
     backup withholding, intangibles, franchise, and other taxes,
     governmental charges, levies or like assessments together with all
     penalties and additions to Tax and interest thereon.

                (c)  Target Bank, at the close of its most recent taxable
     year, qualified, and on the Closing Date will qualify either as a
     "domestic building and loan association" within the meaning of
     Section 7701(a)(19) of the Code or as a "mutual savings bank" within
     the meaning of Section 591(b) of the Code that meets the requirements
     of Section 7701(a)(19)(C) of the Code.

                3.11  Employees.  (a)  The Target Reports (as defined in
     Section 3.12 hereof) accurately describe all bonus, deferred
     compensation, pension, retirement, profit-sharing, thrift, savings,
     employee stock ownership, stock bonus, stock purchase, restricted
     stock and stock option plans, all employment or severance contracts,
     other material employee benefit plans and any applicable "change of
     control" or similar provisions in any plan, contract or arrangement
     which cover employees or former employees of Target or its
     Subsidiaries (collectively, the "Compensation and Benefit Plans")
     required to be described in such Target Reports.  The Compensation and
     Benefit Plans and all other benefit plans, contracts or arrangements
     covering directors, employees or former employees of Target or its
     Subsidiaries (the "Employees"), including, but not limited to,
     "employee benefit plans" within the meaning of Section 3(3) of the
     Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
     are listed in Section 3.11 of the Target Disclosure Schedule.  True
     and complete copies of all Compensation and Benefit Plans and such
     other benefit plans, contracts or arrangements, including, but not
     limited to, any trust instruments and/or insurance contracts, if any,
     forming a part of any such plans and agreements, and all amendments
     thereto, including but not limited to (i) the actuarial report for
     such plan (if applicable) for each of the last two years, and (ii) the
     most recent determination letter from the IRS (if applicable) for such
     plan, have heretofore been delivered to Parent.

                (b)  All employee benefit plans, other than "multiemployer
     plans" within the meaning of Sections 3(37) or 4001(a)(3) of ERISA,
     covering Employees (the "Plans"), to the extent subject to ERISA, are
     in substantial compliance with ERISA.  Each Plan which is an "employee
     pension benefit plan" within the meaning of Section 3(2) of ERISA
     ("Pension Plan") and which is intended to be qualified under Section
     401(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
     has received a favorable determination letter from the IRS, and Target
     is not aware of any circumstances likely to result in revocation of
     any such favorable determination letter.  The 1985 Target Employee
     Stock Ownership Plan satisfies the requirements for an employee stock
     ownership plan under Section 4975(e)(7) of the Code.  There is no
     material pending or threatened litigation relating to the Plans. 
     Neither Target nor any of its Subsidiaries has engaged in a
     transaction with respect to any Plan that, assuming the taxable period
     of such transaction expired as of the date hereof, could subject
     Target or any of its Subsidiaries to a tax or penalty imposed by
     either Section 4975 of the Code or Section 502(i) of ERISA in an
     amount which would be material.

                (c)  No liability under Subtitle C or D of Title IV of
     ERISA has been or is expected to be incurred by Target or any of its
     Subsidiaries with respect to any ongoing, frozen or terminated
     "single-employer plan", within the meaning of Section 4001(a)(15) of
     ERISA, currently or formerly maintained by any of them, or the single-
     employer plan of any entity which is considered one employer with
     Target or any of its Subsidiaries under Section 4001 of ERISA or
     Section 414 of the Code (an "ERISA Affiliate").  Target and its
     Subsidiaries have not incurred and do not expect to incur any
     withdrawal liability with respect to a multiemployer plan under
     Subtitle E of Title IV of ERISA (regardless of whether based on
     contributions of an ERISA Affiliate).  No notice of a "reportable
     event", within the meaning of Section 4043 of ERISA for which the 30-
     day reporting requirement has not been waived, has been required to be
     filed for any Pension Plan or by any ERISA Affiliate within the 12-
     month period ending on the date hereof.

                (d)  All contributions required to be made under the terms
     of any Plan have been timely made.  Neither any Pension Plan nor any
     single-employer plan of an ERISA Affiliate has an "accumulated funding
     deficiency" (whether or not waived) within the meaning of Section 412
     of the Code or Section 302 of ERISA.  Neither Target nor its
     Subsidiaries has provided, or is required to provide, security to any
     Pension Plan or to any single-employer plan of an ERISA Affiliate
     pursuant to Section 401(a)(29) of the Code.

                (e)  Under each Pension Plan which is a single-employer
     plan, as of the last day of the most recent plan year ended prior to
     the date hereof, the actuarially determined present value of all
     "benefit liabilities", within the meaning of Section 4001(a)(16) of
     ERISA (as determined on the basis of the actuarial assumptions
     contained in the Plan's most recent actuarial valuation), did not
     exceed the then current value of the assets of such Plan, and there
     has been no material change in the financial condition of such Plan
     since the last day of the most recent Plan Year.  The withdrawal
     liability of Target and its Subsidiaries under each Benefit Plan which
     is a multiemployer plan to which Target, its Subsidiaries or an ERISA
     Affiliate has contributed during the preceding 12 months, determined
     as if a "complete withdrawal", within the meaning of Section 4203 of
     ERISA, had occurred as of the date hereof, does not exceed $100,000.

                (f)  Neither Target nor its Subsidiaries has any
     obligations for retiree health and life benefits under any Plan,
     except as set forth in Section 3.11 of the Target Disclosure Schedule.
      Except as set forth in Section 3.11 of the Target Disclosure
     Schedule, there are no restrictions on the rights of Target or its
     Subsidiaries to amend or terminate any such Plan without incurring any
     liability thereunder.

                (g)  Target and its Subsidiaries have no material unfunded
     liabilities with respect to any Pension Plan which covers foreign
     Employees.

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

                3.12  SEC Reports.  Target has made or will make available
     to Parent an accurate and complete copy of each (a) registration
     statement, prospectus, report, schedule, proxy statement, information
     statement or other stockholder communication used, circulated or filed
     after January 1, 1990 by Target, and no such registration statement,
     prospectus, report, schedule, proxy statement, information statement
     or communication, each in the form (including exhibits and amendments
     thereto) filed with the SEC (or if not so filed, in the form first
     used or circulated) (collectively, the "Target Reports"), contained,
     as of its date, any untrue statement of a material fact or omitted to
     state any material fact required to be stated therein or necessary in
     order to make the statements therein, in light of the circumstances in
     which they were made, not misleading.  Target has timely filed, and
     will timely file, all Target Reports and other documents required to
     be filed by it under the Securities Act of 1933, as amended (the
     "Securities Act") and the Exchange Act, and, as of their respective
     dates, all Target Reports complied in all material respects with the
     published rules and regulations of the SEC with respect thereto.

                3.13  Target Information  The information relating to or
     provided by Target and its Subsidiaries to be contained or
     incorporated by reference in the Proxy Statement and the registration
     statement on Form S-4 (the "S-4") in which the Proxy Statement will be
     included as a prospectus, or in any other document filed with any
     other regulatory agency in connection herewith, will not contain any
     untrue statement of a material fact or omit to state a material fact
     necessary to make the statements therein not misleading.  The Proxy
     Statement (except for such portions thereof that relate only to Parent
     or any of its Subsidiaries) will comply in all material respects with
     the provisions of the Exchange Act and the rules and regulations
     thereunder.

                3.14  Compliance with Applicable Law.  Except as disclosed
     in Section 3.14 of the Target Disclosure Schedule, Target and each of
     its Subsidiaries hold, and have at all times held, all material
     licenses, franchises, permits and authorizations necessary for the
     lawful conduct of their respective businesses under and pursuant to
     all, and have complied with and are not in default in any respect
     under any, applicable laws, statutes, orders, rules, regulations,
     policies and/or guidelines of any Governmental Entity relating to
     Target or any of its Subsidiaries, except where the failure to hold
     such license, franchise, permit or authorization or such noncompliance
     or default would not, individually or in the aggregate, have a
     Material Adverse Effect on Target or the Surviving Corporation, and
     neither Target nor any of its Subsidiaries knows of, or has received
     notice of, any violations of any of the above.

                3.15  Certain Contracts.  (a)  Except as set forth in
     Section 3.15(a) of the Target Disclosure Schedule, neither Target nor
     any of its Subsidiaries is a party to or bound by any contract,
     arrangement, commitment or understanding (whether written or oral)
     (i) with respect to the employment of any directors, officers,
     employees or consultants, (ii) which, upon the consummation of the
     transactions contemplated by this Agreement will (either alone or upon
     the occurrence of any additional acts or events) result in any payment
     (whether of severance pay or otherwise) becoming due from Parent,
     Target, Target Bank, the Surviving Corporation or any of their
     respective Subsidiaries to any officer or employee thereof,
     (iii) which is a material contract (as defined in Item 601(b)(10) of
     Regulation S-K of the SEC) to be performed after the date of this
     Agreement that has not been filed or incorporated by reference in the
     Target Reports filed with the SEC during 1994, (iv) which is a
     consulting agreement (including data processing, software programming
     and licensing contracts) not terminable on 60 days or less notice
     involving the payment of more than $100,000 per annum, in the case of
     any such agreement with an individual, or $500,000 per annum, in the
     case of any other such agreement, (v) which materially restricts the
     conduct of any line of business by Target or Target Bank, or
     (vi) (including any stock option plan, stock appreciation rights plan,
     restricted stock plan or stock purchase 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.  Target has previously delivered to
     Parent true and correct copies of all employment, consulting and
     deferred compensation agreements which are in writing and to which
     Target or any of its Subsidiaries is a party.  Each contract,
     arrangement, commitment or understanding of the type described in this
     Section 3.15(a), whether or not set forth in Section 3.15(a) of the
     Target Disclosure Schedule, is referred to herein as a "Target
     Contract," and neither Target nor any of its Subsidiaries knows of, or
     has received notice of, any material violation of the above.

                (b)  Except as set forth in Section 3.15(b) of the Target
     Disclosure Schedule, (i) each Target Contract is valid and binding and
     in full force and effect, (ii) Target and each of its Subsidiaries has
     in all material respects performed all obligations required to be
     performed by it to date under each Target Contract, except where such
     noncompliance, individually or in the aggregate, would not have a
     Material Adverse Effect on Target, and (iii) no event or condition
     exists which constitutes or, after notice or lapse of time or both,
     would constitute, a material default on the part of Target or any of
     its Subsidiaries under any such Target Contract, except where such
     default, individually or in the aggregate, would not have a Material
     Adverse Effect on Target.

                3.16  Agreements with Regulatory Agencies.  Except as
     disclosed in the Target Reports or as set forth in Section 3.16 of the
     Target Disclosure Schedule, neither Target nor any of its Subsidiaries
     is subject to any cease-and-desist or other order issued by, or is a
     party to any written agreement, consent agreement or memorandum of
     understanding with, or is a party to any commitment letter or similar
     undertaking to, or is subject to any order or directive by, or is a
     recipient of any extraordinary supervisory letter from, or has adopted
     any board resolutions at the request of (each, whether or not set
     forth on Section 3.16 of the Target Disclosure Schedule, a "Regulatory
     Agreement"), any Regulatory Agency or other Governmental Entity that
     restricts the conduct of its business or that in any manner relates to
     its capital adequacy, its credit policies, its management or its
     business, nor has Target or any of its Subsidiaries been advised by
     any regulatory Agency or other Governmental Entity that it is
     considering issuing or requesting any Regulatory Agreement.

                3.17  Investment Securities.  Section 3.17 of the Target
     Disclosure Schedule sets forth the book and market value as of
     March 31, 1994 of the investment securities, mortgage backed
     securities and securities held for sale of Target and its
     Subsidiaries.  Section 3.17 of the Target Disclosure Schedule sets
     forth an investment securities report which includes security
     descriptions, CUSIP numbers, pool face values, book values, coupon
     rates, market values, book yields and weighted average coupon, in each
     case as of March 31, 1994.

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

                3.19  Undisclosed Liabilities.  Except (a) as set forth in
     Section 3.19 of the Target Disclosure Schedule, (b) for those
     liabilities that are fully reflected or reserved against on the
     consolidated balance sheet of Target included in its Form 10-Q for the
     period ended March 31, 1994 and (c) for liabilities incurred in the
     ordinary course of business consistent with past practice since
     March 31, 1994, neither Target nor any of its Subsidiaries has
     incurred any liability of any nature whatsoever (whether absolute,
     accrued, contingent or otherwise and whether due or to become due)
     that, either alone or when combined with all similar liabilities, is,
     or could reasonably be expected to have, a Material Adverse Effect on
     Target or the Surviving Corporation.

                3.20  Takeover Restrictions.  (a)  The Board of Directors
     of Target has approved the transactions contemplated by this Agreement
     such that the supermajority vote provisions of Section 203 of the DGCL
     and Section 8 of Target's Certificate of Incorporation will not apply
     to this Agreement or any of the transactions contemplated hereby.

                (b) No "business combination", "moratorium", "control
     share", or other federal or state antitakeover statute or regulation
     (collectively, "Antitakeover Provisions") other than HOLA or the
     Federal Deposit Insurance Act (i) prohibits or restricts Target's
     ability to perform its obligations under this Agreement, or its
     ability to consummate the transactions contemplated hereby, (ii) would
     have the effect of invalidating or voiding this Agreement, or any
     provision hereof, (iii) would subject Parent or Merger Sub to any
     material impediment or condition in connection with the exercise of
     any of its rights under this Agreement, or (iv) would provide any
     rights to, or permit the exercise of rights by, Target's stockholders.

                3.21  Administration of Fiduciary Accounts.  Each of Target
     and Target Bank has properly administered in all material respects all
     accounts for which it acts as a fiduciary, including but not limited
     to accounts for which it serves as a trustee, agent, custodian,
     personal representative, guardian, conservator or investment advisor,
     in accordance with the terms of the governing documents and applicable
     state and federal law and regulation and common law.  Neither Target
     nor Target Bank nor any of their respective directors, officers or
     employees has committed any breach of trust with respect to any such
     fiduciary account which has had or could reasonably be expected to
     have a Material Adverse Effect on Target, and the accountings for each
     such fiduciary account are true and correct in all material respects
     and accurately reflect the assets of such fiduciary account.

                3.22  Environmental Matters.  Except as set forth in
     Section 3.22 of the Target Disclosure Schedule, to the knowledge of
     Target:

                (a)  Each of Target, its Subsidiaries, the Participation
     Facilities and the Loan/Fiduciary Properties (each as hereinafter
     defined) are, and have been, in compliance with all applicable laws,
     rules, regulations, standards and requirements of all federal, state,
     local and foreign laws and regulations relating to pollution or
     protection of human health or the environment (including without
     limitation, laws and regulations relating to emissions, discharges,
     releases or threatened releases of Hazardous Material or petroleum or
     petroleum products, or otherwise relating to the manufacture,
     processing, distribution, use, treatment, storage, disposal, transport
     or handling of Hazardous Material or petroleum or petroleum products),
     except for violations which, either individually or in the aggregate,
     have not had and cannot reasonably be expected to have a Material
     Adverse Effect on Target;

                (b)  There is no suit, claim, action, proceeding,
     investigation or notice pending or threatened (or past or present
     actions, activities, circumstances, conditions, events or incidents
     that could form the basis of any such suit, claim, action, proceeding,
     investigation or notice), before any Governmental Entity or other
     forum in which Target, any of its Subsidiaries, any Participation
     Facility or any Loan/Fiduciary Property (or person or entity whose
     liability for any such suit, claim, action, proceeding, investigation
     or notice Target, any of its Subsidiaries, Participation Facility or
     Loan/Fiduciary Property has or may have retained or assumed either
     contractually or by operation of law), has been or, with respect to
     threatened suits, claims, actions, proceedings, investigations or
     notices may be, named as a defendant (x) for alleged noncompliance
     (including by any predecessor), with any environmental law, rule or
     regulation or (y) relating to the release or threatened release into
     the environment of any Hazardous Material (as hereinafter defined) or
     petroleum or petroleum products whether or not occurring at or on a
     site owned, leased or operated by Target or any of its Subsidiaries,
     any Participation Facility or any Loan/Fiduciary Property, except
     where such noncompliance or release has not had, and cannot be
     reasonably expected to have, either individually or in the aggregate,
     a Material Adverse Effect on Target;

                (c)  During the period of (x) Target's or any of its
     Subsidiaries' ownership or operation of any of their respective
     current properties, (y) Target's or any of its Subsidiaries'
     participation in the management of any Participation Facility, or (z)
     Target's or any of its Subsidiaries' holding of a security or other
     interest in a Loan/Fiduciary Property, there has been no release of
     Hazardous Material or petroleum or petroleum products in, on, under or
     affecting any such property, except where such release or threatened
     release has not had and cannot reasonably be expected to have, either
     individually or in the aggregate, a Material Adverse Effect on Target. 
     Prior to the period of (x) Target's or any of its Subsidiaries'
     ownership or operation of any of their respective current properties,
     (y) Target's or any of its Subsidiaries' participation in the
     management of any Participation Facility, or (z) Target's or any of
     its Subsidiaries' holding of a security or other interest in a
     Loan/Fiduciary Property, there was no release or threatened release of
     Hazardous Material or petroleum or petroleum products in, on, under or
     affecting any such property, Participation Facility or Loan/Fiduciary
     Property, except where such release has not had and cannot be
     reasonably expected to have, either individually or in the aggregate,
     a Material Adverse Effect on Target; and

                (d)  The following definitions apply for purposes of this
     Section 3.22:  (x) "Loan/Fiduciary Property" means any property owned
     or controlled by Target or any Target Subsidiary or in which Target or
     any of its Subsidiaries holds a security or other interest, and, where
     required by the context, said term means the owner or operator of such
     property; (y) "Participation Facility" means any facility in which
     Target or any of its Subsidiaries participates in the management and,
     where required by the context, said term means the owner or operator
     of such property; and (z) "Hazardous Material" means any pollutant,
     contaminant, waste or hazardous or toxic substance.

                3.23  Derivative Transactions.  Section 3.23 of the Target
     Disclosure Schedule sets forth the market value, as of May 31, 1994,
     of all holdings by Target or any of its Subsidiaries of positions in
     forwards, futures, options on futures, swaps and any other instrument
     within the scope of Target's Board-approved investment policy
     ("Derivative Instruments").  Except as set forth in Section 3.23 of
     the Target Disclosure Schedule, since December 31, 1993 neither Target
     nor any of its Subsidiaries has engaged in any transactions in or
     involving Derivative Instruments except as agent on the order and for
     the account of others.  None of the counterparties to any contract or
     agreement with respect to any such instrument is in default with
     respect to such contract or agreement and no such contract or
     agreement, were it to be a Loan held by Target or any of its
     Subsidiaries, would be classified as "Other Loans Especially
     Mentioned," "Special Mention," "Substandard," "Doubtful," "Loss,"
     "Classified," "Criticized," "Credit Risk Assets," "Concerned Loans" or
     words of similar import.  The financial position of Target and its
     Subsidiaries on a consolidated basis under or with respect to each
     such instrument has been reflected in the books and records of Target
     and such Subsidiaries in accordance with GAAP consistently applied,
     and no open exposure of Target or any of its Subsidiaries with respect
     to any such instrument (or with respect to multiple instruments with
     respect to any single counterparty) exceeds $500,000.

                3.24  Accuracy of Information.  The statements contained in
     this Agreement, the Target Disclosure Schedules or in any other
     written document delivered by or on behalf of Seller pursuant to the
     terms of this Agreement are true and correct, and such statements and
     documents do not omit any fact necessary to make the statements
     contained therein not misleading.

                3.25  Opinion.  Target has received an opinion, dated the
     date of this Agreement, from Lehman Brothers to the effect that,
     subject to the terms, conditions and qualifications set forth therein,
     as of the date thereof the consideration to be received by the
     stockholders of Target pursuant to the Merger is fair to such
     stockholders from a financial point of view.

                3.26  Assistance Agreements.  Except as set forth in
     Section 3.26 of the Target Disclosure Schedule, neither Target nor any
     of its Subsidiaries is a party to any agreement or arrangement entered
     into in connection with the consummation of a federally or state
     assisted acquisition of a depository institution pursuant to which
     Target or any of its Subsidiaries is entitled to receive financial
     assistance or indemnification from any governmental agency.

                3.27  DEPCO Directors.  On the date hereof, (i) the Rhode
     Island Depositors Economic Protection Corporation ("DEPCO") or any
     "Nominee" as defined in the Stock and Warrant Purchase Agreement dated
     as of April 21, 1992, by and between DEPCO and Target (the "DEPCO
     Agreement") (A) owns all of the issued and outstanding shares of
     Target's Series B Preferred Stock and (B) has the right to elect and
     has elected at least one current member of Target's Board of Directors
     and (ii) on the date hereof, and at all times through and including
     the Effective Date, the Directors elected by DEPCO or any "Nominee" as
     defined in the DEPCO Agreement pursuant to the terms of the Target
     Series B Preferred Stock shall represent less than 20% of the members
     of Target's Board of Directors.

                3.28  Qualified Thrift Lender.  Target Bank is a "qualified
     thrift lender" within the meaning set forth in Section 10(m) of HOLA.

                3.29  Knowledge as to Conditions.  Target knows of no
     reason why the Requisite Regulatory Approvals (as defined below)
     should not be obtained.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES
                                  OF PARENT

                Parent hereby represents and warrants to Target as follows:

                4.1  Corporate Organization.  (a)  Parent is a corporation
     duly organized, validly existing and in good standing under the laws
     of the State of Delaware.  Parent has the corporate power and
     authority to own or lease all of its properties and assets and to
     carry on its business as it is now being conducted, and is duly
     licensed or qualified to do business in each jurisdiction in which the
     nature of the business conducted by it or the character or location of
     the properties and assets owned or leased by it makes such licensing
     or qualification necessary, except where the failure to be so licensed
     or qualified would not have a Material Adverse Effect on Parent. 
     Parent is duly registered as a bank holding company under the BHC Act. 
     The Certificate of Incorporation and By-laws of Parent, copies of
     which have previously been made available to Target, are true,
     complete and correct copies of such documents as in effect as of the
     date of this Agreement.

                (b)  Merger Sub is or will be a corporation duly organized,
     validly existing and in good standing under the laws of the State of
     Delaware.

                (c)  Each Significant Subsidiary of Parent is duly
     organized, validly existing and in good standing under the laws of the
     jurisdiction of its incorporation.  Each Significant Subsidiary of
     Parent has the corporate power and authority to own or lease all of
     its properties and assets and to carry on its business as it is now
     being conducted, and is duly licensed or qualified to do business in
     each jurisdiction in which the nature of the business conducted by it
     or the character or location of the properties and assets owned or
     leased by it makes such licensing or qualification necessary, except
     where the failure to be so licensed or qualified would not have a
     Material Adverse Effect on Parent.

                4.2  Capitalization.  (a)  The authorized capital  stock of
     Parent consists of 150,000,000 shares of Parent Common Stock and
     10,000,000 shares of preferred stock, without par value ("Parent
     Preferred Stock").  At the close of business on March 31, 1994 there
     were 95,927,307 shares of Parent Common Stock, 700,000 shares of
     Parent Preferred Stock (of stated value of $50.00 per share), and
     5,750,000 shares of Parent Depositary Shares (each representing a one-
     tenth interest in a share of 9.30% cumulative preferred stock ($250
     stated value)) issued and outstanding, and 543 shares of Parent Common
     Stock held in Parent's treasury.  On March 31, 1994, no shares of
     Parent Common Stock or Parent Preferred Stock were reserved for
     issuance, except that 13,052,807 shares of Parent Common Stock were
     reserved for issuance pursuant to Parent's dividend reinvestment and
     stock purchase plans, 6,115,251 shares of Parent Common Stock were
     reserved for issuance upon the exercise of stock options pursuant to
     the Parent Stock Option and Restricted Stock Award Plan and the Parent
     1989 Nonemployee Directors' Restricted Stock Plan (collectively, the
     "Parent Stock Plans"), 9,357,452 shares of Parent Common Stock were
     reserved for issuance upon consummation of the merger of New Dartmouth
     Bank ("New Dartmouth") with a Subsidiary of Parent, pursuant to the
     Agreement and Plan of Merger, dated as of March 23, 1993, as amended,
     between Parent and New Dartmouth, 8,453,445 shares of Parent Common
     Stock were reserved for issuance upon consummation of the merger of
     Peoples Bancorp of Worcester, Inc. ("Peoples") with a Subsidiary of
     Parent, pursuant to the Agreement and Plan of Merger dated as of
     August 26, 1993, as amended, between Parent and Peoples, 7,627,301
     shares of Parent Common Stock were reserved for issuance upon
     consummation of the merger of Gateway Financial Corporation
     ("Gateway") with a Subsidiary of Parent, pursuant to the Agreement and
     Plan of Merger between Parent, Shawmut Service Corporation and Gateway
     dated as of November 5, 1993, and 1,500,000 shares of Parent Series A
     Junior Participating Preferred Stock were reserved for issuance upon
     exercise of the rights (the "Parent Rights") distributed to holders of
     Parent Common Stock pursuant to the Shareholder Rights Agreement,
     dated as of February 28, 1989, between Parent and Manufacturers
     Hanover Trust Company, as Rights Agent (the "Parent Shareholder Rights
     Agreement").  In addition, Parent has issued and outstanding 1,329,115
     warrants to purchase Parent Common Stock.  All of the issued and
     outstanding shares of Parent Common Stock and Parent Preferred Stock
     have been duly authorized and validly issued and are fully paid,
     nonassessable and free of preemptive rights, with no personal
     liability attaching to the ownership thereof.  As of the date of this
     Agreement, except as referred to above or reflected in Section 4.2(a)
     of the Disclosure Schedule which is being delivered by Parent to
     Target herewith (the "Parent Disclosure Schedule") and except for the
     Parent Shareholder Rights Agreement, Parent does not have and is not
     bound by any outstanding subscriptions, options, warrants, calls,
     commitments or agreements of any character calling for the purchase or
     issuance of any shares of Parent Common Stock or Parent Preferred
     Stock or any other equity securities of Parent or any securities
     representing the right to purchase or otherwise receive any shares of
     Parent Common Stock or Parent Preferred Stock.  The shares of Parent
     Common Stock to be issued pursuant to the Merger will be duly
     authorized and validly issued and, at the Effective Time, all such
     shares will be fully paid, nonassessable and free of preemptive
     rights, with no personal liability attaching to the ownership thereof.

                (b)  Section 4.2(b) of the Parent Disclosure Schedule sets
     forth a true and correct list of all of the Parent Subsidiaries as of
     the date of this Agreement.  Except as set forth in Section 4.2(b) of
     the Parent Disclosure Schedule, Parent owns, directly or indirectly,
     all of the issued and outstanding shares of capital stock of each of
     the Parent Subsidiaries, free and clear of all liens, charges,
     encumbrances and security interests whatsoever, and all of such shares
     are duly authorized and validly issued and are fully paid,
     nonassessable and free of preemptive rights, with no personal
     liability attaching to the ownership thereof.  No Parent Subsidiary
     has or is bound by any outstanding subscriptions, options, warrants,
     calls, commitments or agreements of any character with any party that
     is not a direct or indirect Subsidiary of Parent calling for the
     purchase or issuance of any shares of capital stock or any other
     equity security of such Subsidiary or any securities representing the
     right to purchase or otherwise receive any shares of capital stock or
     any other equity security of such Subsidiary.

                4.3  Authority; No Violation.  (a)  Parent has full
     corporate power and authority to execute and deliver this Agreement
     and to consummate the transactions contemplated hereby.  The execution
     and delivery of this Agreement and the consummation of the
     transactions contemplated hereby have been duly and validly approved
     by the Board of Directors of Parent, and no other corporate
     proceedings on the part of Parent are necessary to consummate the
     transactions contemplated hereby.  This Agreement has been duly and
     validly executed and delivered by Parent and constitutes a valid and
     binding obligation of Parent.

                (b)  Except as set forth in Section 4.3(b) of the Parent
     Disclosure Schedule, neither the execution and delivery of this
     Agreement by Parent, nor the consummation by Parent or Merger Sub, as
     the case may be, of the transactions contemplated hereby or thereby,
     nor compliance by Parent or Merger Sub with any of the terms or
     provisions hereof or thereof, will (i) violate any provision of the
     Certificate of Incorporation or By-Laws of Parent or the Certificate
     of Incorporation or By-Laws of Merger Sub, as the case may be, or
     (ii) assuming that the consents and approvals referred to in
     Section 4.4 are duly obtained, (x) violate any statute, code,
     ordinance, rule, regulation, judgment, order, writ, decree or
     injunction applicable to Parent or any of its Significant Subsidiaries
     or any of their respective properties or assets, or (y) violate,
     conflict with, result in a breach of any provision of or the loss of
     any benefit under, constitute a default (or an event which, with
     notice or lapse of time, or both, would constitute a default) under,
     or result in the termination of or a right of termination or
     cancellation under, accelerate the performance required by, or result
     in the creation of any lien, pledge, security interest, charge or
     other encumbrance upon any of the respective properties or assets of
     Parent or any of its Subsidiaries under, any of the terms, conditions
     or provisions of any note, bond, mortgage, indenture, deed of trust,
     license, lease, agreement or other instrument or obligation to which
     Parent or any of its Subsidiaries is a party, or by which they or any
     of their respective properties or assets may be bound or affected,
     except (in the case of clause (y) above) for such violations,
     conflicts, breaches or defaults which either individually or in the
     aggregate will not have a Material Adverse Effect on Parent.

                4.4  Consents and Approvals.  Except for (i) the filing of
     applications and notices, as applicable, with the Federal Reserve
     Board under the BHC Act and approval of such applications and notices,
     (ii) the filing of applications with the OTS under HOLA and approval
     of such applications, (iii) the State Approvals, (iv) the filing with
     the SEC of the S-4, (v) the approval of this Agreement by Parent as
     the sole stockholder of Merger Sub, (vi) the filing of the Certificate
     of Merger with the Secretary pursuant to the DGCL, (vii) such filings
     and approvals as are required to be made or obtained under the
     securities or "Blue Sky" laws of various states in connection with the
     issuance of the shares of Parent Common Stock pursuant to this
     Agreement, and (viii) such filings, authorizations or approvals as may
     be set forth in Section 4.4 of the Parent Disclosure Schedule, no
     consents or approvals of or filings or registrations with any
     Governmental Entity or with any third party are necessary in
     connection with (1) the execution and delivery by Parent of this
     Agreement and (2) the consummation by Parent and Merger Sub of the
     Merger and the other transactions contemplated hereby.  The
     affirmative vote of the holders of the outstanding shares of Parent
     Common Stock is not required to approve this Agreement or the
     transactions contemplated hereby.

                4.5  Financial Statements.  Parent has previously delivered
     to Target copies of (a) the consolidated balance sheets of Parent and
     its Subsidiaries as of December 31 for the fiscal years 1992 and 1993
     and the related consolidated statements of income, changes in
     shareholders' equity and cash flows for the fiscal years 1991 through
     1993, inclusive, as reported in Parent's Annual Report on Form 10-K
     for the fiscal year ended December 31, 1993 filed with the SEC under
     the Exchange Act, in each case accompanied by the audit report of
     Price Waterhouse, independent public accountants with respect to
     Parent, and (b) the unaudited consolidated balance sheet of Parent and
     its Subsidiaries as of March 31, 1994 and March 31, 1993 and the
     related unaudited consolidated statements of income, changes in
     shareholders' equity and cash flows for the three month periods then
     ended as reported in Parent's Quarterly Report on Form 10-Q for the
     period ended March 31, 1994 filed with the SEC under the Exchange Act. 
     The December 31, 1993 consolidated balance sheet of Parent (including
     the related notes, where applicable) fairly presents the consolidated
     financial position of Parent and its Subsidiaries as of the date
     thereof, and the other financial statements referred to in this
     Section 4.5 (including the related notes, where applicable) fairly
     present and the financial statements referred to in Section 6.8 hereof
     will fairly present (subject, in the case of the unaudited statements,
     to recurring audit adjustments normal in nature and amount), the
     results of the consolidated operations and changes in shareholders'
     equity and consolidated financial position of Parent and its
     Subsidiaries for the respective fiscal periods or as of the respective
     dates therein set forth; each of such statements (including the
     related notes, where applicable) comply, and the financial statements
     referred to in Section 6.8 hereof will comply, in all material
     respects with applicable accounting requirements and with the
     published rules and regulations of the SEC with respect thereto; and
     each of such statements (including the related notes, where
     applicable) has been, and the financial statements referred to in
     Section 6.8 hereof will be, prepared in accordance with GAAP
     consistently applied during the periods involved, except as indicated
     in the notes thereto or, in the case of unaudited statements, as
     permitted by Form 10-Q.  The books and records of Parent and its
     Significant Subsidiaries have been, and are being, maintained in all
     material respects in accordance with GAAP and any other applicable
     legal and accounting requirements and reflect only actual
     transactions.

                4.6  Broker's Fees.  Neither Parent, Merger Sub nor any
     Parent Subsidiary, nor any of their respective officers or directors,
     has employed any broker or finder or incurred any liability for any
     broker's fees, commissions or finder's fees in connection with any of
     the transactions contemplated by this Agreement, except that Parent
     has engaged, and will pay a financial advisory service fee to, Morgan
     Stanley & Co. Incorporated.

                4.7  Absence of Certain Changes or Events.  Except as may
     be set forth in Section 4.7 of the Parent Disclosure Schedule, or as
     disclosed in Parent's Quarterly Report on Form 10-Q for the quarter
     ended March 31, 1994 or in any Current Reports of Parent on Form 8-K
     filed prior to the date of this Agreement, true, complete and correct
     copies of which have previously been delivered to Target, since
     December 31, 1993, no event has occurred which has had or is
     reasonably likely to have, individually or in the aggregate, a
     Material Adverse Effect on Parent.

                4.8  Legal Proceedings.  Except as set forth in Section 4.8
     of the Parent Disclosure Schedule or in Parent's Quarterly Report on
     Form 10-Q for the quarter ended March 31, 1994, neither Parent nor any
     of its Subsidiaries is a party to any and there are no pending or, to
     the best of Parent's knowledge, threatened, legal, administrative,
     arbitral or other proceedings, claims, actions or governmental or
     regulatory investigations of any nature against Parent or any of its
     Subsidiaries as to which there is a reasonable probability of an
     adverse determination and (i) which, if adversely determined, would,
     individually or in the aggregate, have a Material Adverse Effect on
     Parent or (ii) challenging the validity or propriety of the
     transactions contemplated by this Agreement.  There is no injunction,
     order, judgment, decree, or regulatory restriction imposed upon
     Parent, any of its Subsidiaries or the assets of Parent or any of its
     Subsidiaries which has had, or might reasonably be expected to have, a
     Material Adverse Effect on Parent.

                4.9  Compliance with Applicable Law.  Parent and each of
     its Subsidiaries hold, and have at all times held, all material
     licenses, franchises, permits and authorizations necessary for the
     lawful conduct of their respective businesses under and pursuant to
     all, and have complied with and are not in default in any respect
     under any, applicable laws, statutes, orders, rules, regulations,
     policies and/or guidelines of any Governmental Entity relating to
     Parent or any of its Subsidiaries, except where the failure to hold
     such license, franchise, permit or authorization or such non-
     compliance or default would not, individually or in the aggregate,
     have a Material Adverse Effect on Parent, and neither Parent nor any
     of its Subsidiaries knows of, or has received notice of violation of,
     any material violations of any of the above.

                4.10  SEC Reports.  Parent has made or will make available
     to Target an accurate and complete copy of each (a) registration
     statement, prospectus, report, schedule, proxy statement, information
     statement or other stockholder communication used, circulated or filed
     after January 1, 1990 by Parent, and no such registration statement,
     prospectus, report, schedule, proxy statement, information statement
     or other stockholder communication used, each in the form (including
     exhibits and amendments thereto) filed with the SEC (or if not so
     filed, in the form first used or circulated) (collectively, the
     "Parent Reports"), contained, as of its date, any untrue statement of
     a material fact or omitted to state any material fact required to be
     stated therein or necessary in order to make the statements therein,
     in light of the circumstances in which they were made, not misleading. 
     Parent has timely filed, and will timely file, all Parent Reports and
     other documents required to be filed by it under the Securities Act
     and the Exchange Act, and, as of their respective dates, all Parent
     Reports complied in all material respects with the published rules and
     regulations of the SEC with respect thereto.

                4.11  Parent Information.  The information relating to or
     provided by Parent and its Subsidiaries to be contained or
     incorporated by reference in the Proxy Statement and the S-4, or in
     any other document filed with any other regulatory agency in
     connection herewith, will not contain any untrue statement of a
     material fact or omit to state a material fact necessary to make the
     statements therein not misleading.  The S-4 (except for such portions
     thereof that relate only to Target or any of its Subsidiaries) will
     comply in all material respects with the provisions of the Exchange
     Act and the rules and regulations thereunder.

                4.12  Accuracy of Information.  The statements contained in
     this Agreement, the Parent Disclosure Schedule or in any other written
     document delivered by or on behalf of Parent pursuant to the terms of
     this Agreement are true and correct in all material respects, and such
     statements and documents do not omit any material fact necessary to
     make the statements contained therein not misleading.

                4.13  Undisclosed Liabilities.  Except (a) as set forth in
     Section 4.13 of the Parent Disclosure Schedule, (b) for those
     liabilities that are fully reflected or reserved against on the
     consolidated balance sheet of Parent included in its Form 10-Q for the
     quarter ended March 31, 1994 and (c) for liabilities incurred in the
     ordinary course of business consistent with past practice, since
     December 31, 1993, neither Parent nor any of its Subsidiaries has
     incurred any liability of any nature whatsoever (whether absolute,
     accrued, contingent or otherwise and whether due or to become due)
     that, either alone or when combined with all similar liabilities, is,
     or could reasonably be expected to have a Material Adverse Effect.

                4.14  Knowledge as to Conditions.  Parent knows of no
     reason why the Requisite Regulatory Approvals should not be obtained.

                                    ARTICLE V

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

                5.1  Covenants of Target.  During the period from the date
     of this Agreement and continuing until the Effective Time, except as
     expressly contemplated or permitted by this Agreement or with the
     prior written consent of Parent, Target and its Subsidiaries shall
     carry on their respective businesses in the ordinary course and
     consistent with prudent banking practice.  Target will, and will use
     its best efforts to cause each of its Subsidiaries, to (x) preserve
     intact its and their business organizations, (y) keep available to
     itself and Parent the present services of its and their employees and
     (z) preserve intact for itself and Parent the goodwill of its and
     their customers and others with whom business relationships exist. 
     Without limiting the generality of the foregoing, and except as
     consented to in writing by Parent, Target shall not, and shall not
     permit any of its Subsidiaries to:

                (a)  solely in the case of Target, declare or pay any
     dividends on, or make other distributions in respect of, any of its
     capital stock except for regular dividends on Target Series B
     Preferred Stock;

                (b)  (i)  adjust, split, combine or reclassify any shares
     of its capital stock or issue or authorize or propose the issuance of
     any other securities in respect of, in lieu of or in substitution for
     shares of its capital stock (other than payment of regular dividends
     on Target Series B Preferred Stock) or grant any stock appreciation
     rights except upon the exercise or fulfillment of rights or options
     issued or existing pursuant to employee or director benefit plans,
     programs or arrangements, all to the extent outstanding and in
     existence on the date of this Agreement and listed in Section 3.11 of
     the Target Disclosure Schedule, or (ii) repurchase, redeem or
     otherwise acquire (except for the acquisition of Trust Account Shares
     and DPC Shares, as such terms are defined in Section 1.4(b) hereof or
     as required by the DEPCO Agreement) any shares of the capital stock of
     Target or any Target Subsidiary, or any securities convertible into or
     exercisable for any shares of the capital stock of Target or any
     Target Subsidiary;

                (c)  issue, deliver or sell, or authorize or propose the
     issuance, delivery or sale of, any shares of its capital stock (other
     than payment of regular dividends on Target Series B Preferred Stock)
     or any securities convertible into or exercisable for, or any rights,
     warrants or options to acquire, any such shares, or enter into any
     agreement with respect to any of the foregoing, other than the grant
     of options required pursuant to the Subsequent Grant provision of the
     Target 1993 Stock Option Plan For Three Year Term Outside Directors
     (the "Subsequent Options") and the issuance of Target Common Stock
     upon exercise of Subsequent Options, the issuance of Target Common
     Stock upon exercise of Subsequent Options, the issuance of Target
     Common Stock pursuant to stock options or similar rights to acquire
     Target Common Stock granted pursuant to the Target Stock Option Plans
     and outstanding prior to the date of this Agreement or pursuant to the
     Target Warrants, in each case in accordance with their terms on the
     date hereof;

                (d)  amend its Certificate of Incorporation, By-laws or
     other similar governing documents;

                (e)  authorize or permit any of its officers, directors,
     employees or agents directly or indirectly to solicit, initiate or
     encourage any inquiries relating to, or other making of any proposal
     which constitutes, a "takeover proposal" (as defined below), or,
     except to the extent legally required for the discharge of the
     fiduciary duties of the Board of Directors of Target as advised in
     writing by such Board's outside counsel, recommend or endorse any
     takeover proposal, or participate in any discussions or negotiations,
     or provide third parties with any nonpublic information, relating to
     any such inquiry or proposal or otherwise facilitate any effort or
     attempt to make or implement a takeover proposal; provided, however,
     that Target may communicate information about any such takeover
     proposal to its stockholders if, in the judgment of Target's Board of
     Directors with the written advice of such Board's outside counsel,
     such communication is required under applicable law.  Target will
     immediately cease and cause to be terminated any existing activities,
     discussions or negotiations previously conducted with any parties
     other than Parent with respect to any of the foregoing and shall
     demand the return of any confidential information provided to any
     other person and will enforce its rights, under any confidentiality
     agreement, to the return of any confidential information in the event
     any such other person does not return such information.  Target will
     take all actions necessary or advisable to inform the appropriate
     individuals or entities referred to in the first sentence of this
     Section 5.1(e) of the obligations undertaken in this Section 5.1(e). 
     Target will notify Parent immediately if any such inquiries or
     takeover proposals are received by, any such information is requested
     from, or any such negotiations or discussions are sought to be
     initiated or continued with, Target, and Target will promptly inform
     Parent in writing of all of the relevant details with respect to the
     foregoing.  As used in this Agreement, "takeover proposal" shall mean
     any tender or exchange offer, proposal for a merger, consolidation or
     other business combination involving Target or any Subsidiary of
     Target or any proposal or offer to acquire in any manner a substantial
     equity interest in, or a substantial portion of the assets or deposits
     of, Target or any Subsidiary of Target other than the transactions
     contemplated or permitted by this Agreement;

                (f)  except as set forth in Section 5.1 of the Target
     Disclosure Schedule, make any capital expenditures other than in the
     ordinary course of business, as necessary to maintain existing assets
     in good repair or capital expenditures contemplated by the Target
     Business Plan dated as of April 15, 1994 previously furnished to
     Parent (the "Business Plan");

                (g)  enter into any new, or materially alter or expand any
     present line of business other than new lines of businesses, or
     material alterations or expansions of present lines of business
     contemplated by the Business Plan;

                (h)  acquire or agree to acquire, by merging or
     consolidating with, or by purchasing a substantial equity interest in
     or a substantial portion of the assets of, or by any other manner, any
     business or any corporation, partnership, association or other
     business organization or division thereof or (other than in the
     ordinary course of business) otherwise acquire any assets, other than
     in connection with foreclosures, settlements in lieu of foreclosure or
     troubled loan or debt restructurings in the ordinary course of
     business consistent with prudent banking practices, which would be
     material, individually or in the aggregate, to Target or Target Bank,
     as the case may be;

                (i)  except as required by law, take any action that is
     intended or could reasonably be expected to result in any of its
     representations and warranties set forth in this Agreement being or
     becoming untrue in any material respect, or in any of the conditions
     to the Merger set forth in Article VII not being satisfied, or in a
     violation of any provision of this Agreement;

                (j)  change its methods of accounting in effect at
     March 31, 1994, except as required by changes in GAAP or regulatory
     accounting principles as concurred in by Target's independent
     auditors;

                (k)  except as set forth in Section 5.1 of the Target
     Disclosure Schedule, (i)  except as required by applicable law or to
     maintain qualification pursuant to the Code, adopt, amend, renew (for
     a term longer than the prior term) or terminate any Plan or any
     agreement, arrangement, plan or policy between Target or any
     Subsidiary of Target and one or more of its current or former
     directors, officers or employees or (ii) except as set forth in
     Section 5.1 of the Target Disclosure Schedule, except for normal
     increases in the ordinary course of business consistent with past
     practice or except as required by applicable law, increase in any
     manner the compensation or fringe benefits of any director, officer or
     employee or pay any benefit not required by any plan or agreement as
     in effect as of the date hereof (including, without limitation, the
     granting of stock options, stock appreciation rights, restricted
     stock, restricted stock units or performance units or shares) or
     (iii) enter into, modify or renew (for a term longer than the prior
     term) any contract, agreement, commitment or arrangement providing for
     the payment to any director, officer or employee of such party of
     compensation or benefits contingent, or the terms of which are
     materially altered, upon the occurrence of any of the transactions
     contemplated by this Agreement;

                (l)  take or cause to be taken any action which would
     disqualify the Merger as a tax free reorganization under Section 368
     of the Code;

                (m)  other than activities in the ordinary course of
     business consistent with prudent banking practice, sell, lease,
     encumber, assign or otherwise dispose of, or agree to sell, lease,
     encumber, assign or otherwise dispose of, any of its material assets,
     properties or other rights or agreements;

                (n)  other than in the ordinary course of business
     consistent with prudent banking practice or to cover expenses and
     obligations under this Agreement, incur any indebtedness for borrowed
     money, assume, guarantee, endorse or otherwise as an accommodation
     become responsible for the obligations of any other individual,
     corporation or other entity;

                (o)  file any application to relocate or terminate the
     operations of any office of it or any of its Subsidiaries (other than
     the previously announced move of Target's head office to Farmington,
     Connecticut);

                (p)  commit any act or omission which constitutes a breach
     or default by Target or any of its Subsidiaries under any Regulatory
     Agreement or a material breach or default by Target or any of its
     Subsidiaries under any material contract or material license to which
     Target or any of its Subsidiaries is a party or by which any of them
     or their respective properties is bound;

                (q)  make any equity investment or commitment to make such
     an investment in real estate or in any real estate development
     project, other than in connection with foreclosure, settlements in
     lieu of foreclosure or troubled loan or debt restructurings in the
     ordinary course of business consistent with prudent banking practices;

                (r)  create, renew, amend or terminate or give notice of a
     proposed renewal, amendment or termination of, any material contract,
     agreement or lease for goods, services or office space to which Target
     or any of its Subsidiaries is a party or by which Target or any of its
     Subsidiaries or their respective properties is bound except that
     Target may renew contracts, agreements or leases in the ordinary
     course of business after consultation with Parent;

                (s) settle any claim, action or proceeding involving any
     liability of Target or any Subsidiary of Target for material money
     damages or material restrictions upon the operation of Target or any
     Subsidiary of Target;

                (t) take any other action that would materially adversely
     affect or materially delay the ability of Parent or Target to obtain
     the Requisite Regulatory Approvals (as defined below) or otherwise
     materially adversely affect Parent's ability to consummate the
     transactions contemplated by this Agreement; or

                (u)  authorize or enter into any agreement or commitment to
     do any of the foregoing.

                5.2  Covenants of Parent.  During the period from the date
     of this Agreement and continuing until the Effective Time, except as
     expressly contemplated or permitted by this Agreement or with the
     prior written consent of Target, Parent and its Subsidiaries shall
     carry on their respective businesses in the ordinary course consistent
     with prudent banking practice.  Without limiting the generality of the
     foregoing, and except as consented to in writing by Target, Parent
     shall not, and shall not permit any of its Subsidiaries to:

                (a)  take any action that is intended or may reasonably be
     expected to result in any of its representations and warranties set
     forth in this Agreement being or becoming untrue in any material
     respect, or in any of the conditions to the Merger set forth in
     Article VII not being satisfied or in a violation of any provision of
     this Agreement, except, in every case, as may be required by
     applicable law;

                (b)  take or cause to be taken any action which would
     disqualify the Merger as a tax free reorganization under Section 368
     of the Code;

                (c)  take any other action that would materially adversely
     affect or materially delay the ability of Parent or Target to obtain
     the Requisite Regulatory Approvals or otherwise materially adversely
     affect Parent's ability to consummate the transactions contemplated by
     this Agreement; 

                (d)  solely in the case of Parent, declare or pay any
     dividend on, or make any other distributions in respect of, the Parent
     Common Stock except for regular dividends and dividends or
     distributions in Parent Common Stock;

                (e)  consolidate with or merge into any other person or
     convey, transfer or lease its properties and assets substantially as
     an entirety to any person unless such person shall expressly assume
     the obligations of Parent hereunder; or

                (f)  authorize or enter into any agreement or commitment to
     do any of the foregoing.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

                6.1  Regulatory Matters.  (a)  Target shall promptly
     prepare and file with the SEC the Proxy Statement and Parent shall
     promptly prepare and file with the SEC the S-4, in which the Proxy
     Statement will be included as a prospectus.  Each of Parent and Target
     shall use all reasonable efforts to have the S-4 declared effective
     under the Securities Act as promptly as practicable after such filing,
     and Target shall thereafter mail the Proxy Statement to its
     stockholders.  Parent shall also use all reasonable efforts to obtain
     all necessary state securities law or "Blue Sky" permits and approvals
     required to carry out the transactions contemplated by this Agreement,
     and Target shall furnish all information concerning Target and the
     holders of Target Common Stock as may be reasonably requested in
     connection with any such action.

                (b)  The parties hereto shall cooperate with each other and
     use their reasonable best efforts promptly to prepare and file all
     necessary documentation, to effect all applications, notices,
     petitions and filings, and to obtain as promptly as practicable all
     permits, consents, approvals and authorizations of all third parties
     and Governmental Entities which are necessary or advisable to
     consummate the transactions contemplated by this Agreement (including
     without limitation the Merger) (it being understood that any
     amendments to the S-4 or a resolicitation of proxies as a consequence
     of an acquisition agreement by Parent or any of its Subsidiaries shall
     not violate this covenant).  Target and Parent shall have the right to
     review in advance, and to the extent practicable each will consult the
     other on, in each case subject to applicable laws relating to the
     exchange of information, all the information relating to Target or
     Parent, as the case may be, and any of their respective Subsidiaries,
     which appear in any filing made with, or written materials submitted
     to, any third party or any Governmental Entity in connection with the
     transactions contemplated by this Agreement; provided, however, that
     nothing contained herein shall be deemed to provide either party with
     a right to review any information provided to any Governmental Entity
     on a confidential basis in connection with the transactions
     contemplated hereby.  In exercising the foregoing right, each of the
     parties hereto shall act reasonably and as promptly as practicable. 
     The parties hereto agree that they will consult with each other with
     respect to the obtaining of all permits, consents, approvals and
     authorizations of all third parties and Governmental Entities
     necessary or advisable to consummate the transactions contemplated by
     this Agreement and each party will keep the other apprised of the
     status of matters relating to completion of the transactions
     contemplated herein.

                (c)  Parent and Target shall, upon request, furnish each
     other with all information concerning themselves, their Subsidiaries,
     directors, officers and stockholders and such other matters as may be
     reasonably necessary or advisable in connection with the Proxy
     Statement, the S-4 or any other statement, filing, notice or
     application made by or on behalf of Parent, Target or any of their
     respective Subsidiaries to any Governmental Entity in connection with
     the Merger and the other transactions contemplated by this Agreement.

                (d)  Parent and Target shall promptly advise each other
     upon receiving any communication from any Governmental Entity whose
     consent or approval is required for consummation of the transactions
     contemplated by this Agreement which causes such party to believe that
     there is a reasonable likelihood that any Requisite Regulatory
     Approval will not be obtained or that the receipt of any such approval
     will be materially delayed.

                6.2  Access to Information.  (a)  Upon reasonable notice
     and subject to applicable laws relating to the exchange of
     information, Target shall, and shall cause each of its Subsidiaries
     to, afford to the officers, employees, accountants, counsel and other
     representatives of Parent, access, during normal business hours during
     the period prior to the Effective Time, to all its properties, books,
     contracts, commitments and records and, during such period, Target
     shall, and shall cause its Subsidiaries to, make available to Parent
     (i) a copy of each report, schedule, registration statement and other
     document filed or received by it during such period pursuant to the
     requirements of Federal securities laws or Federal or state banking,
     savings and loan or savings association laws (other than reports or
     documents which Target is not permitted to disclose under applicable
     law) and (ii) all other information concerning its business,
     properties and personnel as Parent may reasonably request.  Neither
     Target nor any of its Subsidiaries shall be required to provide access
     to or to disclose information where such access or disclosure would
     violate or prejudice the rights of Target's customers, jeopardize the
     attorney-client privilege of the institution in possession or control
     of such information or contravene any law, rule, regulation, order,
     judgment, decree, fiduciary duty or binding agreement entered into
     prior to the date of this Agreement.  The parties hereto will make
     appropriate substitute disclosure arrangements under circumstances in
     which the restrictions of the preceding sentence apply.  Parent will
     hold all such information in confidence to the extent required by, and
     in accordance with, the provisions of the confidentiality agreement
     between Parent and Target (the "Confidentiality Agreement").

                (b)  Upon reasonable notice and subject to applicable laws
     relating to the exchange of information, Parent shall, and shall cause
     its Subsidiaries to, afford to the officers, employees, accountants,
     counsel and other representatives of Target, access, during normal
     business hours during the period prior to the Effective Time, to such
     information regarding Parent and its Subsidiaries as shall be
     reasonably necessary for Target to fulfill its obligations pursuant to
     this Agreement to prepare the Proxy Statement or which may be
     reasonably necessary for Target to confirm that the representations
     and warranties of Parent contained herein are true and correct and
     that the covenants of Parent contained herein have been performed in
     all material respects.  Neither Parent nor any of its Subsidiaries
     shall be required to provide access to or to disclose information
     where such access or disclosure would violate or prejudice the rights
     of Parent's customers, jeopardize the attorney-client privilege of the
     institution in possession or control of such information or contravene
     any law, rule, regulation, order, judgment, decree, fiduciary duty or
     binding agreement entered into prior to the date of this Agreement. 
     The parties hereto will make appropriate substitute disclosure
     arrangements under circumstances in which the restrictions of the
     preceding sentence apply.

                (c)  All information furnished by Parent to Target or its
     representatives pursuant hereto shall be treated as the sole property
     of Parent and, if the Merger shall not occur, Target and its
     representatives shall return to Parent all of such written information
     and all documents, notes, summaries or other materials containing,
     reflecting or referring to, or derived from, such information.  Target
     shall, and shall use its best efforts to cause its representatives to,
     keep confidential all such information, and shall not directly or
     indirectly use such information for any competitive or other
     commercial purpose.  The obligation to keep such information
     confidential shall continue for five years from the date the proposed
     Merger is abandoned and shall not apply to (i) any information which
     (x) was legally in Target's possession prior to the disclosure thereof
     by Parent; (y) was then generally known to the public; or (z) was
     disclosed to Target by a third party not bound by an obligation of
     confidentiality or (ii) disclosures made as required by law.  It is
     further agreed that, if in the absence of a protective order or the
     receipt of a waiver hereunder Target is nonetheless, in the written
     opinion of its outside counsel, compelled to disclose information
     concerning Parent to any tribunal or governmental body or agency or
     else stand liable for contempt or suffer other censure or penalty,
     Target may disclose such information to such tribunal or governmental
     body or agency without liability hereunder.

                (d)  No investigation by either of the parties or their
     respective representatives shall affect the representations and
     warranties of the other set forth herein.

                (e)  Within ten business days of the date of this
     Agreement, Target shall deliver to Parent amended Section 3.17 of the
     Target Disclosure Statement setting forth an investment securities
     report which includes pay down factors, paydown speeds, durations, and
     weighted average life, in each case as of March 31, 1994.

                6.3  Stockholders Meeting.  Target shall take all steps
     necessary to duly call, give notice of, convene and hold a meeting of
     its stockholders to be held as soon as is reasonably practicable after
     the date on which the S-4 becomes effective for the purpose of voting
     upon the approval of this Agreement.  Target will, through its Board
     of Directors, except to the extent legally required for the discharge
     of the fiduciary duties of such board as advised in writing by such
     Board's outside counsel, recommend to its stockholders approval of
     this Agreement and the transactions contemplated hereby and such other
     matters as may be submitted to its stockholders in connection with
     this Agreement.  Target and Parent shall coordinate and cooperate with
     respect to the foregoing matters.

                6.4  Legal Conditions to Merger.  Each of Parent and Target
     shall, and shall cause its subsidiaries to, use their reasonable best
     efforts (a) to take, or cause to be taken, all actions necessary,
     proper or advisable to comply promptly with all legal requirements
     which may be imposed on such party or its Subsidiaries with respect to
     the Merger and, subject to the conditions set forth in Article VII
     hereof, to consummate the transactions contemplated by this Agreement
     and (b) to obtain (and to cooperate with the other party to obtain)
     any consent, authorization, order or approval of, or any exemption by,
     any Governmental Entity and any other third party which is required to
     be obtained by Target or Parent or any of their respective
     Subsidiaries in connection with the Merger and the other transactions
     contemplated by this Agreement.

                6.5  Affiliates.  Target shall use its best efforts to
     cause each director, executive officer and other person who is an
     "affiliate" (for purposes of Rule 145 under the Securities Act) of
     Target (each an "Affiliate") to deliver to Parent, as soon as
     practicable after the date of this Agreement, and prior to the date of
     the stockholders meeting called by Target to approve this Agreement, a
     written agreement, in substantially the form of Exhibit 6.5 hereto.

                6.6  Stock Exchange Listing.  Parent shall use its best
     efforts to cause the shares of Parent Common Stock to be issued in the
     Merger to be approved for listing on the New York Stock Exchange, Inc.
     (the "NYSE"), subject to official notice of issuance, prior to the
     Effective Time.

                6.7  Indemnification; Directors' and Officers' Insurance. 
     (a)  In the event of any threatened or actual claim, action, suit,
     proceeding or investigation, whether civil, criminal or
     administrative, including, without limitation, any such claim, action,
     suit, proceeding or investigation in which any person who is now, or
     has been at any time prior to the date of this Agreement, or who
     becomes prior to the Effective Time, a director or officer or employee
     of Target or any of its Subsidiaries (the "Indemnified Parties") is,
     or is threatened to be, made a party based in whole or in part on, or
     arising in whole or in part out of, or pertaining to any action or
     omission by such person in his or her capacity as a director, officer
     or employee of Target, any of the Target Subsidiaries or any of their
     respective predecessors, whether in any case asserted or arising
     before or after the Effective Time, the parties hereto agree to
     cooperate and use their best efforts to defend against and respond
     thereto.  It is understood and agreed that after the Effective Time,
     Parent shall indemnify and hold harmless, as and to the fullest extent
     provided in Target's Certificate of Incorporation and Bylaws and
     permitted by Delaware law, each such Indemnified Party against any
     losses, claims, damages, liabilities, costs, expenses (including, to
     the extent so provided and permitted, reasonable attorney's fees and
     expenses in advance of the final disposition of any claim, suit,
     proceeding or investigation upon receipt of any undertaking required
     by applicable law or Target's Certificate of Incorporation or Bylaws),
     judgments, fines and amounts paid in settlement in connection with any
     such threatened or actual claim, action, suit, proceeding or
     investigation, and in the event of any such threatened or actual
     claim, action, suit, proceeding or investigation (whether asserted or
     arising before or after the Effective Time), an Indemnified Party may
     retain counsel reasonably satisfactory to him or her after
     consultation with Parent; provided, however, that (1) Parent shall
     have the right to assume the defense thereof and upon such assumption
     Parent shall not be liable to any Indemnified Party for any legal
     expenses of other counsel or any other expenses subsequently incurred
     by any Indemnified Party in connection with the defense thereof,
     except that if Parent elects not to assume such defense or counsel for
     the Indemnified Parties reasonably advises the Indemnified Parties
     that there are issues which raise conflicts of interest between Parent
     and the Indemnified Parties, the Indemnified Parties may retain
     counsel reasonably satisfactory to them after consultation with
     Parent, and Parent shall pay the reasonable fees and expenses of such
     counsel for the Indemnified Parties, (2) Parent shall be obligated
     pursuant to this paragraph to pay for only one firm of counsel for all
     Indemnified Parties, (3) Parent shall not be liable for any settlement
     effected without its prior written consent (which consent shall not be
     unreasonably withheld) and (4) Parent shall have no obligation
     hereunder to any Indemnified Party when and if a court of competent
     jurisdiction shall ultimately determine, and such determination shall
     have become final and nonappealable, that indemnification of such
     Indemnified Party in the manner contemplated hereby is prohibited
     under applicable law.  Any Indemnified Party wishing to claim
     Indemnification under this Section 6.7, upon learning of any such
     claim, action, suit, proceeding or investigation, shall notify Parent
     thereof, provided that the failure to so notify shall not affect the
     obligations of Parent under this Section 6.7 except to the extent such
     failure to notify materially prejudices Parent.  Parent's obligations
     under this Section 6.7 continue in full force and effect for a period
     of six (6) years from the Effective Time; provided, however, that all
     rights to indemnification in respect of any claim (a "Claim") asserted
     or made within such period shall continue until the final disposition
     of such Claim.

                (b)  Parent shall use its best efforts to cause the persons
     serving as officers and directors of Target immediately prior to the
     Effective Time to be covered for a period of four (4) years from the
     Effective Time by the directors' and officers' liability insurance
     policy maintained by Target (provided that Parent may substitute
     therefor policies of at least the same coverage and amounts containing
     terms and conditions, including limits, deductibles and prior acts
     coverage, which are not less advantageous than such policy) with
     respect to acts or omissions occurring prior to the Effective Time
     which were committed by such officers and directors in their capacity
     as such; provided, however, that, in the event that the annual amount
     Parent would be required to expend would be more than 200% of the
     current annual amount expended by Target (the "Insurance Amount") to
     maintain insurance coverage for such persons under Target's current
     policies, Parent may self insure; and further provided that if Parent
     is unable to maintain or obtain the insurance called for by this
     Section 6.7(b), Parent shall use its best efforts to obtain as much
     comparable insurance as available for the Insurance Amount.  Nothing
     in this Section 6.7(b) shall be deemed to modify any existing
     contractual obligations under any agreements of Target or any of its
     Subsidiaries.

                (c)  In the event Parent or any of its successors or
     assigns (i) consolidates with or merges into any other person and
     shall not be the continuing or surviving corporation or entity of such
     consolidation or merger, or (ii) transfers or conveys all or
     substantially all of its properties and assets to any person, then,
     and in each such case, to the extent necessary, proper provision shall
     be made so that the successors and assigns of Parent assume the
     obligations set forth in this section.

                (d)  The provisions of this Section 6.7 are intended to be
     for the benefit of, and shall be enforceable by, each Indemnified
     Party and his or her heirs and representatives.

                6.8  Subsequent Financial Statements.  As soon as
     reasonably available, but in no event more than 45 days after the end
     of each fiscal quarter ending after the date of this Agreement, Parent
     will deliver to Target and Target will deliver to Parent their
     respective Quarterly Reports on Form 10-Q, as filed with the SEC under
     the Exchange Act.

                6.9  Additional Agreements.  In case at any time after the
     Effective Time any further action is necessary or desirable to carry
     out the purposes of this Agreement, or to vest the Surviving
     Corporation with full title to all properties, assets, rights,
     approvals, immunities and franchises of any of the parties to the
     Merger, the proper officers and directors of each party to this
     Agreement and their respective Subsidiaries shall take all such
     necessary action as may be reasonably requested by, and at the sole
     expense of, Parent.

                6.10  Advice of Changes.  Parent and Target shall promptly
     advise the other party of any change or event having a Material
     Adverse Effect on it or which it believes would or would be reasonably
     likely to cause or constitute a material breach of any of its
     representations, warranties or covenants contained herein.  From time
     to time prior to the Effective Time, each party will promptly
     supplement or amend the Disclosure Schedules delivered in connection
     with the execution of this Agreement to reflect any matter which, if
     existing, occurring or known at the date of this Agreement, would have
     been required to be set forth or described in such Disclosure
     Schedules or which is necessary to correct any information in such
     Disclosure Schedules which has been rendered inaccurate thereby.  No
     supplement or amendment to such Disclosure Schedules shall have any
     effect for the purpose of determining satisfaction of the conditions
     set forth in Section 7.2(a) or 7.3(a) hereof, as the case may be, or
     the compliance by Target or Parent, as the case may be, with the
     respective covenants set forth in Sections 5.1 and 5.2 hereof.

                6.11  Current Information.  During the period from the date
     of this Agreement to the Effective Time, Target will cause one or more
     of its designated representatives to confer on a regular and frequent
     basis (not less than monthly) with representatives of Parent and to
     report (i) the general status of the ongoing operations of Target and
     its Subsidiaries and (ii) the status of, and the action proposed to be
     taken with respect to, those Loans held by Target or any Target
     Subsidiary which, individually or in combination with one or more
     other Loans to the same borrower thereunder, have an unpaid principal
     amount of $100,000 or more and are non-performing assets.  Target will
     promptly notify Parent of any material change in the normal course of
     business or in the operation of the properties of Target or any of its
     Subsidiaries and of any governmental complaints, investigations or
     hearings (or communications indicating that the same may be
     contemplated), or the institution or the threat of significant
     litigation involving Target or any of its Subsidiaries, and will keep
     Parent fully informed of such events.

                6.12  Termination of Regulatory Agreements.  Target shall,
     and shall cause Target Bank to, use its reasonable best efforts in
     cooperation with Parent to confirm that all Regulatory Agreements to
     which Target or Target Bank is or becomes subject to will be
     terminated and of no further force and effect at or prior to the
     Effective Time.

                6.13  Tax Returns.  Target shall prepare and file, as
     approved and directed by Parent, any Tax returns (including, without
     limitation, New York Real Property Transfer and Transfer Gains Tax
     pre-clearance forms) with respect to the Merger as Parent shall
     reasonably request.

                6.14  Employee Benefit Plans; Existing Agreements.  (a) 
     Except as otherwise provided herein, the employees of Target and its
     Subsidiaries (the "Target Employees") shall be entitled to participate
     in Parent's employee benefit plans in which similarly situated
     employees of Parent participate, to the same extent as comparable
     employees of Parent.  As soon as administratively practicable after
     the Effective Time, Parent shall permit the Target Employees to
     participate in Parent's group hospitalization, medical, life and
     disability insurance plans, defined benefit pension plan, thrift plan,
     severance plan and similar plans, on the same terms and conditions as
     applicable to comparable employees of Parent and its Subsidiaries
     (including the waiver of pre-existing condition prohibitions), giving
     effect to years of service with Target and its Subsidiaries (to the
     extent Target gave effect) as if such service were with Parent, for
     purposes of eligibility and vesting, but not for benefit accrual
     purposes (except as regards to vacation, severance and short-term
     disability accruals or for purposes of determining employer
     contributions for retiree medical benefits).  Notwithstanding anything
     in this Section 6.14 to the contrary, participation by Target
     Employees in employee benefit plans and programs of Parent with
     respect to which eligibility for employees of Parent to participate is
     at the discretion of Parent shall be at the sole discretion of Parent.

                (b) Following the Effective Time, Parent shall honor and
     shall cause the Surviving Corporation to honor in accordance with
     their terms all individual employment, severance and other
     compensation agreements existing prior to the execution of this
     Agreement, which are between Target and any director, officer or
     employee thereof and which have been disclosed in the Target
     Disclosure Schedule. 

                (c) To the extent not duplicative of any agreement or
     arrangement described in paragraph (b) above, Parent agrees to make
     the payments and provide the benefits set forth on Exhibit 6.14(c)(1)
     to the employees of Target or Target Bank (the names of which shall be
     set forth on Section 3.11 of the Target Disclosure Schedule).  Parent
     further agrees to honor and cause the Surviving Corporation to honor
     the retirement plan, in substantially the form attached as Exhibit
     6.14(c)(2) hereto, previously adopted for the members of the board of
     directors of Target.

                (d) Notwithstanding anything in this Section 6.14 to the
     contrary, Parent shall have sole discretion with respect to the
     determination as to whether to terminate, merge or continue any
     employee benefit plans and programs of Target; provided, however, that
     Parent shall continue to maintain Target plans (other than stock-based
     or incentive plans) until Target Employees are permitted to
     participate in Parent's plans.

                                   ARTICLE VII

                              CONDITIONS PRECEDENT

                7.1  Conditions to Each Party's Obligation To Effect the
     Merger.  The respective obligation of each party to effect the Merger
     shall be subject to the satisfaction at or prior to the Effective Time
     of the following conditions:

                (a)  Stockholder Approval.  This Agreement shall have been
     approved and adopted by the affirmative vote of the holders of at
     least a majority of the outstanding shares of Target Common Stock
     entitled to vote thereon.

                (b)  NYSE Listing.  The shares of Parent Common Stock which
     shall be issued to the stockholders of Target upon consummation of the
     Merger shall have been authorized for listing on the NYSE, subject to
     official notice of issuance.

                (c)  Other Approvals.  All regulatory approvals required to
     consummate the transactions contemplated hereby shall have been
     obtained and shall remain in full force and effect and all statutory
     waiting periods in respect thereof shall have expired; and the parties
     shall have procured all other regulatory approvals, consents or
     waivers of governmental authorities that are necessary to the
     consummation of this Agreement (other than immaterial consents, the
     failure to obtain which would not have a Material Adverse Effect on
     Parent (on a combined basis giving effect to the Merger)); provided,
     however, that no approval, consent or waiver referred to in this
     Section 7.1(c) shall be deemed to have been received if it shall
     include any condition or requirement that, in the opinion of Parent,
     would so materially adversely affect the economic or business benefits
     of the transactions contemplated by this Agreement to Parent as to
     render inadvisable the consummation of the Merger; provided further,
     that no condition or requirement which does no more than subject
     Parent or Target to legal requirements generally applicable to a bank
     holding company under the BHC Act or savings and loan holding company
     under HOLA as a matter of law shall be deemed to affect materially and
     adversely the economic or business benefits of the transactions
     contemplated by this Agreement (all such approvals and the expiration
     of all such waiting periods being referred to herein as the "Requisite
     Regulatory Approvals").

                (d)  S-4.  The S-4 shall have become effective under the
     Securities Act and no stop order suspending the effectiveness of the
     S-4 shall have been issued and no proceedings for that purpose shall
     have been initiated or threatened by the SEC.

                (e)  No Injunctions or Restraints; Illegality.  No order,
     injunction or decree issued by any court or agency of competent
     jurisdiction or other legal restraint or prohibition preventing the
     consummation of the Merger or any of the other transactions
     contemplated by this Agreement (an "Injunction") shall be in effect. 
     No statute, rule, regulation, order, injunction or decree shall have
     been enacted, entered, promulgated or enforced by any Governmental
     Entity which prohibits, restricts or makes illegal consummation of the
     Merger.

                (f)  Federal Tax Opinion.  Parent and Target shall have
     received an opinion of Sullivan & Cromwell, counsel to Parent, in form
     and substance reasonably satisfactory to Parent and Target, dated as
     of the Closing Date, substantially to the effect that, on the basis of
     facts, representations and assumptions set forth in such opinion, the
     Merger will be treated for Federal income tax purposes as a
     reorganization within the meaning of Section 368 of the Code and that
     accordingly:

                (i)  No gain or loss will be recognized by Parent, Merger
             Sub or Target as a result of the Merger; and

                (ii)  No gain or loss will be recognized by the
             stockholders of Target who or which exchange their Target
             Common Stock solely for Parent Common Stock pursuant to the
             Merger (except with respect to cash received in lieu of a
             fractional share interest in Parent Common Stock).

                In rendering such opinion, Sullivan & Cromwell may require
     and rely upon representations contained in certificates of officers of
     Parent, Merger Sub, Target and others.

                7.2  Conditions to Obligations of Parent.  The obligation
     of Parent to effect the Merger is also subject to the satisfaction or
     waiver by Parent at or prior to the Effective Time of the following
     conditions:

                (a)  Representations and Warranties.  The representations
     and warranties of Target set forth in this Agreement shall be true and
     correct in all material respects as of the date of this Agreement and
     (except to the extent such representations and warranties speak as of
     an earlier date) as of the Closing Date as though made on and as of
     the Closing Date.  Parent shall have received a certificate signed on
     behalf of Target by the Chief Executive Officer and the Chief
     Financial Officer of Target to the foregoing effect.

                (b)  Performance of Obligations of Target.  Target shall
     have performed in all material respects all obligations required to be
     performed by it under this Agreement at or prior to the Closing Date,
     and Parent shall have received a certificate signed on behalf of
     Target by the Chief Executive Officer and the Chief Financial Officer
     of Target to such effect.

                (c)  Consents Under Agreements.  The consent, approval or
     waiver of each person (other than the Governmental Entities referred
     to in Section 7.1(c)) whose consent or approval shall be required in
     order to permit the succession by the Surviving Corporation pursuant
     to the Merger to any obligation, right or interest of Target or any
     Subsidiary of Target under any loan or credit agreement, note,
     mortgage, indenture, lease, license or other agreement or instrument
     shall have been obtained, except where the failure to obtain such
     consent, approval or waiver would not materially adversely affect the
     economic or business benefits of the transactions contemplated by this
     Agreement to Parent as to render inadvisable the consummation of the
     Merger.

                (d)  No Pending Governmental Actions.  No proceeding
     initiated by any Governmental Entity seeking an Injunction shall be
     pending.

                (e)  DEPCO Directors.  (i) DEPCO or any "Nominee" as
     defined in the DEPCO Agreement (A) shall own all of the issued and
     outstanding shares of Target Series B Preferred Stock and (B) shall
     have the right to elect and shall have elected at least one current
     member of Target's Board of Directors and (ii) the Directors elected
     by DEPCO or any "Nominee" as defined in the DEPCO Agreement pursuant
     to the Target Series B Preferred Stock shall represent less than 20%
     of the number of Target's Board of Directors.

                (f)  Accountant's Letter.  Target shall have caused to be
     delivered to Parent letters from Target's independent public
     accountants dated the date on which the S-4 or last amendment thereto
     shall become effective, and dated the Closing Date, and addressed to
     Parent and Target, with respect to Target's consolidated financial
     position and results of operation, which letters shall be based upon
     SAS 72 and certain agreed upon procedures to be specified by Parent,
     which procedures shall be consistent with applicable professional
     standards for letters delivered by independent accountants in
     connection with comparable transactions.

                7.3  Conditions to Obligations of Target.  The obligation
     of Target to effect the Merger is also subject to the satisfaction or
     waiver by Target at or prior to the Effective Time of the following
     conditions:

                (a)  Representations and Warranties.  The representations
     and warranties of Parent set forth in this Agreement shall be true and
     correct in all material respects as of the date of this Agreement and
     (except to the extent such representations and warranties speak as of
     an earlier date) as of the Closing Date as though made on and as of
     the  Closing Date.  Target shall have received a certificate signed on
     behalf of Parent by the Chief Executive Officer and the Chief
     Financial Officer of Parent to the foregoing effect.

                (b)  Performance of Obligations of Parent.  Parent shall
     have performed in all material respects all obligations required to be
     performed by it under this Agreement at or prior to the Closing Date,
     and Target shall have received a certificate signed on behalf of
     Parent by the Chief Executive Officer and the Chief Financial Officer
     of Parent to such effect.

                (c)  Consents Under Agreements.  The consent or approval of
     each person (other than the Governmental Entities referred to in
     Section 7.1(c)) whose consent or approval shall be required in
     connection with the transactions contemplated hereby under any loan or
     credit agreement, note, mortgage, indenture, lease, license or other
     agreement or instrument to which Parent or any of its Subsidiaries is
     a party or is otherwise bound, except those for which failure to
     obtain such consents and approvals would not, individually or in the
     aggregate, have a material adverse effect on the business, operations
     or financial condition of Parent and its Subsidiaries taken as a whole
     (after giving effect to the transactions contemplated hereby), shall
     have been obtained.

                (d)  No Pending Governmental Actions.  No proceeding
     initiated by any Governmental Entity seeking an Injunction shall be
     pending.

                                  ARTICLE VIII

                            TERMINATION AND AMENDMENT

                8.1  Termination.  This Agreement may be terminated at any
     time prior to the Effective Time, whether before or after approval of
     the matters presented in connection with the Merger by the
     stockholders of Target:

                (a)  by mutual consent of Parent and Target in a written
     instrument, if the Board of Directors of each so determines by a vote
     of a majority of the members of its entire Board;

                (b)  by either Parent or Target upon written notice to the
     other party (i) ninety (90) days after the date on which any request
     or application for a Requisite Regulatory Approval shall have been
     denied or withdrawn at the request or recommendation of the
     Governmental Entity which must grant such Requisite Regulatory
     Approval, unless within the 90-day period following such denial or
     withdrawal a petition for rehearing or an amended application has been
     filed with the applicable Governmental Entity, provided, however, that
     no party shall have the right to terminate this Agreement pursuant to
     this Section 8.1(b)(i) if such denial or request or recommendation for
     withdrawal shall be due to the failure of the party seeking to
     terminate this Agreement to perform or observe the covenants and
     agreements of such party set forth herein or (ii) if any Governmental
     Entity of competent jurisdiction shall have issued a final
     nonappealable order enjoining or otherwise prohibiting the
     consummation of any of the transactions contemplated by this
     Agreement;

                (c)  by either Parent or Target if the Merger shall not
     have been consummated on or before June 30, 1995, unless the failure
     of the Closing to occur by such date shall be due to the failure of
     the party seeking to terminate this Agreement to perform or observe
     the covenants and agreements of such party set forth herein;

                (d)  by either Parent or Target (provided that if the
     terminating party is Target, Target shall not be in material breach of
     any of its obligations under Section 5.1(e) or 6.3) if any approval of
     the stockholders of Target required for the consummation of the Merger
     shall not have been obtained by reason of the failure to obtain the
     required vote at a duly held meeting of stockholders or at any
     adjournment or postponement thereof;

                (e)  by either Parent or Target (provided that the
     terminating party is not then in material breach of any
     representation, warranty, covenant or other agreement contained
     herein) if there shall have been a material breach of any of the
     representations or warranties set forth in this Agreement on the part
     of the other party, which breach is not cured within forty-five (45)
     days following written notice to the party committing such breach, or
     which breach, by its nature, cannot be cured prior to the Closing;

                (f)  by either Parent or Target (provided that the
     terminating party is not then in material breach of any
     representation, warranty, covenant or other agreement contained
     herein) if there shall have been a material breach of any of the
     covenants or agreements set forth in this Agreement on the part of the
     other party, which breach shall not have been cured within forty-five
     (45) days following receipt by the breaching party of written notice
     of such breach from the other party hereto; or

                (g)  (i) by Target, if (either before or after the approval
             by the stockholders of this Agreement) its Board of Directors
             so determines by a vote of a majority of the members of its
             entire Board, at any time during the five-day period
             commencing with the Determination Date, if the Parent Common
             Stock Average Price on the Determination Date shall be less
             than $21.465; subject, however, to subsection (g)(ii).  

                (ii)  If Target elects to exercise its termination right
             pursuant to subsection (g)(i), it shall give prompt written
             notice to Parent (provided that such notice of election to
             terminate may be withdrawn at any time within the
             aforementioned five-day period).  During the three-day period
             commencing with its receipt of such notice, Parent shall have
             the option of increasing the consideration to be received by
             holders of Target Common Stock hereunder by adjusting the
             Exchange Ratio to equal a number equal to $10.875 divided by
             the Parent Common Stock Average Price.  If Parent makes an
             election contemplated by this subsection (g)(ii) within such
             three-day period, it shall give prompt written notice to
             Target of such election and the revised Exchange Ratio,
             whereupon no termination shall have occurred pursuant to this
             subsection (g) and this Agreement shall remain in effect in
             accordance with its terms (except as the Exchange Ratio shall
             have been so modified), and any references in this Agreement
             to "Exchange Ratio" shall thereafter be deemed to refer to
             the Exchange Ratio as adjusted pursuant to this subsection
             (g).

                For purposes of this subsection (g), the following terms
     shall have the meanings indicated:

                "Determination Date" means the date on which the last
             regulatory approval required to consummate the Merger has
             been obtained and all statutory waiting periods in respect
             thereof have expired.

                "Parent Common Stock Average Price" means the average of
             the daily closing sales prices of Parent Common Stock as
             reported on the NYSE Composite Transactions reporting system
             (as reported by The Wall Street Journal or, if not reported
             thereby, another authoritative source as chosen by Parent)
             for the 15 consecutive full trading days in which such shares
             are traded on the NYSE ending at the close of trading on the
             trading day immediately prior to the Determination Date.

                8.2  Fee.  (a)  Target hereby agrees to pay Parent and
     Parent shall be entitled to payment of, a fee (the "Fee") of
     $11,000,000 following the occurrence of a Purchase Event (as defined
     below); provided that Parent shall have sent written notice of such
     entitlement within 90 days following such Purchase Event.  Such
     payment shall be made in immediately available funds within five
     business days after delivery of such notice.  The right to receive the
     Fee shall terminate if any of the following (a "Fee Termination
     Event") occurs prior to a Purchase Event:  (i) the Effective Time of
     the Merger, (ii) termination of this Agreement in accordance with the
     provisions hereof if such termination occurs prior to the occurrence
     of a Preliminary Purchase Event, except a termination by Parent
     pursuant to Sections 8.1(e) or (f) hereof (unless the breach by Target
     is non-volitional), or (iii) if termination of this Agreement follows
     the occurrence of a Preliminary Purchase Event (x) the passage of
     twenty-four months after termination of this Agreement (eighteen
     months in the case of a Preliminary Purchase Event listed in
     subsection (c)(iv) or (c)(v)) if such termination is by Parent
     pursuant to Sections 8.1(e) or (f) of this Agreement (unless the
     breach by Target is non-volitional) or pursuant to Section 8.1(d), or
     (y) if such termination is otherwise pursuant to Section 8.1.  The
     "Last Preliminary Purchase Event" shall mean the last Preliminary
     Purchase Event to expire.

                (c) The term "Preliminary Purchase Event" shall mean any of
     the following events or transactions occurring after the date hereof:

                (i) Target or any of the Target Subsidiaries without having
             received Parent's prior written consent, shall have entered
             into an agreement to engage in an Acquisition Transaction (as
             defined below) with any person (the term "person" for
             purposes of this Agreement having the meaning assigned
             thereto in Sections 3(a)(9) and 13(d)(3) of the Securities
             Exchange Act of 1934, as amended (the "Securities Exchange
             Act") and the rules and regulations thereunder) other than
             Parent or any of the Parent Subsidiaries or the Board of
             Directors of Target shall have recommended that the
             shareholders of Target approve or accept any Acquisition
             Transaction with any person other than Parent or any Parent
             Subsidiary.  For purposes of this Agreement, "Acquisition
             Transaction" shall mean (A) a merger or consolidation, or any
             similar transaction, involving Target or any Target
             Significant Subsidiary, (B) a purchase, lease or other
             acquisition of all or substantially all of the assets or
             deposits of Target or any Target Significant Subsidiary,
             (C) a purchase or other acquisition (including by way of
             merger, consolidation, share exchange or otherwise) of
             securities representing 10% or more of the voting power of
             Target or a Target Significant Subsidiary; provided that the
             term "Acquisition Transaction" does not include any internal
             merger or consolidation involving only Target and/or Target
             Subsidiaries;

                (ii)     (A) Any person (other than Parent or any Parent
             Subsidiary) shall have acquired beneficial ownership or the
             right to acquire beneficial ownership of 10% or more of the
             outstanding shares of Target Common Stock (the term
             "beneficial ownership" for purposes of this Agreement having
             the meaning assigned thereto in Section 13(d) of the
             Securities Exchange Act, and the rules and regulations
             thereunder), or (B) any group (as such term "group" is
             defined in Section 13(d)(3) of the Securities Exchange Act),
             other than a group of which Parent or any Parent Subsidiary
             is a member, shall have been formed that beneficially owns
             10% or more of the Target Common Stock then outstanding;

                (iii)    Any person other than Parent or any Parent
             Subsidiary shall have made a bona fide proposal to Target or
             its shareholders, by public announcement or written
             communication that is or becomes the subject of public
             disclosure, to engage in an Acquisition Transaction
             (including, without limitation, any situation which any
             person other than Parent or any Parent Subsidiary shall have
             commenced (as such term is defined in Rule 14d-2 under the
             Securities Exchange Act) or shall have filed a registration
             statement under the Securities Act with respect to, a tender
             offer or exchange offer to purchase any shares of Target
             Common Stock such that, upon consummation of such offer, such
             person would own or control 10% or more of the then
             outstanding shares of Target Common Stock (such an offering
             referred to herein as a "Tender Offer" or an "Exchange
             Offer", respectively));

                (iv)     After a proposal is made by a third party to
             Target or its shareholders to engage in an Acquisition
             Transaction, or such third party states its intention to
             Target to make such a proposal if the Plan terminates, Target
             shall have breached any representation, covenant or
             obligation contained in this Agreement and such breach would
             entitle Parent to terminate this Agreement under Sections
             8.01(e) or (f) of this Agreement (without regard to the cure
             periods provided for therein unless such cure is promptly
             effected without jeopardizing consummation of the Merger
             pursuant to the terms of this Agreement); or

                (v) the holders of Target Common Stock shall not have
             approved this Agreement at the meeting of such stockholders
             held for the purpose of voting on this Agreement or such
             meeting shall not have been held or shall have been canceled
             prior to termination of this Agreement, in each case after
             any person (other than Parent or any Parent Subsidiary) shall
             have (A) made, or disclosed an intention to make, a bona fide
             proposal to engage in an Acquisition Transaction or (B)
             commenced a Tender Offer or filed a registration statement
             under the Securities Act with respect to an Exchange Offer.

                (d) The Term "Purchase Event" shall mean either of the
     following events or transactions occurring after the date hereof:

                (i) The acquisition by any person, other than Parent or any
             Parent Subsidiary, alone or together with such person's
             affiliates and associates, or any group (as defined in
             Section 13(d)(3) of the Securities Exchange Act), of
             beneficial ownership of 50% or more of the Target Common
             Stock; or

                (ii)     The occurrence of a Preliminary Purchase Event
             described in Section 8.2(c)(i) except that the percentage
             referred to in clause (C) shall be 50%.

                (e) Target shall notify Parent promptly in writing of its
     knowledge of the occurrence of any Preliminary Purchase Event or
     Purchase Event; provided, however, that the giving of such notice by
     Target shall not be a condition to the right of Parent to the Fee.

                8.3  Effect of Termination.  (a)  In the event of
     termination of this Agreement by either Parent or Target as provided
     in Section 8.1, this Agreement shall forthwith become void and have no
     effect except (i) the last sentence of Section 6.2(a), and Sections
     6.2(c), 8.2, 8.3, 9.3 and 9.4, shall survive any termination of this
     Agreement, and (ii) notwithstanding anything to the contrary contained
     in this Agreement, no party shall be relieved or released from any
     liabilities or damages arising out of its willful breach of any
     provision of this Agreement.

                8.4  Amendment.  Subject to compliance with applicable law,
     this Agreement may be amended by the parties hereto, by action taken
     or authorized by their respective Boards of Directors, at any time
     before or after approval of the matters presented in connection with
     the Merger by the common stockholders of Target; provided, however,
     that after any approval of the transactions contemplated by this
     Agreement by Target's common stockholders, there may not be, without
     further approval of such stockholders, any amendment of this Agreement
     which reduces the amount or changes the form of the consideration to
     be delivered to the Target stockholders hereunder other than as
     contemplated by this Agreement.  This Agreement may not be amended
     except by an instrument in writing signed on behalf of each of the
     parties hereto.

                8.5  Extension; Waiver.  At any time prior to the Effective
     Time, the parties hereto, by action taken or authorized by their
     respective Board of Directors, may, to the extent legally allowed, (a)
     extend the time for the performance of any of the obligations or other
     acts of the other parties hereto, (b) waive any inaccuracies in the
     representations and warranties contained herein or in any document
     delivered pursuant hereto and (c) waive compliance with any of the
     agreements or conditions contained herein; provided, however, that
     after any approval of the transactions contemplated by this Agreement
     by Target's common stockholders, there may not be, without further
     approval of such stockholders, any extension or waiver of this
     Agreement or any portion thereof which reduces the amount or changes
     the form of the consideration to be delivered to the Target
     stockholders hereunder other than as contemplated by this Agreement. 
     Any agreement on the part of a party hereto to any such extension or
     waiver shall be valid only if set forth in a written instrument signed
     on behalf of such party, but such extension or waiver or failure to
     insist on strict compliance with an obligation, covenant, agreement or
     condition shall not operate as a waiver of, or estoppel with respect
     to, any subsequent or other failure.

                                   ARTICLE IX

                               GENERAL PROVISIONS

                9.1  Closing.  Subject to the terms and conditions of this
     Agreement, the closing of the Merger (the "Closing") will take place
     at 10:00 a.m. on a date to be selected by Parent, which shall be the
     tenth business day after the satisfaction or waiver (subject to
     applicable law) of the latest to occur of the conditions set forth in
     Article VII hereof (the "Closing Date"), at the offices of Parent,
     unless another time, date or place is agreed to in writing by the
     parties hereto.

                9.2  Alternative Structure.  Notwithstanding anything to
     the contrary contained in this Agreement, prior to the Effective Time,
     Parent shall be entitled to revise the structure of the Merger and
     related transactions provided that each of the transactions comprising
     such revised structure shall (i) not subject any of the stockholders
     of Target to adverse tax consequences or change the amount of
     consideration to be received by such stockholders and (ii) be capable
     of consummation without material delay.  This Agreement and any
     related documents shall be appropriately amended in order to reflect
     any such revised structure.

                9.3  Nonsurvival of Representations, Warranties and
     Agreements.  None of the representations, warranties, covenants and
     agreements in this Agreement or in any instrument delivered pursuant
     to this Agreement shall survive the Effective Time, except for those
     covenants and agreements contained herein and therein which by their
     terms apply in whole or in part after the Effective Time.

                9.4  Expenses.  All costs and expenses incurred in
     connection with this Agreement and the transactions contemplated
     hereby shall he paid by the party incurring such expense, provided,
     however, that the costs and expenses of printing and mailing the Proxy
     Statement, and all filing and other fees paid to the SEC in connection
     with the Merger, shall be borne equally by Parent and Target,
     provided, further, however, that in the event of termination of this
     Agreement in accordance with the provisions hereof, except a
     termination by Parent pursuant to Section 8.1(e) or (f) hereof, Parent
     shall pay for the accountant's letters pursuant to Section 7.2(f).

                9.5  Notices.  All notices and other communications
     hereunder shall be in writing and shall be deemed given if delivered
     personally, telecopied (with confirmation), mailed by registered or
     certified mail (return receipt requested) or delivered by an express
     courier (with confirmation) to the parties at the following addresses
     (or at such other address for a party as shall be specified by like
     notice):

               (a)  if to Parent, to:

                    Shawmut National Corporation
                    777 Main Street
                    Hartford, CT  06115
                    Fax:  (203) 728-4205
                    Attn:  Chief Executive Officer

                    with a copy to:

                    Sullivan & Cromwell
                    125 Broad Street
                    New York, NY  10004
                    Fax:  (212) 558-3588
                    Attn:  Donald J. Toumey, Esq.

               and

               (b)  if to Target, to:

                    Northeast Federal Corp.
                    50 State House Square
                    Hartford, CT  06103
                    Fax:  (203) 280-0008
                    Attn:  Chief Executive Officer

                    with a copy to:

                    Muldoon, Murphy & Faucette
                    5101 Wisconsin Avenue, N.W.
                    Washington, D.C.  20016
                    Fax:  (202) 966-9409
                    Attn:  Thomas J. Haggerty, Esq.

               9.6  Interpretation.  When a reference is made in this
     Agreement to Sections, Exhibits or Schedules, such reference shall be
     to a Section of or Exhibit or Schedule to this Agreement unless
     otherwise indicated.  The table of contents and headings contained in
     this Agreement are for reference purposes only and shall not affect in
     any way the meaning or interpretation of this Agreement.  Whenever the
     words "include", "includes" or "including" are used in this Agreement,
     they shall be deemed to be followed by the words "without limitation."

               9.7  Counterparts.  This Agreement may be executed in
     counterparts, all of which shall be considered one and the same
     agreement and shall become effective when counterparts have been
     signed by each of the parties and delivered to the other parties, it
     being understood that all parties need not sign the same counterpart.

               9.8  Entire Agreement.  This Agreement (including the
     documents and the instruments referred to herein) constitutes the
     entire agreement and supersedes all prior agreements and
     understandings, both written and oral, among the parties with respect
     to the subject matter hereof, other than the Confidentiality
     Agreement.

               9.9  Governing Law.  This Agreement shall be governed and
     construed in accordance with the laws of the State of Delaware
     applicable to agreements made and wholly to be performed in such
     state.

               9.10  Enforcement of Agreement.  The parties hereto agree
     that irreparable damage would occur in the event that the provisions
     contained in the last sentence of Section 6.2(a) and in Section 6.2(c)
     of this Agreement were not performed in accordance with its specific
     terms or was otherwise breached.  It is accordingly agreed that the
     parties shall be entitled to an injunction or injunctions to prevent
     breaches of the last sentence of Section 6.2(a) and Section 6.2(c) of
     this Agreement and to enforce specifically the terms and provisions
     thereof in any court of the United States or any state having
     jurisdiction, this being in addition to any other remedy to which they
     are entitled at law or in equity.

               9.11  Severability.  Any term or provision of this Agreement
     which is invalid or unenforceable in any jurisdiction shall, as to
     that jurisdiction, be ineffective to the extent of such invalidity or
     unenforceability without rendering invalid or unenforceable the
     remaining terms and provisions of this Agreement or affecting the
     validity or enforceability of any of the terms or provisions of this
     Agreement in any other jurisdiction.  If any provision of this
     Agreement is so broad as to be unenforceable, the provision shall be
     interpreted to be only so broad as is enforceable.

               9.12  Publicity.  Except as otherwise required by law or the
     rules of the NYSE or the National Association of Securities Dealers,
     so long as this Agreement is in effect, neither Parent nor Target
     shall, or shall permit any of its Subsidiaries to, issue or cause the
     publication of any press release or other written statement for
     general circulation with respect to the transactions contemplated by
     this Agreement, without the consent of the other party, which consent
     shall not be unreasonably withheld.

               9.13  Assignment.  Neither this Agreement nor any of the
     rights, interests or obligations hereunder shall be assigned by any of
     the parties hereto (whether by operation of law or otherwise) without
     the prior written consent of the other parties, and any purported such
     assignment shall be null and void.  Subject to the preceding sentence,
     this Agreement will be binding upon, inure to the benefit of and be
     enforceable by the parties and their respective successors and
     assigns.  Except as otherwise specifically provided in Section 6.7
     hereof, this Agreement (including the documents and instruments
     referred to herein) is not intended to, and shall not, confer upon any
     person other than the parties hereto any rights or remedies hereunder.

               IN WITNESS WHEREOF, Parent and Target have caused this
     Agreement to be executed by their respective officers thereunto duly
     authorized as of the date first above written.

                                   SHAWMUT NATIONAL CORPORATION


                                   By                                 
                                      Name:
                                      Title:

                                   NORTHEAST FEDERAL CORP.

                                   By                                 
                                      Name:
                                      Title:


                                                          EXHIBIT 99.2



                     PURCHASE AND ASSUMPTION AGREEMENT

                       DATED AS OF NOVEMBER 12, 1994

                                   among

                       BARCLAYS BUSINESS CREDIT INC.,

                             BARCLAYS BANK PLC,

                        SHAWMUT NATIONAL CORPORATION

                                    and

                       SHAWMUT BANK CONNECTICUT, N.A.


                             TABLE OF CONTENTS

                                                                  Page

     Article 1.     Definitions  . . . . . . . . . . . . . . . . .   

     Article 2.     Purchase of Assets; Assumption of
                       Liabilities . . . . . . . . . . . . . . . .   
          2.1       Sale and Purchase of Assets  . . . . . . . . .   
          2.2       Conveyance of Assets . . . . . . . . . . . . .   
          2.3       Assets Excluded  . . . . . . . . . . . . . . .   
          2.4       Transfer and Assumption of Liabilities . . . .  
          2.5       Manner of Assumption . . . . . . . . . . . . .  

     Article 3.     Consideration  . . . . . . . . . . . . . . . .  
          3.1       Purchase Price . . . . . . . . . . . . . . . .  
          3.2       Asset and Liability Schedules  . . . . . . . .  

     Article 4.     Closing; Time and Place  . . . . . . . . . . .  

     Article 5.     Representations and Warranties of
                       the Seller and Parent . . . . . . . . . . .  
          5.1       Corporate Organization and Authority . . . . .  
          5.2       No Conflict; Licenses and Permits;
                       Compliance with Laws and
                       Regulations . . . . . . . . . . . . . . . .  
          5.3       Approvals and Consents . . . . . . . . . . . .  
          5.4       Title to Assets, Etc.  . . . . . . . . . . . .  
          5.5       Leases . . . . . . . . . . . . . . . . . . . .  
          5.6       Contracts and Defaults . . . . . . . . . . . .  
          5.7       Loans and Loan Commitments . . . . . . . . . .  
          5.8       List of Transferred Offices  . . . . . . . . .  
          5.9       Environmental Matters  . . . . . . . . . . . .  
          5.10      Labor Contracts and Relations  . . . . . . . .  
          5.11      Financial Statements . . . . . . . . . . . . .  
          5.12      Litigation . . . . . . . . . . . . . . . . . .  
          5.13      Brokers' Fees  . . . . . . . . . . . . . . . .  
          5.14      Employee Benefits  . . . . . . . . . . . . . .  
          5.15      Undisclosed Liabilities  . . . . . . . . . . .  
          5.16      Taxes  . . . . . . . . . . . . . . . . . . . .  
          5.17      Loan Portfolio . . . . . . . . . . . . . . . .  
          5.18      Accounting Records . . . . . . . . . . . . . .  
          5.19      Technology . . . . . . . . . . . . . . . . . .  
          5.20      Absence of Certain Chances or Events . . . . .  
          5.21      Investments  . . . . . . . . . . . . . . . . .  

     Article 6.     Representations and Warranties of
                       Shawmut and Purchaser . . . . . . . . . . .  
          6.1       Corporate Organization and Authority . . . . .  
          6.2       No Conflict, Licenses and Permits,
                       Compliance with Laws and
                       Regulations . . . . . . . . . . . . . . . .  
          6.3       Approvals and Consents . . . . . . . . . . . .  
          6.4       Brokers' Fees  . . . . . . . . . . . . . . . .  
          6.5       Litigation and Liabilities . . . . . . . . . .  
          6.6       No Implied Representation  . . . . . . . . . .  
          6.7       Disclosure . . . . . . . . . . . . . . . . . .  

     Article 7.     Covenants  . . . . . . . . . . . . . . . . . .  
          7.1       Conduct of Business  . . . . . . . . . . . . .  
          7.2       Investigation  . . . . . . . . . . . . . . . .  
          7.3       Best Efforts; Taking of Necessary Action.  . .  
          7.4       Expenses.  . . . . . . . . . . . . . . . . . .  
          7.5       Use of Names, Trademarks and Service Marks . .  
          7.6       Post-Closing Cooperation.  . . . . . . . . . .  
          7.7       Employee-Related Matters.  . . . . . . . . . .  
          7.8       Letters of Credit of ISG.  . . . . . . . . . .  
          7.9       Non-Compete; Non-Solicitation of Employees . .  
          7.10      Independent Third Parties. . . . . . . . . . .  
          7.11      Payments.  . . . . . . . . . . . . . . . . . .  
          7.12      Limitation on Dealings with Loans. . . . . . .  
          7.13      Further Assurances.  . . . . . . . . . . . . .  
          7.14      Small Equipment Leasing Portfolio. . . . . . .  
          7.15      ISG Loan Portfolio.  . . . . . . . . . . . . .  
          7.16      Transfer of Administration.  . . . . . . . . .  

     Article 8.     Taxes  . . . . . . . . . . . . . . . . . . . .  
          8.1       Liability for Taxes. . . . . . . . . . . . . .  
          8.2       Sales and Transfer Taxes.  . . . . . . . . . .  
          8.3       Parent of Amounts Due under Article 8  . . . .  
          8.4       Refunds or Credits.  . . . . . . . . . . . . .  
          8.5       Tax Returns. . . . . . . . . . . . . . . . . .  
          8.6       Assistance and Cooperation . . . . . . . . . .  
          8.7       Document Retention.  . . . . . . . . . . . . .  
          8.8       Allocation of Purchase Price.  . . . . . . . .  
          8.9       Notices, Etc.  . . . . . . . . . . . . . . . .  
          8.10      Tax Indemnities. . . . . . . . . . . . . . . .  

     Article 9.     Conditions to the Closing  . . . . . . . . . .  
          9.1       Conditions of Obligation of Each Party.  . . .  
          9.2       Additional Conditions to the
                       Obligations of Purchaser. . . . . . . . . .  
          9.3       Additional Conditions to the
                       Obligations of the Seller . . . . . . . . .  

     Article 10.    Termination, Amendment and Waiver  . . . . . .  
          10.1      Termination  . . . . . . . . . . . . . . . . .  
          10.2      Effect of Termination  . . . . . . . . . . . .  

     Article 11.    General Provisions . . . . . . . . . . . . . .  
          11.1      Survival of Representations and
                       Warranties and Covenants  . . . . . . . . .  
          11.2      Indemnification  . . . . . . . . . . . . . . .  
          11.3      Schedules  . . . . . . . . . . . . . . . . . .  
          11.4      Notices  . . . . . . . . . . . . . . . . . . .  
          11.5      Interpretation . . . . . . . . . . . . . . . .  
          11.6      Amendment  . . . . . . . . . . . . . . . . . .  
          11.7      Extension; Waiver  . . . . . . . . . . . . . .  
          11.8      Entire Agreement . . . . . . . . . . . . . . .  
          11.9      Third Party Beneficiaries  . . . . . . . . . .  
          11.10        Assignment  . . . . . . . . . . . . . . . .  
          11.11        Publicity Notice  . . . . . . . . . . . . .  
          11.12        Governing Law . . . . . . . . . . . . . . . 
          11.13        Counterparts  . . . . . . . . . . . . . . . 
          11.14        Consent to Jurisdiction; Service of Process 
          11.15        Waiver of Jury Trial  . . . . . . . . . . .  
          11.16        Confidentiality Agreement . . . . . . . . .  


               PURCHASE AND ASSUMPTION AGREEMENT, dated as of November
     12, 1994 among BARCLAYS BUSINESS CREDIT INC., a Connecticut
     corporation ("Seller"), BARCLAYS BANK PLC, a public limited
     company organized in England ("Parent"), Shawmut National
     Corporation, a Delaware corporation ("Shawmut"), and Shawmut Bank
     Connecticut, N.A., a national banking association ("Purchaser"). 

               WHEREAS, Seller is engaged through its Business Finance
     Division ("BFD") in the business of providing asset-based
     financing and related financial services;  

               WHEREAS, Purchaser, directly or acting through a to-be-
     formed wholly owned subsidiary or any assignee designated in
     accordance with Section 11.10, seeks to acquire certain of the
     assets and assume certain of the liabilities of BFD on the terms
     and conditions described herein; and 

               WHEREAS, the respective Boards of Directors of Parent,
     Seller, Shawmut and Purchaser have approved or will soon approve
     such transactions; 

               NOW, THEREFORE, in consideration of the premises and of
     the mutual covenants and agreements hereinafter set forth, the
     parties hereto agree as follows:

     ARTICLE 1.  DEFINITIONS

               1.1  "Accounting Manual":  the BFD Accounting
     Policy/Procedure Statement, as in effect from time to time, a
     complete and correct copy of which as of September 30, 1994 is
     attached as Schedule 1.1.

               1.2  "Accrued Interest":  with respect to any Loan at
     any time, the amount of earned and unpaid interest payable by the
     Debtor accrued on or with respect to such Loan.

               1.3  "Acquired Assets":  the collective reference to
     those assets and/or businesses of BFD to be acquired by the
     Purchaser pursuant to Section 2.1.

               1.4  "Adjustment":  the difference between the Final
     Amount and the Interim Amount.

               1.5  "Affiliate" means any individual, partnership,
     corporation or other organization or entity directly or
     indirectly controlling, controlled by, or under common control
     with, the subject entity through the possession, directly or
     indirectly, of the power to direct or cause the direction of the
     management and policies of such entity whether through the
     ownership of voting securities, by contract or otherwise. 
     Without limiting the foregoing, the ownership, direct or
     indirect, or a 10% interest in such entity shall be deemed to be
     control.

               1.6  "Agreement":  this Purchase and Assumption
     Agreement as the same may be amended, supplemented or otherwise
     modified.

               1.7  "Allowance for Credit Losses Reserve":  as defined
     in the BFD Accounting Principles.

               1.8  "Assigned Leases":  the leases or subleases
     relating to Transferred Offices set forth on Schedule 1.8.

               1.9  "Assigned Software":  the collective reference to
     the Software described on Schedule 1.9.

               1.10 "Assumed Contracts and Other Obligations":  those
     Contracts and all other obligations or liabilities of the Seller
     relating to or arising from the BFD Acquired Business or the
     Acquired Assets in all cases which are identified on Schedule
     1.10 and any other Contracts relating to the BFD Acquired
     Business or the Acquired Assets entered into between the date
     hereof and the Closing Date by Seller consistent with the terms
     of this Agreement except, in each case, those expiring or
     terminating between the date hereof and the Closing Date.

               1.11 "Assumed Liabilities":  those liabilities to be
     assumed by the Purchaser pursuant to Section 2.4.

               1.12 "Bank Plans":  as defined in Section 5.14(a).

               1.13 "BFD Accounting Principles" means the accounting
     principles set forth in the Accounting Manual.

               1.14 "BFD Acquired Business":  as defined in Section
     2.1.

               1.15 "Book Value":  with respect to each asset and
     liability indicated in the Interim or Final Asset and Liability
     Schedule as being transferred in whole or in part to the
     Purchaser, the dollar amount of such transferred asset or
     liability stated on the Books of the Seller as of the relevant
     date calculated in accordance with the BFD Accounting Principles. 
     The Book Value of the KB Investment shall be its Book Value as
     reflected on the Books of the Seller as of the close of business
     on the Closing Date plus the amount specified in Schedule 1.45.

               1.16 "Books":  with respect to any Person, the general
     ledger of such Person and any related subsidiary ledger.

               1.17 "Closing":  as defined in Section 4.

               1.18 "Closing Date":  as defined in Section 4.

               1.19 "Code":  the Internal Revenue Code of 1986, as
     amended.

               1.20 "Communications":  as defined in Section 7.2(b).

               1.21 "Confidentiality Agreement":  the Confidentiality
     Agreement dated May 10, 1994, as amended, between Seller and
     Shawmut.

               1.22 "Contract":  any arrangement, note, bond,
     commitment, franchise, guarantee, indemnity, indenture,
     instrument, lease, license or other agreement, understanding,
     instrument or obligation, whether written or oral, and all rights
     and interests arising thereunder or in connection therewith.

               1.23 "Covered Employees":  as defined in Section
     7.7(a).

               1.24 "Debtors" means the Person or Persons obligated on
     or in respect to a Loan or Loan Commitment, including any
     guarantor, hypothecator or other provider of security.

               1.25 "Diligence Group" means the officers and employees
     of the Purchaser set forth on Schedule 1.25.

               1.26 "Employee Benefit Losses":  as defined in Section
     7.7(i).

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

               1.28 "Excluded Assets":  those assets described in
     Section 2.3.

               1.29 "Excluded Liabilities":  those liabilities not
     assumed by the Purchaser pursuant to this Agreement.

               1.30 "Excluded Loans":  those Loans or Loan Commitments
     (together with all of Seller's right, title and interest in and
     to all related Loan Documents) subject to a restriction on
     assignability and as to which Seller shall not on or prior to the
     Closing Date have obtained the consent or consents to transfer
     such Loans or Loan Commitments to Purchaser which Seller
     reasonably concludes are necessary for its representation in
     Section 5.2 to be true on the Closing Date.

               1.31 "Exposure":  as defined in Section 2.4.

               1.32 "Federal Funds Rate":  for any date, the rate for
     such date as set forth in the weekly statistical release
     designated "H.15(519)" or any successor publication of the Board
     of Governors of the Federal Reserve System.

               1.33 "Final Amount":  an amount equal to (a) the Book
     Value of the Acquired Assets as reflected on the Final Asset and
     Liability Schedule, less (b) the Book Value of the Assumed
     Liabilities as reflected on the Final Asset and Liability
     Schedule as being assumed by Purchaser, plus (c) $290,000,000.

               1.34 "Final Asset and Liability Schedule":  the
     Schedule to be prepared in accordance with Section 3.2(b).

               1.35 "GAAP":  generally accepted accounting principles
     in effect from time to time in the United States.

               1.36 "HSR Act":  the Hart-Scott-Rodino Antitrust
     Improvements Act of 1976, as amended.

               1.37 "ICG":  the International Corporate Group of
     Parent, London, England.

               1.38 "Interim Amount":  an amount equal to (a) the Book
     Value of the Acquired Assets as reflected on the Interim Asset
     and Liability Schedule, less (b) the Book Value of the Assumed
     Liabilities as reflected on the Interim Asset and Liability
     Schedule as being assumed by Purchaser, plus (c) $290,000,000.

               1.39 "Interim Asset and Liability Schedule":  the
     Schedule to be prepared in accordance with Section 3.2(a).

               1.40 "Interim Date":  the latest month end date as of
     which an asset and liability schedule of the Seller shall, as of
     the date which is two weeks prior to the Closing Date, be
     available.

               1.41 "Investments":  any investments or other interests
     in securities other than Loans, including, without limitation,
     partnership interests, warrants, rights, options and other
     similar securities.

               1.42 "ISG":  the International Services Group, a
     division of Barclays Bank PLC, Atlanta Agency.

               1.43 "ISG L/C's":  those letters of credit issued by
     ISG on behalf of Debtors of BFD in connection with Loans or Loan
     Commitments included in the Acquired Assets.

               1.44 "ISG Portfolio":  those Loans held in ISG and
     described in Schedule 7.15 which are to be transferred to BFD
     pursuant to Section 7.15.

               1.45 "KB Investment":  the investment of BFD described
     in Schedule 1.45.  

               1.46 "knowledge":  as applied in this Agreement to the
     Seller or BFD means the actual knowledge of a Senior Officer of
     the Seller.

               1.47 "Leasehold Improvements":  the permanent fixtures
     and improvements located at the Transferred Offices which are
     indicated in Schedule 5.8 as being leased by BFD.

               1.48 "Licenses":  as defined in Section 5.2.

               1.49 "Liens":  any mortgage, lien, pledge, charge,
     assignment for security purposes, security interest, or
     encumbrance of any kind with respect to an Acquired Asset,
     including any unconditional sale agreement or capital lease or
     other title retention agreement relating to such Acquired Asset.

               1.50 "Loan Commitments":  the collective reference to
     each commitment or obligation on the part of Seller relating to
     BFD to extend credit to any Person (including pursuant to a
     letter of credit or banker's acceptance) or to participate
     therein, including without limitation, the obligations of Seller
     relating to BFD as a participant in letters of credit issued by
     ISG on behalf of Seller relating to BFD, whether or not such
     commitment, obligation or participation has been accepted or
     utilized by such Person.

               1.51 "Loan Documents":  the agreements, instruments,
     certificates, or other documents at any time evidencing or
     otherwise relating to, governing, or executed in connection with,
     or as security for, a Loan or Loan Commitment, including without
     limitation, notes, bonds, loan agreements, letter of credit
     applications, letters of credit, lease financing contracts,
     bankers' acceptances, drafts, guarantees, deeds of trust,
     mortgages, assignments, security agreements, pledges,
     subordination or priority agreements, lien priority agreements,
     undertakings, security instruments, financing statements,
     certificates, documents, legal opinions, participation and
     assignment agreements and inter-creditor agreements, and all
     amendments, modifications, renewals, extensions, rearrangements,
     and substitutions with respect to any of the foregoing.

               1.52 "Loan Transfer Documents":  as defined in Section
     2.2.

               1.53 "Loans":  all of the following owed to or held by
     Seller relating to BFD (including those Loans included in the ISG
     Portfolio) as of the Closing Date (including any of the following
     fully or partially charged off the Books of Seller): 

               (i)  loans, advances or other extensions of credit, 
          including interests in loan participations and assignments,
          customer liabilities on letters of credit, bankers,
          acceptances and participations in letters of credit
          (including in all cases loans made to pay interest accruing
          on loans, whether or not due or payable (sometimes referred
          to as capitalized interest);

               (ii)  all Liens, rights (including rights of set-off),
          remedies, powers, privileges, demands, priorities, equities
          and benefits owned or held by, or accruing or to accrue to
          or for the benefit of, the holder of the obligations or
          instrument being referred to in clause (i) above, including
          but not limited to those arising under or based upon the
          Loan Documents, casualty insurance policies and binders,
          standby letters of credit, mortgagee title insurance
          policies and binders, payment bonds and performance bonds at
          any time and from time to time existing with respect to any
          of the obligations or instruments referred to in clause (i)
          above; and

               (iii)  all amendments, modifications, renewals,
          extensions, refinancings and refundings of or for any of the
          foregoing.

               1.54 "Losses":  as defined in Section 7.7(n).

               1.55 "Material Adverse Effect":  any effect that is
     materially adverse to the Acquired Assets and the Assumed
     Liabilities taken as a whole or the business or financial
     condition of the BFD Acquired Business taken as a whole.  For
     purposes of Section 5.2, Material Adverse Effect shall include
     the material impairment of the parties' ability to consummate the
     transactions contemplated by this Agreement, but shall exclude in
     all respects the occurrence or effects of changes in general
     economic conditions.

               1.56 "Non-Performing Loan":  refers to Loans classified
     as "non-performing" in accordance with BFD Accounting Principles.

               1.57 "Permitted Encumbrances":  as defined in Section
     5.4(c).

               1.58 "Permitted Liens":  as defined in Section 5.4(b).

               1.59 "Person":  any individual, corporation,
     partnership, joint venture, association, joint-stock company,
     trust, unincorporated organization or government or any agency or
     political subdivision thereof.

               1.60 "Personal Property":  the furniture, furnishings,
     equipment, trade fixtures, supply inventory and other tangible
     personal property owned or leased by Seller at the Transferred
     Offices.

               1.61 "Purchaser Plans":  as defined in Section 7.7(c).

               1.62 "Purchaser's Retirement Plan":  as defined in
     Section 7.7(e).

               1.63 "Purchaser Welfare Plans":  as defined in Section
     7.7(d).

               1.64 "Records":  all documents, microfiche, microfilm
     and computer records (including but not limited to, magnetic
     tape, disc storage, card forms and printed copy) of BFD generated
     or maintained by BFD or the Seller that relate to the Acquired
     Assets, Assumed Liabilities and/or the BFD Acquired Business,
     including without limitation the Assumed Contracts and Other
     Obligations and the Loan Documents.

               1.65 "Repossessions":  all property, both real and
     personal, tangible and intangible, acquired by BFD pursuant to
     any Lien securing a Loan included in the Acquired Assets.

               1.66 "Seller's Savings Plan":  as defined in Section
     7.7(f).

               1.67 "Senior Officer":  any senior vice president or
     higher officer of the Seller.

               1.68 "Servicing Agreement":  the Servicing Agreement to
     be entered into on the Closing Date among Purchaser, Seller and
     Parent substantially in the form of Exhibit A.

               1.69 "Software":  computer programs, software, and
     related documentation.

               1.70 "Straddle Period":  as defined in Section 8.1(c).

               1.71 "Successor Plan":  as defined in Section 7.7(f).

               1.72 "Sundry Receivables":  fees, expenses and other
     charges payable by Debtors with respect to Loans and Loan
     Commitments or by other Persons with respect to Loans and Loan
     Commitments comprising the Acquired Assets.

               1.73 "Tax Returns":  any return or other report
     required to be filed with respect to any Tax, including
     declaration of estimated tax and information returns.

               1.74 "Taxes":  any federal, state, local or foreign
     taxes, including but not limited to taxes on or measured by
     income, estimated income, alternative or add-on minimum tax,
     gross receipts, sales, use, ad valorem, franchise, capital stock,
     transfer, gains, profit, license, employees' withholding, foreign
     person withholding, backup withholding, social security,
     occupation, unemployment, disability, excise, severance, stamp,
     premium, value added taxes, taxes on services, real property,
     personal property, inventory and merchandise, business privilege,
     or windfall profit tax, custom, duty or other tax, governmental
     fee or other like assessment or charge of any kind whatsoever,
     together with any interest, penalty, addition to tax or
     additional amount imposed by any governmental authority
     responsible for the imposition of such tax whether or not
     disputed.

               1.75 "Transferred Offices":  the collective reference
     to each of the offices of BFD identified in Schedule 5.8.

               1.76 "Unearned Fees":  the amount of unearned fees
     relating to Loans included in the Acquired Assets or relating to
     ISG L/Cs and reflected on the Interim and Final Asset and
     Liability Schedules, as the case may be.

               1.77 "Vacation Policy":  as defined in Section 7.7(g).

               1.78 "WARN":  as defined in Section 7.7(h).

     ARTICLE 2.  PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES

               2.1  SALE AND PURCHASE OF ASSETS.  On the terms and
     subject to the conditions of this Agreement, on the Closing Date
     the Seller shall sell, transfer, assign, convey and deliver to
     the Purchaser, and the Purchaser shall purchase and acquire from
     the Seller, subject to the exclusions set forth in Section 2.3,
     all of the business and operations of the Seller conducted
     through BFD (such business and operations being referred to
     herein as the "BFD Acquired Business") and all right, title and
     interest of Seller as of the Closing Date in and to the assets,
     rights, properties, claims and contracts in respect of the BFD
     Acquired Business as they appear on the Books and Records of
     Seller as of the close of business on the Closing Date, including
     without limitation the following:

               (a)  Loans and Loan Commitments, including the
                    Allowance for Credit Losses Reserves in respect of
                    all Loans and Loan Commitments;

               (b)  Repossessions;

               (c)  Accrued Interest;

               (d)  Sundry Receivables;

               (e)  Assigned Leases;

               (f)  all Personal Property and Leasehold Improvements
                    located on or associated with the Transferred
                    Offices or otherwise utilized in the BFD Acquired
                    Business;

               (g)  all prepaid expenses relating to the BFD Acquired
                    Business;

               (h)  Assumed Contracts and Other Obligations;

               (i)  the trademark "We Build Relationships";

               (j)  Records;

               (k)  Assigned Software;

               (l)  the KB Investment;

               (m)  any cash, bank deposits and other cash equivalents
                    securing or otherwise relating to Loans or Loan
                    Commitments included in the Acquired Assets;

               (n)  the right to receive from ICG fees in respect of
                    the guaranty obligation of BFD being assumed by
                    Purchaser pursuant to Section 2.4(g);

               (o)  a non-exclusive license to use the letter of
                    credit application and processing software of ISG;

               (p)  Unearned Fees in respect of Loans and Loan
                    Commitments; and

               (q)  all client relationship value, goodwill, going
                    concern value and other customer based intangible
                    assets attributable to the BFD Acquired Business
                    (except as such items may relate to the Excluded
                    Assets).

               2.2  CONVEYANCE OF ASSETS.  The sale, transfer,
     assignment, conveyance and delivery of the Acquired Assets
     described in Section 2.1 (other than the Loans and Loan
     Commitments) shall be made, as necessary, by the Seller's
     delivery, at the closing, of assignments, bills of sale or
     assignments of leases or subleases, as the case may be.  With
     respect to the Loans and Loan Commitments included in the
     Acquired Assets, the Seller shall execute and deliver such
     instruments and documents of conveyance (in each instance as
     prepared by the Seller and in form and substance satisfactory to
     the Purchaser) as are necessary or advisable (collectively, the
     "Loan Transfer Documents") to transfer to and vest in the
     Purchaser the full legal and equitable title of Seller in and to
     the assets transferred to the Purchaser under this Agreement,
     including without limitation, valid and perfected liens and
     security interests in all collateral and other security
     arrangements securing each of the Loans and Loan Commitments;
     provided that the Loan Transfer Documents shall not expressly or
     impliedly include, or be deemed to include, any representations
     or warranties as to the effectiveness of such transfers,
     conveyances or assignments beyond these explicitly set forth in
     this Agreement.  The documents and instruments referred to in
     this section shall be prepared, and the costs relating thereto
     shared, in the manner set forth in Section 7.13.  Seller and
     Purchaser shall at the Closing enter into the Servicing Agreement
     with respect to each Excluded Loan, and Seller and Purchaser
     agree to fulfill their obligations under the Servicing Agreement
     and under any other agreement entered into in connection with the
     Servicing Agreement.

               2.3  ASSETS EXCLUDED.  Notwithstanding anything to the
          contrary contained in this Agreement, the Purchaser shall not
          acquire under this Agreement:

                    (a)  any cash, bank deposits and other cash equivalents
                         (other than any of the same which secure or are
                         otherwise related to Loans or Loan Commitments
                         included in the Acquired Assets);

                    (b)  all rights of the Seller under the Confidentiality
                         Agreement and this Agreement and the
                         consideration, agreements, instruments and
                         certificates delivered in connection with this
                         Agreement;

                    (c)  any claims of the Seller against current or former
                         officers or directors of the Seller or its
                         Affiliates;

                    (d)  Seller's charter documents, non-transferable
                         licenses, permits, charters, corporate seals,
                         minute books, stock books and other corporate
                         records having to do with the corporate
                         organization and capitalization of Seller, and all
                         records relating to Taxes, including but not
                         limited to all books, records and other
                         documentation which are or may be pertinent to any
                         examination, audit or other inquiry relating to
                         Taxes concerning any period prior to and including
                         the Closing Date;

                    (e)  Seller's personnel records pertaining to any
                         employees of Seller not hired by Purchaser,
                         personnel references and security or background
                         investigation materials which were prepared or
                         obtained at the time of hiring with respect to
                         employees of Seller and any other books and
                         records which Seller is required by law to retain,
                         provided that the Acquired Assets shall include
                         copies of any portions of such retained books and
                         records that relate to the BFD Acquired Business
                         or any of the Acquired Assets or Assumed
                         Liabilities;

                    (f)  any claim, right or interest of Seller in and to
                         any refund or credit for foreign, federal, state
                         or local income or other taxes for periods ending
                         on or prior to the Closing Date, including any
                         deferred tax asset;

                    (g)  the assets and rights described on Schedule
                         2.3(g);

                    (h)  all amounts owed by any Seller Affiliate to Seller
                         and all rights of Seller under agreements or
                         relationships with any Seller Affiliate, including
                         without limitation in connection with interest
                         rate hedging transaction;

                    (i)  reserves and accruals on the Records of Seller
                         relating to Excluded Assets or Excluded
                         Liabilities;

                    (j)  Investments other than the KB Investment;

                    (k)  Excluded Loans; and

                    (l)  any other rights relating to any Excluded Asset.

                    2.4  TRANSFER AND ASSUMPTION OF LIABILITIES.  In
          addition to performing the obligations and agreements required to
          be performed by it under the terms of this Agreement, on the
          Closing Date Purchaser shall, on the terms and subject to the
          conditions of this Agreement (including without limitation
          Article 11 hereof), assume, agree to pay, perform and discharge
          when due all of the following liabilities of BFD as of the
          Closing Date:

                    (a)  obligations under Loans and Loan Commitments
                         included in the Acquired Assets;

                    (b)  obligations under Loan Documents relating to such
                         Loans and Loan Commitments;

                    (c)  obligations of Seller under the Assigned Leases
                         and Assumed Contracts and Other Obligations;

                    (d)  obligations in respect of Repossessions, including
                         without limitation obligations in respect of ad
                         valorem taxes relating to real property and
                         personal property taxes relating to Personal
                         Property comprising the Repossessions;

                    (e)  liabilities to trade creditors of BFD to the
                         extent reflected on the Final Asset and Liability
                         Schedule;

                    (f)  liabilities that may arise in connection with any
                         litigation that has been or may be brought against
                         (i) Seller or (ii) Seller and any of its
                         Affiliates (but excluding in the case of clause
                         (ii) any proportionate share of such liabilities
                         relating to the actions and omissions of any such
                         Affiliate), in any case in connection with or
                         arising out of the BFD Acquired Business,
                         including without limitation those claims against
                         Seller described in Schedule 2.4(f)-A, but
                         excluding the litigation described in Schedule
                         2.4(f)-B;

                    (g)  obligations arising in connection with the
                         guarantee by BFD of Loans and Loan Commitments
                         made or extended by ICG as set forth on Schedule
                         2.4(g);

                    (h)  obligations of BFD to reimburse ISG for drawdowns
                         on letters of credit issued by ISG on behalf of
                         Debtors of BFD in connection with Loans and Loan
                         Commitments included in the Acquired Assets as set
                         forth on Schedule 2.4(h);

                    (i)  obligations arising under participation
                         arrangements sold to third parties with respect to
                         Loans and Loan Commitments included in the
                         Acquired Assets as set forth on Schedule 2.4(i);
                         and

                    (j)  all other liabilities and obligations relating to
                         in any manner or arising out of the Acquired
                         Assets, the Assumed Liabilities or the BFD
                         Acquired Business transferred pursuant to this
                         Agreement as conducted through the Closing Date,
                         whether primary or secondary, direct or indirect,
                         absolute or contingent, contractual, tortious or
                         otherwise, excluding only those liabilities of
                         Seller which are reflected on Schedule 2.4(j) as
                         being retained by Seller.

          Notwithstanding the foregoing, Purchaser shall not assume (i) any
          liability or obligation in respect of any indebtedness of Seller
          to any of its Affiliates, (ii) any liability or obligation of
          Seller to any of its Affiliates in connection with any contract
          or arrangement, including without limitation, interest rate
          hedging transactions (except as expressly set forth in Sections
          2.4(g) and (h)), (iii) except as expressly provided in Article 8
          hereof, any liability for Taxes including, without limitation,
          any liability for Taxes imposed on the Seller pursuant to
          Treasury Regulation Section 1.1502-6 (and any comparable state,
          local or foreign law or regulation) as a result of being a member
          of an affiliated group of corporations as defined in Section 1504
          of the Code and any liability for Taxes arising from any Tax
          sharing agreement or similar arrangement, (iv) any liability for
          the payment of an "excess parachute payment", as defined in
          Section 280G of the Code, (v) except as specifically provided in
          Section 7.7 hereof, any liabilities arising under any employee
          benefit plan, program, arrangement or agreement maintained or
          contributed to by Seller, BFD or their respective Affiliates, or
          (vi) any liability for which indemnification is provided pursuant
          to clause (iv), (v), (vi) or (vii) of Section 11.2(a).

                    Except as expressly provided in this Section 2.4,
          neither Purchaser nor any of its Affiliates is assuming, and none
          of them shall be deemed to have assumed, any liabilities,
          obligations or duties of Seller or any of Seller's Affiliates of
          any kind or nature whatsoever (whether primary or secondary,
          direct or indirect, absolute or contingent, contractual, tortious
          or otherwise), and Seller or its Affiliates, as the case may be,
          shall remain and be solely and exclusively liable with regard to
          such liabilities and obligations.

                    2.5  MANNER OF ASSUMPTION.  (a)  The Seller and the
          Purchaser shall execute and deliver at the Closing an assumption
          agreement in form and substance reasonably satisfactory to the
          Purchaser and the Seller and such other assignments and
          assumption agreements as may be necessary and appropriate to
          effect the assumption by the Purchaser of the obligations and
          liabilities assumed by the Purchaser under this Agreement and the
          transfer to the Purchaser of all rights and obligations, to the
          extent possible, of the Seller under the Assigned Leases and all
          Assumed Contracts and Other Obligations.

                    (b)  On and after the Closing Date, the Purchaser shall
          give such further assurances to the Seller, and shall execute,
          acknowledge and deliver all such acknowledgements and other
          instruments, as the Seller shall reasonably request to
          effectively relieve and discharge the Seller from any obligations
          assumed by the Purchaser pursuant to this Agreement.

          ARTICLE 3.  CONSIDERATION

                    3.1  PURCHASE PRICE.  (a)  At the Closing, Purchaser
          shall pay to Seller to such account as Seller shall have
          designated in writing to Purchaser at least two business days
          prior to the Closing Date funds immediately available in New York
          City in an amount equal to the Interim Amount.

                    (b)  Upon the availability of the Final Asset and
          Liability Schedule prepared pursuant to Section 3.2(a), and
          subject to the terms and conditions of Section 3.2, the Seller
          and Purchaser shall calculate the amount of the Adjustment.  If
          the Adjustment is a positive number, Purchaser shall promptly pay
          to the Seller the amount of such Adjustment, together with
          interest from the Closing Date to the date of payment at the
          average of the Federal Funds Rate or Rates in effect from time to
          time during such period.  If the Adjustment is a negative number,
          the Seller shall promptly pay to Purchaser the absolute value of
          the amount of such Adjustment, together with interest from the
          Closing Date to the date of payment at the average of the Federal
          Funds Rate or Rates in effect from time to time during such
          period.

                    3.2  ASSET AND LIABILITY SCHEDULES.  (a)  The Seller
          shall cause to be prepared a schedule (the "Interim Asset and
          Liability Schedule") prepared in accordance with the BFD
          Accounting Principles as in effect on September 30, 1994 and
          substantially in the form of Schedule 3.2(d) setting forth (i)
          the Book Value of all Acquired Assets and (ii) the Book Value of
          all Assumed Liabilities, in each case through and including the
          close of business on the Interim Date.  The Seller shall provide
          a copy of such Schedule to the Purchaser no later than seven
          business days prior to the Closing Date, and such Schedule shall,
          absent manifest error, serve as the basis for the calculation of
          the Interim Amount payable on the Closing Date.

                    (b)  As promptly as practicable but no later than 30
          days after the Closing Date, the Seller shall cause to be
          prepared a schedule (the "Final Asset and Liability Schedule")
          prepared in accordance with the BFD Accounting Principles as in
          effect on September 30, 1994 and substantially in the form set
          forth on Schedule 3.2(d) setting forth (i) the Book Value of all
          Acquired Assets and (ii) the Book Value of all Assumed
          Liabilities, in each case through the close of business on the
          Closing Date.  Purchaser shall cooperate with Seller in
          connection with the preparation of the Final Asset and Liability
          Schedule, and shall give Seller full access to the Books and
          Records of the BFD Acquired Business to the extent necessary or
          appropriate in order to facilitate such preparation, and provide
          Seller with such other information as it may reasonably request
          in connection with such preparation.  Upon the availability of
          the Final Asset and Liability Schedule, the Seller shall deliver
          same to the Purchaser, together with a duly completed and
          executed certificate of a senior officer of Seller to the effect
          that, to the best knowledge of such officer, such Schedule has
          been prepared in accordance with the requirements of this
          Agreement.

                    (c)  (i)  Purchaser shall promptly review the Final
               Asset and Liability Schedule and work papers of Seller
               related to its preparation and shall make inquiries with
               respect thereto of representatives of Seller as Purchaser
               shall deem necessary or appropriate.  In the event of any
               disagreement concerning the Final Asset and Liability
               Schedule (or the computation or determination in accordance
               with the terms of this Agreement of any item or amount),
               Purchaser shall notify Seller in writing thereof not later
               than thirty (30) days after delivery of the Final Asset and
               Liability Schedule to Purchaser, specifying in reasonable
               detail the disagreement and the basis therefor.  In the
               event there is no such disagreement or in the event that
               Purchaser so notifies Seller of a disagreement as to any
               such item or amount, then any payment based on the Final
               Asset and Liability Schedule required to be made under this
               Agreement shall initially be made no later than thirty (30)
               days after delivery of the Final Asset and Liability
               Schedule to Purchaser, all on the basis of such items or
               amounts as to which the parties do not disagree.

                    (ii)  In the event that any disagreement notified to
               Seller by Purchaser in accordance with the foregoing
               procedures is not resolved pursuant to a written agreement
               between the parties prior to the close of business in New
               York City on the eighth business day following the date
               seller received such notification of such disagreement,
               either Seller or Purchaser shall thereupon be entitled to
               request KPMG Peat Marwick or any other firm mutually agreed
               to by the parties ("Peat") to determine, in accordance with
               the provisions of this Agreement, the disputed item or
               amount (or computation or determination thereof).  Any such
               request shall be in writing and shall specify with
               particularity the disputed items, amounts or computations
               being submitted for determination, and the requesting party
               shall furnish the other parties hereto with a copy of such
               request at the same time it is submitted to the independent
               accountants.

                    (iii)  Peat shall as promptly as practicable determine,
               in accordance with the provisions of this Agreement and the
               BFD Accounting Principles in effect on September 30, 1994,
               the proper amount of any disputed item or other amount, or
               the computation thereof, and such determination shall be
               final, conclusive and binding on all parties hereto.  Seller
               and Purchaser shall cooperate fully in assisting such firm
               in making any determination requested hereunder, including
               giving such firm full access to all files, books and records
               relevant thereto and providing such other information as
               such firm may reasonably request in connection with the
               determination to be made by it hereunder.  Peat shall
               promptly and substantially simultaneously notify Purchaser
               and Seller in writing of any determination by it hereunder. 
               The fees and disbursements in connection with such firm's
               determination shall be borne (i) by Purchaser, if Seller's
               position with respect to the disputed payment amount is
               fully upheld by such determination, (ii) by Seller, if
               Purchaser's position with respect to the disputed payment is
               fully upheld by such determination and (iii) otherwise by
               Purchaser and Seller based upon the relative portions of the
               disputed payment amount resolved against such party by such
               determination.

                    (iv)  In the event that a payment is required to be
               made by any party pursuant to the terms of this Section,
               such payment shall be made promptly (and in any event within
               5 days after the date of an agreement between the parties or
               of receipt by the parties of written notice of a
               determination by Peat pursuant to this Section, as the case
               may be), together with interest accrued pursuant to Section
               3.1(b).  Purchaser and Seller agree that the settlement of
               amounts payable pursuant to this Section will not be
               considered to be a claim for indemnification pursuant to the
               provisions of Section 11.2, and will not limit or affect
               their respective rights thereunder.

                    (d)  In order to illustrate the parties' intent with
          respect to the amounts payable by Purchaser pursuant to this
          Agreement, attached hereto as Schedule 3.2(d) is a schedule which
          sets forth the Book Value of all of the Acquired Assets and
          Assumed Liabilities as of, and calculates the amount that would
          have been payable by Seller pursuant to this Agreement if, the
          Closing Date was September 30, 1994.

                    (e)  The parties hereto agree that the Interim and
          Final Asset and Liability Schedules shall not reflect a reserve
          or allowance in respect of any contingent liabilities relating to
          pending or threatened litigation, provided that the foregoing
          does not diminish or otherwise adversely affect the Purchaser's
          right to seek indemnification under Section 11.2.  The parties
          further agree that the Allowance for Credit Losses Reserve
          reflected on the Interim and Final Asset and Liability Schedules
          shall be established in accordance with the BFD Accounting
          Principles as in effect on September 30, 1994; provided that
          since September 30, 1994 the Seller has not effected and will not
          effect any discretionary increase or decrease in the Allowance
          for Credit Losses Reserve.

          ARTICLE 4.  CLOSING; TIME AND PLACE.

                    Unless this Agreement shall have been terminated and
          the transactions herein contemplated shall have been abandoned
          pursuant to the provisions of Section 10.1, and subject to the
          conditions of Article 9 hereof, the closing (the "Closing") of
          the purchase and assumption of the assets and liabilities shall
          take place at the offices of Simpson Thacher & Bartlett, 425
          Lexington Avenue, New York, New York on January 31, 1995,
          provided, that in the event the conditions set forth in Article 9
          are not satisfied on such date, the Closing shall occur on the
          next succeeding month-end date on which such conditions are
          satisfied, or at such other place, time and date as the parties
          may mutually agree.  The date and time of such Closing are herein
          referred to as the "Closing Date."  For purposes of this
          Agreement, the Closing shall be deemed to be effective
          immediately following the close of business on the month-end date
          to which the Closing relates.

          ARTICLE 5.  REPRESENTATIONS AND WARRANTIES OF THE SELLER AND
          PARENT.

                    The Seller and Parent represent and warrant as follows:

                    5.1  CORPORATE ORGANIZATION AND AUTHORITY.  The Seller
          is a corporation organized under the laws of Connecticut, duly
          organized, validly existing and in good standing under the laws
          of the jurisdiction of its organization, and the Seller has the
          requisite power and authority to conduct the businesses being
          transferred pursuant to this Agreement, to maintain the Assumed
          Liabilities and to own, lease and/or operate, as the case may be,
          the Acquired Assets.  Parent is a public limited company duly
          organized, validly existing and in good standing under the laws
          of England.  Parent has the corporate power and authority to
          carry on its business as it is now being conducted and to own,
          lease and/or operate, as the case may be, all of its properties
          and assets.  Each of Parent and the Seller has the requisite
          corporate power and authority and has taken or, in the case of
          Seller, will prior to the Closing Date take, all corporate action
          necessary in order to duly and validly execute and deliver this
          Agreement, the Servicing Agreement and each of the other
          agreements entered into in connection herewith and therewith to
          which it is a party, to consummate the transactions contemplated
          hereby and thereby and to perform all of the terms of this
          Agreement, the Servicing Agreement and each of the agreements
          entered into in connection herewith and therewith to be performed
          by it hereunder and thereunder.  This Agreement, the Servicing
          Agreement and each of the agreements entered into in connection
          herewith and therewith has been duly and validly executed and
          delivered by each of Seller and Parent where it is a party and
          (subject in the case of Seller to the taking of the corporate
          action referred to above) is a valid and binding agreement of
          each of the Seller and Parent enforceable against Seller and
          Parent in accordance with its terms except as may be limited by
          bankruptcy, insolvency, reorganization, moratorium or other
          similar laws relating to or affecting creditors rights generally
          and by general equitable principles. 

                    5.2  NO CONFLICT; LICENSES AND PERMITS; COMPLIANCE WITH
          LAWS AND REGULATIONS.  Except as set forth on Schedule 5.2, the
          execution, delivery and performance by the Seller and Parent of
          this Agreement, the Servicing Agreement and the other agreements
          entered into in connection herewith and therewith to which it is
          a party, do not and will not (i) violate any provision of the
          certificates of incorporation or by-laws of the Seller or Parent
          or (ii) violate, conflict with, or constitute a breach of, or
          default (or event which, with notice or lapse of time, or both,
          would constitute a default) under, or the loss of any benefit
          under, or result in the termination of or a right of termination
          or cancellation of, or accelerate the performance required by, or
          result in the creation of any Liens under, any law, rule,
          regulation, judgment, decree, ruling or order of any court,
          government or governmental agency applicable to the Seller or
          Parent or any of the respective properties or assets of Seller or
          Parent or under any agreement, instrument or obligation of the
          Seller or Parent or to which the Seller or Parent is subject or
          is a party or by which the Seller or Parent is otherwise bound or
          affected (including the Assumed Contracts and Other Obligations),
          or to which any of their respective properties or assets
          (including the Acquired Assets) are subject, other than, in each
          case described in clause (ii) above, violations, breaches,
          defaults and other events which, individually or in the
          aggregate, have not had and could not reasonably be expected to
          have a Material Adverse Effect.  The Seller has all licenses,
          franchises, permits, certificates of public convenience, orders
          and other authorizations (collectively, "Licenses") of all
          federal, state and local governments and governmental authorities
          necessary for the lawful ownership and use of Acquired Assets and
          the conduct of its business as now conducted other than Licenses
          the absence of which, individually or in the aggregate, has not
          had and could not reasonably be expected to have a Material
          Adverse Effect, and all such Licenses are valid and in good
          standing and are not subject to any suspension, modification or
          revocation or proceedings related thereto except where the
          invalidity, lack of good standing, suspension, modification or
          proceeding, individually or in the aggregate, has not had and
          could not reasonably be expected to have a Material Adverse
          Effect.  The Seller is in compliance with all applicable laws,
          rules, regulations, ordinances, statutes and consent decrees of
          all federal, state and local governments to which BFD's
          operations at the Transferred Offices are subject except where
          the failure to be in compliance, individually or in the
          aggregate, has not had and could not reasonably be expected to
          have a Material Adverse Effect.

                    5.3  APPROVALS AND CONSENTS.  Except as described in
          Schedule 5.3, no notices, reports or other filings are required
          to be made by the Seller or Parent with, nor are any consents,
          registrations, approvals, permits or authorizations required to
          be obtained by the Seller or Parent from, any governmental or
          regulatory authorities of the United States or the several States
          or any other Persons in connection with the execution and
          delivery of this Agreement by the Seller or Parent and the
          consummation by the Seller or Parent of the transactions
          contemplated hereby.

                    5.4  TITLE TO ASSETS, ETC.  (a)  The Seller has or will
          have at Closing, and will convey to the Purchaser at Closing,
          good title to the Loans, Loan Commitments and Loan Documents and
          all of the other Acquired Assets (other than those Acquired
          Assets leased by Seller) which pursuant to this Agreement are to
          be transferred to Purchaser, subject only to (i) the matters
          specifically set forth on Schedule 5.4(a), (ii) liens for taxes
          being contested in good faith by appropriate proceedings, (iii)
          liens of carriers and warehousemen incurred in the ordinary
          course of business for sums not yet due, (iv) liens incurred or
          deposits made in the ordinary course of business in connection
          with workers' compensation, unemployment insurance and other
          types of social security, or to secure the performance of
          tenders, statutory obligations, surety and appeal bonds, bids,
          leases, performance and return-of-money bonds and similar
          obligations and (v) other matters affecting such title which do
          not, in any case covered by clauses (i) through (v), individually
          or in the aggregate, materially impair the value of, or interfere
          with the Purchaser's ability to use in substantially the same
          manner as it is currently used by the Seller, such Acquired Asset
          or otherwise materially impair the business operations of the BFD
          Acquired Business (the matters described in clauses (i) through
          (v), collectively, the "Permitted Liens").  Seller has not
          granted or transferred to any other party any interest in the
          Personal Property owned or leased by Seller other than pursuant
          to the Permitted Liens.

                    (b)  The Seller has or will have at the Closing, and
          will convey to Purchaser at Closing, a valid leasehold interest
          in the Transferred Offices which pursuant to this Agreement are
          to be transferred to Purchaser, subject to (i) the matters
          specifically set forth on Schedule 5.4(b), (ii) liens of
          mechanics and materialmen incurred in the ordinary course of
          business which are being contested in good faith by appropriate
          proceedings or which are bonded, (iii) matters of record
          (including easements, restrictions, covenants and other
          exceptions to title) which do not materially impair the value of,
          or interfere with the present use of, such Transferred Office or
          otherwise materially impair the business operations of the
          Seller, (iv) matters affecting the landlord's title and (v) other
          exceptions to title which do not, in any case covered by clauses
          (i) through (v), individually or in the aggregate, materially
          impair the value of, such Transferred Office or interfere with
          the Purchaser's ability to use such Transferred Office in
          substantially the same manner as currently used by the Seller, or
          otherwise materially impair the business operations of the BFD
          Acquired Business (the matters described in clauses (i) through
          (v), collectively the "Permitted Encumbrances").  The Seller has
          not granted or transferred to any other party any interest in its
          leasehold estate in a Transferred Office other than Permitted
          Encumbrances.

                    (c)  To the best of Seller's knowledge, all of the
          Transferred Offices and Leasehold Improvements conform in all
          material respects to all applicable health and safety ordinances;
          provided that no representation or warranty is made with respect
          to compliance with the Americans with Disabilities Act and
          regulations issued thereunder or similar state and local rules,
          statutes and ordinances.

                    5.5  LEASES.  Each Assigned Lease is the valid and
          binding obligation of the Seller and, to the knowledge of the
          Seller, each of the other parties thereto, and there does not
          exist with respect to the Seller's obligations thereunder or, to
          the knowledge of the Seller, with respect to the obligation of
          the lessor thereof, any material default, or event or condition
          which constitutes, or after notice or passage of time or both
          would constitute, a material default on the part of the Seller or
          the lessor under any Assigned Lease.  All rents, expenses and
          charges which are or shall as of the Closing Date be due and
          payable by the Seller have been or as of the Closing Date shall
          have been paid or fully accrued on the Final Asset and Liability
          Schedule pursuant to the terms of each Assigned Lease.

                    5.6  CONTRACTS AND DEFAULTS.  Schedule 1.10 includes a
          list of all of the Assumed Contracts and Other Obligations in
          effect as of the date hereof.  True and complete copies of all
          such Assumed Contracts and Other Obligations have been made
          available to the Purchaser.  Except as set forth in Schedule
          1.10, all of the Assumed Contracts and Other Obligations (whether
          or not disclosed to the Purchaser pursuant to this Section 5.6)
          are valid and binding obligations of Seller and, to the knowledge
          of Seller, all of the other parties thereto, and are in full
          force and effect and are enforceable in accordance with their
          respective terms, and no event has occurred and remains uncured
          which constitutes a material default or breach or results in a
          right of acceleration, termination or any similar right by any
          party (or would, with the passage of time or the giving of
          notice, constitute a material default or breach or result in such
          a right of acceleration, termination or similar right) under any
          such contract, agreement or commitment, and Seller has duly
          performed all its obligations under each such contract, agreement
          or commitment to the extent such obligations have accrued, other
          than such defaults, breaches or results as have not had and could
          not reasonably be expected to have, individually or in the
          aggregate, a Material Adverse Effect.

                    5.7  LOANS AND LOAN COMMITMENTS.  (a)  Each Loan or
          Loan Commitment being transferred to Purchaser pursuant to this
          Agreement was made or acquired by BFD in the ordinary course of
          business at the time such Loan or Loan Commitment was made or
          acquired, as the case may be.  Schedule 5.7(a) contains the
          following true and correct information (as of three days
          preceding the date of this Agreement with respect to clauses (i)
          and (ii) and as of September 30, 1994 with respect to clause
          (iii)) with respect to each Loan or Loan Commitment being
          transferred to Purchaser hereby:  (i) the unpaid principal
          balance of each such Loan as well as the aggregate amount of each
          Loan Commitment, (ii) the payment status of each such Loan and
          (iii) the schedule of principal and interest payments of each
          such Loan and the amounts thereof.

                    (b)  Except as described on Schedule 5.7(b), with
          respect to each Loan or Loan Commitment being transferred to
          Purchaser pursuant to this Agreement:

                    (1)  Each Loan Document constitutes a valid, legal and
               binding obligation of the obligor thereunder, enforceable in
               accordance with its terms, subject to bankruptcy,
               insolvency, reorganization, moratorium, laws governing
               fraudulent conveyance or equitable subordination and other
               similar laws of general applicability relating to or
               affecting creditors' rights generally and to general
               principles of equity; each Loan Document contains customary
               and enforceable provisions such as to render the rights and
               remedies of the holder thereof adequate for the realization
               (including realization by judicial foreclosure) of the
               benefits intended to be provided by the security interest or
               lien created and granted by such Loan Document, subject to
               bankruptcy, insolvency, reorganization, moratorium, laws
               governing fraudulent conveyance or equitable subordination
               and other similar laws of general applicability relating to
               or affecting creditors' rights generally and to general
               principles of equity; and except as set forth on Schedule
               5.7(b)(1), all Liens granted to the Seller in any collateral
               described in each Loan Commitment and Loan Document as
               security for each Loan and Loan Commitment constitute valid
               and perfected Liens in such collateral (assuming the
               relevant Debtor has rights in the collateral as to permit
               attachment), subject to (x) bankruptcy, insolvency,
               reorganization, moratorium, laws governing fraudulent
               conveyance or equitable subordination and other similar laws
               of general applicability relating to or affecting creditors'
               rights generally and to general principles of equity
               provided that the effect of all such laws would not have
               more than a de minimis adverse impact on the value and
               benefits of the collateral, taken as a whole, securing the
               Loans and Loan Commitments and (y) federal and state laws
               relating to fraudulent conveyances and preferences;

                    (2)  All Loans, Loan Commitments and related Loan
               Documents were issued, made and maintained in accordance
               with applicable law; under existing law, there is no valid
               claim against Seller with respect to, or valid defense to
               the enforcement of, such Loan or Loan Commitment and neither
               the Seller nor any of its Affiliates has taken or failed to
               take any action that would entitle any Debtor or other party
               to assert successfully any claim or defense against the
               Seller or the Purchaser (including without limitation any
               right not to repay any such obligation or any part thereof);

                    (3)  Such Loan or Loan Commitment was made
               substantially in accordance with BFD's standard underwriting
               and documentation guidelines as in effect at the time of its
               origination and has been administered substantially in
               accordance with BFD's standard loan servicing and operating
               procedures as in effect from time to time.  Appended hereto
               as Exhibit 5.7(b)(3) are copies of (x) BFD's standard
               underwriting and documentation guidelines currently in
               effect and (y) BFD's current standard loan servicing and
               operating procedures; and

                    (4)  None of the rights or remedies under the Loan
               Documents in favor of the Seller have been amended,
               modified, waived, supplemented, subordinated or otherwise
               altered by Seller or BFD other than in good faith and in the
               ordinary course of business and all writings and other
               documents relating to any such amendment, modification,
               waiver, supplement, subordination or other alteration of any
               Loan or Loan Commitment are included among the Loan
               Documents to be transferred to Purchaser pursuant to Section
               2.2.

                    (c)  There are no intentional misrepresentations of
          material facts made by officers or employees of the Seller in the
          credit files relating to the Loans and Loan Commitments, provided
          that the term "facts" shall not include judgments or opinions
          (including, without limitation, industry analyses) of such
          officers or employees which were made in good faith; the
          classification assigned to a Loan or Loan Commitment and in
          effect as of September 30, 1994 has been designated in accordance
          with the standards of the BFD Acquired Business then in effect.

                    (d)  Schedule 5.7(d) lists all Loans owned by BFD
          classified as Non-Performing Loans as of September 30, 1994.

                    (e)  Since September 30, 1994 no Loan or Loan
          Commitment (or any interest therein) which would otherwise be
          included in the Acquired Assets or Excluded Loans has been
          assigned or sold in any manner, except in the ordinary course of
          business or as scheduled on Schedule 5.7(e).

                    (f)  Schedule 5.7(f) identifies all separate accounts,
          including, but not limited to, all lockboxes, escrow accounts,
          cash collateral accounts, investment accounts and security
          deposits held or maintained by or on behalf of Seller or any
          Debtor in connection with any Loan or Loan Commitment.

                    (g)  Upon the payment of the Interim Amount on the
          Closing Date and the execution, delivery and, if necessary,
          filing and/or recording of the Loan Transfer Documents, Seller
          will have validly transferred and assigned to Purchaser all of
          Seller's right, title and interest in all Loans, Loan Commitments
          and Loan Documents and all rights relating thereto, including,
          without limitation, all of Seller's Liens and security interests
          in any and all collateral described in any Loan Document as
          security for the related Loan; provided that the representation
          and warranty of Seller in this Section 5.7(g) shall only become
          applicable to the Excluded Loans upon the full transfer thereof
          by Seller to Purchaser following receipt of all requisite
          consents.

                    (h)  Each file of Loan Documents pertaining to each
          Loan includes all documents relating to each such Loan that are
          necessary to enforce such Loan.

                    (i)  Except as set forth in Schedule 5.7(i), since
          January 1, 1990 neither Seller nor BFD has assigned, transferred
          or conveyed (by participation or otherwise) any Loans or Loan
          Commitments (i) at a discount from its outstanding principal
          balance at the time of such sale (except for such discounts
          attributable solely to the interest rate of such loan) or (ii) to
          any Affiliate of BFD (including without limitation to another
          division of Seller).

                    (j)  To the best knowledge of the Seller, Schedule
          5.7(j)-A and Schedule 5.7(j)-B lists all Loans and Loan
          Commitments which, as of the Closing Date, will be Excluded Loans
          unless all required consents are obtained.

                    (k)  Without in any way limiting Seller's liability
          with respect to any breach of or misrepresentation under any
          other provisions of this Agreement, the Seller makes no
          representation or warranty with respect to the amount that may
          ultimately be collected or the credit quality of the Loans and
          Loan Commitments comprising the Acquired Assets, the value or
          condition of any collateral securing such Loans and Loan
          Commitments, the creditworthiness or financial condition of the
          Debtors under such Loans and Loan Commitments or, subject to
          subsection 5.7(c), with respect to the evaluations contained or
          conclusions reached in any credit analyses delivered to the
          Purchaser.

                    5.8  LIST OF TRANSFERRED OFFICES.  Schedule 5.8
          contains a list, complete and accurate in all material respects,
          setting forth as of a recent date identified in Schedule 5.8 the
          address of each Transferred Office which is leased by the Seller
          and Schedule 1.8 contains a complete and accurate list as of the
          date hereof of each such lease agreement and all material
          amendments thereto.

                    5.9  ENVIRONMENTAL MATTERS.  (a)  For purposes of this
          Section 5.9, the following terms shall have the indicated
          meaning:

                    "Environmental Law" means any applicable federal, state
               or local statute, law, ordinance, rule, or regulation, now
               existing, relating to pollution or protection of the
               environment, including natural resources or the exposure to
               materials in the environment or workplace.  For the purposes
               of this definition the term "Environmental Law" shall
               include, without limiting the foregoing, (A) the following
               statutes, as amended:

                         (i)  the Clean Air Act, as amended, 42 U.S.C.
                    SECTION 7401 et seq.;

                         (ii)  the Federal Water Pollution Control Act, as
                    amended, 33 U.S.C. SECTION 1251 et seq.;

                         (iii)  the Resource Conservation and Recovery Act
                    of 1976, as amended, 42 U.S.C. SECTION 6901 et seq.;

                         (iv)  the Comprehensive Environmental Response,
                    Compensation and Liability Act of 1980, as amended
                    (including, the Superfund Amendments and
                    Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
                    SECTION 9601 et seq.;

                         (v)  the Toxic Substances Control Act, as amended,
                    15 U.S.C. SECTION 2601 et seq.;

                         (vi)  the Occupational Safety and Health Act, as
                    amended, 29 U.S.C. SECTION 651;

                         (vii)  the Emergency Planning and Community Right-
                    to-Know Act of 1986, 42 U.S.C. SECTION 11001 et seq.;

                         (viii)  the Safe Drinking Water Act, 42 U.S.C.
                    SECTION 300f et seq.; and

                         (ix)  all comparable state and local laws and
                    regulations; and

                    (B)  the terms and conditions of any permit, license,
               authority, settlement or other obligation applicable to BFD
               under Environmental Law.

                    "Real Property" means real property classified by BFD
               as Repossessions.

                    (b)  To the Seller's knowledge, there are no pending or
          threatened claims, actions or proceedings under Environmental Law
          against Seller involving BFD relating to:

                         (i)  an asserted liability of Seller under
                    Environmental Law; or

                         (ii)  the handling, storage, use or disposal of
                    materials;

                         (iii)  the actual or threatened discharge, release
                    or emission of materials from, on or under or within
                    the Real Property or any other property; or

                         (iv)  personal injuries or damage to property
                    (including, without limitation, nuisance, diminished
                    enjoyment and diminished value) related to or arising
                    out of exposure to materials discharged, released or
                    emitted from or into, or transported from or to, the
                    Real Property.

                    (c)  To the Seller's knowledge, and other than with
          respect to matters which, individually or in the aggregate, have
          not had or could not reasonably be expected to have a Material
          Adverse Effect, no conditions exist or acts have occurred which
          form the basis for claims, actions or proceedings under Section
          5.09(b).

                    5.10  LABOR CONTRACTS AND RELATIONS.  With respect to
          employees of BFD, the Seller is not party to any collective
          bargaining agreement, contract, or other agreement or
          understanding with a labor union or labor organization, nor is
          the Seller the subject of a proceeding asserting it has committed
          an unfair labor practice or seeking to compel it to bargain with
          any labor organization as to wages and conditions of employment,
          nor is any such proceeding threatened, nor is there any strike or
          other labor dispute by employees of BFD, pending or threatened,
          nor is the Seller aware of any activity involving any employees
          of BFD seeking to certify a collective bargaining unit or
          engaging in any other union organizational activity.

                    5.11  FINANCIAL STATEMENTS.  Schedule 5.11 contains the
          balance sheets of BFD as of December 31, 1993, 1992 and 1991 and
          as of September 30, 1994 (the "Balance Sheets") and the related
          statements of income for the years ended December 31, 1993, 1992
          and 1991 and the nine months ended September 30, 1994 (the
          "Income Statements"; together with the Balance Sheets, the
          "Financial Statements").  The Financial Statements have been
          prepared in accordance with BFD Accounting Principles applied on
          a consistent basis except as may be stated therein and in all
          material respects present fairly, with respect to the Balance
          Sheets, the financial position of BFD as of the dates set forth
          therein, and with respect to the Income Statements, the results
          of their operations for each of the periods set forth therein,
          subject, where appropriate, to normal year-end adjustments.  The
          Allowance for Credit Losses Reserves as of the date of each of
          the Balance Sheets has been prepared in accordance with BFD
          Accounting Principles; however, no representation or warranty is
          made as to the adequacy of the Allowance for Credit Losses
          Reserve.

                    5.12  LITIGATION.  Except as set forth on Schedule
          5.12, as of the date hereof, Seller is not a party to any
          pending, and to Seller's knowledge, there are no threatened,
          legal, administrative, arbitral or other proceedings, claims,
          actions or governmental or regulatory investigations of any
          nature against or affecting Seller, the Acquired Assets
          (excluding collateral), the Assumed Liabilities or the BFD
          Acquired Business.

                    5.13  BROKERS' FEES.  Except for BZW Division of
          Barclays Bank PLC ("BZW"), the Seller has not employed any broker
          or finder or incurred any liability for any brokerage fees,
          commissions or finders' fee in connection with the transactions
          contemplated by this Agreement.  The Seller will pay the fees of
          BZW.

                    5.14  EMPLOYEE BENEFITS.  (a)  Schedule 5.14 lists each
          "employee benefit plan" (within the meaning of section 3(3) of
          ERISA) and any other employee plan or agreement maintained by the
          Seller for the benefit of the employees of BFD (the "Bank
          Plans").  Copies or descriptions of the Bank Plans have been or
          will be made available to the Purchaser.

                    (b)  Each Bank Plan is in substantial compliance with
          ERISA and the Code where such failure to comply would have a
          Material Adverse Effect.  Each Bank Plan with respect to which
          assets and liabilities are to be transferred to an employee
          benefit plan maintained by Purchaser, if intended to be qualified
          under the Code, is so qualified.  A favorable determination
          letter has been obtained from the Internal Revenue Service for
          any other Bank Plan which is intended to be qualified under the
          Code.

                    (c)  No "accumulated funding deficiency" (as such term
          is used in section 412 or 4971 of the Code) has heretofore
          occurred with respect to any Bank Plan which would have a
          Material Adverse Effect.

                    (d)  No litigation or administrative or other
          proceeding involving any Bank Plan has occurred or, to the
          knowledge of Seller or BFD, been threatened where an adverse
          determination would have a Material Adverse Effect.

                    (e)  BFD does not contribute to any "multiemployer
          plan" (within the meaning of section 3(37) of ERISA) and neither
          BFD nor any member of its Controlled Group (defined as any
          organization which is a member of a controlled group of
          organizations within the meaning of Code section 414(b) or (c))
          has incurred any withdrawal liability which remains unsatisfied
          in an amount which, individually or in the aggregate, have had or
          could reasonably be expected to have a Material Adverse Effect.

                    (f)  Except as set forth in Section 7.7 and Schedule
          5.14(f), the consummation of the transactions contemplated hereby
          will not cause any benefits which are payable by the Purchaser to
          be vested, increased, or payable on an accelerated basis.

                    5.15  UNDISCLOSED LIABILITIES.  Except (a) as set forth
          in Schedule 5.15, (b) for those liabilities that are fully
          reflected or reserved against on Schedule 3.2(d) and (c) for
          liabilities incurred since September 30, 1994 in the ordinary
          course of business consistent with past practice, Seller has not
          incurred any liability of any nature whatsoever (whether
          absolute, accrued, contingent or otherwise and whether due or to
          become. due).

                    5.16  TAXES.  There are no liens for Taxes upon any of
          the properties of the BFD Acquired Business other than liens for
          Taxes not yet due or payable or liens for Taxes being contested
          in good faith by appropriate proceedings.

                    5.17  LOAN PORTFOLIO.  Schedule 5.17 sets forth, with
          respect to each Loan or Loan Commitment owned by BFD as of the
          date of this Agreement, the most recent rating or classification
          of such Loan in accordance with BFD internal standards.  Seller
          shall promptly inform Purchaser if the rating or classification
          of any such Loan or Loan Commitment (including without limitation
          any new Loan or Loan Commitment) should be changed at any time
          after the date of this Agreement.

                    5.18  ACCOUNTING RECORDS.  Seller maintains records
          which accurately reflect transactions in reasonable detail, and
          maintains accounting controls, policies and procedures sufficient
          to ensure that such transactions are (i) executed in accordance
          with management's general or specific authorization, as
          applicable, and (ii) recorded in a manner which permits the
          preparation of financial statements in accordance with BFD
          Accounting Principles, and the documentation pertaining thereto
          is retained, protected and duplicated in accordance with prudent
          business practices and applicable regulatory requirements.

                    5.19  TECHNOLOGY.  (a)  Schedule 5.19(a) contains a
          true and complete list and description of each of the electronic
          data processing, communications, telecommunications and other
          computer systems which are material to the BFD Acquired Business
          or the operation of the Transferred Offices (collectively, the
          "Technology Systems"), including (i) a description of any
          computer hardware or Assigned Software leased or owned by Seller
          that is included in the operation of the Technology Systems and
          (ii) a list of any contracts pursuant to which Seller is granted
          rights which are used in the operation of the Technology Systems,
          including Assigned Software licenses and similar agreements.
          Since January 1, 1993, there has not been any material
          malfunction with respect to any of the Technology Systems.

                    (b)  Except as set forth in Schedule 5.19(b), Seller
          has the right to use the Assigned Software in accordance with the
          terms of the relevant contracts governing such use, free and
          clear of any claims by any Person (other than the claims of any
          licensors under licensing or similar agreements), and the
          consummation of the transactions contemplated by this Agreement
          will not alter or impair the unrestricted right of Purchaser to
          use the Assigned Software, free and clear of any claims by any
          Person (other than the claims of any licensors under licensing or
          similar agreements).  No claims have been asserted by any Person
          with respect to the use by Seller of the Assigned Software or
          challenging or questioning the validity or effectiveness of any
          license or similar agreement with respect thereto, and, to the
          knowledge of Seller, there is no basis or any such claim.  The
          Assigned Software is not subject to any outstanding order,
          judgment, decree, stipulation or agreement restricting the use
          thereof by Seller.

                    5.20  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as
          set forth in Schedule 5.20, since December 31, 1993 Seller has
          not:  (i) other than in the ordinary course of business
          consistent with past practice, increased the wages, salaries,
          compensation, pension, or other fringe benefits or perquisites
          payable to any executive officer, employee, or director or
          granted any severance or termination pay, entered into any
          contract to make or grant any severance or termination pay, or
          paid any bonus to any such person; or (ii) changed its accounting
          principles, practices or methods except as required by GAAP (all
          of which changes, including those required by GAAP, to the extent
          made or implemented prior to the date of this Agreement, are
          described in Schedule 5.20).

                    5.21  INVESTMENTS.  Except for KB Investment, there
          were no Investments as of September 30, 1994.

          ARTICLE 6.  REPRESENTATIONS AND WARRANTIES OF SHAWMUT AND
          PURCHASER

                    Shawmut and Purchaser represent and warrant to Seller
          as follows:

                    6.1  CORPORATE ORGANIZATION AND AUTHORITY.  Shawmut is
          a corporation organized under the laws of Delaware, duly
          organized, validly existing and in good standing under the laws
          of the jurisdiction of its organization.  The Purchaser is a
          national banking association organized under the laws of the
          United States, duly organized, validly existing and in good
          standing under the laws of the jurisdiction of its organization.
          Purchaser has the corporate power and authority to carry on its
          business as it is now being conducted and to own, lease or
          operate, as the case may be, all of its properties and assets. 
          Shawmut and Purchaser each has the requisite corporate power and
          authority and franchises, permits, licenses and registrations and
          has taken (or in the case of an assignee, will take) all
          corporate action necessary in order to duly and validly execute
          and deliver this Agreement, the Servicing Agreement and each of
          the agreements entered into in connection herewith and therewith,
          to consummate the transactions contemplated hereby and thereby
          and to perform all of the terms of this Agreement, the Servicing
          Agreement and each of the agreements to be entered into in
          connection herewith and therewith to be performed by it hereunder
          and thereunder.  Any assignee of Purchaser pursuant to Section
          11.10 will at the time of such assignment be a corporation duly
          organized under the laws of its jurisdiction of incorporation,
          validly existing and in good standing under the laws of the
          jurisdiction of its organization.  Any such assignee will at the
          time of such assignment have the requisite corporate power and
          authority and franchises, permits, licenses and registrations and
          will take all corporate action necessary in order to duly and
          validly conduct the businesses being transferred to it pursuant
          to this Agreement, to maintain the Assumed Liabilities and to
          own, lease or operate, as the case may be, the Acquired Assets.
          Each of this Agreement, the Servicing Agreement and each of the
          agreements to be entered into in connection herewith and
          therewith has been (or will be, in the case of any such assignee)
          duly and validly executed and delivered by the Purchaser and
          Shawmut (or such assignee) where it is a party and is (or will
          be, in the case of any such assignee) a valid and binding
          agreement of Purchaser and Shawmut (or any such assignee)
          enforceable against Purchaser (or any such assignee) and Shawmut
          in accordance with their respective terms except as may be
          limited by bankruptcy, insolvency, reorganization, moratorium or
          other similar laws relating to, or affecting creditors' rights
          generally and by general equity principles.

                    6.2  NO CONFLICT, LICENSES AND PERMITS, COMPLIANCE WITH
          LAWS AND REGULATIONS.  The execution, delivery and performance by
          the Purchaser (and any assignee of Purchaser pursuant to Section
          11.10) and Shawmut of this Agreement, the Servicing Agreement and
          each of the agreements entered into in connection herewith and
          therewith to which it is a party does not, and will not, (i)
          violate any provision of the certificate of incorporation or by-
          laws of Purchaser (or the assignee of Purchaser pursuant to
          Section 11.10) and Shawmut or (ii) violate, conflict with, or
          constitute a breach of, or default (or event which, with notice
          or lapse of time, or both, would constitute a default) under, or
          the loss of any benefit under, or result in the termination of or
          a right of termination or cancellation of, or accelerate the
          performance required by, or result in the creation of any Liens
          under, any law, rule, regulation, order, judgment, decree or
          ruling or order of any government, governmental authority or
          court applicable to the Purchaser (or the assignee of Purchaser
          pursuant to Section 11.10) and Shawmut or any of their respective
          properties or assets or under any agreement, instrument or
          obligation of the Purchaser (or the assignee of Purchaser
          pursuant to Section 11.10) and Shawmut or to which the Purchaser
          (or the assignee of Purchaser pursuant to Section 11.10) and
          Shawmut are subject or are a party or by which the Purchaser (or
          the assignee of Purchaser pursuant to Section 11.10) and Shawmut
          are otherwise bound or affected or to which any of their
          respective properties or assets are subject, which violation,
          breach, contravention or default, individually or in the
          aggregate, (1) could reasonably be expected to prevent or impair
          the ability of the Purchaser to perform its obligations under
          this Agreement in any material respect or (2) could reasonably be
          expected to impair the validity or consummation of this Agreement
          or the transactions contemplated hereby in any material respect.

                    6.3  APPROVALS AND CONSENTS.  Other than the prior
          approval of the Office of the Comptroller of the Currency and the
          filing of the premerger notification required by the HSR Act and
          the expiration of the required waiting period thereunder, no
          notices, reports or other filings are required to be made by the
          Purchaser with, nor are any consents, registrations, approvals,
          permits or authorizations required to be obtained by the
          Purchaser from, any governmental or regulatory authorities of the
          United States, the several States or any foreign jurisdictions or
          any other Persons in connection with the execution and delivery
          of this Agreement by the Purchaser and any assignee of Purchaser
          pursuant to Section 11.10 and the consummation of the
          transactions contemplated hereby by the Purchaser and any such
          assignee.

                    6.4  BROKERS' FEES.  Except for Morgan Stanley & Co.,
          Incorporated, the Purchaser has not employed any broker or finder
          or incurred any liability for any brokerage fees, commissions or
          finders fees in connection with the transactions contemplated by
          this Agreement.  Purchaser will pay the fees of Morgan Stanley &
          Co. Incorporated.

                    6.5  LITIGATION AND LIABILITIES.  There are no actions,
          suits or proceedings pending, or, to the best knowledge of the
          management of the Purchaser, threatened against the Purchaser,
          violations of law or regulation, or obligations or liabilities,
          whether or not accrued, contingent or otherwise, or any facts or
          circumstances of which the management of the Purchaser is aware,
          including, without limitation, those relating to environmental
          and occupational safety and health matters, that questions the
          legality or propriety of the transactions contemplated by this
          Agreement or could result in any claims against or obligations or
          liabilities of the Purchaser that, individually or in the
          aggregate, (i) could reasonably be expected to prevent or impair
          the ability of the Purchaser to perform its obligations under
          this Agreement in any material respect or (ii) could reasonably
          be expected to impair the validity or consummation of this
          Agreement or the transactions contemplated hereby in any material
          respect.

                    6.6  NO IMPLIED REPRESENTATION.  Notwithstanding
          anything contained in this Article 6 or any other provision of
          this Agreement, in entering into this Agreement, the Purchaser
          has not been induced by and has not relied upon any
          representations, warranties or statements, whether express or
          implied, made by the Seller or any agent, employee or other
          representative of the Seller or by any broker or any other person
          representing or purporting to represent the Seller, which are not
          expressly set forth in this Agreement, whether or not any such
          representations, warranties or statements were made in writing or
          orally.  It is understood that any cost estimates, projections or
          other predictions as to future events or results contained or
          referred to in this Agreement or which otherwise have been
          provided to the Purchaser are not and shall not be deemed to be
          representations or warranties of the Seller.  The Purchaser
          acknowledges that there are uncertainties inherent in attempting
          to make such estimates, projections and other predictions, that
          the Purchaser is familiar with such uncertainties, that the
          Purchaser is taking full responsibility for making its own
          evaluation of the adequacy and accuracy of all estimates,
          projections and other predictions so furnished to it, and that
          Purchaser shall have no claim against anyone with respect
          thereto.

                    6.7  DISCLOSURE.  The Diligence Group has not
          intentionally withheld from the Seller any information discovered
          in the course of its due diligence investigation of the Seller
          prior to the date of this Agreement (other than those
          representations and warranties relating to any consents required
          to assign Loans, Assigned Leases or Assumed Contracts and Other
          Obligations) that would indicate that one or more of the
          representations and warranties of the Seller contained in this
          Agreement are inaccurate.

          ARTICLE 7.  COVENANTS

                    7.1  CONDUCT OF BUSINESS.  During the period from the
          date hereof to the Closing Date, without the prior written
          consent of the Purchaser or except as specifically contemplated
          by this Agreement or as set forth on Schedule 7.1 hereof, the
          Seller agrees that:

                    (a)  the business of BFD will be operated in the
               ordinary course consistent with past practice;

                    (b)  other than in the ordinary course consistent with
               past practice applicable to employees of BFD generally, (A)
               no increase in the compensation payable or to become payable
               by Seller to any officer, employee or agent of BFD shall be
               made, (B) no bonus, percentage of compensation or other like
               benefit shall be accrued to or for the credit of any
               officer, employee or agent of Seller, and (C) no bonus,
               stock option, profit sharing, pension, retirement or other
               similar arrangement or plan affecting BFD shall be
               instituted or changed;

                    (c)  the Seller shall use its reasonable best efforts
               to th&extent permitted by law to keep available to the
               Purchaser the opportunity to retain the services of the
               present employees of BFD, but in no event shall the Seller
               be obligated to expend monies or other items of value beyond
               current levels of compensation to retain employees. 
               Similarly, the Seller shall use its reasonable best efforts
               and work in good faith to preserve its relationships with
               customers and others having business relations with BFD;

                    (d)  the Seller will duly comply with the material
               legal requirements applicable to it and to the conduct of
               the business of BFD;

                    (e)  there shall be no material change in BFD's
               internal auditing program, bookkeeping and recordkeeping
               practices or BFD Accounting Principles (except as required
               pursuant to regulatory accounting or capital requirements);

                    (f)  the Seller shall not amend or extend, seek to
               amend or extend or take any action in connection with
               amending or extending any Assigned Lease other than to
               effect the purposes of this Agreement or ordinary renewals
               of such Assigned Leases;

                    (g)  the Seller shall not initiate litigation (other
               than actions incidental to loan recovery efforts) involving
               a claim in excess of $100,000, which litigation would
               otherwise be assumed by the Purchaser pursuant to this
               Agreement, without the prior consent of the Purchaser, which
               consent shall not be unreasonably withheld;

                    (h)  the Seller shall not, with respect to the Acquired
               Assets, Assumed Liabilities or the BFD Acquired Business,
               engage or participate in any material transaction, or incur
               or sustain any material obligation, except in the ordinary
               course of business;

                    (i)  the Seller shall not make any improvements to or
               capital expenditures on any Transferred Office, except
               pursuant to commitments for such made before the date of
               this Agreement (all of which commitments are described on
               Schedule 7.1(i)) and normal maintenance or refurbishing made
               in the ordinary course of business or as necessary to
               maintain existing assets in good repair or as required by
               the Assigned Leases;

                    (j)  the Seller shall not deviate in any material
               respect from policies and procedures existing as of the date
               hereof with respect to (I) classification and rating of
               assets (except as required by regulatory authorities), (II)
               accrual of interest on assets, and (III) underwriting or
               originating loans;

                    (k)  BFD shall not purchase any assets from, or sell
               any assets to, any Affiliate of Seller that would become, or
               would have been absent such sale, Acquired Assets;

                    (l)  the Seller shall not take action or fail to take
               any action that would, or could reasonably be expected to
               (I) result in any of Seller's representations and warranties
               set forth in this Agreement being or becoming untrue in any
               material respect; (II) result in any of the conditions to
               the Closing set forth in Article 9 not being satisfied;
               (III) result in a material violation of any provision of
               this Agreement; or (IV) otherwise be inconsistent with the
               terms and provisions of this Agreement, except, in every
               case, as may be required by applicable law;

                    (m)  BFD shall not enter into any new line of business;

                    (n)  the Seller shall continue to provide for credit
               losses on the financial statements of BFD in accordance
               with, and at the rate prescribed by, the BFD Accounting
               Principles (including for any portion of a calendar quarter
               in the event the Closing shall not occur as of the end of a
               calendar quarter) and shall make no discretionary changes to
               the level of the Allowance for Credit Losses Reserves
               (including without limitation by way of reversals of such
               reserves) which reduce the level thereof;

                    (o)  between the date of this Agreement and the Closing
               Date, the Seller shall not amend, modify, waive, supplement,
               subordinate or otherwise alter any of the rights or remedies
               under the Loan Documents in favor of Seller other than in
               good faith and in the ordinary course of business and all
               writings and other documents relating to any such amendment,
               modification, waiver, supplement, subordination or other
               alteration of any Loan, Loan Commitment or related Loan
               Document shall be included among the Loan Documents to be
               transferred to the Purchaser pursuant to Section 2.2; and

                    (p)  the Seller shall not agree to do any of the
               matters set forth in paragraph (b), (e), (f), (g), (h), (i),
               (j), (k), (l), (m) or (o) of this Section 7.1. 

                    7.2  INVESTIGATION.  (a)  Between the date of this
          Agreement and the Closing Date, the Seller shall afford to the
          Purchaser and its authorized agents and representatives
          reasonable access, upon reasonable notice and during normal
          business hours, to the Transferred Offices and to Records and all
          other information within the Seller's possession relating to the
          Acquired Assets, the Assumed Liabilities and the BFD Acquired
          Business.  Any request for such access will be coordinated with
          the Parent.  The Seller shall cause its personnel to cooperate
          with the Purchaser and provide to the Purchaser reasonable
          assistance in the Purchaser's investigation of matters relating
          to such Acquired Assets, the Assumed Liabilities and the BFD
          Acquired Business and the Purchaser's preparation for an orderly
          transition.  Notwithstanding the foregoing, the parties agree
          that (i) the Purchaser's investigations and preparations for the
          transition shall be conducted in a manner which does not
          unreasonably interfere with the Seller's normal operations,
          customers and employee relations, and (ii) subject to the
          provisions of Section 7.2(b) hereof, prior to the Closing Date
          the Purchaser shall not use the names and addresses of customers
          of the Seller for any purpose and shall not communicate or
          otherwise solicit such customers for any reason.  No
          investigation by Purchaser or its representatives pursuant to
          this Section 7.2(a) or otherwise shall affect or limit the
          representations, warranties or covenants of Seller set forth
          herein or be considered in determining whether any closing
          condition in Purchaser's favor shall have been satisfied or
          Purchaser shall have the right to be indemnified for any matter
          pursuant to this Agreement.  Prior to the Closing Date, the
          Purchaser shall promptly notify the Seller upon any member of the
          Diligence Group becoming aware of any information (other than
          those representations and warranties relating to any consents
          required to assign Loans, Assigned Leases or Assumed Contracts
          and Other Obligations) that any such member shall have discovered
          that would indicate to such member that any of the
          representations and warranties of Seller contained herein are
          inaccurate.

                    (b)  Purchaser shall be permitted, at its own expense,
          to communicate with, and deliver information, brochures,
          bulletins, press releases, and other communications
          (collectively, "Communications") to, Loan borrowers and other
          customers of BFD and BFD's employees concerning the transactions
          contemplated by this Agreement and concerning the business and
          operations of Purchaser; provided that, Purchaser shall inform
          the Seller of its plans to communicate with customers and
          employees in advance of any such Communication and all such
          Communications shall be subject to the prior review and approval
          of Seller (such approval not to be unreasonably withheld). 
          Seller, if so requested by Purchaser, shall on behalf and at the
          expense of Purchaser, furnish such Communications to Loan
          borrowers and other customers of BFD and BFD's employees in the
          manner and time period requested by Purchaser.

                    (c)  In the event Purchaser or any of its Affiliates is
          required pursuant to applicable legal or regulatory requirements
          to have available audited financial statements relating to the
          BFD Acquired Business, and the date by which such audited
          financial statements must be available requires that their
          preparation (including the related audit) be commenced prior to
          the Closing Date, Parent shall, at the request of the Purchaser,
          engage Shawmut's auditor for such purpose, but at the sole
          expense of Purchaser.  Seller and Purchaser shall, at the expense
          of the Purchaser, take such actions as are customary to assist
          such auditors in the preparation of such required audited
          financial statements, including assistance after the Closing Date
          with reasonable requests for financial information not included
          in the records of BFD.  Prior to the Closing Date, in connection
          with any sale or distribution of securities (whether registered
          or otherwise) made by Purchaser or any of its Affiliates or the
          Purchaser's or any of its Affiliates' efforts to comply with any
          applicable legal or regulatory requirements, Seller further
          agrees to (i) make available on a timely basis such financial
          information of the BFD Acquired Business, the Acquired Assets and
          the Assumed Liabilities as is readily available and may
          reasonably be requested, (ii) cooperate with reasonable requests
          for other information concerning the BFD Acquired Business, the
          Acquired Assets and the Assumed Liabilities and (iii) request to
          be provided, at the Purchaser's expense, "cold comfort" letters
          and updates thereof from Seller's independent certified public
          accountants.

                    7.3  BEST EFFORTS; TAKING OF NECESSARY ACTION. 
          (a)  Each of the parties hereto agrees to use its reasonable best
          efforts promptly to take or cause to be taken all action and
          promptly to do or cause to be done all things necessary, proper
          or advisable to consummate and make effective the transactions
          contemplated by this Agreement, including, without limitation,
          using reasonable efforts to lift or rescind any injunction or
          restraining order or other order adversely affecting the ability
          of the parties to consummate the transactions contemplated
          hereby, provided, however, that neither party shall be required
          to make any payment to any landlord or agree to any material
          increase in rent under any Assigned Lease in connection with
          obtaining such landlord's consent to the assignment of such lease
          without the consent of the Purchaser.  In case at any time after
          the Closing Date any further action is necessary, proper or
          advisable to carry out the purposes of this Agreement, as soon as
          reasonably practicable each party to this Agreement shall cause
          its proper officers and/or directors to take all such necessary
          action.

                    (b)  Without limiting the foregoing, the Purchaser
          agrees to promptly prepare and file all applications and other
          notices required in connection with, and to use its reasonable
          best efforts to obtain promptly and comply with all conditions
          contained in, all necessary regulatory approvals and any other
          consent, approval or other action by, or notice to or
          registration or filing with, any governmental or administrative
          agency or authority required or necessary to be made, obtained or
          complied with, as the case may be, by the Purchaser in connection
          with the performance of this Agreement by the Purchaser or the
          consummation of the transactions contemplated hereby.  In
          connection therewith, the Purchaser shall submit to the relevant
          regulatory authorities such capital plans, description of
          operating procedures, financial information (including
          projections) and such other information as may be necessary to
          obtain such consents and approvals and to address those issues
          that may arise in connection therewith.  The Purchaser shall
          refrain from taking any action that could reasonably be expected
          to impair or materially delay its ability to obtain the
          regulatory approval described in Schedule 6.3 and to consummate
          the transactions contemplated hereby, including action that could
          frustrate or cause the denial of any applications or other
          notices required in connection with such regulatory approval.  To
          the extent that any application filed in connection with
          obtaining any such approval contains any significant information
          relating to the Seller, prior to submitting such application to
          any regulatory agency, the Purchaser will permit the Seller to
          review such information and will consider in good faith the
          suggestions of the Seller with respect thereto.  The Purchaser
          shall use its reasonable best efforts to ensure that any
          information provided by the Seller to be submitted in connection
          with submissions to governmental or administrative agencies or
          authorities receives confidential treatment if so requested by
          the Seller.  Seller shall cooperate with Purchaser in its efforts
          to obtain all necessary regulatory approvals.

                    (c)  Seller agrees to use its reasonable best efforts
          (excluding the payment of cash or other consideration) to obtain
          as promptly as practicable all permits, consents, approvals,
          waivers and authorizations of all third parties with whom Seller
          or its Affiliates is in contractual privity which are necessary
          or desirable to consummate the transactions contemplated by this
          Agreement, and after the Closing Date, shall cooperate, at the
          Purchaser's expense, with reasonable requests to execute and
          acknowledge consents, approvals, waivers and authorizations
          obtained by the Purchaser in connection with the Loan Documents.

                    (d)  Except to the extent prohibited by applicable law,
          the Purchaser shall provide to the Seller copies of all
          applications and other notices required in connection with any
          prior regulatory approvals and any other consent, approval or
          other action by, or notice to, or registration or filing with,
          any governmental or administrative authority or agency in
          connection with the transaction contemplated by this Agreement
          within five days of such submissions.  Except to the extent
          prohibited by applicable law, the Purchaser shall provide copies
          of any comments, requests or actions by governmental or
          administrative agencies or authorities to the Seller within five
          days of the Purchaser's receipt.  Information provided under this
          paragraph shall be held by the Seller subject to confidentiality
          restrictions substantially similar to those applicable to the
          Purchaser and Shawmut under the Confidentiality Agreement with
          respect to confidential information received from the Seller. 
          Nothing contained herein shall be deemed to provide Seller with a
          right to review any information provided to any governmental or
          administrative agency or authority on a confidential basis in
          connection with the transactions contemplated hereby, except that
          the Seller shall retain the right to review confidential
          information to the extent necessary to review the context of
          references to Seller and its Affiliates.  

                    (e)  Purchaser and Seller shall, upon request, furnish
          each other with all information concerning themselves, their
          subsidiaries, directors, officers and stockholders and such other
          matters as may be reasonably necessary or advisable in connection
          with any statement, filing, notice or application made by or on
          behalf of Purchaser and Seller or any of their respective
          subsidiaries to any governmental or administrative agency or
          authority in connection with the transactions contemplated by
          this Agreement (except to the extent that such information would
          be, or relates to information that would be, filed under a claim
          of confidentiality).

                    (f)  The Seller shall permit the Purchaser to engage in
          negotiations with Senior Officers for the retention of such
          Senior Officer's services after the Closing; provided that the
          standard form of such employment contracts and employment
          contracts materially different than such standard form shall be
          subject to the prior approval of Parent, which approval shall not
          be unreasonably withheld; provided further that such employment
          contracts disclosed to Parent may delete the amount of
          compensation or other payments to be made pursuant to such
          agreement.

                    (g)  Promptly after the execution of this Agreement,
          the Seller shall request, and shall use commercially reasonable
          efforts to obtain, the consent of the landlord under any Assigned
          Lease which requires consent for assignment thereof.  If the
          consent of the landlord under any Assigned Lease cannot be
          obtained, the Seller shall cooperate with the Purchaser in
          attempting to reach a mutually satisfactory arrangement regarding
          occupancy by Purchaser of the space demised under such Assigned
          Lease; provided, however, that the failure of the Seller to
          obtain any consent to assignment after the exercise of
          commercially reasonable efforts or the inability of the Purchaser
          to occupy space demised under any Assigned Lease shall not give
          rise to any right on the part of the Purchaser or the Seller to
          terminate this Agreement or to cause a reduction in the purchase
          price hereunder and the Seller shall have no liability to the
          Purchaser as a result thereof.  Any assignment fee specified in
          any Assigned Lease required to be paid to the relevant lessee in
          connection with the related assignment hereunder shall be borne
          equally by Purchaser and Seller.

                    7.4  EXPENSES.  Whether or not the transactions
          contemplated hereby are consummated, all costs and expenses
          incurred in connection with this Agreement and the transactions
          contemplated hereby shall, except as otherwise provided herein,
          be paid by the party incurring such expenses.

                    7.5  USE OF NAMES, TRADEMARKS AND SERVICE MARKS. (a)
          Anything herein to the contrary notwithstanding, no interest in
          or right to use any logo, name, trademark or service mark
          presently or previously used by the Seller (with the exception of
          the trademark "We Build Relationships") is being conveyed
          pursuant to this Agreement.  The Purchaser agrees that on and
          after the Closing Date neither it nor any of its Affiliates
          (including the Transferred Offices) will use the names "Barclay"
          or "Barclays", the "BCI" initials, the eagle symbol used by
          Affiliates of Seller or the shade of blue used by Affiliates of
          Seller (samples of which will be furnished to Purchaser)
          (collectively, the "Retained Names") in connection with any
          business or activity engaged in by the Purchaser and its
          Affiliates, except that (x) for a period of six months after the
          Closing, Purchaser may refer to the BFD Acquired Business in
          correspondence with existing BFD customers as "formerly known as
          Barclays Business Credit Inc." or "formerly known as BCI" or any
          similar designation and (y) Purchaser or its Affiliates or
          advisers may make "tombstone" advertisements announcing
          consummation of transactions contemplated hereby; provided that
          the Purchaser shall not refer to any Retained Name to advertise,
          market or solicit prospective new customers, or the agents
          thereof, or otherwise to engage in any business.  Promptly after
          the Closing Date, the Purchaser shall commence the removal of the
          trade names, names, service marks, logos, insignia, slogans,
          emblems, symbols, designs, and other identifying characteristics
          ("names") from all premises, equipment, signs, interior decor
          items, fixtures and furnishings, and from all printed materials
          and related business literature associated with the Transferred
          Offices, Personal Property and Leasehold Improvements acquired. 
          Such removal shall be at the sole expense of Purchaser.  Nothing
          in this Section 7.5 shall require the Purchaser, except in the
          ordinary course of business or as required by the terms thereof,
          to reissue or replace the Loan Documents transferred pursuant to
          this Agreement.

                    (b)  Notwithstanding anything to the contrary contained
          in Section 7.5(a), Purchaser and its Affiliates shall have the
          non-transferable and non-sublicensable right, for a period of
          ninety (90) days following the Closing Date, to use any materials
          or property existing on the Closing Date that bear any Retained
          Name where the removal of the Retained Name would be impractical
          (excluding letterhead, marketing materials or other means of
          communication with present or prospective customers that are not
          unduly burdensome to replace); provided, however, that as of the
          Closing Date Purchaser shall, to the extent practicable, place a
          stamp, mark or other notation on any such material or property
          that identifies the BFD Acquired Business as a business of
          Purchaser (and not of Seller).

                    7.6  POST-CLOSING COOPERATION.  The Purchaser agrees
          that the Seller and/or its independent auditors shall have
          reasonable access upon reasonable notice to Purchaser to the
          Books and Records of the Purchaser and its Affiliates as they
          relate to the business of BFD and its predecessors applicable to
          the period ending on the Closing Date and have the reasonable
          assistance and cooperation of the appropriate personnel of the
          Purchaser and its Affiliates in the review of such Books and
          Records.  Parent shall provide to Purchaser comparable access,
          assistance and cooperation with respect to the Books and Records
          of Seller relating to the BFD Acquired Business which are not
          included in the Acquired Assets.

                    7.7  EMPLOYEE-RELATED MATTERS.  (a)  Continuity of
          Employment.  The parties hereto intend that there shall be
          continuity of employment with respect to all employees of BFD,
          including any employees of Seller's Administration division named
          on Schedule 7.7(a).  The Purchaser shall employ, commencing on
          the Closing Date, all employees, including those on vacation,
          leave of absence, or short-term disability (including workers'
          compensation), but not long-term disability, who were employed by
          BFD (including such scheduled Administration Division employees)
          immediately prior to Closing, on the same terms (including
          salary, job responsibility and location) as those provided to
          such employees immediately prior to Closing.  All such employees
          who are employed by BFD or who are so scheduled shall hereafter
          be referred to as "Covered Employees".

                    (b)  Severance.  For purposes of severance benefits, if
          after Closing a Covered Employee is offered employment in a
          location which is not within a reasonable commute, as determined
          by Purchaser in accordance with its practice under Purchaser's
          Salary Continuation Procedure, and such Covered Employee's
          employment terminates due to his or her refusal to work in such
          new location, such Covered Employee shall be entitled to
          severance payments in accordance with Section 7.7(c) hereof.

                    (c)  Benefit Plans -- General.  Effective as of the
          Closing Date, Covered Employees shall cease participation in all
          plans, programs, policies and arrangements maintained for their
          benefit by the Seller or any of its Affiliates.  Commencing on
          the Closing Date and continuing thereafter,  Purchaser shall
          provide to Covered Employees such plans, programs, policies and
          arrangements, including but not limited to those providing
          severance benefits, which are the same as the Bank Plans provided
          to Covered Employees immediately prior to the Closing Date,
          subject to the terms and conditions thereof as in effect on the
          date of this Agreement except for ordinary course and other
          changes permitted under Section 7.1 hereof ("Purchaser Plans"). 
          As of the Closing Date, Purchaser shall provide credit for each
          Covered Employee's service with BFD or its Affiliates prior to
          the Closing Date (including periods of employment with any other
          employer which are taken into account under the corresponding
          benefit plan maintained for the benefit of such Covered Employee
          prior to Closing) for all purposes including without limitation
          (i) eligibility for, participation in, vesting and early
          retirement under Purchaser Plans, and (ii) determining vacation,
          sick leave, disability benefits, severance benefits and plan
          accruals under Purchaser Plans (except accruals under any defined
          benefit plan).

                    (d)  Welfare Benefit Plans.  Notwithstanding anything
          to the contrary contained herein, as of the Closing Date,
          Purchaser shall provide Covered Employees with immediate coverage
          under Purchaser Plans that are welfare benefit plans (as defined
          in section 3(1) of ERISA) (the "Purchaser Welfare Plans"). 
          Purchaser shall (i) cause there to be waived any preexisting
          condition restrictions otherwise applicable under any Purchaser
          Welfare Plan to any Covered Employee or his or her covered
          dependents and (ii) give effect, in determining any deductible
          and maximum out-of-pocket limitations, to claims incurred,
          amounts paid by and amounts reimbursed to Covered Employees with
          respect to similar plans maintained for their benefit immediately
          prior to the Closing Date.  The Seller or its Affiliates will
          retain responsibility for and continue to pay all medical, life
          insurance, disability and other welfare plan expenses and
          benefits for each Covered Employee with respect to claims
          incurred by such Covered Employee or their covered dependents
          prior to the Closing Date.  Expenses and benefits with respect to
          claims incurred by such Covered Employees or their covered
          dependents on or after the Closing Date shall be the
          responsibility of the Purchaser.  For purposes of this paragraph,
          a claim is deemed incurred when, in the case of medical benefits,
          the medical or other services giving rise to the claim are
          performed, in the case of life insurance, on the date of death
          and with respect to disability, on each day of such disability. 
          The Seller shall be responsible for all legally mandated
          continuation of health care coverage for all Covered Employees
          and their covered dependents who have a loss of health care
          coverage due to a qualifying event with respect to periods before
          the Closing Date.

                    (e)  Defined Benefit Plan.  No assets or liabilities
          with respect to Covered Employees and their beneficiaries shall
          be transferred as a result of this Agreement from the Restated
          Retirement Plan of the Seller (the "Seller's Retirement Plan") to
          any plan or arrangement established or maintained by Purchaser or
          any other employer for the benefit of such Covered Employees and
          their beneficiaries.  After the Closing, no further benefit shall
          accrue under the Seller's Retirement Plan with respect to Covered
          Employees.  All Covered Employees who are members of the Seller's
          Retirement Plan shall become fully vested in their accrued
          benefits thereunder as of the Closing Date.  Benefits payable to
          Covered Employees under the Seller's Retirement Plan shall be
          payable to such Covered Employees pursuant to the terms of, and
          at the time and in the amounts provided under, the Seller's
          Retirement Plan based upon each such Covered Employee's years of
          service with BFD or its Affiliates (including periods of
          employment with any employer which are taken into account under
          the Seller's Retirement Plan), and compensation received from BFD
          or its Affiliates through the Closing Date.  Purchaser shall
          provide the Seller with a list, no less frequently than
          semi-annually, of Covered Employees who have terminated
          employment with Purchaser or its Affiliates.  Effective on the
          Closing Date, a qualified defined benefit plan containing
          substantially the same provisions as the Seller's Retirement Plan
          (the "Purchaser's Retirement Plan") shall include as participants
          those Covered Employees who were participants in the Seller's
          Retirement Plan immediately before the Closing Date.  The
          remaining Covered Employees shall become participants in the
          Purchaser's Retirement Plan in accordance with its terms.

                    (f)  Savings Plan.  All Covered Employees who are
          participants in the Seller's Thrift-Savings Plan ("Seller's
          Savings Plan") shall become fully vested in their account
          balances as of the Closing Date.  The Seller shall (i) cause the
          Seller's Savings Plan to segregate, in accordance with the
          spin-off provisions set forth under section 414(l) of the Code,
          the assets of such Plan representing the full account balances of
          Covered Employees as of the first day of the month following the
          Closing Date, (ii) make any required filings and submissions to
          appropriate governmental agencies and (iii) make any necessary
          amendments to the Seller's Savings Plan and the related trust
          agreement to provide for such segregation and the transfer of
          assets described below.  Prior to the Closing Date, Purchaser or
          its designated affiliate shall (i) establish or designate a plan
          that is substantially similar to the Seller's Savings Plan,
          including provision for the same level of matching contributions
          and qualified under sections 401(a) and 401(k) of the Code for
          the benefit of Covered Employees (the "Successor Plan") and
          furnish Seller with the most recent favorable determination
          letter from the Internal Revenue Service relating to such
          Successor Plan, (ii) take any necessary action to qualify tee
          Successor Plan under the applicable provisions of the Code and
          (iii) make any filings and submissions to appropriate
          governmental agencies required of it in connection with a
          transfer of assets as described below.  As soon as practicable
          following the Closing Date and receipt of such determination
          letter, the Seller shall cause the trustee of the Seller's
          Savings Plan to transfer in cash (and, in the case of outstanding
          participant loans, Notes) the full account balances of all
          Covered Employees, which account balances shall have been
          credited with appropriate earnings attributable to the period
          from the Closing Date to the valuation date of the Seller's
          Savings Plan last preceding the date of transfer described
          herein, reduced by any benefit or withdrawal payments in respect
          of Covered Employees occurring during the period from the Closing
          Date to the date of transfer described herein, to the trustee
          designated under the trust agreement forming a part of the
          Successor Plan.  In consideration for such transfer of assets,
          Purchaser shall, effective as of the date of transfer, assume all
          of the obligations of the Seller or its Affiliates to Covered
          Employees in respect of the Seller's Savings Plan.  Each of the
          parties hereto shall pay its own expenses in connection with such
          transfer.  Purchaser or its Affiliates shall, effective as of the
          Closing Date, amend or adopt any Successor Plan to the extent
          necessary to effectuate the foregoing.

                    (g)  Vacation Pay.  With respect to any accrued but
          unused vacation time to which any Covered Employee is entitled
          pursuant to the vacation policy applicable to such employee
          immediately prior to the Closing Date (the "Vacation Policy"),
          provided that the liability with respect thereto is fully
          reflected on the Final Asset and Liability Schedule, Purchaser
          shall allow such Covered Employee to use such accrued vacation,
          for which Purchaser shall pay such Covered Employee at his/her
          then salary. 

                    (h)  WARN.  Purchaser shall not on, or at any time
          prior to 90 days after the Closing Date, effectuate a "plant
          /closing" or "mass layoff", as those terms are defined in the
          Worker Adjustment and Retraining Notification Act of 1988
          ("WARN"), affecting in whole or in part any site of employment,
          facility, operating unit or employee, without notifying BFD and
          the Seller in advance and without complying with the notice
          requirements and other provisions of WARN.

                    (i)  Other Benefits.  During the five-year period
          following the Closing Date, Seller shall continue to provide to
          Covered Employees who are participants in Seller's Executive
          Split Dollar Life program as of the Closing Date such benefits as
          may be provided under the terms of such program as in effect on
          the date of this Agreement.

                    (j)  Bonuses.  Amounts due, whether prior to, on or
          after the Closing Date, to any Covered Employee under the
          Barclays Business Credit Inc. Management Incentive Plan shall be
          payable by Seller.  Seller shall pay any amounts due prior to the
          Closing Date to any Covered Employee under the Barclays Business
          Credit Inc. Business Development Officer Bonus Plan (the "BDO
          Plan").  Purchaser shall pay any amounts due on and after the
          Closing Date to any Covered Employee under the BDO Plan provided
          that the liability with respect thereto is fully reflected on the
          Final Asset and Liability Schedule.

                    (k)  Thrift Restoration Plan.  Purchaser shall assume
          the Barclays Bank PLC Thrift Savings Restoration Plan with
          respect to Covered Employees and pay any amounts due to any
          Covered Employee thereunder in accordance with the terms thereof
          provided that the liability with respect thereto is fully
          reflected on the Final Asset and Liability Schedule.

                    (l)  Retention Bonuses.  Parent shall use its best
          efforts to cause the executives named on the attached Schedule
          7.7(l) to enter into retention incentive agreements for which
          Parent shall remain solely liable and which, if executed, shall
          supersede in all respects any applicable executive security
          agreement; provided, however, that the individual named on
          Schedule 7.7(l) shall enter into a retention incentive agreement
          for which Purchaser shall, on and after the Closing Date, be
          solely liable provided that the liability with respect thereto is
          fully reflected on the Final Asset and Liability Schedule.

                    (m)  Deferred Compensation Plan.  All amounts payable
          to the individual named on Schedule 7.7(l) under the Barclays
          Bank PLC Deferred Compensation Plan (the "Deferred Compensation
          Plan") shall be paid by Purchaser in accordance with the terms of
          such plan and his prior election to defer such compensation
          provided that the liability with respect thereto is fully
          reflected on the Final Asset and Liability Schedule.  During the
          period of deferral, all such deferred compensation shall remain
          subject to the terms of, and Purchaser shall assume with respect
          to the individual named on Schedule 7.7(l), the Deferred
          Compensation Plan.

                    (n)  Indemnity by Purchaser.  Purchaser shall
          indemnify, defend and hold the Seller and BFD and their
          Affiliates harmless from and against any and all claims, actions,
          suits, demands, proceedings, losses, expenses, damages,
          obligations and liabilities (including costs of collection,
          reasonable out-of-pocket attorney's fees and other costs of
          defense) (collectively, "Losses") arising out of or otherwise in
          respect of (i) Purchaser's failure to offer employment to or to
          employ any employee of BFD on the Closing Date; (ii) termination
          of any Covered Employee on or after the Closing Date; (iii)
          failure of Purchaser to comply with any of its obligations to
          Covered Employees including, but not limited to, any statutory
          obligations and obligations under this Section; (iv) any claim
          made by any Covered Employee for severance pay other than a claim
          incurred prior to the Closing Date; (v) any claim made pursuant
          to WARN relating to events occurring on or after the Closing
          Date; (vi) benefits or claims incurred on or after the Closing
          Date by Covered Employees but not including any benefits accrued
          prior to the Closing Date ("Employee Benefit Losses"); provided
          that none of such Employee Benefit Losses results directly or
          indirectly from a breach by the Seller of any of its respective
          representations, warranties, covenants or agreements in this
          Agreement.

                    7.8  LETTERS OF CREDIT OF ISG.  Following the Closing,
          Purchaser may attempt to cause itself or any other financial
          institution to be substituted in all respects for ISG under each
          ISG L/C the reimbursement obligation for which is being assumed
          by Purchaser pursuant to Section 2.4(h).  For so long as ISG
          remains obligated under any such ISG L/C and Purchaser does not
          substitute itself or another financial institution as issuer
          under such ISG L/C so that the ISG/LC is cancelled, ISG shall
          remain the Administrative Agent and Letter of Credit Agent under
          such ISG L/C, and Purchaser shall pay to ISG a fronting fee,
          payable quarterly, in respect of each such ISG L/C, as set forth
          on Schedule 7.8, prorated for any unexpired term of the
          applicable ISG L/C.  Parent agrees that any letter of credit fees
          payable by the account parties under such letters of credit
          directly to ISG shall be for the account of and paid over to
          Purchaser.

                    7.9  NON-COMPETE; NON-SOLICITATION OF EMPLOYEES. (a)
          For a period of two years following the Closing Date, neither
          Seller nor Parent, nor any of their Affiliates, shall employ any
          person who is an employee of BED as of the date of this
          Agreement, except with the written consent of the Purchaser. 
          Until the second anniversary of the Closing Date, neither Seller
          nor Parent, nor any of their Affiliates, shall seek to persuade
          any such employee not to accept employment with Purchaser or
          discontinue employment with Purchaser from and after the Closing
          Date.

                    (b)  For a period of three years following the Closing
          Date, except as agreed to in writing by Purchaser or with respect
          to loans in which Purchaser or one of its Affiliates and Seller
          or one of its Affiliates each has or will have a partial
          interest, neither Seller nor Parent, nor any of their Affiliates,
          shall engage in any lending activities in the United States with
          any Person on a basis where (x) a substantial portion of the
          collateral would consist of accounts receivable or inventory, and
          (y) which activities are subject to agreements which include
          terms and conditions with respect to borrowing base requirements,
          and (z) which collateral is subject to periodic audit by the
          lender's personnel or its agents.  The foregoing is not intended
          to preclude Parent or its Affiliates from engaging in its current
          strategic investment banking businesses, including without
          limitation structured financing, mezzanine financing, asset
          securitization and bank financing and private placement
          activities.  Neither Parent nor any of its Affiliates shall for a
          period of three years following the Closing Date provide any
          loans or other credit-related products to any Person which is a
          customer of Seller or any of its Subsidiaries as of the Closing
          Date unless there is a preexisting relationship.  The foregoing
          restrictions shall not prevent any business combination or
          similar transactions involving Parent or any of its Affiliates
          and any non-asset-based lender.  A-non-asset-based lender is any
          Person whose assets attributable to loans where a substantial
          portion of the collateral would consist of accounts receivable or
          inventory, where the loans are subject to agreements which
          include terms with respect to borrowing base requirements and
          which collateral would be subject to periodic review by such
          Person's personnel or its agents, constitute less than 25% of
          such Person's total consolidated assets.  Following any such
          business combination or similar transaction, the less than 25%
          asset-based lending activities engaged in by such non-asset-based
          lender may continue to be engaged in without violating this
          Agreement.  Seller's retention of the Excluded Loans in and of
          itself, shall not be deemed to constitute a violation of the
          foregoing.  Without limiting the foregoing, Seller will not use
          the name Business Credit Inc. at any time following the Closing
          in any advertising or marketing efforts, provided, however, that
          nothing contained herein shall preclude Seller from using such
          name in correspondence with or other actions taken in the
          ordinary course of business with respect to the obligors under
          the loans included in Seller's workout division or with respect
          to the Excluded Loans.

                    (c)  If any of the restrictions set forth in Section
          7.9(b) should, for any reason whatsoever, be declared invalid by
          a court of competent jurisdiction, the validity or enforcement of
          the remainder of such restrictions and covenants shall not
          thereby be adversely affected.  Seller, Parent and Purchaser
          agree that, if any provisions of this Section 7.9 should be
          adjudicated to be invalid or unenforceable, such provisions shall
          be deemed deleted herefrom with respect, and only with respect,
          to the operation of such provision in the particular jurisdiction
          in which such adjudication was made; provided, however, that to
          the extent any such provision may be made valid and enforceable
          in such jurisdiction by limitations on the scope of the
          activities, geographical area or time period covered, Seller,
          Parent and Purchaser agree that such provision instead shall be
          deemed limited to the extent, and only to the extent, necessary
          to make such provision enforceable to the fullest extent
          permissible under the laws and public policies applied in such
          jurisdiction.

                    7.10 INDEPENDENT THIRD PARTIES.  Seller will identify
          and use its reasonable best efforts to make available upon
          reasonable notice and during normal business hours, to Purchaser,
          at Purchaser's request and sole expense, any independent third
          parties retained by Seller to assist Seller in the preparation of
          any Loan Documents or the making or maintaining of any Loan
          Commitment.  In addition, Seller will instruct such parties to
          cooperate with Purchaser and make available to Purchaser any and
          all documents relating to the Loans and the Loan Commitments in
          such parties' possession and upon request of Purchaser will waive
          any applicable privilege provided by law that would prevent such
          third parties from cooperating with the Purchaser or making such
          documents available to the Purchaser.

                    7.11  PAYMENTS.  Any interest, commissions, fees and
          other payments received by Seller after the Closing Date in any
          capacity (except fees earned by Seller or its Affiliates in
          providing services to the Purchaser after the Closing Date),
          regardless of when accrued, with respect to any Loan or Loan
          Commitment included in the Acquired Assets shall as of the
          Closing Date be for the account of Purchaser.  Any such amounts
          received by Seller after the Closing Date shall be received by
          Seller in trust for the Purchaser and Seller will immediately pay
          such amounts to Purchaser upon receipt thereof.

                    7.12  LIMITATION ON DEALINGS WITH LOANS.  Without the
          Purchaser's prior written consent, Seller shall not renew, extend
          the maturity of, acquire a participation in, reacquire an
          interest in a participation sold with respect to, or alter any of
          the material terms of any Loan or Loan Commitment, other than in
          the ordinary course of business, consistent with Seller's
          standard loan servicing and operating procedures in effect as of
          the date hereof.

                    7.13  FURTHER ASSURANCES.  Without in any way limiting
          any representation, warranty or covenant of Seller contained
          herein, Seller and Purchaser shall jointly retain the services of
          legal counsel to prepare the financing statements, amendments,
          continuation statements, assignments, certificates and other
          documents with respect to Purchaser's security interest in the
          collateral relating to the Loans as may be necessary or requested
          by Purchaser to enable Purchaser to obtain the valid assignment
          of and to maintain the perfection of such security interest, each
          in form satisfactory to Purchaser.  Seller and Purchaser shall
          each be responsible for the payment of one-half of all fees,
          costs and expenses incurred in the performance of the preceding
          sentence.  Seller hereby authorizes and empowers Purchaser after
          the Closing to file any or all such financing statements,
          amendments, continuation statements, assignments, certificates
          and other documents pursuant to the Uniform Commercial Code and
          otherwise without its signature and hereby irrevocably appoints
          Purchaser as Seller's attorney-in-fact to execute, deliver and
          file any such financing statements, amendments, continuation
          statements, assignments, certificates and other documents in
          Seller's name and to perform all other acts necessary to perfect
          Seller's security interest in the Acquired Assets and to obtain
          the valid assignment of and to maintain the perfection of any
          security interest in the collateral securing the Loans. 

                    7.14 SMALL EQUIPMENT LEASING PORTFOLIO.  Prior to the
          Closing Date, Seller shall have caused one of its Affiliates to
          transfer the small equipment leasing portfolio described on
          Schedule 7.14 to Seller.  The Book Value of the assets in such
          small equipment leasing portfolio as of September 30 is set forth
          on Schedule 7.14.

                    7.15  ISG LOAN PORTFOLIO.  Prior to the Closing Date,
          Parent shall have transferred the ISG Portfolio of ISG described
          on Schedule 7.15 to Seller.  The Book Value of the assets in such
          ISG Portfolio as of September 30 is set forth on Schedule 7.15. 
          At the Closing, Parent shall provide for the benefit of Purchaser
          a guaranty (the "Guaranty") of collection as to the Loans
          included in the ISG Loan Portfolio set forth in the form of
          Exhibit B.  Purchaser agrees to service the Loans in the ISG
          Portfolio in the same manner it services the other Loans included
          in the Acquired Assets.

                    7.16 TRANSFER OF ADMINISTRATION.  Prior to the Closing
          Date Seller shall transfer to BFD that portion of its
          Administration Division that the parties agree pertains to the
          business of BFD.

          ARTICLE 8.  TAXES

                    8.1  LIABILITY FOR TAXES.  (a)  Liability of the
          Seller.  Except as set forth in Section 8.2 below, with respect
          to the Acquired Assets, Assumed Liabilities and Transferred
          Offices transferred at the Closing, the Seller shall be liable
          for and indemnify the Purchaser for all Taxes imposed on such
          Acquired Assets or any income therefrom (including all net income
          taxes imposed on any gain recognized by the Seller as a result of
          the sale of such Acquired Assets pursuant to this Agreement),
          such Assumed Liabilities or any payments in respect thereof, or
          the operation of such Transferred Offices (including employment
          taxes) for (i) any taxable year or period that ends on or before
          the Closing Date and (ii), with respect to any taxable year or
          period beginning before and ending after the Closing Date, the
          portion of such taxable year or period ending on and including
          the Closing Date.

                    (b)  Liability of the Purchaser.  Except as set forth
          in Section 8.2 below, with respect to the Acquired Assets,
          Assumed Liabilities and Transferred Offices transferred at the
          Closing, the Purchaser shall be liable for and indemnify the
          Seller for all Taxes imposed on such Acquired Assets or any
          income therefrom, such Assumed Liabilities or any payments in
          respect thereof, or the operation of such Transferred Offices for
          (i) any taxable year or period that begins after the Closing Date
          and (ii), with respect to any taxable year or period beginning
          before and ending after the Closing Date, the portion of such
          taxable year beginning after the Closing Date.

                    (c)  Proration of Taxes.  All Taxes for any portion of
          a taxable year or period that begins before and ends after the
          Closing Date shall be apportioned between the Seller and the
          Purchaser using an interim-closing-of-the- books method on the
          assumption that such taxable period ended on and included the
          Closing Date, except that (i) all standard deductions,
          exemptions, allowances, progressivity in rates and other similar
          items shall be apportioned based on a per diem basis and (ii)
          real, personal and intangible property Taxes shall be apportioned
          between the Seller and the Purchaser in accordance with the
          principles set forth in Section 164(d) of the Code.

                    (d)  Limitation on the Liability of the Purchaser.  The
          Seller and the Purchaser expressly acknowledge and agree that (i)
          the Purchaser is not assuming, expressly or by implication, any
          other Taxes of the Seller (and specifically is not assuming
          liability for any income or franchise taxes measured by the
          Seller's or any Affiliate of the Seller's net income)
          attributable to the conduct of the Seller's business or to its
          assets or liabilities and (ii) the Seller and Parent shall
          indemnify and hold the Purchaser harmless from and against any
          Taxes not described in subsection (b) above or Section 8.2 below.

                    8.2  SALES AND TRANSFER TAXES.  All excise, sales, use
          and transfer taxes that are payable or that arise as a result of
          the consummation of the purchase and sale contemplated by this
          Agreement (including, without limitation, New York State and City
          real property transfer taxes and New York State real property
          transfer gains tax) shall be borne equally by the Purchaser and
          Seller.  The Seller will prepare any Tax Returns that must be
          filed in connection with such taxes and will use its reasonable
          best effort to provide such returns to the Purchaser for the
          Purchaser's review at least 10 days before the date such returns
          are due.  The Purchaser and Seller shall jointly execute any tax
          return as required by applicable law.  The Seller and the
          Purchaser shall consult during the preparation of such returns
          and the Purchaser shall provide to the Seller, upon Seller's
          reasonable request, such information regarding the value of the
          property being transferred hereunder as is in the Purchaser's
          possession at the time of the request.  The Seller will pay the
          full amount of such taxes shown on such returns to the applicable
          Tax authorities on or before the date such taxes are due (the
          "Payment Date") and will indemnify the Purchaser for any interest
          or penalties resulting from any failure to pay such taxes when
          due.  The Purchaser will reimburse the Seller on the Payment Date
          in immediately available funds for one-half of the taxes paid by
          the Seller.

                    8.3  PARENT OF AMOUNTS DUE UNDER ARTICLE 8.  Any
          payment by the Seller to the Purchaser, or to the Seller from the
          Purchaser, under this Article 8 (other than payments required
          under Section 8.2 of this Agreement) to the extent due at the
          Closing may be offset against any payment due the other party at
          the Closing.  All subsequent payments under this Article 8 shall
          be made as soon as determinable and shall be made and bear
          interest from the date due to the date of payment at the average
          of the Federal Funds Rate or Rates in effect from time to time
          during such period.

                    8.4  REFUNDS OR CREDITS.  If any refunds or credits of
          Taxes of the Seller described in Section 2.3(g) of this Agreement
          (including any deferred tax assets) are received or utilized by
          the Purchaser, or any of its Affiliates, the Purchaser shall pay
          to the Seller the amount of such refund or credit within five (5)
          business days after the Purchaser, or any of its Affiliates, as
          the case may be, receives such refund or utilizes such credit. 

                    8.5  TAX RETURNS.  Except as provided in Section 8.2 or
          as otherwise agreed to by the parties, with respect to the
          Acquired Assets and Transferred Offices transferred at the
          Closing, (a) the Seller shall file or cause to be filed when due
          all Tax Returns that are required to be filed with respect to
          such Acquired Assets or such Transferred Offices for taxable
          years or periods ending on or before the Closing Date and shall
          pay any Taxes due in respect of such Tax Returns, and (b) the
          Purchaser shall file or cause to be filed when due all Tax
          Returns with respect to such Acquired Assets or such Transferred
          Offices for taxable years or periods ending after the Closing
          Date (excluding any Tax Returns that must be filed by the Seller
          with respect to net income or franchise taxes of the Seller) and
          shall remit any Taxes due in respect of such Tax Returns.  If the
          Seller or the Purchaser shall be liable hereunder for any portion
          of the Taxes shown due on any Tax Return prepared by the other
          party, the party preparing the Tax Return shall deliver a copy to
          the party so liable for its review and approval not less than 30
          days prior to the date on which such Tax Return is due to be
          filed (taking into account any applicable extensions).  The
          Seller or the Purchaser, as the case may be, shall pay in
          immediately available funds the Taxes for which it is liable
          pursuant to Section 8.1(a) or 8.1(b), respectively, but which are
          payable with Tax Returns to be filed by the other party pursuant
          to the previous sentence on the due date for the payment of such
          Taxes.  If the party not preparing the Returns objects to any
          items reflected on such Tax Returns, the Purchaser and the Seller
          shall attempt to resolve the disagreement.  If the Purchaser and
          the Seller cannot resolve the disagreement, the dispute shall be
          referred to a nationally recognized independent accounting firm
          mutually acceptable to the Seller and the Purchaser whose
          determination shall be binding upon the parties.  The fees and
          expenses of such accounting firm shall be borne equally by the
          Purchaser and the Seller.

                    8.6  ASSISTANCE AND COOPERATION.  (a)  The Seller and
          the Purchaser shall:

                    (i)  assist (and cause their respective Affiliates to
               assist) the other party in preparing any Tax Returns which
               such other party is responsible for preparing and filing in
               accordance with this Article 8;

                    (ii)  cooperate fully in preparing for any audits of,
               or disputes with taxing authorities regarding, any Tax
               Returns with respect to the Acquired Assets or income
               therefrom or the Assumed Liabilities or payments in respect
               thereof;

                    (iii)  make available to the other and to any taxing
               authority as reasonably requested all relevant information,
               records, and documents relating to Taxes with respect to the
               Acquired Assets or income therefrom or the Assumed
               Liabilities or payments in respect thereof;

                    (iv)  provide timely notice to the other in writing of
               any pending or proposed audits or assessments with respect
               to Taxes for which the other may have a liability under this
               Article 8; and

                    (v)  furnish the other with copies of all relevant
               correspondence received from any taxing authority in
               connection with any such audit or assessment, including,
               without limitation, any information document requests
               received with respect to any such audit.

                    (b)  The party requesting assistance or cooperation
          under paragraph (a) above shall bear the other party's reasonable
          out-of-pocket expenses in complying with such request to the
          extent that those expenses are attributable to fees and other
          costs of unaffiliated third-party service providers which
          third-party service providers may be used if the party whose
          assistance or cooperation is requested reasonably determines that
          it would be burdensome to comply with such request without the
          use of such third-party service providers; provided, that
          notwithstanding the foregoing, if only one party is responsible
          for the payment of a Tax, then such party shall be responsible
          for the payment of any out-of-pocket expenses for fees and costs
          of third-party servicers.

                    8.7  DOCUMENT RETENTION.  The Purchaser and Seller each
          agree to retain in accordance with its records retention policies
          applicable to its own documents of a similar nature any Books and
          Records that could be necessary or useful in connection with the
          Seller's preparation or the Purchaser's preparation, as the case
          may be, of any Tax Return, form or report or any audit,
          examination, other review or proceeding by any Tax authority;
          provided, however, that, for purposes of applying its records
          retention policies, the Purchaser shall treat the Seller's
          taxable year ending December 31, 1988, and all subsequent taxable
          years as open years until such time as the Seller notifies the
          Purchaser in accordance with Section 8.9 that all audits for any
          such year have been finally settled or the applicable statute of
          limitations has passed.

                    8.8  ALLOCATION OF PURCHASE PRICE.  The parties to this
          Agreement agree to allocate the Purchase Price in accordance with
          the rules under Section 1060 of the Code, and the Treasury
          Regulations promulgated thereunder.  Such allocation shall be
          based on the fair market value of the Acquired Assets to be sold. 
          The Purchaser agrees to provide the Seller with a schedule
          allocating the Purchase Price and with a properly completed
          Internal Revenue Service Form 8594 within 60 days of the
          determination of the Purchase Price but in no event later than 90
          days before the due date, including extensions, for the
          consolidated federal income tax return that includes the Seller
          for the taxable year including the Closing Date.  If the Seller
          objects to any items reflected on such schedule, the Seller shall
          notify the Purchaser in writing of such objection and describe in
          reasonable detail its reasons for objecting, in which case the
          Purchaser and the Seller shall attempt to resolve the
          disagreement.  If the Purchaser and the Seller cannot resolve the
          disagreement, the allocation shall be determined by a nationally
          recognized independent appraiser selected by the Purchaser and
          reasonably acceptable to the Seller.  The fees and expenses of
          such appraiser shall be borne equally by the Seller and
          Purchaser.  The Seller and the Purchaser agree to act in
          accordance with the computations and allocations contained in the
          schedule as finally agreed or determined by such independent
          appraiser (including any modifications thereto reflecting any
          post-closing adjustments) in any relevant Tax Returns or similar
          filings (including any forms or reports required to be filed
          pursuant to Section 1060 of the Code or the Treasury Regulations
          promulgated thereunder ("1060 Forms")) and to file such 1060
          Forms in the manner required by applicable law.  The Purchaser
          and the Seller will promptly notify each other in accordance with
          Section 8.9 of any challenge by any Tax authority to such
          computations or allocations.  The Seller agrees that a "Big Six"
          accounting firm (other than the accounting firm regularly used by
          the Purchaser or the Seller) is a nationally recognized
          independent appraiser that is reasonably acceptable to the Seller
          for purposes of making the computations and allocations described
          above.

                    8.9  NOTICES, ETC.  Without limiting the provisions of
          Section 8.6, the notification and contest provisions of Article
          11 shall apply to claims for indemnification under this Article
          8; provided, however, that notice of claim for indemnification
          pursuant to this Article 8 shall be given prior to the expiration
          of the applicable statute of limitations (as extended) for the
          assertion of the claims for Taxes by the relevant Tax authority;
          and further provided that a copy of any notices required under
          this Article 8 shall be provided to the following parties:

                    (A)  if to the Purchaser, to:

                    Shawmut National Corporation
                    777 Main Street
                    Hartford, Connecticut 06115

                    Attn:  Susan E. Lester
                           Chief Financial Officer

                    (B)  if to the Seller, to:

                    Barclays Group Inc. (U.S.A.)
                    222 Broadway
                    New York, N.Y. 10038

                    Attn:  Mr. Rick Steineger
                           Head of Group Tax

                    8.10 TAX INDEMNITIES.  Except as provided in Section
          8.9 of this Agreement, both the Seller's and the Purchaser's
          obligations to indemnify the other party for Taxes shall be
          governed by this Article 8 and such obligations shall survive
          Closing until the expiration of the relevant statute of
          limitations period has expired for the assertion of claims for
          any such Taxes by the relevant Tax authority.

          ARTICLE 9.  CONDITIONS TO THE CLOSING

                    9.1  CONDITIONS OF OBLIGATION OF EACH PARTY.  The
          respective obligations of each party to effect the Closing are
          subject to the fulfillment at or prior to the Closing Date of the
          condition precedent that (a) no injunction, order, decree or
          ruling issued by a court of competent jurisdiction or by a
          government, regulatory or administrative agency or commission nor
          any statute, rule, regulation or executive order promulgated or
          enacted by any governmental authority shall be in effect
          enjoining, making illegal or otherwise materially impairing or
          restricting the consummation of the transactions contemplated by
          this Agreement and (b) the parties thereto shall have executed
          and delivered the Servicing Agreement and any other agreement
          contemplated to be entered into in connection therewith and
          Parent shall have executed the Guaranty.

                    9.2  ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF
          PURCHASER.  The obligations of the Purchaser are also subject to
          fulfillment (or waiver by the Purchaser) at or prior to the
          Closing Date of each of the following conditions precedent:

                    (a)  Representations and Warranties True.  The
               representations and warranties of the Seller contained in
               Article 5 of this Agreement shall be true and correct in all
               material respects as of the Closing Date as though made at
               and as of the Closing Date (except to the extent that they
               expressly refer to an earlier time, in which case they must
               be true as of such earlier date), except for (i) changes
               resulting from (A) actions expressly consented to in writing
               by the Purchaser or (B) changed circumstances occurring as a
               result of operations of the Seller in the ordinary course of
               business do not adversely affect the Acquired Assets (taken
               as a whole) or the BFD Acquired Business or (ii)
               inaccuracies in the representation and warranty contained in
               Section 5.15 hereof which could not reasonably be expected
               to have a Material Adverse Effect.

                    (b)  Performance of Covenants.  The Seller shall have
               duly performed and complied in all material respects with
               each covenant, agreement and condition required by this
               Agreement to be performed or complied with by them prior to
               or on the Closing Date.

                    (c)  Officer's Certificate.  The Purchaser shall have
               received from a duly authorized senior executive officer of
               the Seller a certificate as to the matters described in
               Sections 9.2(a) and 9.2(b).

                    (d)  Regulatory Approvals.  The regulatory approvals
               described in Schedule 6.3 shall have been obtained and be in
               full force and effect and all required waiting periods and
               any extensions thereof shall have expired or been
               terminated.

                    (e)  No Restraint or Litigation.  The waiting period
               under the HSR Act shall have expired or terminated, and no
               action, suit, investigation or proceeding by any
               governmental agency or authority shall have been instituted
               or threatened to restrain or prohibit or otherwise challenge
               the legality or validity of the transactions contemplated
               hereby.

                    (f)  Legal Opinion.  The receipt by Purchaser of legal
               opinions as to the (i) due incorporation, valid existence
               and good standing of Seller and Parent, (ii) the corporate
               power and authority of Seller and Parent to make, deliver
               and perform its obligations under the Agreement, the
               Guaranty, the Servicing Agreement and the agreements entered
               into thereunder, (iii) the taking of all necessary corporate
               action by the Seller and Parent to execute, deliver and
               perform its obligations under the Agreement, the Guaranty,
               the Servicing Agreement, and the agreements entered into
               thereunder, (iv) the execution and delivery of the
               Agreement, the Guaranty, the Servicing Agreement, and the
               agreements entered into thereunder by the Seller and Parent
               and that each of the Agreements, the Guaranty, the Servicing
               Agreement, and the agreements entered into thereunder
               constitutes the legally binding and valid obligation of each
               of the Seller and Parent enforceable in accordance with its
               terms (subject to exceptions for bankruptcy and necessary
               exceptions arising from the indemnification provisions) and
               (v) the execution, delivery and performance by the Seller
               and Parent of this Agreement, the Guaranty, the Servicing
               Agreement and the agreements entered into thereunder will
               not violate their respective certificates of incorporation
               or by-laws, the law of the jurisdiction of incorporation or
               similar law or any provision of any other law or statute
               with all necessary exceptions.

                    (g)  Allowance for Credit Losses Reserve.  The
               Allowance for Credit Losses Reserve on the Final Asset and
               Liability Schedule shall have been established in accordance
               with BFD Accounting Principles.

                    (h)  Material Adverse Change.  Subsequent to September
               30, 1994, no event, condition, development or circumstance
               shall have occurred which, individually or in the aggregate,
               has had or could reasonably be expected to have a Material
               Adverse Effect.

                    9.3  ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE
          SELLER.  The obligations of the Seller are also subject to
          fulfillment (or waiver by the Seller) at or prior to the Closing
          Date of each of the following conditions precedent:

                    (a)  Representations and Warranties True.  The
               representations and warranties of the Purchaser contained in
               Article 6 of this Agreement shall be true and correct as of
               the Closing Date (other than any inaccuracies which would
               not have a Material Adverse Effect) as though made at and as
               of the Closing Date, except to the extent they expressly
               refer to an earlier time.

                    (b)  Performance of Covenants.  The Purchaser shall
               have duly performed and complied in all material respects
               with each covenant, agreement and condition required by this
               Agreement to be performed or complied with by each of them
               prior to or on the Closing Date.

                    (c)  No Restraint or Litigation.  The waiting period
               under the HSR Act shall have expired or terminated, and no
               action, suit, investigation or proceeding by any
               governmental agency or authority shall have been instituted
               or threatened to restrain or prohibit or otherwise challenge
               the legality or validity of the transactions contemplated
               hereby.

                    (d)  Officer's Certificate.  The Seller shall have
               received from a duly authorized senior officer of the
               Purchaser a certificate as to the matters described in
               Sections 9.3(a) and 9.3(b).

                    (e)  Legal Opinion.  The receipt by Seller of legal
               opinions as to the (i) due organization, valid existence and
               good standing of Purchaser, (ii) the corporate power and
               authority of Purchaser to make, deliver and perform its
               obligations under the Agreement, the Servicing Agreement and
               the agreements entered into thereunder, (iii) the taking of
               all necessary corporate action by the Purchaser to execute,
               deliver and perform its obligations under the Agreement, the
               Servicing Agreement and the agreements entered into
               thereunder, (iv) the execution and delivery of the Agreement
               by the Purchaser and that the Agreement, the Servicing
               Agreement and the agreements entered into thereunder
               constitute the legally binding and valid obligation of the
               Purchaser enforceable in accordance with its terms (subject
               to exceptions for bankruptcy and necessary exceptions
               arising from the indemnification provisions) and (v) the
               execution, delivery and performance by the Purchaser will
               not violate its articles of association or by-laws, the    
               federal banking laws or any provision of any other law or
               statute, with all necessary exceptions. 

          ARTICLE 10.  TERMINATION, AMENDMENT AND WAIVER

                    10.1 TERMINATION.  This Agreement may be terminated at
          any time prior to the Closing:

                    (a)  By written mutual agreement of the Seller and the
               Purchaser;

                    (b)  By the Purchaser or the Seller upon notice given
               to the other party in the event that the other party shall
               have materially breached any of its representations and
               warranties or agreements in this Agreement (including
               without limitation its agreement to consummate the Closing
               contemplated hereby upon the satisfaction of the conditions
               to its obligations contained herein) which breach is not
               cured within thirty days after notice to cure such breach is
               given by the non-breaching party; provided that the party
               seeking to terminate the Agreement shall not have materially
               breached any of its representations or warranties, covenants
               or agreements hereunder;

                    (c)  By the Purchaser or the Seller upon notice given
               to the other if the Closing shall not have taken place for
               any reason by March 31, 1995, or it is manifestly apparent
               that the Closing will not take place because of the
               inability to satisfy the condition described in Section
               9.2(d) on or before March 31, 1995, provided, that, in
               either case, the failure of the Closing to occur on or
               before such date (or the inability to satisfy such
               condition) is not the result of the breach of the covenants,
               agreements, representations or warranties hereunder of the
               party seeking such termination; or

                    (d)  By the Purchaser or the Seller upon written notice
               to the other party if any court or governmental authority of
               competent jurisdiction shall have issued a final permanent
               order, enjoining or otherwise prohibiting the transactions
               contemplated by this Agreement, and the time for appeal or
               petition for reconsideration of such order shall have
               expired.

                    10.2 EFFECT OF TERMINATION.  In the event of the
          termination of this Agreement as provided in Section 10.1, this
          Agreement shall forthwith become wholly void and of no further
          force and effect and, other than in the event of a termination
          pursuant to Section 10.1(b) or (c) at a time when there exists a
          wilful breach of any of the covenants, there shall be no
          liability on the part of the Purchaser or the Seller or their
          respective officers or directors (except as set forth in this
          Section 10.2 and Section 7.4).  In the event of the termination
          by any party of this Agreement pursuant to Section 10.1(b) or (c)
          at a time when there exists a willful breach of any of the
          covenants, agreements, representations or warranties set forth
          herein by the other party hereto, then the terminating party
          shall be entitled to institute an action for breach of contract
          and shall be indemnified by the other party for any or all
          damages, costs and expenses sustained or incurred as a result of
          such breach.  The obligations of the parties to this Agreement
          under this Section 10.2 and Section 7.4, as well as under the
          Confidentiality Agreement, shall survive any such termination.

          ARTICLE 11.  GENERAL PROVISIONS

                    11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
          COVENANTS.  The representations and warranties set forth in
          Articles 5 and 6 of this Agreement shall survive until the date
          which is 15 months after the Closing Date, and all other
          representations and warranties of the parties contained in this
          Agreement or in any certificate delivered pursuant hereto shall
          not survive the Closing; provided that the representation and
          warranty contained in Section 5.4(a) shall not expire and shall
          last indefinitely.  No action or claim pursuant to Section 11.2
          hereof resulting from breaches of the representations and
          warranties of any of the parties hereto or any claim for
          indemnity in respect thereof shall be brought or made unless,
          prior to the expiration of the survival period for the applicable
          representation or warranty as set forth above, the action or
          claim shall have been the subject of a good faith written notice
          from either party hereto to the other party which notice
          specifies in reasonable detail the nature of the claim (it being
          understood that such written notice may be delivered prior to the
          incurrence or suffering of a Loss by an indemnified party if
          facts are described in sufficient detail in such notice as to
          warrant the delivery of a good faith notice in which case the
          party giving such notice shall be entitled to indemnification in
          accordance with the provisions hereof notwithstanding that such
          Loss may occur after the expiration of the applicable survival
          period).  Any covenant contained herein which by its terms is to
          be performed in whole or in part after the Closing Date shall
          survive the Closing Date.

                    11.2 INDEMNIFICATION.  (a)  The Seller and Parent agree
          to indemnify and hold the Purchaser harmless against and in
          respect of any Loss incurred or sustained by the Purchaser as a
          result of (i) any breach by the Seller or Parent of their
          respective representations or warranties contained herein (it
          being agreed that solely for purposes of establishing whether any
          matter is indemnifiable pursuant to this clause (i), the accuracy
          of the representations and warranties made by Seller and Parent
          shall be determined without giving effect to the qualifications
          to such representations and warranties concerning "Material
          Adverse Effect", (ii) any breach by the Seller or Parent of its
          covenants contained herein, (iii) the Excluded Assets (other than
          Excluded Loans and related Loan Commitments) or Excluded
          Liabilities, (iv) any claim made by any employee or former
          employee of Seller, BFD or their respective Affiliates for
          severance pay other than a claim incurred on or after the Closing
          Date, (v) any claim made pursuant to WARN relating to events
          occurring prior to the Closing Date, (vi) benefits or claims
          incurred prior to the Closing Date by employees or former
          employees of Seller, BFD or their respective Affiliates (other
          than liabilities for accrued benefits specifically assumed by
          Purchaser in Section 7.7), and (vii) liabilities arising under
          Title IV of ERISA, Section 412 or 4980B of the Code or Section
          302 of ERISA with respect to any employee benefit plans, programs
          or arrangements maintained, sponsored, contributed to or required
          to be contributed to by Seller, BFD or any of their respective
          Affiliates or any trade or business, whether or not incorporated,
          that together with Seller, BFD or any of their respective
          Affiliates would be deemed a "single employer" within the meaning
          of Section 4001(b) of ERISA (other than liabilities for accrued
          benefits specifically assumed by Purchaser in Section 7.7). 
          Notwithstanding the foregoing, Losses in any year attributable to
          out-of-pocket attorney's fees or litigation expenses which are
          not in excess of $250,000 shall be borne by Purchaser and shall
          not be indemnifiable.  The parties acknowledge that with respect
          to any litigation not set forth on Schedule 5.12 (whether arising
          prior to, on or after the Closing Date) which arises out of any
          act or omission of Seller or any of its Affiliates on or prior to
          the Closing Date, all Losses incurred or sustained by Purchaser
          in connection with such litigation (other than litigation
          expenses related to the portion of such litigation brought for
          purposes of loan recovery efforts) shall be considered to be
          outside of the ordinary course of business for purposes of
          Section 5.15 hereof.  Accordingly, subject to the terms of the
          second preceding sentence and the Basket, such Losses shall be
          indemnifiable under this Article 11 to the extent that Purchaser
          shall have given a notice of claim for indemnification meeting
          the requirements of Section 11.1 hereof with respect to such
          litigation or with respect to the facts, events or circumstances
          giving rise thereto.  In the case of any indemnification claim
          involving a credit loss where a representation, warranty or
          covenant of the Seller is alleged to have been breached, it is
          understood that the Purchaser shall not be entitled to
          indemnification under this Article 11 for any damage, loss,
          liability or expense arising out of or based upon a breach or
          event referred to in clause (i) of the first sentence of this
          paragraph relating to a Loan or Loan Commitment included in the
          Acquired Assets or to the related Loan Document, which Loan is
          not collected in full, if and to the extent the Seller
          demonstrates that such damage, loss, liability or expense would
          have occurred, notwithstanding such breach, by reason of the
          Debtor being unable or unwilling to pay and discharge such Loan
          in full and the collateral securing such Loan otherwise having
          inadequate value.  The Purchaser agrees that it will take
          commercially reasonable actions consistent with its general
          policies and practices to mitigate Losses (including, without
          limitation, taking commercially reasonable steps to cure any
          documentation or security interest defect upon the discovery
          thereof), and in the event any such Loss is sustained and an
          indemnification claim is made against the Seller hereunder, the
          Purchaser will provide the Seller with such information in the
          credit and other files of the Purchaser relating to the relevant
          loan and the administration thereof as may be reasonably
          requested by the Seller for purposes of determining whether such
          Loss would have otherwise occurred.  The costs incurred by
          Purchaser pursuant to the previous sentence shall (subject to the
          Basket in the case of mitigation of Losses resulting from any
          breach of the representations and warranties of Seller and Parent
          contained herein) be indemnifiable by Seller pursuant to this
          Article 11.  Notwithstanding the foregoing, in no event shall the
          Purchaser be required to initiate any litigation against any
          third party in connection with its mitigation obligation unless
          the Seller requests the Purchaser do so and reimburse the
          Purchaser for all expenses incurred by the Purchaser in
          connection with such litigation as such expenses are incurred. 
          Regardless of any breach of a representation or warranty, the
          Seller shall not be responsible for any loss or portion thereof
          to the extent it results from the act or omission of the
          Purchaser.  In no event shall indemnification be provided in
          respect of any loss, liability or damages arising from or
          relating to any matter described in Schedule 5.12.

                    (b)  The Purchaser agrees to indemnify and hold the
          Seller harmless against and in respect of any Loss incurred or
          sustained by the Seller as a result of (i) any Assumed Liability,
          (ii) any breach by the Purchaser of its representations or
          warranties contained herein, (iii) any breach by the Purchaser of
          its covenants contained herein and (iv) acts or omissions of the
          Seller taken at the direction of the Purchaser whether occurring
          before or after the Closing Date.

                    (c)  No indemnifying party shall be liable for.any
          loss, liability or damage based on the indemnification provisions
          of clause (i) of subsection (a) or clause (ii) of subsection (b)
          above except to the extent that the aggregate of such losses,
          liabilities or damages exceeds $8 million, in which event the
          indemnified party shall be entitled to recover only those losses,
          liabilities or damages in excess of $8 million (the "Basket"),
          provided, however, that the $8 million limitation contained in
          this Section 11.2(c) shall not apply to, and Purchaser's
          indemnified parties shall be entitled to dollar-for-dollar
          recovery with respect to, Losses resulting from breaches of the
          representations contained in Section 5.4(a) hereof.  The
          indemnifying party shall not be liable for any breach of
          representation or warranty hereunder if the loss, liability or
          damage therefrom, in any individual case, amounts to $10,000 or
          less, and such losses, liabilities or damages shall not be
          included in calculating the $8 million threshold established in
          the immediately preceding sentence, provided, however, that in
          the case of any Loss exceeding $10,000, subject to the $8 million
          limitation described above, the entire Loss, and not solely the
          portion of such Loss in excess of $10,000, shall be indemnifiable
          by Seller and provided further, however, that where a number of
          Losses are each individually less than $10,000, but the aggregate
          of such Losses exceeds $10,000, and all such Losses are based
          upon, arise from or are attributable to the same or a series of
          closely related matters, then subject to the $8 million
          limitation, such Losses shall be indemnifiable by Seller pursuant
          to Section 11(a)(i).

                    (d)  Promptly after receipt by an indemnified party
          under this Section 11.2 of notice of any claim or the
          commencement of any action, the indemnified party shall, if a
          claim in respect thereof is to be made against the indemnifying
          party under this Section 11.2, notify the indemnifying party in
          writing of the claim or the commencement of that action, provided
          that the failure to notify the indemnifying party shall not
          relieve it from any liability which it may have to the
          indemnified party under this Section 11.2 unless and only to the
          extent such failure is materially prejudicial to the indemnifying
          party.  If any such claim shall be brought in respect of which
          any indemnification claim may be made, the indemnifying party
          shall be entitled to participate therein and to assume the
          defense thereof (or the defense of the portion thereof for which
          the indemnifying party is potentially responsible) with counsel
          reasonably satisfactory to the indemnified party, and to settle
          and compromise any such claim or action (or such portion
          thereof), such settlement or compromise shall be effected only
          with the consent of the indemnified party, which consent shall
          not be unreasonably withheld; provided, that the indemnified
          party shall reimburse the indemnifying party for all costs and
          expenses incurred by the indemnifying party in connection with
          such defense to the extent that such costs and expenses do not
          exceed the remaining availability, if any, under the Basket in
          the case of indemnification claims resulting from any breach of
          representations and warranties of Seller and Parent contained
          herein; and provided further, however, that if the indemnified
          party has elected to be represented by separate counsel at its
          own expense (or, pursuant to the proviso to the penultimate
          sentence of this paragraph, at the expense of the indemnifying
          party), such settlement or compromise shall be effected only with
          the consent of the indemnified and indemnifying parties, which
          consent shall not be unreasonably withheld.  If the indemnifying
          party elects not to assume the defense in connection with any
          such claim or portion thereof, the indemnified party may not
          settle or compromise any such claim or portion thereof without
          the consent of the indemnifying party, which consent shall not be
          unreasonably withheld.  After notice from the indemnifying party
          to the indemnified party of its election to assume the defense of
          such claim or action or portion thereof, the indemnifying party
          shall not be liable to the indemnified party under this Section
          11.2 for any legal or other expenses subsequently incurred by the
          indemnified party in connection with the defense thereof other
          than reasonable costs of investigation, provided, however, that
          the indemnified party shall have the right to employ counsel to
          represent it if, in the indemnified party's reasonable judgment,
          it is advisable, because of a reasonably apparent conflict of
          interest between the indemnifying party and the indemnified party
          or because there are specific defenses available to the
          indemnified party which are different from or additional to those
          available to the indemnifying party and which could be materially
          adverse to the indemnifying party, for the indemnified party to
          be represented by separate counsel, which separate counsel shall
          have the right to assume and direct the indemnified party's
          defense and enter into settlements or compromises with the
          consent of the indemnifying party, and in that event the
          reasonable fees and expenses of one such separate counsel shall
          (to the extent no portion of the Basket remains available in the
          case of indemnification claims resulting from any breach of
          representations and warranties of Seller and Parent contained
          herein) be paid by the indemnifying party.  In addition, the
          parties agree to render to each other such assistance as may
          reasonably be requested in order to insure the proper and
          adequate defense of any such claim or proceeding.  The parties
          hereto agree that the procedures set forth in this Section
          11.2(d) shall not apply to claims for indemnification between
          such parties. 

                    (e)  Absent claims based on fraud or bad faith, the
          indemnity provided in this Section 11.2 shall be the sole and
          exclusive remedy of the indemnified party against the
          indemnifying party for any matter arising in connection with this
          Agreement.  Except as may otherwise be required by law, any
          indemnity payments pursuant to this Agreement shall constitute
          and shall be reported by the parties as adjustments to the
          purchase price hereunder.

                    11.3 SCHEDULES.  Disclosures included in any schedule
          to this Agreement shall be considered to be made for purposes of
          all schedules.  Inclusion of any matter in any schedule to this
          Agreement does not imply that such matter would, under the
          provisions of this Agreement, have to be included in such
          schedule.

                    11.4 NOTICES.  All notices and other communications
          hereunder shall be in writing and shall be deemed given if
          delivered personally or transmitted by telex or telegram or
          mailed by registered or certified mail (returned receipt
          requested) to the parties at the following addresses (or at such
          other address for a party as shall be specified by like notice):

                    (A)  if to the Purchaser or Shawmut, to:

                    Shawmut National Corporation
                    Executive Offices
                    One Federal Street
                    Boston, Massachusetts 02211

                    Attention:  J. Michael Shepherd

                    with a copy to:

                    Skadden, Arps, Slate, Meagher & Flom
                    919 Third Avenue
                    New York, N.Y. 10022

                    Attention:  William S. Rubenstein

                    (B)  if to Seller or Parent to:

                    Barclays Group Inc. (USA)
                    222 Broadway
                    New York, N.Y. 10038

                    Attention:  John Freeman
                    Telecopy:   212-412-3862

                    with a copy to:

                    Simpson Thacher & Bartlett
                    425 Lexington Avenue
                    New York, N.Y. 10017-3954

                    Attention:  Wilson S. Neely

                    11.5 INTERPRETATION.  The headings contained in this
          Agreement are for reference purposes only and shall not affect in
          any way the meaning or interpretation of this Agreement.

                    11.6 AMENDMENT.  This Agreement and the Exhibits and
          Schedules hereto may be amended by the parties hereto, but may
          not be amended except by an instrument or instruments in writing
          signed and delivered on behalf of each of the parties hereto.

                    11.7 EXTENSION; WAIVER.  At any time prior to the
          Closing Date, any party hereto which is entitled to the benefits
          hereof may (a) extend the time for the performance of any of the
          obligations or other acts of the other party hereto, (b) waive
          any inaccuracy in the representations and warranties of the other
          party hereto contained herein or in any Schedule hereto or in any
          document delivered pursuant hereto, and (c) waive compliance with
          any of the agreements of the other party hereto or conditions
          contained herein.  Any agreement on the part of a party hereto to
          any such extension or waiver shall be valid if set forth in an
          instrument in writing signed and delivered on behalf of such
          party.

                    11.8 ENTIRE AGREEMENT.  This Agreement (including the
          Exhibits, Annexes, Schedules, documents and instruments referred
          to herein) and the Confidentiality Agreement constitute the
          entire agreement and supersede all other prior agreements and
          understandings, both written and oral, among the parties, or any
          of them, with respect to the subject matter hereof.

                    11.9 THIRD PARTY BENEFICIARIES.  This Agreement is not
          intended to confer upon any other person any rights or remedies
          hereunder.

                    11.10     ASSIGNMENT.  This Agreement shall not be
          assigned, and any attempted assignment shall be void; provided,
          however, that Purchaser may assign its right to purchase any
          Acquired Asset and/or to assume any Assumed Liability, together
          with Purchaser's rights under this Agreement with respect
          thereto, to any of its Affiliates only if such Affiliate of the
          Purchaser and the Purchaser agree to be bound jointly and
          severally hereunder and such Affiliate executes a counterpart of
          this Agreement.  Subject to the preceding sentence, this
          Agreement will be binding upon, inure to the benefit of and be
          enforceable by the parties and their respective successors and
          assigns.

                    11.11     PUBLICITY NOTICE.  Except (i) as required or
          expressly permitted by this Agreement, (ii) as may be necessary
          in order to give the notices to obtain the prior regulatory
          approval described in Schedule 6.3, (iii) as necessary to consult
          with attorneys, accountants, employees, or other advisors
          retained in connection with the transactions contemplated hereby,
          (iv) as required by court order or otherwise mandated by law or
          the rules of the New York Stock Exchange, or by contract in which
          the Seller or the Purchaser is a party, or (v) in connection with
          disclosure documents prepared by the Seller, the Purchaser or a
          subsidiary or parent of either, neither party shall issue any
          news release or other public notice or communication or otherwise
          make any disclosure to third parties concerning this Agreement or
          the transactions contemplated hereby without the prior consent of
          the other party, which consent will not be unreasonably withheld. 
          Even in cases where such prior consent is not required each party
          will, to the extent practicable under the circumstances, give
          prior notice to the other of the contents of such releases in
          order to provide a reasonable opportunity to the other party to
          prepare a corresponding or other similar release. 
          Notwithstanding the foregoing, if the parties hereto issue a news
          release after the execution of this Agreement announcing the
          proposed sale it must specifically state that such sale is
          subject to prior regulatory approval.

                    11.12     GOVERNING LAW.  This Agreement shall be
          governed in all respects, including validity, interpretation and
          effect, by the laws of the State of New York.

                    11.13     COUNTERPARTS.  This Agreement may be executed
          in two or more counterparts, each of which shall be deemed an
          original, but which together shall constitute a single agreement.

                    11.14     CONSENT TO JURISDICTION; SERVICE OF PROCESS. 
          (a)  The parties hereto hereby exclusively and irrevocably submit
          to the jurisdiction of the federal and state courts of New York
          over any action arising out of or relating to this Agreement, the
          Servicing Agreement and any of the agreements entered into in
          connection herewith and therewith and Parent, Seller, Shawmut and
          Purchaser hereby irrevocably agree that all claims in respect of
          such suit, action or proceeding shall be heard and determined in
          such courts.  The parties hereby irrevocably waive, to the
          fullest extent permitted by applicable law, any objection which
          they may now or thereafter have to the laying of venue of any
          such suit, action or proceeding brought in such court or any
          defense of inconvenient forum for the maintenance of such suit,
          action or proceeding.  Each of the parties hereto agrees that a
          judgment in any such action or proceeding may be enforced in
          other jurisdictions by suit on the judgment or in any manner
          provided by law.

                    (b)  Each of the parties hereto hereby consents to
          process being served by any party to this Agreement in any suit,
          action or proceeding of the nature specified in subsection (a)
          above by the mailing of a copy thereof in accordance with the
          provisions of Section 11.4 of this Agreement.

                    11.15     WAIVER OF JURY TRIAL.  The parties to the
          Agreement hereby irrevocably and unconditionally waive trial by
          jury in any legal action or proceeding relating to the Agreement,
          the Servicing Agreement and the agreements entered into in
          connection herewith and therewith and any amendment, waiver,
          consent or other document that amends, waives, supplements or
          otherwise modifies the Agreement, the Servicing Agreement or any
          of the agreements entered into in connection herewith and
          therewith.

                    11.16     CONFIDENTIALITY AGREEMENT.  Parties agree
          that on the Closing Date, the provisions of the Confidentiality
          Agreement shall terminate and be of no further force and effect,
          except to the extent that Shawmut or Purchaser has received
          confidential information of Seller unrelated to the BFD Acquired
          Business, the Acquired Assets or the Assumed Liabilities. 

                    IN WITNESS WHEREOF, the Seller, Parent, Shawmut and
          Purchaser have caused this Agreement to be executed on their
          behalf by their respective officers hereunto duly authorized all
          as of the date first written above.

                                   BARCLAYS BUSINESS CREDIT INC.

                                   By /s/ Richard Webb                

                                   BARCLAYS BANK PLC

                                   By /s/ Richard Webb                

                                   SHAWMUT NATIONAL CORPORATION

                                   By /s/ J. Michael Shepherd         

                                   SHAWMUT BANK CONNECTICUT, N.A.

                                   By /s/ Susan E. Lester
[{"type": "8-K", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 408397}]
[{"company-data": {"conformed-name": "SHAWMUT NATIONAL CORP", "cik": "0000823393", "assigned-sic": "6021", "irs-number": "061212629", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-10102", "film-number": "95500638"}, "business-address": {"street1": "777 MAIN ST", "city": "HARTFORD", "state": "CT", "zip": "06115", "phone": "2037282000"}, "mail-address": {"street1": "777 MAIN STREET-MSN 217", "city": "HARTFORD", "state": "CT", "zip": "06115"}}, {"company-data": {"conformed-name": "SHAWMUT NATIONAL CORP", "cik": "0000823393", "assigned-sic": "6021", "irs-number": "061212629", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-10102", "film-number": "95500638"}, "business-address": {"street1": "777 MAIN ST", "city": "HARTFORD", "state": "CT", "zip": "06115", "phone": "2037282000"}, "mail-address": {"street1": "777 MAIN STREET-MSN 217", "city": "HARTFORD", "state": "CT", "zip": "06115"}}]
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):  January 6, 1995

                           SHAWMUT NATIONAL CORPORATION         
                (Exact Name of Registrant as Specified in Charter)

        Delaware                  1-10102                   06-1212629
     (State or Other          (Commission File            (IRS Employer
     Jurisdiction of            Number)                    Identification No.)
     Incorporation)

             777 Main Street, Hartford, Connecticut               06115
             One Federal Street, Boston, Massachusetts            02211
             (Address of principal executive offices)          (Zip Codes)

                                                                (203) 986-2000
          Registrant's telephone numbers, including area codes: (617) 292-2000

                               Not Applicable                         
     (Former name or former address, if changed since last report)

          ITEM 5.  OTHER EVENTS

                    Shawmut National Corporation ("SNC") and
          Shawmut Bank Connecticut, National Association (the
          "Bank), entered into a Purchase and Assumption Agreement,
          dated as of November 12, 1994 (the "Asset Purchase
          Agreement"), with Barclays Bank PLC ("Barclays") and
          Barclays Business Credit Inc. ("Business Credit")
          pursuant to which the Bank agreed to purchase
          substantially all of the assets and to assume certain
          liabilities of the Business Finance Division ("Finance
          Division") of Business Credit.  

                    The purchase price is equal to the net book
          value of the assets to be acquired and the liabilities to
          be assumed plus a premium of $290 million.  The book value 
          of the assets to be acquired, totalling approximately $2.1 
          billion at September 30, 1994, include all of the business and 
          operations of Business Credit conducted through the Finance 
          Division, which includes, among other things, loans and loan
          commitments; all property acquired by Business Credit in
          connection with foreclosures on the property securing
          non-performing loans; the leased office facilities at
          which the Finance Division conducts business and
          leasehold improvements thereon; all rights and interests
          under the contracts relating to the Finance Division  to
          which Business Credit is a party; certain investments;
          all books and records relating to the Finance Division;
          and all unearned fees relating to the purchased loans and
          loan commitments.  The book value of the liabilities to
          be assumed was approximately $10.5 million at September
          30, 1994.  SNC anticipates that the total funding
          required for the transaction will be approximately $2.4
          billion.  The Finance Division, based in Glastonbury,
          Connecticut, provides asset-based financing to middle
          market companies throughout the United States through its
          17 nationwide offices.  

                    The Asset Purchase Agreement may be terminated
          by either party if the closing has not taken place by 
          March 31, 1995.  SNC currently anticipates that the acquisition 
          of the Finance Division will close on or before January 31, 
          1995, subject to the satisfaction of certain conditions, including 
          certain regulatory approvals.

                    SNC entered into an agreement with Northeast Federal 
          Corp. ("Northeast"), dated as of June 13, 1994, to acquire 
          Northeast for $172.1 million in SNC common stock (the "Merger 
          Agreement").  Northeast is a unitary savings and loan holding 
          company registered under the Home Owners' Loan Act of 1933, as 
          amended, which provides financial services through its subsidiary,
          Northeast Savings, F.A.  As of September 30, 1994,
          Northeast had assets of $3.3 billion, deposits of $2.4
          billion and stockholders' equity of $135.1 million. 
          Northeast has 33 offices located in Connecticut,
          Massachusetts and the capital region of New York.   Each
          issued and outstanding share of Northeast common stock,
          except for certain shares held by affiliates, will be
          converted into and exchangeable for a number of shares of
          SNC common stock equal to the exchange ratio (the
          "Exchange Ratio") determined as follows:

                    (i)  if the SNC Common Stock Average Price is
                         greater than or equal to $26.235, the
                         Exchange Ratio will be .415;

                    (ii) if the SNC Common Stock Average Price is
                         less than $26.235 but equal to or greater
                         than $21.465, the Exchange Ratio will be
                         (a) $10.875 divided by (b) the SNC Common
                         Stock Average Price; or

                  (iii)  if the SNC Common Stock Average Price
                         is less than $21.465, the Exchange
                         Ratio will be .507; provided,
                         however, that, as described below,
                         under such circumstances Northeast
                         has the right to terminate the Merger
                         Agreement, subject to the right of
                         SNC to avoid such termination by an
                         increase in the Exchange Ratio.

                    The Merger Agreement may be terminated if the 
          transaction is not closed on or before June 30, 1995.  In 
          addition, if the SNC Common Stock Average Price (defined as the 
          average daily closing price of SNC Common Stock as reported 
          on the New York Stock Exchange Composite Transaction reporting
          system for the 15 consecutive full trading days prior to
          the date on which the last regulatory approval is obtained 
          and all statutory waiting periods in respect thereof have 
          expired) is less than $21.465, Northeast's Board of Directors 
          may terminate the Merger Agreement pursuant to its terms, 
          whether before or after the approval of the merger by Northeast's
          stockholders; provided, however, that SNC may avoid such
          termination by increasing the Exchange Ratio so that the
          shares of SNC Common Stock issued in exchange for each
          share of Northeast's common stock have a value (valued at
          the SNC Common Stock Average Price) of $10.875.  At January 6, 
          1995, the closing price of SNC's Common Stock was $17.750 per 
          share.  In addition, the transaction is subject to the 
          satisfaction of certain conditions, including certain regulatory 
          approvals and approval by Northeast stockholders. 

     ITEM 7.   FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION 
               AND EXHIBITS.

               (c)  The following exhibits are filed with this Current
     Report on Form 8-K:

          EXHIBIT
          NUMBER              DESCRIPTION

          99.1                 Agreement and Plan of Merger by and
                               between Shawmut National Corporation
                               and Northeast Federal Corp. dated June
                               11, 1994.

          99.2                 Purchase and Assumption Agreement among
                               Barclays Business Credit Inc., Barclays
                               Bank PLC, Shawmut National Corporation
                               and Shawmut Bank Connecticut, N.A.
                               dated November 12, 1994.

                                 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 hereunto duly authorized.

                                   SHAWMUT NATIONAL CORPORATION

                                  By:                       
                                       Joel B. Alvord
                                       Chairman and Chief Executive Officer

     Dated:  January 6, 1995

                                  EXHIBIT INDEX

     Exhibit        
     Number         Description

     99.1           Agreement and Plan of Merger by and
                    between Shawmut National Corporation
                    and Northeast Federal Corp. dated June
                    11, 1994.

     99.2           Purchase and Assumption Agreement among
                    Barclays Business Credit Inc., Barclays
                    Bank PLC, Shawmut National Corporation
                    and Shawmut Bank Connecticut, N.A.
                    dated November 12, 1994.

                                                               EXHIBIT 99.1

                          AGREEMENT AND PLAN OF MERGER

                                 By and Between 

                          SHAWMUT NATIONAL CORPORATION

                                       and

                             NORTHEAST FEDERAL CORP.

                            Dated as of June 11, 1994

                               TABLE OF CONTENTS  

                                                                       Page

                                    ARTICLE I

                                   THE MERGER

     1.1   The Merger  . . . . . . . . . . . . . . . . . . . . . . . .    
     1.2   Effective Time  . . . . . . . . . . . . . . . . . . . . . .    
     1.3   Effects of the Merger . . . . . . . . . . . . . . . . . . .    
     1.4   Conversion of Target Common Stock;
             Target Preferred Stock  . . . . . . . . . . . . . . . . .    
     1.5   Conversion of Merger Sub Common Stock . . . . . . . . . . .    
     1.6   Options and Warrants  . . . . . . . . . . . . . . . . . . .    
     1.7   Certificate of Incorporation  . . . . . . . . . . . . . . .    
     1.8   By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . .    
     1.9   Directors and Officers  . . . . . . . . . . . . . . . . . .    
     1.10  Tax Consequences  . . . . . . . . . . . . . . . . . . . . .    

                                   ARTICLE II

                               EXCHANGE OF SHARES

     2.1   Parent to Make Shares Available . . . . . . . . . . . . . .    
     2.2   Exchange of Shares  . . . . . . . . . . . . . . . . . . . . .  

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF TARGET

     3.1   Corporate Organization  . . . . . . . . . . . . . . . . . .    
     3.2   Capitalization  . . . . . . . . . . . . . . . . . . . . . . .  
     3.3   Authority; No Violation . . . . . . . . . . . . . . . . . . .  
     3.4   Consents and Approvals  . . . . . . . . . . . . . . . . . . .  
     3.5   Loan Portfolio; Reports . . . . . . . . . . . . . . . . . . .  
     3.6   Financial Statements  . . . . . . . . . . . . . . . . . . . .  
     3.7   Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . .
     3.8   Absence of Certain Changes or Events  . . . . . . . . . . . .
     3.9   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .
     3.10  Taxes and Tax Returns . . . . . . . . . . . . . . . . . . . .
     3.11  Employees . . . . . . . . . . . . . . . . . . . . . . . . . .
     3.12  SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . .
     3.13  Target Information  . . . . . . . . . . . . . . . . . . . . .
     3.14  Compliance with Applicable Law  . . . . . . . . . . . . . . .
     3.15  Certain Contracts . . . . . . . . . . . . . . . . . . . . . .
     3.16  Agreements with Regulatory Agencies . . . . . . . . . . . . .
     3.17  Investment Securities . . . . . . . . . . . . . . . . . . . .
     3.18  Intellectual Property . . . . . . . . . . . . . . . . . . . .
     3.19  Undisclosed Liabilities . . . . . . . . . . . . . . . . . . .
     3.20  Takeover Restrictions . . . . . . . . . . . . . . . . . . . .
     3.21  Administration of Fiduciary Accounts  . . . . . . . . . . . .
     3.22  Environmental Matters . . . . . . . . . . . . . . . . . . . .
     3.23  Derivative Transactions . . . . . . . . . . . . . . . . . . .
     3.24  Accuracy of Information . . . . . . . . . . . . . . . . . . .
     3.25  Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . .
     3.26  Assistance Agreements . . . . . . . . . . . . . . . . . . . .
     3.27  DEPCO Directors . . . . . . . . . . . . . . . . . . . . . . .
     3.28  Qualified Thrift Lender . . . . . . . . . . . . . . . . . . .
     3.29  Knowledge as to Conditions  . . . . . . . . . . . . . . . . .

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES
                                 OF PARENT

     4.1   Corporate Organization  . . . . . . . . . . . . . . . . . . .
     4.2   Capitalization  . . . . . . . . . . . . . . . . . . . . . . .
     4.3   Authority; No Violation . . . . . . . . . . . . . . . . . . .
     4.4   Consents and Approvals  . . . . . . . . . . . . . . . . . . .
     4.5   Financial Statements  . . . . . . . . . . . . . . . . . . . .
     4.6   Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . .
     4.7   Absence of Certain Changes or Events  . . . . . . . . . . . .
     4.8   Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .
     4.9   Compliance with Applicable Law  . . . . . . . . . . . . . . .
     4.10  SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . .
     4.11  Parent Information  . . . . . . . . . . . . . . . . . . . . .
     4.12  Accuracy of Information . . . . . . . . . . . . . . . . . . .
     4.13  Undisclosed Liabilities . . . . . . . . . . . . . . . . . . .
     4.14  Knowledge as to Conditions  . . . . . . . . . . . . . . . . .

                                    ARTICLE V

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

     5.1   Covenants of Target . . . . . . . . . . . . . . . . . . . . .
     5.2   Covenants of Parent . . . . . . . . . . . . . . . . . . . . .

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

     6.1   Regulatory Matters  . . . . . . . . . . . . . . . . . . . . .
     6.2   Access to Information . . . . . . . . . . . . . . . . . . . .
     6.3   Stockholders Meeting  . . . . . . . . . . . . . . . . . . . .
     6.4   Legal Conditions to Merger  . . . . . . . . . . . . . . . . .
     6.5   Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . .
     6.6   Stock Exchange Listing  . . . . . . . . . . . . . . . . . . .
     6.7   Indemnification; Directors' and Officers' Insurance . . . . .
     6.8   Subsequent Financial Statements . . . . . . . . . . . . . . .
     6.9   Additional Agreements . . . . . . . . . . . . . . . . . . . .
     6.10  Advice of Changes . . . . . . . . . . . . . . . . . . . . . .
     6.11  Current Information . . . . . . . . . . . . . . . . . . . . .
     6.12  Termination of Regulatory Agreements  . . . . . . . . . . . .
     6.13  Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . .
     6.14  Employee Benefit Plans; Existing Agreements . . . . . . . . .

                                   ARTICLE VII

                              CONDITIONS PRECEDENT

     7.1   Conditions to Each Party's Obligation To
             Effect the Merger . . . . . . . . . . . . . . . . . . . . .
             (a)  Stockholder Approval   . . . . . . . . . . . . . . . .
             (b)  NYSE Listing   . . . . . . . . . . . . . . . . . . . .
             (c)  Other Approvals  . . . . . . . . . . . . . . . . . . .
             (d)  S-4  . . . . . . . . . . . . . . . . . . . . . . . . .
             (e)  No Injunctions or Restraints;
                    Illegality   . . . . . . . . . . . . . . . . . . . .
             (f)  Federal Tax Opinion  . . . . . . . . . . . . . . . . .
     7.2   Conditions to Obligations of Parent . . . . . . . . . . . . .
             (a)  Representations and Warranties   . . . . . . . . . . .
             (b)  Performance of Obligations of Target   . . . . . . . .
             (c)  Consents Under Agreements  . . . . . . . . . . . . . .
             (d)  No Pending Governmental Actions  . . . . . . . . . . .
             (e)  DEPCO Directors  . . . . . . . . . . . . . . . . . . .
             (f)  Accountant's Letter  . . . . . . . . . . . . . . . . .
     7.3   Conditions to Obligations of Target . . . . . . . . . . . . .
             (a)  Representations and Warranties   . . . . . . . . . . .
             (b)  Performance of Obligations of Parent   . . . . . . . .
             (c)  Consents Under Agreements  . . . . . . . . . . . . . .
             (d)  No Pending Governmental Actions  . . . . . . . . . . .

                                  ARTICLE VIII

                            TERMINATION AND AMENDMENT

     8.1   Termination . . . . . . . . . . . . . . . . . . . . . . . . .
     8.2   Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
     8.3   Effect of Termination . . . . . . . . . . . . . . . . . . . .
     8.4   Amendment . . . . . . . . . . . . . . . . . . . . . . . . . .
     8.5   Extension; Waiver . . . . . . . . . . . . . . . . . . . . . .

                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1   Closing . . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.2   Alternative Structure . . . . . . . . . . . . . . . . . . . .
     9.3   Nonsurvival of Representations, Warranties
             and Agreements  . . . . . . . . . . . . . . . . . . . . . .
     9.4   Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.5   Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.6   Interpretation  . . . . . . . . . . . . . . . . . . . . . . .
     9.7   Counterparts  . . . . . . . . . . . . . . . . . . . . . . . .
     9.8   Entire Agreement  . . . . . . . . . . . . . . . . . . . . . .
     9.9   Governing Law . . . . . . . . . . . . . . . . . . . . . . . .
     9.10  Enforcement of Agreement  . . . . . . . . . . . . . . . . . .
     9.11  Severability  . . . . . . . . . . . . . . . . . . . . . . . .
     9.12  Publicity . . . . . . . . . . . . . . . . . . . . . . . . . .
     9.13  Assignment  . . . . . . . . . . . . . . . . . . . . . . . . .

                          AGREEMENT AND PLAN OF MERGER

                AGREEMENT AND PLAN OF MERGER, dated as of June 11, 1994
     (this "Agreement"), by and between Shawmut National Corporation, a
     Delaware corporation ("Parent"), and Northeast Federal Corp., a
     Delaware corporation ("Target").

                WHEREAS, the Boards of Directors of Parent and Target have
     determined that it is in the best interests of their respective
     companies and their shareholders to consummate the business
     combination transaction provided for herein in which a subsidiary of
     Parent ("Merger Sub") will, subject to the terms and conditions set
     forth herein, merge (the "Merger") with and into Target; and

                WHEREAS, the parties desire to make certain
     representations, warranties and agreements in connection with the
     Merger and also to prescribe certain conditions to the Merger.

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

                                    ARTICLE I

                                   THE MERGER

                1.1  The Merger.  Subject to the terms and conditions of
     this Agreement, in accordance with the Delaware General Corporation
     Law (the "DGCL"), at the Effective Time (as defined in Section 1.2
     hereof), Merger Sub shall merge with and into Target.  Target shall be
     the surviving corporation (hereinafter sometimes called the "Surviving
     Corporation") in the Merger, and shall continue its corporate
     existence under the laws of the State of Delaware as a wholly owned
     subsidiary of Parent.  Upon consummation of the Merger, the separate
     corporate existence of Merger Sub shall terminate.

                1.2  Effective Time.  The Merger shall become effective as
     set forth in the certificate of merger (the "Certificate of Merger")
     which shall be filed with the Secretary of State of the State of
     Delaware (the "Secretary") on the Closing Date (as defined in Section
     9.1 hereof).  The term "Effective Time" shall be the date and time
     when the Merger becomes effective, as set forth in the Certificate of
     Merger.

                1.3  Effects of the Merger.  At and after the Effective
     Time, the Merger shall have the effects set forth in Sections 259 and
     261 of the DGCL.

                1.4  Conversion of Target Common Stock; Target Preferred
     Stock.  (a)  At the Effective Time, subject to Section 2.2(e) hereof,
     each share of the common stock, par value $0.01 per share, of Target
     (the "Target Common Stock") issued and outstanding immediately prior
     to the Effective Time (other than shares of Target Common Stock held
     (x) in Target's treasury or (y) directly or indirectly by Parent or
     Target or any of their respective Subsidiaries (as defined below)
     (except for Trust Account Shares and DPC Shares, as such terms are
     defined in Section 1.4(b) hereof)) shall, by virtue of this Agreement
     and without any action on the part of the holder thereof, be converted
     into the number of shares (the "Exchange Ratio") of common stock, par
     value $.01 per share, of Parent ("Parent Common Stock") (together with
     the number of Parent Rights (as defined in Section 4.2 hereof)
     associated therewith) determined as follows:

                  (i)    if the Parent Common Stock Average Price (as
                         defined in Section 8.1(g) hereof) is greater than
                         or equal to $26.235, the Exchange Ratio will be
                         .415;

                 (ii)    if the Parent Common Stock Average Price is less
                         than $26.235 but equal to or greater than $21.465,
                         the Exchange Ratio will be (i) $10.875 divided by
                         (ii) the Parent Common Stock Average Price; or

                (iii)    if the Parent Common Stock Average Price is less
                         than $21.465, the Exchange Ratio will be .507.

                All of the shares of Target Common Stock converted into
     Parent Common Stock pursuant to this Article I shall no longer be
     outstanding and shall automatically be cancelled and shall cease to
     exist, and each certificate (each a "Certificate") previously
     representing any such shares of Target Common Stock shall thereafter
     represent the right to receive (i) a certificate representing the
     number of whole shares of Parent Common Stock and (ii) cash in lieu of
     fractional shares into which the shares of Target Common Stock
     represented by such Certificate have been converted pursuant to this
     Section 1.4(a) and Section 2.2(e) hereof.  Certificates previously
     representing shares of Target Common Stock shall be exchanged for
     certificates representing whole shares of Parent Common Stock and cash
     in lieu of fractional shares issued, in consideration therefor upon
     the surrender of such Certificates in accordance with Section 2.2
     hereof, without any interest thereon.  If prior to the Effective Time
     Parent should split or combine its common stock, or pay a dividend or
     other distribution in such common stock, then the Exchange Ratio shall
     be appropriately adjusted to reflect such split, combination, dividend
     or distribution.

                (b)  At the Effective Time, all shares of Target Common
     Stock that are owned by Target as treasury stock and all shares of
     Target Common Stock that are owned directly or indirectly by Parent or
     Target or any of their respective Subsidiaries (other than shares of
     Target Common Stock held directly or indirectly in trust accounts,
     managed accounts and the like or otherwise held in a fiduciary
     capacity that are beneficially owned by third parties (any such
     shares, and shares of Parent Common Stock which are similarly held,
     whether held directly or indirectly by Parent or Target or any of
     their respective subsidiaries, as the case may be, being referred to
     herein as "Trust Account Shares") and other than any shares of Target
     Common Stock held by Parent or Target or any of their respective
     Subsidiaries in respect of a debt previously contracted (any such
     shares of Target Common Stock, and shares of Parent Common Stock which
     are similarly held, whether held directly or indirectly by Parent or
     Target or any of their respective subsidiaries, being referred to
     herein as "DPC Shares")) shall be cancelled and shall cease to exist
     and no stock of Parent or other consideration shall be delivered in
     exchange therefor.  All shares of Parent Common Stock that are owned
     by Target or any of its Subsidiaries (other than Trust Account Shares
     and DPC Shares) shall become treasury stock of Parent.

                (c) At and after the Effective Time each share of the $8.50
     Cumulative Preferred Stock, Series B, of Target (the "Target Series B
     Preferred Stock"), outstanding shall remain outstanding.

                1.5  Conversion of Merger Sub Common Stock.  Each of the
     100 shares of the common stock, par value $1.00 per share, of Merger
     Sub issued and outstanding immediately prior to the Effective Time
     shall by virtue of this Agreement and without any action on the part
     of the holder thereof, be converted into and exchangeable for one
     share common stock, par value $1.00, of the Surviving Corporation,
     which shall thereafter constitute all of the issued and outstanding
     shares of Common Stock of the Surviving Corporation.

                1.6  Options and Warrants.  At the Effective Time, each
     option and warrant granted by Target to purchase shares of Target
     Common Stock which is outstanding and unexercised immediately prior
     thereto shall be converted automatically into an option or warrant, as
     the case may be, to purchase shares of Parent Common Stock in an
     amount and at an exercise price determined as provided below (and, in
     the case of options, otherwise subject to the terms of the 1983 Stock
     Option Plan of Target, The 1986 Stock Option Plan of Target, the
     Target 1993 Stock Option Plan, or the Target 1993 Stock Option Plan
     for Three Year Term Outside Directors, as the case may be (each a
     "Target Stock Option Plan"; collectively the "Target Stock Option
     Plans") or, in the case of warrants, otherwise subject to the terms of
     the Stock Warrants, each dated April 22, 1992, of Target (the "Target
     Warrants")):

                (a)  The number of shares of Parent Common Stock to be
             subject to the new option or warrant shall be equal to the
             product of the number of shares of Target Common Stock
             subject to the original option or warrant and the Exchange
             Ratio, provided that any fractional shares of Parent Common
             Stock resulting from such multiplication shall be rounded to
             the nearest whole share; and

                (b)  The exercise price per share of Parent Common Stock
             under the new option or warrant shall be equal to the
             exercise price per share of Target Common Stock under the
             original option or warrant divided by the Exchange Ratio,
             provided that such exercise price shall be rounded to the
             nearest cent.

     The adjustment provided herein with respect to any options which are
     "incentive stock options" (as defined in Section 422 of the Internal
     Revenue Code of 1986, as amended (the "Code")) shall be and is
     intended to be effected in a manner which is consistent with Section
     424(a) of the Code.  The duration and other terms of the new option or
     warrant shall be the same as the original option or warrant, except
     that all references to Target shall be deemed to be references to
     Parent.

                1.7  Certificate of Incorporation.  At the Effective Time,
     the Certificate of Incorporation of Target, as in effect at the
     Effective Time, shall be the Certificate of Incorporation of the
     Surviving Corporation.

                1.8  By-Laws.  At the Effective Time, the By-Laws of Merger
     Sub, as in effect immediately prior to the Effective Time, shall be
     the By-Laws of the Surviving Corporation until thereafter amended in
     accordance with applicable law.

                1.9  Directors and Officers.  The directors and officers of
     Merger Sub immediately prior to the Effective Time shall be the
     directors and officers of the Surviving Corporation, each to hold
     office in accordance with the Certificate of Incorporation and By-Laws
     of the Surviving Corporation until their respective successors are
     duly elected or appointed and qualified, provided that so long as the
     Target Series B Preferred Stock is outstanding by the terms thereof,
     and DEPCO or any Nominee (each as defined in Section 3.27) is entitled
     to elect directors of Target pursuant to the terms of the Target
     Series B Preferred Stock, the directors elected by the holders of the
     Target Series B Preferred Stock shall be directors of the Surviving
     Corporation.

                1.10  Tax Consequences.  It is intended that the Merger
     shall constitute a reorganization within the meaning of Section 368(a)
     of the Code, and that this Agreement shall constitute a "plan of
     reorganization" for the purposes of Section 368 of the Code.

                                   ARTICLE II

                               EXCHANGE OF SHARES

                2.1  Parent to Make Shares Available.  As of the Effective
     Time, Parent shall deposit, or shall cause to be deposited, with a
     bank or trust company selected by Parent (which may be a Subsidiary of
     Parent) (the "Exchange Agent"), for the benefit of the holders of
     Certificates, for exchange in accordance with this Article II,
     certificates representing the shares of Parent Common Stock and the
     cash in lieu of fractional shares (such cash and certificates for
     shares of Parent Common Stock, together with any dividends or
     distributions with respect thereto, being hereinafter referred to as
     the "Exchange Fund") to be issued pursuant to Section 1.4 and paid
     pursuant to Section 2.2(a) in exchange for outstanding shares of
     Target Common Stock.

                2.2  Exchange of Shares.  (a)  As soon as practicable after
     the Effective Time, the Exchange Agent shall mail to each holder of
     record of a Certificate or Certificates a form letter of transmittal
     (which shall specify that delivery shall be effected, and risk of loss
     and title to the Certificates shall pass, only upon actual receipt of
     the Certificates by the Exchange Agent) and instructions for use in
     effecting the surrender of the Certificates in exchange for
     certificates representing the shares of Parent Common Stock and cash
     in lieu of fractional shares, if any, into which the shares of Target
     Common Stock previously represented by such Certificate or
     Certificates shall have been converted pursuant to this Agreement. 
     Upon proper surrender to the Exchange Agent of a Certificate for
     exchange and cancellation, together with such properly completed
     letter of transmittal, duly executed, the holder of such Certificate
     shall be entitled to receive in exchange therefor (x) a certificate
     representing that number of whole shares of Parent Common Stock to
     which such holder of Target Common Stock shall have become entitled
     pursuant to the provisions of Article I hereof and (y) a check
     representing the amount of cash in lieu of fractional shares, if any,
     which such holder has the right to receive in respect of the
     Certificate surrendered pursuant to the provisions of this Article II,
     and the Certificate so surrendered shall forthwith be cancelled.  No
     interest will be paid or accrued on the cash in lieu of fractional
     shares and unpaid dividends and distributions, if any, payable to
     holders of Certificates.  Notwithstanding anything to the contrary
     contained herein, no certificate representing Parent Common Stock or
     cash in lieu of a fractional share interest shall be delivered to a
     person who is an Affiliate (as defined in Section 6.5) of Target
     unless such Affiliate has theretofore executed and delivered to Parent
     the agreement referred to in Section 6.5.

                (b)  No dividends or other distributions payable after the
     Effective Time with respect to Parent Common Stock shall be paid to
     the holder of any unsurrendered Certificate until the holder thereof
     shall duly surrender such Certificate in accordance with this Article
     II.  After the surrender of a Certificate in accordance with this
     Article II, the record holder thereof shall be entitled to receive any
     dividends or other distributions, without any interest thereon, which
     became payable with respect to the shares of Parent Common Stock
     represented by such Certificate after the Effective Time but on or
     before the time of such surrender.  No holder of an unsurrendered
     Certificate shall be entitled, until the surrender of such
     Certificate, to vote the shares of Parent Common Stock into which his
     or her Target Common Stock shall have been converted.

                (c)  If any certificate representing shares of Parent
     Common Stock is to be issued in a name other than that in which the
     Certificate surrendered in exchange therefor is registered, it shall
     be a condition of the issuance thereof that the Certificate so
     surrendered shall be properly endorsed (or accompanied by an
     appropriate instrument of transfer) and otherwise in proper form for
     transfer, and that the person requesting such exchange shall pay to
     the Exchange Agent in advance any transfer or other taxes required by
     reason of the issuance of a certificate representing shares of Parent
     Common Stock in any name other than that of the registered holder of
     the Certificate surrendered, or required for any other reason, or
     shall establish to the satisfaction of the Exchange Agent that such
     tax has been paid or is not payable.

                (d)  After the Effective Time, there shall be no transfers
     on the stock transfer books of Target of the shares of Target Common
     Stock which were issued and outstanding immediately prior to the
     Effective Time.  If, after the Effective Time, Certificates
     representing such shares are presented for transfer to the Exchange
     Agent, they shall be cancelled and exchanged for certificates
     representing shares of Parent Common Stock as provided in this Article
     II.

                (e)  Notwithstanding anything to the contrary contained
     herein, no certificates or scrip representing fractional shares of
     Parent Common Stock shall be issued upon the surrender for exchange of
     Certificates, no dividend or distribution with respect to Parent
     Common Stock shall be payable on or with respect to any fractional
     share, and such fractional share interests shall not entitle the owner
     thereof to vote or to any other rights of a shareholder of Target.  In
     lieu of the issuance of any such fractional share, Parent shall pay to
     each former stockholder of Target who otherwise would be entitled to
     receive a fractional share of Parent Common Stock an amount in cash
     determined by multiplying (i) the average of the closing-sale prices
     of Parent Common Stock on the New York Stock Exchange as reported by
     The Wall Street Journal for the five trading days immediately
     preceding the date of the Effective Time by (ii) the fraction of a
     share of Parent Common Stock to which such holder would otherwise be
     entitled to receive pursuant to Section 1.4 hereof.

                (f)  Any portion of the Exchange Fund that remains
     unclaimed by the stockholders of Target for six months after the
     Effective Time shall be paid to Parent.  Any stockholders of Target
     who have not theretofore complied with this Article II shall
     thereafter look only to Parent for payment of their shares of Parent
     Common Stock, cash in lieu of fractional shares and unpaid dividends
     and distributions on the Parent Common Stock deliverable in respect of
     each share of Target Common Stock such stockholder holds as determined
     pursuant to this Agreement, in each case, without any interest
     thereon.  Notwithstanding the foregoing, none of Parent, Target, the
     Exchange Agent or any other person shall be liable to any former
     holder of shares of Target Common Stock for any amount properly
     delivered to a public official pursuant to applicable abandoned
     property, escheat or similar laws.

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

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF TARGET

                Target hereby represents and warrants to Parent and Merger
     Sub as follows:

                3.1  Corporate Organization.  (a)  Target is a corporation
     duly organized, validly existing and in good standing under the laws
     of the State of Delaware.  Target has the corporate power and
     authority to own or lease all of its properties and assets and to
     carry on its business as it is now being conducted, and is duly
     licensed or qualified to do business in each jurisdiction in which the
     nature of the business conducted by it or the character or location of
     the properties and assets owned or leased by it makes such licensing
     or qualification necessary, except where the failure to be so licensed
     or qualified would not have a Material Adverse Effect (as defined
     below) on Target.  As used in this Agreement, the term "Material
     Adverse Effect" means, with respect to Parent, Target or the Surviving
     Corporation, as the case may be, a material adverse effect on the
     business, properties, assets, liabilities, prospects, results of
     operations or financial condition of such party and its Subsidiaries
     taken as a whole or the ability of any party to consummate the
     transactions contemplated hereby on the terms hereof, it being
     understood that a Material Adverse Effect will not include a change
     with respect to, or effect on, such entity resulting from a change in
     law, rule, regulation, generally accepted or regulatory accounting
     principles, or a change with respect to, or effect on, such entity
     resulting from any other matter affecting financial institutions or
     their holding companies generally.  As used in this Agreement, the
     word "Subsidiary" when used with respect to any party means any
     corporation, partnership or other organization, whether incorporated
     or unincorporated, which is consolidated with such party for financial
     reporting purposes or of which the party holds 25% or more of the
     shares.  Target is duly registered as a savings and loan holding
     company under the Home Owners' Loan Act, as amended ("HOLA").  The
     copies of the Certificate of Incorporation and By-laws of Target which
     have previously been delivered to Parent are true, complete and
     correct copies of such documents as in effect as of the date of this
     Agreement.

                (b)  Northeast Savings, F.A. ("Target Bank") is a federal
     savings and loan association or savings bank duly organized, validly
     existing and in good standing under the laws of the United States. 
     The deposit accounts of Target Bank are insured by the Federal Deposit
     Insurance Corporation (the "FDIC") through the Savings Association
     Insurance Fund (the "SAIF") to the fullest extent permitted by law,
     and all premiums and assessments required in connection therewith have
     been paid by Target Bank.  Target Bank is the only direct Subsidiary
     of Target, and is the only Subsidiary of Target that is a "Significant
     Subsidiary" as such term is defined in Regulation S-X promulgated by
     the Securities and Exchange Commission (the "SEC").  Target Bank has
     the corporate power and authority to own or lease all of its
     properties and assets and to carry on its business as it is now being
     conducted and is duly licensed or qualified to do business in each
     jurisdiction in which the nature of the business conducted by it or
     the character or the location of the properties and assets owned or
     leased by it makes such licensing or qualification necessary, except
     where the failure to be so licensed or qualified would not have a
     Material Adverse Effect on Target.  The copies of the Federal Stock
     Charter and By-laws of Target Bank which have previously been
     delivered to Parent are true, complete and correct copies of such
     documents as in effect as of the date of this Agreement.

                (c)  The minute books of Target and Target Bank accurately
     reflect in all material respects all corporate actions held or taken
     since January 1, 1989 of their respective stockholders and Boards of
     Directors (including committees of their respective Boards of
     Directors).

                3.2  Capitalization.  (a)  The authorized capital stock of
     Target consists of 25,000,000 shares of Target Common Stock and
     15,000,000 shares of preferred stock, par value $.01 per share
     ("Target Preferred Stock").  As of March 31, 1994, there are (x)
     13,519,193 shares of Target Common Stock issued and outstanding and no
     shares of Target Common Stock held in Target's treasury and 402,576
     shares of Target Series B Preferred Stock issued and outstanding,
     (y) no shares of Target Common Stock reserved for issuance upon
     exercise of outstanding stock options or warrants or otherwise except
     for (i) 1,497,292 shares of Target Common Stock reserved for issuance
     pursuant to the Target Stock Option Plans and (ii) 800,000 shares of
     Target Common Stock reserved for issuance pursuant to the Target
     Warrants and (z), except for the 402,576 shares of Target Series B
     Preferred Stock issued and outstanding and shares of such stock which
     may be issued in payment for dividends on the Target Series B
     Preferred Stock, no shares of Target Preferred Stock are issued or
     outstanding or reserved for issuance.  All of the issued and
     outstanding shares of Target Common Stock and Target Series B
     Preferred Stock have been duly authorized and validly issued and are
     fully paid, nonassessable and free of preemptive rights, with no
     personal liability attaching to the ownership thereof.  Except as
     referred to above or reflected in Section 3.2(a) of the Disclosure
     Schedule which is being delivered to Parent concurrently herewith (the
     "Target Disclosure Schedule"), Target does not have and is not bound
     by any outstanding subscriptions, options, warrants, calls,
     commitments or agreements of any character calling for the purchase or
     issuance of any shares of Target Common Stock or Target Preferred
     Stock or any other equity security of Target or any securities
     representing the right to purchase or otherwise receive any shares of
     Target Common Stock or any other equity security of Target.  The names
     of the optionees, the date of each option to purchase Target Common
     Stock granted, the number of shares subject to each such option, the
     expiration date of each such option, and the price at which each such
     option may be exercised under the Target Stock Option Plans are set
     forth in Section 3.2(a) of the Target Disclosure Schedule.  Except as
     set forth in Section 3.2(a) of the Target Disclosure Schedule, since
     March 31, 1994, Target has not issued any shares of its capital stock
     or any securities convertible into or exercisable for any shares of
     its capital stock, other than pursuant to the exercise of employee or
     director stock options granted prior to such date and except for
     Series B Preferred Stock issued in payment of dividends on outstanding
     shares of Series B Preferred Stock.  Section 3.2(a) of the Target
     Disclosure Schedule sets forth the number of shares of Target Common
     Stock issued and outstanding as of the date of this Agreement.  Target
     has reserved an adequate number of shares to cover exercise of options
     under the currently outstanding options granted pursuant to the Target
     Stock Option Plans.

                (b)  Section 3.2(b) of the Target Disclosure Schedule sets
     forth a true and correct list of all of the Target Subsidiaries as of
     the date of this Agreement.  Except as set forth in Section 3.2(b) of
     the Target Disclosure Schedule, Target owns, directly or indirectly,
     all of the issued and outstanding shares of capital stock of each of
     the Target Subsidiaries, free and clear of all liens, charges,
     encumbrances and security interests whatsoever, and all of such shares
     are duly authorized and validly issued and are fully paid,
     nonassessable and free of preemptive rights, with no personal
     liability attaching to the ownership thereof.  Each Target Subsidiary
     is duly organized and validly existing as a corporation or partnership
     under the laws of its jurisdiction of organization.  No Target
     Subsidiary has or is bound by any outstanding subscriptions, options,
     warrants, calls, commitments or agreements of any character calling
     for the purchase or issuance of any shares of capital stock or any
     other equity security of such Subsidiary or any securities
     representing the right to purchase or otherwise receive any shares of
     capital stock or any other equity security of such Subsidiary. 
     Assuming compliance by Parent with Section 1.6 hereof and except
     pursuant to the DEPCO Agreement (as defined in Section 3.27), at the
     Effective Time, there will not be any outstanding subscriptions,
     options, warrants, calls, commitments or agreements of any character
     by which Target or any of its Subsidiaries will be bound calling for
     the purchase or issuance of any shares of the capital stock of Target
     or any of its Subsidiaries.

                3.3  Authority; No Violation.  (a)  Target has full
     corporate power and authority to execute and deliver this Agreement
     and to consummate the transactions contemplated hereby.  The execution
     and delivery of this Agreement and the consummation of the
     transactions contemplated hereby have been duly and validly approved
     by the Board of Directors of Target.  The Board of Directors of Target
     has directed that this Agreement and the transactions contemplated
     hereby be submitted to Target's stockholders for approval at a meeting
     of such stockholders and, except for the adoption of this Agreement by
     the requisite vote of Target's stockholders, no other corporate
     proceedings on the part of Target are necessary to approve this
     Agreement and to consummate the transactions contemplated hereby. 
     This Agreement has been duly and validly executed and delivered by
     Target and constitutes a valid and binding obligation of Target.

                (b)  Except as set forth in Section 3.3(b) of the Target
     Disclosure Schedule, neither the execution and delivery of this
     Agreement by Target nor the consummation by Target of the transactions
     contemplated hereby or thereby, nor compliance by Target with any of
     the terms or provisions hereof or thereof, will (i) violate any
     provision of the Certificate of Incorporation or By-Laws of Target or
     the certificate of incorporation, by-laws or similar governing
     documents of Target Bank or (ii) assuming that the consents and
     approvals referred to in Section 3.4 hereof are duly obtained, (x)
     violate any statute, code, ordinance, rule, regulation, judgment,
     order, writ, decree or injunction applicable to Target or Target Bank,
     or any of their respective properties or assets, or (y) violate,
     conflict with, result in a breach of any provision of or the loss of
     any benefit under, constitute a default (or an event which, with
     notice or lapse of time, or both, would constitute a default) under,
     result in the termination of or a right of termination or cancellation
     under, accelerate the performance required by, or result in the
     creation of any lien, pledge, security interest, charge or other
     encumbrance upon any of the respective properties or assets of Target
     or Target Bank under, any of the terms, conditions or provisions of
     any note, bond, mortgage, indenture, deed of trust, license, lease,
     agreement or other instrument or obligation to which Target or Target
     Bank is a party, or by which they or any of their respective
     properties or assets may be bound or affected, except (in the case of
     clause (y) above) for such violations, conflicts, breaches or defaults
     which, either individually or in the aggregate, would not have or be
     reasonably likely to have a Material Adverse Effect on Target.

                3.4  Consents and Approvals.  Except for (a) the filing of
     applications and notices, as applicable, with the Board of Governors
     of the Federal Reserve System (the "Federal Reserve Board") under the
     Bank Holding Company Act of 1956, as amended (the "BHC Act") and
     approval of such applications and notices, (b) the filing of
     applications with the Office of Thrift Supervision (the "OTS") under
     the HOLA and approval of such applications, (c) the filing of any
     required applications or notices with any state agencies  and approval
     of such applications (the "State Approvals"), (d) the filing with the
     SEC of a proxy statement in definitive form relating to any meeting of
     Target's stockholders to be held in connection with this Agreement and
     the transactions contemplated hereby (the "Proxy Statement"), (e) the
     approval of this Agreement by the requisite vote of the stockholders
     of Target, (f) the filing of the Certificate of Merger with the
     Secretary pursuant to the DGCL, and (g) such filings, authorizations
     or approvals as may be set forth in Section 3.4 of the Target
     Disclosure Schedule, no consents or approvals of or filings or
     registrations with any court, administrative agency or commission or
     other governmental authority or instrumentality (each a "Governmental
     Entity") or with any third party are necessary in connection with
     (1) the execution and delivery by Target of this Agreement and (2) the
     consummation by Target of the Merger and the other transactions
     contemplated hereby.

                3.5  Loan Portfolio; Reports.  (a)  Except as set forth in
     Section 3.5(a) of the Target Disclosure Schedule, as of March 31,
     1994, neither Target nor any of its Subsidiaries is a party to any
     written or oral (i) loan agreement, note or borrowing arrangement
     (including, without limitation, leases, credit enhancements,
     commitments, guarantees and interest-bearing assets) (collectively,
     "Loans"), other than Loans the unpaid principal balance of which does
     not exceed $100,000, under the terms of which the obligor was, as of
     March 31, 1994, over 90 days delinquent in payment of principal or
     interest or in default under any other provision, or (ii) Loan to any
     director, executive officer or ten percent stockholder of Target or
     any of its Subsidiaries or, to the knowledge of Target, any person,
     corporation or enterprise controlling, controlled by or under common
     control with any of the foregoing.  Section 3.5(a) of the Target
     Schedule sets forth (i) all of the Loans of Target or any of its
     Subsidiaries the unpaid principal amount in excess of (A) $100,000
     that as of the date of this Agreement are internally classified as
     "Substandard," "Doubtful," "Loss," or "Classified," (B) $100,000 that
     as of the date of this Agreement are internally classified as
     "Criticized," "Other Loans Especially Mentioned" or "Special Mention",
     (C) $750,000 that as of the date of this Agreement are internally
     classified as "Credit Risk Assets," "Concerned Loans," "Watch List" or
     words of similar import, in each case together with the principal
     amount of and accrued and unpaid interest on each such Loan and the
     identity of the borrower thereunder, and (ii) by category of Loan
     (i.e., commercial, consumer, etc.), all of the other Loans of Target
     and its Subsidiaries that as of the date of this Agreement are
     classified as such, together with the aggregate principal amount of
     and accrued and unpaid interest on such Loans by category.  Target
     shall promptly inform Parent of any Loan that becomes classified in
     the manner described in the previous sentence, or any Loan the
     classification of which is changed, at any time after the date of this
     Agreement.  Target and its Subsidiaries have internally classified, in
     the manner described above, all Loans that any auditor or government
     examiner has criticized or classified, and the internal classification
     of such Loans is at least as strict as the criticism or classification
     thereof by an auditor or government examiner.

                (b)  Target and Target Bank have timely filed all reports,
     registrations and statements, together with any amendments required to
     be made with respect thereto, that they were required to file since
     January 1, 1990 with (i) the Federal Reserve Board, (ii) the FDIC,
     (iii) the OTS, (iv) any state regulatory authority (each a "State
     Regulator") and (v) any self-regulatory organization ("SRO")
     (collectively "Regulatory Agencies"), and all other material reports
     and statements required to be filed by them since January 1, 1989,
     including, without limitation, any report or statement required to be
     filed pursuant to the laws, rules or regulations of the United States,
     any state, the Federal Reserve Board, the FDIC, the OTS, any State
     Regulator or any SRO, and have paid all fees and assessments due and
     payable in connection therewith.  Except for normal examinations
     conducted by a Regulatory Agency in the regular course of the business
     of Target and its Subsidiaries, and except as otherwise disclosed in
     Section 3.5(b) of the Target Disclosure Schedule, no Regulatory Agency
     has initiated any proceeding or, to the best knowledge of Target,
     investigation into the business or operations of Target or any of its
     Subsidiaries since January 1, 1989.  Except as otherwise disclosed in
     Section 3.5(b) of the Target Disclosure Schedule, there is no material
     unresolved violation, criticism, or exception by any Regulatory Agency
     with respect to any report or statement relating to any examinations
     of Target or any of its Subsidiaries.

                3.6  Financial Statements.  Target has previously delivered
     to Parent copies of (a) the consolidated balance sheets of Target and
     its Subsidiaries as of December 31, for the fiscal years ended
     December 31, 1992 and 1993, and the related consolidated statements of
     income, changes in stockholders' equity and cash flows for each of the
     fiscal years in the three year period ended December 31, 1993, as
     reported in Target's Annual Report on Form 10-K for the fiscal year
     ended December 31, 1993 filed with the SEC under the Securities
     Exchange Act of 1934, as amended (the "Exchange Act"), accompanied by
     the audit reports of Deloitte & Touche or Coopers & Lybrand,
     independent public accountants with respect to Target, and (b) the
     unaudited consolidated balance sheets of Target and its Subsidiaries
     as of March 31, 1993 and March 31, 1994 and the related unaudited
     consolidated statements of income, cash flows and changes in
     stockholders' equity for the three month periods then ended as
     reported in Target's Quarterly Report on Form 10-Q for the period
     ended March 31, 1994 filed with the SEC under the Exchange Act.  The
     March 31, 1994 consolidated balance sheet of Target (including the
     related notes, where applicable) fairly presents the consolidated
     financial position of Target and its Subsidiaries as of the date
     thereof, and the other financial statements referred to in this
     Section 3.6 (including the related notes, where applicable) fairly
     present, and the financial statements referred to in Section 6.8
     hereof will fairly present (subject, in the case of the unaudited
     statements, to recurring audit adjustments normal in nature and
     amount), the results of the consolidated operations and consolidated
     financial position of Target and its Subsidiaries for the respective
     fiscal periods or as of the respective dates therein set forth; each
     of such statements (including the related notes, where applicable)
     comply, and the financial statements referred to in Section 6.8 hereof
     will comply, in all material respects with applicable accounting
     requirements and with the published rules and regulations of the SEC
     with respect thereto and each of such statements (including the
     related notes, where applicable) has been, and the financial
     statements referred to in Section 6.8 hereof will be, prepared in
     accordance with generally accepted accounting principles ("GAAP")
     consistently applied during the periods involved, except in the case
     of unaudited statements, as permitted by Form 10-Q.  The books and
     records of Target and Target Bank have been, and are being, maintained
     in all material respects in accordance with GAAP and any other
     applicable legal and accounting requirements and reflect only actual
     transactions.

                3.7  Broker's Fees.  Neither Target nor any Target
     Subsidiary nor any of their respective officers or directors has
     employed any broker or finder or incurred any liability for any
     broker's fees, commissions or finder's fees in connection with any of
     the transactions contemplated by this Agreement, except that Target
     has engaged, and will pay a fee or commission to, Lehman Brothers Inc.
     ("Lehman Brothers") in accordance with the terms of a letter agreement
     between Lehman Brothers and Target, a true, complete and correct copy
     of which has been previously delivered by Target to Parent.

                3.8  Absence of Certain Changes or Events.  (a)  Except as
     may be set forth in Section 3.8(a) of the Target Disclosure Schedule
     or as disclosed in Target's Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1994, true, complete and correct copies of
     which have previously been delivered to Parent, since December 31,
     1993, (i) neither Target nor any of its Subsidiaries has incurred any
     material liability, except in the ordinary course of its business
     consistent with prudent banking practices, and (ii) no events have
     occurred which have had, individually or in the aggregate, a Material
     Adverse Effect on Target.

                (b) Except as set forth in Section 3.8(b) of the Target
     Disclosure Schedule or as disclosed in Target's Quarterly Report on
     Form 10-Q for the quarter ended March 31, 1994, since December 31,
     1993, Target and its Subsidiaries have carried on their respective
     businesses in the ordinary and usual course consistent with prudent
     banking practices.

                (c) Except as set forth in Section 3.8(c) of the Target
     Disclosure Schedule, since December 31, 1993, neither Target nor any
     of its Subsidiaries has (i) except for normal increases in the
     ordinary course of business consistent with past practice or except as
     required by applicable law, increased the wages, salaries,
     compensation, pension, or other fringe benefits or perquisites payable
     to any executive officer, employee, or director from the amount
     thereof in effect as of December 31, 1993, granted any severance or
     termination pay, entered into any contract to make or grant any
     severance or termination pay, or paid any bonus other than year-end
     bonuses for fiscal 1993 and 1994 as listed in Section 3.8 of the
     Target Disclosure Schedule or (ii) suffered any strike, work stoppage,
     slow-down, or other labor disturbance.

                3.9  Legal Proceedings.  (a)  Except as set forth in
     Section 3.9(a) of the Target Disclosure Schedule, neither Target nor
     any of its Subsidiaries is a party to any, and there are no pending
     or, to the best of Target's knowledge, threatened, legal,
     administrative, arbitral or other proceedings, claims, actions or
     governmental or regulatory investigations of any nature against Target
     or any of its Subsidiaries as to which there is a reasonable
     probability of an adverse determination and (i) which, if adversely
     determined, would, individually or in the aggregate, have a Material
     Adverse Effect on Target or the Surviving Corporation or (ii)
     challenging the validity or propriety of the transactions contemplated
     by this Agreement.

                (b)  Except as otherwise disclosed in Section 3.9(b) of the
     Target Disclosure Schedule, there is no injunction, order, judgment,
     decree, or regulatory restriction imposed upon Target, any of its
     Subsidiaries or the assets of Target or any of its Subsidiaries which
     has had, or might reasonably be expected to have, a Material Adverse
     Effect on Target or the Surviving Corporation.

                (c) Section 3.9(c) of the Target Disclosure Schedule sets
     forth all pending litigation involving any claim against the Target
     Bank or any of its Subsidiaries, whether directly or by counterclaim,
     involving a "lender liability" cause of action.

                3.10  Taxes and Tax Returns.  (a)  Except as may be
     reflected in Section 3.10 of the Target Disclosure Schedule or, in the
     aggregate, otherwise would not have a Material Adverse Effect on
     Target, Parent or the Surviving Corporation, each of Target and its
     Subsidiaries has duly filed all Federal, state, and to the best of its
     knowledge, county, local and foreign Tax returns (including, without
     limitation, information returns and returns of estimated tax) required
     to be filed by it on or prior to the date hereof (all such returns
     being accurate and complete) and has duly paid or made adequate
     provision for the payment of all Taxes (as defined below) that have
     been incurred by it or are due or claimed to be due from it by
     Federal, state, county, local or foreign taxing authorities on or
     prior to the date of this Agreement (including, without limitation, if
     and to the extent applicable, those due in respect of its properties,
     income, business, capital stock, deposits, franchises, licenses, sales
     and payrolls) other than Taxes that are being contested in good faith
     (and which are set forth in Section 3.10 of the Target Disclosure
     Schedule).  The income tax returns of Target and its Subsidiaries have
     been examined by the Internal Revenue Service (the "IRS") for all
     years through and including 1979, and the deficiencies (if any)
     asserted as a result of such examination either, in the aggregate,
     were not material, or have been satisfied.  Except as may be reflected
     in Section 3.10 of the Target Disclosure Schedule there are no
     material disputes pending, or claims asserted for, Taxes or
     assessments upon Target or any of its Subsidiaries, nor does Target or
     any of its Subsidiaries have outstanding any currently effective
     waivers extending the statutory period of limitation applicable to any
     Federal, state, county, local or foreign income tax return for any
     period.  In addition, (i) proper and accurate amounts have been
     withheld by Target and its Subsidiaries from their employees,
     customers, depositors, shareholders and others from whom they are
     required to withhold Tax in compliance with all applicable Federal,
     state, county, local and foreign laws, except where the failures to do
     so would not, in the aggregate, have a Material Adverse Effect on
     Target, Parent or the Surviving Corporation and (ii) there are no Tax
     liens upon any property or assets of the Target or its Subsidiaries
     except liens for current Taxes not yet due.  Except as, in the
     aggregate, would not have a Material Adverse Effect on Target, Parent
     or the Surviving Corporation, or as disclosed in Section 3.10 of the
     Target Disclosure Schedule, to the best of its knowledge, (i) no
     property of Target or any of its Subsidiaries is property that Target
     or any of its Subsidiaries is or will be required to treat as being
     owned by another person pursuant to the provisions of Section
     168(f)(8) of the Internal Revenue Code of 1954, as amended (as in
     effect prior to its amendment by the Tax Reform Act of 1986) or is
     "tax-exempt use property" within the meaning of Section 168(h) of the
     Code; (ii) neither Target nor any of its Subsidiaries has been
     required to include in income any adjustment pursuant to Section 481
     of the Code by reason a voluntary change in accounting method
     initiated by Target or any of its Subsidiaries, and the Internal
     Revenue Service has not initiated or proposed any such adjustment or
     change in accounting method; and (iii) neither Target nor any of its
     Subsidiaries has entered into a transaction which is being accounted
     for as an installment obligation under Section 453 of the Code.

                (b)  As used in this Agreement, the term "Tax" or "Taxes"
     means all Federal, state, county, local, and foreign income, excise,
     gross receipts, ad valorem, profits, gains, transfer gains, property,
     sales, transfer, use, payroll, employment, severance, withholding,
     backup withholding, intangibles, franchise, and other taxes,
     governmental charges, levies or like assessments together with all
     penalties and additions to Tax and interest thereon.

                (c)  Target Bank, at the close of its most recent taxable
     year, qualified, and on the Closing Date will qualify either as a
     "domestic building and loan association" within the meaning of
     Section 7701(a)(19) of the Code or as a "mutual savings bank" within
     the meaning of Section 591(b) of the Code that meets the requirements
     of Section 7701(a)(19)(C) of the Code.

                3.11  Employees.  (a)  The Target Reports (as defined in
     Section 3.12 hereof) accurately describe all bonus, deferred
     compensation, pension, retirement, profit-sharing, thrift, savings,
     employee stock ownership, stock bonus, stock purchase, restricted
     stock and stock option plans, all employment or severance contracts,
     other material employee benefit plans and any applicable "change of
     control" or similar provisions in any plan, contract or arrangement
     which cover employees or former employees of Target or its
     Subsidiaries (collectively, the "Compensation and Benefit Plans")
     required to be described in such Target Reports.  The Compensation and
     Benefit Plans and all other benefit plans, contracts or arrangements
     covering directors, employees or former employees of Target or its
     Subsidiaries (the "Employees"), including, but not limited to,
     "employee benefit plans" within the meaning of Section 3(3) of the
     Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
     are listed in Section 3.11 of the Target Disclosure Schedule.  True
     and complete copies of all Compensation and Benefit Plans and such
     other benefit plans, contracts or arrangements, including, but not
     limited to, any trust instruments and/or insurance contracts, if any,
     forming a part of any such plans and agreements, and all amendments
     thereto, including but not limited to (i) the actuarial report for
     such plan (if applicable) for each of the last two years, and (ii) the
     most recent determination letter from the IRS (if applicable) for such
     plan, have heretofore been delivered to Parent.

                (b)  All employee benefit plans, other than "multiemployer
     plans" within the meaning of Sections 3(37) or 4001(a)(3) of ERISA,
     covering Employees (the "Plans"), to the extent subject to ERISA, are
     in substantial compliance with ERISA.  Each Plan which is an "employee
     pension benefit plan" within the meaning of Section 3(2) of ERISA
     ("Pension Plan") and which is intended to be qualified under Section
     401(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
     has received a favorable determination letter from the IRS, and Target
     is not aware of any circumstances likely to result in revocation of
     any such favorable determination letter.  The 1985 Target Employee
     Stock Ownership Plan satisfies the requirements for an employee stock
     ownership plan under Section 4975(e)(7) of the Code.  There is no
     material pending or threatened litigation relating to the Plans. 
     Neither Target nor any of its Subsidiaries has engaged in a
     transaction with respect to any Plan that, assuming the taxable period
     of such transaction expired as of the date hereof, could subject
     Target or any of its Subsidiaries to a tax or penalty imposed by
     either Section 4975 of the Code or Section 502(i) of ERISA in an
     amount which would be material.

                (c)  No liability under Subtitle C or D of Title IV of
     ERISA has been or is expected to be incurred by Target or any of its
     Subsidiaries with respect to any ongoing, frozen or terminated
     "single-employer plan", within the meaning of Section 4001(a)(15) of
     ERISA, currently or formerly maintained by any of them, or the single-
     employer plan of any entity which is considered one employer with
     Target or any of its Subsidiaries under Section 4001 of ERISA or
     Section 414 of the Code (an "ERISA Affiliate").  Target and its
     Subsidiaries have not incurred and do not expect to incur any
     withdrawal liability with respect to a multiemployer plan under
     Subtitle E of Title IV of ERISA (regardless of whether based on
     contributions of an ERISA Affiliate).  No notice of a "reportable
     event", within the meaning of Section 4043 of ERISA for which the 30-
     day reporting requirement has not been waived, has been required to be
     filed for any Pension Plan or by any ERISA Affiliate within the 12-
     month period ending on the date hereof.

                (d)  All contributions required to be made under the terms
     of any Plan have been timely made.  Neither any Pension Plan nor any
     single-employer plan of an ERISA Affiliate has an "accumulated funding
     deficiency" (whether or not waived) within the meaning of Section 412
     of the Code or Section 302 of ERISA.  Neither Target nor its
     Subsidiaries has provided, or is required to provide, security to any
     Pension Plan or to any single-employer plan of an ERISA Affiliate
     pursuant to Section 401(a)(29) of the Code.

                (e)  Under each Pension Plan which is a single-employer
     plan, as of the last day of the most recent plan year ended prior to
     the date hereof, the actuarially determined present value of all
     "benefit liabilities", within the meaning of Section 4001(a)(16) of
     ERISA (as determined on the basis of the actuarial assumptions
     contained in the Plan's most recent actuarial valuation), did not
     exceed the then current value of the assets of such Plan, and there
     has been no material change in the financial condition of such Plan
     since the last day of the most recent Plan Year.  The withdrawal
     liability of Target and its Subsidiaries under each Benefit Plan which
     is a multiemployer plan to which Target, its Subsidiaries or an ERISA
     Affiliate has contributed during the preceding 12 months, determined
     as if a "complete withdrawal", within the meaning of Section 4203 of
     ERISA, had occurred as of the date hereof, does not exceed $100,000.

                (f)  Neither Target nor its Subsidiaries has any
     obligations for retiree health and life benefits under any Plan,
     except as set forth in Section 3.11 of the Target Disclosure Schedule.
      Except as set forth in Section 3.11 of the Target Disclosure
     Schedule, there are no restrictions on the rights of Target or its
     Subsidiaries to amend or terminate any such Plan without incurring any
     liability thereunder.

                (g)  Target and its Subsidiaries have no material unfunded
     liabilities with respect to any Pension Plan which covers foreign
     Employees.

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

                3.12  SEC Reports.  Target has made or will make available
     to Parent an accurate and complete copy of each (a) registration
     statement, prospectus, report, schedule, proxy statement, information
     statement or other stockholder communication used, circulated or filed
     after January 1, 1990 by Target, and no such registration statement,
     prospectus, report, schedule, proxy statement, information statement
     or communication, each in the form (including exhibits and amendments
     thereto) filed with the SEC (or if not so filed, in the form first
     used or circulated) (collectively, the "Target Reports"), contained,
     as of its date, any untrue statement of a material fact or omitted to
     state any material fact required to be stated therein or necessary in
     order to make the statements therein, in light of the circumstances in
     which they were made, not misleading.  Target has timely filed, and
     will timely file, all Target Reports and other documents required to
     be filed by it under the Securities Act of 1933, as amended (the
     "Securities Act") and the Exchange Act, and, as of their respective
     dates, all Target Reports complied in all material respects with the
     published rules and regulations of the SEC with respect thereto.

                3.13  Target Information  The information relating to or
     provided by Target and its Subsidiaries to be contained or
     incorporated by reference in the Proxy Statement and the registration
     statement on Form S-4 (the "S-4") in which the Proxy Statement will be
     included as a prospectus, or in any other document filed with any
     other regulatory agency in connection herewith, will not contain any
     untrue statement of a material fact or omit to state a material fact
     necessary to make the statements therein not misleading.  The Proxy
     Statement (except for such portions thereof that relate only to Parent
     or any of its Subsidiaries) will comply in all material respects with
     the provisions of the Exchange Act and the rules and regulations
     thereunder.

                3.14  Compliance with Applicable Law.  Except as disclosed
     in Section 3.14 of the Target Disclosure Schedule, Target and each of
     its Subsidiaries hold, and have at all times held, all material
     licenses, franchises, permits and authorizations necessary for the
     lawful conduct of their respective businesses under and pursuant to
     all, and have complied with and are not in default in any respect
     under any, applicable laws, statutes, orders, rules, regulations,
     policies and/or guidelines of any Governmental Entity relating to
     Target or any of its Subsidiaries, except where the failure to hold
     such license, franchise, permit or authorization or such noncompliance
     or default would not, individually or in the aggregate, have a
     Material Adverse Effect on Target or the Surviving Corporation, and
     neither Target nor any of its Subsidiaries knows of, or has received
     notice of, any violations of any of the above.

                3.15  Certain Contracts.  (a)  Except as set forth in
     Section 3.15(a) of the Target Disclosure Schedule, neither Target nor
     any of its Subsidiaries is a party to or bound by any contract,
     arrangement, commitment or understanding (whether written or oral)
     (i) with respect to the employment of any directors, officers,
     employees or consultants, (ii) which, upon the consummation of the
     transactions contemplated by this Agreement will (either alone or upon
     the occurrence of any additional acts or events) result in any payment
     (whether of severance pay or otherwise) becoming due from Parent,
     Target, Target Bank, the Surviving Corporation or any of their
     respective Subsidiaries to any officer or employee thereof,
     (iii) which is a material contract (as defined in Item 601(b)(10) of
     Regulation S-K of the SEC) to be performed after the date of this
     Agreement that has not been filed or incorporated by reference in the
     Target Reports filed with the SEC during 1994, (iv) which is a
     consulting agreement (including data processing, software programming
     and licensing contracts) not terminable on 60 days or less notice
     involving the payment of more than $100,000 per annum, in the case of
     any such agreement with an individual, or $500,000 per annum, in the
     case of any other such agreement, (v) which materially restricts the
     conduct of any line of business by Target or Target Bank, or
     (vi) (including any stock option plan, stock appreciation rights plan,
     restricted stock plan or stock purchase 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.  Target has previously delivered to
     Parent true and correct copies of all employment, consulting and
     deferred compensation agreements which are in writing and to which
     Target or any of its Subsidiaries is a party.  Each contract,
     arrangement, commitment or understanding of the type described in this
     Section 3.15(a), whether or not set forth in Section 3.15(a) of the
     Target Disclosure Schedule, is referred to herein as a "Target
     Contract," and neither Target nor any of its Subsidiaries knows of, or
     has received notice of, any material violation of the above.

                (b)  Except as set forth in Section 3.15(b) of the Target
     Disclosure Schedule, (i) each Target Contract is valid and binding and
     in full force and effect, (ii) Target and each of its Subsidiaries has
     in all material respects performed all obligations required to be
     performed by it to date under each Target Contract, except where such
     noncompliance, individually or in the aggregate, would not have a
     Material Adverse Effect on Target, and (iii) no event or condition
     exists which constitutes or, after notice or lapse of time or both,
     would constitute, a material default on the part of Target or any of
     its Subsidiaries under any such Target Contract, except where such
     default, individually or in the aggregate, would not have a Material
     Adverse Effect on Target.

                3.16  Agreements with Regulatory Agencies.  Except as
     disclosed in the Target Reports or as set forth in Section 3.16 of the
     Target Disclosure Schedule, neither Target nor any of its Subsidiaries
     is subject to any cease-and-desist or other order issued by, or is a
     party to any written agreement, consent agreement or memorandum of
     understanding with, or is a party to any commitment letter or similar
     undertaking to, or is subject to any order or directive by, or is a
     recipient of any extraordinary supervisory letter from, or has adopted
     any board resolutions at the request of (each, whether or not set
     forth on Section 3.16 of the Target Disclosure Schedule, a "Regulatory
     Agreement"), any Regulatory Agency or other Governmental Entity that
     restricts the conduct of its business or that in any manner relates to
     its capital adequacy, its credit policies, its management or its
     business, nor has Target or any of its Subsidiaries been advised by
     any regulatory Agency or other Governmental Entity that it is
     considering issuing or requesting any Regulatory Agreement.

                3.17  Investment Securities.  Section 3.17 of the Target
     Disclosure Schedule sets forth the book and market value as of
     March 31, 1994 of the investment securities, mortgage backed
     securities and securities held for sale of Target and its
     Subsidiaries.  Section 3.17 of the Target Disclosure Schedule sets
     forth an investment securities report which includes security
     descriptions, CUSIP numbers, pool face values, book values, coupon
     rates, market values, book yields and weighted average coupon, in each
     case as of March 31, 1994.

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

                3.19  Undisclosed Liabilities.  Except (a) as set forth in
     Section 3.19 of the Target Disclosure Schedule, (b) for those
     liabilities that are fully reflected or reserved against on the
     consolidated balance sheet of Target included in its Form 10-Q for the
     period ended March 31, 1994 and (c) for liabilities incurred in the
     ordinary course of business consistent with past practice since
     March 31, 1994, neither Target nor any of its Subsidiaries has
     incurred any liability of any nature whatsoever (whether absolute,
     accrued, contingent or otherwise and whether due or to become due)
     that, either alone or when combined with all similar liabilities, is,
     or could reasonably be expected to have, a Material Adverse Effect on
     Target or the Surviving Corporation.

                3.20  Takeover Restrictions.  (a)  The Board of Directors
     of Target has approved the transactions contemplated by this Agreement
     such that the supermajority vote provisions of Section 203 of the DGCL
     and Section 8 of Target's Certificate of Incorporation will not apply
     to this Agreement or any of the transactions contemplated hereby.

                (b) No "business combination", "moratorium", "control
     share", or other federal or state antitakeover statute or regulation
     (collectively, "Antitakeover Provisions") other than HOLA or the
     Federal Deposit Insurance Act (i) prohibits or restricts Target's
     ability to perform its obligations under this Agreement, or its
     ability to consummate the transactions contemplated hereby, (ii) would
     have the effect of invalidating or voiding this Agreement, or any
     provision hereof, (iii) would subject Parent or Merger Sub to any
     material impediment or condition in connection with the exercise of
     any of its rights under this Agreement, or (iv) would provide any
     rights to, or permit the exercise of rights by, Target's stockholders.

                3.21  Administration of Fiduciary Accounts.  Each of Target
     and Target Bank has properly administered in all material respects all
     accounts for which it acts as a fiduciary, including but not limited
     to accounts for which it serves as a trustee, agent, custodian,
     personal representative, guardian, conservator or investment advisor,
     in accordance with the terms of the governing documents and applicable
     state and federal law and regulation and common law.  Neither Target
     nor Target Bank nor any of their respective directors, officers or
     employees has committed any breach of trust with respect to any such
     fiduciary account which has had or could reasonably be expected to
     have a Material Adverse Effect on Target, and the accountings for each
     such fiduciary account are true and correct in all material respects
     and accurately reflect the assets of such fiduciary account.

                3.22  Environmental Matters.  Except as set forth in
     Section 3.22 of the Target Disclosure Schedule, to the knowledge of
     Target:

                (a)  Each of Target, its Subsidiaries, the Participation
     Facilities and the Loan/Fiduciary Properties (each as hereinafter
     defined) are, and have been, in compliance with all applicable laws,
     rules, regulations, standards and requirements of all federal, state,
     local and foreign laws and regulations relating to pollution or
     protection of human health or the environment (including without
     limitation, laws and regulations relating to emissions, discharges,
     releases or threatened releases of Hazardous Material or petroleum or
     petroleum products, or otherwise relating to the manufacture,
     processing, distribution, use, treatment, storage, disposal, transport
     or handling of Hazardous Material or petroleum or petroleum products),
     except for violations which, either individually or in the aggregate,
     have not had and cannot reasonably be expected to have a Material
     Adverse Effect on Target;

                (b)  There is no suit, claim, action, proceeding,
     investigation or notice pending or threatened (or past or present
     actions, activities, circumstances, conditions, events or incidents
     that could form the basis of any such suit, claim, action, proceeding,
     investigation or notice), before any Governmental Entity or other
     forum in which Target, any of its Subsidiaries, any Participation
     Facility or any Loan/Fiduciary Property (or person or entity whose
     liability for any such suit, claim, action, proceeding, investigation
     or notice Target, any of its Subsidiaries, Participation Facility or
     Loan/Fiduciary Property has or may have retained or assumed either
     contractually or by operation of law), has been or, with respect to
     threatened suits, claims, actions, proceedings, investigations or
     notices may be, named as a defendant (x) for alleged noncompliance
     (including by any predecessor), with any environmental law, rule or
     regulation or (y) relating to the release or threatened release into
     the environment of any Hazardous Material (as hereinafter defined) or
     petroleum or petroleum products whether or not occurring at or on a
     site owned, leased or operated by Target or any of its Subsidiaries,
     any Participation Facility or any Loan/Fiduciary Property, except
     where such noncompliance or release has not had, and cannot be
     reasonably expected to have, either individually or in the aggregate,
     a Material Adverse Effect on Target;

                (c)  During the period of (x) Target's or any of its
     Subsidiaries' ownership or operation of any of their respective
     current properties, (y) Target's or any of its Subsidiaries'
     participation in the management of any Participation Facility, or (z)
     Target's or any of its Subsidiaries' holding of a security or other
     interest in a Loan/Fiduciary Property, there has been no release of
     Hazardous Material or petroleum or petroleum products in, on, under or
     affecting any such property, except where such release or threatened
     release has not had and cannot reasonably be expected to have, either
     individually or in the aggregate, a Material Adverse Effect on Target. 
     Prior to the period of (x) Target's or any of its Subsidiaries'
     ownership or operation of any of their respective current properties,
     (y) Target's or any of its Subsidiaries' participation in the
     management of any Participation Facility, or (z) Target's or any of
     its Subsidiaries' holding of a security or other interest in a
     Loan/Fiduciary Property, there was no release or threatened release of
     Hazardous Material or petroleum or petroleum products in, on, under or
     affecting any such property, Participation Facility or Loan/Fiduciary
     Property, except where such release has not had and cannot be
     reasonably expected to have, either individually or in the aggregate,
     a Material Adverse Effect on Target; and

                (d)  The following definitions apply for purposes of this
     Section 3.22:  (x) "Loan/Fiduciary Property" means any property owned
     or controlled by Target or any Target Subsidiary or in which Target or
     any of its Subsidiaries holds a security or other interest, and, where
     required by the context, said term means the owner or operator of such
     property; (y) "Participation Facility" means any facility in which
     Target or any of its Subsidiaries participates in the management and,
     where required by the context, said term means the owner or operator
     of such property; and (z) "Hazardous Material" means any pollutant,
     contaminant, waste or hazardous or toxic substance.

                3.23  Derivative Transactions.  Section 3.23 of the Target
     Disclosure Schedule sets forth the market value, as of May 31, 1994,
     of all holdings by Target or any of its Subsidiaries of positions in
     forwards, futures, options on futures, swaps and any other instrument
     within the scope of Target's Board-approved investment policy
     ("Derivative Instruments").  Except as set forth in Section 3.23 of
     the Target Disclosure Schedule, since December 31, 1993 neither Target
     nor any of its Subsidiaries has engaged in any transactions in or
     involving Derivative Instruments except as agent on the order and for
     the account of others.  None of the counterparties to any contract or
     agreement with respect to any such instrument is in default with
     respect to such contract or agreement and no such contract or
     agreement, were it to be a Loan held by Target or any of its
     Subsidiaries, would be classified as "Other Loans Especially
     Mentioned," "Special Mention," "Substandard," "Doubtful," "Loss,"
     "Classified," "Criticized," "Credit Risk Assets," "Concerned Loans" or
     words of similar import.  The financial position of Target and its
     Subsidiaries on a consolidated basis under or with respect to each
     such instrument has been reflected in the books and records of Target
     and such Subsidiaries in accordance with GAAP consistently applied,
     and no open exposure of Target or any of its Subsidiaries with respect
     to any such instrument (or with respect to multiple instruments with
     respect to any single counterparty) exceeds $500,000.

                3.24  Accuracy of Information.  The statements contained in
     this Agreement, the Target Disclosure Schedules or in any other
     written document delivered by or on behalf of Seller pursuant to the
     terms of this Agreement are true and correct, and such statements and
     documents do not omit any fact necessary to make the statements
     contained therein not misleading.

                3.25  Opinion.  Target has received an opinion, dated the
     date of this Agreement, from Lehman Brothers to the effect that,
     subject to the terms, conditions and qualifications set forth therein,
     as of the date thereof the consideration to be received by the
     stockholders of Target pursuant to the Merger is fair to such
     stockholders from a financial point of view.

                3.26  Assistance Agreements.  Except as set forth in
     Section 3.26 of the Target Disclosure Schedule, neither Target nor any
     of its Subsidiaries is a party to any agreement or arrangement entered
     into in connection with the consummation of a federally or state
     assisted acquisition of a depository institution pursuant to which
     Target or any of its Subsidiaries is entitled to receive financial
     assistance or indemnification from any governmental agency.

                3.27  DEPCO Directors.  On the date hereof, (i) the Rhode
     Island Depositors Economic Protection Corporation ("DEPCO") or any
     "Nominee" as defined in the Stock and Warrant Purchase Agreement dated
     as of April 21, 1992, by and between DEPCO and Target (the "DEPCO
     Agreement") (A) owns all of the issued and outstanding shares of
     Target's Series B Preferred Stock and (B) has the right to elect and
     has elected at least one current member of Target's Board of Directors
     and (ii) on the date hereof, and at all times through and including
     the Effective Date, the Directors elected by DEPCO or any "Nominee" as
     defined in the DEPCO Agreement pursuant to the terms of the Target
     Series B Preferred Stock shall represent less than 20% of the members
     of Target's Board of Directors.

                3.28  Qualified Thrift Lender.  Target Bank is a "qualified
     thrift lender" within the meaning set forth in Section 10(m) of HOLA.

                3.29  Knowledge as to Conditions.  Target knows of no
     reason why the Requisite Regulatory Approvals (as defined below)
     should not be obtained.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES
                                  OF PARENT

                Parent hereby represents and warrants to Target as follows:

                4.1  Corporate Organization.  (a)  Parent is a corporation
     duly organized, validly existing and in good standing under the laws
     of the State of Delaware.  Parent has the corporate power and
     authority to own or lease all of its properties and assets and to
     carry on its business as it is now being conducted, and is duly
     licensed or qualified to do business in each jurisdiction in which the
     nature of the business conducted by it or the character or location of
     the properties and assets owned or leased by it makes such licensing
     or qualification necessary, except where the failure to be so licensed
     or qualified would not have a Material Adverse Effect on Parent. 
     Parent is duly registered as a bank holding company under the BHC Act. 
     The Certificate of Incorporation and By-laws of Parent, copies of
     which have previously been made available to Target, are true,
     complete and correct copies of such documents as in effect as of the
     date of this Agreement.

                (b)  Merger Sub is or will be a corporation duly organized,
     validly existing and in good standing under the laws of the State of
     Delaware.

                (c)  Each Significant Subsidiary of Parent is duly
     organized, validly existing and in good standing under the laws of the
     jurisdiction of its incorporation.  Each Significant Subsidiary of
     Parent has the corporate power and authority to own or lease all of
     its properties and assets and to carry on its business as it is now
     being conducted, and is duly licensed or qualified to do business in
     each jurisdiction in which the nature of the business conducted by it
     or the character or location of the properties and assets owned or
     leased by it makes such licensing or qualification necessary, except
     where the failure to be so licensed or qualified would not have a
     Material Adverse Effect on Parent.

                4.2  Capitalization.  (a)  The authorized capital  stock of
     Parent consists of 150,000,000 shares of Parent Common Stock and
     10,000,000 shares of preferred stock, without par value ("Parent
     Preferred Stock").  At the close of business on March 31, 1994 there
     were 95,927,307 shares of Parent Common Stock, 700,000 shares of
     Parent Preferred Stock (of stated value of $50.00 per share), and
     5,750,000 shares of Parent Depositary Shares (each representing a one-
     tenth interest in a share of 9.30% cumulative preferred stock ($250
     stated value)) issued and outstanding, and 543 shares of Parent Common
     Stock held in Parent's treasury.  On March 31, 1994, no shares of
     Parent Common Stock or Parent Preferred Stock were reserved for
     issuance, except that 13,052,807 shares of Parent Common Stock were
     reserved for issuance pursuant to Parent's dividend reinvestment and
     stock purchase plans, 6,115,251 shares of Parent Common Stock were
     reserved for issuance upon the exercise of stock options pursuant to
     the Parent Stock Option and Restricted Stock Award Plan and the Parent
     1989 Nonemployee Directors' Restricted Stock Plan (collectively, the
     "Parent Stock Plans"), 9,357,452 shares of Parent Common Stock were
     reserved for issuance upon consummation of the merger of New Dartmouth
     Bank ("New Dartmouth") with a Subsidiary of Parent, pursuant to the
     Agreement and Plan of Merger, dated as of March 23, 1993, as amended,
     between Parent and New Dartmouth, 8,453,445 shares of Parent Common
     Stock were reserved for issuance upon consummation of the merger of
     Peoples Bancorp of Worcester, Inc. ("Peoples") with a Subsidiary of
     Parent, pursuant to the Agreement and Plan of Merger dated as of
     August 26, 1993, as amended, between Parent and Peoples, 7,627,301
     shares of Parent Common Stock were reserved for issuance upon
     consummation of the merger of Gateway Financial Corporation
     ("Gateway") with a Subsidiary of Parent, pursuant to the Agreement and
     Plan of Merger between Parent, Shawmut Service Corporation and Gateway
     dated as of November 5, 1993, and 1,500,000 shares of Parent Series A
     Junior Participating Preferred Stock were reserved for issuance upon
     exercise of the rights (the "Parent Rights") distributed to holders of
     Parent Common Stock pursuant to the Shareholder Rights Agreement,
     dated as of February 28, 1989, between Parent and Manufacturers
     Hanover Trust Company, as Rights Agent (the "Parent Shareholder Rights
     Agreement").  In addition, Parent has issued and outstanding 1,329,115
     warrants to purchase Parent Common Stock.  All of the issued and
     outstanding shares of Parent Common Stock and Parent Preferred Stock
     have been duly authorized and validly issued and are fully paid,
     nonassessable and free of preemptive rights, with no personal
     liability attaching to the ownership thereof.  As of the date of this
     Agreement, except as referred to above or reflected in Section 4.2(a)
     of the Disclosure Schedule which is being delivered by Parent to
     Target herewith (the "Parent Disclosure Schedule") and except for the
     Parent Shareholder Rights Agreement, Parent does not have and is not
     bound by any outstanding subscriptions, options, warrants, calls,
     commitments or agreements of any character calling for the purchase or
     issuance of any shares of Parent Common Stock or Parent Preferred
     Stock or any other equity securities of Parent or any securities
     representing the right to purchase or otherwise receive any shares of
     Parent Common Stock or Parent Preferred Stock.  The shares of Parent
     Common Stock to be issued pursuant to the Merger will be duly
     authorized and validly issued and, at the Effective Time, all such
     shares will be fully paid, nonassessable and free of preemptive
     rights, with no personal liability attaching to the ownership thereof.

                (b)  Section 4.2(b) of the Parent Disclosure Schedule sets
     forth a true and correct list of all of the Parent Subsidiaries as of
     the date of this Agreement.  Except as set forth in Section 4.2(b) of
     the Parent Disclosure Schedule, Parent owns, directly or indirectly,
     all of the issued and outstanding shares of capital stock of each of
     the Parent Subsidiaries, free and clear of all liens, charges,
     encumbrances and security interests whatsoever, and all of such shares
     are duly authorized and validly issued and are fully paid,
     nonassessable and free of preemptive rights, with no personal
     liability attaching to the ownership thereof.  No Parent Subsidiary
     has or is bound by any outstanding subscriptions, options, warrants,
     calls, commitments or agreements of any character with any party that
     is not a direct or indirect Subsidiary of Parent calling for the
     purchase or issuance of any shares of capital stock or any other
     equity security of such Subsidiary or any securities representing the
     right to purchase or otherwise receive any shares of capital stock or
     any other equity security of such Subsidiary.

                4.3  Authority; No Violation.  (a)  Parent has full
     corporate power and authority to execute and deliver this Agreement
     and to consummate the transactions contemplated hereby.  The execution
     and delivery of this Agreement and the consummation of the
     transactions contemplated hereby have been duly and validly approved
     by the Board of Directors of Parent, and no other corporate
     proceedings on the part of Parent are necessary to consummate the
     transactions contemplated hereby.  This Agreement has been duly and
     validly executed and delivered by Parent and constitutes a valid and
     binding obligation of Parent.

                (b)  Except as set forth in Section 4.3(b) of the Parent
     Disclosure Schedule, neither the execution and delivery of this
     Agreement by Parent, nor the consummation by Parent or Merger Sub, as
     the case may be, of the transactions contemplated hereby or thereby,
     nor compliance by Parent or Merger Sub with any of the terms or
     provisions hereof or thereof, will (i) violate any provision of the
     Certificate of Incorporation or By-Laws of Parent or the Certificate
     of Incorporation or By-Laws of Merger Sub, as the case may be, or
     (ii) assuming that the consents and approvals referred to in
     Section 4.4 are duly obtained, (x) violate any statute, code,
     ordinance, rule, regulation, judgment, order, writ, decree or
     injunction applicable to Parent or any of its Significant Subsidiaries
     or any of their respective properties or assets, or (y) violate,
     conflict with, result in a breach of any provision of or the loss of
     any benefit under, constitute a default (or an event which, with
     notice or lapse of time, or both, would constitute a default) under,
     or result in the termination of or a right of termination or
     cancellation under, accelerate the performance required by, or result
     in the creation of any lien, pledge, security interest, charge or
     other encumbrance upon any of the respective properties or assets of
     Parent or any of its Subsidiaries under, any of the terms, conditions
     or provisions of any note, bond, mortgage, indenture, deed of trust,
     license, lease, agreement or other instrument or obligation to which
     Parent or any of its Subsidiaries is a party, or by which they or any
     of their respective properties or assets may be bound or affected,
     except (in the case of clause (y) above) for such violations,
     conflicts, breaches or defaults which either individually or in the
     aggregate will not have a Material Adverse Effect on Parent.

                4.4  Consents and Approvals.  Except for (i) the filing of
     applications and notices, as applicable, with the Federal Reserve
     Board under the BHC Act and approval of such applications and notices,
     (ii) the filing of applications with the OTS under HOLA and approval
     of such applications, (iii) the State Approvals, (iv) the filing with
     the SEC of the S-4, (v) the approval of this Agreement by Parent as
     the sole stockholder of Merger Sub, (vi) the filing of the Certificate
     of Merger with the Secretary pursuant to the DGCL, (vii) such filings
     and approvals as are required to be made or obtained under the
     securities or "Blue Sky" laws of various states in connection with the
     issuance of the shares of Parent Common Stock pursuant to this
     Agreement, and (viii) such filings, authorizations or approvals as may
     be set forth in Section 4.4 of the Parent Disclosure Schedule, no
     consents or approvals of or filings or registrations with any
     Governmental Entity or with any third party are necessary in
     connection with (1) the execution and delivery by Parent of this
     Agreement and (2) the consummation by Parent and Merger Sub of the
     Merger and the other transactions contemplated hereby.  The
     affirmative vote of the holders of the outstanding shares of Parent
     Common Stock is not required to approve this Agreement or the
     transactions contemplated hereby.

                4.5  Financial Statements.  Parent has previously delivered
     to Target copies of (a) the consolidated balance sheets of Parent and
     its Subsidiaries as of December 31 for the fiscal years 1992 and 1993
     and the related consolidated statements of income, changes in
     shareholders' equity and cash flows for the fiscal years 1991 through
     1993, inclusive, as reported in Parent's Annual Report on Form 10-K
     for the fiscal year ended December 31, 1993 filed with the SEC under
     the Exchange Act, in each case accompanied by the audit report of
     Price Waterhouse, independent public accountants with respect to
     Parent, and (b) the unaudited consolidated balance sheet of Parent and
     its Subsidiaries as of March 31, 1994 and March 31, 1993 and the
     related unaudited consolidated statements of income, changes in
     shareholders' equity and cash flows for the three month periods then
     ended as reported in Parent's Quarterly Report on Form 10-Q for the
     period ended March 31, 1994 filed with the SEC under the Exchange Act. 
     The December 31, 1993 consolidated balance sheet of Parent (including
     the related notes, where applicable) fairly presents the consolidated
     financial position of Parent and its Subsidiaries as of the date
     thereof, and the other financial statements referred to in this
     Section 4.5 (including the related notes, where applicable) fairly
     present and the financial statements referred to in Section 6.8 hereof
     will fairly present (subject, in the case of the unaudited statements,
     to recurring audit adjustments normal in nature and amount), the
     results of the consolidated operations and changes in shareholders'
     equity and consolidated financial position of Parent and its
     Subsidiaries for the respective fiscal periods or as of the respective
     dates therein set forth; each of such statements (including the
     related notes, where applicable) comply, and the financial statements
     referred to in Section 6.8 hereof will comply, in all material
     respects with applicable accounting requirements and with the
     published rules and regulations of the SEC with respect thereto; and
     each of such statements (including the related notes, where
     applicable) has been, and the financial statements referred to in
     Section 6.8 hereof will be, prepared in accordance with GAAP
     consistently applied during the periods involved, except as indicated
     in the notes thereto or, in the case of unaudited statements, as
     permitted by Form 10-Q.  The books and records of Parent and its
     Significant Subsidiaries have been, and are being, maintained in all
     material respects in accordance with GAAP and any other applicable
     legal and accounting requirements and reflect only actual
     transactions.

                4.6  Broker's Fees.  Neither Parent, Merger Sub nor any
     Parent Subsidiary, nor any of their respective officers or directors,
     has employed any broker or finder or incurred any liability for any
     broker's fees, commissions or finder's fees in connection with any of
     the transactions contemplated by this Agreement, except that Parent
     has engaged, and will pay a financial advisory service fee to, Morgan
     Stanley & Co. Incorporated.

                4.7  Absence of Certain Changes or Events.  Except as may
     be set forth in Section 4.7 of the Parent Disclosure Schedule, or as
     disclosed in Parent's Quarterly Report on Form 10-Q for the quarter
     ended March 31, 1994 or in any Current Reports of Parent on Form 8-K
     filed prior to the date of this Agreement, true, complete and correct
     copies of which have previously been delivered to Target, since
     December 31, 1993, no event has occurred which has had or is
     reasonably likely to have, individually or in the aggregate, a
     Material Adverse Effect on Parent.

                4.8  Legal Proceedings.  Except as set forth in Section 4.8
     of the Parent Disclosure Schedule or in Parent's Quarterly Report on
     Form 10-Q for the quarter ended March 31, 1994, neither Parent nor any
     of its Subsidiaries is a party to any and there are no pending or, to
     the best of Parent's knowledge, threatened, legal, administrative,
     arbitral or other proceedings, claims, actions or governmental or
     regulatory investigations of any nature against Parent or any of its
     Subsidiaries as to which there is a reasonable probability of an
     adverse determination and (i) which, if adversely determined, would,
     individually or in the aggregate, have a Material Adverse Effect on
     Parent or (ii) challenging the validity or propriety of the
     transactions contemplated by this Agreement.  There is no injunction,
     order, judgment, decree, or regulatory restriction imposed upon
     Parent, any of its Subsidiaries or the assets of Parent or any of its
     Subsidiaries which has had, or might reasonably be expected to have, a
     Material Adverse Effect on Parent.

                4.9  Compliance with Applicable Law.  Parent and each of
     its Subsidiaries hold, and have at all times held, all material
     licenses, franchises, permits and authorizations necessary for the
     lawful conduct of their respective businesses under and pursuant to
     all, and have complied with and are not in default in any respect
     under any, applicable laws, statutes, orders, rules, regulations,
     policies and/or guidelines of any Governmental Entity relating to
     Parent or any of its Subsidiaries, except where the failure to hold
     such license, franchise, permit or authorization or such non-
     compliance or default would not, individually or in the aggregate,
     have a Material Adverse Effect on Parent, and neither Parent nor any
     of its Subsidiaries knows of, or has received notice of violation of,
     any material violations of any of the above.

                4.10  SEC Reports.  Parent has made or will make available
     to Target an accurate and complete copy of each (a) registration
     statement, prospectus, report, schedule, proxy statement, information
     statement or other stockholder communication used, circulated or filed
     after January 1, 1990 by Parent, and no such registration statement,
     prospectus, report, schedule, proxy statement, information statement
     or other stockholder communication used, each in the form (including
     exhibits and amendments thereto) filed with the SEC (or if not so
     filed, in the form first used or circulated) (collectively, the
     "Parent Reports"), contained, as of its date, any untrue statement of
     a material fact or omitted to state any material fact required to be
     stated therein or necessary in order to make the statements therein,
     in light of the circumstances in which they were made, not misleading. 
     Parent has timely filed, and will timely file, all Parent Reports and
     other documents required to be filed by it under the Securities Act
     and the Exchange Act, and, as of their respective dates, all Parent
     Reports complied in all material respects with the published rules and
     regulations of the SEC with respect thereto.

                4.11  Parent Information.  The information relating to or
     provided by Parent and its Subsidiaries to be contained or
     incorporated by reference in the Proxy Statement and the S-4, or in
     any other document filed with any other regulatory agency in
     connection herewith, will not contain any untrue statement of a
     material fact or omit to state a material fact necessary to make the
     statements therein not misleading.  The S-4 (except for such portions
     thereof that relate only to Target or any of its Subsidiaries) will
     comply in all material respects with the provisions of the Exchange
     Act and the rules and regulations thereunder.

                4.12  Accuracy of Information.  The statements contained in
     this Agreement, the Parent Disclosure Schedule or in any other written
     document delivered by or on behalf of Parent pursuant to the terms of
     this Agreement are true and correct in all material respects, and such
     statements and documents do not omit any material fact necessary to
     make the statements contained therein not misleading.

                4.13  Undisclosed Liabilities.  Except (a) as set forth in
     Section 4.13 of the Parent Disclosure Schedule, (b) for those
     liabilities that are fully reflected or reserved against on the
     consolidated balance sheet of Parent included in its Form 10-Q for the
     quarter ended March 31, 1994 and (c) for liabilities incurred in the
     ordinary course of business consistent with past practice, since
     December 31, 1993, neither Parent nor any of its Subsidiaries has
     incurred any liability of any nature whatsoever (whether absolute,
     accrued, contingent or otherwise and whether due or to become due)
     that, either alone or when combined with all similar liabilities, is,
     or could reasonably be expected to have a Material Adverse Effect.

                4.14  Knowledge as to Conditions.  Parent knows of no
     reason why the Requisite Regulatory Approvals should not be obtained.

                                    ARTICLE V

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

                5.1  Covenants of Target.  During the period from the date
     of this Agreement and continuing until the Effective Time, except as
     expressly contemplated or permitted by this Agreement or with the
     prior written consent of Parent, Target and its Subsidiaries shall
     carry on their respective businesses in the ordinary course and
     consistent with prudent banking practice.  Target will, and will use
     its best efforts to cause each of its Subsidiaries, to (x) preserve
     intact its and their business organizations, (y) keep available to
     itself and Parent the present services of its and their employees and
     (z) preserve intact for itself and Parent the goodwill of its and
     their customers and others with whom business relationships exist. 
     Without limiting the generality of the foregoing, and except as
     consented to in writing by Parent, Target shall not, and shall not
     permit any of its Subsidiaries to:

                (a)  solely in the case of Target, declare or pay any
     dividends on, or make other distributions in respect of, any of its
     capital stock except for regular dividends on Target Series B
     Preferred Stock;

                (b)  (i)  adjust, split, combine or reclassify any shares
     of its capital stock or issue or authorize or propose the issuance of
     any other securities in respect of, in lieu of or in substitution for
     shares of its capital stock (other than payment of regular dividends
     on Target Series B Preferred Stock) or grant any stock appreciation
     rights except upon the exercise or fulfillment of rights or options
     issued or existing pursuant to employee or director benefit plans,
     programs or arrangements, all to the extent outstanding and in
     existence on the date of this Agreement and listed in Section 3.11 of
     the Target Disclosure Schedule, or (ii) repurchase, redeem or
     otherwise acquire (except for the acquisition of Trust Account Shares
     and DPC Shares, as such terms are defined in Section 1.4(b) hereof or
     as required by the DEPCO Agreement) any shares of the capital stock of
     Target or any Target Subsidiary, or any securities convertible into or
     exercisable for any shares of the capital stock of Target or any
     Target Subsidiary;

                (c)  issue, deliver or sell, or authorize or propose the
     issuance, delivery or sale of, any shares of its capital stock (other
     than payment of regular dividends on Target Series B Preferred Stock)
     or any securities convertible into or exercisable for, or any rights,
     warrants or options to acquire, any such shares, or enter into any
     agreement with respect to any of the foregoing, other than the grant
     of options required pursuant to the Subsequent Grant provision of the
     Target 1993 Stock Option Plan For Three Year Term Outside Directors
     (the "Subsequent Options") and the issuance of Target Common Stock
     upon exercise of Subsequent Options, the issuance of Target Common
     Stock upon exercise of Subsequent Options, the issuance of Target
     Common Stock pursuant to stock options or similar rights to acquire
     Target Common Stock granted pursuant to the Target Stock Option Plans
     and outstanding prior to the date of this Agreement or pursuant to the
     Target Warrants, in each case in accordance with their terms on the
     date hereof;

                (d)  amend its Certificate of Incorporation, By-laws or
     other similar governing documents;

                (e)  authorize or permit any of its officers, directors,
     employees or agents directly or indirectly to solicit, initiate or
     encourage any inquiries relating to, or other making of any proposal
     which constitutes, a "takeover proposal" (as defined below), or,
     except to the extent legally required for the discharge of the
     fiduciary duties of the Board of Directors of Target as advised in
     writing by such Board's outside counsel, recommend or endorse any
     takeover proposal, or participate in any discussions or negotiations,
     or provide third parties with any nonpublic information, relating to
     any such inquiry or proposal or otherwise facilitate any effort or
     attempt to make or implement a takeover proposal; provided, however,
     that Target may communicate information about any such takeover
     proposal to its stockholders if, in the judgment of Target's Board of
     Directors with the written advice of such Board's outside counsel,
     such communication is required under applicable law.  Target will
     immediately cease and cause to be terminated any existing activities,
     discussions or negotiations previously conducted with any parties
     other than Parent with respect to any of the foregoing and shall
     demand the return of any confidential information provided to any
     other person and will enforce its rights, under any confidentiality
     agreement, to the return of any confidential information in the event
     any such other person does not return such information.  Target will
     take all actions necessary or advisable to inform the appropriate
     individuals or entities referred to in the first sentence of this
     Section 5.1(e) of the obligations undertaken in this Section 5.1(e). 
     Target will notify Parent immediately if any such inquiries or
     takeover proposals are received by, any such information is requested
     from, or any such negotiations or discussions are sought to be
     initiated or continued with, Target, and Target will promptly inform
     Parent in writing of all of the relevant details with respect to the
     foregoing.  As used in this Agreement, "takeover proposal" shall mean
     any tender or exchange offer, proposal for a merger, consolidation or
     other business combination involving Target or any Subsidiary of
     Target or any proposal or offer to acquire in any manner a substantial
     equity interest in, or a substantial portion of the assets or deposits
     of, Target or any Subsidiary of Target other than the transactions
     contemplated or permitted by this Agreement;

                (f)  except as set forth in Section 5.1 of the Target
     Disclosure Schedule, make any capital expenditures other than in the
     ordinary course of business, as necessary to maintain existing assets
     in good repair or capital expenditures contemplated by the Target
     Business Plan dated as of April 15, 1994 previously furnished to
     Parent (the "Business Plan");

                (g)  enter into any new, or materially alter or expand any
     present line of business other than new lines of businesses, or
     material alterations or expansions of present lines of business
     contemplated by the Business Plan;

                (h)  acquire or agree to acquire, by merging or
     consolidating with, or by purchasing a substantial equity interest in
     or a substantial portion of the assets of, or by any other manner, any
     business or any corporation, partnership, association or other
     business organization or division thereof or (other than in the
     ordinary course of business) otherwise acquire any assets, other than
     in connection with foreclosures, settlements in lieu of foreclosure or
     troubled loan or debt restructurings in the ordinary course of
     business consistent with prudent banking practices, which would be
     material, individually or in the aggregate, to Target or Target Bank,
     as the case may be;

                (i)  except as required by law, take any action that is
     intended or could reasonably be expected to result in any of its
     representations and warranties set forth in this Agreement being or
     becoming untrue in any material respect, or in any of the conditions
     to the Merger set forth in Article VII not being satisfied, or in a
     violation of any provision of this Agreement;

                (j)  change its methods of accounting in effect at
     March 31, 1994, except as required by changes in GAAP or regulatory
     accounting principles as concurred in by Target's independent
     auditors;

                (k)  except as set forth in Section 5.1 of the Target
     Disclosure Schedule, (i)  except as required by applicable law or to
     maintain qualification pursuant to the Code, adopt, amend, renew (for
     a term longer than the prior term) or terminate any Plan or any
     agreement, arrangement, plan or policy between Target or any
     Subsidiary of Target and one or more of its current or former
     directors, officers or employees or (ii) except as set forth in
     Section 5.1 of the Target Disclosure Schedule, except for normal
     increases in the ordinary course of business consistent with past
     practice or except as required by applicable law, increase in any
     manner the compensation or fringe benefits of any director, officer or
     employee or pay any benefit not required by any plan or agreement as
     in effect as of the date hereof (including, without limitation, the
     granting of stock options, stock appreciation rights, restricted
     stock, restricted stock units or performance units or shares) or
     (iii) enter into, modify or renew (for a term longer than the prior
     term) any contract, agreement, commitment or arrangement providing for
     the payment to any director, officer or employee of such party of
     compensation or benefits contingent, or the terms of which are
     materially altered, upon the occurrence of any of the transactions
     contemplated by this Agreement;

                (l)  take or cause to be taken any action which would
     disqualify the Merger as a tax free reorganization under Section 368
     of the Code;

                (m)  other than activities in the ordinary course of
     business consistent with prudent banking practice, sell, lease,
     encumber, assign or otherwise dispose of, or agree to sell, lease,
     encumber, assign or otherwise dispose of, any of its material assets,
     properties or other rights or agreements;

                (n)  other than in the ordinary course of business
     consistent with prudent banking practice or to cover expenses and
     obligations under this Agreement, incur any indebtedness for borrowed
     money, assume, guarantee, endorse or otherwise as an accommodation
     become responsible for the obligations of any other individual,
     corporation or other entity;

                (o)  file any application to relocate or terminate the
     operations of any office of it or any of its Subsidiaries (other than
     the previously announced move of Target's head office to Farmington,
     Connecticut);

                (p)  commit any act or omission which constitutes a breach
     or default by Target or any of its Subsidiaries under any Regulatory
     Agreement or a material breach or default by Target or any of its
     Subsidiaries under any material contract or material license to which
     Target or any of its Subsidiaries is a party or by which any of them
     or their respective properties is bound;

                (q)  make any equity investment or commitment to make such
     an investment in real estate or in any real estate development
     project, other than in connection with foreclosure, settlements in
     lieu of foreclosure or troubled loan or debt restructurings in the
     ordinary course of business consistent with prudent banking practices;

                (r)  create, renew, amend or terminate or give notice of a
     proposed renewal, amendment or termination of, any material contract,
     agreement or lease for goods, services or office space to which Target
     or any of its Subsidiaries is a party or by which Target or any of its
     Subsidiaries or their respective properties is bound except that
     Target may renew contracts, agreements or leases in the ordinary
     course of business after consultation with Parent;

                (s) settle any claim, action or proceeding involving any
     liability of Target or any Subsidiary of Target for material money
     damages or material restrictions upon the operation of Target or any
     Subsidiary of Target;

                (t) take any other action that would materially adversely
     affect or materially delay the ability of Parent or Target to obtain
     the Requisite Regulatory Approvals (as defined below) or otherwise
     materially adversely affect Parent's ability to consummate the
     transactions contemplated by this Agreement; or

                (u)  authorize or enter into any agreement or commitment to
     do any of the foregoing.

                5.2  Covenants of Parent.  During the period from the date
     of this Agreement and continuing until the Effective Time, except as
     expressly contemplated or permitted by this Agreement or with the
     prior written consent of Target, Parent and its Subsidiaries shall
     carry on their respective businesses in the ordinary course consistent
     with prudent banking practice.  Without limiting the generality of the
     foregoing, and except as consented to in writing by Target, Parent
     shall not, and shall not permit any of its Subsidiaries to:

                (a)  take any action that is intended or may reasonably be
     expected to result in any of its representations and warranties set
     forth in this Agreement being or becoming untrue in any material
     respect, or in any of the conditions to the Merger set forth in
     Article VII not being satisfied or in a violation of any provision of
     this Agreement, except, in every case, as may be required by
     applicable law;

                (b)  take or cause to be taken any action which would
     disqualify the Merger as a tax free reorganization under Section 368
     of the Code;

                (c)  take any other action that would materially adversely
     affect or materially delay the ability of Parent or Target to obtain
     the Requisite Regulatory Approvals or otherwise materially adversely
     affect Parent's ability to consummate the transactions contemplated by
     this Agreement; 

                (d)  solely in the case of Parent, declare or pay any
     dividend on, or make any other distributions in respect of, the Parent
     Common Stock except for regular dividends and dividends or
     distributions in Parent Common Stock;

                (e)  consolidate with or merge into any other person or
     convey, transfer or lease its properties and assets substantially as
     an entirety to any person unless such person shall expressly assume
     the obligations of Parent hereunder; or

                (f)  authorize or enter into any agreement or commitment to
     do any of the foregoing.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

                6.1  Regulatory Matters.  (a)  Target shall promptly
     prepare and file with the SEC the Proxy Statement and Parent shall
     promptly prepare and file with the SEC the S-4, in which the Proxy
     Statement will be included as a prospectus.  Each of Parent and Target
     shall use all reasonable efforts to have the S-4 declared effective
     under the Securities Act as promptly as practicable after such filing,
     and Target shall thereafter mail the Proxy Statement to its
     stockholders.  Parent shall also use all reasonable efforts to obtain
     all necessary state securities law or "Blue Sky" permits and approvals
     required to carry out the transactions contemplated by this Agreement,
     and Target shall furnish all information concerning Target and the
     holders of Target Common Stock as may be reasonably requested in
     connection with any such action.

                (b)  The parties hereto shall cooperate with each other and
     use their reasonable best efforts promptly to prepare and file all
     necessary documentation, to effect all applications, notices,
     petitions and filings, and to obtain as promptly as practicable all
     permits, consents, approvals and authorizations of all third parties
     and Governmental Entities which are necessary or advisable to
     consummate the transactions contemplated by this Agreement (including
     without limitation the Merger) (it being understood that any
     amendments to the S-4 or a resolicitation of proxies as a consequence
     of an acquisition agreement by Parent or any of its Subsidiaries shall
     not violate this covenant).  Target and Parent shall have the right to
     review in advance, and to the extent practicable each will consult the
     other on, in each case subject to applicable laws relating to the
     exchange of information, all the information relating to Target or
     Parent, as the case may be, and any of their respective Subsidiaries,
     which appear in any filing made with, or written materials submitted
     to, any third party or any Governmental Entity in connection with the
     transactions contemplated by this Agreement; provided, however, that
     nothing contained herein shall be deemed to provide either party with
     a right to review any information provided to any Governmental Entity
     on a confidential basis in connection with the transactions
     contemplated hereby.  In exercising the foregoing right, each of the
     parties hereto shall act reasonably and as promptly as practicable. 
     The parties hereto agree that they will consult with each other with
     respect to the obtaining of all permits, consents, approvals and
     authorizations of all third parties and Governmental Entities
     necessary or advisable to consummate the transactions contemplated by
     this Agreement and each party will keep the other apprised of the
     status of matters relating to completion of the transactions
     contemplated herein.

                (c)  Parent and Target shall, upon request, furnish each
     other with all information concerning themselves, their Subsidiaries,
     directors, officers and stockholders and such other matters as may be
     reasonably necessary or advisable in connection with the Proxy
     Statement, the S-4 or any other statement, filing, notice or
     application made by or on behalf of Parent, Target or any of their
     respective Subsidiaries to any Governmental Entity in connection with
     the Merger and the other transactions contemplated by this Agreement.

                (d)  Parent and Target shall promptly advise each other
     upon receiving any communication from any Governmental Entity whose
     consent or approval is required for consummation of the transactions
     contemplated by this Agreement which causes such party to believe that
     there is a reasonable likelihood that any Requisite Regulatory
     Approval will not be obtained or that the receipt of any such approval
     will be materially delayed.

                6.2  Access to Information.  (a)  Upon reasonable notice
     and subject to applicable laws relating to the exchange of
     information, Target shall, and shall cause each of its Subsidiaries
     to, afford to the officers, employees, accountants, counsel and other
     representatives of Parent, access, during normal business hours during
     the period prior to the Effective Time, to all its properties, books,
     contracts, commitments and records and, during such period, Target
     shall, and shall cause its Subsidiaries to, make available to Parent
     (i) a copy of each report, schedule, registration statement and other
     document filed or received by it during such period pursuant to the
     requirements of Federal securities laws or Federal or state banking,
     savings and loan or savings association laws (other than reports or
     documents which Target is not permitted to disclose under applicable
     law) and (ii) all other information concerning its business,
     properties and personnel as Parent may reasonably request.  Neither
     Target nor any of its Subsidiaries shall be required to provide access
     to or to disclose information where such access or disclosure would
     violate or prejudice the rights of Target's customers, jeopardize the
     attorney-client privilege of the institution in possession or control
     of such information or contravene any law, rule, regulation, order,
     judgment, decree, fiduciary duty or binding agreement entered into
     prior to the date of this Agreement.  The parties hereto will make
     appropriate substitute disclosure arrangements under circumstances in
     which the restrictions of the preceding sentence apply.  Parent will
     hold all such information in confidence to the extent required by, and
     in accordance with, the provisions of the confidentiality agreement
     between Parent and Target (the "Confidentiality Agreement").

                (b)  Upon reasonable notice and subject to applicable laws
     relating to the exchange of information, Parent shall, and shall cause
     its Subsidiaries to, afford to the officers, employees, accountants,
     counsel and other representatives of Target, access, during normal
     business hours during the period prior to the Effective Time, to such
     information regarding Parent and its Subsidiaries as shall be
     reasonably necessary for Target to fulfill its obligations pursuant to
     this Agreement to prepare the Proxy Statement or which may be
     reasonably necessary for Target to confirm that the representations
     and warranties of Parent contained herein are true and correct and
     that the covenants of Parent contained herein have been performed in
     all material respects.  Neither Parent nor any of its Subsidiaries
     shall be required to provide access to or to disclose information
     where such access or disclosure would violate or prejudice the rights
     of Parent's customers, jeopardize the attorney-client privilege of the
     institution in possession or control of such information or contravene
     any law, rule, regulation, order, judgment, decree, fiduciary duty or
     binding agreement entered into prior to the date of this Agreement. 
     The parties hereto will make appropriate substitute disclosure
     arrangements under circumstances in which the restrictions of the
     preceding sentence apply.

                (c)  All information furnished by Parent to Target or its
     representatives pursuant hereto shall be treated as the sole property
     of Parent and, if the Merger shall not occur, Target and its
     representatives shall return to Parent all of such written information
     and all documents, notes, summaries or other materials containing,
     reflecting or referring to, or derived from, such information.  Target
     shall, and shall use its best efforts to cause its representatives to,
     keep confidential all such information, and shall not directly or
     indirectly use such information for any competitive or other
     commercial purpose.  The obligation to keep such information
     confidential shall continue for five years from the date the proposed
     Merger is abandoned and shall not apply to (i) any information which
     (x) was legally in Target's possession prior to the disclosure thereof
     by Parent; (y) was then generally known to the public; or (z) was
     disclosed to Target by a third party not bound by an obligation of
     confidentiality or (ii) disclosures made as required by law.  It is
     further agreed that, if in the absence of a protective order or the
     receipt of a waiver hereunder Target is nonetheless, in the written
     opinion of its outside counsel, compelled to disclose information
     concerning Parent to any tribunal or governmental body or agency or
     else stand liable for contempt or suffer other censure or penalty,
     Target may disclose such information to such tribunal or governmental
     body or agency without liability hereunder.

                (d)  No investigation by either of the parties or their
     respective representatives shall affect the representations and
     warranties of the other set forth herein.

                (e)  Within ten business days of the date of this
     Agreement, Target shall deliver to Parent amended Section 3.17 of the
     Target Disclosure Statement setting forth an investment securities
     report which includes pay down factors, paydown speeds, durations, and
     weighted average life, in each case as of March 31, 1994.

                6.3  Stockholders Meeting.  Target shall take all steps
     necessary to duly call, give notice of, convene and hold a meeting of
     its stockholders to be held as soon as is reasonably practicable after
     the date on which the S-4 becomes effective for the purpose of voting
     upon the approval of this Agreement.  Target will, through its Board
     of Directors, except to the extent legally required for the discharge
     of the fiduciary duties of such board as advised in writing by such
     Board's outside counsel, recommend to its stockholders approval of
     this Agreement and the transactions contemplated hereby and such other
     matters as may be submitted to its stockholders in connection with
     this Agreement.  Target and Parent shall coordinate and cooperate with
     respect to the foregoing matters.

                6.4  Legal Conditions to Merger.  Each of Parent and Target
     shall, and shall cause its subsidiaries to, use their reasonable best
     efforts (a) to take, or cause to be taken, all actions necessary,
     proper or advisable to comply promptly with all legal requirements
     which may be imposed on such party or its Subsidiaries with respect to
     the Merger and, subject to the conditions set forth in Article VII
     hereof, to consummate the transactions contemplated by this Agreement
     and (b) to obtain (and to cooperate with the other party to obtain)
     any consent, authorization, order or approval of, or any exemption by,
     any Governmental Entity and any other third party which is required to
     be obtained by Target or Parent or any of their respective
     Subsidiaries in connection with the Merger and the other transactions
     contemplated by this Agreement.

                6.5  Affiliates.  Target shall use its best efforts to
     cause each director, executive officer and other person who is an
     "affiliate" (for purposes of Rule 145 under the Securities Act) of
     Target (each an "Affiliate") to deliver to Parent, as soon as
     practicable after the date of this Agreement, and prior to the date of
     the stockholders meeting called by Target to approve this Agreement, a
     written agreement, in substantially the form of Exhibit 6.5 hereto.

                6.6  Stock Exchange Listing.  Parent shall use its best
     efforts to cause the shares of Parent Common Stock to be issued in the
     Merger to be approved for listing on the New York Stock Exchange, Inc.
     (the "NYSE"), subject to official notice of issuance, prior to the
     Effective Time.

                6.7  Indemnification; Directors' and Officers' Insurance. 
     (a)  In the event of any threatened or actual claim, action, suit,
     proceeding or investigation, whether civil, criminal or
     administrative, including, without limitation, any such claim, action,
     suit, proceeding or investigation in which any person who is now, or
     has been at any time prior to the date of this Agreement, or who
     becomes prior to the Effective Time, a director or officer or employee
     of Target or any of its Subsidiaries (the "Indemnified Parties") is,
     or is threatened to be, made a party based in whole or in part on, or
     arising in whole or in part out of, or pertaining to any action or
     omission by such person in his or her capacity as a director, officer
     or employee of Target, any of the Target Subsidiaries or any of their
     respective predecessors, whether in any case asserted or arising
     before or after the Effective Time, the parties hereto agree to
     cooperate and use their best efforts to defend against and respond
     thereto.  It is understood and agreed that after the Effective Time,
     Parent shall indemnify and hold harmless, as and to the fullest extent
     provided in Target's Certificate of Incorporation and Bylaws and
     permitted by Delaware law, each such Indemnified Party against any
     losses, claims, damages, liabilities, costs, expenses (including, to
     the extent so provided and permitted, reasonable attorney's fees and
     expenses in advance of the final disposition of any claim, suit,
     proceeding or investigation upon receipt of any undertaking required
     by applicable law or Target's Certificate of Incorporation or Bylaws),
     judgments, fines and amounts paid in settlement in connection with any
     such threatened or actual claim, action, suit, proceeding or
     investigation, and in the event of any such threatened or actual
     claim, action, suit, proceeding or investigation (whether asserted or
     arising before or after the Effective Time), an Indemnified Party may
     retain counsel reasonably satisfactory to him or her after
     consultation with Parent; provided, however, that (1) Parent shall
     have the right to assume the defense thereof and upon such assumption
     Parent shall not be liable to any Indemnified Party for any legal
     expenses of other counsel or any other expenses subsequently incurred
     by any Indemnified Party in connection with the defense thereof,
     except that if Parent elects not to assume such defense or counsel for
     the Indemnified Parties reasonably advises the Indemnified Parties
     that there are issues which raise conflicts of interest between Parent
     and the Indemnified Parties, the Indemnified Parties may retain
     counsel reasonably satisfactory to them after consultation with
     Parent, and Parent shall pay the reasonable fees and expenses of such
     counsel for the Indemnified Parties, (2) Parent shall be obligated
     pursuant to this paragraph to pay for only one firm of counsel for all
     Indemnified Parties, (3) Parent shall not be liable for any settlement
     effected without its prior written consent (which consent shall not be
     unreasonably withheld) and (4) Parent shall have no obligation
     hereunder to any Indemnified Party when and if a court of competent
     jurisdiction shall ultimately determine, and such determination shall
     have become final and nonappealable, that indemnification of such
     Indemnified Party in the manner contemplated hereby is prohibited
     under applicable law.  Any Indemnified Party wishing to claim
     Indemnification under this Section 6.7, upon learning of any such
     claim, action, suit, proceeding or investigation, shall notify Parent
     thereof, provided that the failure to so notify shall not affect the
     obligations of Parent under this Section 6.7 except to the extent such
     failure to notify materially prejudices Parent.  Parent's obligations
     under this Section 6.7 continue in full force and effect for a period
     of six (6) years from the Effective Time; provided, however, that all
     rights to indemnification in respect of any claim (a "Claim") asserted
     or made within such period shall continue until the final disposition
     of such Claim.

                (b)  Parent shall use its best efforts to cause the persons
     serving as officers and directors of Target immediately prior to the
     Effective Time to be covered for a period of four (4) years from the
     Effective Time by the directors' and officers' liability insurance
     policy maintained by Target (provided that Parent may substitute
     therefor policies of at least the same coverage and amounts containing
     terms and conditions, including limits, deductibles and prior acts
     coverage, which are not less advantageous than such policy) with
     respect to acts or omissions occurring prior to the Effective Time
     which were committed by such officers and directors in their capacity
     as such; provided, however, that, in the event that the annual amount
     Parent would be required to expend would be more than 200% of the
     current annual amount expended by Target (the "Insurance Amount") to
     maintain insurance coverage for such persons under Target's current
     policies, Parent may self insure; and further provided that if Parent
     is unable to maintain or obtain the insurance called for by this
     Section 6.7(b), Parent shall use its best efforts to obtain as much
     comparable insurance as available for the Insurance Amount.  Nothing
     in this Section 6.7(b) shall be deemed to modify any existing
     contractual obligations under any agreements of Target or any of its
     Subsidiaries.

                (c)  In the event Parent or any of its successors or
     assigns (i) consolidates with or merges into any other person and
     shall not be the continuing or surviving corporation or entity of such
     consolidation or merger, or (ii) transfers or conveys all or
     substantially all of its properties and assets to any person, then,
     and in each such case, to the extent necessary, proper provision shall
     be made so that the successors and assigns of Parent assume the
     obligations set forth in this section.

                (d)  The provisions of this Section 6.7 are intended to be
     for the benefit of, and shall be enforceable by, each Indemnified
     Party and his or her heirs and representatives.

                6.8  Subsequent Financial Statements.  As soon as
     reasonably available, but in no event more than 45 days after the end
     of each fiscal quarter ending after the date of this Agreement, Parent
     will deliver to Target and Target will deliver to Parent their
     respective Quarterly Reports on Form 10-Q, as filed with the SEC under
     the Exchange Act.

                6.9  Additional Agreements.  In case at any time after the
     Effective Time any further action is necessary or desirable to carry
     out the purposes of this Agreement, or to vest the Surviving
     Corporation with full title to all properties, assets, rights,
     approvals, immunities and franchises of any of the parties to the
     Merger, the proper officers and directors of each party to this
     Agreement and their respective Subsidiaries shall take all such
     necessary action as may be reasonably requested by, and at the sole
     expense of, Parent.

                6.10  Advice of Changes.  Parent and Target shall promptly
     advise the other party of any change or event having a Material
     Adverse Effect on it or which it believes would or would be reasonably
     likely to cause or constitute a material breach of any of its
     representations, warranties or covenants contained herein.  From time
     to time prior to the Effective Time, each party will promptly
     supplement or amend the Disclosure Schedules delivered in connection
     with the execution of this Agreement to reflect any matter which, if
     existing, occurring or known at the date of this Agreement, would have
     been required to be set forth or described in such Disclosure
     Schedules or which is necessary to correct any information in such
     Disclosure Schedules which has been rendered inaccurate thereby.  No
     supplement or amendment to such Disclosure Schedules shall have any
     effect for the purpose of determining satisfaction of the conditions
     set forth in Section 7.2(a) or 7.3(a) hereof, as the case may be, or
     the compliance by Target or Parent, as the case may be, with the
     respective covenants set forth in Sections 5.1 and 5.2 hereof.

                6.11  Current Information.  During the period from the date
     of this Agreement to the Effective Time, Target will cause one or more
     of its designated representatives to confer on a regular and frequent
     basis (not less than monthly) with representatives of Parent and to
     report (i) the general status of the ongoing operations of Target and
     its Subsidiaries and (ii) the status of, and the action proposed to be
     taken with respect to, those Loans held by Target or any Target
     Subsidiary which, individually or in combination with one or more
     other Loans to the same borrower thereunder, have an unpaid principal
     amount of $100,000 or more and are non-performing assets.  Target will
     promptly notify Parent of any material change in the normal course of
     business or in the operation of the properties of Target or any of its
     Subsidiaries and of any governmental complaints, investigations or
     hearings (or communications indicating that the same may be
     contemplated), or the institution or the threat of significant
     litigation involving Target or any of its Subsidiaries, and will keep
     Parent fully informed of such events.

                6.12  Termination of Regulatory Agreements.  Target shall,
     and shall cause Target Bank to, use its reasonable best efforts in
     cooperation with Parent to confirm that all Regulatory Agreements to
     which Target or Target Bank is or becomes subject to will be
     terminated and of no further force and effect at or prior to the
     Effective Time.

                6.13  Tax Returns.  Target shall prepare and file, as
     approved and directed by Parent, any Tax returns (including, without
     limitation, New York Real Property Transfer and Transfer Gains Tax
     pre-clearance forms) with respect to the Merger as Parent shall
     reasonably request.

                6.14  Employee Benefit Plans; Existing Agreements.  (a) 
     Except as otherwise provided herein, the employees of Target and its
     Subsidiaries (the "Target Employees") shall be entitled to participate
     in Parent's employee benefit plans in which similarly situated
     employees of Parent participate, to the same extent as comparable
     employees of Parent.  As soon as administratively practicable after
     the Effective Time, Parent shall permit the Target Employees to
     participate in Parent's group hospitalization, medical, life and
     disability insurance plans, defined benefit pension plan, thrift plan,
     severance plan and similar plans, on the same terms and conditions as
     applicable to comparable employees of Parent and its Subsidiaries
     (including the waiver of pre-existing condition prohibitions), giving
     effect to years of service with Target and its Subsidiaries (to the
     extent Target gave effect) as if such service were with Parent, for
     purposes of eligibility and vesting, but not for benefit accrual
     purposes (except as regards to vacation, severance and short-term
     disability accruals or for purposes of determining employer
     contributions for retiree medical benefits).  Notwithstanding anything
     in this Section 6.14 to the contrary, participation by Target
     Employees in employee benefit plans and programs of Parent with
     respect to which eligibility for employees of Parent to participate is
     at the discretion of Parent shall be at the sole discretion of Parent.

                (b) Following the Effective Time, Parent shall honor and
     shall cause the Surviving Corporation to honor in accordance with
     their terms all individual employment, severance and other
     compensation agreements existing prior to the execution of this
     Agreement, which are between Target and any director, officer or
     employee thereof and which have been disclosed in the Target
     Disclosure Schedule. 

                (c) To the extent not duplicative of any agreement or
     arrangement described in paragraph (b) above, Parent agrees to make
     the payments and provide the benefits set forth on Exhibit 6.14(c)(1)
     to the employees of Target or Target Bank (the names of which shall be
     set forth on Section 3.11 of the Target Disclosure Schedule).  Parent
     further agrees to honor and cause the Surviving Corporation to honor
     the retirement plan, in substantially the form attached as Exhibit
     6.14(c)(2) hereto, previously adopted for the members of the board of
     directors of Target.

                (d) Notwithstanding anything in this Section 6.14 to the
     contrary, Parent shall have sole discretion with respect to the
     determination as to whether to terminate, merge or continue any
     employee benefit plans and programs of Target; provided, however, that
     Parent shall continue to maintain Target plans (other than stock-based
     or incentive plans) until Target Employees are permitted to
     participate in Parent's plans.

                                   ARTICLE VII

                              CONDITIONS PRECEDENT

                7.1  Conditions to Each Party's Obligation To Effect the
     Merger.  The respective obligation of each party to effect the Merger
     shall be subject to the satisfaction at or prior to the Effective Time
     of the following conditions:

                (a)  Stockholder Approval.  This Agreement shall have been
     approved and adopted by the affirmative vote of the holders of at
     least a majority of the outstanding shares of Target Common Stock
     entitled to vote thereon.

                (b)  NYSE Listing.  The shares of Parent Common Stock which
     shall be issued to the stockholders of Target upon consummation of the
     Merger shall have been authorized for listing on the NYSE, subject to
     official notice of issuance.

                (c)  Other Approvals.  All regulatory approvals required to
     consummate the transactions contemplated hereby shall have been
     obtained and shall remain in full force and effect and all statutory
     waiting periods in respect thereof shall have expired; and the parties
     shall have procured all other regulatory approvals, consents or
     waivers of governmental authorities that are necessary to the
     consummation of this Agreement (other than immaterial consents, the
     failure to obtain which would not have a Material Adverse Effect on
     Parent (on a combined basis giving effect to the Merger)); provided,
     however, that no approval, consent or waiver referred to in this
     Section 7.1(c) shall be deemed to have been received if it shall
     include any condition or requirement that, in the opinion of Parent,
     would so materially adversely affect the economic or business benefits
     of the transactions contemplated by this Agreement to Parent as to
     render inadvisable the consummation of the Merger; provided further,
     that no condition or requirement which does no more than subject
     Parent or Target to legal requirements generally applicable to a bank
     holding company under the BHC Act or savings and loan holding company
     under HOLA as a matter of law shall be deemed to affect materially and
     adversely the economic or business benefits of the transactions
     contemplated by this Agreement (all such approvals and the expiration
     of all such waiting periods being referred to herein as the "Requisite
     Regulatory Approvals").

                (d)  S-4.  The S-4 shall have become effective under the
     Securities Act and no stop order suspending the effectiveness of the
     S-4 shall have been issued and no proceedings for that purpose shall
     have been initiated or threatened by the SEC.

                (e)  No Injunctions or Restraints; Illegality.  No order,
     injunction or decree issued by any court or agency of competent
     jurisdiction or other legal restraint or prohibition preventing the
     consummation of the Merger or any of the other transactions
     contemplated by this Agreement (an "Injunction") shall be in effect. 
     No statute, rule, regulation, order, injunction or decree shall have
     been enacted, entered, promulgated or enforced by any Governmental
     Entity which prohibits, restricts or makes illegal consummation of the
     Merger.

                (f)  Federal Tax Opinion.  Parent and Target shall have
     received an opinion of Sullivan & Cromwell, counsel to Parent, in form
     and substance reasonably satisfactory to Parent and Target, dated as
     of the Closing Date, substantially to the effect that, on the basis of
     facts, representations and assumptions set forth in such opinion, the
     Merger will be treated for Federal income tax purposes as a
     reorganization within the meaning of Section 368 of the Code and that
     accordingly:

                (i)  No gain or loss will be recognized by Parent, Merger
             Sub or Target as a result of the Merger; and

                (ii)  No gain or loss will be recognized by the
             stockholders of Target who or which exchange their Target
             Common Stock solely for Parent Common Stock pursuant to the
             Merger (except with respect to cash received in lieu of a
             fractional share interest in Parent Common Stock).

                In rendering such opinion, Sullivan & Cromwell may require
     and rely upon representations contained in certificates of officers of
     Parent, Merger Sub, Target and others.

                7.2  Conditions to Obligations of Parent.  The obligation
     of Parent to effect the Merger is also subject to the satisfaction or
     waiver by Parent at or prior to the Effective Time of the following
     conditions:

                (a)  Representations and Warranties.  The representations
     and warranties of Target set forth in this Agreement shall be true and
     correct in all material respects as of the date of this Agreement and
     (except to the extent such representations and warranties speak as of
     an earlier date) as of the Closing Date as though made on and as of
     the Closing Date.  Parent shall have received a certificate signed on
     behalf of Target by the Chief Executive Officer and the Chief
     Financial Officer of Target to the foregoing effect.

                (b)  Performance of Obligations of Target.  Target shall
     have performed in all material respects all obligations required to be
     performed by it under this Agreement at or prior to the Closing Date,
     and Parent shall have received a certificate signed on behalf of
     Target by the Chief Executive Officer and the Chief Financial Officer
     of Target to such effect.

                (c)  Consents Under Agreements.  The consent, approval or
     waiver of each person (other than the Governmental Entities referred
     to in Section 7.1(c)) whose consent or approval shall be required in
     order to permit the succession by the Surviving Corporation pursuant
     to the Merger to any obligation, right or interest of Target or any
     Subsidiary of Target under any loan or credit agreement, note,
     mortgage, indenture, lease, license or other agreement or instrument
     shall have been obtained, except where the failure to obtain such
     consent, approval or waiver would not materially adversely affect the
     economic or business benefits of the transactions contemplated by this
     Agreement to Parent as to render inadvisable the consummation of the
     Merger.

                (d)  No Pending Governmental Actions.  No proceeding
     initiated by any Governmental Entity seeking an Injunction shall be
     pending.

                (e)  DEPCO Directors.  (i) DEPCO or any "Nominee" as
     defined in the DEPCO Agreement (A) shall own all of the issued and
     outstanding shares of Target Series B Preferred Stock and (B) shall
     have the right to elect and shall have elected at least one current
     member of Target's Board of Directors and (ii) the Directors elected
     by DEPCO or any "Nominee" as defined in the DEPCO Agreement pursuant
     to the Target Series B Preferred Stock shall represent less than 20%
     of the number of Target's Board of Directors.

                (f)  Accountant's Letter.  Target shall have caused to be
     delivered to Parent letters from Target's independent public
     accountants dated the date on which the S-4 or last amendment thereto
     shall become effective, and dated the Closing Date, and addressed to
     Parent and Target, with respect to Target's consolidated financial
     position and results of operation, which letters shall be based upon
     SAS 72 and certain agreed upon procedures to be specified by Parent,
     which procedures shall be consistent with applicable professional
     standards for letters delivered by independent accountants in
     connection with comparable transactions.

                7.3  Conditions to Obligations of Target.  The obligation
     of Target to effect the Merger is also subject to the satisfaction or
     waiver by Target at or prior to the Effective Time of the following
     conditions:

                (a)  Representations and Warranties.  The representations
     and warranties of Parent set forth in this Agreement shall be true and
     correct in all material respects as of the date of this Agreement and
     (except to the extent such representations and warranties speak as of
     an earlier date) as of the Closing Date as though made on and as of
     the  Closing Date.  Target shall have received a certificate signed on
     behalf of Parent by the Chief Executive Officer and the Chief
     Financial Officer of Parent to the foregoing effect.

                (b)  Performance of Obligations of Parent.  Parent shall
     have performed in all material respects all obligations required to be
     performed by it under this Agreement at or prior to the Closing Date,
     and Target shall have received a certificate signed on behalf of
     Parent by the Chief Executive Officer and the Chief Financial Officer
     of Parent to such effect.

                (c)  Consents Under Agreements.  The consent or approval of
     each person (other than the Governmental Entities referred to in
     Section 7.1(c)) whose consent or approval shall be required in
     connection with the transactions contemplated hereby under any loan or
     credit agreement, note, mortgage, indenture, lease, license or other
     agreement or instrument to which Parent or any of its Subsidiaries is
     a party or is otherwise bound, except those for which failure to
     obtain such consents and approvals would not, individually or in the
     aggregate, have a material adverse effect on the business, operations
     or financial condition of Parent and its Subsidiaries taken as a whole
     (after giving effect to the transactions contemplated hereby), shall
     have been obtained.

                (d)  No Pending Governmental Actions.  No proceeding
     initiated by any Governmental Entity seeking an Injunction shall be
     pending.

                                  ARTICLE VIII

                            TERMINATION AND AMENDMENT

                8.1  Termination.  This Agreement may be terminated at any
     time prior to the Effective Time, whether before or after approval of
     the matters presented in connection with the Merger by the
     stockholders of Target:

                (a)  by mutual consent of Parent and Target in a written
     instrument, if the Board of Directors of each so determines by a vote
     of a majority of the members of its entire Board;

                (b)  by either Parent or Target upon written notice to the
     other party (i) ninety (90) days after the date on which any request
     or application for a Requisite Regulatory Approval shall have been
     denied or withdrawn at the request or recommendation of the
     Governmental Entity which must grant such Requisite Regulatory
     Approval, unless within the 90-day period following such denial or
     withdrawal a petition for rehearing or an amended application has been
     filed with the applicable Governmental Entity, provided, however, that
     no party shall have the right to terminate this Agreement pursuant to
     this Section 8.1(b)(i) if such denial or request or recommendation for
     withdrawal shall be due to the failure of the party seeking to
     terminate this Agreement to perform or observe the covenants and
     agreements of such party set forth herein or (ii) if any Governmental
     Entity of competent jurisdiction shall have issued a final
     nonappealable order enjoining or otherwise prohibiting the
     consummation of any of the transactions contemplated by this
     Agreement;

                (c)  by either Parent or Target if the Merger shall not
     have been consummated on or before June 30, 1995, unless the failure
     of the Closing to occur by such date shall be due to the failure of
     the party seeking to terminate this Agreement to perform or observe
     the covenants and agreements of such party set forth herein;

                (d)  by either Parent or Target (provided that if the
     terminating party is Target, Target shall not be in material breach of
     any of its obligations under Section 5.1(e) or 6.3) if any approval of
     the stockholders of Target required for the consummation of the Merger
     shall not have been obtained by reason of the failure to obtain the
     required vote at a duly held meeting of stockholders or at any
     adjournment or postponement thereof;

                (e)  by either Parent or Target (provided that the
     terminating party is not then in material breach of any
     representation, warranty, covenant or other agreement contained
     herein) if there shall have been a material breach of any of the
     representations or warranties set forth in this Agreement on the part
     of the other party, which breach is not cured within forty-five (45)
     days following written notice to the party committing such breach, or
     which breach, by its nature, cannot be cured prior to the Closing;

                (f)  by either Parent or Target (provided that the
     terminating party is not then in material breach of any
     representation, warranty, covenant or other agreement contained
     herein) if there shall have been a material breach of any of the
     covenants or agreements set forth in this Agreement on the part of the
     other party, which breach shall not have been cured within forty-five
     (45) days following receipt by the breaching party of written notice
     of such breach from the other party hereto; or

                (g)  (i) by Target, if (either before or after the approval
             by the stockholders of this Agreement) its Board of Directors
             so determines by a vote of a majority of the members of its
             entire Board, at any time during the five-day period
             commencing with the Determination Date, if the Parent Common
             Stock Average Price on the Determination Date shall be less
             than $21.465; subject, however, to subsection (g)(ii).  

                (ii)  If Target elects to exercise its termination right
             pursuant to subsection (g)(i), it shall give prompt written
             notice to Parent (provided that such notice of election to
             terminate may be withdrawn at any time within the
             aforementioned five-day period).  During the three-day period
             commencing with its receipt of such notice, Parent shall have
             the option of increasing the consideration to be received by
             holders of Target Common Stock hereunder by adjusting the
             Exchange Ratio to equal a number equal to $10.875 divided by
             the Parent Common Stock Average Price.  If Parent makes an
             election contemplated by this subsection (g)(ii) within such
             three-day period, it shall give prompt written notice to
             Target of such election and the revised Exchange Ratio,
             whereupon no termination shall have occurred pursuant to this
             subsection (g) and this Agreement shall remain in effect in
             accordance with its terms (except as the Exchange Ratio shall
             have been so modified), and any references in this Agreement
             to "Exchange Ratio" shall thereafter be deemed to refer to
             the Exchange Ratio as adjusted pursuant to this subsection
             (g).

                For purposes of this subsection (g), the following terms
     shall have the meanings indicated:

                "Determination Date" means the date on which the last
             regulatory approval required to consummate the Merger has
             been obtained and all statutory waiting periods in respect
             thereof have expired.

                "Parent Common Stock Average Price" means the average of
             the daily closing sales prices of Parent Common Stock as
             reported on the NYSE Composite Transactions reporting system
             (as reported by The Wall Street Journal or, if not reported
             thereby, another authoritative source as chosen by Parent)
             for the 15 consecutive full trading days in which such shares
             are traded on the NYSE ending at the close of trading on the
             trading day immediately prior to the Determination Date.

                8.2  Fee.  (a)  Target hereby agrees to pay Parent and
     Parent shall be entitled to payment of, a fee (the "Fee") of
     $11,000,000 following the occurrence of a Purchase Event (as defined
     below); provided that Parent shall have sent written notice of such
     entitlement within 90 days following such Purchase Event.  Such
     payment shall be made in immediately available funds within five
     business days after delivery of such notice.  The right to receive the
     Fee shall terminate if any of the following (a "Fee Termination
     Event") occurs prior to a Purchase Event:  (i) the Effective Time of
     the Merger, (ii) termination of this Agreement in accordance with the
     provisions hereof if such termination occurs prior to the occurrence
     of a Preliminary Purchase Event, except a termination by Parent
     pursuant to Sections 8.1(e) or (f) hereof (unless the breach by Target
     is non-volitional), or (iii) if termination of this Agreement follows
     the occurrence of a Preliminary Purchase Event (x) the passage of
     twenty-four months after termination of this Agreement (eighteen
     months in the case of a Preliminary Purchase Event listed in
     subsection (c)(iv) or (c)(v)) if such termination is by Parent
     pursuant to Sections 8.1(e) or (f) of this Agreement (unless the
     breach by Target is non-volitional) or pursuant to Section 8.1(d), or
     (y) if such termination is otherwise pursuant to Section 8.1.  The
     "Last Preliminary Purchase Event" shall mean the last Preliminary
     Purchase Event to expire.

                (c) The term "Preliminary Purchase Event" shall mean any of
     the following events or transactions occurring after the date hereof:

                (i) Target or any of the Target Subsidiaries without having
             received Parent's prior written consent, shall have entered
             into an agreement to engage in an Acquisition Transaction (as
             defined below) with any person (the term "person" for
             purposes of this Agreement having the meaning assigned
             thereto in Sections 3(a)(9) and 13(d)(3) of the Securities
             Exchange Act of 1934, as amended (the "Securities Exchange
             Act") and the rules and regulations thereunder) other than
             Parent or any of the Parent Subsidiaries or the Board of
             Directors of Target shall have recommended that the
             shareholders of Target approve or accept any Acquisition
             Transaction with any person other than Parent or any Parent
             Subsidiary.  For purposes of this Agreement, "Acquisition
             Transaction" shall mean (A) a merger or consolidation, or any
             similar transaction, involving Target or any Target
             Significant Subsidiary, (B) a purchase, lease or other
             acquisition of all or substantially all of the assets or
             deposits of Target or any Target Significant Subsidiary,
             (C) a purchase or other acquisition (including by way of
             merger, consolidation, share exchange or otherwise) of
             securities representing 10% or more of the voting power of
             Target or a Target Significant Subsidiary; provided that the
             term "Acquisition Transaction" does not include any internal
             merger or consolidation involving only Target and/or Target
             Subsidiaries;

                (ii)     (A) Any person (other than Parent or any Parent
             Subsidiary) shall have acquired beneficial ownership or the
             right to acquire beneficial ownership of 10% or more of the
             outstanding shares of Target Common Stock (the term
             "beneficial ownership" for purposes of this Agreement having
             the meaning assigned thereto in Section 13(d) of the
             Securities Exchange Act, and the rules and regulations
             thereunder), or (B) any group (as such term "group" is
             defined in Section 13(d)(3) of the Securities Exchange Act),
             other than a group of which Parent or any Parent Subsidiary
             is a member, shall have been formed that beneficially owns
             10% or more of the Target Common Stock then outstanding;

                (iii)    Any person other than Parent or any Parent
             Subsidiary shall have made a bona fide proposal to Target or
             its shareholders, by public announcement or written
             communication that is or becomes the subject of public
             disclosure, to engage in an Acquisition Transaction
             (including, without limitation, any situation which any
             person other than Parent or any Parent Subsidiary shall have
             commenced (as such term is defined in Rule 14d-2 under the
             Securities Exchange Act) or shall have filed a registration
             statement under the Securities Act with respect to, a tender
             offer or exchange offer to purchase any shares of Target
             Common Stock such that, upon consummation of such offer, such
             person would own or control 10% or more of the then
             outstanding shares of Target Common Stock (such an offering
             referred to herein as a "Tender Offer" or an "Exchange
             Offer", respectively));

                (iv)     After a proposal is made by a third party to
             Target or its shareholders to engage in an Acquisition
             Transaction, or such third party states its intention to
             Target to make such a proposal if the Plan terminates, Target
             shall have breached any representation, covenant or
             obligation contained in this Agreement and such breach would
             entitle Parent to terminate this Agreement under Sections
             8.01(e) or (f) of this Agreement (without regard to the cure
             periods provided for therein unless such cure is promptly
             effected without jeopardizing consummation of the Merger
             pursuant to the terms of this Agreement); or

                (v) the holders of Target Common Stock shall not have
             approved this Agreement at the meeting of such stockholders
             held for the purpose of voting on this Agreement or such
             meeting shall not have been held or shall have been canceled
             prior to termination of this Agreement, in each case after
             any person (other than Parent or any Parent Subsidiary) shall
             have (A) made, or disclosed an intention to make, a bona fide
             proposal to engage in an Acquisition Transaction or (B)
             commenced a Tender Offer or filed a registration statement
             under the Securities Act with respect to an Exchange Offer.

                (d) The Term "Purchase Event" shall mean either of the
     following events or transactions occurring after the date hereof:

                (i) The acquisition by any person, other than Parent or any
             Parent Subsidiary, alone or together with such person's
             affiliates and associates, or any group (as defined in
             Section 13(d)(3) of the Securities Exchange Act), of
             beneficial ownership of 50% or more of the Target Common
             Stock; or

                (ii)     The occurrence of a Preliminary Purchase Event
             described in Section 8.2(c)(i) except that the percentage
             referred to in clause (C) shall be 50%.

                (e) Target shall notify Parent promptly in writing of its
     knowledge of the occurrence of any Preliminary Purchase Event or
     Purchase Event; provided, however, that the giving of such notice by
     Target shall not be a condition to the right of Parent to the Fee.

                8.3  Effect of Termination.  (a)  In the event of
     termination of this Agreement by either Parent or Target as provided
     in Section 8.1, this Agreement shall forthwith become void and have no
     effect except (i) the last sentence of Section 6.2(a), and Sections
     6.2(c), 8.2, 8.3, 9.3 and 9.4, shall survive any termination of this
     Agreement, and (ii) notwithstanding anything to the contrary contained
     in this Agreement, no party shall be relieved or released from any
     liabilities or damages arising out of its willful breach of any
     provision of this Agreement.

                8.4  Amendment.  Subject to compliance with applicable law,
     this Agreement may be amended by the parties hereto, by action taken
     or authorized by their respective Boards of Directors, at any time
     before or after approval of the matters presented in connection with
     the Merger by the common stockholders of Target; provided, however,
     that after any approval of the transactions contemplated by this
     Agreement by Target's common stockholders, there may not be, without
     further approval of such stockholders, any amendment of this Agreement
     which reduces the amount or changes the form of the consideration to
     be delivered to the Target stockholders hereunder other than as
     contemplated by this Agreement.  This Agreement may not be amended
     except by an instrument in writing signed on behalf of each of the
     parties hereto.

                8.5  Extension; Waiver.  At any time prior to the Effective
     Time, the parties hereto, by action taken or authorized by their
     respective Board of Directors, may, to the extent legally allowed, (a)
     extend the time for the performance of any of the obligations or other
     acts of the other parties hereto, (b) waive any inaccuracies in the
     representations and warranties contained herein or in any document
     delivered pursuant hereto and (c) waive compliance with any of the
     agreements or conditions contained herein; provided, however, that
     after any approval of the transactions contemplated by this Agreement
     by Target's common stockholders, there may not be, without further
     approval of such stockholders, any extension or waiver of this
     Agreement or any portion thereof which reduces the amount or changes
     the form of the consideration to be delivered to the Target
     stockholders hereunder other than as contemplated by this Agreement. 
     Any agreement on the part of a party hereto to any such extension or
     waiver shall be valid only if set forth in a written instrument signed
     on behalf of such party, but such extension or waiver or failure to
     insist on strict compliance with an obligation, covenant, agreement or
     condition shall not operate as a waiver of, or estoppel with respect
     to, any subsequent or other failure.

                                   ARTICLE IX

                               GENERAL PROVISIONS

                9.1  Closing.  Subject to the terms and conditions of this
     Agreement, the closing of the Merger (the "Closing") will take place
     at 10:00 a.m. on a date to be selected by Parent, which shall be the
     tenth business day after the satisfaction or waiver (subject to
     applicable law) of the latest to occur of the conditions set forth in
     Article VII hereof (the "Closing Date"), at the offices of Parent,
     unless another time, date or place is agreed to in writing by the
     parties hereto.

                9.2  Alternative Structure.  Notwithstanding anything to
     the contrary contained in this Agreement, prior to the Effective Time,
     Parent shall be entitled to revise the structure of the Merger and
     related transactions provided that each of the transactions comprising
     such revised structure shall (i) not subject any of the stockholders
     of Target to adverse tax consequences or change the amount of
     consideration to be received by such stockholders and (ii) be capable
     of consummation without material delay.  This Agreement and any
     related documents shall be appropriately amended in order to reflect
     any such revised structure.

                9.3  Nonsurvival of Representations, Warranties and
     Agreements.  None of the representations, warranties, covenants and
     agreements in this Agreement or in any instrument delivered pursuant
     to this Agreement shall survive the Effective Time, except for those
     covenants and agreements contained herein and therein which by their
     terms apply in whole or in part after the Effective Time.

                9.4  Expenses.  All costs and expenses incurred in
     connection with this Agreement and the transactions contemplated
     hereby shall he paid by the party incurring such expense, provided,
     however, that the costs and expenses of printing and mailing the Proxy
     Statement, and all filing and other fees paid to the SEC in connection
     with the Merger, shall be borne equally by Parent and Target,
     provided, further, however, that in the event of termination of this
     Agreement in accordance with the provisions hereof, except a
     termination by Parent pursuant to Section 8.1(e) or (f) hereof, Parent
     shall pay for the accountant's letters pursuant to Section 7.2(f).

                9.5  Notices.  All notices and other communications
     hereunder shall be in writing and shall be deemed given if delivered
     personally, telecopied (with confirmation), mailed by registered or
     certified mail (return receipt requested) or delivered by an express
     courier (with confirmation) to the parties at the following addresses
     (or at such other address for a party as shall be specified by like
     notice):

               (a)  if to Parent, to:

                    Shawmut National Corporation
                    777 Main Street
                    Hartford, CT  06115
                    Fax:  (203) 728-4205
                    Attn:  Chief Executive Officer

                    with a copy to:

                    Sullivan & Cromwell
                    125 Broad Street
                    New York, NY  10004
                    Fax:  (212) 558-3588
                    Attn:  Donald J. Toumey, Esq.

               and

               (b)  if to Target, to:

                    Northeast Federal Corp.
                    50 State House Square
                    Hartford, CT  06103
                    Fax:  (203) 280-0008
                    Attn:  Chief Executive Officer

                    with a copy to:

                    Muldoon, Murphy & Faucette
                    5101 Wisconsin Avenue, N.W.
                    Washington, D.C.  20016
                    Fax:  (202) 966-9409
                    Attn:  Thomas J. Haggerty, Esq.

               9.6  Interpretation.  When a reference is made in this
     Agreement to Sections, Exhibits or Schedules, such reference shall be
     to a Section of or Exhibit or Schedule to this Agreement unless
     otherwise indicated.  The table of contents and headings contained in
     this Agreement are for reference purposes only and shall not affect in
     any way the meaning or interpretation of this Agreement.  Whenever the
     words "include", "includes" or "including" are used in this Agreement,
     they shall be deemed to be followed by the words "without limitation."

               9.7  Counterparts.  This Agreement may be executed in
     counterparts, all of which shall be considered one and the same
     agreement and shall become effective when counterparts have been
     signed by each of the parties and delivered to the other parties, it
     being understood that all parties need not sign the same counterpart.

               9.8  Entire Agreement.  This Agreement (including the
     documents and the instruments referred to herein) constitutes the
     entire agreement and supersedes all prior agreements and
     understandings, both written and oral, among the parties with respect
     to the subject matter hereof, other than the Confidentiality
     Agreement.

               9.9  Governing Law.  This Agreement shall be governed and
     construed in accordance with the laws of the State of Delaware
     applicable to agreements made and wholly to be performed in such
     state.

               9.10  Enforcement of Agreement.  The parties hereto agree
     that irreparable damage would occur in the event that the provisions
     contained in the last sentence of Section 6.2(a) and in Section 6.2(c)
     of this Agreement were not performed in accordance with its specific
     terms or was otherwise breached.  It is accordingly agreed that the
     parties shall be entitled to an injunction or injunctions to prevent
     breaches of the last sentence of Section 6.2(a) and Section 6.2(c) of
     this Agreement and to enforce specifically the terms and provisions
     thereof in any court of the United States or any state having
     jurisdiction, this being in addition to any other remedy to which they
     are entitled at law or in equity.

               9.11  Severability.  Any term or provision of this Agreement
     which is invalid or unenforceable in any jurisdiction shall, as to
     that jurisdiction, be ineffective to the extent of such invalidity or
     unenforceability without rendering invalid or unenforceable the
     remaining terms and provisions of this Agreement or affecting the
     validity or enforceability of any of the terms or provisions of this
     Agreement in any other jurisdiction.  If any provision of this
     Agreement is so broad as to be unenforceable, the provision shall be
     interpreted to be only so broad as is enforceable.

               9.12  Publicity.  Except as otherwise required by law or the
     rules of the NYSE or the National Association of Securities Dealers,
     so long as this Agreement is in effect, neither Parent nor Target
     shall, or shall permit any of its Subsidiaries to, issue or cause the
     publication of any press release or other written statement for
     general circulation with respect to the transactions contemplated by
     this Agreement, without the consent of the other party, which consent
     shall not be unreasonably withheld.

               9.13  Assignment.  Neither this Agreement nor any of the
     rights, interests or obligations hereunder shall be assigned by any of
     the parties hereto (whether by operation of law or otherwise) without
     the prior written consent of the other parties, and any purported such
     assignment shall be null and void.  Subject to the preceding sentence,
     this Agreement will be binding upon, inure to the benefit of and be
     enforceable by the parties and their respective successors and
     assigns.  Except as otherwise specifically provided in Section 6.7
     hereof, this Agreement (including the documents and instruments
     referred to herein) is not intended to, and shall not, confer upon any
     person other than the parties hereto any rights or remedies hereunder.

               IN WITNESS WHEREOF, Parent and Target have caused this
     Agreement to be executed by their respective officers thereunto duly
     authorized as of the date first above written.

                                   SHAWMUT NATIONAL CORPORATION

                                   By                                 
                                      Name:
                                      Title:

                                   NORTHEAST FEDERAL CORP.

                                   By                                 
                                      Name:
                                      Title:

                                                          EXHIBIT 99.2

                     PURCHASE AND ASSUMPTION AGREEMENT

                       DATED AS OF NOVEMBER 12, 1994

                                   among

                       BARCLAYS BUSINESS CREDIT INC.,

                             BARCLAYS BANK PLC,

                        SHAWMUT NATIONAL CORPORATION

                                    and

                       SHAWMUT BANK CONNECTICUT, N.A.

                             TABLE OF CONTENTS

                                                                  Page

     Article 1.     Definitions  . . . . . . . . . . . . . . . . .   

     Article 2.     Purchase of Assets; Assumption of
                       Liabilities . . . . . . . . . . . . . . . .   
          2.1       Sale and Purchase of Assets  . . . . . . . . .   
          2.2       Conveyance of Assets . . . . . . . . . . . . .   
          2.3       Assets Excluded  . . . . . . . . . . . . . . .   
          2.4       Transfer and Assumption of Liabilities . . . .  
          2.5       Manner of Assumption . . . . . . . . . . . . .  

     Article 3.     Consideration  . . . . . . . . . . . . . . . .  
          3.1       Purchase Price . . . . . . . . . . . . . . . .  
          3.2       Asset and Liability Schedules  . . . . . . . .  

     Article 4.     Closing; Time and Place  . . . . . . . . . . .  

     Article 5.     Representations and Warranties of
                       the Seller and Parent . . . . . . . . . . .  
          5.1       Corporate Organization and Authority . . . . .  
          5.2       No Conflict; Licenses and Permits;
                       Compliance with Laws and
                       Regulations . . . . . . . . . . . . . . . .  
          5.3       Approvals and Consents . . . . . . . . . . . .  
          5.4       Title to Assets, Etc.  . . . . . . . . . . . .  
          5.5       Leases . . . . . . . . . . . . . . . . . . . .  
          5.6       Contracts and Defaults . . . . . . . . . . . .  
          5.7       Loans and Loan Commitments . . . . . . . . . .  
          5.8       List of Transferred Offices  . . . . . . . . .  
          5.9       Environmental Matters  . . . . . . . . . . . .  
          5.10      Labor Contracts and Relations  . . . . . . . .  
          5.11      Financial Statements . . . . . . . . . . . . .  
          5.12      Litigation . . . . . . . . . . . . . . . . . .  
          5.13      Brokers' Fees  . . . . . . . . . . . . . . . .  
          5.14      Employee Benefits  . . . . . . . . . . . . . .  
          5.15      Undisclosed Liabilities  . . . . . . . . . . .  
          5.16      Taxes  . . . . . . . . . . . . . . . . . . . .  
          5.17      Loan Portfolio . . . . . . . . . . . . . . . .  
          5.18      Accounting Records . . . . . . . . . . . . . .  
          5.19      Technology . . . . . . . . . . . . . . . . . .  
          5.20      Absence of Certain Chances or Events . . . . .  
          5.21      Investments  . . . . . . . . . . . . . . . . .  

     Article 6.     Representations and Warranties of
                       Shawmut and Purchaser . . . . . . . . . . .  
          6.1       Corporate Organization and Authority . . . . .  
          6.2       No Conflict, Licenses and Permits,
                       Compliance with Laws and
                       Regulations . . . . . . . . . . . . . . . .  
          6.3       Approvals and Consents . . . . . . . . . . . .  
          6.4       Brokers' Fees  . . . . . . . . . . . . . . . .  
          6.5       Litigation and Liabilities . . . . . . . . . .  
          6.6       No Implied Representation  . . . . . . . . . .  
          6.7       Disclosure . . . . . . . . . . . . . . . . . .  

     Article 7.     Covenants  . . . . . . . . . . . . . . . . . .  
          7.1       Conduct of Business  . . . . . . . . . . . . .  
          7.2       Investigation  . . . . . . . . . . . . . . . .  
          7.3       Best Efforts; Taking of Necessary Action.  . .  
          7.4       Expenses.  . . . . . . . . . . . . . . . . . .  
          7.5       Use of Names, Trademarks and Service Marks . .  
          7.6       Post-Closing Cooperation.  . . . . . . . . . .  
          7.7       Employee-Related Matters.  . . . . . . . . . .  
          7.8       Letters of Credit of ISG.  . . . . . . . . . .  
          7.9       Non-Compete; Non-Solicitation of Employees . .  
          7.10      Independent Third Parties. . . . . . . . . . .  
          7.11      Payments.  . . . . . . . . . . . . . . . . . .  
          7.12      Limitation on Dealings with Loans. . . . . . .  
          7.13      Further Assurances.  . . . . . . . . . . . . .  
          7.14      Small Equipment Leasing Portfolio. . . . . . .  
          7.15      ISG Loan Portfolio.  . . . . . . . . . . . . .  
          7.16      Transfer of Administration.  . . . . . . . . .  

     Article 8.     Taxes  . . . . . . . . . . . . . . . . . . . .  
          8.1       Liability for Taxes. . . . . . . . . . . . . .  
          8.2       Sales and Transfer Taxes.  . . . . . . . . . .  
          8.3       Parent of Amounts Due under Article 8  . . . .  
          8.4       Refunds or Credits.  . . . . . . . . . . . . .  
          8.5       Tax Returns. . . . . . . . . . . . . . . . . .  
          8.6       Assistance and Cooperation . . . . . . . . . .  
          8.7       Document Retention.  . . . . . . . . . . . . .  
          8.8       Allocation of Purchase Price.  . . . . . . . .  
          8.9       Notices, Etc.  . . . . . . . . . . . . . . . .  
          8.10      Tax Indemnities. . . . . . . . . . . . . . . .  

     Article 9.     Conditions to the Closing  . . . . . . . . . .  
          9.1       Conditions of Obligation of Each Party.  . . .  
          9.2       Additional Conditions to the
                       Obligations of Purchaser. . . . . . . . . .  
          9.3       Additional Conditions to the
                       Obligations of the Seller . . . . . . . . .  

     Article 10.    Termination, Amendment and Waiver  . . . . . .  
          10.1      Termination  . . . . . . . . . . . . . . . . .  
          10.2      Effect of Termination  . . . . . . . . . . . .  

     Article 11.    General Provisions . . . . . . . . . . . . . .  
          11.1      Survival of Representations and
                       Warranties and Covenants  . . . . . . . . .  
          11.2      Indemnification  . . . . . . . . . . . . . . .  
          11.3      Schedules  . . . . . . . . . . . . . . . . . .  
          11.4      Notices  . . . . . . . . . . . . . . . . . . .  
          11.5      Interpretation . . . . . . . . . . . . . . . .  
          11.6      Amendment  . . . . . . . . . . . . . . . . . .  
          11.7      Extension; Waiver  . . . . . . . . . . . . . .  
          11.8      Entire Agreement . . . . . . . . . . . . . . .  
          11.9      Third Party Beneficiaries  . . . . . . . . . .  
          11.10        Assignment  . . . . . . . . . . . . . . . .  
          11.11        Publicity Notice  . . . . . . . . . . . . .  
          11.12        Governing Law . . . . . . . . . . . . . . . 
          11.13        Counterparts  . . . . . . . . . . . . . . . 
          11.14        Consent to Jurisdiction; Service of Process 
          11.15        Waiver of Jury Trial  . . . . . . . . . . .  
          11.16        Confidentiality Agreement . . . . . . . . .  

               PURCHASE AND ASSUMPTION AGREEMENT, dated as of November
     12, 1994 among BARCLAYS BUSINESS CREDIT INC., a Connecticut
     corporation ("Seller"), BARCLAYS BANK PLC, a public limited
     company organized in England ("Parent"), Shawmut National
     Corporation, a Delaware corporation ("Shawmut"), and Shawmut Bank
     Connecticut, N.A., a national banking association ("Purchaser"). 

               WHEREAS, Seller is engaged through its Business Finance
     Division ("BFD") in the business of providing asset-based
     financing and related financial services;  

               WHEREAS, Purchaser, directly or acting through a to-be-
     formed wholly owned subsidiary or any assignee designated in
     accordance with Section 11.10, seeks to acquire certain of the
     assets and assume certain of the liabilities of BFD on the terms
     and conditions described herein; and 

               WHEREAS, the respective Boards of Directors of Parent,
     Seller, Shawmut and Purchaser have approved or will soon approve
     such transactions; 

               NOW, THEREFORE, in consideration of the premises and of
     the mutual covenants and agreements hereinafter set forth, the
     parties hereto agree as follows:

     ARTICLE 1.  DEFINITIONS

               1.1  "Accounting Manual":  the BFD Accounting
     Policy/Procedure Statement, as in effect from time to time, a
     complete and correct copy of which as of September 30, 1994 is
     attached as Schedule 1.1.

               1.2  "Accrued Interest":  with respect to any Loan at
     any time, the amount of earned and unpaid interest payable by the
     Debtor accrued on or with respect to such Loan.

               1.3  "Acquired Assets":  the collective reference to
     those assets and/or businesses of BFD to be acquired by the
     Purchaser pursuant to Section 2.1.

               1.4  "Adjustment":  the difference between the Final
     Amount and the Interim Amount.

               1.5  "Affiliate" means any individual, partnership,
     corporation or other organization or entity directly or
     indirectly controlling, controlled by, or under common control
     with, the subject entity through the possession, directly or
     indirectly, of the power to direct or cause the direction of the
     management and policies of such entity whether through the
     ownership of voting securities, by contract or otherwise. 
     Without limiting the foregoing, the ownership, direct or
     indirect, or a 10% interest in such entity shall be deemed to be
     control.

               1.6  "Agreement":  this Purchase and Assumption
     Agreement as the same may be amended, supplemented or otherwise
     modified.

               1.7  "Allowance for Credit Losses Reserve":  as defined
     in the BFD Accounting Principles.

               1.8  "Assigned Leases":  the leases or subleases
     relating to Transferred Offices set forth on Schedule 1.8.

               1.9  "Assigned Software":  the collective reference to
     the Software described on Schedule 1.9.

               1.10 "Assumed Contracts and Other Obligations":  those
     Contracts and all other obligations or liabilities of the Seller
     relating to or arising from the BFD Acquired Business or the
     Acquired Assets in all cases which are identified on Schedule
     1.10 and any other Contracts relating to the BFD Acquired
     Business or the Acquired Assets entered into between the date
     hereof and the Closing Date by Seller consistent with the terms
     of this Agreement except, in each case, those expiring or
     terminating between the date hereof and the Closing Date.

               1.11 "Assumed Liabilities":  those liabilities to be
     assumed by the Purchaser pursuant to Section 2.4.

               1.12 "Bank Plans":  as defined in Section 5.14(a).

               1.13 "BFD Accounting Principles" means the accounting
     principles set forth in the Accounting Manual.

               1.14 "BFD Acquired Business":  as defined in Section
     2.1.

               1.15 "Book Value":  with respect to each asset and
     liability indicated in the Interim or Final Asset and Liability
     Schedule as being transferred in whole or in part to the
     Purchaser, the dollar amount of such transferred asset or
     liability stated on the Books of the Seller as of the relevant
     date calculated in accordance with the BFD Accounting Principles. 
     The Book Value of the KB Investment shall be its Book Value as
     reflected on the Books of the Seller as of the close of business
     on the Closing Date plus the amount specified in Schedule 1.45.

               1.16 "Books":  with respect to any Person, the general
     ledger of such Person and any related subsidiary ledger.

               1.17 "Closing":  as defined in Section 4.

               1.18 "Closing Date":  as defined in Section 4.

               1.19 "Code":  the Internal Revenue Code of 1986, as
     amended.

               1.20 "Communications":  as defined in Section 7.2(b).

               1.21 "Confidentiality Agreement":  the Confidentiality
     Agreement dated May 10, 1994, as amended, between Seller and
     Shawmut.

               1.22 "Contract":  any arrangement, note, bond,
     commitment, franchise, guarantee, indemnity, indenture,
     instrument, lease, license or other agreement, understanding,
     instrument or obligation, whether written or oral, and all rights
     and interests arising thereunder or in connection therewith.

               1.23 "Covered Employees":  as defined in Section
     7.7(a).

               1.24 "Debtors" means the Person or Persons obligated on
     or in respect to a Loan or Loan Commitment, including any
     guarantor, hypothecator or other provider of security.

               1.25 "Diligence Group" means the officers and employees
     of the Purchaser set forth on Schedule 1.25.

               1.26 "Employee Benefit Losses":  as defined in Section
     7.7(i).

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

               1.28 "Excluded Assets":  those assets described in
     Section 2.3.

               1.29 "Excluded Liabilities":  those liabilities not
     assumed by the Purchaser pursuant to this Agreement.

               1.30 "Excluded Loans":  those Loans or Loan Commitments
     (together with all of Seller's right, title and interest in and
     to all related Loan Documents) subject to a restriction on
     assignability and as to which Seller shall not on or prior to the
     Closing Date have obtained the consent or consents to transfer
     such Loans or Loan Commitments to Purchaser which Seller
     reasonably concludes are necessary for its representation in
     Section 5.2 to be true on the Closing Date.

               1.31 "Exposure":  as defined in Section 2.4.

               1.32 "Federal Funds Rate":  for any date, the rate for
     such date as set forth in the weekly statistical release
     designated "H.15(519)" or any successor publication of the Board
     of Governors of the Federal Reserve System.

               1.33 "Final Amount":  an amount equal to (a) the Book
     Value of the Acquired Assets as reflected on the Final Asset and
     Liability Schedule, less (b) the Book Value of the Assumed
     Liabilities as reflected on the Final Asset and Liability
     Schedule as being assumed by Purchaser, plus (c) $290,000,000.

               1.34 "Final Asset and Liability Schedule":  the
     Schedule to be prepared in accordance with Section 3.2(b).

               1.35 "GAAP":  generally accepted accounting principles
     in effect from time to time in the United States.

               1.36 "HSR Act":  the Hart-Scott-Rodino Antitrust
     Improvements Act of 1976, as amended.

               1.37 "ICG":  the International Corporate Group of
     Parent, London, England.

               1.38 "Interim Amount":  an amount equal to (a) the Book
     Value of the Acquired Assets as reflected on the Interim Asset
     and Liability Schedule, less (b) the Book Value of the Assumed
     Liabilities as reflected on the Interim Asset and Liability
     Schedule as being assumed by Purchaser, plus (c) $290,000,000.

               1.39 "Interim Asset and Liability Schedule":  the
     Schedule to be prepared in accordance with Section 3.2(a).

               1.40 "Interim Date":  the latest month end date as of
     which an asset and liability schedule of the Seller shall, as of
     the date which is two weeks prior to the Closing Date, be
     available.

               1.41 "Investments":  any investments or other interests
     in securities other than Loans, including, without limitation,
     partnership interests, warrants, rights, options and other
     similar securities.

               1.42 "ISG":  the International Services Group, a
     division of Barclays Bank PLC, Atlanta Agency.

               1.43 "ISG L/C's":  those letters of credit issued by
     ISG on behalf of Debtors of BFD in connection with Loans or Loan
     Commitments included in the Acquired Assets.

               1.44 "ISG Portfolio":  those Loans held in ISG and
     described in Schedule 7.15 which are to be transferred to BFD
     pursuant to Section 7.15.

               1.45 "KB Investment":  the investment of BFD described
     in Schedule 1.45.  

               1.46 "knowledge":  as applied in this Agreement to the
     Seller or BFD means the actual knowledge of a Senior Officer of
     the Seller.

               1.47 "Leasehold Improvements":  the permanent fixtures
     and improvements located at the Transferred Offices which are
     indicated in Schedule 5.8 as being leased by BFD.

               1.48 "Licenses":  as defined in Section 5.2.

               1.49 "Liens":  any mortgage, lien, pledge, charge,
     assignment for security purposes, security interest, or
     encumbrance of any kind with respect to an Acquired Asset,
     including any unconditional sale agreement or capital lease or
     other title retention agreement relating to such Acquired Asset.

               1.50 "Loan Commitments":  the collective reference to
     each commitment or obligation on the part of Seller relating to
     BFD to extend credit to any Person (including pursuant to a
     letter of credit or banker's acceptance) or to participate
     therein, including without limitation, the obligations of Seller
     relating to BFD as a participant in letters of credit issued by
     ISG on behalf of Seller relating to BFD, whether or not such
     commitment, obligation or participation has been accepted or
     utilized by such Person.

               1.51 "Loan Documents":  the agreements, instruments,
     certificates, or other documents at any time evidencing or
     otherwise relating to, governing, or executed in connection with,
     or as security for, a Loan or Loan Commitment, including without
     limitation, notes, bonds, loan agreements, letter of credit
     applications, letters of credit, lease financing contracts,
     bankers' acceptances, drafts, guarantees, deeds of trust,
     mortgages, assignments, security agreements, pledges,
     subordination or priority agreements, lien priority agreements,
     undertakings, security instruments, financing statements,
     certificates, documents, legal opinions, participation and
     assignment agreements and inter-creditor agreements, and all
     amendments, modifications, renewals, extensions, rearrangements,
     and substitutions with respect to any of the foregoing.

               1.52 "Loan Transfer Documents":  as defined in Section
     2.2.

               1.53 "Loans":  all of the following owed to or held by
     Seller relating to BFD (including those Loans included in the ISG
     Portfolio) as of the Closing Date (including any of the following
     fully or partially charged off the Books of Seller): 

               (i)  loans, advances or other extensions of credit, 
          including interests in loan participations and assignments,
          customer liabilities on letters of credit, bankers,
          acceptances and participations in letters of credit
          (including in all cases loans made to pay interest accruing
          on loans, whether or not due or payable (sometimes referred
          to as capitalized interest);

               (ii)  all Liens, rights (including rights of set-off),
          remedies, powers, privileges, demands, priorities, equities
          and benefits owned or held by, or accruing or to accrue to
          or for the benefit of, the holder of the obligations or
          instrument being referred to in clause (i) above, including
          but not limited to those arising under or based upon the
          Loan Documents, casualty insurance policies and binders,
          standby letters of credit, mortgagee title insurance
          policies and binders, payment bonds and performance bonds at
          any time and from time to time existing with respect to any
          of the obligations or instruments referred to in clause (i)
          above; and

               (iii)  all amendments, modifications, renewals,
          extensions, refinancings and refundings of or for any of the
          foregoing.

               1.54 "Losses":  as defined in Section 7.7(n).

               1.55 "Material Adverse Effect":  any effect that is
     materially adverse to the Acquired Assets and the Assumed
     Liabilities taken as a whole or the business or financial
     condition of the BFD Acquired Business taken as a whole.  For
     purposes of Section 5.2, Material Adverse Effect shall include
     the material impairment of the parties' ability to consummate the
     transactions contemplated by this Agreement, but shall exclude in
     all respects the occurrence or effects of changes in general
     economic conditions.

               1.56 "Non-Performing Loan":  refers to Loans classified
     as "non-performing" in accordance with BFD Accounting Principles.

               1.57 "Permitted Encumbrances":  as defined in Section
     5.4(c).

               1.58 "Permitted Liens":  as defined in Section 5.4(b).

               1.59 "Person":  any individual, corporation,
     partnership, joint venture, association, joint-stock company,
     trust, unincorporated organization or government or any agency or
     political subdivision thereof.

               1.60 "Personal Property":  the furniture, furnishings,
     equipment, trade fixtures, supply inventory and other tangible
     personal property owned or leased by Seller at the Transferred
     Offices.

               1.61 "Purchaser Plans":  as defined in Section 7.7(c).

               1.62 "Purchaser's Retirement Plan":  as defined in
     Section 7.7(e).

               1.63 "Purchaser Welfare Plans":  as defined in Section
     7.7(d).

               1.64 "Records":  all documents, microfiche, microfilm
     and computer records (including but not limited to, magnetic
     tape, disc storage, card forms and printed copy) of BFD generated
     or maintained by BFD or the Seller that relate to the Acquired
     Assets, Assumed Liabilities and/or the BFD Acquired Business,
     including without limitation the Assumed Contracts and Other
     Obligations and the Loan Documents.

               1.65 "Repossessions":  all property, both real and
     personal, tangible and intangible, acquired by BFD pursuant to
     any Lien securing a Loan included in the Acquired Assets.

               1.66 "Seller's Savings Plan":  as defined in Section
     7.7(f).

               1.67 "Senior Officer":  any senior vice president or
     higher officer of the Seller.

               1.68 "Servicing Agreement":  the Servicing Agreement to
     be entered into on the Closing Date among Purchaser, Seller and
     Parent substantially in the form of Exhibit A.

               1.69 "Software":  computer programs, software, and
     related documentation.

               1.70 "Straddle Period":  as defined in Section 8.1(c).

               1.71 "Successor Plan":  as defined in Section 7.7(f).

               1.72 "Sundry Receivables":  fees, expenses and other
     charges payable by Debtors with respect to Loans and Loan
     Commitments or by other Persons with respect to Loans and Loan
     Commitments comprising the Acquired Assets.

               1.73 "Tax Returns":  any return or other report
     required to be filed with respect to any Tax, including
     declaration of estimated tax and information returns.

               1.74 "Taxes":  any federal, state, local or foreign
     taxes, including but not limited to taxes on or measured by
     income, estimated income, alternative or add-on minimum tax,
     gross receipts, sales, use, ad valorem, franchise, capital stock,
     transfer, gains, profit, license, employees' withholding, foreign
     person withholding, backup withholding, social security,
     occupation, unemployment, disability, excise, severance, stamp,
     premium, value added taxes, taxes on services, real property,
     personal property, inventory and merchandise, business privilege,
     or windfall profit tax, custom, duty or other tax, governmental
     fee or other like assessment or charge of any kind whatsoever,
     together with any interest, penalty, addition to tax or
     additional amount imposed by any governmental authority
     responsible for the imposition of such tax whether or not
     disputed.

               1.75 "Transferred Offices":  the collective reference
     to each of the offices of BFD identified in Schedule 5.8.

               1.76 "Unearned Fees":  the amount of unearned fees
     relating to Loans included in the Acquired Assets or relating to
     ISG L/Cs and reflected on the Interim and Final Asset and
     Liability Schedules, as the case may be.

               1.77 "Vacation Policy":  as defined in Section 7.7(g).

               1.78 "WARN":  as defined in Section 7.7(h).

     ARTICLE 2.  PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES

               2.1  SALE AND PURCHASE OF ASSETS.  On the terms and
     subject to the conditions of this Agreement, on the Closing Date
     the Seller shall sell, transfer, assign, convey and deliver to
     the Purchaser, and the Purchaser shall purchase and acquire from
     the Seller, subject to the exclusions set forth in Section 2.3,
     all of the business and operations of the Seller conducted
     through BFD (such business and operations being referred to
     herein as the "BFD Acquired Business") and all right, title and
     interest of Seller as of the Closing Date in and to the assets,
     rights, properties, claims and contracts in respect of the BFD
     Acquired Business as they appear on the Books and Records of
     Seller as of the close of business on the Closing Date, including
     without limitation the following:

               (a)  Loans and Loan Commitments, including the
                    Allowance for Credit Losses Reserves in respect of
                    all Loans and Loan Commitments;

               (b)  Repossessions;

               (c)  Accrued Interest;

               (d)  Sundry Receivables;

               (e)  Assigned Leases;

               (f)  all Personal Property and Leasehold Improvements
                    located on or associated with the Transferred
                    Offices or otherwise utilized in the BFD Acquired
                    Business;

               (g)  all prepaid expenses relating to the BFD Acquired
                    Business;

               (h)  Assumed Contracts and Other Obligations;

               (i)  the trademark "We Build Relationships";

               (j)  Records;

               (k)  Assigned Software;

               (l)  the KB Investment;

               (m)  any cash, bank deposits and other cash equivalents
                    securing or otherwise relating to Loans or Loan
                    Commitments included in the Acquired Assets;

               (n)  the right to receive from ICG fees in respect of
                    the guaranty obligation of BFD being assumed by
                    Purchaser pursuant to Section 2.4(g);

               (o)  a non-exclusive license to use the letter of
                    credit application and processing software of ISG;

               (p)  Unearned Fees in respect of Loans and Loan
                    Commitments; and

               (q)  all client relationship value, goodwill, going
                    concern value and other customer based intangible
                    assets attributable to the BFD Acquired Business
                    (except as such items may relate to the Excluded
                    Assets).

               2.2  CONVEYANCE OF ASSETS.  The sale, transfer,
     assignment, conveyance and delivery of the Acquired Assets
     described in Section 2.1 (other than the Loans and Loan
     Commitments) shall be made, as necessary, by the Seller's
     delivery, at the closing, of assignments, bills of sale or
     assignments of leases or subleases, as the case may be.  With
     respect to the Loans and Loan Commitments included in the
     Acquired Assets, the Seller shall execute and deliver such
     instruments and documents of conveyance (in each instance as
     prepared by the Seller and in form and substance satisfactory to
     the Purchaser) as are necessary or advisable (collectively, the
     "Loan Transfer Documents") to transfer to and vest in the
     Purchaser the full legal and equitable title of Seller in and to
     the assets transferred to the Purchaser under this Agreement,
     including without limitation, valid and perfected liens and
     security interests in all collateral and other security
     arrangements securing each of the Loans and Loan Commitments;
     provided that the Loan Transfer Documents shall not expressly or
     impliedly include, or be deemed to include, any representations
     or warranties as to the effectiveness of such transfers,
     conveyances or assignments beyond these explicitly set forth in
     this Agreement.  The documents and instruments referred to in
     this section shall be prepared, and the costs relating thereto
     shared, in the manner set forth in Section 7.13.  Seller and
     Purchaser shall at the Closing enter into the Servicing Agreement
     with respect to each Excluded Loan, and Seller and Purchaser
     agree to fulfill their obligations under the Servicing Agreement
     and under any other agreement entered into in connection with the
     Servicing Agreement.

               2.3  ASSETS EXCLUDED.  Notwithstanding anything to the
          contrary contained in this Agreement, the Purchaser shall not
          acquire under this Agreement:

                    (a)  any cash, bank deposits and other cash equivalents
                         (other than any of the same which secure or are
                         otherwise related to Loans or Loan Commitments
                         included in the Acquired Assets);

                    (b)  all rights of the Seller under the Confidentiality
                         Agreement and this Agreement and the
                         consideration, agreements, instruments and
                         certificates delivered in connection with this
                         Agreement;

                    (c)  any claims of the Seller against current or former
                         officers or directors of the Seller or its
                         Affiliates;

                    (d)  Seller's charter documents, non-transferable
                         licenses, permits, charters, corporate seals,
                         minute books, stock books and other corporate
                         records having to do with the corporate
                         organization and capitalization of Seller, and all
                         records relating to Taxes, including but not
                         limited to all books, records and other
                         documentation which are or may be pertinent to any
                         examination, audit or other inquiry relating to
                         Taxes concerning any period prior to and including
                         the Closing Date;

                    (e)  Seller's personnel records pertaining to any
                         employees of Seller not hired by Purchaser,
                         personnel references and security or background
                         investigation materials which were prepared or
                         obtained at the time of hiring with respect to
                         employees of Seller and any other books and
                         records which Seller is required by law to retain,
                         provided that the Acquired Assets shall include
                         copies of any portions of such retained books and
                         records that relate to the BFD Acquired Business
                         or any of the Acquired Assets or Assumed
                         Liabilities;

                    (f)  any claim, right or interest of Seller in and to
                         any refund or credit for foreign, federal, state
                         or local income or other taxes for periods ending
                         on or prior to the Closing Date, including any
                         deferred tax asset;

                    (g)  the assets and rights described on Schedule
                         2.3(g);

                    (h)  all amounts owed by any Seller Affiliate to Seller
                         and all rights of Seller under agreements or
                         relationships with any Seller Affiliate, including
                         without limitation in connection with interest
                         rate hedging transaction;

                    (i)  reserves and accruals on the Records of Seller
                         relating to Excluded Assets or Excluded
                         Liabilities;

                    (j)  Investments other than the KB Investment;

                    (k)  Excluded Loans; and

                    (l)  any other rights relating to any Excluded Asset.

                    2.4  TRANSFER AND ASSUMPTION OF LIABILITIES.  In
          addition to performing the obligations and agreements required to
          be performed by it under the terms of this Agreement, on the
          Closing Date Purchaser shall, on the terms and subject to the
          conditions of this Agreement (including without limitation
          Article 11 hereof), assume, agree to pay, perform and discharge
          when due all of the following liabilities of BFD as of the
          Closing Date:

                    (a)  obligations under Loans and Loan Commitments
                         included in the Acquired Assets;

                    (b)  obligations under Loan Documents relating to such
                         Loans and Loan Commitments;

                    (c)  obligations of Seller under the Assigned Leases
                         and Assumed Contracts and Other Obligations;

                    (d)  obligations in respect of Repossessions, including
                         without limitation obligations in respect of ad
                         valorem taxes relating to real property and
                         personal property taxes relating to Personal
                         Property comprising the Repossessions;

                    (e)  liabilities to trade creditors of BFD to the
                         extent reflected on the Final Asset and Liability
                         Schedule;

                    (f)  liabilities that may arise in connection with any
                         litigation that has been or may be brought against
                         (i) Seller or (ii) Seller and any of its
                         Affiliates (but excluding in the case of clause
                         (ii) any proportionate share of such liabilities
                         relating to the actions and omissions of any such
                         Affiliate), in any case in connection with or
                         arising out of the BFD Acquired Business,
                         including without limitation those claims against
                         Seller described in Schedule 2.4(f)-A, but
                         excluding the litigation described in Schedule
                         2.4(f)-B;

                    (g)  obligations arising in connection with the
                         guarantee by BFD of Loans and Loan Commitments
                         made or extended by ICG as set forth on Schedule
                         2.4(g);

                    (h)  obligations of BFD to reimburse ISG for drawdowns
                         on letters of credit issued by ISG on behalf of
                         Debtors of BFD in connection with Loans and Loan
                         Commitments included in the Acquired Assets as set
                         forth on Schedule 2.4(h);

                    (i)  obligations arising under participation
                         arrangements sold to third parties with respect to
                         Loans and Loan Commitments included in the
                         Acquired Assets as set forth on Schedule 2.4(i);
                         and

                    (j)  all other liabilities and obligations relating to
                         in any manner or arising out of the Acquired
                         Assets, the Assumed Liabilities or the BFD
                         Acquired Business transferred pursuant to this
                         Agreement as conducted through the Closing Date,
                         whether primary or secondary, direct or indirect,
                         absolute or contingent, contractual, tortious or
                         otherwise, excluding only those liabilities of
                         Seller which are reflected on Schedule 2.4(j) as
                         being retained by Seller.

          Notwithstanding the foregoing, Purchaser shall not assume (i) any
          liability or obligation in respect of any indebtedness of Seller
          to any of its Affiliates, (ii) any liability or obligation of
          Seller to any of its Affiliates in connection with any contract
          or arrangement, including without limitation, interest rate
          hedging transactions (except as expressly set forth in Sections
          2.4(g) and (h)), (iii) except as expressly provided in Article 8
          hereof, any liability for Taxes including, without limitation,
          any liability for Taxes imposed on the Seller pursuant to
          Treasury Regulation Section 1.1502-6 (and any comparable state,
          local or foreign law or regulation) as a result of being a member
          of an affiliated group of corporations as defined in Section 1504
          of the Code and any liability for Taxes arising from any Tax
          sharing agreement or similar arrangement, (iv) any liability for
          the payment of an "excess parachute payment", as defined in
          Section 280G of the Code, (v) except as specifically provided in
          Section 7.7 hereof, any liabilities arising under any employee
          benefit plan, program, arrangement or agreement maintained or
          contributed to by Seller, BFD or their respective Affiliates, or
          (vi) any liability for which indemnification is provided pursuant
          to clause (iv), (v), (vi) or (vii) of Section 11.2(a).

                    Except as expressly provided in this Section 2.4,
          neither Purchaser nor any of its Affiliates is assuming, and none
          of them shall be deemed to have assumed, any liabilities,
          obligations or duties of Seller or any of Seller's Affiliates of
          any kind or nature whatsoever (whether primary or secondary,
          direct or indirect, absolute or contingent, contractual, tortious
          or otherwise), and Seller or its Affiliates, as the case may be,
          shall remain and be solely and exclusively liable with regard to
          such liabilities and obligations.

                    2.5  MANNER OF ASSUMPTION.  (a)  The Seller and the
          Purchaser shall execute and deliver at the Closing an assumption
          agreement in form and substance reasonably satisfactory to the
          Purchaser and the Seller and such other assignments and
          assumption agreements as may be necessary and appropriate to
          effect the assumption by the Purchaser of the obligations and
          liabilities assumed by the Purchaser under this Agreement and the
          transfer to the Purchaser of all rights and obligations, to the
          extent possible, of the Seller under the Assigned Leases and all
          Assumed Contracts and Other Obligations.

                    (b)  On and after the Closing Date, the Purchaser shall
          give such further assurances to the Seller, and shall execute,
          acknowledge and deliver all such acknowledgements and other
          instruments, as the Seller shall reasonably request to
          effectively relieve and discharge the Seller from any obligations
          assumed by the Purchaser pursuant to this Agreement.

          ARTICLE 3.  CONSIDERATION

                    3.1  PURCHASE PRICE.  (a)  At the Closing, Purchaser
          shall pay to Seller to such account as Seller shall have
          designated in writing to Purchaser at least two business days
          prior to the Closing Date funds immediately available in New York
          City in an amount equal to the Interim Amount.

                    (b)  Upon the availability of the Final Asset and
          Liability Schedule prepared pursuant to Section 3.2(a), and
          subject to the terms and conditions of Section 3.2, the Seller
          and Purchaser shall calculate the amount of the Adjustment.  If
          the Adjustment is a positive number, Purchaser shall promptly pay
          to the Seller the amount of such Adjustment, together with
          interest from the Closing Date to the date of payment at the
          average of the Federal Funds Rate or Rates in effect from time to
          time during such period.  If the Adjustment is a negative number,
          the Seller shall promptly pay to Purchaser the absolute value of
          the amount of such Adjustment, together with interest from the
          Closing Date to the date of payment at the average of the Federal
          Funds Rate or Rates in effect from time to time during such
          period.

                    3.2  ASSET AND LIABILITY SCHEDULES.  (a)  The Seller
          shall cause to be prepared a schedule (the "Interim Asset and
          Liability Schedule") prepared in accordance with the BFD
          Accounting Principles as in effect on September 30, 1994 and
          substantially in the form of Schedule 3.2(d) setting forth (i)
          the Book Value of all Acquired Assets and (ii) the Book Value of
          all Assumed Liabilities, in each case through and including the
          close of business on the Interim Date.  The Seller shall provide
          a copy of such Schedule to the Purchaser no later than seven
          business days prior to the Closing Date, and such Schedule shall,
          absent manifest error, serve as the basis for the calculation of
          the Interim Amount payable on the Closing Date.

                    (b)  As promptly as practicable but no later than 30
          days after the Closing Date, the Seller shall cause to be
          prepared a schedule (the "Final Asset and Liability Schedule")
          prepared in accordance with the BFD Accounting Principles as in
          effect on September 30, 1994 and substantially in the form set
          forth on Schedule 3.2(d) setting forth (i) the Book Value of all
          Acquired Assets and (ii) the Book Value of all Assumed
          Liabilities, in each case through the close of business on the
          Closing Date.  Purchaser shall cooperate with Seller in
          connection with the preparation of the Final Asset and Liability
          Schedule, and shall give Seller full access to the Books and
          Records of the BFD Acquired Business to the extent necessary or
          appropriate in order to facilitate such preparation, and provide
          Seller with such other information as it may reasonably request
          in connection with such preparation.  Upon the availability of
          the Final Asset and Liability Schedule, the Seller shall deliver
          same to the Purchaser, together with a duly completed and
          executed certificate of a senior officer of Seller to the effect
          that, to the best knowledge of such officer, such Schedule has
          been prepared in accordance with the requirements of this
          Agreement.

                    (c)  (i)  Purchaser shall promptly review the Final
               Asset and Liability Schedule and work papers of Seller
               related to its preparation and shall make inquiries with
               respect thereto of representatives of Seller as Purchaser
               shall deem necessary or appropriate.  In the event of any
               disagreement concerning the Final Asset and Liability
               Schedule (or the computation or determination in accordance
               with the terms of this Agreement of any item or amount),
               Purchaser shall notify Seller in writing thereof not later
               than thirty (30) days after delivery of the Final Asset and
               Liability Schedule to Purchaser, specifying in reasonable
               detail the disagreement and the basis therefor.  In the
               event there is no such disagreement or in the event that
               Purchaser so notifies Seller of a disagreement as to any
               such item or amount, then any payment based on the Final
               Asset and Liability Schedule required to be made under this
               Agreement shall initially be made no later than thirty (30)
               days after delivery of the Final Asset and Liability
               Schedule to Purchaser, all on the basis of such items or
               amounts as to which the parties do not disagree.

                    (ii)  In the event that any disagreement notified to
               Seller by Purchaser in accordance with the foregoing
               procedures is not resolved pursuant to a written agreement
               between the parties prior to the close of business in New
               York City on the eighth business day following the date
               seller received such notification of such disagreement,
               either Seller or Purchaser shall thereupon be entitled to
               request KPMG Peat Marwick or any other firm mutually agreed
               to by the parties ("Peat") to determine, in accordance with
               the provisions of this Agreement, the disputed item or
               amount (or computation or determination thereof).  Any such
               request shall be in writing and shall specify with
               particularity the disputed items, amounts or computations
               being submitted for determination, and the requesting party
               shall furnish the other parties hereto with a copy of such
               request at the same time it is submitted to the independent
               accountants.

                    (iii)  Peat shall as promptly as practicable determine,
               in accordance with the provisions of this Agreement and the
               BFD Accounting Principles in effect on September 30, 1994,
               the proper amount of any disputed item or other amount, or
               the computation thereof, and such determination shall be
               final, conclusive and binding on all parties hereto.  Seller
               and Purchaser shall cooperate fully in assisting such firm
               in making any determination requested hereunder, including
               giving such firm full access to all files, books and records
               relevant thereto and providing such other information as
               such firm may reasonably request in connection with the
               determination to be made by it hereunder.  Peat shall
               promptly and substantially simultaneously notify Purchaser
               and Seller in writing of any determination by it hereunder. 
               The fees and disbursements in connection with such firm's
               determination shall be borne (i) by Purchaser, if Seller's
               position with respect to the disputed payment amount is
               fully upheld by such determination, (ii) by Seller, if
               Purchaser's position with respect to the disputed payment is
               fully upheld by such determination and (iii) otherwise by
               Purchaser and Seller based upon the relative portions of the
               disputed payment amount resolved against such party by such
               determination.

                    (iv)  In the event that a payment is required to be
               made by any party pursuant to the terms of this Section,
               such payment shall be made promptly (and in any event within
               5 days after the date of an agreement between the parties or
               of receipt by the parties of written notice of a
               determination by Peat pursuant to this Section, as the case
               may be), together with interest accrued pursuant to Section
               3.1(b).  Purchaser and Seller agree that the settlement of
               amounts payable pursuant to this Section will not be
               considered to be a claim for indemnification pursuant to the
               provisions of Section 11.2, and will not limit or affect
               their respective rights thereunder.

                    (d)  In order to illustrate the parties' intent with
          respect to the amounts payable by Purchaser pursuant to this
          Agreement, attached hereto as Schedule 3.2(d) is a schedule which
          sets forth the Book Value of all of the Acquired Assets and
          Assumed Liabilities as of, and calculates the amount that would
          have been payable by Seller pursuant to this Agreement if, the
          Closing Date was September 30, 1994.

                    (e)  The parties hereto agree that the Interim and
          Final Asset and Liability Schedules shall not reflect a reserve
          or allowance in respect of any contingent liabilities relating to
          pending or threatened litigation, provided that the foregoing
          does not diminish or otherwise adversely affect the Purchaser's
          right to seek indemnification under Section 11.2.  The parties
          further agree that the Allowance for Credit Losses Reserve
          reflected on the Interim and Final Asset and Liability Schedules
          shall be established in accordance with the BFD Accounting
          Principles as in effect on September 30, 1994; provided that
          since September 30, 1994 the Seller has not effected and will not
          effect any discretionary increase or decrease in the Allowance
          for Credit Losses Reserve.

          ARTICLE 4.  CLOSING; TIME AND PLACE.

                    Unless this Agreement shall have been terminated and
          the transactions herein contemplated shall have been abandoned
          pursuant to the provisions of Section 10.1, and subject to the
          conditions of Article 9 hereof, the closing (the "Closing") of
          the purchase and assumption of the assets and liabilities shall
          take place at the offices of Simpson Thacher & Bartlett, 425
          Lexington Avenue, New York, New York on January 31, 1995,
          provided, that in the event the conditions set forth in Article 9
          are not satisfied on such date, the Closing shall occur on the
          next succeeding month-end date on which such conditions are
          satisfied, or at such other place, time and date as the parties
          may mutually agree.  The date and time of such Closing are herein
          referred to as the "Closing Date."  For purposes of this
          Agreement, the Closing shall be deemed to be effective
          immediately following the close of business on the month-end date
          to which the Closing relates.

          ARTICLE 5.  REPRESENTATIONS AND WARRANTIES OF THE SELLER AND
          PARENT.

                    The Seller and Parent represent and warrant as follows:

                    5.1  CORPORATE ORGANIZATION AND AUTHORITY.  The Seller
          is a corporation organized under the laws of Connecticut, duly
          organized, validly existing and in good standing under the laws
          of the jurisdiction of its organization, and the Seller has the
          requisite power and authority to conduct the businesses being
          transferred pursuant to this Agreement, to maintain the Assumed
          Liabilities and to own, lease and/or operate, as the case may be,
          the Acquired Assets.  Parent is a public limited company duly
          organized, validly existing and in good standing under the laws
          of England.  Parent has the corporate power and authority to
          carry on its business as it is now being conducted and to own,
          lease and/or operate, as the case may be, all of its properties
          and assets.  Each of Parent and the Seller has the requisite
          corporate power and authority and has taken or, in the case of
          Seller, will prior to the Closing Date take, all corporate action
          necessary in order to duly and validly execute and deliver this
          Agreement, the Servicing Agreement and each of the other
          agreements entered into in connection herewith and therewith to
          which it is a party, to consummate the transactions contemplated
          hereby and thereby and to perform all of the terms of this
          Agreement, the Servicing Agreement and each of the agreements
          entered into in connection herewith and therewith to be performed
          by it hereunder and thereunder.  This Agreement, the Servicing
          Agreement and each of the agreements entered into in connection
          herewith and therewith has been duly and validly executed and
          delivered by each of Seller and Parent where it is a party and
          (subject in the case of Seller to the taking of the corporate
          action referred to above) is a valid and binding agreement of
          each of the Seller and Parent enforceable against Seller and
          Parent in accordance with its terms except as may be limited by
          bankruptcy, insolvency, reorganization, moratorium or other
          similar laws relating to or affecting creditors rights generally
          and by general equitable principles. 

                    5.2  NO CONFLICT; LICENSES AND PERMITS; COMPLIANCE WITH
          LAWS AND REGULATIONS.  Except as set forth on Schedule 5.2, the
          execution, delivery and performance by the Seller and Parent of
          this Agreement, the Servicing Agreement and the other agreements
          entered into in connection herewith and therewith to which it is
          a party, do not and will not (i) violate any provision of the
          certificates of incorporation or by-laws of the Seller or Parent
          or (ii) violate, conflict with, or constitute a breach of, or
          default (or event which, with notice or lapse of time, or both,
          would constitute a default) under, or the loss of any benefit
          under, or result in the termination of or a right of termination
          or cancellation of, or accelerate the performance required by, or
          result in the creation of any Liens under, any law, rule,
          regulation, judgment, decree, ruling or order of any court,
          government or governmental agency applicable to the Seller or
          Parent or any of the respective properties or assets of Seller or
          Parent or under any agreement, instrument or obligation of the
          Seller or Parent or to which the Seller or Parent is subject or
          is a party or by which the Seller or Parent is otherwise bound or
          affected (including the Assumed Contracts and Other Obligations),
          or to which any of their respective properties or assets
          (including the Acquired Assets) are subject, other than, in each
          case described in clause (ii) above, violations, breaches,
          defaults and other events which, individually or in the
          aggregate, have not had and could not reasonably be expected to
          have a Material Adverse Effect.  The Seller has all licenses,
          franchises, permits, certificates of public convenience, orders
          and other authorizations (collectively, "Licenses") of all
          federal, state and local governments and governmental authorities
          necessary for the lawful ownership and use of Acquired Assets and
          the conduct of its business as now conducted other than Licenses
          the absence of which, individually or in the aggregate, has not
          had and could not reasonably be expected to have a Material
          Adverse Effect, and all such Licenses are valid and in good
          standing and are not subject to any suspension, modification or
          revocation or proceedings related thereto except where the
          invalidity, lack of good standing, suspension, modification or
          proceeding, individually or in the aggregate, has not had and
          could not reasonably be expected to have a Material Adverse
          Effect.  The Seller is in compliance with all applicable laws,
          rules, regulations, ordinances, statutes and consent decrees of
          all federal, state and local governments to which BFD's
          operations at the Transferred Offices are subject except where
          the failure to be in compliance, individually or in the
          aggregate, has not had and could not reasonably be expected to
          have a Material Adverse Effect.

                    5.3  APPROVALS AND CONSENTS.  Except as described in
          Schedule 5.3, no notices, reports or other filings are required
          to be made by the Seller or Parent with, nor are any consents,
          registrations, approvals, permits or authorizations required to
          be obtained by the Seller or Parent from, any governmental or
          regulatory authorities of the United States or the several States
          or any other Persons in connection with the execution and
          delivery of this Agreement by the Seller or Parent and the
          consummation by the Seller or Parent of the transactions
          contemplated hereby.

                    5.4  TITLE TO ASSETS, ETC.  (a)  The Seller has or will
          have at Closing, and will convey to the Purchaser at Closing,
          good title to the Loans, Loan Commitments and Loan Documents and
          all of the other Acquired Assets (other than those Acquired
          Assets leased by Seller) which pursuant to this Agreement are to
          be transferred to Purchaser, subject only to (i) the matters
          specifically set forth on Schedule 5.4(a), (ii) liens for taxes
          being contested in good faith by appropriate proceedings, (iii)
          liens of carriers and warehousemen incurred in the ordinary
          course of business for sums not yet due, (iv) liens incurred or
          deposits made in the ordinary course of business in connection
          with workers' compensation, unemployment insurance and other
          types of social security, or to secure the performance of
          tenders, statutory obligations, surety and appeal bonds, bids,
          leases, performance and return-of-money bonds and similar
          obligations and (v) other matters affecting such title which do
          not, in any case covered by clauses (i) through (v), individually
          or in the aggregate, materially impair the value of, or interfere
          with the Purchaser's ability to use in substantially the same
          manner as it is currently used by the Seller, such Acquired Asset
          or otherwise materially impair the business operations of the BFD
          Acquired Business (the matters described in clauses (i) through
          (v), collectively, the "Permitted Liens").  Seller has not
          granted or transferred to any other party any interest in the
          Personal Property owned or leased by Seller other than pursuant
          to the Permitted Liens.

                    (b)  The Seller has or will have at the Closing, and
          will convey to Purchaser at Closing, a valid leasehold interest
          in the Transferred Offices which pursuant to this Agreement are
          to be transferred to Purchaser, subject to (i) the matters
          specifically set forth on Schedule 5.4(b), (ii) liens of
          mechanics and materialmen incurred in the ordinary course of
          business which are being contested in good faith by appropriate
          proceedings or which are bonded, (iii) matters of record
          (including easements, restrictions, covenants and other
          exceptions to title) which do not materially impair the value of,
          or interfere with the present use of, such Transferred Office or
          otherwise materially impair the business operations of the
          Seller, (iv) matters affecting the landlord's title and (v) other
          exceptions to title which do not, in any case covered by clauses
          (i) through (v), individually or in the aggregate, materially
          impair the value of, such Transferred Office or interfere with
          the Purchaser's ability to use such Transferred Office in
          substantially the same manner as currently used by the Seller, or
          otherwise materially impair the business operations of the BFD
          Acquired Business (the matters described in clauses (i) through
          (v), collectively the "Permitted Encumbrances").  The Seller has
          not granted or transferred to any other party any interest in its
          leasehold estate in a Transferred Office other than Permitted
          Encumbrances.

                    (c)  To the best of Seller's knowledge, all of the
          Transferred Offices and Leasehold Improvements conform in all
          material respects to all applicable health and safety ordinances;
          provided that no representation or warranty is made with respect
          to compliance with the Americans with Disabilities Act and
          regulations issued thereunder or similar state and local rules,
          statutes and ordinances.

                    5.5  LEASES.  Each Assigned Lease is the valid and
          binding obligation of the Seller and, to the knowledge of the
          Seller, each of the other parties thereto, and there does not
          exist with respect to the Seller's obligations thereunder or, to
          the knowledge of the Seller, with respect to the obligation of
          the lessor thereof, any material default, or event or condition
          which constitutes, or after notice or passage of time or both
          would constitute, a material default on the part of the Seller or
          the lessor under any Assigned Lease.  All rents, expenses and
          charges which are or shall as of the Closing Date be due and
          payable by the Seller have been or as of the Closing Date shall
          have been paid or fully accrued on the Final Asset and Liability
          Schedule pursuant to the terms of each Assigned Lease.

                    5.6  CONTRACTS AND DEFAULTS.  Schedule 1.10 includes a
          list of all of the Assumed Contracts and Other Obligations in
          effect as of the date hereof.  True and complete copies of all
          such Assumed Contracts and Other Obligations have been made
          available to the Purchaser.  Except as set forth in Schedule
          1.10, all of the Assumed Contracts and Other Obligations (whether
          or not disclosed to the Purchaser pursuant to this Section 5.6)
          are valid and binding obligations of Seller and, to the knowledge
          of Seller, all of the other parties thereto, and are in full
          force and effect and are enforceable in accordance with their
          respective terms, and no event has occurred and remains uncured
          which constitutes a material default or breach or results in a
          right of acceleration, termination or any similar right by any
          party (or would, with the passage of time or the giving of
          notice, constitute a material default or breach or result in such
          a right of acceleration, termination or similar right) under any
          such contract, agreement or commitment, and Seller has duly
          performed all its obligations under each such contract, agreement
          or commitment to the extent such obligations have accrued, other
          than such defaults, breaches or results as have not had and could
          not reasonably be expected to have, individually or in the
          aggregate, a Material Adverse Effect.

                    5.7  LOANS AND LOAN COMMITMENTS.  (a)  Each Loan or
          Loan Commitment being transferred to Purchaser pursuant to this
          Agreement was made or acquired by BFD in the ordinary course of
          business at the time such Loan or Loan Commitment was made or
          acquired, as the case may be.  Schedule 5.7(a) contains the
          following true and correct information (as of three days
          preceding the date of this Agreement with respect to clauses (i)
          and (ii) and as of September 30, 1994 with respect to clause
          (iii)) with respect to each Loan or Loan Commitment being
          transferred to Purchaser hereby:  (i) the unpaid principal
          balance of each such Loan as well as the aggregate amount of each
          Loan Commitment, (ii) the payment status of each such Loan and
          (iii) the schedule of principal and interest payments of each
          such Loan and the amounts thereof.

                    (b)  Except as described on Schedule 5.7(b), with
          respect to each Loan or Loan Commitment being transferred to
          Purchaser pursuant to this Agreement:

                    (1)  Each Loan Document constitutes a valid, legal and
               binding obligation of the obligor thereunder, enforceable in
               accordance with its terms, subject to bankruptcy,
               insolvency, reorganization, moratorium, laws governing
               fraudulent conveyance or equitable subordination and other
               similar laws of general applicability relating to or
               affecting creditors' rights generally and to general
               principles of equity; each Loan Document contains customary
               and enforceable provisions such as to render the rights and
               remedies of the holder thereof adequate for the realization
               (including realization by judicial foreclosure) of the
               benefits intended to be provided by the security interest or
               lien created and granted by such Loan Document, subject to
               bankruptcy, insolvency, reorganization, moratorium, laws
               governing fraudulent conveyance or equitable subordination
               and other similar laws of general applicability relating to
               or affecting creditors' rights generally and to general
               principles of equity; and except as set forth on Schedule
               5.7(b)(1), all Liens granted to the Seller in any collateral
               described in each Loan Commitment and Loan Document as
               security for each Loan and Loan Commitment constitute valid
               and perfected Liens in such collateral (assuming the
               relevant Debtor has rights in the collateral as to permit
               attachment), subject to (x) bankruptcy, insolvency,
               reorganization, moratorium, laws governing fraudulent
               conveyance or equitable subordination and other similar laws
               of general applicability relating to or affecting creditors'
               rights generally and to general principles of equity
               provided that the effect of all such laws would not have
               more than a de minimis adverse impact on the value and
               benefits of the collateral, taken as a whole, securing the
               Loans and Loan Commitments and (y) federal and state laws
               relating to fraudulent conveyances and preferences;

                    (2)  All Loans, Loan Commitments and related Loan
               Documents were issued, made and maintained in accordance
               with applicable law; under existing law, there is no valid
               claim against Seller with respect to, or valid defense to
               the enforcement of, such Loan or Loan Commitment and neither
               the Seller nor any of its Affiliates has taken or failed to
               take any action that would entitle any Debtor or other party
               to assert successfully any claim or defense against the
               Seller or the Purchaser (including without limitation any
               right not to repay any such obligation or any part thereof);

                    (3)  Such Loan or Loan Commitment was made
               substantially in accordance with BFD's standard underwriting
               and documentation guidelines as in effect at the time of its
               origination and has been administered substantially in
               accordance with BFD's standard loan servicing and operating
               procedures as in effect from time to time.  Appended hereto
               as Exhibit 5.7(b)(3) are copies of (x) BFD's standard
               underwriting and documentation guidelines currently in
               effect and (y) BFD's current standard loan servicing and
               operating procedures; and

                    (4)  None of the rights or remedies under the Loan
               Documents in favor of the Seller have been amended,
               modified, waived, supplemented, subordinated or otherwise
               altered by Seller or BFD other than in good faith and in the
               ordinary course of business and all writings and other
               documents relating to any such amendment, modification,
               waiver, supplement, subordination or other alteration of any
               Loan or Loan Commitment are included among the Loan
               Documents to be transferred to Purchaser pursuant to Section
               2.2.

                    (c)  There are no intentional misrepresentations of
          material facts made by officers or employees of the Seller in the
          credit files relating to the Loans and Loan Commitments, provided
          that the term "facts" shall not include judgments or opinions
          (including, without limitation, industry analyses) of such
          officers or employees which were made in good faith; the
          classification assigned to a Loan or Loan Commitment and in
          effect as of September 30, 1994 has been designated in accordance
          with the standards of the BFD Acquired Business then in effect.

                    (d)  Schedule 5.7(d) lists all Loans owned by BFD
          classified as Non-Performing Loans as of September 30, 1994.

                    (e)  Since September 30, 1994 no Loan or Loan
          Commitment (or any interest therein) which would otherwise be
          included in the Acquired Assets or Excluded Loans has been
          assigned or sold in any manner, except in the ordinary course of
          business or as scheduled on Schedule 5.7(e).

                    (f)  Schedule 5.7(f) identifies all separate accounts,
          including, but not limited to, all lockboxes, escrow accounts,
          cash collateral accounts, investment accounts and security
          deposits held or maintained by or on behalf of Seller or any
          Debtor in connection with any Loan or Loan Commitment.

                    (g)  Upon the payment of the Interim Amount on the
          Closing Date and the execution, delivery and, if necessary,
          filing and/or recording of the Loan Transfer Documents, Seller
          will have validly transferred and assigned to Purchaser all of
          Seller's right, title and interest in all Loans, Loan Commitments
          and Loan Documents and all rights relating thereto, including,
          without limitation, all of Seller's Liens and security interests
          in any and all collateral described in any Loan Document as
          security for the related Loan; provided that the representation
          and warranty of Seller in this Section 5.7(g) shall only become
          applicable to the Excluded Loans upon the full transfer thereof
          by Seller to Purchaser following receipt of all requisite
          consents.

                    (h)  Each file of Loan Documents pertaining to each
          Loan includes all documents relating to each such Loan that are
          necessary to enforce such Loan.

                    (i)  Except as set forth in Schedule 5.7(i), since
          January 1, 1990 neither Seller nor BFD has assigned, transferred
          or conveyed (by participation or otherwise) any Loans or Loan
          Commitments (i) at a discount from its outstanding principal
          balance at the time of such sale (except for such discounts
          attributable solely to the interest rate of such loan) or (ii) to
          any Affiliate of BFD (including without limitation to another
          division of Seller).

                    (j)  To the best knowledge of the Seller, Schedule
          5.7(j)-A and Schedule 5.7(j)-B lists all Loans and Loan
          Commitments which, as of the Closing Date, will be Excluded Loans
          unless all required consents are obtained.

                    (k)  Without in any way limiting Seller's liability
          with respect to any breach of or misrepresentation under any
          other provisions of this Agreement, the Seller makes no
          representation or warranty with respect to the amount that may
          ultimately be collected or the credit quality of the Loans and
          Loan Commitments comprising the Acquired Assets, the value or
          condition of any collateral securing such Loans and Loan
          Commitments, the creditworthiness or financial condition of the
          Debtors under such Loans and Loan Commitments or, subject to
          subsection 5.7(c), with respect to the evaluations contained or
          conclusions reached in any credit analyses delivered to the
          Purchaser.

                    5.8  LIST OF TRANSFERRED OFFICES.  Schedule 5.8
          contains a list, complete and accurate in all material respects,
          setting forth as of a recent date identified in Schedule 5.8 the
          address of each Transferred Office which is leased by the Seller
          and Schedule 1.8 contains a complete and accurate list as of the
          date hereof of each such lease agreement and all material
          amendments thereto.

                    5.9  ENVIRONMENTAL MATTERS.  (a)  For purposes of this
          Section 5.9, the following terms shall have the indicated
          meaning:

                    "Environmental Law" means any applicable federal, state
               or local statute, law, ordinance, rule, or regulation, now
               existing, relating to pollution or protection of the
               environment, including natural resources or the exposure to
               materials in the environment or workplace.  For the purposes
               of this definition the term "Environmental Law" shall
               include, without limiting the foregoing, (A) the following
               statutes, as amended:

                         (i)  the Clean Air Act, as amended, 42 U.S.C.
                    SECTION 7401 et seq.;

                         (ii)  the Federal Water Pollution Control Act, as
                    amended, 33 U.S.C. SECTION 1251 et seq.;

                         (iii)  the Resource Conservation and Recovery Act
                    of 1976, as amended, 42 U.S.C. SECTION 6901 et seq.;

                         (iv)  the Comprehensive Environmental Response,
                    Compensation and Liability Act of 1980, as amended
                    (including, the Superfund Amendments and
                    Reauthorization Act of 1986, "CERCLA"), 42 U.S.C.
                    SECTION 9601 et seq.;

                         (v)  the Toxic Substances Control Act, as amended,
                    15 U.S.C. SECTION 2601 et seq.;

                         (vi)  the Occupational Safety and Health Act, as
                    amended, 29 U.S.C. SECTION 651;

                         (vii)  the Emergency Planning and Community Right-
                    to-Know Act of 1986, 42 U.S.C. SECTION 11001 et seq.;

                         (viii)  the Safe Drinking Water Act, 42 U.S.C.
                    SECTION 300f et seq.; and

                         (ix)  all comparable state and local laws and
                    regulations; and

                    (B)  the terms and conditions of any permit, license,
               authority, settlement or other obligation applicable to BFD
               under Environmental Law.

                    "Real Property" means real property classified by BFD
               as Repossessions.

                    (b)  To the Seller's knowledge, there are no pending or
          threatened claims, actions or proceedings under Environmental Law
          against Seller involving BFD relating to:

                         (i)  an asserted liability of Seller under
                    Environmental Law; or

                         (ii)  the handling, storage, use or disposal of
                    materials;

                         (iii)  the actual or threatened discharge, release
                    or emission of materials from, on or under or within
                    the Real Property or any other property; or

                         (iv)  personal injuries or damage to property
                    (including, without limitation, nuisance, diminished
                    enjoyment and diminished value) related to or arising
                    out of exposure to materials discharged, released or
                    emitted from or into, or transported from or to, the
                    Real Property.

                    (c)  To the Seller's knowledge, and other than with
          respect to matters which, individually or in the aggregate, have
          not had or could not reasonably be expected to have a Material
          Adverse Effect, no conditions exist or acts have occurred which
          form the basis for claims, actions or proceedings under Section
          5.09(b).

                    5.10  LABOR CONTRACTS AND RELATIONS.  With respect to
          employees of BFD, the Seller is not party to any collective
          bargaining agreement, contract, or other agreement or
          understanding with a labor union or labor organization, nor is
          the Seller the subject of a proceeding asserting it has committed
          an unfair labor practice or seeking to compel it to bargain with
          any labor organization as to wages and conditions of employment,
          nor is any such proceeding threatened, nor is there any strike or
          other labor dispute by employees of BFD, pending or threatened,
          nor is the Seller aware of any activity involving any employees
          of BFD seeking to certify a collective bargaining unit or
          engaging in any other union organizational activity.

                    5.11  FINANCIAL STATEMENTS.  Schedule 5.11 contains the
          balance sheets of BFD as of December 31, 1993, 1992 and 1991 and
          as of September 30, 1994 (the "Balance Sheets") and the related
          statements of income for the years ended December 31, 1993, 1992
          and 1991 and the nine months ended September 30, 1994 (the
          "Income Statements"; together with the Balance Sheets, the
          "Financial Statements").  The Financial Statements have been
          prepared in accordance with BFD Accounting Principles applied on
          a consistent basis except as may be stated therein and in all
          material respects present fairly, with respect to the Balance
          Sheets, the financial position of BFD as of the dates set forth
          therein, and with respect to the Income Statements, the results
          of their operations for each of the periods set forth therein,
          subject, where appropriate, to normal year-end adjustments.  The
          Allowance for Credit Losses Reserves as of the date of each of
          the Balance Sheets has been prepared in accordance with BFD
          Accounting Principles; however, no representation or warranty is
          made as to the adequacy of the Allowance for Credit Losses
          Reserve.

                    5.12  LITIGATION.  Except as set forth on Schedule
          5.12, as of the date hereof, Seller is not a party to any
          pending, and to Seller's knowledge, there are no threatened,
          legal, administrative, arbitral or other proceedings, claims,
          actions or governmental or regulatory investigations of any
          nature against or affecting Seller, the Acquired Assets
          (excluding collateral), the Assumed Liabilities or the BFD
          Acquired Business.

                    5.13  BROKERS' FEES.  Except for BZW Division of
          Barclays Bank PLC ("BZW"), the Seller has not employed any broker
          or finder or incurred any liability for any brokerage fees,
          commissions or finders' fee in connection with the transactions
          contemplated by this Agreement.  The Seller will pay the fees of
          BZW.

                    5.14  EMPLOYEE BENEFITS.  (a)  Schedule 5.14 lists each
          "employee benefit plan" (within the meaning of section 3(3) of
          ERISA) and any other employee plan or agreement maintained by the
          Seller for the benefit of the employees of BFD (the "Bank
          Plans").  Copies or descriptions of the Bank Plans have been or
          will be made available to the Purchaser.

                    (b)  Each Bank Plan is in substantial compliance with
          ERISA and the Code where such failure to comply would have a
          Material Adverse Effect.  Each Bank Plan with respect to which
          assets and liabilities are to be transferred to an employee
          benefit plan maintained by Purchaser, if intended to be qualified
          under the Code, is so qualified.  A favorable determination
          letter has been obtained from the Internal Revenue Service for
          any other Bank Plan which is intended to be qualified under the
          Code.

                    (c)  No "accumulated funding deficiency" (as such term
          is used in section 412 or 4971 of the Code) has heretofore
          occurred with respect to any Bank Plan which would have a
          Material Adverse Effect.

                    (d)  No litigation or administrative or other
          proceeding involving any Bank Plan has occurred or, to the
          knowledge of Seller or BFD, been threatened where an adverse
          determination would have a Material Adverse Effect.

                    (e)  BFD does not contribute to any "multiemployer
          plan" (within the meaning of section 3(37) of ERISA) and neither
          BFD nor any member of its Controlled Group (defined as any
          organization which is a member of a controlled group of
          organizations within the meaning of Code section 414(b) or (c))
          has incurred any withdrawal liability which remains unsatisfied
          in an amount which, individually or in the aggregate, have had or
          could reasonably be expected to have a Material Adverse Effect.

                    (f)  Except as set forth in Section 7.7 and Schedule
          5.14(f), the consummation of the transactions contemplated hereby
          will not cause any benefits which are payable by the Purchaser to
          be vested, increased, or payable on an accelerated basis.

                    5.15  UNDISCLOSED LIABILITIES.  Except (a) as set forth
          in Schedule 5.15, (b) for those liabilities that are fully
          reflected or reserved against on Schedule 3.2(d) and (c) for
          liabilities incurred since September 30, 1994 in the ordinary
          course of business consistent with past practice, Seller has not
          incurred any liability of any nature whatsoever (whether
          absolute, accrued, contingent or otherwise and whether due or to
          become. due).

                    5.16  TAXES.  There are no liens for Taxes upon any of
          the properties of the BFD Acquired Business other than liens for
          Taxes not yet due or payable or liens for Taxes being contested
          in good faith by appropriate proceedings.

                    5.17  LOAN PORTFOLIO.  Schedule 5.17 sets forth, with
          respect to each Loan or Loan Commitment owned by BFD as of the
          date of this Agreement, the most recent rating or classification
          of such Loan in accordance with BFD internal standards.  Seller
          shall promptly inform Purchaser if the rating or classification
          of any such Loan or Loan Commitment (including without limitation
          any new Loan or Loan Commitment) should be changed at any time
          after the date of this Agreement.

                    5.18  ACCOUNTING RECORDS.  Seller maintains records
          which accurately reflect transactions in reasonable detail, and
          maintains accounting controls, policies and procedures sufficient
          to ensure that such transactions are (i) executed in accordance
          with management's general or specific authorization, as
          applicable, and (ii) recorded in a manner which permits the
          preparation of financial statements in accordance with BFD
          Accounting Principles, and the documentation pertaining thereto
          is retained, protected and duplicated in accordance with prudent
          business practices and applicable regulatory requirements.

                    5.19  TECHNOLOGY.  (a)  Schedule 5.19(a) contains a
          true and complete list and description of each of the electronic
          data processing, communications, telecommunications and other
          computer systems which are material to the BFD Acquired Business
          or the operation of the Transferred Offices (collectively, the
          "Technology Systems"), including (i) a description of any
          computer hardware or Assigned Software leased or owned by Seller
          that is included in the operation of the Technology Systems and
          (ii) a list of any contracts pursuant to which Seller is granted
          rights which are used in the operation of the Technology Systems,
          including Assigned Software licenses and similar agreements.
          Since January 1, 1993, there has not been any material
          malfunction with respect to any of the Technology Systems.

                    (b)  Except as set forth in Schedule 5.19(b), Seller
          has the right to use the Assigned Software in accordance with the
          terms of the relevant contracts governing such use, free and
          clear of any claims by any Person (other than the claims of any
          licensors under licensing or similar agreements), and the
          consummation of the transactions contemplated by this Agreement
          will not alter or impair the unrestricted right of Purchaser to
          use the Assigned Software, free and clear of any claims by any
          Person (other than the claims of any licensors under licensing or
          similar agreements).  No claims have been asserted by any Person
          with respect to the use by Seller of the Assigned Software or
          challenging or questioning the validity or effectiveness of any
          license or similar agreement with respect thereto, and, to the
          knowledge of Seller, there is no basis or any such claim.  The
          Assigned Software is not subject to any outstanding order,
          judgment, decree, stipulation or agreement restricting the use
          thereof by Seller.

                    5.20  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as
          set forth in Schedule 5.20, since December 31, 1993 Seller has
          not:  (i) other than in the ordinary course of business
          consistent with past practice, increased the wages, salaries,
          compensation, pension, or other fringe benefits or perquisites
          payable to any executive officer, employee, or director or
          granted any severance or termination pay, entered into any
          contract to make or grant any severance or termination pay, or
          paid any bonus to any such person; or (ii) changed its accounting
          principles, practices or methods except as required by GAAP (all
          of which changes, including those required by GAAP, to the extent
          made or implemented prior to the date of this Agreement, are
          described in Schedule 5.20).

                    5.21  INVESTMENTS.  Except for KB Investment, there
          were no Investments as of September 30, 1994.

          ARTICLE 6.  REPRESENTATIONS AND WARRANTIES OF SHAWMUT AND
          PURCHASER

                    Shawmut and Purchaser represent and warrant to Seller
          as follows:

                    6.1  CORPORATE ORGANIZATION AND AUTHORITY.  Shawmut is
          a corporation organized under the laws of Delaware, duly
          organized, validly existing and in good standing under the laws
          of the jurisdiction of its organization.  The Purchaser is a
          national banking association organized under the laws of the
          United States, duly organized, validly existing and in good
          standing under the laws of the jurisdiction of its organization.
          Purchaser has the corporate power and authority to carry on its
          business as it is now being conducted and to own, lease or
          operate, as the case may be, all of its properties and assets. 
          Shawmut and Purchaser each has the requisite corporate power and
          authority and franchises, permits, licenses and registrations and
          has taken (or in the case of an assignee, will take) all
          corporate action necessary in order to duly and validly execute
          and deliver this Agreement, the Servicing Agreement and each of
          the agreements entered into in connection herewith and therewith,
          to consummate the transactions contemplated hereby and thereby
          and to perform all of the terms of this Agreement, the Servicing
          Agreement and each of the agreements to be entered into in
          connection herewith and therewith to be performed by it hereunder
          and thereunder.  Any assignee of Purchaser pursuant to Section
          11.10 will at the time of such assignment be a corporation duly
          organized under the laws of its jurisdiction of incorporation,
          validly existing and in good standing under the laws of the
          jurisdiction of its organization.  Any such assignee will at the
          time of such assignment have the requisite corporate power and
          authority and franchises, permits, licenses and registrations and
          will take all corporate action necessary in order to duly and
          validly conduct the businesses being transferred to it pursuant
          to this Agreement, to maintain the Assumed Liabilities and to
          own, lease or operate, as the case may be, the Acquired Assets.
          Each of this Agreement, the Servicing Agreement and each of the
          agreements to be entered into in connection herewith and
          therewith has been (or will be, in the case of any such assignee)
          duly and validly executed and delivered by the Purchaser and
          Shawmut (or such assignee) where it is a party and is (or will
          be, in the case of any such assignee) a valid and binding
          agreement of Purchaser and Shawmut (or any such assignee)
          enforceable against Purchaser (or any such assignee) and Shawmut
          in accordance with their respective terms except as may be
          limited by bankruptcy, insolvency, reorganization, moratorium or
          other similar laws relating to, or affecting creditors' rights
          generally and by general equity principles.

                    6.2  NO CONFLICT, LICENSES AND PERMITS, COMPLIANCE WITH
          LAWS AND REGULATIONS.  The execution, delivery and performance by
          the Purchaser (and any assignee of Purchaser pursuant to Section
          11.10) and Shawmut of this Agreement, the Servicing Agreement and
          each of the agreements entered into in connection herewith and
          therewith to which it is a party does not, and will not, (i)
          violate any provision of the certificate of incorporation or by-
          laws of Purchaser (or the assignee of Purchaser pursuant to
          Section 11.10) and Shawmut or (ii) violate, conflict with, or
          constitute a breach of, or default (or event which, with notice
          or lapse of time, or both, would constitute a default) under, or
          the loss of any benefit under, or result in the termination of or
          a right of termination or cancellation of, or accelerate the
          performance required by, or result in the creation of any Liens
          under, any law, rule, regulation, order, judgment, decree or
          ruling or order of any government, governmental authority or
          court applicable to the Purchaser (or the assignee of Purchaser
          pursuant to Section 11.10) and Shawmut or any of their respective
          properties or assets or under any agreement, instrument or
          obligation of the Purchaser (or the assignee of Purchaser
          pursuant to Section 11.10) and Shawmut or to which the Purchaser
          (or the assignee of Purchaser pursuant to Section 11.10) and
          Shawmut are subject or are a party or by which the Purchaser (or
          the assignee of Purchaser pursuant to Section 11.10) and Shawmut
          are otherwise bound or affected or to which any of their
          respective properties or assets are subject, which violation,
          breach, contravention or default, individually or in the
          aggregate, (1) could reasonably be expected to prevent or impair
          the ability of the Purchaser to perform its obligations under
          this Agreement in any material respect or (2) could reasonably be
          expected to impair the validity or consummation of this Agreement
          or the transactions contemplated hereby in any material respect.

                    6.3  APPROVALS AND CONSENTS.  Other than the prior
          approval of the Office of the Comptroller of the Currency and the
          filing of the premerger notification required by the HSR Act and
          the expiration of the required waiting period thereunder, no
          notices, reports or other filings are required to be made by the
          Purchaser with, nor are any consents, registrations, approvals,
          permits or authorizations required to be obtained by the
          Purchaser from, any governmental or regulatory authorities of the
          United States, the several States or any foreign jurisdictions or
          any other Persons in connection with the execution and delivery
          of this Agreement by the Purchaser and any assignee of Purchaser
          pursuant to Section 11.10 and the consummation of the
          transactions contemplated hereby by the Purchaser and any such
          assignee.

                    6.4  BROKERS' FEES.  Except for Morgan Stanley & Co.,
          Incorporated, the Purchaser has not employed any broker or finder
          or incurred any liability for any brokerage fees, commissions or
          finders fees in connection with the transactions contemplated by
          this Agreement.  Purchaser will pay the fees of Morgan Stanley &
          Co. Incorporated.

                    6.5  LITIGATION AND LIABILITIES.  There are no actions,
          suits or proceedings pending, or, to the best knowledge of the
          management of the Purchaser, threatened against the Purchaser,
          violations of law or regulation, or obligations or liabilities,
          whether or not accrued, contingent or otherwise, or any facts or
          circumstances of which the management of the Purchaser is aware,
          including, without limitation, those relating to environmental
          and occupational safety and health matters, that questions the
          legality or propriety of the transactions contemplated by this
          Agreement or could result in any claims against or obligations or
          liabilities of the Purchaser that, individually or in the
          aggregate, (i) could reasonably be expected to prevent or impair
          the ability of the Purchaser to perform its obligations under
          this Agreement in any material respect or (ii) could reasonably
          be expected to impair the validity or consummation of this
          Agreement or the transactions contemplated hereby in any material
          respect.

                    6.6  NO IMPLIED REPRESENTATION.  Notwithstanding
          anything contained in this Article 6 or any other provision of
          this Agreement, in entering into this Agreement, the Purchaser
          has not been induced by and has not relied upon any
          representations, warranties or statements, whether express or
          implied, made by the Seller or any agent, employee or other
          representative of the Seller or by any broker or any other person
          representing or purporting to represent the Seller, which are not
          expressly set forth in this Agreement, whether or not any such
          representations, warranties or statements were made in writing or
          orally.  It is understood that any cost estimates, projections or
          other predictions as to future events or results contained or
          referred to in this Agreement or which otherwise have been
          provided to the Purchaser are not and shall not be deemed to be
          representations or warranties of the Seller.  The Purchaser
          acknowledges that there are uncertainties inherent in attempting
          to make such estimates, projections and other predictions, that
          the Purchaser is familiar with such uncertainties, that the
          Purchaser is taking full responsibility for making its own
          evaluation of the adequacy and accuracy of all estimates,
          projections and other predictions so furnished to it, and that
          Purchaser shall have no claim against anyone with respect
          thereto.

                    6.7  DISCLOSURE.  The Diligence Group has not
          intentionally withheld from the Seller any information discovered
          in the course of its due diligence investigation of the Seller
          prior to the date of this Agreement (other than those
          representations and warranties relating to any consents required
          to assign Loans, Assigned Leases or Assumed Contracts and Other
          Obligations) that would indicate that one or more of the
          representations and warranties of the Seller contained in this
          Agreement are inaccurate.

          ARTICLE 7.  COVENANTS

                    7.1  CONDUCT OF BUSINESS.  During the period from the
          date hereof to the Closing Date, without the prior written
          consent of the Purchaser or except as specifically contemplated
          by this Agreement or as set forth on Schedule 7.1 hereof, the
          Seller agrees that:

                    (a)  the business of BFD will be operated in the
               ordinary course consistent with past practice;

                    (b)  other than in the ordinary course consistent with
               past practice applicable to employees of BFD generally, (A)
               no increase in the compensation payable or to become payable
               by Seller to any officer, employee or agent of BFD shall be
               made, (B) no bonus, percentage of compensation or other like
               benefit shall be accrued to or for the credit of any
               officer, employee or agent of Seller, and (C) no bonus,
               stock option, profit sharing, pension, retirement or other
               similar arrangement or plan affecting BFD shall be
               instituted or changed;

                    (c)  the Seller shall use its reasonable best efforts
               to th&extent permitted by law to keep available to the
               Purchaser the opportunity to retain the services of the
               present employees of BFD, but in no event shall the Seller
               be obligated to expend monies or other items of value beyond
               current levels of compensation to retain employees. 
               Similarly, the Seller shall use its reasonable best efforts
               and work in good faith to preserve its relationships with
               customers and others having business relations with BFD;

                    (d)  the Seller will duly comply with the material
               legal requirements applicable to it and to the conduct of
               the business of BFD;

                    (e)  there shall be no material change in BFD's
               internal auditing program, bookkeeping and recordkeeping
               practices or BFD Accounting Principles (except as required
               pursuant to regulatory accounting or capital requirements);

                    (f)  the Seller shall not amend or extend, seek to
               amend or extend or take any action in connection with
               amending or extending any Assigned Lease other than to
               effect the purposes of this Agreement or ordinary renewals
               of such Assigned Leases;

                    (g)  the Seller shall not initiate litigation (other
               than actions incidental to loan recovery efforts) involving
               a claim in excess of $100,000, which litigation would
               otherwise be assumed by the Purchaser pursuant to this
               Agreement, without the prior consent of the Purchaser, which
               consent shall not be unreasonably withheld;

                    (h)  the Seller shall not, with respect to the Acquired
               Assets, Assumed Liabilities or the BFD Acquired Business,
               engage or participate in any material transaction, or incur
               or sustain any material obligation, except in the ordinary
               course of business;

                    (i)  the Seller shall not make any improvements to or
               capital expenditures on any Transferred Office, except
               pursuant to commitments for such made before the date of
               this Agreement (all of which commitments are described on
               Schedule 7.1(i)) and normal maintenance or refurbishing made
               in the ordinary course of business or as necessary to
               maintain existing assets in good repair or as required by
               the Assigned Leases;

                    (j)  the Seller shall not deviate in any material
               respect from policies and procedures existing as of the date
               hereof with respect to (I) classification and rating of
               assets (except as required by regulatory authorities), (II)
               accrual of interest on assets, and (III) underwriting or
               originating loans;

                    (k)  BFD shall not purchase any assets from, or sell
               any assets to, any Affiliate of Seller that would become, or
               would have been absent such sale, Acquired Assets;

                    (l)  the Seller shall not take action or fail to take
               any action that would, or could reasonably be expected to
               (I) result in any of Seller's representations and warranties
               set forth in this Agreement being or becoming untrue in any
               material respect; (II) result in any of the conditions to
               the Closing set forth in Article 9 not being satisfied;
               (III) result in a material violation of any provision of
               this Agreement; or (IV) otherwise be inconsistent with the
               terms and provisions of this Agreement, except, in every
               case, as may be required by applicable law;

                    (m)  BFD shall not enter into any new line of business;

                    (n)  the Seller shall continue to provide for credit
               losses on the financial statements of BFD in accordance
               with, and at the rate prescribed by, the BFD Accounting
               Principles (including for any portion of a calendar quarter
               in the event the Closing shall not occur as of the end of a
               calendar quarter) and shall make no discretionary changes to
               the level of the Allowance for Credit Losses Reserves
               (including without limitation by way of reversals of such
               reserves) which reduce the level thereof;

                    (o)  between the date of this Agreement and the Closing
               Date, the Seller shall not amend, modify, waive, supplement,
               subordinate or otherwise alter any of the rights or remedies
               under the Loan Documents in favor of Seller other than in
               good faith and in the ordinary course of business and all
               writings and other documents relating to any such amendment,
               modification, waiver, supplement, subordination or other
               alteration of any Loan, Loan Commitment or related Loan
               Document shall be included among the Loan Documents to be
               transferred to the Purchaser pursuant to Section 2.2; and

                    (p)  the Seller shall not agree to do any of the
               matters set forth in paragraph (b), (e), (f), (g), (h), (i),
               (j), (k), (l), (m) or (o) of this Section 7.1. 

                    7.2  INVESTIGATION.  (a)  Between the date of this
          Agreement and the Closing Date, the Seller shall afford to the
          Purchaser and its authorized agents and representatives
          reasonable access, upon reasonable notice and during normal
          business hours, to the Transferred Offices and to Records and all
          other information within the Seller's possession relating to the
          Acquired Assets, the Assumed Liabilities and the BFD Acquired
          Business.  Any request for such access will be coordinated with
          the Parent.  The Seller shall cause its personnel to cooperate
          with the Purchaser and provide to the Purchaser reasonable
          assistance in the Purchaser's investigation of matters relating
          to such Acquired Assets, the Assumed Liabilities and the BFD
          Acquired Business and the Purchaser's preparation for an orderly
          transition.  Notwithstanding the foregoing, the parties agree
          that (i) the Purchaser's investigations and preparations for the
          transition shall be conducted in a manner which does not
          unreasonably interfere with the Seller's normal operations,
          customers and employee relations, and (ii) subject to the
          provisions of Section 7.2(b) hereof, prior to the Closing Date
          the Purchaser shall not use the names and addresses of customers
          of the Seller for any purpose and shall not communicate or
          otherwise solicit such customers for any reason.  No
          investigation by Purchaser or its representatives pursuant to
          this Section 7.2(a) or otherwise shall affect or limit the
          representations, warranties or covenants of Seller set forth
          herein or be considered in determining whether any closing
          condition in Purchaser's favor shall have been satisfied or
          Purchaser shall have the right to be indemnified for any matter
          pursuant to this Agreement.  Prior to the Closing Date, the
          Purchaser shall promptly notify the Seller upon any member of the
          Diligence Group becoming aware of any information (other than
          those representations and warranties relating to any consents
          required to assign Loans, Assigned Leases or Assumed Contracts
          and Other Obligations) that any such member shall have discovered
          that would indicate to such member that any of the
          representations and warranties of Seller contained herein are
          inaccurate.

                    (b)  Purchaser shall be permitted, at its own expense,
          to communicate with, and deliver information, brochures,
          bulletins, press releases, and other communications
          (collectively, "Communications") to, Loan borrowers and other
          customers of BFD and BFD's employees concerning the transactions
          contemplated by this Agreement and concerning the business and
          operations of Purchaser; provided that, Purchaser shall inform
          the Seller of its plans to communicate with customers and
          employees in advance of any such Communication and all such
          Communications shall be subject to the prior review and approval
          of Seller (such approval not to be unreasonably withheld). 
          Seller, if so requested by Purchaser, shall on behalf and at the
          expense of Purchaser, furnish such Communications to Loan
          borrowers and other customers of BFD and BFD's employees in the
          manner and time period requested by Purchaser.

                    (c)  In the event Purchaser or any of its Affiliates is
          required pursuant to applicable legal or regulatory requirements
          to have available audited financial statements relating to the
          BFD Acquired Business, and the date by which such audited
          financial statements must be available requires that their
          preparation (including the related audit) be commenced prior to
          the Closing Date, Parent shall, at the request of the Purchaser,
          engage Shawmut's auditor for such purpose, but at the sole
          expense of Purchaser.  Seller and Purchaser shall, at the expense
          of the Purchaser, take such actions as are customary to assist
          such auditors in the preparation of such required audited
          financial statements, including assistance after the Closing Date
          with reasonable requests for financial information not included
          in the records of BFD.  Prior to the Closing Date, in connection
          with any sale or distribution of securities (whether registered
          or otherwise) made by Purchaser or any of its Affiliates or the
          Purchaser's or any of its Affiliates' efforts to comply with any
          applicable legal or regulatory requirements, Seller further
          agrees to (i) make available on a timely basis such financial
          information of the BFD Acquired Business, the Acquired Assets and
          the Assumed Liabilities as is readily available and may
          reasonably be requested, (ii) cooperate with reasonable requests
          for other information concerning the BFD Acquired Business, the
          Acquired Assets and the Assumed Liabilities and (iii) request to
          be provided, at the Purchaser's expense, "cold comfort" letters
          and updates thereof from Seller's independent certified public
          accountants.

                    7.3  BEST EFFORTS; TAKING OF NECESSARY ACTION. 
          (a)  Each of the parties hereto agrees to use its reasonable best
          efforts promptly to take or cause to be taken all action and
          promptly to do or cause to be done all things necessary, proper
          or advisable to consummate and make effective the transactions
          contemplated by this Agreement, including, without limitation,
          using reasonable efforts to lift or rescind any injunction or
          restraining order or other order adversely affecting the ability
          of the parties to consummate the transactions contemplated
          hereby, provided, however, that neither party shall be required
          to make any payment to any landlord or agree to any material
          increase in rent under any Assigned Lease in connection with
          obtaining such landlord's consent to the assignment of such lease
          without the consent of the Purchaser.  In case at any time after
          the Closing Date any further action is necessary, proper or
          advisable to carry out the purposes of this Agreement, as soon as
          reasonably practicable each party to this Agreement shall cause
          its proper officers and/or directors to take all such necessary
          action.

                    (b)  Without limiting the foregoing, the Purchaser
          agrees to promptly prepare and file all applications and other
          notices required in connection with, and to use its reasonable
          best efforts to obtain promptly and comply with all conditions
          contained in, all necessary regulatory approvals and any other
          consent, approval or other action by, or notice to or
          registration or filing with, any governmental or administrative
          agency or authority required or necessary to be made, obtained or
          complied with, as the case may be, by the Purchaser in connection
          with the performance of this Agreement by the Purchaser or the
          consummation of the transactions contemplated hereby.  In
          connection therewith, the Purchaser shall submit to the relevant
          regulatory authorities such capital plans, description of
          operating procedures, financial information (including
          projections) and such other information as may be necessary to
          obtain such consents and approvals and to address those issues
          that may arise in connection therewith.  The Purchaser shall
          refrain from taking any action that could reasonably be expected
          to impair or materially delay its ability to obtain the
          regulatory approval described in Schedule 6.3 and to consummate
          the transactions contemplated hereby, including action that could
          frustrate or cause the denial of any applications or other
          notices required in connection with such regulatory approval.  To
          the extent that any application filed in connection with
          obtaining any such approval contains any significant information
          relating to the Seller, prior to submitting such application to
          any regulatory agency, the Purchaser will permit the Seller to
          review such information and will consider in good faith the
          suggestions of the Seller with respect thereto.  The Purchaser
          shall use its reasonable best efforts to ensure that any
          information provided by the Seller to be submitted in connection
          with submissions to governmental or administrative agencies or
          authorities receives confidential treatment if so requested by
          the Seller.  Seller shall cooperate with Purchaser in its efforts
          to obtain all necessary regulatory approvals.

                    (c)  Seller agrees to use its reasonable best efforts
          (excluding the payment of cash or other consideration) to obtain
          as promptly as practicable all permits, consents, approvals,
          waivers and authorizations of all third parties with whom Seller
          or its Affiliates is in contractual privity which are necessary
          or desirable to consummate the transactions contemplated by this
          Agreement, and after the Closing Date, shall cooperate, at the
          Purchaser's expense, with reasonable requests to execute and
          acknowledge consents, approvals, waivers and authorizations
          obtained by the Purchaser in connection with the Loan Documents.

                    (d)  Except to the extent prohibited by applicable law,
          the Purchaser shall provide to the Seller copies of all
          applications and other notices required in connection with any
          prior regulatory approvals and any other consent, approval or
          other action by, or notice to, or registration or filing with,
          any governmental or administrative authority or agency in
          connection with the transaction contemplated by this Agreement
          within five days of such submissions.  Except to the extent
          prohibited by applicable law, the Purchaser shall provide copies
          of any comments, requests or actions by governmental or
          administrative agencies or authorities to the Seller within five
          days of the Purchaser's receipt.  Information provided under this
          paragraph shall be held by the Seller subject to confidentiality
          restrictions substantially similar to those applicable to the
          Purchaser and Shawmut under the Confidentiality Agreement with
          respect to confidential information received from the Seller. 
          Nothing contained herein shall be deemed to provide Seller with a
          right to review any information provided to any governmental or
          administrative agency or authority on a confidential basis in
          connection with the transactions contemplated hereby, except that
          the Seller shall retain the right to review confidential
          information to the extent necessary to review the context of
          references to Seller and its Affiliates.  

                    (e)  Purchaser and Seller shall, upon request, furnish
          each other with all information concerning themselves, their
          subsidiaries, directors, officers and stockholders and such other
          matters as may be reasonably necessary or advisable in connection
          with any statement, filing, notice or application made by or on
          behalf of Purchaser and Seller or any of their respective
          subsidiaries to any governmental or administrative agency or
          authority in connection with the transactions contemplated by
          this Agreement (except to the extent that such information would
          be, or relates to information that would be, filed under a claim
          of confidentiality).

                    (f)  The Seller shall permit the Purchaser to engage in
          negotiations with Senior Officers for the retention of such
          Senior Officer's services after the Closing; provided that the
          standard form of such employment contracts and employment
          contracts materially different than such standard form shall be
          subject to the prior approval of Parent, which approval shall not
          be unreasonably withheld; provided further that such employment
          contracts disclosed to Parent may delete the amount of
          compensation or other payments to be made pursuant to such
          agreement.

                    (g)  Promptly after the execution of this Agreement,
          the Seller shall request, and shall use commercially reasonable
          efforts to obtain, the consent of the landlord under any Assigned
          Lease which requires consent for assignment thereof.  If the
          consent of the landlord under any Assigned Lease cannot be
          obtained, the Seller shall cooperate with the Purchaser in
          attempting to reach a mutually satisfactory arrangement regarding
          occupancy by Purchaser of the space demised under such Assigned
          Lease; provided, however, that the failure of the Seller to
          obtain any consent to assignment after the exercise of
          commercially reasonable efforts or the inability of the Purchaser
          to occupy space demised under any Assigned Lease shall not give
          rise to any right on the part of the Purchaser or the Seller to
          terminate this Agreement or to cause a reduction in the purchase
          price hereunder and the Seller shall have no liability to the
          Purchaser as a result thereof.  Any assignment fee specified in
          any Assigned Lease required to be paid to the relevant lessee in
          connection with the related assignment hereunder shall be borne
          equally by Purchaser and Seller.

                    7.4  EXPENSES.  Whether or not the transactions
          contemplated hereby are consummated, all costs and expenses
          incurred in connection with this Agreement and the transactions
          contemplated hereby shall, except as otherwise provided herein,
          be paid by the party incurring such expenses.

                    7.5  USE OF NAMES, TRADEMARKS AND SERVICE MARKS. (a)
          Anything herein to the contrary notwithstanding, no interest in
          or right to use any logo, name, trademark or service mark
          presently or previously used by the Seller (with the exception of
          the trademark "We Build Relationships") is being conveyed
          pursuant to this Agreement.  The Purchaser agrees that on and
          after the Closing Date neither it nor any of its Affiliates
          (including the Transferred Offices) will use the names "Barclay"
          or "Barclays", the "BCI" initials, the eagle symbol used by
          Affiliates of Seller or the shade of blue used by Affiliates of
          Seller (samples of which will be furnished to Purchaser)
          (collectively, the "Retained Names") in connection with any
          business or activity engaged in by the Purchaser and its
          Affiliates, except that (x) for a period of six months after the
          Closing, Purchaser may refer to the BFD Acquired Business in
          correspondence with existing BFD customers as "formerly known as
          Barclays Business Credit Inc." or "formerly known as BCI" or any
          similar designation and (y) Purchaser or its Affiliates or
          advisers may make "tombstone" advertisements announcing
          consummation of transactions contemplated hereby; provided that
          the Purchaser shall not refer to any Retained Name to advertise,
          market or solicit prospective new customers, or the agents
          thereof, or otherwise to engage in any business.  Promptly after
          the Closing Date, the Purchaser shall commence the removal of the
          trade names, names, service marks, logos, insignia, slogans,
          emblems, symbols, designs, and other identifying characteristics
          ("names") from all premises, equipment, signs, interior decor
          items, fixtures and furnishings, and from all printed materials
          and related business literature associated with the Transferred
          Offices, Personal Property and Leasehold Improvements acquired. 
          Such removal shall be at the sole expense of Purchaser.  Nothing
          in this Section 7.5 shall require the Purchaser, except in the
          ordinary course of business or as required by the terms thereof,
          to reissue or replace the Loan Documents transferred pursuant to
          this Agreement.

                    (b)  Notwithstanding anything to the contrary contained
          in Section 7.5(a), Purchaser and its Affiliates shall have the
          non-transferable and non-sublicensable right, for a period of
          ninety (90) days following the Closing Date, to use any materials
          or property existing on the Closing Date that bear any Retained
          Name where the removal of the Retained Name would be impractical
          (excluding letterhead, marketing materials or other means of
          communication with present or prospective customers that are not
          unduly burdensome to replace); provided, however, that as of the
          Closing Date Purchaser shall, to the extent practicable, place a
          stamp, mark or other notation on any such material or property
          that identifies the BFD Acquired Business as a business of
          Purchaser (and not of Seller).

                    7.6  POST-CLOSING COOPERATION.  The Purchaser agrees
          that the Seller and/or its independent auditors shall have
          reasonable access upon reasonable notice to Purchaser to the
          Books and Records of the Purchaser and its Affiliates as they
          relate to the business of BFD and its predecessors applicable to
          the period ending on the Closing Date and have the reasonable
          assistance and cooperation of the appropriate personnel of the
          Purchaser and its Affiliates in the review of such Books and
          Records.  Parent shall provide to Purchaser comparable access,
          assistance and cooperation with respect to the Books and Records
          of Seller relating to the BFD Acquired Business which are not
          included in the Acquired Assets.

                    7.7  EMPLOYEE-RELATED MATTERS.  (a)  Continuity of
          Employment.  The parties hereto intend that there shall be
          continuity of employment with respect to all employees of BFD,
          including any employees of Seller's Administration division named
          on Schedule 7.7(a).  The Purchaser shall employ, commencing on
          the Closing Date, all employees, including those on vacation,
          leave of absence, or short-term disability (including workers'
          compensation), but not long-term disability, who were employed by
          BFD (including such scheduled Administration Division employees)
          immediately prior to Closing, on the same terms (including
          salary, job responsibility and location) as those provided to
          such employees immediately prior to Closing.  All such employees
          who are employed by BFD or who are so scheduled shall hereafter
          be referred to as "Covered Employees".

                    (b)  Severance.  For purposes of severance benefits, if
          after Closing a Covered Employee is offered employment in a
          location which is not within a reasonable commute, as determined
          by Purchaser in accordance with its practice under Purchaser's
          Salary Continuation Procedure, and such Covered Employee's
          employment terminates due to his or her refusal to work in such
          new location, such Covered Employee shall be entitled to
          severance payments in accordance with Section 7.7(c) hereof.

                    (c)  Benefit Plans -- General.  Effective as of the
          Closing Date, Covered Employees shall cease participation in all
          plans, programs, policies and arrangements maintained for their
          benefit by the Seller or any of its Affiliates.  Commencing on
          the Closing Date and continuing thereafter,  Purchaser shall
          provide to Covered Employees such plans, programs, policies and
          arrangements, including but not limited to those providing
          severance benefits, which are the same as the Bank Plans provided
          to Covered Employees immediately prior to the Closing Date,
          subject to the terms and conditions thereof as in effect on the
          date of this Agreement except for ordinary course and other
          changes permitted under Section 7.1 hereof ("Purchaser Plans"). 
          As of the Closing Date, Purchaser shall provide credit for each
          Covered Employee's service with BFD or its Affiliates prior to
          the Closing Date (including periods of employment with any other
          employer which are taken into account under the corresponding
          benefit plan maintained for the benefit of such Covered Employee
          prior to Closing) for all purposes including without limitation
          (i) eligibility for, participation in, vesting and early
          retirement under Purchaser Plans, and (ii) determining vacation,
          sick leave, disability benefits, severance benefits and plan
          accruals under Purchaser Plans (except accruals under any defined
          benefit plan).

                    (d)  Welfare Benefit Plans.  Notwithstanding anything
          to the contrary contained herein, as of the Closing Date,
          Purchaser shall provide Covered Employees with immediate coverage
          under Purchaser Plans that are welfare benefit plans (as defined
          in section 3(1) of ERISA) (the "Purchaser Welfare Plans"). 
          Purchaser shall (i) cause there to be waived any preexisting
          condition restrictions otherwise applicable under any Purchaser
          Welfare Plan to any Covered Employee or his or her covered
          dependents and (ii) give effect, in determining any deductible
          and maximum out-of-pocket limitations, to claims incurred,
          amounts paid by and amounts reimbursed to Covered Employees with
          respect to similar plans maintained for their benefit immediately
          prior to the Closing Date.  The Seller or its Affiliates will
          retain responsibility for and continue to pay all medical, life
          insurance, disability and other welfare plan expenses and
          benefits for each Covered Employee with respect to claims
          incurred by such Covered Employee or their covered dependents
          prior to the Closing Date.  Expenses and benefits with respect to
          claims incurred by such Covered Employees or their covered
          dependents on or after the Closing Date shall be the
          responsibility of the Purchaser.  For purposes of this paragraph,
          a claim is deemed incurred when, in the case of medical benefits,
          the medical or other services giving rise to the claim are
          performed, in the case of life insurance, on the date of death
          and with respect to disability, on each day of such disability. 
          The Seller shall be responsible for all legally mandated
          continuation of health care coverage for all Covered Employees
          and their covered dependents who have a loss of health care
          coverage due to a qualifying event with respect to periods before
          the Closing Date.

                    (e)  Defined Benefit Plan.  No assets or liabilities
          with respect to Covered Employees and their beneficiaries shall
          be transferred as a result of this Agreement from the Restated
          Retirement Plan of the Seller (the "Seller's Retirement Plan") to
          any plan or arrangement established or maintained by Purchaser or
          any other employer for the benefit of such Covered Employees and
          their beneficiaries.  After the Closing, no further benefit shall
          accrue under the Seller's Retirement Plan with respect to Covered
          Employees.  All Covered Employees who are members of the Seller's
          Retirement Plan shall become fully vested in their accrued
          benefits thereunder as of the Closing Date.  Benefits payable to
          Covered Employees under the Seller's Retirement Plan shall be
          payable to such Covered Employees pursuant to the terms of, and
          at the time and in the amounts provided under, the Seller's
          Retirement Plan based upon each such Covered Employee's years of
          service with BFD or its Affiliates (including periods of
          employment with any employer which are taken into account under
          the Seller's Retirement Plan), and compensation received from BFD
          or its Affiliates through the Closing Date.  Purchaser shall
          provide the Seller with a list, no less frequently than
          semi-annually, of Covered Employees who have terminated
          employment with Purchaser or its Affiliates.  Effective on the
          Closing Date, a qualified defined benefit plan containing
          substantially the same provisions as the Seller's Retirement Plan
          (the "Purchaser's Retirement Plan") shall include as participants
          those Covered Employees who were participants in the Seller's
          Retirement Plan immediately before the Closing Date.  The
          remaining Covered Employees shall become participants in the
          Purchaser's Retirement Plan in accordance with its terms.

                    (f)  Savings Plan.  All Covered Employees who are
          participants in the Seller's Thrift-Savings Plan ("Seller's
          Savings Plan") shall become fully vested in their account
          balances as of the Closing Date.  The Seller shall (i) cause the
          Seller's Savings Plan to segregate, in accordance with the
          spin-off provisions set forth under section 414(l) of the Code,
          the assets of such Plan representing the full account balances of
          Covered Employees as of the first day of the month following the
          Closing Date, (ii) make any required filings and submissions to
          appropriate governmental agencies and (iii) make any necessary
          amendments to the Seller's Savings Plan and the related trust
          agreement to provide for such segregation and the transfer of
          assets described below.  Prior to the Closing Date, Purchaser or
          its designated affiliate shall (i) establish or designate a plan
          that is substantially similar to the Seller's Savings Plan,
          including provision for the same level of matching contributions
          and qualified under sections 401(a) and 401(k) of the Code for
          the benefit of Covered Employees (the "Successor Plan") and
          furnish Seller with the most recent favorable determination
          letter from the Internal Revenue Service relating to such
          Successor Plan, (ii) take any necessary action to qualify tee
          Successor Plan under the applicable provisions of the Code and
          (iii) make any filings and submissions to appropriate
          governmental agencies required of it in connection with a
          transfer of assets as described below.  As soon as practicable
          following the Closing Date and receipt of such determination
          letter, the Seller shall cause the trustee of the Seller's
          Savings Plan to transfer in cash (and, in the case of outstanding
          participant loans, Notes) the full account balances of all
          Covered Employees, which account balances shall have been
          credited with appropriate earnings attributable to the period
          from the Closing Date to the valuation date of the Seller's
          Savings Plan last preceding the date of transfer described
          herein, reduced by any benefit or withdrawal payments in respect
          of Covered Employees occurring during the period from the Closing
          Date to the date of transfer described herein, to the trustee
          designated under the trust agreement forming a part of the
          Successor Plan.  In consideration for such transfer of assets,
          Purchaser shall, effective as of the date of transfer, assume all
          of the obligations of the Seller or its Affiliates to Covered
          Employees in respect of the Seller's Savings Plan.  Each of the
          parties hereto shall pay its own expenses in connection with such
          transfer.  Purchaser or its Affiliates shall, effective as of the
          Closing Date, amend or adopt any Successor Plan to the extent
          necessary to effectuate the foregoing.

                    (g)  Vacation Pay.  With respect to any accrued but
          unused vacation time to which any Covered Employee is entitled
          pursuant to the vacation policy applicable to such employee
          immediately prior to the Closing Date (the "Vacation Policy"),
          provided that the liability with respect thereto is fully
          reflected on the Final Asset and Liability Schedule, Purchaser
          shall allow such Covered Employee to use such accrued vacation,
          for which Purchaser shall pay such Covered Employee at his/her
          then salary. 

                    (h)  WARN.  Purchaser shall not on, or at any time
          prior to 90 days after the Closing Date, effectuate a "plant
          /closing" or "mass layoff", as those terms are defined in the
          Worker Adjustment and Retraining Notification Act of 1988
          ("WARN"), affecting in whole or in part any site of employment,
          facility, operating unit or employee, without notifying BFD and
          the Seller in advance and without complying with the notice
          requirements and other provisions of WARN.

                    (i)  Other Benefits.  During the five-year period
          following the Closing Date, Seller shall continue to provide to
          Covered Employees who are participants in Seller's Executive
          Split Dollar Life program as of the Closing Date such benefits as
          may be provided under the terms of such program as in effect on
          the date of this Agreement.

                    (j)  Bonuses.  Amounts due, whether prior to, on or
          after the Closing Date, to any Covered Employee under the
          Barclays Business Credit Inc. Management Incentive Plan shall be
          payable by Seller.  Seller shall pay any amounts due prior to the
          Closing Date to any Covered Employee under the Barclays Business
          Credit Inc. Business Development Officer Bonus Plan (the "BDO
          Plan").  Purchaser shall pay any amounts due on and after the
          Closing Date to any Covered Employee under the BDO Plan provided
          that the liability with respect thereto is fully reflected on the
          Final Asset and Liability Schedule.

                    (k)  Thrift Restoration Plan.  Purchaser shall assume
          the Barclays Bank PLC Thrift Savings Restoration Plan with
          respect to Covered Employees and pay any amounts due to any
          Covered Employee thereunder in accordance with the terms thereof
          provided that the liability with respect thereto is fully
          reflected on the Final Asset and Liability Schedule.

                    (l)  Retention Bonuses.  Parent shall use its best
          efforts to cause the executives named on the attached Schedule
          7.7(l) to enter into retention incentive agreements for which
          Parent shall remain solely liable and which, if executed, shall
          supersede in all respects any applicable executive security
          agreement; provided, however, that the individual named on
          Schedule 7.7(l) shall enter into a retention incentive agreement
          for which Purchaser shall, on and after the Closing Date, be
          solely liable provided that the liability with respect thereto is
          fully reflected on the Final Asset and Liability Schedule.

                    (m)  Deferred Compensation Plan.  All amounts payable
          to the individual named on Schedule 7.7(l) under the Barclays
          Bank PLC Deferred Compensation Plan (the "Deferred Compensation
          Plan") shall be paid by Purchaser in accordance with the terms of
          such plan and his prior election to defer such compensation
          provided that the liability with respect thereto is fully
          reflected on the Final Asset and Liability Schedule.  During the
          period of deferral, all such deferred compensation shall remain
          subject to the terms of, and Purchaser shall assume with respect
          to the individual named on Schedule 7.7(l), the Deferred
          Compensation Plan.

                    (n)  Indemnity by Purchaser.  Purchaser shall
          indemnify, defend and hold the Seller and BFD and their
          Affiliates harmless from and against any and all claims, actions,
          suits, demands, proceedings, losses, expenses, damages,
          obligations and liabilities (including costs of collection,
          reasonable out-of-pocket attorney's fees and other costs of
          defense) (collectively, "Losses") arising out of or otherwise in
          respect of (i) Purchaser's failure to offer employment to or to
          employ any employee of BFD on the Closing Date; (ii) termination
          of any Covered Employee on or after the Closing Date; (iii)
          failure of Purchaser to comply with any of its obligations to
          Covered Employees including, but not limited to, any statutory
          obligations and obligations under this Section; (iv) any claim
          made by any Covered Employee for severance pay other than a claim
          incurred prior to the Closing Date; (v) any claim made pursuant
          to WARN relating to events occurring on or after the Closing
          Date; (vi) benefits or claims incurred on or after the Closing
          Date by Covered Employees but not including any benefits accrued
          prior to the Closing Date ("Employee Benefit Losses"); provided
          that none of such Employee Benefit Losses results directly or
          indirectly from a breach by the Seller of any of its respective
          representations, warranties, covenants or agreements in this
          Agreement.

                    7.8  LETTERS OF CREDIT OF ISG.  Following the Closing,
          Purchaser may attempt to cause itself or any other financial
          institution to be substituted in all respects for ISG under each
          ISG L/C the reimbursement obligation for which is being assumed
          by Purchaser pursuant to Section 2.4(h).  For so long as ISG
          remains obligated under any such ISG L/C and Purchaser does not
          substitute itself or another financial institution as issuer
          under such ISG L/C so that the ISG/LC is cancelled, ISG shall
          remain the Administrative Agent and Letter of Credit Agent under
          such ISG L/C, and Purchaser shall pay to ISG a fronting fee,
          payable quarterly, in respect of each such ISG L/C, as set forth
          on Schedule 7.8, prorated for any unexpired term of the
          applicable ISG L/C.  Parent agrees that any letter of credit fees
          payable by the account parties under such letters of credit
          directly to ISG shall be for the account of and paid over to
          Purchaser.

                    7.9  NON-COMPETE; NON-SOLICITATION OF EMPLOYEES. (a)
          For a period of two years following the Closing Date, neither
          Seller nor Parent, nor any of their Affiliates, shall employ any
          person who is an employee of BED as of the date of this
          Agreement, except with the written consent of the Purchaser. 
          Until the second anniversary of the Closing Date, neither Seller
          nor Parent, nor any of their Affiliates, shall seek to persuade
          any such employee not to accept employment with Purchaser or
          discontinue employment with Purchaser from and after the Closing
          Date.

                    (b)  For a period of three years following the Closing
          Date, except as agreed to in writing by Purchaser or with respect
          to loans in which Purchaser or one of its Affiliates and Seller
          or one of its Affiliates each has or will have a partial
          interest, neither Seller nor Parent, nor any of their Affiliates,
          shall engage in any lending activities in the United States with
          any Person on a basis where (x) a substantial portion of the
          collateral would consist of accounts receivable or inventory, and
          (y) which activities are subject to agreements which include
          terms and conditions with respect to borrowing base requirements,
          and (z) which collateral is subject to periodic audit by the
          lender's personnel or its agents.  The foregoing is not intended
          to preclude Parent or its Affiliates from engaging in its current
          strategic investment banking businesses, including without
          limitation structured financing, mezzanine financing, asset
          securitization and bank financing and private placement
          activities.  Neither Parent nor any of its Affiliates shall for a
          period of three years following the Closing Date provide any
          loans or other credit-related products to any Person which is a
          customer of Seller or any of its Subsidiaries as of the Closing
          Date unless there is a preexisting relationship.  The foregoing
          restrictions shall not prevent any business combination or
          similar transactions involving Parent or any of its Affiliates
          and any non-asset-based lender.  A-non-asset-based lender is any
          Person whose assets attributable to loans where a substantial
          portion of the collateral would consist of accounts receivable or
          inventory, where the loans are subject to agreements which
          include terms with respect to borrowing base requirements and
          which collateral would be subject to periodic review by such
          Person's personnel or its agents, constitute less than 25% of
          such Person's total consolidated assets.  Following any such
          business combination or similar transaction, the less than 25%
          asset-based lending activities engaged in by such non-asset-based
          lender may continue to be engaged in without violating this
          Agreement.  Seller's retention of the Excluded Loans in and of
          itself, shall not be deemed to constitute a violation of the
          foregoing.  Without limiting the foregoing, Seller will not use
          the name Business Credit Inc. at any time following the Closing
          in any advertising or marketing efforts, provided, however, that
          nothing contained herein shall preclude Seller from using such
          name in correspondence with or other actions taken in the
          ordinary course of business with respect to the obligors under
          the loans included in Seller's workout division or with respect
          to the Excluded Loans.

                    (c)  If any of the restrictions set forth in Section
          7.9(b) should, for any reason whatsoever, be declared invalid by
          a court of competent jurisdiction, the validity or enforcement of
          the remainder of such restrictions and covenants shall not
          thereby be adversely affected.  Seller, Parent and Purchaser
          agree that, if any provisions of this Section 7.9 should be
          adjudicated to be invalid or unenforceable, such provisions shall
          be deemed deleted herefrom with respect, and only with respect,
          to the operation of such provision in the particular jurisdiction
          in which such adjudication was made; provided, however, that to
          the extent any such provision may be made valid and enforceable
          in such jurisdiction by limitations on the scope of the
          activities, geographical area or time period covered, Seller,
          Parent and Purchaser agree that such provision instead shall be
          deemed limited to the extent, and only to the extent, necessary
          to make such provision enforceable to the fullest extent
          permissible under the laws and public policies applied in such
          jurisdiction.

                    7.10 INDEPENDENT THIRD PARTIES.  Seller will identify
          and use its reasonable best efforts to make available upon
          reasonable notice and during normal business hours, to Purchaser,
          at Purchaser's request and sole expense, any independent third
          parties retained by Seller to assist Seller in the preparation of
          any Loan Documents or the making or maintaining of any Loan
          Commitment.  In addition, Seller will instruct such parties to
          cooperate with Purchaser and make available to Purchaser any and
          all documents relating to the Loans and the Loan Commitments in
          such parties' possession and upon request of Purchaser will waive
          any applicable privilege provided by law that would prevent such
          third parties from cooperating with the Purchaser or making such
          documents available to the Purchaser.

                    7.11  PAYMENTS.  Any interest, commissions, fees and
          other payments received by Seller after the Closing Date in any
          capacity (except fees earned by Seller or its Affiliates in
          providing services to the Purchaser after the Closing Date),
          regardless of when accrued, with respect to any Loan or Loan
          Commitment included in the Acquired Assets shall as of the
          Closing Date be for the account of Purchaser.  Any such amounts
          received by Seller after the Closing Date shall be received by
          Seller in trust for the Purchaser and Seller will immediately pay
          such amounts to Purchaser upon receipt thereof.

                    7.12  LIMITATION ON DEALINGS WITH LOANS.  Without the
          Purchaser's prior written consent, Seller shall not renew, extend
          the maturity of, acquire a participation in, reacquire an
          interest in a participation sold with respect to, or alter any of
          the material terms of any Loan or Loan Commitment, other than in
          the ordinary course of business, consistent with Seller's
          standard loan servicing and operating procedures in effect as of
          the date hereof.

                    7.13  FURTHER ASSURANCES.  Without in any way limiting
          any representation, warranty or covenant of Seller contained
          herein, Seller and Purchaser shall jointly retain the services of
          legal counsel to prepare the financing statements, amendments,
          continuation statements, assignments, certificates and other
          documents with respect to Purchaser's security interest in the
          collateral relating to the Loans as may be necessary or requested
          by Purchaser to enable Purchaser to obtain the valid assignment
          of and to maintain the perfection of such security interest, each
          in form satisfactory to Purchaser.  Seller and Purchaser shall
          each be responsible for the payment of one-half of all fees,
          costs and expenses incurred in the performance of the preceding
          sentence.  Seller hereby authorizes and empowers Purchaser after
          the Closing to file any or all such financing statements,
          amendments, continuation statements, assignments, certificates
          and other documents pursuant to the Uniform Commercial Code and
          otherwise without its signature and hereby irrevocably appoints
          Purchaser as Seller's attorney-in-fact to execute, deliver and
          file any such financing statements, amendments, continuation
          statements, assignments, certificates and other documents in
          Seller's name and to perform all other acts necessary to perfect
          Seller's security interest in the Acquired Assets and to obtain
          the valid assignment of and to maintain the perfection of any
          security interest in the collateral securing the Loans. 

                    7.14 SMALL EQUIPMENT LEASING PORTFOLIO.  Prior to the
          Closing Date, Seller shall have caused one of its Affiliates to
          transfer the small equipment leasing portfolio described on
          Schedule 7.14 to Seller.  The Book Value of the assets in such
          small equipment leasing portfolio as of September 30 is set forth
          on Schedule 7.14.

                    7.15  ISG LOAN PORTFOLIO.  Prior to the Closing Date,
          Parent shall have transferred the ISG Portfolio of ISG described
          on Schedule 7.15 to Seller.  The Book Value of the assets in such
          ISG Portfolio as of September 30 is set forth on Schedule 7.15. 
          At the Closing, Parent shall provide for the benefit of Purchaser
          a guaranty (the "Guaranty") of collection as to the Loans
          included in the ISG Loan Portfolio set forth in the form of
          Exhibit B.  Purchaser agrees to service the Loans in the ISG
          Portfolio in the same manner it services the other Loans included
          in the Acquired Assets.

                    7.16 TRANSFER OF ADMINISTRATION.  Prior to the Closing
          Date Seller shall transfer to BFD that portion of its
          Administration Division that the parties agree pertains to the
          business of BFD.

          ARTICLE 8.  TAXES

                    8.1  LIABILITY FOR TAXES.  (a)  Liability of the
          Seller.  Except as set forth in Section 8.2 below, with respect
          to the Acquired Assets, Assumed Liabilities and Transferred
          Offices transferred at the Closing, the Seller shall be liable
          for and indemnify the Purchaser for all Taxes imposed on such
          Acquired Assets or any income therefrom (including all net income
          taxes imposed on any gain recognized by the Seller as a result of
          the sale of such Acquired Assets pursuant to this Agreement),
          such Assumed Liabilities or any payments in respect thereof, or
          the operation of such Transferred Offices (including employment
          taxes) for (i) any taxable year or period that ends on or before
          the Closing Date and (ii), with respect to any taxable year or
          period beginning before and ending after the Closing Date, the
          portion of such taxable year or period ending on and including
          the Closing Date.

                    (b)  Liability of the Purchaser.  Except as set forth
          in Section 8.2 below, with respect to the Acquired Assets,
          Assumed Liabilities and Transferred Offices transferred at the
          Closing, the Purchaser shall be liable for and indemnify the
          Seller for all Taxes imposed on such Acquired Assets or any
          income therefrom, such Assumed Liabilities or any payments in
          respect thereof, or the operation of such Transferred Offices for
          (i) any taxable year or period that begins after the Closing Date
          and (ii), with respect to any taxable year or period beginning
          before and ending after the Closing Date, the portion of such
          taxable year beginning after the Closing Date.

                    (c)  Proration of Taxes.  All Taxes for any portion of
          a taxable year or period that begins before and ends after the
          Closing Date shall be apportioned between the Seller and the
          Purchaser using an interim-closing-of-the- books method on the
          assumption that such taxable period ended on and included the
          Closing Date, except that (i) all standard deductions,
          exemptions, allowances, progressivity in rates and other similar
          items shall be apportioned based on a per diem basis and (ii)
          real, personal and intangible property Taxes shall be apportioned
          between the Seller and the Purchaser in accordance with the
          principles set forth in Section 164(d) of the Code.

                    (d)  Limitation on the Liability of the Purchaser.  The
          Seller and the Purchaser expressly acknowledge and agree that (i)
          the Purchaser is not assuming, expressly or by implication, any
          other Taxes of the Seller (and specifically is not assuming
          liability for any income or franchise taxes measured by the
          Seller's or any Affiliate of the Seller's net income)
          attributable to the conduct of the Seller's business or to its
          assets or liabilities and (ii) the Seller and Parent shall
          indemnify and hold the Purchaser harmless from and against any
          Taxes not described in subsection (b) above or Section 8.2 below.

                    8.2  SALES AND TRANSFER TAXES.  All excise, sales, use
          and transfer taxes that are payable or that arise as a result of
          the consummation of the purchase and sale contemplated by this
          Agreement (including, without limitation, New York State and City
          real property transfer taxes and New York State real property
          transfer gains tax) shall be borne equally by the Purchaser and
          Seller.  The Seller will prepare any Tax Returns that must be
          filed in connection with such taxes and will use its reasonable
          best effort to provide such returns to the Purchaser for the
          Purchaser's review at least 10 days before the date such returns
          are due.  The Purchaser and Seller shall jointly execute any tax
          return as required by applicable law.  The Seller and the
          Purchaser shall consult during the preparation of such returns
          and the Purchaser shall provide to the Seller, upon Seller's
          reasonable request, such information regarding the value of the
          property being transferred hereunder as is in the Purchaser's
          possession at the time of the request.  The Seller will pay the
          full amount of such taxes shown on such returns to the applicable
          Tax authorities on or before the date such taxes are due (the
          "Payment Date") and will indemnify the Purchaser for any interest
          or penalties resulting from any failure to pay such taxes when
          due.  The Purchaser will reimburse the Seller on the Payment Date
          in immediately available funds for one-half of the taxes paid by
          the Seller.

                    8.3  PARENT OF AMOUNTS DUE UNDER ARTICLE 8.  Any
          payment by the Seller to the Purchaser, or to the Seller from the
          Purchaser, under this Article 8 (other than payments required
          under Section 8.2 of this Agreement) to the extent due at the
          Closing may be offset against any payment due the other party at
          the Closing.  All subsequent payments under this Article 8 shall
          be made as soon as determinable and shall be made and bear
          interest from the date due to the date of payment at the average
          of the Federal Funds Rate or Rates in effect from time to time
          during such period.

                    8.4  REFUNDS OR CREDITS.  If any refunds or credits of
          Taxes of the Seller described in Section 2.3(g) of this Agreement
          (including any deferred tax assets) are received or utilized by
          the Purchaser, or any of its Affiliates, the Purchaser shall pay
          to the Seller the amount of such refund or credit within five (5)
          business days after the Purchaser, or any of its Affiliates, as
          the case may be, receives such refund or utilizes such credit. 

                    8.5  TAX RETURNS.  Except as provided in Section 8.2 or
          as otherwise agreed to by the parties, with respect to the
          Acquired Assets and Transferred Offices transferred at the
          Closing, (a) the Seller shall file or cause to be filed when due
          all Tax Returns that are required to be filed with respect to
          such Acquired Assets or such Transferred Offices for taxable
          years or periods ending on or before the Closing Date and shall
          pay any Taxes due in respect of such Tax Returns, and (b) the
          Purchaser shall file or cause to be filed when due all Tax
          Returns with respect to such Acquired Assets or such Transferred
          Offices for taxable years or periods ending after the Closing
          Date (excluding any Tax Returns that must be filed by the Seller
          with respect to net income or franchise taxes of the Seller) and
          shall remit any Taxes due in respect of such Tax Returns.  If the
          Seller or the Purchaser shall be liable hereunder for any portion
          of the Taxes shown due on any Tax Return prepared by the other
          party, the party preparing the Tax Return shall deliver a copy to
          the party so liable for its review and approval not less than 30
          days prior to the date on which such Tax Return is due to be
          filed (taking into account any applicable extensions).  The
          Seller or the Purchaser, as the case may be, shall pay in
          immediately available funds the Taxes for which it is liable
          pursuant to Section 8.1(a) or 8.1(b), respectively, but which are
          payable with Tax Returns to be filed by the other party pursuant
          to the previous sentence on the due date for the payment of such
          Taxes.  If the party not preparing the Returns objects to any
          items reflected on such Tax Returns, the Purchaser and the Seller
          shall attempt to resolve the disagreement.  If the Purchaser and
          the Seller cannot resolve the disagreement, the dispute shall be
          referred to a nationally recognized independent accounting firm
          mutually acceptable to the Seller and the Purchaser whose
          determination shall be binding upon the parties.  The fees and
          expenses of such accounting firm shall be borne equally by the
          Purchaser and the Seller.

                    8.6  ASSISTANCE AND COOPERATION.  (a)  The Seller and
          the Purchaser shall:

                    (i)  assist (and cause their respective Affiliates to
               assist) the other party in preparing any Tax Returns which
               such other party is responsible for preparing and filing in
               accordance with this Article 8;

                    (ii)  cooperate fully in preparing for any audits of,
               or disputes with taxing authorities regarding, any Tax
               Returns with respect to the Acquired Assets or income
               therefrom or the Assumed Liabilities or payments in respect
               thereof;

                    (iii)  make available to the other and to any taxing
               authority as reasonably requested all relevant information,
               records, and documents relating to Taxes with respect to the
               Acquired Assets or income therefrom or the Assumed
               Liabilities or payments in respect thereof;

                    (iv)  provide timely notice to the other in writing of
               any pending or proposed audits or assessments with respect
               to Taxes for which the other may have a liability under this
               Article 8; and

                    (v)  furnish the other with copies of all relevant
               correspondence received from any taxing authority in
               connection with any such audit or assessment, including,
               without limitation, any information document requests
               received with respect to any such audit.

                    (b)  The party requesting assistance or cooperation
          under paragraph (a) above shall bear the other party's reasonable
          out-of-pocket expenses in complying with such request to the
          extent that those expenses are attributable to fees and other
          costs of unaffiliated third-party service providers which
          third-party service providers may be used if the party whose
          assistance or cooperation is requested reasonably determines that
          it would be burdensome to comply with such request without the
          use of such third-party service providers; provided, that
          notwithstanding the foregoing, if only one party is responsible
          for the payment of a Tax, then such party shall be responsible
          for the payment of any out-of-pocket expenses for fees and costs
          of third-party servicers.

                    8.7  DOCUMENT RETENTION.  The Purchaser and Seller each
          agree to retain in accordance with its records retention policies
          applicable to its own documents of a similar nature any Books and
          Records that could be necessary or useful in connection with the
          Seller's preparation or the Purchaser's preparation, as the case
          may be, of any Tax Return, form or report or any audit,
          examination, other review or proceeding by any Tax authority;
          provided, however, that, for purposes of applying its records
          retention policies, the Purchaser shall treat the Seller's
          taxable year ending December 31, 1988, and all subsequent taxable
          years as open years until such time as the Seller notifies the
          Purchaser in accordance with Section 8.9 that all audits for any
          such year have been finally settled or the applicable statute of
          limitations has passed.

                    8.8  ALLOCATION OF PURCHASE PRICE.  The parties to this
          Agreement agree to allocate the Purchase Price in accordance with
          the rules under Section 1060 of the Code, and the Treasury
          Regulations promulgated thereunder.  Such allocation shall be
          based on the fair market value of the Acquired Assets to be sold. 
          The Purchaser agrees to provide the Seller with a schedule
          allocating the Purchase Price and with a properly completed
          Internal Revenue Service Form 8594 within 60 days of the
          determination of the Purchase Price but in no event later than 90
          days before the due date, including extensions, for the
          consolidated federal income tax return that includes the Seller
          for the taxable year including the Closing Date.  If the Seller
          objects to any items reflected on such schedule, the Seller shall
          notify the Purchaser in writing of such objection and describe in
          reasonable detail its reasons for objecting, in which case the
          Purchaser and the Seller shall attempt to resolve the
          disagreement.  If the Purchaser and the Seller cannot resolve the
          disagreement, the allocation shall be determined by a nationally
          recognized independent appraiser selected by the Purchaser and
          reasonably acceptable to the Seller.  The fees and expenses of
          such appraiser shall be borne equally by the Seller and
          Purchaser.  The Seller and the Purchaser agree to act in
          accordance with the computations and allocations contained in the
          schedule as finally agreed or determined by such independent
          appraiser (including any modifications thereto reflecting any
          post-closing adjustments) in any relevant Tax Returns or similar
          filings (including any forms or reports required to be filed
          pursuant to Section 1060 of the Code or the Treasury Regulations
          promulgated thereunder ("1060 Forms")) and to file such 1060
          Forms in the manner required by applicable law.  The Purchaser
          and the Seller will promptly notify each other in accordance with
          Section 8.9 of any challenge by any Tax authority to such
          computations or allocations.  The Seller agrees that a "Big Six"
          accounting firm (other than the accounting firm regularly used by
          the Purchaser or the Seller) is a nationally recognized
          independent appraiser that is reasonably acceptable to the Seller
          for purposes of making the computations and allocations described
          above.

                    8.9  NOTICES, ETC.  Without limiting the provisions of
          Section 8.6, the notification and contest provisions of Article
          11 shall apply to claims for indemnification under this Article
          8; provided, however, that notice of claim for indemnification
          pursuant to this Article 8 shall be given prior to the expiration
          of the applicable statute of limitations (as extended) for the
          assertion of the claims for Taxes by the relevant Tax authority;
          and further provided that a copy of any notices required under
          this Article 8 shall be provided to the following parties:

                    (A)  if to the Purchaser, to:

                    Shawmut National Corporation
                    777 Main Street
                    Hartford, Connecticut 06115

                    Attn:  Susan E. Lester
                           Chief Financial Officer

                    (B)  if to the Seller, to:

                    Barclays Group Inc. (U.S.A.)
                    222 Broadway
                    New York, N.Y. 10038

                    Attn:  Mr. Rick Steineger
                           Head of Group Tax

                    8.10 TAX INDEMNITIES.  Except as provided in Section
          8.9 of this Agreement, both the Seller's and the Purchaser's
          obligations to indemnify the other party for Taxes shall be
          governed by this Article 8 and such obligations shall survive
          Closing until the expiration of the relevant statute of
          limitations period has expired for the assertion of claims for
          any such Taxes by the relevant Tax authority.

          ARTICLE 9.  CONDITIONS TO THE CLOSING

                    9.1  CONDITIONS OF OBLIGATION OF EACH PARTY.  The
          respective obligations of each party to effect the Closing are
          subject to the fulfillment at or prior to the Closing Date of the
          condition precedent that (a) no injunction, order, decree or
          ruling issued by a court of competent jurisdiction or by a
          government, regulatory or administrative agency or commission nor
          any statute, rule, regulation or executive order promulgated or
          enacted by any governmental authority shall be in effect
          enjoining, making illegal or otherwise materially impairing or
          restricting the consummation of the transactions contemplated by
          this Agreement and (b) the parties thereto shall have executed
          and delivered the Servicing Agreement and any other agreement
          contemplated to be entered into in connection therewith and
          Parent shall have executed the Guaranty.

                    9.2  ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF
          PURCHASER.  The obligations of the Purchaser are also subject to
          fulfillment (or waiver by the Purchaser) at or prior to the
          Closing Date of each of the following conditions precedent:

                    (a)  Representations and Warranties True.  The
               representations and warranties of the Seller contained in
               Article 5 of this Agreement shall be true and correct in all
               material respects as of the Closing Date as though made at
               and as of the Closing Date (except to the extent that they
               expressly refer to an earlier time, in which case they must
               be true as of such earlier date), except for (i) changes
               resulting from (A) actions expressly consented to in writing
               by the Purchaser or (B) changed circumstances occurring as a
               result of operations of the Seller in the ordinary course of
               business do not adversely affect the Acquired Assets (taken
               as a whole) or the BFD Acquired Business or (ii)
               inaccuracies in the representation and warranty contained in
               Section 5.15 hereof which could not reasonably be expected
               to have a Material Adverse Effect.

                    (b)  Performance of Covenants.  The Seller shall have
               duly performed and complied in all material respects with
               each covenant, agreement and condition required by this
               Agreement to be performed or complied with by them prior to
               or on the Closing Date.

                    (c)  Officer's Certificate.  The Purchaser shall have
               received from a duly authorized senior executive officer of
               the Seller a certificate as to the matters described in
               Sections 9.2(a) and 9.2(b).

                    (d)  Regulatory Approvals.  The regulatory approvals
               described in Schedule 6.3 shall have been obtained and be in
               full force and effect and all required waiting periods and
               any extensions thereof shall have expired or been
               terminated.

                    (e)  No Restraint or Litigation.  The waiting period
               under the HSR Act shall have expired or terminated, and no
               action, suit, investigation or proceeding by any
               governmental agency or authority shall have been instituted
               or threatened to restrain or prohibit or otherwise challenge
               the legality or validity of the transactions contemplated
               hereby.

                    (f)  Legal Opinion.  The receipt by Purchaser of legal
               opinions as to the (i) due incorporation, valid existence
               and good standing of Seller and Parent, (ii) the corporate
               power and authority of Seller and Parent to make, deliver
               and perform its obligations under the Agreement, the
               Guaranty, the Servicing Agreement and the agreements entered
               into thereunder, (iii) the taking of all necessary corporate
               action by the Seller and Parent to execute, deliver and
               perform its obligations under the Agreement, the Guaranty,
               the Servicing Agreement, and the agreements entered into
               thereunder, (iv) the execution and delivery of the
               Agreement, the Guaranty, the Servicing Agreement, and the
               agreements entered into thereunder by the Seller and Parent
               and that each of the Agreements, the Guaranty, the Servicing
               Agreement, and the agreements entered into thereunder
               constitutes the legally binding and valid obligation of each
               of the Seller and Parent enforceable in accordance with its
               terms (subject to exceptions for bankruptcy and necessary
               exceptions arising from the indemnification provisions) and
               (v) the execution, delivery and performance by the Seller
               and Parent of this Agreement, the Guaranty, the Servicing
               Agreement and the agreements entered into thereunder will
               not violate their respective certificates of incorporation
               or by-laws, the law of the jurisdiction of incorporation or
               similar law or any provision of any other law or statute
               with all necessary exceptions.

                    (g)  Allowance for Credit Losses Reserve.  The
               Allowance for Credit Losses Reserve on the Final Asset and
               Liability Schedule shall have been established in accordance
               with BFD Accounting Principles.

                    (h)  Material Adverse Change.  Subsequent to September
               30, 1994, no event, condition, development or circumstance
               shall have occurred which, individually or in the aggregate,
               has had or could reasonably be expected to have a Material
               Adverse Effect.

                    9.3  ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE
          SELLER.  The obligations of the Seller are also subject to
          fulfillment (or waiver by the Seller) at or prior to the Closing
          Date of each of the following conditions precedent:

                    (a)  Representations and Warranties True.  The
               representations and warranties of the Purchaser contained in
               Article 6 of this Agreement shall be true and correct as of
               the Closing Date (other than any inaccuracies which would
               not have a Material Adverse Effect) as though made at and as
               of the Closing Date, except to the extent they expressly
               refer to an earlier time.

                    (b)  Performance of Covenants.  The Purchaser shall
               have duly performed and complied in all material respects
               with each covenant, agreement and condition required by this
               Agreement to be performed or complied with by each of them
               prior to or on the Closing Date.

                    (c)  No Restraint or Litigation.  The waiting period
               under the HSR Act shall have expired or terminated, and no
               action, suit, investigation or proceeding by any
               governmental agency or authority shall have been instituted
               or threatened to restrain or prohibit or otherwise challenge
               the legality or validity of the transactions contemplated
               hereby.

                    (d)  Officer's Certificate.  The Seller shall have
               received from a duly authorized senior officer of the
               Purchaser a certificate as to the matters described in
               Sections 9.3(a) and 9.3(b).

                    (e)  Legal Opinion.  The receipt by Seller of legal
               opinions as to the (i) due organization, valid existence and
               good standing of Purchaser, (ii) the corporate power and
               authority of Purchaser to make, deliver and perform its
               obligations under the Agreement, the Servicing Agreement and
               the agreements entered into thereunder, (iii) the taking of
               all necessary corporate action by the Purchaser to execute,
               deliver and perform its obligations under the Agreement, the
               Servicing Agreement and the agreements entered into
               thereunder, (iv) the execution and delivery of the Agreement
               by the Purchaser and that the Agreement, the Servicing
               Agreement and the agreements entered into thereunder
               constitute the legally binding and valid obligation of the
               Purchaser enforceable in accordance with its terms (subject
               to exceptions for bankruptcy and necessary exceptions
               arising from the indemnification provisions) and (v) the
               execution, delivery and performance by the Purchaser will
               not violate its articles of association or by-laws, the    
               federal banking laws or any provision of any other law or
               statute, with all necessary exceptions. 

          ARTICLE 10.  TERMINATION, AMENDMENT AND WAIVER

                    10.1 TERMINATION.  This Agreement may be terminated at
          any time prior to the Closing:

                    (a)  By written mutual agreement of the Seller and the
               Purchaser;

                    (b)  By the Purchaser or the Seller upon notice given
               to the other party in the event that the other party shall
               have materially breached any of its representations and
               warranties or agreements in this Agreement (including
               without limitation its agreement to consummate the Closing
               contemplated hereby upon the satisfaction of the conditions
               to its obligations contained herein) which breach is not
               cured within thirty days after notice to cure such breach is
               given by the non-breaching party; provided that the party
               seeking to terminate the Agreement shall not have materially
               breached any of its representations or warranties, covenants
               or agreements hereunder;

                    (c)  By the Purchaser or the Seller upon notice given
               to the other if the Closing shall not have taken place for
               any reason by March 31, 1995, or it is manifestly apparent
               that the Closing will not take place because of the
               inability to satisfy the condition described in Section
               9.2(d) on or before March 31, 1995, provided, that, in
               either case, the failure of the Closing to occur on or
               before such date (or the inability to satisfy such
               condition) is not the result of the breach of the covenants,
               agreements, representations or warranties hereunder of the
               party seeking such termination; or

                    (d)  By the Purchaser or the Seller upon written notice
               to the other party if any court or governmental authority of
               competent jurisdiction shall have issued a final permanent
               order, enjoining or otherwise prohibiting the transactions
               contemplated by this Agreement, and the time for appeal or
               petition for reconsideration of such order shall have
               expired.

                    10.2 EFFECT OF TERMINATION.  In the event of the
          termination of this Agreement as provided in Section 10.1, this
          Agreement shall forthwith become wholly void and of no further
          force and effect and, other than in the event of a termination
          pursuant to Section 10.1(b) or (c) at a time when there exists a
          wilful breach of any of the covenants, there shall be no
          liability on the part of the Purchaser or the Seller or their
          respective officers or directors (except as set forth in this
          Section 10.2 and Section 7.4).  In the event of the termination
          by any party of this Agreement pursuant to Section 10.1(b) or (c)
          at a time when there exists a willful breach of any of the
          covenants, agreements, representations or warranties set forth
          herein by the other party hereto, then the terminating party
          shall be entitled to institute an action for breach of contract
          and shall be indemnified by the other party for any or all
          damages, costs and expenses sustained or incurred as a result of
          such breach.  The obligations of the parties to this Agreement
          under this Section 10.2 and Section 7.4, as well as under the
          Confidentiality Agreement, shall survive any such termination.

          ARTICLE 11.  GENERAL PROVISIONS

                    11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
          COVENANTS.  The representations and warranties set forth in
          Articles 5 and 6 of this Agreement shall survive until the date
          which is 15 months after the Closing Date, and all other
          representations and warranties of the parties contained in this
          Agreement or in any certificate delivered pursuant hereto shall
          not survive the Closing; provided that the representation and
          warranty contained in Section 5.4(a) shall not expire and shall
          last indefinitely.  No action or claim pursuant to Section 11.2
          hereof resulting from breaches of the representations and
          warranties of any of the parties hereto or any claim for
          indemnity in respect thereof shall be brought or made unless,
          prior to the expiration of the survival period for the applicable
          representation or warranty as set forth above, the action or
          claim shall have been the subject of a good faith written notice
          from either party hereto to the other party which notice
          specifies in reasonable detail the nature of the claim (it being
          understood that such written notice may be delivered prior to the
          incurrence or suffering of a Loss by an indemnified party if
          facts are described in sufficient detail in such notice as to
          warrant the delivery of a good faith notice in which case the
          party giving such notice shall be entitled to indemnification in
          accordance with the provisions hereof notwithstanding that such
          Loss may occur after the expiration of the applicable survival
          period).  Any covenant contained herein which by its terms is to
          be performed in whole or in part after the Closing Date shall
          survive the Closing Date.

                    11.2 INDEMNIFICATION.  (a)  The Seller and Parent agree
          to indemnify and hold the Purchaser harmless against and in
          respect of any Loss incurred or sustained by the Purchaser as a
          result of (i) any breach by the Seller or Parent of their
          respective representations or warranties contained herein (it
          being agreed that solely for purposes of establishing whether any
          matter is indemnifiable pursuant to this clause (i), the accuracy
          of the representations and warranties made by Seller and Parent
          shall be determined without giving effect to the qualifications
          to such representations and warranties concerning "Material
          Adverse Effect", (ii) any breach by the Seller or Parent of its
          covenants contained herein, (iii) the Excluded Assets (other than
          Excluded Loans and related Loan Commitments) or Excluded
          Liabilities, (iv) any claim made by any employee or former
          employee of Seller, BFD or their respective Affiliates for
          severance pay other than a claim incurred on or after the Closing
          Date, (v) any claim made pursuant to WARN relating to events
          occurring prior to the Closing Date, (vi) benefits or claims
          incurred prior to the Closing Date by employees or former
          employees of Seller, BFD or their respective Affiliates (other
          than liabilities for accrued benefits specifically assumed by
          Purchaser in Section 7.7), and (vii) liabilities arising under
          Title IV of ERISA, Section 412 or 4980B of the Code or Section
          302 of ERISA with respect to any employee benefit plans, programs
          or arrangements maintained, sponsored, contributed to or required
          to be contributed to by Seller, BFD or any of their respective
          Affiliates or any trade or business, whether or not incorporated,
          that together with Seller, BFD or any of their respective
          Affiliates would be deemed a "single employer" within the meaning
          of Section 4001(b) of ERISA (other than liabilities for accrued
          benefits specifically assumed by Purchaser in Section 7.7). 
          Notwithstanding the foregoing, Losses in any year attributable to
          out-of-pocket attorney's fees or litigation expenses which are
          not in excess of $250,000 shall be borne by Purchaser and shall
          not be indemnifiable.  The parties acknowledge that with respect
          to any litigation not set forth on Schedule 5.12 (whether arising
          prior to, on or after the Closing Date) which arises out of any
          act or omission of Seller or any of its Affiliates on or prior to
          the Closing Date, all Losses incurred or sustained by Purchaser
          in connection with such litigation (other than litigation
          expenses related to the portion of such litigation brought for
          purposes of loan recovery efforts) shall be considered to be
          outside of the ordinary course of business for purposes of
          Section 5.15 hereof.  Accordingly, subject to the terms of the
          second preceding sentence and the Basket, such Losses shall be
          indemnifiable under this Article 11 to the extent that Purchaser
          shall have given a notice of claim for indemnification meeting
          the requirements of Section 11.1 hereof with respect to such
          litigation or with respect to the facts, events or circumstances
          giving rise thereto.  In the case of any indemnification claim
          involving a credit loss where a representation, warranty or
          covenant of the Seller is alleged to have been breached, it is
          understood that the Purchaser shall not be entitled to
          indemnification under this Article 11 for any damage, loss,
          liability or expense arising out of or based upon a breach or
          event referred to in clause (i) of the first sentence of this
          paragraph relating to a Loan or Loan Commitment included in the
          Acquired Assets or to the related Loan Document, which Loan is
          not collected in full, if and to the extent the Seller
          demonstrates that such damage, loss, liability or expense would
          have occurred, notwithstanding such breach, by reason of the
          Debtor being unable or unwilling to pay and discharge such Loan
          in full and the collateral securing such Loan otherwise having
          inadequate value.  The Purchaser agrees that it will take
          commercially reasonable actions consistent with its general
          policies and practices to mitigate Losses (including, without
          limitation, taking commercially reasonable steps to cure any
          documentation or security interest defect upon the discovery
          thereof), and in the event any such Loss is sustained and an
          indemnification claim is made against the Seller hereunder, the
          Purchaser will provide the Seller with such information in the
          credit and other files of the Purchaser relating to the relevant
          loan and the administration thereof as may be reasonably
          requested by the Seller for purposes of determining whether such
          Loss would have otherwise occurred.  The costs incurred by
          Purchaser pursuant to the previous sentence shall (subject to the
          Basket in the case of mitigation of Losses resulting from any
          breach of the representations and warranties of Seller and Parent
          contained herein) be indemnifiable by Seller pursuant to this
          Article 11.  Notwithstanding the foregoing, in no event shall the
          Purchaser be required to initiate any litigation against any
          third party in connection with its mitigation obligation unless
          the Seller requests the Purchaser do so and reimburse the
          Purchaser for all expenses incurred by the Purchaser in
          connection with such litigation as such expenses are incurred. 
          Regardless of any breach of a representation or warranty, the
          Seller shall not be responsible for any loss or portion thereof
          to the extent it results from the act or omission of the
          Purchaser.  In no event shall indemnification be provided in
          respect of any loss, liability or damages arising from or
          relating to any matter described in Schedule 5.12.

                    (b)  The Purchaser agrees to indemnify and hold the
          Seller harmless against and in respect of any Loss incurred or
          sustained by the Seller as a result of (i) any Assumed Liability,
          (ii) any breach by the Purchaser of its representations or
          warranties contained herein, (iii) any breach by the Purchaser of
          its covenants contained herein and (iv) acts or omissions of the
          Seller taken at the direction of the Purchaser whether occurring
          before or after the Closing Date.

                    (c)  No indemnifying party shall be liable for.any
          loss, liability or damage based on the indemnification provisions
          of clause (i) of subsection (a) or clause (ii) of subsection (b)
          above except to the extent that the aggregate of such losses,
          liabilities or damages exceeds $8 million, in which event the
          indemnified party shall be entitled to recover only those losses,
          liabilities or damages in excess of $8 million (the "Basket"),
          provided, however, that the $8 million limitation contained in
          this Section 11.2(c) shall not apply to, and Purchaser's
          indemnified parties shall be entitled to dollar-for-dollar
          recovery with respect to, Losses resulting from breaches of the
          representations contained in Section 5.4(a) hereof.  The
          indemnifying party shall not be liable for any breach of
          representation or warranty hereunder if the loss, liability or
          damage therefrom, in any individual case, amounts to $10,000 or
          less, and such losses, liabilities or damages shall not be
          included in calculating the $8 million threshold established in
          the immediately preceding sentence, provided, however, that in
          the case of any Loss exceeding $10,000, subject to the $8 million
          limitation described above, the entire Loss, and not solely the
          portion of such Loss in excess of $10,000, shall be indemnifiable
          by Seller and provided further, however, that where a number of
          Losses are each individually less than $10,000, but the aggregate
          of such Losses exceeds $10,000, and all such Losses are based
          upon, arise from or are attributable to the same or a series of
          closely related matters, then subject to the $8 million
          limitation, such Losses shall be indemnifiable by Seller pursuant
          to Section 11(a)(i).

                    (d)  Promptly after receipt by an indemnified party
          under this Section 11.2 of notice of any claim or the
          commencement of any action, the indemnified party shall, if a
          claim in respect thereof is to be made against the indemnifying
          party under this Section 11.2, notify the indemnifying party in
          writing of the claim or the commencement of that action, provided
          that the failure to notify the indemnifying party shall not
          relieve it from any liability which it may have to the
          indemnified party under this Section 11.2 unless and only to the
          extent such failure is materially prejudicial to the indemnifying
          party.  If any such claim shall be brought in respect of which
          any indemnification claim may be made, the indemnifying party
          shall be entitled to participate therein and to assume the
          defense thereof (or the defense of the portion thereof for which
          the indemnifying party is potentially responsible) with counsel
          reasonably satisfactory to the indemnified party, and to settle
          and compromise any such claim or action (or such portion
          thereof), such settlement or compromise shall be effected only
          with the consent of the indemnified party, which consent shall
          not be unreasonably withheld; provided, that the indemnified
          party shall reimburse the indemnifying party for all costs and
          expenses incurred by the indemnifying party in connection with
          such defense to the extent that such costs and expenses do not
          exceed the remaining availability, if any, under the Basket in
          the case of indemnification claims resulting from any breach of
          representations and warranties of Seller and Parent contained
          herein; and provided further, however, that if the indemnified
          party has elected to be represented by separate counsel at its
          own expense (or, pursuant to the proviso to the penultimate
          sentence of this paragraph, at the expense of the indemnifying
          party), such settlement or compromise shall be effected only with
          the consent of the indemnified and indemnifying parties, which
          consent shall not be unreasonably withheld.  If the indemnifying
          party elects not to assume the defense in connection with any
          such claim or portion thereof, the indemnified party may not
          settle or compromise any such claim or portion thereof without
          the consent of the indemnifying party, which consent shall not be
          unreasonably withheld.  After notice from the indemnifying party
          to the indemnified party of its election to assume the defense of
          such claim or action or portion thereof, the indemnifying party
          shall not be liable to the indemnified party under this Section
          11.2 for any legal or other expenses subsequently incurred by the
          indemnified party in connection with the defense thereof other
          than reasonable costs of investigation, provided, however, that
          the indemnified party shall have the right to employ counsel to
          represent it if, in the indemnified party's reasonable judgment,
          it is advisable, because of a reasonably apparent conflict of
          interest between the indemnifying party and the indemnified party
          or because there are specific defenses available to the
          indemnified party which are different from or additional to those
          available to the indemnifying party and which could be materially
          adverse to the indemnifying party, for the indemnified party to
          be represented by separate counsel, which separate counsel shall
          have the right to assume and direct the indemnified party's
          defense and enter into settlements or compromises with the
          consent of the indemnifying party, and in that event the
          reasonable fees and expenses of one such separate counsel shall
          (to the extent no portion of the Basket remains available in the
          case of indemnification claims resulting from any breach of
          representations and warranties of Seller and Parent contained
          herein) be paid by the indemnifying party.  In addition, the
          parties agree to render to each other such assistance as may
          reasonably be requested in order to insure the proper and
          adequate defense of any such claim or proceeding.  The parties
          hereto agree that the procedures set forth in this Section
          11.2(d) shall not apply to claims for indemnification between
          such parties. 

                    (e)  Absent claims based on fraud or bad faith, the
          indemnity provided in this Section 11.2 shall be the sole and
          exclusive remedy of the indemnified party against the
          indemnifying party for any matter arising in connection with this
          Agreement.  Except as may otherwise be required by law, any
          indemnity payments pursuant to this Agreement shall constitute
          and shall be reported by the parties as adjustments to the
          purchase price hereunder.

                    11.3 SCHEDULES.  Disclosures included in any schedule
          to this Agreement shall be considered to be made for purposes of
          all schedules.  Inclusion of any matter in any schedule to this
          Agreement does not imply that such matter would, under the
          provisions of this Agreement, have to be included in such
          schedule.

                    11.4 NOTICES.  All notices and other communications
          hereunder shall be in writing and shall be deemed given if
          delivered personally or transmitted by telex or telegram or
          mailed by registered or certified mail (returned receipt
          requested) to the parties at the following addresses (or at such
          other address for a party as shall be specified by like notice):

                    (A)  if to the Purchaser or Shawmut, to:

                    Shawmut National Corporation
                    Executive Offices
                    One Federal Street
                    Boston, Massachusetts 02211

                    Attention:  J. Michael Shepherd

                    with a copy to:

                    Skadden, Arps, Slate, Meagher & Flom
                    919 Third Avenue
                    New York, N.Y. 10022

                    Attention:  William S. Rubenstein

                    (B)  if to Seller or Parent to:

                    Barclays Group Inc. (USA)
                    222 Broadway
                    New York, N.Y. 10038

                    Attention:  John Freeman
                    Telecopy:   212-412-3862

                    with a copy to:

                    Simpson Thacher & Bartlett
                    425 Lexington Avenue
                    New York, N.Y. 10017-3954

                    Attention:  Wilson S. Neely

                    11.5 INTERPRETATION.  The headings contained in this
          Agreement are for reference purposes only and shall not affect in
          any way the meaning or interpretation of this Agreement.

                    11.6 AMENDMENT.  This Agreement and the Exhibits and
          Schedules hereto may be amended by the parties hereto, but may
          not be amended except by an instrument or instruments in writing
          signed and delivered on behalf of each of the parties hereto.

                    11.7 EXTENSION; WAIVER.  At any time prior to the
          Closing Date, any party hereto which is entitled to the benefits
          hereof may (a) extend the time for the performance of any of the
          obligations or other acts of the other party hereto, (b) waive
          any inaccuracy in the representations and warranties of the other
          party hereto contained herein or in any Schedule hereto or in any
          document delivered pursuant hereto, and (c) waive compliance with
          any of the agreements of the other party hereto or conditions
          contained herein.  Any agreement on the part of a party hereto to
          any such extension or waiver shall be valid if set forth in an
          instrument in writing signed and delivered on behalf of such
          party.

                    11.8 ENTIRE AGREEMENT.  This Agreement (including the
          Exhibits, Annexes, Schedules, documents and instruments referred
          to herein) and the Confidentiality Agreement constitute the
          entire agreement and supersede all other prior agreements and
          understandings, both written and oral, among the parties, or any
          of them, with respect to the subject matter hereof.

                    11.9 THIRD PARTY BENEFICIARIES.  This Agreement is not
          intended to confer upon any other person any rights or remedies
          hereunder.

                    11.10     ASSIGNMENT.  This Agreement shall not be
          assigned, and any attempted assignment shall be void; provided,
          however, that Purchaser may assign its right to purchase any
          Acquired Asset and/or to assume any Assumed Liability, together
          with Purchaser's rights under this Agreement with respect
          thereto, to any of its Affiliates only if such Affiliate of the
          Purchaser and the Purchaser agree to be bound jointly and
          severally hereunder and such Affiliate executes a counterpart of
          this Agreement.  Subject to the preceding sentence, this
          Agreement will be binding upon, inure to the benefit of and be
          enforceable by the parties and their respective successors and
          assigns.

                    11.11     PUBLICITY NOTICE.  Except (i) as required or
          expressly permitted by this Agreement, (ii) as may be necessary
          in order to give the notices to obtain the prior regulatory
          approval described in Schedule 6.3, (iii) as necessary to consult
          with attorneys, accountants, employees, or other advisors
          retained in connection with the transactions contemplated hereby,
          (iv) as required by court order or otherwise mandated by law or
          the rules of the New York Stock Exchange, or by contract in which
          the Seller or the Purchaser is a party, or (v) in connection with
          disclosure documents prepared by the Seller, the Purchaser or a
          subsidiary or parent of either, neither party shall issue any
          news release or other public notice or communication or otherwise
          make any disclosure to third parties concerning this Agreement or
          the transactions contemplated hereby without the prior consent of
          the other party, which consent will not be unreasonably withheld. 
          Even in cases where such prior consent is not required each party
          will, to the extent practicable under the circumstances, give
          prior notice to the other of the contents of such releases in
          order to provide a reasonable opportunity to the other party to
          prepare a corresponding or other similar release. 
          Notwithstanding the foregoing, if the parties hereto issue a news
          release after the execution of this Agreement announcing the
          proposed sale it must specifically state that such sale is
          subject to prior regulatory approval.

                    11.12     GOVERNING LAW.  This Agreement shall be
          governed in all respects, including validity, interpretation and
          effect, by the laws of the State of New York.

                    11.13     COUNTERPARTS.  This Agreement may be executed
          in two or more counterparts, each of which shall be deemed an
          original, but which together shall constitute a single agreement.

                    11.14     CONSENT TO JURISDICTION; SERVICE OF PROCESS. 
          (a)  The parties hereto hereby exclusively and irrevocably submit
          to the jurisdiction of the federal and state courts of New York
          over any action arising out of or relating to this Agreement, the
          Servicing Agreement and any of the agreements entered into in
          connection herewith and therewith and Parent, Seller, Shawmut and
          Purchaser hereby irrevocably agree that all claims in respect of
          such suit, action or proceeding shall be heard and determined in
          such courts.  The parties hereby irrevocably waive, to the
          fullest extent permitted by applicable law, any objection which
          they may now or thereafter have to the laying of venue of any
          such suit, action or proceeding brought in such court or any
          defense of inconvenient forum for the maintenance of such suit,
          action or proceeding.  Each of the parties hereto agrees that a
          judgment in any such action or proceeding may be enforced in
          other jurisdictions by suit on the judgment or in any manner
          provided by law.

                    (b)  Each of the parties hereto hereby consents to
          process being served by any party to this Agreement in any suit,
          action or proceeding of the nature specified in subsection (a)
          above by the mailing of a copy thereof in accordance with the
          provisions of Section 11.4 of this Agreement.

                    11.15     WAIVER OF JURY TRIAL.  The parties to the
          Agreement hereby irrevocably and unconditionally waive trial by
          jury in any legal action or proceeding relating to the Agreement,
          the Servicing Agreement and the agreements entered into in
          connection herewith and therewith and any amendment, waiver,
          consent or other document that amends, waives, supplements or
          otherwise modifies the Agreement, the Servicing Agreement or any
          of the agreements entered into in connection herewith and
          therewith.

                    11.16     CONFIDENTIALITY AGREEMENT.  Parties agree
          that on the Closing Date, the provisions of the Confidentiality
          Agreement shall terminate and be of no further force and effect,
          except to the extent that Shawmut or Purchaser has received
          confidential information of Seller unrelated to the BFD Acquired
          Business, the Acquired Assets or the Assumed Liabilities. 

                    IN WITNESS WHEREOF, the Seller, Parent, Shawmut and
          Purchaser have caused this Agreement to be executed on their
          behalf by their respective officers hereunto duly authorized all
          as of the date first written above.

                                   BARCLAYS BUSINESS CREDIT INC.

                                   By /s/ Richard Webb                

                                   BARCLAYS BANK PLC

                                   By /s/ Richard Webb                

                                   SHAWMUT NATIONAL CORPORATION

                                   By /s/ J. Michael Shepherd         

                                   SHAWMUT BANK CONNECTICUT, N.A.

                                   By /s/ Susan E. Lester