EXHIBIT 10.47
                        AGREEMENT AND PLAN OF COMBINATION

                            dated as of June 22, 1997

                                  by and among

                         NORTH AMERICAN MORTGAGE COMPANY

                               DIME BANCORP, INC.

                     THE DIME SAVINGS BANK OF NEW YORK, FSB

                                       and

                          47TH ST. PROPERTY CORPORATION

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

                              AMENDED AND RESTATED

                                      as of

                                  July 31, 1997
                                 --------------

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page

RECITALS.....................................................................1

ARTICLE I

Certain Definitions; Interpretation..........................................1
     1.01     Certain Definitions............................................1
     1.02     Interpretation.................................................10

ARTICLE II

The Merger...................................................................10
     2.01     The Merger.....................................................10
     2.02     Reservation of Right to Revise Structure.......................11
     2.03     Effective Time.................................................11

ARTICLE III

Consideration................................................................11
     3.01     Consideration..................................................11
     3.02     Rights as Stockholders; Stock Transfers........................12
     3.03     Fractional Shares..............................................12
     3.04     Exchange Procedures............................................12
     3.05     Anti-Dilution Provisions.......................................14
     3.06     Options........................................................14

ARTICLE IV

Actions Pending the Merger...................................................16
     4.01     Forbearances of the Company....................................16
     4.02     Forbearances of the Acquiror...................................19
     4.03.    Coordination of Dividends......................................20

ARTICLE V

Representations and Warranties...............................................20
     5.01     Disclosure Schedules...........................................20
     5.02     Standard.......................................................20
     5.03     Representations and Warranties of the Company..................20
     5.04     Representations and Warranties of the Acquiror.................37



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ARTICLE VI

Covenants....................................................................43
     6.01     Reasonable Best Efforts........................................43
     6.02     Stockholder Approvals..........................................43
     6.03     Registration Statement.........................................43
     6.04     Press Releases.................................................44
     6.05     Access; Information............................................44
     6.06     Acquisition Proposals..........................................45
     6.07     Affiliate Agreements...........................................46
     6.08     Takeover Laws..................................................46
     6.09     No Rights Triggered............................................46
     6.10     Rights Agreement...............................................46
     6.11     NYSE Listing...................................................47
     6.12     Regulatory Applications........................................47
     6.13     Indemnification................................................47
     6.14     Benefit Plans..................................................49
     6.15     Accountants' Letters...........................................50
     6.16     Notification of Certain Matters................................50
     6.17     Certain Policies of the Company................................50
     6.18     Employee Benefits..............................................51
     6.19     Certain Payments at Effective Time.............................51
     6.20     Certain Employee Agreements....................................52

ARTICLE VII

Conditions to Consummation of the Merger.....................................52
     7.01     Conditions to Each Party's Obligation to Effect the ...........52
     7.02     Conditions to Obligation of the Company........................53
     7.03     Conditions to Obligation of the Acquiror.......................54

ARTICLE VIII

Termination..................................................................55
     8.01     Termination....................................................55
     8.02     Effect of Termination and Abandonment..........................57
     8.03     Termination Fee................................................57


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ARTICLE IX

Miscellaneous................................................................59
     9.01     Survival.......................................................59
     9.02     Waiver; Amendment..............................................60
     9.03     Counterparts...................................................60
     9.04     Governing Law..................................................60
     9.05     Expenses.......................................................60
     9.06     Notices........................................................60
     9.07     Entire Understanding; No Third Party Beneficiaries.............61


EXHIBIT A         Form of Amendment to Company Rights Agreement
EXHIBIT B         Form of Company Affiliate Letter



                                      -iii-
<PAGE>

          AGREEMENT  AND PLAN OF  COMBINATION,  dated  as of June  22,  1997 and
amended and restated as of July 31, 1997 (this "Agreement"),  by and among North
American Mortgage Company (the "Company"),  Dime Bancorp, Inc. (the "Acquiror"),
The Dime  Savings  Bank of New York,  FSB (the  "Bank"),  and 47th St.  Property
Corporation ("Merger Sub").

                                    RECITALS

          A. The  Company.  The  Company is a Delaware  corporation,  having its
principal place of business in Santa Rosa, California.

          B . The Acquiror.  The Acquiror is a Delaware corporation,  having its
principal place of business in New York, New York.

          C. The Bank.  The Bank is a federal  savings  bank and a wholly  owned
subsidiary of the Acquiror,  having its principal place of business in New York,
New York.

          D. Merger Sub. Merger Sub is a Delaware corporation and a wholly owned
subsidiary of the Bank.  Merger Sub has engaged in no business  other than as an
incident to the transactions contemplated by this Agreement.

          E.  Intentions  of the Parties.  It is the intention of the parties to
this Agreement that the business combination contemplated hereby be treated as a
"reorganization"  under  Section 368 of the Internal  Revenue  Code of 1986,  as
amended (the "Code").

          F.  Board  Action.  The  respective  Boards  of  Directors  of each of
Acquiror,  the  Bank  and the  Company  have  determined  that it is in the best
interests of their respective companies and their stockholders to consummate the
business combination transaction provided for in this Agreement.

          NOW,  THEREFORE,  in consideration of the premises,  and of the mutual
covenants,  representations,  warranties and agreements  contained  herein,  the
parties agree as follows:

                                    ARTICLE I

                       Certain Definitions; Interpretation

          1.01  Certain  Definitions.  The  following  terms  are  used  in this
Agreement with the meanings set forth below:

          "Acquiror"  has  the  meaning  set  forth  in  the  preamble  to  this
Agreement.

          "Acquiror  Certificate" means the Amended and Restated  Certificate of
Incorporation of the Acquiror.

                                       -1-

<PAGE>
          "Acquiror  Common Stock" means the common  stock,  par value $0.01 per
share, of the Acquiror.

          "Acquiror Person" has the meaning set forth in Section 8.03(b).

          "Acquiror  Preferred Stock" means the preferred stock, par value $1.00
per share, of the Acquiror.

          "Acquiror   Rights"  means  the  rights  to  purchase  Acquiror  Stock
outstanding from time to time pursuant to the Acquiror Rights Agreement.

          "Acquiror Rights  Agreement" means the Stockholders  Protection Rights
Agreement,  dated as of October 20,  1995,  between the  Acquiror  and the First
National Bank of Boston, as Rights Agent.

          "Acquiror  Stock" means,  collectively,  the Acquiror Common Stock and
the Acquiror Preferred Stock.

          "Acquiror's  SEC  Documents"  has the  meaning  set  forth in  Section
5.04(g).

          "Acquisition Transaction" means (i) a merger or consolidation,  or any
similar  transaction,  involving the Company or any subsidiary of it (other than
mergers,  consolidations  or similar  transactions  involving solely the Company
and/or one or more wholly-owned  subsidiaries of the Company;  provided that any
such  transaction  is not  entered  into  in  violation  of the  terms  of  this
Agreement),  (ii)  a  purchase,  lease  or  other  acquisition  of  all  or  any
substantial  part of the assets or deposits of the Company or any  subsidiary of
it,  or (iii) a  purchase  or other  acquisition  (including  by way of  merger,
consolidation,  share exchange or otherwise) of securities  representing  15% or
more of the voting power of the Company or any subsidiary of it.

          "Agency" means the HUD, FHA, VA, FNMA,  FHLMC, GNMA or a State Agency,
as applicable.

          "Agreement" means this Agreement,  as amended or modified from time to
time in accordance with Section 9.02.

          "Average  Closing  Price"  means the  average  of the daily  last sale
prices of Acquiror  Common Stock as reported on the NYSE Composite  Transactions
Reporting  System (as  reported in The Wall Street  Journal or, if not  reported
therein,  in another  authoritative  source) for the ten  consecutive  NYSE full
trading  days (in which such shares are traded on the NYSE)  ending at the close
of trading on the Determination Date.


                                       -2-
<PAGE>

          "Bank" has the meaning set forth in the preamble to this Agreement.

          "Code" has the meaning set forth in Recital D.

          "Company" has the meaning set forth in the preamble to this Agreement.

          "Company Affiliate" has the meaning set forth in Section 6.07.

          "Company Board" means the Board of Directors of the Company.

          "Company  By-Laws"  means the  Amended  and  Restated  By-laws  of the
Company.

          "Company  Certificate"  means the Amended and Restated  Certificate of
Incorporation of the Company.

          "Company Common Stock" means the common stock, par value $0.01
         per share, of the Company.

          "Company  Convertible  Preferred  Stock"  means  the  $0.20  Series  A
Convertible Preferred Stock of the Company.

          "Company Meeting" has the meaning set forth in Section 6.02.

          "Company  Preferred  Stock" means the preferred stock, par value $0.01
per share, of the Company.

          "Company   Rights"   means  the  rights  to  purchase   Company  Stock
outstanding from time to time pursuant to the Company Rights Agreement.

          "Company Rights  Agreement"  means the Shareholder  Rights  Agreement,
dated as of October 19, 1992,  between the Company and The Bank of New York,  as
Rights Agent.

          "Company Stock" means, collectively,  the Company Common Stock and the
Company Preferred Stock.

          "Company  Stock  Option"  means each  outstanding  option to  purchase
shares of Company Common Stock.

          "Company's  SEC  Documents"  has the  meaning  set  forth  in  Section
5.03(g).

          "Compensation and Benefit Plans" has, with respect to any person,  the
meaning set forth in Section 5.03(l).


                                       -3-

<PAGE>

          "Consideration" has the meaning set forth in Section 3.01.

          "Contract"  means,   with  respect  to  any  person,   any  agreement,
indenture,  undertaking, debt instrument, contract, lease or other commitment to
which such person or any of its  Subsidiaries is a party or by which any of them
is bound or to which any of their properties is subject.

          "Costs" has the meaning set forth in Section 6.13(a).

          "Determination  Date"  means the date of receipt of all OTS  approvals
necessary to consummate the Merger.

          "DGCL" means the General Corporation Law of the State of Delaware.

          "Disclosure Schedule" has the meaning set forth in Section 5.01.

          "DOL" means the United States Department of Labor.

          "Effective Date" means the date on which the Effective Time occurs.

          "Effective  Time" means the date and time at which the Merger  becomes
effective.

          "Environmental   Laws"  means  any   federal,   state  or  local  law,
regulation,  order,  decree,  permit,   authorization,   common  law  or  agency
requirement  with force of law relating to: (a) the protection or restoration of
the environment,  health or safety (in each case as relating to the environment)
or natural resources; or (b) the handling, use, presence,  disposal,  release or
threatened release of any Hazardous Substance.

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

          "ERISA  Affiliate"  has,  with respect to any person,  the meaning set
forth in Section 5.03(l).

          "ERISA Affiliate Plan" has the meaning set forth in Section 5.03(l).

          "Exchange Act" means the Securities  Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

          "Exchange Agent" has the meaning set forth in Section 3.04.

          "Exchange Fund" has the meaning set forth in Section 3.04.


                                       -4-

<PAGE>

          "FDIC" means the Federal Deposit Insurance Corporation.

          "Fee" has the meaning set forth in Section 8.03(a).

          "Fee Termination Event" has the meaning set forth in Section 8.03(a).

          "Fee Trigger Event" has the meaning set forth in Section 8.03(c).

          "FHA" means the Federal Housing Administration.

          "FHLMC" means the Federal Home Loan Mortgage Corporation.

          "FHMA" means the Farmers' Home Mortgage Administration.

          "FNMA" means the Federal National Mortgage Association.

          "GNMA" means the Government National Mortgage Association.

          "Governmental  Authority"  means any court,  administrative  agency or
commission  or  other  federal,   state  or  local  governmental   authority  or
instrumentality.

          "Hazardous  Substance" means any substance in any  concentration  that
is: (a) listed,  classified or regulated  pursuant to any Environmental Law; (b)
any   petroleum   product   or   by-product,    asbestos-containing    material,
lead-containing  paint  or  plumbing,   polychlorinated  biphenyls,  radioactive
materials or radon; or (c) any other substance which is or may be the subject of
regulatory  action by any Governmental  Authority  pursuant to any Environmental
Law.

          "HSR Act" means the  Hart-Scott-Rodino  Antitrust  Improvements Act of
1976.

          "HUD"  means  the  United  States  Department  of  Housing  and  Urban
Development.

          "Indemnified Party" has the meaning set forth in Section 6.13(a).

          "Index  Group" means the group of the eighteen (18)  companies  listed
below, the common stock of all of which shall be publicly traded and as to which
there shall not have been, since the Starting Date and before the  Determination
Date, an announcement of a proposal for the acquisition or sale of such company.
In the event that the common  stock of any such  company  ceases to be  publicly
traded or any such  announcement is made with respect to any such company,  such
company will be removed from the Index Group,  and the weights  (which have been
determined based on market capitalization)


                                       -5-

<PAGE>
redistributed  proportionately  for purposes of determining  the Index Price.  
The eighteen (18)  companies  and the weights  attributed to them are as
follows:


           Company                                   Weighting       Ticker
           -------                                   ---------       ------

           Ahmanson & Company (H.F.)                    14.0           AHM
           Astoria Financial Corporation                 2.8           ASFC
           Bank United Corp.                             3.5           BNKU
           Commercial Federal Corporation                2.4           CFB
           Charter One Financial                         7.1           COFI
           Coast Savings Financial                       2.7           CSA
           Downey Financial Corp.                        1.8           DSL
           Golden West Financial                        12.5           GDW
           Glendale Federal Bank FSB                     4.2           GLN
           GreenPoint Financial Corp.                    9.2           GPT
           Long Island Bancorp Inc.                      2.6           LISB
           New York Bancorp Inc.                         2.7           NYB
           Peoples Heritage Finl Group                   3.0           PHBK
           Roslyn Bancorp Inc.                           2.5           RSLN
           St. Paul Bancorp Inc.                         2.3           SPBC
           Sovereign Bancorp Inc.                        3.0           SVRN
           Washington Mutual Inc.                       21.0           WAMU
           Washington Federal Inc.                       3.9           WFSL
                                                       100.0%

          "Index Price" means, on a given date, the weighted  average  (weighted
in accordance with the factors listed in the definition of "Index Group") of the
closing prices on such date of the common stocks of the companies  composing the
Index Group.

          "Insurance Amount" has the meaning set forth in Section 6.13(b).

          "Insurer"  means a person who insures or guarantees all or any portion
of the  risk of loss  upon  borrower  default  on any of the  Loans,  including,
without  limitation,  the FHA,  the VA and any  private  mortgage  insurer,  and
providers of life,  hazard,  flood,  disability,  title or other  insurance with
respect to any of the Loans or the collateral therefor.

          "Investor"  means  (i) the  FHLMC,  the FNMA,  the GNMA,  or any other
person,  as the case may be, that owns any of the Loans or any portion of a Pool
of Loans or holds  beneficial  title to the  Loans or any  portion  of a Pool of
Loans, but shall not mean the holder of  mortgage-backed  securities or mortgage
pass-through securities except to the extent that the consent of such holder may
be required in order for the Company or any of


                                       -6-

<PAGE>
its  Subsidiaries to continue to have servicing rights with respect to the Loans
related thereto and (ii) any person who owns servicing rights for loans serviced
or master serviced by the Company or any of its Subsidiaries  pursuant to a Loan
Servicing Agreement.

          "Investor  Commitment"  means any  commitment  of a person to purchase
Loans from the Company or any of its Subsidiaries.

          "IRS" means the United States Internal Revenue Service.

          "Liens"  means  any  charge,  mortgage,   pledge,  security  interest,
restriction, claim, lien, or encumbrance.

          "Listed  Termination" means a termination of this Agreement (i) by the
Acquiror  pursuant  to Section  8.01(b)  because of a  knowing,  intentional  or
grossly  negligent  breach by the  Company,  (ii) by the  Acquiror  pursuant  to
Section  8.01(e) or (iii) by the Company  pursuant to Section  8.01(f),  in each
case,  unless at the time of such  termination  (A) the  Company is  entitled to
terminate  this  Agreement  pursuant  to Section  8.01(b)  because of a knowing,
intentional  or grossly  negligent  breach by the  Acquiror  and (B) the Company
shall have notified the Acquiror in writing of such breach.

          "Loan" has the meaning set forth in Section 5.03(t).

          "Loan  Servicing  Agreement"  has the  meaning  set  forth in  Section
5.03(t).

          "Material  Adverse Effect" means,  with respect to the Acquiror or the
Company,  any effect that (i) is material and adverse to the financial position,
results of operations or business of the Acquiror and its Subsidiaries  taken as
a whole, or the Company and its Subsidiaries taken as a whole, respectively,  or
(ii) would  materially  impair the ability of either the Acquiror or the Company
to perform its obligations under this Agreement or otherwise materially threaten
or materially  impede the consummation of the Merger and the other  transactions
contemplated by this Agreement;  provided, however, that Material Adverse Effect
shall not be deemed to include  the impact of (a) changes in banking and similar
laws  of  general   applicability  or  interpretations   thereof  by  courts  or
governmental   authorities,   (b)  changes  in  generally  accepted   accounting
principles  or  regulatory   accounting   requirements   applicable  to  savings
associations and their holding companies  generally and (c) events or conditions
generally adversely  affecting the mortgage banking industry,  including general
changes in  interest  rates and other  changes in general  business  or economic
conditions.

          "Merger" has the meaning set forth in Section 2.01.



                                       -7-

<PAGE>
          "Multiemployer   Plan"   means,   with   respect  to  any  person,   a
multiemployer plan within the meaning of Section 3(37) of ERISA.

          "New Certificates" has the meaning set forth in Section 3.04.

          "NYSE" means the New York Stock Exchange, Inc.

          "Old Certificates" has the meaning set forth in Section 3.04.

          "OTS" means the Office of Thrift Supervision.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "Pension Plan" has, with respect to any person,  the meaning set forth
in Section 5.03(l).

          "person"  means  any  individual,   bank,  corporation,   partnership,
association, joint-stock company, business trust or unincorporated organization.

          "Pool" means a pool of Loans  originated,  acquired or serviced by the
Company or any of its Subsidiaries.

          "Preliminary  Fee Trigger  Event" has the meaning set forth in Section
8.03(b).

          "Previously  Disclosed"  means,  with  respect  to the  Company or the
Acquiror, information set forth in such party's Disclosure Schedule.

          "Proxy Statement" has the meaning set forth in Section 6.03.

          "Registration Statement" has the meaning set forth in Section 6.03.

          "Representatives"  means,  with respect to any person,  such  person's
directors,   officers,   employees,   legal  or   financial   advisors   or  any
representatives of such legal or financial advisors.

          "Rights" means, with respect to any person,  securities or obligations
convertible  into or exercisable or  exchangeable  for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock  appreciation  right or other  instrument the value of which is
determined  in whole or in part by  reference  to the market  price or value of,
shares of capital stock of such person.

          "SEC" means the Securities and Exchange Commission.


                                       -8-

<PAGE>

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.

          "Securitization  Instruments"  has the  meaning  set forth in  Section
5.03(t).

          "Securitization  Servicer"  has  the  meaning  set  forth  in  Section
5.03(t).

          "Securitization  Transaction"  has the  meaning  set forth in  Section
5.03(t).

          "Serviced Loans" has the meaning set forth in Section 5.03(t).

          "Starting Date" means June 20, 1997.

          "Starting Price" shall mean $19.00.

          "State  Agency" means any state agency with  authority to regulate the
business of the Company, determine the investment or servicing requirements with
regard to loans originated,  purchased or serviced by the Company,  or otherwise
participate in or promote mortgage lending.

          "Subsidiary" and "Significant  Subsidiary" have the meanings  ascribed
to them in Rule 1-02 of Regulation S-X of the SEC.

          "Surviving Corporation" has the meaning set forth in Section 2.01.

          "Takeover Laws" has the meaning set forth in Section 5.03(n).

          "Taxes" means all taxes,  charges,  fees, levies or other assessments,
however  denominated,  including,  without  limitation,  all net  income,  gross
income,  gross receipts,  sales, use, ad valorem,  goods and services,  capital,
transfer,  franchise,   profits,  license,  withholding,   payroll,  employment,
employer health, excise, estimated,  severance,  stamp, occupation,  property or
other taxes, custom duties, fees, assessments or charges of any kind whatsoever,
together  with any interest and any  penalties,  additions to tax or  additional
amounts imposed by any taxing authority  whether arising before, on or after the
Effective Date.

          "Tax Returns" has the meaning set forth in Section 5.03(q).

          "Treasury Stock" has the meaning set forth in Section 5.03(b).

          "Warehouse Loans" has the meaning set forth in Section 5.03(t).



                                       -9-

<PAGE>
          1.02  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  are not  part  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." No provision of this Agreement shall
be  construed to require the  Company,  the Acquiror or any of their  respective
Subsidiaries or affiliates to take any action which would violate applicable law
(whether statutory or common law), rule or regulation.


                                   ARTICLE II

                                   The Merger

          2.01 The Merger.  (a) Subject to and upon the terms and  conditions of
this Agreement,  at the Effective Time, Merger Sub shall merge with and into the
Company (the  "Merger"),  the separate  corporate  existence of Merger Sub shall
cease  and the  Company  shall  survive  and  continue  to exist  as a  Delaware
corporation (the Company, as the surviving corporation in the Merger,  sometimes
being referred to herein as the "Surviving Corporation").

          (b)  Effectiveness   and  Effects  of  the  Merger.   Subject  to  the
satisfaction  or waiver of the  conditions  set forth in Article VII, the Merger
shall become  effective  upon the filing in the office of the Secretary of State
of the State of Delaware of a certificate  of merger in accordance  with Section
251 of the Delaware General  Corporation Law (the "DGCL"), or at such later date
and time as may be set forth in such articles and certificate.  The Merger shall
have the effects prescribed in the DGCL.

          (c)  Certificate  of  Incorporation  and By-Laws.  The  certificate of
incorporation and by-laws of the Surviving  Corporation shall be,  respectively,
the certificate of incorporation of the Company,  as in effect immediately prior
to the Effective Time, and the by-laws of the Company,  as in effect immediately
prior to the Effective Time.

          (d) Directors.  At the Effective  Time, the directors of the Surviving
Corporation  shall be the  directors  of  Merger  Sub  immediately  prior to the
Effective  Time, and such directors,  together with any additional  directors as
may  thereafter  be  elected,  shall hold such  office  until such time as their
successors shall be duly elected and qualified.

          (e)  Officers.  At the Effective  Time,  the officers of the Surviving
Corporation  shall  be the  officers  of  Merger  Sub  immediately  prior to the
Effective  Time,  together  with any  additional  officers as may be agreed upon
prior thereto by the Acquiror and the Company or as may be appointed thereafter.


                                      -10-

<PAGE>

          2.02 Reservation of Right to Revise Structure. At the Bank's election,
the Merger may  alternatively  be  structured  so that (i) the Company is merged
with and into Acquiror,  the Bank, or any other direct or indirect  wholly owned
subsidiary  of  Acquiror  (provided,  that in such  event the  Company  makes no
representation  as to whether any consents are required,  or any  agreements are
adversely  affected,  thereby)  or (ii) any  direct  or  indirect  wholly  owned
subsidiary  of  Acquiror  (other  than  Merger  Sub) is merged with and into the
Company;  provided,  however,  that no such change shall (a) alter or change the
amount or kind of the  Consideration  or the treatment of the holders of Company
Stock  Options,  (b)  adversely  affect  the  tax  treatment  of  the  Company's
stockholders as a result of receiving the  Consideration  or prevent the parties
from obtaining the opinions of Simpson Thacher & Bartlett or Sullivan & Cromwell
referred to in Section  7.02(d) and  7.03(c),  respectively,  or (c)  materially
impede or delay consummation of the transactions contemplated by this Agreement.
In the event of such an election,  the parties  agree to execute an  appropriate
amendment to this Agreement in order to reflect such election.

          2.03  Effective  Time.  Subject to the  satisfaction  or waiver of the
conditions  set forth in Article  VII,  the  parties  shall  cause the Merger to
become  effective on the date that is (i) the fifth  business day (the  "Initial
Closing  Date") to occur after the last of the  conditions set forth in Sections
7.01,  7.02 or 7.03 shall have been  satisfied or waived in accordance  with the
terms of this  Agreement  (or,  at the  election  of the  Acquiror,  on the last
business  day of the  month in which  such day  occurs;  provided  that,  if the
Acquiror  shall make such  election,  it shall waive the  condition set forth in
Section  7.03(a) as to other than an intentional,  knowing or grossly  negligent
breach (so long as such condition is satisfied on the Initial Closing Date)).


                                   ARTICLE III

                                  Consideration

          3.01  Consideration.  Subject  to the  terms  and  conditions  of this
Agreement,  at the  Effective  Time,  automatically  by virtue of the Merger and
without any action on the part of any stockholder:

                  (a) Outstanding  Company Common Stock.  Each share,  excluding
         Treasury  Stock,  of  Company  Common  Stock,  issued  and  outstanding
         immediately  prior to the  Effective  Time,  together  with the related
         Company Rights, shall become and be converted into the right to receive
         1.37  shares  of  Acquiror  Common  Stock  (together  with the  related
         Acquiror  Rights)  (subject  to  possible  adjustment  as set  forth in
         Sections  3.05 and  8.01(g),  the  "Exchange  Ratio") and the number of
         shares of Company Common Stock,  excluding Treasury Shares,  issued and
         outstanding    immediately   prior   to   the   Effective   Time   (the
         "Consideration").



                                      -11-

<PAGE>
                  (b) Outstanding  Merger Sub Common Stock. Each share of common
         stock,  par value $0.01 per share, of Merger Sub issued and outstanding
         immediately  prior to the  Effective  Time shall be unchanged and shall
         remain  issued  and  outstanding  as one share of  common  stock of the
         Surviving Corporation.

                  (c)  Treasury  Shares.  Each  share of  Company  Stock held as
         Treasury  Stock  (which  includes  all  shares of  Company  Convertible
         Preferred  Stock)  immediately  prior to the  Effective  Time  shall be
         canceled and retired at the Effective Time and no  consideration  shall
         be issued in exchange therefor.

          3.02 Rights as Stockholders;  Stock Transfers.  At the Effective Time,
holders  of  Company  Stock  shall  cease to be,  and shall  have no rights  as,
stockholders of the Company, other than the right to receive (a) any dividend or
other  distribution  with  respect  to such  Company  Stock  with a record  date
occurring prior to the Effective Time and (b) the  consideration  provided under
this Article III. After the Effective  Time,  there shall be no transfers on the
stock transfer books of the Company or the Surviving Corporation of shares of
Company Stock.

          3.03 Fractional  Shares.  Notwithstanding  any other provision in this
Agreement,  no fractional shares of Acquiror Common Stock and no certificates or
scrip therefor,  or other evidence of ownership  thereof,  will be issued in the
Merger;  instead,  the Acquiror shall pay to each holder of Company Common Stock
who otherwise  would be entitled to a fractional  share of Acquiror Common Stock
(after  taking into  account all Old  Certificates  delivered by such holder) an
amount in cash (without interest) determined by multiplying such fraction by the
average of the last sale prices of  Acquiror  Common  Stock,  as reported by the
NYSE  Composite  Transactions  Reporting  System (as reported in The Wall Street
Journal or, if not reported therein, in another  authoritative  source), for the
five  consecutive  NYSE full trading days  immediately  preceding  the Effective
Date.

          3.04 Exchange  Procedures.  (a) At or prior to the Effective Time, the
Acquiror shall deposit,  or shall cause to be deposited,  with an exchange agent
appointed prior to the Effective Time by the Acquiror (the "Exchange Agent"), as
agent for the  benefit of the  holders  of  certificates  formerly  representing
shares of Company Common Stock ("Old Certificates"),  for exchange in accordance
with this Article III,  certificates  representing the shares of Acquiror Common
Stock ("New  Certificates")  and an estimated  amount of cash (such cash and New
Certificates,  together with any dividends or  distributions  with a record date
occurring after the Effective Date with respect thereto (without any interest on
any such cash, dividends or distributions), being hereinafter referred to as the
"Exchange Fund") to be issued as Consideration.

          (b) As promptly as practicable after the Effective Date, the Surviving
Corporation  shall send or cause to be sent to each  former  holder of record of
shares (other than Treasury Stock) of Company Common Stock  immediately prior to
the Effective Time transmittal


                                      -12-

<PAGE>
materials for use in exchanging such  stockholder's  Old Certificates for Merger
Consideration.  The Surviving  Corporation shall cause the New Certificates into
which  shares of a  stockholder's  Company  Common  Stock are  converted  on the
Effective Date and/or any check in respect of any fractional  share interests or
dividends or distributions  which such person shall be entitled to receive to be
delivered  to such  stockholder  upon  delivery  to the  Exchange  Agent  of Old
Certificates  representing  such shares of Company  Common  Stock (or  indemnity
satisfactory to the Surviving Corporation and the Exchange Agent, if any of such
certificates are lost, stolen or destroyed) owned by such stockholder;  provided
that New  Certificates  and/or any such check shall not be issued to any Company
Affiliate  unless and until such Company  Affiliate  has  delivered an agreement
pursuant  to  Section  6.07.  No  interest  will be  paid on any  Consideration,
including cash to be paid in lieu of fractional share  interests,  or in respect
of dividends or distributions which any such person shall be entitled to receive
pursuant to this Article II upon such delivery.

          (c) Notwithstanding the foregoing,  neither the Exchange Agent nor any
party  hereto  shall be liable to any  former  holder of  Company  Stock for any
amount properly delivered to a public official pursuant to applicable  abandoned
property, escheat or similar laws.

          (d) No dividends or other  distributions on Acquiror Common Stock with
a record date occurring  after the Effective Time shall be paid to the holder of
any  unsurrendered Old Certificate  representing  shares of Company Common Stock
converted in the Merger into the right to receive shares of such Acquiror Common
Stock until the holder thereof shall be entitled to receive New  Certificates in
exchange  therefor in  accordance  with this  Article III, and no such shares of
Company  Common  Stock  shall  be  eligible  to vote  until  the  holder  of Old
Certificates  is entitled to receive New  Certificates  in accordance  with this
Article III. After becoming so entitled in accordance with this Article III, the
record  holder  thereof also shall be entitled to receive any such  dividends or
other distributions,  without any interest thereon, which theretofore had become
payable  with  respect to shares of  Acquiror  Common  Stock such holder had the
right to receive upon surrender of the Old Certificate.

          (e) Any portion of the  Exchange  Fund that  remains  unclaimed by the
stockholders  of the Company for six months  after the  Effective  Time shall be
returned  to  the  Acquiror.  Any  stockholders  of the  Company  who  have  not
theretofore  complied  with this Article III shall  thereafter  look only to the
Acquiror for payment of the shares of Acquiror Common Stock, cash in lieu of any
fractional  shares and unpaid dividends and distributions on the Acquiror Common
Stock  deliverable  in  respect  of each  share of  Company  Common  Stock  such
stockholder  holds as  determined  pursuant  to this  Agreement,  in each  case,
without any interest thereon.

          3.05  Anti-Dilution   Provisions.   Should  the  Acquiror  change  (or
establish a record date for  changing)  the number of shares of Acquiror  Common
Stock  issued  and  outstanding  prior to the  Effective  Date by way of a stock
split, stock dividend, recapitalization or


                                      -13-

<PAGE>
similar  transaction  with respect to the outstanding  Acquiror Common Stock and
the record date  therefor  shall be prior to the  Effective  Date,  the Exchange
Ratio shall be proportionately adjusted.

          3.06  Options.  (a) At the Effective  Time,  each Company Stock Option
shall cease to represent a right to acquire  shares of Company  Common Stock and
shall be converted  automatically  into an option to purchase shares of Acquiror
Common Stock,  and Acquiror  shall assume each such Company Stock Option subject
to the terms thereof; provided, however, that from and after the Effective Time,
(i) the number of shares of Acquiror Common Stock  purchasable  upon exercise of
such  Company  Stock  Option  shall be equal to the  number of shares of Company
Common Stock that were purchasable  under such Company Stock Option  immediately
prior to the Effective Time  multiplied by the Exchange  Ratio,  and rounding to
the nearest whole share,  and (ii) the per share  exercise price under each such
Company Stock Option shall be adjusted by dividing the per share  exercise price
of each such Company  Stock Option by the Exchange  Ratio,  and rounding down to
the nearest cent.  The terms of each Company  Stock Option shall,  in accordance
with its terms,  be subject to further  adjustment as appropriate to reflect any
stock split, stock dividend,  recapitalization or other similar transaction with
respect  to  Acquiror  Common  Stock on or  subsequent  to the  Effective  Date.
Notwithstanding the foregoing, each Company Stock Option which is intended to be
an  "incentive  stock  option"  (as defined in Section 422 of the Code) shall be
adjusted  in  accordance  with the  requirements  of  Section  424 of the  Code.
Accordingly,  with respect to any incentive  stock  options,  fractional  shares
shall be rounded down to the nearest whole number of shares and where  necessary
the per share exercise price shall be rounded down to the nearest
cent.

          (b) In order to effectuate the adjustment of the Company Stock Options
provided  for in the  proviso to Section  3.06(a),  the Company  represents  and
warrants to, and agrees with, the Acquiror that the Company (or as  appropriate,
the  Company  Board)  shall take all action  required  to be taken such that (i)
holders of Stock Options issued under the Company's  Incentive Stock Option Plan
will not  receive  the cash  payment  for such Stock  Options as provided in the
second  sentence of Section 10 of such Plan (which  shall be effected  either by
resolving  that  this  Agreement  and  the  transactions   contemplated   hereby
(including  the Company  Meeting and any Merger) do not  constitute a "Change of
Control"  for  purposes of such  Section or by taking such other action with the
prior consent of Acquiror, provided that such other action is taken prior to the
date on which a "Change of Control" would  otherwise occur in the absence of the
Company  Board  resolution  to the  contrary)  and (ii) under  Section 11 of the
Company's  Incentive Stock Option Plan, at the Effective Time, all Company Stock
Options  shall be  adjusted as  provided  in Section  3.06(a)  (and shall not be
canceled in exchange  for  payment as  contemplated  by clause (ii) of the first
sentence  of  that  Section).   Notwithstanding  any  other  provision  in  this
Agreement,  the Company  shall be permitted to take such action or to cause such
action to be taken as may be required for each Company Stock Option (x) to fully
vest and become immediately  exercisable at the Effective Time and (y) to remain
exercisable  after the  Effective  Time for the  remaining  term of such Company
Stock Option, in both cases


                                      -14-

<PAGE>
notwithstanding  the action of the  Company  referred  to in the first sentence
of this Section 3.06(b).

          (c) At or prior to the  Effective  Time,  the  Company  shall take all
action  necessary with respect to the Company's  Incentive  Stock Option Plan to
permit the assumption of the then outstanding  Company Stock Options by Acquiror
pursuant to this Section. The Company shall take all action necessary, including
obtaining any required  consents from  optionees,  to provide that following the
Effective Time no participant  in the Company's  Incentive  Stock Option Plan or
other plans,  programs or arrangements of the Company or any of its Subsidiaries
shall have any right thereunder to acquire equity securities of the Company, the
Surviving Corporation or any subsidiary thereof and to permit Acquiror to assume
the Company's  Incentive  Stock Option Plan.  The Company shall further take all
action necessary to amend the Company's Incentive Stock Option Plan to eliminate
automatic grants or awards thereunder,  if any, following the Effective Time. At
the Effective Time,  Acquiror shall assume the Company's  Incentive Stock Option
Plan;  provided,  that such  assumption  shall be only in respect of the assumed
Company Stock Options and that Acquiror shall have no obligation with respect to
any  awards  under the  Company's  Incentive  Stock  Option  Plan other than the
assumed  Company Stock Options or to make any additional  grants or awards under
such assumed plan.

          (d) The Acquiror shall take all corporate  action necessary to reserve
for issuance a sufficient number of shares of Acquiror Common Stock for delivery
pursuant to the terms set forth in this Section 3.06.  Subject to any applicable
limitations  under  the  Securities  Act,  Acquiror  shall  either  (i)  file  a
registration  statement on Form S-8 (or any successor form), effective as of the
Effective  Time,  with respect to the shares of Acquiror  Common Stock  issuable
upon exercise of the Stock Options, or (ii) file any necessary amendments to the
Company's  previously filed registration  statement(s) on Form S-8 in order that
the Acquiror will be deemed a "successor registrant" thereunder,  and, in either
event the  Acquiror  shall use its  reasonable  best  efforts  to  maintain  the
effectiveness of such registration statement(s) (and maintain the current status
of the prospectus or prospectuses  relating thereto) for so long as such options
shall remain outstanding.

                                   ARTICLE IV

                           Actions Pending the Merger

          4.01  Forbearances  of the  Company.  From the date  hereof  until the
earlier of the  termination of this Agreement or the Effective  Time,  except as
expressly contemplated by this Agreement or the Disclosure Schedule, without the
prior written consent of the Acquiror, the Company will not, and will cause each
of its Subsidiaries not to:

          (a)  Ordinary  Course.  Conduct  the  business  of the Company and its
Subsidiaries  other  than in the  ordinary  and usual  course  or, to the extent
consistent


                                      -15-

<PAGE>
therewith,  fail to use  reasonable  efforts to preserve  intact their  business
organizations  and assets and maintain  their  rights,  franchises  and existing
relations with customers, suppliers, employees and business associates.

          (b) Capital Stock. Other than pursuant to Rights Previously  Disclosed
and  outstanding  on the date hereof,  (i) issue,  sell or  otherwise  permit to
become  outstanding,  or authorize  the creation  of, any  additional  shares of
Company Stock or any Rights,  (ii) enter into any agreement  with respect to the
foregoing,  or (iii)  permit any  additional  shares of Company  Stock to become
subject to new grants of employee or director  stock  options,  other  Rights or
similar stock-based employee rights. Without limiting the foregoing, the Company
will not issue or agree to issue any shares of Company Stock or Rights under the
Company's 1997 Amended Incentive Stock Option Plan or the Company's 1997 Amended
Employee Stock Purchase Plan other than pursuant to Rights Previously  Disclosed
and outstanding on the date hereof.

          (c) Dividends,  Etc. (i) Make,  declare,  pay or set aside for payment
any dividend,  other than (A) subject to Section 4.03 hereof,  regular quarterly
cash  dividends  on Company  Common  Stock in an amount not to exceed  $0.06 per
share paid with record and payment dates  consistent  with past practice and (B)
dividends from wholly owned  Subsidiaries to the Company or another wholly owned
Subsidiary of the Company, as applicable (in each case having record and payment
dates  consistent with past  practice),  on or in respect of, or declare or make
any  distribution  on any  shares  of its  capital  stock  or (ii)  directly  or
indirectly adjust, split,  combine,  redeem,  reclassify,  purchase or otherwise
acquire, any shares of its capital stock.

          (d)  Compensation;  Employment  Agreements;  Etc.  Enter into,  amend,
modify  or renew  any  written  employment,  consulting,  severance  or  similar
agreements  or  arrangements  with any  directors,  officers,  employees  of, or
independent  contractors  with respect to, the Company or its  Subsidiaries,  or
grant any  salary,  wage or other  increase  or increase  any  employee  benefit
(including  incentive  or bonus  payments),  except  (i) for  normal  individual
increases  in  compensation  to  employees  in the  ordinary  course of business
consistent  with past  practice,  (ii) for other  changes  that are  required by
applicable law, or (iii) to satisfy Previously Disclosed obligations.

          (e) Benefit Plans. Enter into,  establish,  adopt, amend or modify any
pension,  retirement,  stock option,  stock purchase,  savings,  profit sharing,
deferred  compensation,  consulting,  bonus,  group  insurance or other employee
benefit,  incentive  or  welfare  contract,  plan or  arrangement,  or any trust
agreement (or similar arrangement) related thereto, in respect of any directors,
officers,  employees of, or independent contractors with respect to, the Company
or its Subsidiaries, including taking any action that accelerates the vesting or
exercisability of stock options, restricted stock or other


                                      -16-

<PAGE>
compensation or benefits payable  thereunder,  except, in each such case, (i) as
may be  required  by  applicable  law or (ii) to  satisfy  Previously  Disclosed
obligations.

          (f) Dispositions. Except (i) pursuant to Previously Disclosed Investor
Commitments  existing  on the  date  hereof  or  (ii)  as  otherwise  Previously
Disclosed, (A) sell, transfer, mortgage, lease, encumber or otherwise dispose of
or discontinue any material portion of its assets,  business or properties;  (B)
sell,  assign or  otherwise  transfer  any rights to service  loans,  other than
servicing  rights in respect of first  mortgage loans held by the Company or one
of its  Subsidiaries in its warehouse of first mortgage loans  originated by the
Company or one of its  Subsidiaries  (x) on a retail basis or (y) on a wholesale
basis where such  wholesale  loans are jumbo  loans,  adjustable  rate  mortgage
loans, or other wholesale mortgage loans registered with private  investors,  in
each case where such sales are in a manner consistent with past practice; or (C)
except in the ordinary  course of business and in a manner  consistent with past
practice, sell, transfer, lease or encumber any Loans.

          (g)  Acquisitions.  Except (i) (A)  pursuant to  Previously  Disclosed
contractual  obligations  existing  on the  date  hereof,  (B) the  purchase  or
repurchase  of mortgage  loans  and/or loan  servicing  rights,  (C)  short-term
investments  for  cash  management  purposes  (including  transactions  that the
Company may enter into to utilize  escrow  balances),  (D) pursuant to bona fide
hedging transactions, or (E) by way of foreclosures or otherwise in satisfaction
of debts  previously  contracted in good faith, in each case in the ordinary and
usual course of business  consistent  with past practice,  or (ii) as Previously
Disclosed, neither the Company nor any of its Subsidiaries will: (x) acquire any
assets  in  any  one  transaction  or  a  series  of  related  transactions  for
consideration  in excess of  $250,000  or enter  into any  contract,  agreement,
commitment or  arrangement  with respect  thereto;  or (y) acquire any servicing
right in a "bulk" transaction.

          (h) Governing Documents.  Amend the Company  Certificate,  the Company
By-laws or the  certificate of  incorporation  or by-laws (or similar  governing
documents) of any of the Company's Subsidiaries.

          (i)  Accounting  Methods.   Implement  or  adopt  any  change  in  its
accounting  principles,  practices or methods,  other than as may be required by
generally accepted accounting principles.

          (j) Contracts.  Except in the ordinary  course of business  consistent
with past  practice,  enter into or terminate any material  Contract or amend or
modify in any material respect any of its existing material Contracts.



                                      -17-

<PAGE>
          (k) Claims.  Settle any claim,  action or  proceeding,  except for any
claim,  action or  proceeding  involving  solely  money  damages  in an  amount,
individually  or in the  aggregate,  that is not material to the Company and its
Subsidiaries, taken as a whole.

          (l) Adverse Actions.  (i) Take any action reasonably likely to prevent
or impede the Merger from qualifying as a  reorganization  within the meaning of
Section 368 of the Code; or (ii)  knowingly  take any action that is intended or
is reasonably likely to result in (A) any of its  representations and warranties
set forth in this Agreement being or becoming untrue in any material  respect at
any time at or prior to the  Effective  Time,  (B) any of the  conditions to the
Merger set forth in Article VII not being  satisfied or (C) a material breach of
any  provision of this  Agreement;  except,  in each case, as may be required by
applicable law.

          (m) Risk Management;  Loan Policies.  Except as required by applicable
law or  regulation,  to  comply  with  modifications  of rules,  regulations  or
requirements  imposed by any Agency and except  (after prior  consultation  with
Acquiror)  for changes  required by the  Company's  or any of its  subsidiaries'
traditional  conduits for the sale of non- conventional  loans: (i) implement or
adopt any  material  change in its  interest  rate risk  management  and hedging
(which term  includes  buying  futures and forward  commitments  from  financial
institutions)  policies,  procedures  or  practices;  (ii)  fail to  follow  its
existing policies or practices with respect to managing its exposure to interest
rate risk; (iii) fail to use commercially reasonable means to avoid any material
increase in its  aggregate  exposure to interest rate risk against loans held in
the  Company's  pipeline;  or (iv)  materially  alter its methods or policies of
underwriting,  pricing,  originating,  warehousing,  selling and  servicing,  or
buying or selling rights to service loans.

          (n)  Indebtedness.  Incur any  indebtedness  for borrowed  money other
than: (i) indebtedness  used to fund or purchase  mortgage Loans in the ordinary
course  of  business  consistent  with  past  practice;  (ii)  pursuant  to  its
"Warehouse  Line of Credit  Facility"  (i.e.,  the Second  Amended and  Restated
Revolving Credit Agreement,  dated as of January 23, 1996, with a group of banks
headed by The First National Bank of Chicago);  and (iii)  indebtedness  arising
from  repurchase  agreements  with FNMA,  FHLMC and  investment  banks and other
financial  institutions  in the ordinary  course of business and consistent with
past practice.

          (o) Offices. Open any new branch offices, or close any existing branch
office for the retail  origination of mortgage loans,  except for closures where
(i) the term of such lease expires in 1997 and the Company or its Subsidiary has
not  renewed  such  lease,  (ii) the Company or its  Subsidiary  had  previously
planned to close such  branch  office or (iii) such  closure is in the  ordinary
course of business and in a manner consistent with past practice (in the case of
(i) and (ii), as Previously Disclosed).



                                      -18-

<PAGE>

          (p)  Commitments.  Agree  or  commit  to do  anything  that  would  be
precluded  by clauses (a) through (o) without  first  obtaining  the  Acquiror's
consent.

          4.02 Forbearances of the Acquiror. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement,  without the
prior written consent of the Company, the Acquiror will not, and will cause each
of its Subsidiaries not to:

          (a)  Ordinary  Course.  Conduct the  business of the  Acquiror and its
Subsidiaries  other than in the ordinary and usual  course;  provided  that this
Section  4.02(a)  shall in no way affect  the  ability  of the  Acquiror  or its
Subsidiaries  to  engage  in any  business,  asset  or  deposit  acquisition  or
disposition, or merger, consolidation or other business combination transaction.

          (b) Adverse Actions.  (i) Take any action reasonably likely to prevent
or impede the Merger from qualifying as a  reorganization  within the meaning of
Section 368 of the Code; or (ii)  knowingly  take any action that is intended or
is reasonably likely to result in (A) any of its  representations and warranties
set forth in this Agreement being or becoming untrue in any material  respect at
any time at or prior to the  Effective  Time,  (B) any of the  conditions to the
Merger set forth in Article VII not being  satisfied or (C) a material breach of
any  provision of this  Agreement;  except,  in each case, as may be required by
applicable law.

          (c) Dividends,  Etc. Make,  declare,  pay or set aside for payment any
dividend  (other than,  subject to Section 4.03 hereof,  regular  quarterly cash
dividends  on Acquiror  Common  Stock and  dividends  from  Subsidiaries  to the
Acquiror or another Subsidiary of the Acquiror), on or in respect of, or declare
or make any distribution on any shares of its capital stock.

          (d) Governing Documents. Amend the Acquiror Certificate or the by-laws
of  Acquiror  in a manner  that would be  materially  adverse to the  holders of
Acquiror Common Stock.

          (e)  Commitments.  Agree  or  commit  to do  anything  that  would  be
precluded  by clauses  (a) through (d) without  first  obtaining  the  Company's
consent.

          4.03.  Coordination  of  Dividends.  Each of the Company and  Acquiror
shall  coordinate  with the other  regarding the  declaration and payment of any
dividends in respect of the Company  Common Stock and Acquiror  Common Stock and
the record dates and the payment dates relating thereto,  it being the intention
of the Company  and  Acquiror  that  holders of Company  Common  Stock shall not
receive two dividends,  or fail to receive one dividend, for any single calendar
quarter with respect to their shares of Company Common Stock and/or any shares


                                      -19-

<PAGE>
of  Acquiror  Common  Stock that any such holder  receives in exchange  therefor
pursuant to the Merger.


                                    ARTICLE V

                         Representations and Warranties

          5.01 Disclosure Schedules. On or prior to the date hereof, the Company
has  delivered to the  Acquiror and the Acquiror (on behalf of itself,  the Bank
and Merger  Sub) has  delivered  to the  Company a schedule  (respectively,  its
"Disclosure  Schedule") setting forth, among other things,  items the disclosure
of which is necessary or appropriate either in response to an express disclosure
requirement  contained  in a provision  hereof or as an exception to one or more
representations or warranties  contained in Section 5.03 or 5.04,  respectively,
or to one or more of its covenants  contained in Article IV; provided,  that (a)
no such  item  is  required  to be set  forth  in a  Disclosure  Schedule  as an
exception to a representation or warranty if its absence would not result in the
related  representation  or warranty being deemed untrue or incorrect  under the
standard established by Section 5.02, and (b) the mere inclusion of an item in a
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an  admission  by a party  that such item (or any  non-disclosed  item or
information  of  comparable  or  greater  significance)  represents  a  material
exception or fact, event or circumstance or that such item is reasonably  likely
to result in a  Material  Adverse  Effect  with  respect  to the  Company or the
Acquiror, respectively.

          5.02  Standard.  No  representation  or warranty of the Company or the
Acquiror  contained in Section 5.03 or 5.04 shall be deemed untrue or incorrect,
and no party  hereto  shall be  deemed  to have  breached  a  representation  or
warranty,  as a consequence of the existence of any fact,  event or circumstance
unless such fact, event or circumstance, individually or taken together with all
other facts,  events or circumstances  inconsistent  with any  representation or
warranty  contained in Section 5.03 or 5.04 has had or is  reasonably  likely to
have a Material  Adverse  Effect with  respect to the  Company or the  Acquiror,
respectively.

          5.03  Representations  and  Warranties  of  the  Company.  Subject  to
Sections 5.01 and 5.02 and except as Previously  Disclosed in a paragraph of its
Disclosure  Schedule  corresponding to the relevant paragraph below, the Company
hereby represents and warrants to the Acquiror, the Bank and Merger Sub:

          (a)   Organization,   Standing  and   Authority.   The  Company  is  a
corporation,  duly  organized,  validly  existing and in good standing under the
laws of the State of  Delaware,  and is duly  qualified to do business and is in
good  standing  in all the  jurisdictions  where its  ownership  or  leasing  of
property  or  assets  or  the  conduct  of  its  business  requires  it to be so
qualified.


                                      -20-

<PAGE>
          (b) Company Stock. As of the date hereof, the authorized capital stock
of the Company consists solely of (i) 50,000,000 shares of Company Common Stock,
of which  13,986,899  shares  are  outstanding  as of the date  hereof  and (ii)
20,000,000  shares of  Company  Preferred  Stock,  of which  748,179  shares are
outstanding (in the form of Company Convertible  Preferred Stock) as of the date
hereof. As of the date hereof, 2,433,016 shares of Company Common Stock are held
in treasury by the Company and 748,179 shares of Company  Convertible  Preferred
Stock are  otherwise  owned by the  Company or its  Subsidiaries  (collectively,
"Treasury  Stock").  The  outstanding  shares of  Company  Stock  have been duly
authorized and are validly issued and outstanding, fully paid and nonassessable,
and subject to no  preemptive  rights (and were not issued in  violation  of any
preemptive  rights).  As of the date hereof,  other than the Company  Rights and
except as Previously Disclosed in its Disclosure  Schedule,  there are no shares
of Company Stock authorized and reserved for issuance, the Company does not have
any Rights issued or outstanding  with respect to Company Stock, and the Company
does not have any  commitment to  authorize,  issue or sell any Company Stock or
Rights,  except pursuant to this Agreement.  Since May 29, 1997, the Company has
issued no shares of  Company  Stock or Rights or  reserved  any  shares for such
purposes  except  pursuant to Previously  Disclosed  plans or  commitments.  The
number of shares of Company  Stock which are  issuable and reserved for issuance
upon  exercise of Company  Stock  Options as of the date  hereof are  Previously
Disclosed in the Company's Disclosure Schedule.

          (c) Subsidiaries.  (i)(A) The Company has Previously  Disclosed a list
of all its  Subsidiaries  together with the jurisdiction of organization of each
such Subsidiary,  (B) the Company owns,  directly or indirectly,  all the issued
and outstanding  equity  securities of each of its  Subsidiaries,  (C) no equity
securities of any of its  Subsidiaries  are or may become  required to be issued
(other than to it or its Subsidiaries) by reason of any Rights, (D) there are no
contracts,  commitments,  understandings  or  arrangements  by which any of such
Subsidiaries  is or may be  bound  to  sell or  otherwise  transfer  any  equity
securities of any such Subsidiaries (other than to it or its Subsidiaries),  (E)
there are no contracts, commitments, understandings, or arrangements relating to
its  rights to vote or to dispose of such  securities  (other  than to it or its
Subsidiaries), and (F) all the equity securities of each such Subsidiary held by
the Company or its Subsidiaries are fully paid and  nonassessable  and are owned
by the Company or its Subsidiaries free and clear of any Liens.

                  (ii)  The  Company  does  not own  beneficially,  directly  or
         indirectly,  any equity  securities or similar interests of any person,
         or any interest in a partnership  or joint  venture of any kind,  other
         than its Subsidiaries.

                  (iii)  Each  of  the  Company's  Subsidiaries  has  been  duly
         organized and is validly  existing and in good standing  under the laws
         of the  jurisdiction of its  organization,  and is duly qualified to do
         business and in good standing in all the jurisdictions where its


                                      -21-

<PAGE>
         ownership or leasing of property or assets or the conduct of its
         business requires it to be so qualified.

          (d) Corporate  Power. The Company and each of its Subsidiaries has the
corporate  power  and  authority  to carry on its  business  as it is now  being
conducted  and to own all its  properties  and  assets;  and the Company has the
corporate  power and authority to execute,  deliver and perform its  obligations
under this Agreement and to consummate the transactions contemplated hereby.

          (e)  Corporate  Authority.  Subject in the case of this  Agreement  to
adoption of the  agreement of merger set forth in this  Agreement by the holders
of at least a  majority  of the  outstanding  shares  of  Company  Common  Stock
entitled to vote  thereon,  this  Agreement  and the  transactions  contemplated
hereby have been authorized by all requisite corporate action on the part of the
Company.  This  Agreement  is a valid  and  legally  binding  obligation  of the
Company,  enforceable in accordance with its terms (except as enforceability may
be limited by applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
fraudulent  transfer  and similar laws of general  applicability  relating to or
affecting creditors' rights or by general equity principles).

          (f) Regulatory Filings; No Defaults.  (i) No consents or approvals of,
or filings or registrations  with, any Governmental  Authority or with any third
party  are  required  to be  made  or  obtained  by  the  Company  or any of its
Subsidiaries  in connection  with the execution,  delivery or performance by the
Company of this Agreement, or to consummate the Merger except for (A) the filing
of a notice  under the HSR Act,  (B)  filings of  applications  or notices  with
Previously Disclosed mortgage banking licensing or supervisory authorities,  (C)
the filing with the SEC of the Proxy  Statement in definitive  form, and (D) the
filing of a  certificate  of merger with the  Secretary of State of the State of
Delaware  pursuant to the DGCL. As of the date hereof,  the Company is not aware
of any reason why the  approvals of all  Governmental  Authorities  necessary to
permit consummation of the transactions  contemplated by this Agreement will not
be received  without the imposition of a condition or  requirement  described in
Section 7.01(b).

                  (ii)  Subject  to  receipt of the  regulatory  approvals,  and
         expiration  of  the  waiting  periods,  referred  to in  the  preceding
         paragraph  and the making of required  filings  under federal and state
         securities  laws,  the  execution,  delivery  and  performance  of this
         Agreement and the consummation of the transactions  contemplated hereby
         and thereby do not and will not (A)  constitute  a breach or  violation
         of, or a default under,  or give rise to any Lien, any  acceleration of
         remedies or any right of termination under, any law, rule or regulation
         or any judgment,  decree,  order,  governmental  permit or license,  or
         Contract of the Company or of any of its  Subsidiaries  or to which the
         Company or any of its  Subsidiaries  or properties is subject or bound,
         (B)  constitute  a breach or  violation  of, or a  default  under,  the
         Company Certificate or the Company By-laws, or (C) require any


                                      -22-

<PAGE>



         consent or approval  under any such law,  rule,  regulation,  judgment,
         decree, order, governmental permit or license or Contract.

          (g) SEC  Documents;  Financial  Statements.  (i) The Company's  Annual
Reports on Form 10-K for the fiscal  years ended  December  31,  1994,  1995 and
1996,  and  all  other  reports,   registration  statements,   definitive  proxy
statements or information  statements filed or to be filed by the Company or any
of its Subsidiaries subsequent to December 31, 1994 under the Securities Act, or
under Sections 13(a),  13(c), 14 or 15(d) of the Exchange Act, in the form filed
or to be filed (collectively, the "Company's SEC Documents") with the SEC, as of
the date filed, (A) complied or will comply in all material  respects as to form
with the applicable  requirements  under the Securities Act or the Exchange Act,
as the case may be,  and (B) did not (or if amended  or  superseded  by a filing
prior to the date of this  Agreement,  then as of the date of such  filing)  and
will not  contain  any untrue  statement  of a material  fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading;  and each of the balance  sheets  contained  in or  incorporated  by
reference into any such SEC Document  (including the related notes and schedules
thereto) fairly presents,  or will fairly present, the financial position of the
Company  and its  Subsidiaries  as of its date,  and each of the  statements  of
income  and  changes  in  stockholders'  equity  and cash  flows  or  equivalent
statements  in such SEC  Documents  (including  any related  notes and schedules
thereto) fairly  presents,  or will fairly  present,  the results of operations,
changes in  stockholders'  equity and changes in cash flows, as the case may be,
of the Company and its  Subsidiaries  for the periods to which they  relate,  in
each  case  in  accordance  with  generally   accepted   accounting   principles
consistently applied during the periods involved,  except in each case as may be
noted  therein,  subject to normal  year-end  audit  adjustments  in the case of
unaudited statements.

                  (ii) Since  December 31,  1996,  on a  consolidated  basis the
         Company and its Subsidiaries have not incurred any liability other than
         in the ordinary course of business consistent with past practice.

                  (iii)  Since  December  31,  1996,  (A)  the  Company  and its
         Subsidiaries have conducted their respective businesses in the ordinary
         and  usual  course   consistent  with  past  practice   (excluding  the
         incurrence of expenses  related to this Agreement and the  transactions
         contemplated  hereby)  and (B) no event has  occurred  or  circumstance
         arisen  that,  individually  or taken  together  with all other  facts,
         events and circumstances (described in any paragraph of Section 5.03 or
         otherwise), is reasonably likely to have a Material Adverse Effect with
         respect to the Company.

                  (iv)     The Company has Previously Disclosed a list of all
         write-downs of assets of the Company and its Subsidiaries since 
         December 31, 1996, including write-downs of


                                      -23-

<PAGE>



         interest participations, interest-only strips, residual interest strips
         or originated loan servicing rights. To the Company's knowledge,  there
         are no other write-downs that the Company and its Subsidiaries would be
         required to make to ensure that financial statements prepared as of the
         end of the month in which the Effective  Date occurs fairly present the
         financial  condition  of the  Company and its  Subsidiaries  as of such
         date.

          (h) Litigation.  No litigation,  claim or other proceeding  before any
court or  governmental  agency is  pending  against  the  Company  or any of its
Subsidiaries and, to the Company's knowledge, no such litigation, claim or other
proceeding has been threatened.

                  (i)      Compliance with Laws.  The Company and each of its
          Subsidiaries:

                           (i) in the conduct of its business,  is in compliance
                  with  all  applicable   federal,   state,  local  and  foreign
                  statutes,  laws,  regulations,  ordinances,  rules, judgments,
                  orders  or  decrees  applicable  thereto  or to the  employees
                  conducting such businesses, including, without limitation, the
                  Equal Credit  Opportunity  Act, the Fair Housing Act, the Home
                  Mortgage  Disclosure Act and all other applicable fair lending
                  laws  and  other  laws  relating  to  discriminatory  business
                  practices;

                           (ii)  has  all  permits,  licenses,   authorizations,
                  orders  and   approvals   of,   and  has  made  all   filings,
                  applications   and   registrations   with,  all   Governmental
                  Authorities  that are  required in order to permit them to own
                  or lease their  properties and to conduct their  businesses as
                  presently conducted; all such permits, licenses,  certificates
                  of  authority,  orders  and  approvals  are in full  force and
                  effect and,  to the  Company's  knowledge,  no  suspension  or
                  cancellation of any of them is threatened; and

                           (iii) has  received,  since  December  31,  1995,  no
                  notification or communication from any Governmental  Authority
                  (A) asserting that the Company or any of its  Subsidiaries  is
                  not in compliance  with any of the statutes,  regulations,  or
                  ordinances that such  Governmental  Authority  enforces or (B)
                  threatening  to revoke  any  license,  franchise,  permit,  or
                  governmental  authorization (nor, to the Company's  knowledge,
                  do any grounds for any of the foregoing exist).

          (j) Material Contracts; Defaults. The Company has Previously Disclosed
a complete and accurate  list of all material  Contracts to which the Company or
any of its Subsidiaries is a party, including the following categories:

                           (i) any Contract  that (A) is not  terminable at will
                  both without cost or other  liability to the Company or any of
                  its  Subsidiaries  and upon notice of ninety (90) days or less
                  and (B) which provides for fees or other payments in excess of


                                      -24-

<PAGE>
                  $150,000 per annum or in excess of $300,000 for the remaining
                  term of the Contract;

                           (ii) any  Contract  with a term beyond the  Effective
                  Time  under  which  the  Company  or any  of its  Subsidiaries
                  created,  incurred,  assumed,  or  guaranteed  (or may create,
                  incur,  assume, or guarantee)  indebtedness for borrowed money
                  (including capitalized lease obligations);

                           (iii)  any Contract restricting the conduct of 
                  business by the Company or any of its Subsidiaries;

                           (iv) any  Contract to which the Company or any of its
                  Subsidiaries  is a party, on the one hand, and under which any
                  affiliate, officer, director, employee or equity holder of any
                  of the Company or any of its Subsidiaries,  on the other hand,
                  is a party or beneficiary;

                           (v) any  Contract  between  the Company or any of its
                  Subsidiaries  and any insurance  company which has  authorized
                  the  Company  or  any  of its  Subsidiaries  to  act  as  such
                  insurance  company's  representative  in the sale,  placement,
                  writing or administration of insurance;

                           (vi)  any Contract with respect to the employment of,
                  or payment to, any present or former directors, officers, 
                  employees or consultants;

                           (vii) any Contract  involving the purchase or sale of
                  assets with a book value  greater than  $300,000  entered into
                  since December 31, 1996; and

                           (viii) any Contract with respect to a warehouse  line
                  of  credit,  any Loan  Servicing  Agreement  and any  Investor
                  Commitment.

          Neither the Company nor any of its Subsidiaries  nor, to the Company's
knowledge,  any other party  thereto is in default  under any such  Contract and
there has not occurred  any event that,  with the lapse of time or the giving of
notice or both, would constitute such a default.

          (k) Properties. Except as reserved against in the financial statements
filed in its SEC  Documents  on or before the date  hereof,  the Company and its
Subsidiaries  have good and marketable title, free and clear of all Liens (other
than  Liens  for  current  taxes  not  yet  delinquent)  to all of the  material
properties  and assets,  tangible or  intangible,  reflected  in such  financial
statements  as being owned by the Company and its  Subsidiaries  as of the dates
thereof. To the Company's knowledge, all buildings and all fixtures,  equipment,
and other property and assets which are material to its business on a


                                      -25-

<PAGE>



consolidated  basis and are held under leases or subleases by any of the Company
and its  Subsidiaries  are held under valid leases or subleases  enforceable  in
accordance with their respective terms (except as enforceability  may be limited
by applicable bankruptcy, insolvency,  reorganization,  moratorium or other laws
affecting creditors' rights generally and to general equity principles).

          (l) Employee  Benefit  Plans.  (i) The Company's  Disclosure  Schedule
contains a complete list of all bonus, vacation, deferred compensation, pension,
retirement,  profit-sharing,  thrift, savings,  employee stock ownership,  stock
bonus,  stock purchase,  restricted stock,  stock  appreciation and stock option
plans, all employment or severance contracts, all medical,  dental,  disability,
severance,  health and life plans, all other employee benefit and fringe benefit
plans,  contracts  or  arrangements  and any  "change  of  control"  or  similar
provisions in any plan, contract or arrangement  maintained or contributed to by
the  Company or any of its  Subsidiaries  for the  benefit of  officers,  former
officers, employees, former employees, directors, former directors,  independent
contractors  or the  beneficiaries  of any of the foregoing  (collectively,  the
Company's  "Compensation and Benefit Plans").  Neither the Company Board nor any
executive  officers  of the  Company  or any of its  Subsidiaries  has  taken or
initiated any formal action to create any additional  material  Compensation and
Benefit Plan or to modify or change any existing  Compensation  and Benefit Plan
in any material respect.

                  (ii) With respect to each  Compensation  and Benefit  Plan, if
         applicable,  the Company has  provided,  made  available,  or will make
         available  upon  request,  to  Acquiror,  true and  complete  copies of
         existing:  (A)  Compensation  and Benefit Plan documents and amendments
         thereto;  (B) trust instruments and insurance  contracts;  (C) two most
         recent  Forms 5500 filed with the IRS;  (D) the most  recent  actuarial
         report  and  financial  statement;  (E) the most  recent  summary  plan
         description;  (F) forms  filed with the PBGC  (other  than for  premium
         payments);  (G) the most recent determination letter issued by the IRS;
         (H) any Form 5310 or Form  5330  filed  with the IRS;  and (I) the most
         recent  nondiscrimination  tests  performed  under  ERISA  and the Code
         (including 401(k) and 401(m) tests).

                  (iii) Each of the Company's Compensation and Benefit Plans has
         been  administered  in  accordance  with  the  terms  thereof  and with
         applicable  law,  including  ERISA and the Code.  Each of the Company's
         Compensation  and Benefit Plans 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 Code has
         received a favorable  determination letter from the IRS, and, except as
         Previously  Disclosed,  the  Company is not aware of any  circumstances
         reasonably  likely to result  in the  revocation  or denial of any such
         favorable  determination  letter.  Neither  the  Company nor any of its
         Subsidiaries  has  engaged  in a  transaction,  or  omitted to take any
         action,  with respect to any  Compensation  and Benefit Plan that would
         reasonably be expected to


                                      -26-

<PAGE>
         subject  the  Company  or any of its  Subsidiaries  to a tax or penalty
         imposed by either  Section  4975 of the Code or Section 502 of ERISA in
         an amount  which would be  material,  assuming  for purposes of Section
         4975 of the  Code  that the  taxable  period  of any  such  transaction
         expired as of the date hereof. There is no pending or, to the Company's
         knowledge,  threatened litigation or governmental audit, examination or
         investigation relating to the Company's Compensation and Benefit Plans.

                  (iv)  No  liability  under  Title  IV  of  ERISA  (other  than
         contributions and premiums  required in connection  therewith) has been
         or is  reasonably  expected to be incurred by the Company or any of its
         Subsidiaries  with respect to any  "single-employer  plan"  (within the
         meaning  of  Section  4001  (a)(15)  of  ERISA) or  Multiemployer  Plan
         currently or formerly maintained by any of them, or the single-employer
         plan or Multiemployer  Plan of any entity (an "ERISA  Affiliate") which
         currently is or formerly was  considered  one employer with the Company
         under Section 4001(a)(14) of ERISA or Section 414(b) or (c) of the Code
         (an "ERISA Affiliate Plan").

                  (v)  Except  as  Previously   Disclosed,   all  contributions,
         premiums and payments required to have been made under the terms of any
         of the Company's  Compensation and Benefit Plans or applicable law have
         been timely made or reflected in the Company's SEC  Documents.  Neither
         any of the  Company's  Pension  Plans nor ERISA  Affiliate  Plan has an
         "accumulated  funding  deficiency"  (whether or not waived)  within the
         meaning of Section 412 of the Code or Section 302 of ERISA. None of the
         Company,  any of its  Subsidiaries or any ERISA Affiliate has provided,
         or is required to provide, security to, nor are there any circumstances
         requiring imposition of any lien on the assets of the Company or any of
         its  Subsidiaries  with  respect  to,  any  Pension  Plan or any  ERISA
         Affiliate Plan pursuant to ERISA or the Code. The Company's  Disclosure
         Schedule contains a list of all of the Company's ERISA Affiliate Plans.

                  (vi)  Under  each of the  Company's  Pension  Plans  and ERISA
         Affiliate Plans, to the Company's knowledge, there has been no material
         adverse change in the financial  condition of any Pension Plan or ERISA
         Affiliate  Plan (with respect to either  assets or benefits)  since the
         last day of the most recent plan year.

                  (vii) Except as Previously Disclosed,  neither the Company nor
         any of its Subsidiaries has any obligations  under any Compensation and
         Benefit Plan to provide benefits,  including death or medical benefits,
         with   respect   to  any  of  their   employees   (or  their   spouses,
         beneficiaries,   or   dependents)   beyond  the   retirement  or  other
         termination  of service of any such  employee  other than (A)  coverage
         mandated  by Part 6 of Title I of ERISA or  Section  4980B of the Code,
         (B)  retirement or death benefits  under any employee  pension  benefit
         plan (as defined under Section 3(2) of ERISA), (C) disability  benefits
         under any employee  welfare  plan that have been fully  provided for by
         insurance or otherwise, or (D) benefits in the nature of severance pay.


                                      -27-

<PAGE>
                  (viii)  Except as set forth in the  Company's SEC Documents or
         as  Previously  Disclosed,  neither the  execution and delivery of this
         Agreement nor the consummation of the transactions  contemplated hereby
         including,  without  limitation,  as a  result  of any  termination  of
         employment prior to or following the Effective Time, will (A) result in
         any  increase  in  compensation  or  any  payment  (including,  without
         limitation,  severance,  unemployment compensation, golden parachute or
         otherwise)  becoming due to any current or former director,  officer or
         employee  of  the  Company  or  any  of  its  Subsidiaries   under  any
         Compensation  and Benefit Plan or otherwise  from the Company or any of
         its Subsidiaries, (B) increase any benefits otherwise payable under any
         Compensation and Benefit Plan, or (C) result in any acceleration of the
         time of payment or vesting of any such benefit.

                  (ix) The Company and its  Subsidiaries do not maintain any 
         Compensation and Benefit Plans covering foreign Employees who are not 
         residents of the United States.

          (m) Labor Matters.  Neither the Company nor any of its Subsidiaries is
a party to or is bound by any collective  bargaining  Contract or  understanding
with a labor  union  or labor  organization,  nor is the  Company  or any of its
Subsidiaries  the  subject  of a  proceeding  asserting  that  it  or  any  such
Subsidiary  has  committed an unfair labor  practice  (within the meaning of the
National  Labor  Relations  Act) or seeking  to compel  the  Company or any such
Subsidiary to bargain with any labor  organization  as to wages or conditions of
employment,  nor is there any strike or other labor dispute  involving it or any
of its Subsidiaries pending or, to the Company's knowledge,  threatened,  nor is
the  Company  aware of any  activity  involving  it or any of its  Subsidiaries'
employees  seeking to certify a collective  bargaining unit or engaging in other
organizational activity.

          (n)  Takeover  Laws.  The Company has taken all action  required to be
taken by it in order to exempt this Agreement and the transactions  contemplated
hereby from, and this  Agreement and the  transactions  contemplated  hereby are
exempt from, the requirements of any "moratorium," "control share," "fair price"
or other antitakeover laws and regulations of any state (collectively, "Takeover
Laws"), including,  without limitation the State of Delaware,  including Section
203 of the DGCL,  assuming  the  accuracy of the  representations  contained  in
Section 5.04(l) (without giving effect to the knowledge qualification thereof).

          (o) Company  Rights  Agreement.  There has  occurred no  "Distribution
Date" or "Stock  Acquisition Date" (as defined in the Company Rights Agreement).
The Company and the Rights Agent will have, no later than the first business day
after the date hereof, duly and validly amended the Company Rights Agreement, by
executing and delivering an amendment in substantially the form of Exhibit B.



                                      -28-

<PAGE>
          (p)   Environmental   Matters.   (i)  The  Company  and  each  of  its
Subsidiaries has complied at all times with applicable  Environmental Laws; (ii)
no property (including buildings and any other structures) currently or formerly
owned or  operated  by the  Company or any of its  Subsidiaries  or in which the
Company or any of its  Subsidiaries has a Lien, has been  contaminated  with, or
has had any release of, any Hazardous Substance except as Previously  Disclosed;
(iii)  neither the  Company  nor any of its  Subsidiaries  would  reasonably  be
expected to be ruled to be the owner or operator under any  Environmental Law of
any property in which it has currently or formerly held a Lien; (iv) neither the
Company nor any of its  Subsidiaries  is subject to liability  for any Hazardous
Substance  disposal or  contamination  on any other  third-party  property;  (v)
neither the Company nor any of its Subsidiaries has received any notice,  demand
letter, claim or request for information alleging any violation of, or liability
under,  any  Environmental  Law;  (vi)  neither  the  Company  nor  any  of  its
Subsidiaries is subject to any order, decree, injunction or other agreement with
any Governmental Authority or any third party relating to any Environmental Law;
(vii)  the  Company,  which  does not  perform  an  environmental  review of the
mortgaged  property  at the  time  of  Loan  Origination,  is not  aware  of any
circumstances  or conditions  involving the Company or any of its  Subsidiaries,
any currently or formerly  owned or operated  property,  or any Lien held by the
Company  or  any  of its  Subsidiaries  (including  the  presence  of  asbestos,
underground  storage  tanks,  lead  products,  polychlorinated  biphenyls or gas
station  sites)  that would  reasonably  be  expected  to result in any  claims,
liability or investigations or result in any restrictions on the ownership, use,
or transfer of any property  pursuant to any  Environmental  Law; and (viii) the
Company has  delivered  to the  Acquiror  copies of all  environmental  reports,
studies,  sampling  data,   correspondence,   filings  and  other  environmental
information  in its  possession  or  reasonably  available to it relating to the
Company,  any of its  Subsidiaries,  any currently or formerly owned or operated
property or any  property in which the  Company or any of its  Subsidiaries  has
held a Lien.

          (q) Tax Matters. (i) All returns,  declarations,  reports,  estimates,
information  returns  and  statements  required  to be  filed on or  before  the
Effective  Date  under  federal,  state,  local or any  foreign  tax laws  ("Tax
Returns") with respect to the Company or any of its  Subsidiaries,  have been or
will be timely filed, or requests for extensions have been timely filed and have
not  expired;  (ii)  all Tax  Returns  filed by the  Company  are  complete  and
accurate; (iii) all Taxes shown to be due and payable (without regard to whether
such Taxes have been  assessed)  on such Tax Returns  have been paid or adequate
reserves have been  established for the payment of such Taxes; and (iv) no audit
or  examination or refund  litigation  with respect to any Tax Return is pending
or, to the Company's knowledge, has been threatened.

          (r) Risk  Management.  All swaps,  caps,  floors,  option  agreements,
futures and forward  contracts and other similar risk  management  arrangements,
whether entered into for the Company's own account, or for the account of one or
more of the Company's


                                      -29-

<PAGE>
Subsidiaries  or their  customers,  were  entered  into (i) in  accordance  with
prudent  business  practices and all applicable  laws,  rules,  regulations  and
regulatory  policies  and (ii) with  counterparties  believed to be  financially
responsible  at the time;  and each of them  constitutes  the valid and  legally
binding  obligation of the Company or one of its  Subsidiaries,  enforceable  in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium,  fraudulent  transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles),  and are in full force and effect. Neither the
Company nor its  Subsidiaries,  nor to the  Company's  knowledge any other party
thereto,  is in breach of any of its  obligations  under any such  agreement  or
arrangement.

          (s) Names and Trademarks. The Company (or one of its Subsidiaries) has
the right to use the names, service-marks and trademarks Previously Disclosed in
Section  5.03(s) of its  Disclosure  Letter in each state of the United  States,
free and clear of any Liens,  and no other person has the right to use such name
in any such state.

          (t) Mortgage Banking Business.  (i) Licenses and  Qualifications.  The
Company (or any Subsidiary of it that services or originates  Loans, as the case
may be) (A) is an approved (1) HUD mortgagee and servicer for FHA-insured loans,
(2)  lender  and  servicer  for  VA-insured   loans,  (3)   seller/servicer   of
one-to-four-family  first and second  mortgages  for FNMA and FHLMC and (4) GNMA
issuer and servicer of GNMA- guaranteed mortgage-backed  securities, (B) has all
other  certifications,  authorizations,  licenses,  permits and other  approvals
necessary to conduct its current  business,  (C) is in good  standing  under all
applicable federal,  state and local laws and regulations thereunder as a lender
and servicer and (D) is in good standing with all  authorities and servicers for
the state bond programs in which it participates.  As of the date hereof,  there
is no  pending  or,  to the  Company's  knowledge,  threatened  cancellation  or
reduction of any Investor  Commitment  or other loan sale  Contract to which the
Company  or any of its  Subsidiaries  is a  party,  and the  obligations  of the
Company  and  each of its  Subsidiaries  under  each  such  Contract  are  being
performed by the Company or such  Subsidiary,  as the case may be, in accordance
with its  terms.  The  Company  has no reason to believe  that the  underwriting
waivers from FNMA and FHLMC, under current agreements with the Company,  will be
restricted  or rescinded,  or that the guarantee  fees payable to FNMA and FHLMC
will be  increased  as a result of the  Company's  or its  Subsidiaries'  credit
performance,  or that  the  Company  or its  Subsidiaries  will  suffer a forced
reduction of the master commitment amount relating to FNMA or FHLMC purchases or
swaps of loans, nor has any such restriction,  rescission, increase or reduction
occurred at any time since December 31, 1995.

                  (ii) Title to Loans. All loans held for the Company's account,
         whether  or not  for  future  sale  or  delivery  to an  investor  (the
         "Warehouse  Loans"),  are  owned by the  Company  free and clear of any
         Lien, other than Liens in favor of the Company's lender


                                      -30-

<PAGE>
         banks   pursuant  to  warehouse   lines  of  credit  and  forward  sale
         commitments  or similar  agreements to sell any such loans to investors
         in the ordinary  course,  and all Warehouse Loans meet all requirements
         for sale to the  intended  investors.  Each  mortgage  or deed of trust
         securing a  Warehouse  Loan has been duly  recorded  or  submitted  for
         recordation in due course in the appropriate  filing office in the name
         of the Company or one of its  Subsidiaries  as  mortgagee.  Neither the
         Company nor any of its  Subsidiaries  has released any security for any
         Warehouse  Loan,  except upon receipt of reasonable  consideration  for
         such release (as documented in the applicable  Loan file),  or accepted
         prepayment  of any such  Warehouse  Loan  which  has not been  promptly
         applied to such Warehouse Loan.

                  (iii)  Compliance.  Each Warehouse Loan and each loan which is
         being  serviced  by the  Company  or one of its  Subsidiaries  for  the
         account  of  others  (the  "Serviced  Loans",  and  together  with  the
         Warehouse Loans, the "Loans") was underwritten and originated,  and the
         loan  documents  and  loan  files  maintained  by  the  Company  or its
         Subsidiaries  with respect thereto are being  maintained by the Company
         or such  Subsidiaries,  in  compliance  with  all  applicable  laws and
         regulations  and,  if  applicable,  the  requirements  of the  Investor
         acquiring  such Loan (or, if there is no such  Investor,  in accordance
         with the  Company's  underwriting  standards  then in  effect)  and the
         requirements  of each  Insurer  of such  Loan  (if any) in  effect  and
         applicable at the time such insurance was obtained. The Company and its
         Subsidiaries  have not done or  failed  to do,  or caused to be done or
         omitted  to be done,  any act,  the  effect of which  would  operate to
         invalidate or materially  impair (i) any approvals of any Agency or the
         FHA  to  insure,  (ii)  any VA  guarantee  or  commitment  of the VA to
         guarantee,  (iii) any private  mortgage  insurance or commitment of any
         private  mortgage insurer to insure,  (iv) any title insurance  policy,
         (v) any hazard insurance policy, (vi) any flood insurance policy, (vii)
         any fidelity  bond,  direct surety bond,  errors and omissions or other
         insurance  policy required by any Agency,  Investor or Insurer,  (viii)
         any surety or guaranty  agreement,  (ix) any  guaranty  issued by GNMA,
         FNMA or  FHLMC to the  Company  or any of its  Subsidiaries  respecting
         mortgage  backed  securities  issued  by  the  Company  or  any  of its
         Subsidiaries and other like guarantees or (x) the rights of the Company
         or any of its  Subsidiaries  under  any  Loan  Servicing  Agreement  or
         Investor  Commitment.  No Agency,  Investor  or Insurer has (i) claimed
         that the Company or any of its  Subsidiaries  have violated or have not
         complied  on  a  recurring  basis  with  the  applicable   underwriting
         standards  with  respect  to Loans  sold by the  Company  or any of its
         Subsidiaries  to an  Investor  or  (ii)  imposed  restrictions  on  the
         activities  (including  commitment  authority) of the Company or any of
         its Subsidiaries.

                  (iv)  Loan  Files.  The  loan  documents  relating  to a  Loan
         maintained in the loan files of the Company and its  Subsidiaries  were
         in compliance  with all applicable  laws and regulations at the time of
         the  origination,  assumption or modification of such Loan, as the case
         may be. The loan files  maintained by the Company and its  Subsidiaries
         contain  originals  (or,  where   necessitated  by  the  terms  of  the
         applicable mortgage servicing


                                      -31-

<PAGE>
         agreements, contain true, correct and complete copies) of the documents
         relating to each Loan and the information  contained in such loan files
         with  respect to each such Loan is true,  complete  and accurate and in
         compliance  with all  applicable  laws and  regulations.  Except as set
         forth in the loan documents  relating to a Loan  maintained in the loan
         files of the Company or its Subsidiaries,  the terms of the note, bond,
         deed of trust and mortgage  for each such Loan have not been  impaired,
         waived,  altered  or  modified  in any  respect  from the date of their
         origination except by a written instrument which written instrument has
         been  recorded,   or  submitted  for  recordation  in  due  course,  if
         recordation is necessary to protect the interests of the owner thereof.
         The substance of any such waiver,  alteration or modification  has been
         communicated  to and approved by (A) the relevant  Investor and Insurer
         (if any), to the extent  required by the relevant  Investor and Insurer
         requirements,  and (B) the title Insurer, to the extent required by the
         relevant  policies,  and the terms of any such  waiver,  alteration  or
         modification  are reflected in the loan documents.  Except as set forth
         in the loan  documents  maintained  in the loan files by the Company or
         its Subsidiaries,  no mortgagor has been released from such mortgagor's
         obligations with respect to the applicable Loan.

                  (v) Loan Servicing  Agreements.  All of the Contracts pursuant
         to which the Company or any of its  Subsidiaries  has the right  and/or
         obligation to service loans (each, a "Loan  Servicing  Agreement")  are
         (A) valid and binding  obligations  of the Company or such  Subsidiary,
         and to the knowledge of the Company,  of all the other parties thereto,
         (B) in full force and effect,  (C) enforceable in accordance with their
         terms (except where  enforcement  thereof may be limited by bankruptcy,
         insolvency  or  other  similar  laws   affecting  the   enforcement  of
         creditors'  rights generally and by general equity  principles) and (D)
         owned by the  Company  or such  Subsidiary  free and clear of any Lien,
         except  pursuant  to  the  loan  and  security  agreements   Previously
         Disclosed in the Company's Disclosure Schedule.  There is no default by
         the Company or any of its  Subsidiaries or claim of default against the
         Company  or any of its  Subsidiaries  by any party  under any such Loan
         Servicing   Agreement,   and,  except  for  the   consummation  of  the
         transactions  contemplated  by this  Agreement,  no event has  occurred
         which  with the  passage  of time or the giving of notice or both would
         constitute  a  default  by any  party  under  any such  Loan  Servicing
         Agreement  or would  result in any such  mortgage  servicing  agreement
         being  terminable by any party thereto.  There is no pending or, to the
         knowledge of the Company, threatened cancellation of any Loan Servicing
         Agreement and the obligations of the Company or any of its Subsidiaries
         under each Loan Servicing  Agreement are being performed by the Company
         or such  Subsidiary in accordance  with the terms of such Agreement and
         applicable  rules or regulations.  The Company and its Subsidiaries are
         not subservicers with respect to any of the Serviced Loans.

                  (vi)     No Recourse.  None of the Company's or any of its
         Subsidiaries' servicing rights are subject to recourse against the 
         servicer, and none of the Company or any of its Subsidiaries is subject
         to recourse in connection with any Loans sold by it, in each case


                                      -32-

<PAGE>
         for losses on  liquidation of a loan,  borrower  defaults or repurchase
         obligations  upon the occurrence of non-payment or other events,  other
         than  events  entitling  Investors  to request a  repurchase  of a loan
         because of alleged breaches of customary representations and warranties
         relating to the origination or servicing thereof.

                  (vii) Escrow Account. Unless otherwise prohibited by law or an
         executed  escrow waiver,  the Company or its  Subsidiaries  collect all
         escrows  related  to the  Loans,  and all  escrow  accounts  have  been
         maintained  by the  Company,  its  Subsidiaries  and, to the  Company's
         knowledge,  all prior  servicers  in  accordance  with the related loan
         documents, all applicable laws, rules, regulations, and requirements of
         Investors,  Insurers and  Governmental  Authorities,  and in accordance
         with the applicable Loan Servicing Agreements. The Company has credited
         to the account of  borrowers  all  interest  required to be paid on any
         escrow account in accordance  with applicable law and the terms of such
         agreements  and loan  documents.  All escrow,  custodial,  and suspense
         accounts   related  to  the  Loans  are  held  in  the   Company's  (or
         Subsidiary's) name or the investor's name by the Company.

                  (viii) Advances.  There are no servicing or other Contracts to
         which the Company or any of its Subsidiaries is a party which obligates
         any of them to make  servicing  advances  for  principal  and  interest
         payments with respect to defaulted or delinquent  Loans other than in a
         manner as provided  in standard  and  customary  agreements  with FNMA,
         FHLMC or GNMA.  To the extent  made,  any such  advances  are valid and
         subsisting amounts owing to the Company or its Subsidiary,  as the case
         may  be,  subject  to  the  terms  of  the  applicable  Loan  Servicing
         Agreement.

                  (ix)  Single  Family  Loans.  All of the Loans are  secured by
         single family (i.e., one to four family)  residential real property or,
         to the extent  that a Loan is secured by  property  other than a single
         family residential property,  such Loan is not a Warehouse Loan and has
         not been sold to any  person  where  either  the  Company or any of its
         Subsidiaries has any recourse obligation.

                  (x) ARM  Adjustments.  With respect to each Loan for which the
         interest rate is not fixed for the entire term of the loan, the Company
         or its  Subsidiaries,  as the  case  may be,  has,  since  the  date it
         commenced  servicing  such loan and, to the  Company's  knowledge,  all
         prior  servicers  have (A)  properly  and  accurately  entered into its
         system all data  required  to service the loan in  accordance  with the
         related loan documents and all regulations, (B) properly and accurately
         adjusted  the monthly  payment on each  payment  adjustment  date,  (C)
         properly and accurately  calculated the  amortization  of principal and
         interest on each payment  adjustment  date,  in each case in compliance
         with all applicable  laws,  rules and  regulations and the related loan
         documents, and (D) executed and delivered any and all necessary notices
         required under, and in a form that complies with,


                                      -33-

<PAGE>
         all applicable laws, rules and regulations and the terms of the related
         loan documents regarding the interest rate and payment adjustments.

                  (xi) Pools. Each Loan included in a Pool meets all eligibility
         requirements   (including,    without   limitation,    all   applicable
         requirements  for obtaining  mortgage  insurance  certificates and loan
         guaranty  certificates)  for inclusion in such Pool.  All of such Pools
         have been finally certified or, if required,  recertified in accordance
         with all applicable laws, rules and regulations,  except where the time
         for  certification or  recertification  has not expired.  No Pools have
         been  improperly  certified.  The loan file for each Loan included in a
         Pool  contains all documents  and  instruments  necessary for the final
         certification or  recertification of such Pool. No Loan has been bought
         out of a Pool  without all  required  prior  written  approvals  of the
         applicable Investors. Neither the execution, delivery or performance of
         this  Agreement by the Company nor the  consummation  by the Company of
         the  transactions  contemplated  hereby  will  require  any  Pool to be
         recertified.  The aggregate unpaid principal balance outstanding of the
         Loans in each Pool equals or exceeds the amount owing to the applicable
         Investors.

                  (xii)    Securitization Transactions.

                           (A) The  Company  and  each of its  Subsidiaries,  as
                  servicer under the applicable Loan Servicing  Agreement,  (the
                  "Securitization  Servicer")  of each  outstanding  transaction
                  under which the Company or any of its  Subsidiaries  have sold
                  or pledged Loans in a  securitization,  whether sold under the
                  Securities Act or otherwise (a "Securitization  Transaction"),
                  has  complied in all  material  respects  with all  Contracts,
                  including the Loan Servicing Agreements, and all conditions to
                  be performed or satisfied by it with respect to all agreements
                  and arrangements  pursuant to which such person is bound under
                  such Securitization Transaction (collectively, "Securitization
                  Instruments").

                           (B) No  Securitization  Servicer or, to the Company's
                  knowledge,   no  trustee  or  issuer   with   respect  to  any
                  Securitization  has taken any action which would reasonably be
                  expected  to  adversely  affect  the  characterization  or tax
                  treatment for federal,  state or local income or franchise tax
                  purposes  of  the  issuer  or  any  securities   issued  in  a
                  Securitization  Transaction,  and all required federal,  state
                  and  local  tax  and  information   returns  relating  to  any
                  Securitization Transaction have been properly filed.

                           (C)  Each  representation  and  warranty  made by the
                  Company  or  any  of  its   Subsidiaries   in  each  "Purchase
                  Agreement,"  "Pooling  and  Servicing  Agreement,"  "Placement
                  Agency Agreement," "Servicer's  Indemnification Agreement" and
                  any other Securitization Instrument to which any of them was a
                  party in any  Securitization  Transaction was true and correct
                  in all material


                                      -34-

<PAGE>
                  respects  whenever  made or  reaffirmed by any of them and the
                  Company and each of its Subsidiaries have each fully performed
                  and carried out each  covenant  and  agreement  made by any of
                  them in any such Securitization Instrument.

                           (D) No rating  agency  has  downgraded,  or given the
                  Company or any of its  Subsidiaries  any indication that it is
                  considering  a  downgrading  of any  securities  issued in any
                  Securitization   Transaction,   or  of  its   rating   of  any
                  Securitization Servicer.

                  (xiii) Mortgage Insurance. Each Loan which is indicated in the
         related  loan  documents  to have FHA  insurance  is insured  under the
         National  Housing Act or qualifies for such insurance.  Each Loan which
         is indicated in the related loan  documents to be  guaranteed by the VA
         is  guaranteed  under the  provisions  of Chapter 37 of Title 38 of the
         United States Code to the extent required by the applicable Investor or
         qualifies for such  guarantee.  As to each FHA  insurance  certificate,
         each VA guarantee certificate,  and each Loan which is indicated in the
         related  loan file to be  insured by private  mortgage  insurance,  the
         Company has complied  with  applicable  provisions  of the insurance or
         guarantee  contract and applicable laws and regulations,  the insurance
         or  guarantee  is in full  force and effect  with  respect to each such
         Loan,  and to the  knowledge of the  Company,  there does not exist any
         event or condition  which, but for the passage of time or the giving of
         notice or both,  can result in a  revocation  of any such  insurance or
         guarantee or constitute  adequate grounds for the applicable Insurer to
         refuse to provide insurance or guarantee payments thereunder.

                  (xiv)  Taxes and  Insurance.  Each Loan has been  covered by a
         policy of hazard insurance and flood insurance,  to the extent required
         by the Loan Servicing  Agreements  relating thereto or any laws, rules,
         regulations  or Investor  or Insurer  requirements  applicable  to such
         Loan, all in a form usual and customary in the industry and which is in
         full force and  effect,  and all  amounts  due and  payable  under each
         policy have been,  or will be, paid prior to the date such payments are
         due;  and all  taxes,  assessments,  ground  rents or other  applicable
         charges or fees due and payable as to each Loan have been,  or will be,
         paid prior to the date such  payments are due. Any and all claims under
         such insurance policies have been submitted and processed in accordance
         with  the  applicable  Investor's  and  Insurer's  requirements.   Such
         insurance  policies  name the Company (or a  Subsidiary  of it) and its
         successors and assigns as mortgagee.

                  (xv) Title Insurance. To the extent required by the applicable
         Investor,  each Loan is covered  by an ALTA  lender's  title  insurance
         policy  or other  generally  acceptable  form of  policy  of  insurance
         acceptable  to the  relevant  Investor,  and each such title  insurance
         policy is issued by an Insurer  acceptable to the  applicable  Investor
         and qualified to do business in the  jurisdiction  where the collateral
         securing  such Loan is  located,  and insures  the  originator  and its
         successors and assigns as to the first priority lien of the


                                      -35-

<PAGE>
         mortgage in the original  principal amount of the Loan (or, in the case
         of a  second  mortgage,  the  second  priority  lien).  The  applicable
         Investor, as assignee of the originator's rights, is an insured of such
         lender's title  insurance  policy,  and such lender's policy is in full
         force and effect.  Neither the Company nor, to the Company's knowledge,
         any prior servicer has performed any act or omission which would impair
         the coverage of such lender's policy.

                  (xvi)  Condemnation.  The  Company has no notice of and has no
         knowledge of any  proceeding  pending or threatened  for the partial or
         total condemnation of any of the collateral  securing any of the Loans,
         and the Company has no notice or knowledge that all or any part of such
         collateral has been or will be condemned.

                  (xvii)  Tape.  The Company  has  previously  delivered  to the
         Acquiror a tape (magnetic media) on which certain information regarding
         the servicing  portfolio of the Company and its  Subsidiaries as of May
         31, 1997 is recorded.  Such tape completely and accurately contains the
         list of  serviced  loans  as of such  date.  The  loan  characteristics
         recorded  on  such  tape  have  been  Previously  Disclosed,   and  the
         information contained on such tape is complete and accurate.

                  (u) Books and  Records.  The books and  records of the Company
         and  its  Subsidiaries   have  been  fully,   properly  and  accurately
         maintained  in  all  material  respects,  and  there  are  no  material
         inaccuracies  or  discrepancies  of any  kind  contained  or  reflected
         therein,  and they fairly present the financial position of the Company
         and its Subsidiaries.  None of the records, systems,  controls, data or
         information of the Company and its Subsidiaries  are recorded,  stored,
         maintained, operated or otherwise wholly or partly dependent on or held
         by any means  (including  any  electronic,  mechanical or  photographic
         process,  whether  computerized  or not) which  (including all means of
         access thereto and therefrom) are not under the exclusive ownership and
         direct  control  of the  Company  or its  Subsidiaries  or  accountants
         retained by the Company or its Subsidiaries.

                  (v) Insurance.  The Company's  Disclosure  Schedule sets forth
         all of the  insurance  policies,  binders,  or bonds  maintained by the
         Company or its Subsidiaries ("Insurance Policies"). The Company and its
         Subsidiaries are insured with reputable insurers against such risks and
         in  such  amounts  as the  management  of the  Company  reasonably  has
         determined to be prudent in accordance with industry practices.  All of
         the  Insurance  Policies are in full force and effect;  the Company and
         its Subsidiaries are not in material default thereunder; and all claims
         thereunder have been filed in due and timely fashion.

                  (w)  No Brokers.  No action has been taken by the Company
         that would give  rise to any valid claim against any party hereto for a
         brokerage commission, finder's fee or other like payment with respect 
         to the transactions contemplated by this Agreement,


                                      -36-

<PAGE>
         excluding a fee to be paid by the Company to Morgan Stanley & Co. 
         Incorporated in an amount and on terms Previously Disclosed.

                  (x) Ownership of Acquiror Common Stock. As of the date hereof,
         neither the Company nor, to its  knowledge,  any of its  affiliates  or
         associates  (as such  terms are  defined  under the  Exchange  Act) (i)
         beneficially  owns,  directly  or  indirectly,  or (ii) is party to any
         agreement,  arrangement or understanding  for the purpose of acquiring,
         holding,  voting or disposing of, in each case, any outstanding  shares
         of  Acquiror  Common  Stock  (other  than  shares  held in a bona  fide
         fiduciary  capacity or in satisfaction of a debt previously  contracted
         in good faith).

                  (y) Disclosure.  The representations and warranties  contained
         in this Section 5.03 do not contain any untrue  statement of a material
         fact or omit to state any material fact  necessary in order to make the
         statements  contained  in  this  Section  5.03,  in  the  light  of the
         circumstances in which they are being made, not misleading.  The copies
         of all  documents  furnished to the  Acquiror,  the Bank and Merger Sub
         hereunder are true and complete copies of the originals thereof.

                  5.04  Representations and Warranties of the Acquiror.  Subject
to Sections 5.01 and 5.02 and except as  Previously  Disclosed in a paragraph of
its Disclosure  Schedule  corresponding  to the relevant  paragraph  below,  the
Acquiror hereby represents and warrants to the Company as follows:

          (a) Organization,  Standing and Authority.  Each of the Acquiror,  the
Bank and Merger Sub is duly  organized,  validly  existing and in good  standing
under  the  laws  of the  jurisdiction  of its  organization,  and  each is duly
qualified to do business and is in good standing in the jurisdictions  where its
ownership  or  leasing of  property  or assets or the  conduct  of its  business
requires it to be so qualified.

          (b) Acquiror Stock. (i) As of the date hereof,  the authorized capital
stock of the Acquiror  consists solely of 200,000,000  shares of Acquiror Common
Stock,  of which  103,726,095  shares were  outstanding  as of May 31, 1997, and
40,000,000  shares  of  Acquiror   Preferred  Stock,  of  which  no  shares  are
outstanding  as of the  date  hereof.  As of the  date  hereof,  other  than the
Acquiror Rights and except as set forth in its Disclosure Schedule, there are no
shares of Acquiror Stock authorized and reserved for issuance, the Acquiror does
not have any Rights issued or outstanding  with respect to Acquiror  Stock,  and
the  Acquiror  does not  have any  commitment  to  authorize,  issue or sell any
Acquiror  Stock or Rights,  except  pursuant  to this  Agreement.  The number of
shares of Acquiror  Common  Stock which are  issuable  and reserved for issuance
upon exercise of any employee or director  stock  options to purchase  shares of
Acquiror  Common Stock,  and the number and terms of any Rights,  as of the date
hereof, are Previously Disclosed in the Acquiror's Disclosure Schedule.


                                      -37-

<PAGE>
                  (ii) The  shares  of  Acquiror  Common  Stock to be  issued as
         Consideration,  when  issued  in  accordance  with  the  terms  of this
         Agreement,  will be duly  authorized,  validly  issued,  fully paid and
         nonassessable.

          (c) Subsidiaries.  Each of the Acquiror's Significant Subsidiaries has
been duly organized and is validly  existing and in good standing under the laws
of the  jurisdiction of its  organization,  and is duly qualified to do business
and in good  standing in the  jurisdictions  where its  ownership  or leasing of
property or the conduct of its business requires it to be so qualified.

          (d)  Corporate  Power.  The  Acquiror  and  each  of  its  Significant
Subsidiaries  has the corporate  power and authority to carry on its business as
it is now being conducted and to own all its properties and assets;  each of the
Acquiror and the Bank has the corporate power and authority to execute,  deliver
and  perform  its  obligations  under  this  Agreement  and  to  consummate  the
transactions  contemplated  hereby;  and Merger Sub has the corporate  power and
authority to execute,  deliver and perform its obligations  under this Agreement
and  to  consummate  the  transactions  contemplated  hereby.  

          (e)  Corporate   Authority.   This  Agreement  and  the   transactions
contemplated  hereby have been authorized by all requisite  corporate  action on
the part of  Acquiror,  the Bank and Merger Sub.  This  Agreement is a valid and
legally binding  agreement of each of the Acquiror,  the Bank and Merger Sub, in
each case enforceable in accordance with its terms (except as enforceability may
be limited by applicable  bankruptcy,  insolvency,  reorganization,  moratorium,
fraudulent  transfer  and similar laws of general  applicability  relating to or
affecting creditors' rights or by general equity principles).

          (f) Regulatory  Approvals;  No Defaults.  (i) No consents or approvals
of, or filings or  registrations  with, any  Governmental  Authority or with any
third party are  required  to be made or obtained by the  Acquiror or any of its
Subsidiaries  in connection  with the execution,  delivery or performance by the
Acquiror,  the Bank or Merger Sub of this  Agreement or to consummate the Merger
except  for (A) the  filing  of a notice  under the HSR Act,  (B) the  filing of
applications and notices, as applicable, with the OTS and the FDIC; (C) approval
of the  listing  on the NYSE of the  Acquiror  Common  Stock to be issued in the
Merger  (and  related  Acquiror  Rights);  (D) the  filing  and  declaration  of
effectiveness of the Registration Statement;  (E) the filing of a certificate of
merger  with the  Secretary  of State of the State of  Delaware  pursuant to the
DGCL;  and (F) such  filings  as are  required  to be made or  approvals  as are
required  to be  obtained  under the  securities  or "Blue  Sky" laws of various
states in connection  with the issuance of Acquiror  Common Stock in the Merger.
As of the date hereof, the Acquiror is not aware of any reason why the approvals
of  all  Governmental  Authorities  necessary  to  permit  consummation  of  the
transactions  contemplated hereby will not be received without the imposition of
a condition or requirement described in Section 7.01(b).


                                      -38-

<PAGE>
                           (ii) Subject to receipt of the regulatory  approvals,
         and  expiration  of the waiting  periods,  referred to in the preceding
         paragraph  and the making of all  required  filings  under  federal and
         state securities laws, the execution,  delivery and performance of this
         Agreement and the consummation of the transactions  contemplated hereby
         do not and will not (A)  constitute  a breach  or  violation  of,  or a
         default under,  or give rise to any Lien, any  acceleration of remedies
         or any right of termination  under,  any law, rule or regulation or any
         judgment, decree, order, governmental permit or license, or Contract of
         the Acquiror or of any of its  Subsidiaries or to which the Acquiror or
         any  of its  Subsidiaries  or  properties  is  subject  or  bound,  (B)
         constitute  a  breach  or  violation  of,  or  a  default  under,   the
         certificate  of   incorporation   or  by-laws  (or  similar   governing
         documents) of the Acquiror or any of its  Subsidiaries,  or (C) require
         any consent or approval under any such law, rule, regulation, judgment,
         decree, order, governmental permit or license, agreement,  indenture or
         instrument.

          (g) SEC Documents;  Financial  Statements.  (i) The Acquiror's  Annual
Reports on Form 10-K for the fiscal  years ended  December  31,  1994,  1995 and
1996,  and  all  other  reports,   registration  statements,   definitive  proxy
statements or information statements filed or to be filed by the Acquiror or any
of its Subsidiaries subsequent to December 31, 1994 under the Securities Act, or
under Sections 13(a),  13(c), 14 or 15(d) of the Exchange Act, in the form filed
or to be filed  (collectively,  the "Acquiror's SEC Documents") with the SEC, as
of the date filed,  (A) complied or will comply in all  material  respects as to
form with the applicable  requirements  under the Securities Act or the Exchange
Act,  as the case may be,  and (B) did not (or if  amended  or  superseded  by a
filing prior to the date of this Agreement,  then as of the date of such filing)
and will not contain any untrue  statement of a material fact or omit to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading;  and each of the balance  sheets  contained  in or  incorporated  by
reference into any such SEC Document  (including the related notes and schedules
thereto) fairly presents,  or will fairly present, the financial position of the
Acquiror and its  Subsidiaries  as of its date,  and each of the  statements  of
income  and  changes  in  stockholders'  equity  and cash  flows  or  equivalent
statements  in such SEC  Documents  (including  any related  notes and schedules
thereto) fairly  presents,  or will fairly  present,  the results of operations,
changes in  stockholders'  equity and changes in cash flows, as the case may be,
of the Acquiror and its  Subsidiaries  for the periods to which they relate,  in
each  case  in  accordance  with  generally   accepted   accounting   principles
consistently applied during the periods involved,  except in each case as may be
noted  therein,  subject to normal  year-end  audit  adjustments  in the case of
unaudited statements.

                  (ii) Since  December 31,  1996,  on a  consolidated  basis the
         Acquiror and its  Subsidiaries  have not incurred any  liability  other
         than in the ordinary course of business consistent with past practice.


                                      -39-

<PAGE>



                  (iii)  Since  December  31,  1996,  no event has  occurred  or
         circumstance arisen that, individually or taken together with all other
         facts,  circumstances and events (described in any paragraph of Section
         5.04 or  otherwise),  is reasonably  likely to have a Material  Adverse
         Effect with respect to the Acquiror.

          (h) Litigation;  Regulatory Action. (i) Other than as set forth in its
SEC Documents filed on or before the date hereof, no litigation,  claim or other
proceeding before any Governmental  Authority is pending against the Acquiror or
any of its Subsidiaries  and, to the Acquiror's  knowledge,  no such litigation,
claim or other proceeding has been threatened.

                  (ii)  Neither  the  Acquiror  nor any of its  Subsidiaries  or
         properties is a party to or is subject to any order, decree, agreement,
         memorandum  of  understanding  or  similar   arrangement   with,  or  a
         commitment   letter  or  similar   submission   to,  or   extraordinary
         supervisory  letter from the FDIC or the OTS,  nor has the  Acquiror or
         any of its  Subsidiaries  been advised by the FDIC or the OTS that such
         agency is  contemplating  issuing or requesting (or is considering  the
         appropriateness  of  issuing or  requesting)  any such  order,  decree,
         agreement, memorandum of understanding,  commitment letter, supervisory
         letter or similar submission.

                  (i)      Compliance with Laws.  The Acquiror and each of its 
                  Subsidiaries:

                           (i) in the conduct of its business,  is in compliance
                  with  all  applicable   federal,   state,  local  and  foreign
                  statutes,  laws,  regulations,  ordinances,  rules, judgments,
                  orders  or  decrees  applicable  thereto  or to the  employees
                  conducting such businesses, including, without limitation, the
                  Equal  Credit  Opportunity  Act,  the Fair  Housing  Act,  the
                  Community  Reinvestment Act, the Home Mortgage  Disclosure Act
                  and all other  applicable  fair  lending  laws and other  laws
                  relating to discriminatory business practices;

                           (ii)  has  all  permits,  licenses,   authorizations,
                  orders  and   approvals   of,   and  has  made  all   filings,
                  applications   and   registrations   with,  all   Governmental
                  Authorities  that are  required  in order  to  permit  them to
                  conduct their businesses substantially as presently conducted;
                  all such permits, licenses,  certificates of authority, orders
                  and approvals are in full force and effect and, to the best of
                  its knowledge, no suspension or cancellation of any of them is
                  threatened; and

                           (iii) has  received,  since  December  31,  1995,  no
                  notification or communication from any Governmental  Authority
                  (A) asserting that the Acquiror or any of its  Subsidiaries is
                  not in  compliance  with any of the statutes,  regulations  or
                  ordinances  that such  Governmental  Authority  enforces;  (B)
                  threatening  to  revoke  any  license,  franchise,  permit  or
                  governmental authorization or


                                      -40-

<PAGE>
                  (C) threatening or contemplating  revocation or limitation of,
                  or which would have the effect of revoking  or  limiting,  the
                  FDIC  deposit  insurance of the Bank (nor,  to the  Acquiror's
                  knowledge, do any grounds for any of the foregoing exist).

          (j) No Brokers.  No action has been taken by the  Acquiror  that would
give  rise  to  any  valid  claim  against  any  party  hereto  for a  brokerage
commission,  finder's fee or other like payment with respect to the transactions
contemplated  by this  Agreement,  excluding a fee to be paid by the Acquiror to
Salomon Brothers Inc.

          (k) Employee  Benefit Plans.  (i) Each of the Acquiror's  Compensation
and Benefit Plans has been administered in accordance with the terms thereof and
with  applicable  law,  including  ERISA  and the Code.  Each of the  Acquiror's
Pension Plans which is intended to be qualified under Section 401(a) of the Code
has  received a  favorable  determination  letter from the IRS,  and,  except as
Previously Disclosed,  the Acquiror is not aware of any circumstances reasonably
likely to result in the revocation or denial of any such favorable determination
letter.  There  is no  pending  or,  to  the  Acquiror's  knowledge,  threatened
litigation or governmental audit,  examination or investigation  relating to the
Acquiror's Compensation and Benefit Plans.

                  (ii)  No  liability  under  Title  IV  of  ERISA  (other  than
         contributions and premiums  required in connection  therewith) has been
         or is reasonably  expected to be incurred by the Acquiror or any of its
         Subsidiaries  with respect to any  "single-employer  plan"  (within the
         meaning  of  Section  4001  (a)(15)  of  ERISA) or  Multiemployer  Plan
         currently or formerly maintained by any of them, or the single-employer
         plan or Multiemployer Plan of any ERISA Affiliate.

                  (iii)  Except  as  Previously  Disclosed,  all  contributions,
         premiums and payments required to have been made under the terms of any
         of the Acquiror's Compensation and Benefit Plans or applicable law have
         been timely made or reflected in the Acquiror's SEC Documents.  Neither
         any of the Acquiror's Pension Plans nor any ERISA Affiliate Plan of the
         Acquiror  or any  of  its  Subsidiaries  has  an  "accumulated  funding
         deficiency"  (whether or not waived)  within the meaning of Section 412
         of the Code or Section 302 of ERISA.  None of the Acquiror,  any of its
         Subsidiaries  or any ERISA  Affiliate has  provided,  or is required to
         provide,  security to, nor are there any  circumstances  requiring  the
         imposition  of a  lien  on the  assets  of  the  Company  or any of its
         Subsidiaries  with  respect  to,  any  Pension  Plan  or to  any  ERISA
         Affiliate Plan pursuant to ERISA or the Code.

                  (iv)  Under  each of the  Acquiror's  Pension  Plans and ERISA
         Affiliate  Plans,  to the  Acquiror's  knowledge,  there  has  been  no
         material adverse change in the financial  condition of any Pension Plan
         or ERISA  Affiliate  Plan (with  respect to either  assets or benefits)
         since the last day of the most recent plan year.


                                      -41-

<PAGE>
                  (v) Except as Previously  Disclosed,  neither the Acquiror nor
         any  of  its  Subsidiaries  has  any  obligations  under  any  Acquiror
         Compensation and Benefit Plan to provide  benefits,  including death or
         medical  benefits,   with  respect  to  employees  (or  their  spouses,
         beneficiaries  or  dependents)  of it or its  Subsidiaries  beyond  the
         retirement or other  termination  of service of any such employee other
         than (A)  coverage  mandated  by Part 6 of Title I of ERISA or  Section
         4980B of the Code,  (B) retirement or death benefits under any employee
         pension  benefit plan (as defined  under  Section  3(2) of ERISA),  (C)
         disability  benefits  under any  employee  welfare  plan that have been
         fully  provided for by insurance or  otherwise,  or (D) benefits in the
         nature of severance pay.

          (l) Ownership of Company Common Stock. As of the date hereof,  neither
the Acquiror nor, to its knowledge, any of its affiliates or associates (as such
terms are defined  under the Exchange  Act) (i)  beneficially  owns  directly or
indirectly, or (ii) is party to any agreement,  arrangement or understanding for
the purpose of acquiring,  holding,  voting or disposing  of, in each case,  any
outstanding  shares of Company  Common  Stock  (other than shares held in a bona
fide fiduciary  capacity or in satisfaction  of a debt previously  contracted in
good faith).

          (m) Tax  Matters.  (i) All Tax Returns with respect to the Acquiror or
any of its  Subsidiaries,  have been or will be timely  filed,  or requests  for
extensions  have been timely  filed and have not  expired;  (ii) all Tax Returns
filed by the Acquiror are complete and accurate; (iii) all Taxes shown to be due
and payable  (without  regard to whether such Taxes have been  assessed) on such
Tax Returns have been paid or adequate  reserves have been  established  for the
payment of such Taxes;  and (iv) no audit or  examination  or refund  litigation
with respect to any Tax Return is pending or, to the Acquiror's  knowledge,  has
been threatened.

          (n) Disclosure.  The representations and warranties  contained in this
Section 5.04 do not contain any untrue  statement of a material  fact or omit to
state any material fact necessary in order to make the  statements  contained in
this Section  5.04,  in the light of the  circumstances  in which they are being
made,  not  misleading.  The copies of all  documents  furnished  to the Company
hereunder are true and complete copies of the original thereof.


                                   ARTICLE VI

                                    Covenants


          6.01 Reasonable  Best Efforts.  Subject to the terms and conditions of
this  Agreement,  each  of the  Company  and  the  Acquiror  agrees  to use  its
reasonable best efforts in


                                      -42-

<PAGE>
good  faith  to  take,  or  cause  to be  taken  (including  causing  any of its
Subsidiaries to take),  all actions,  and to do, or cause to be done, all things
necessary,  proper or desirable,  or advisable under  applicable  laws, so as to
permit  consummation  of the Merger as promptly as practicable  and otherwise to
enable consummation of the transactions  contemplated hereby and shall cooperate
fully with the other party hereto to that end.

          6.02 Stockholder Approvals.  The Company agrees to take, in accordance
with applicable law,  applicable stock exchange rules,  the Company  Certificate
and the Company ByLaws,  all action necessary to convene an appropriate  meeting
of  stockholders  of the  Company to  consider  and vote upon the  approval  and
adoption of this Agreement and any other matters  required to be approved by the
Company's stockholders for consummation of the Merger (including any adjournment
or  postponement,  the "Company  Meeting") as promptly as practicable  after the
Registration  Statement is declared  effective.  Unless the Company Board, after
having consulted with and considered the written advice of outside counsel,  has
determined  in good faith that it is  otherwise  required in order to  discharge
properly the directors'  fiduciary  duties in accordance  with Delaware law, the
Company  Board shall  recommend  such  approval,  and the Company shall take all
reasonable, lawful action to solicit such approval by its stockholders.

          6.03  Registration  Statement.  (a) The  Acquiror  agrees to prepare a
registration statement on Form S-4 (the "Registration  Statement"),  to be filed
by the Acquiror with the SEC in connection  with the issuance of Acquiror Common
Stock (and related Acquiror Rights) in the Merger (including the proxy statement
and   prospectus  and  other  proxy   solicitation   materials  of  the  Company
constituting a part thereof (the "Proxy Statement") and all related  documents).
The Company  agrees to cooperate,  and to cause its  Subsidiaries  to cooperate,
with the  Acquiror,  its  counsel and its  accountants,  in  preparation  of the
Registration  Statement and the Proxy Statement;  and, provided that the Company
and its  Subsidiaries  have cooperated as required above, the Acquiror agrees to
file the  Proxy  Statement  in  preliminary  form  with the SEC as  promptly  as
reasonably  practicable,  and to file the Registration Statement with the SEC as
soon as  reasonably  practicable  after any SEC  comments  with  respect  to the
preliminary  Proxy Statement are resolved.  Each of the Company and the Acquiror
agrees to use all reasonable best efforts to cause the Registration Statement to
be  declared  effective  under the  Securities  Act as  promptly  as  reasonably
practicable after filing thereof. The Acquiror also agrees to use all reasonable
best efforts to obtain all necessary state  securities law or "Blue Sky" permits
and  approvals  required  to carry  out the  transactions  contemplated  by this
Agreement.  The  Company  agrees to  furnish  to the  Acquiror  all  information
concerning the Company, its Subsidiaries,  officers,  directors and stockholders
as may be reasonably requested in connection with the foregoing.

                  (b) Each of the Company and the Acquiror agrees,  as to itself
and its Subsidiaries, that none of the information supplied or to be supplied by
it for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration


                                      -43-

<PAGE>
Statement and each amendment or supplement  thereto,  if any, becomes  effective
under the  Securities  Act,  contain any untrue  statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary to
make the statements therein not misleading, and (ii) the Proxy Statement and any
amendment or supplement thereto will, at the date of mailing to stockholders and
at the time of the Company  Meeting,  contain any untrue statement which, at the
time and in the light of the  circumstances  under which such statement is made,
will be false or  misleading  with respect to any material  fact,  or which will
omit to state  any  material  fact  necessary  in  order to make the  statements
therein not false or  misleading  or necessary  to correct any  statement in any
earlier statement in the Proxy Statement or any amendment or supplement thereto.
Each of the  Company and the  Acquiror  further  agrees that if it shall  become
aware prior to the Effective Date of any information  furnished by it that would
cause any of the  statements  in the Proxy  Statement to be false or  misleading
with  respect  to any  material  fact,  or to omit to state  any  material  fact
necessary to make the statements  therein not false or  misleading,  to promptly
inform the other party  thereof and to take the  necessary  steps to correct the
Proxy Statement.

          (c) The  Acquiror  agrees to advise the  Company,  promptly  after the
Acquiror  receives notice thereof,  of the time when the Registration  Statement
has become  effective  or any  supplement  or amendment  has been filed,  of the
issuance  of any  stop  order  or the  suspension  of the  qualification  of the
Acquiror  Stock for offering or sale in any  jurisdiction,  of the initiation or
threat of any proceeding for any such purpose,  or of any request by the SEC for
the  amendment or  supplement of the  Registration  Statement or for  additional
information.

          6.04 Press Releases.  Each of the Company and the Acquiror agrees that
it will not,  without  the prior  approval of the other  party,  issue any press
release  or  written   statement  for  general   circulation   relating  to  the
transactions contemplated hereby, except as otherwise required by applicable law
or regulation or NYSE rules.

          6.05  Access;  Information.  (a) Each of the Company and the  Acquiror
agrees that upon  reasonable  notice and subject to applicable  laws relating to
the  exchange  of  information,  it shall  afford the other  party and the other
party's  officers,   employees,   counsel,   accountants  and  other  authorized
representatives,  such access during normal business hours throughout the period
prior  to  the  Effective  Time  to  the  books,  records  (including,   without
limitation,  tax returns and work papers of independent  auditors),  properties,
personnel and to such other information as any party may reasonably request and,
during such period,  it shall furnish promptly to such other party (i) a copy of
each material  report,  schedule and other  document filed by it pursuant to the
requirements of federal or state  securities or banking laws, and (ii) all other
information concerning the business, properties and personnel of it as the other
may reasonably request.

          (b) Each of the Company and the Acquiror  agrees that it will not, and
will cause its representatives not to, use any information  obtained pursuant to
this  Section  5.05  for  any  purpose  unrelated  to  the  consummation  of the
transactions contemplated by this Agreement.


                                      -44-

<PAGE>
Subject to the requirements of law, each party will keep confidential,  and will
cause its  representatives to keep  confidential,  all information and documents
obtained  pursuant to this Section 6.05 unless such  information (i) was already
known to such party, (ii) becomes available to such party from other sources not
known  by such  party  to be bound  by a  confidentiality  obligation,  (iii) is
disclosed with the prior written approval of the party to which such information
pertains or (iv) is or becomes readily  ascertainable from published information
or trade  sources.  In the  event  that  this  Agreement  is  terminated  or the
transactions   contemplated  by  this  Agreement  shall  otherwise  fail  to  be
consummated, each party shall promptly cause all copies of documents or extracts
thereof  containing  information  and  data as to  another  party  hereto  to be
returned to the party which furnished the same. No investigation by either party
of the  business and affairs of the other shall affect or be deemed to modify or
waive any representation,  warranty, covenant or agreement in this Agreement, or
the  conditions to either  party's  obligation to  consummate  the  transactions
contemplated by this Agreement.

          6.06 Acquisition Proposals.  The Company agrees that it shall not, and
shall cause its Subsidiaries and its and its Subsidiaries' officers,  directors,
agents,  advisors  and  affiliates  not to,  solicit or  encourage  inquiries or
proposals with respect to, or engage in any negotiations concerning,  or provide
any  confidential  information  to, or have any  discussions  with,  any  person
relating to, any tender or exchange offer, proposal for a merger,  consolidation
or other business  combination  involving the Company or any of its Subsidiaries
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, the Company or any of
its  Subsidiaries,  other than the  transactions  contemplated by this Agreement
(any of the  foregoing,  an  "Acquisition  Proposal");  provided,  that,  if the
Company is not  otherwise in violation of this Section  6.06,  the Company Board
may provide  information to, and may engage in such  negotiations or discussions
with, a person, directly or through  representatives,  if (a) the Company Board,
after having  consulted with and  considered the written advice of counsel,  has
determined in good faith that the provision of such  information or the engaging
in such  negotiations  or discussion is required in order to discharge  properly
the  directors'  fiduciary  duties in  accordance  with Delaware law and (b) the
Company  has  received   from  such  person  a   confidentiality   agreement  in
substantially  customary form. The Company also agrees  immediately to cease and
cause to be terminated any  activities,  discussions or  negotiations  conducted
prior to the date of this  Agreement with any parties other than the Acquiror or
the Bank,  with  respect to any of the  foregoing.  The Company  shall  promptly
(within  24 hours)  advise  the  Acquiror  following  the  receipt  by it of any
Acquisition  Proposal and the substance  thereof  (including the identity of the
person  making  such  Acquisition  Proposal),  and  advise the  Acquiror  of any
developments  with respect to such  Acquisition  Proposal  immediately  upon the
occurrence thereof.

          6.07  Affiliate  Agreements.  Not later than the 15th day prior to the
mailing of the Proxy  Statement,  the Company  shall  deliver to the  Acquiror a
schedule of each person that,  to the Company's  knowledge,  is or is reasonably
likely to be, as of the date of the Company Meeting, deemed to be an "affiliate"
of it (each, a "Company Affiliate") as that term is used in


                                      -45-

<PAGE>
Rule 145 under the Securities Act or SEC Accounting Series Releases 130 and 135.
The Company agrees to use its  reasonable  best efforts to cause each person who
may be deemed to be a Company  Affiliate  to execute  and deliver to the Company
and the  Acquiror  on or before the date of mailing  of the Proxy  Statement  an
agreement in the form attached hereto as Exhibit B.

          6.08  Takeover  Laws.  No party shall take any action that would cause
the  transactions  contemplated  by this Agreement to be subject to requirements
imposed by any  Takeover  Law and each of them shall  take all  necessary  steps
within  its  control  to exempt  (or  ensure  the  continued  exemption  of) the
transactions  contemplated by this Agreement from, or if necessary challenge the
validity or applicability  of, any applicable  Takeover Law, as now or hereafter
in effect.

          6.09 No Rights Triggered.  The Company shall take all reasonable steps
necessary  to  ensure  that  the  entering  into  of  this   Agreement  and  the
consummation  of the  transactions  contemplated  hereby and any other action or
combination of actions,  or any other transactions  contemplated  hereby, do not
and will not  result in the  grant of any  rights  to any  person  (a) under the
Company  Certificate or the Company By-Laws or (b) under any material  agreement
to  which  it or  any  of its  Subsidiaries  is a  party  (except  as  expressly
contemplated  by the  mandatory  provisions  under its stock  option  plans,  as
applicable).

          6.10 Rights Agreement. The Company shall take all necessary action (i)
to render the Company Rights Agreement  inapplicable to the Merger and the other
transactions  contemplated by this Agreement and (ii) to ensure that neither the
Acquiror,  the Bank nor Merger Sub will become an "Acquiring Person" and that no
"Stock Acquisition Date" or a "Distribution  Date" (as such terms are defined in
the Rights  Agreement)  will occur and that the  exercisability  of the  Company
Rights  Agreement  will  not be  triggered,  in  each  case as a  result  of the
execution or delivery of this  Agreement or any  amendment  hereto or thereto or
the consummation of the Merger,  or the  consummation of the other  transactions
contemplated by this Agreement.  Except (a) as provided in Section 5.03(o) or in
the  immediately  preceding  sentence or (b) if the Company Board,  after having
consulted  with and  considered  the  written  advice of  outside  counsel,  has
determined  in good faith that it is  otherwise  required in order to  discharge
properly the directors'  fiduciary  duties in accordance  with Delaware law, the
Company Board shall not (i) amend the Company Rights  Agreement or (ii) take any
action with  respect to, or make any  determination  under,  the Company  Rights
Agreement,  including  the  determination  that  the  Acquiror  or  any  of  its
Subsidiaries  is an "Adverse  Person," a redemption of the Company Rights or any
action to facilitate an Acquisition Transaction.

          6.11 NYSE  Listing.  The Acquiror  agrees to use its  reasonable  best
efforts to list,  prior to the Effective Date, on the NYSE,  subject to official
notice of  issuance,  the shares of  Acquiror  Common  Stock to be issued to the
holders of Company Common Stock in the Merger.



                                      -46-

<PAGE>
          6.12  Regulatory  Applications.  (a) The  Acquiror and the Company and
their  respective   Subsidiaries   shall  cooperate  and  use  their  respective
reasonable best efforts to prepare all documentation,  to effect all filings and
to obtain all  permits,  consents,  approvals  and  authorizations  of all third
parties and  Governmental  Authorities  necessary to consummate the transactions
contemplated by this Agreement.  Each of the Acquiror and the Company shall have
the right to review in advance,  and to the extent practicable each will consult
with the other, in each case subject to applicable laws relating to the exchange
of information,  with respect to, all material written information  submitted to
any  third  party  or  any   Governmental   Authority  in  connection  with  the
transactions  contemplated by this Agreement. In exercising the foregoing right,
each of the Acquiror and the Company agrees to act reasonably and as promptly as
practicable.  Each of the Acquiror  and the Company  agrees that it will consult
with the other  party  hereto  with  respect to the  obtaining  of all  material
permits,  consents,  approvals  and  authorizations  of all  third  parties  and
Governmental  Authorities  necessary or advisable to consummate the transactions
contemplated  by this  Agreement  and  each  party  will  keep the  other  party
appraised  of the status of  material  matters  relating  to  completion  of the
transactions contemplated hereby.

          (b) Each of the  Acquiror and the Company  agrees,  upon  request,  to
furnish  the  other  party  with  all   information   concerning   itself,   its
Subsidiaries, directors, officers and stockholders and such other matters as may
be reasonably  necessary or advisable in connection  with any filing,  notice or
application  made by or on behalf of such other party or any of its Subsidiaries
to any third party or Governmental Authority.

          6.13  Indemnification.  (a) The by-laws of the  Surviving  Corporation
shall contain provisions no less favorable with respect to indemnification  than
are set forth in Article VII of the Company By-Laws,  which provisions shall not
be amended,  repealed or otherwise modified,  for a period of six years from the
Effective Time, in any manner that would adversely affect the rights  thereunder
of individuals who at the Effective Time were directors,  officers, employees or
agents of the Company with respect to any action, suit or proceeding arising out
of, or relating to, any actions,  transactions  or facts  occurring prior to the
Effective  Time.  Following  the  Effective  Date and for a period  of six years
thereafter,  the Acquiror shall indemnify,  defend and hold harmless the present
and former directors and officers of the Company and its Subsidiaries  (each, an
"Indemnified  Party")  against  all  costs  or  expenses  (including  reasonable
attorneys'  fees),  judgments,  fines,  losses,  claims,  damages or liabilities
(collectively,  "Costs")  incurred in connection with any claim,  action,  suit,
proceeding  or  investigation,   whether  civil,  criminal,   administrative  or
investigative,  arising out of actions or omissions occurring at or prior to the
Effective Time (including,  without limitation, the transactions contemplated by
this Agreement), whether asserted or claimed prior to, at or after the Effective
Time,  to the fullest  extent that the Company is  permitted  to  indemnify  its
directors  and  officers  under the laws of the State of  Delaware,  the Company
Certificate  and the  Company  By-Laws  as in  effect  on the date  hereof  (and
Acquiror  shall,  or shall cause the  Surviving  Corporation  to,  also  advance
expenses as  incurred  to the fullest  extent  permitted  under  applicable  law
provided the person to whom


                                      -47-

<PAGE>
expenses are advanced  provides an  undertaking  to repay such advances if it is
ultimately  determined  that such person is not  entitled  to  indemnification);
provided that any  determination  required to be made with respect to whether an
officer's or  director's  conduct  complies  with the  standards set forth under
Delaware law, the Company  Certificate  and the Company By-Laws shall be made by
independent  counsel (which shall not be counsel that provides material services
to the  Acquiror)  selected by the Acquiror and  reasonably  acceptable  to such
officer or director;  and provided,  further,  that in the absence of applicable
Delaware  judicial  precedent  to the  contrary,  such  counsel,  in making such
determination,  shall presume such officer's or director's conduct complied with
such standard and the Acquiror  shall have the burden to  demonstrate  that such
officer's or director's conduct failed to comply with such standard.

          (b) For a period of six years from the  Effective  Time,  the Acquiror
shall use its best efforts to provide that portion of  director's  and officer's
liability insurance that serves to reimburse the present and former officers and
directors  of the  Company  or any of  its  Subsidiaries  (determined  as of the
Effective  Time) with  respect to claims  against  such  directors  and officers
arising from facts or events which  occurred  before the Effective  Time,  which
insurance  shall  contain at least the same  coverage and  amounts,  and contain
terms and conditions no less  advantageous,  as that coverage currently provided
by the  Company;  provided,  however,  that in no event  shall the  Acquiror  be
required to expend more than 200 percent of the current  amount  expended by the
Company  (the  "Insurance  Amount") to maintain or procure  such  directors  and
officers insurance coverage;  provided,  further, that if the Acquiror is unable
to maintain or obtain the  insurance  called for by this  Section  6.13(b),  the
Acquiror  shall use its  reasonable  best  efforts to obtain as much  comparable
insurance as is available  for the Insurance  Amount;  provided,  further,  that
officers and directors of the Company or any  Subsidiary may be required to make
application  and  provide  customary   representations  and  warranties  to  the
Acquirer's insurance carrier for the purpose of obtaining such insurance.

          (c) Any  Indemnified  Party  wishing  to claim  indemnification  under
Section  6.13(a),  upon  learning  of any claim,  action,  suit,  proceeding  or
investigation  described  above,  shall  promptly  notify the Acquiror  thereof;
provided that the failure so to notify shall not affect the  obligations  of the
Acquiror  under  Section  6.13(a)  unless and to the extent that the Acquiror is
actually prejudiced as a result of such failure. In the event of any such claim,
action, suit,  proceeding or investigation  (whether arising before or after the
Effective  Time), (i) the Acquiror or the Surviving  Corporation  shall have the
right to assume the defense thereof and the Acquiror shall not be liable to such
Indemnified  Parties  for any  legal  expenses  of other  counsel  or any  other
expenses  subsequently  incurred by such Indemnified  Parties in connection with
the defense  thereof,  except that if the Acquiror or the Surviving  Corporation
elects not to assume such defense or counsel for the Indemnified Parties advises
that there are issues that raise  conflicts of interest  between the Acquiror or
the Surviving  Corporation and the Indemnified  Parties, the Indemnified Parties
may retain  counsel  satisfactory  to them,  and the  Acquiror or the  Surviving
Corporation  shall pay all reasonable  fees and expenses of such counsel for the
Indemnified  Parties  promptly as statements  therefor are  received;  provided,
however, that the Acquiror shall


                                      -48-

<PAGE>
be obligated  pursuant to this paragraph (c) to pay for only one firm of counsel
for all Indemnified  Parties in any  jurisdiction  unless the use of one counsel
for such  Indemnified  Parties  would  present  such  counsel with a conflict of
interest, (ii) the Indemnified Parties will cooperate in the defense of any such
matter and (iii) the Acquiror  shall not be liable for any  settlement  effected
without its prior  written  consent,  which  consent  shall not be  unreasonably
withheld; and provided, further, that the Acquiror shall not have any 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
non-appealable, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.

          (d)  If  the  Acquiror  or any of  its  successors  or  assigns  shall
consolidate  with or merge into any other entity and shall not be the continuing
or surviving  entity of such  consolidation  or merger or shall  transfer all or
substantially  all of its assets to any  entity,  then and in each case,  proper
provision shall be made so that the successors and assigns of the Acquiror shall
assume the obligations set forth in this Section 6.13.

          6.14 Benefit  Plans.  From the Effective Time until December 31, 1998,
Acquiror shall cause the Surviving  Corporation and its Subsidiaries to maintain
for employees of the Company and its  Subsidiaries  who as of the Effective Time
become  employed by the  Surviving  Corporation  or the Acquiror or any of their
Subsidiaries (the "Covered Employees"),  (a) salary and bonus opportunities (but
explicitly excluding commissions and equity grant  opportunities),  (b) employee
pension  benefits in respect of plans  intended to be  qualified  under  Section
401(a) of the Code, (c) employee welfare benefits and (d) broad-based  severance
plans  (the  items  covered  in  (a)  through  (d)  hereinafter  referred  to as
"Designated Benefits"),  that are no less favorable, in the aggregate,  than the
Designated  Benefits enjoyed by such Covered Employees  immediately prior to the
Effective  Time.  For  purposes of all  employee  benefit  plans,  programs  and
arrangements  maintained or contributed to by the Acquiror and its  Subsidiaries
(including without limitation,  the Surviving Corporation),  the Acquiror shall,
or shall cause its Subsidiaries to, cause each such plan, program or arrangement
to treat the prior service with the Company and its Subsidiaries of each Covered
Employee (to the same extent such service is recognized  under analogous  plans,
programs or arrangements of the Company or its Subsidiaries immediately prior to
the Effective Time) as service rendered to the Acquiror or its Subsidiaries,  as
the case may be,  solely for  purposes of  eligibility  to  participate  and for
vesting  thereunder.  Following the Effective Time, the Acquiror shall cause the
Surviving  Corporation to cause any and all pre-existing  condition  limitations
(to the extent such limitations did not apply to a pre-existing  condition under
the  Compensation  and Benefit Plans) and eligibility  waiting periods under any
health plans to be waived with  respect to Covered  Employees  who,  immediately
prior to the Effective  Time,  participated  in a health plan and their eligible
dependents.  All  discretionary  awards and benefits under any employee  benefit
plans of the  Acquiror  shall be subject  to the  discretion  of the  persons or
committee  administering  such plans. The Acquiror shall honor,  pursuant to the
terms of the Company Compensation and Benefit Plans Previously


                                      -49-

<PAGE>
Disclosed,  and to the extent  consistent  with  applicable  law,  all  employee
benefit  obligations  to current and former  employees of the Company under such
plans.

          6.15 Accountants'  Letters. Each of the Company and the Acquiror shall
use its reasonable best efforts to cause to be delivered to the other party, and
such other party's directors and officers who sign the Registration Statement, a
letter  of  Ernest  &  Young  LLP  and  KPMG  Peat  Marwick  LLP,  respectively,
independent  auditors,  dated (i) the date on which the  Registration  Statement
shall become  effective and (ii) a date shortly prior to the Effective Date, and
addressed to such other party,  and such  directors  and  officers,  in form and
substance  customary for "comfort" letters delivered by independent  accountants
in accordance with Statement of Accounting Standards No. 72.

          6.16  Notification  of Certain  Matters.  Each of the  Company and the
Acquiror  shall  give  prompt  notice  to  the  other  of  any  fact,  event  or
circumstance  known to it that (i) is reasonably  likely,  individually or taken
together with all other facts,  events and circumstances  known to it, to result
in any  Material  Adverse  Effect  with  respect  to it or (ii)  would  cause or
constitute  a  material  breach  of  any  of  its  representations,  warranties,
covenants or agreements contained herein.

          6.17  Certain  Policies  of  the  Company.  Upon  the  request  of the
Acquiror,  the Company  shall,  consistent  with generally  accepted  accounting
principles and regulatory accounting principles, use its reasonable best efforts
to  record  certain  accounting   adjustments  intended  to  conform  the  loan,
litigation   and  other   accrual   and   reserve   policies   (including   loan
classifications  and levels of reserves) of the Company and its  Subsidiaries so
as to reflect the policies of the Acquiror;  provided, however, that the Company
shall not be obligated  to record any such  accounting  adjustments  pursuant to
this Section 6.17 (a) unless and until the Company  shall be satisfied  that the
conditions to the  obligation  of the parties to  consummate  the Merger will be
satisfied or waived on or before the Effective  Time,  and (b) in no event until
the day prior to the Effective Date. The Company's  representations,  warranties
and covenants  contained in this  Agreement  shall not be deemed to be untrue or
breached in any respect for any purpose as a consequence of any modifications or
changes undertaken solely on account of this Section 6.17.

          6.18 Employee Benefits.  The Company shall, with the prior approval of
the Acquiror, take any necessary or appropriate action to effect a correction of
any errors made in connection with  contributions  made to the Company's Savings
Plan or  Retirement  Plan  (including,  to the  extent  appropriate,  making any
necessary  corrective  contributions  in order to satisfy the  nondiscrimination
requirements  under Sections  401(k)(3) and 401(m)(2) of the Code). With respect
to any options  granted under the  Company's  Incentive  Stock Option Plan,  the
Company Board shall refrain from  canceling any such options and causing cash to
be paid in  consideration  therefor.  The Company  Board (or such members of the
Company Board authorized to so act), in accordance with the Company's  Incentive
Stock Option Plan, shall take timely action to adopt a resolution  providing and
declaring that the consummation of the Merger,


                                      -50-

<PAGE>
shareholder  approval  of the  Merger,  as well as all  transactions  or  events
contemplated  thereby  or related  thereto,  shall not  constitute  a "Change of
Control"  for  purposes of such  Incentive  Stock Option Plan or, with the prior
consent of the Acquiror, take such other action as shall prevent any holder of a
Stock  Option  from  having a right to  receive,  pursuant to Section 10 of such
Plan,  a cash  payment  as a  result  of this  Agreement  and  the  transactions
contemplated hereby;  provided that such other action be taken prior to the date
on which a "Change  of  Control"  would  otherwise  occur in the  absence of the
Company Board resolution to the contrary.  The Company shall take such action as
is reasonably  necessary to provide that,  after the date of this Agreement,  no
employee of the Company or any of its Subsidiaries who is otherwise  eligible to
participate  in the  Company's  Senior  Executive  Severance  Pay Plan  shall be
eligible to participate in, or receive a benefit under, the Company's  Severance
Pay  Plan,  so as to  prevent  any  employee  of  the  Company  or  any  of  its
subsidiaries  from  receiving a severance  benefit  under both such plans.  With
respect to the Company Annual  Executive Bonus Plan (the "AEBP"),  the aggregate
Target  Pool (as such term is  defined in the AEBP) for the 1997  calendar  year
Valuation Period shall not exceed $2,000,000.  To the extent a change of control
(as  defined  in the AEBP)  occurs  prior to the end of such  Valuation  Period,
however,  such Target Pool shall be pro-rated in the same ratio as the number of
months  in the  Valuation  Period  completed  as of the date of such  change  of
control  bears to 12 (provided,  however,  that such  pro-rated  amount shall be
reduced by $273,750) and the Committee thereunder shall determine the amounts to
be paid under the AEBP and the Company shall make such payments,  if any, at the
Effective  Time.   Notwithstanding  the  foregoing  or  any  provision  of  this
Agreement,  the  Company  shall  take such  action as may be  required  for each
Company  Stock Option to fully vest and become  immediately  exercisable  at the
Effective Time and to remain  exercisable for the remaining term of such Company
Stock Option.

          6.19  Certain   Payments  at  Effective   Time.  In  lieu  of  and  in
satisfaction for the amount of any cash payment which might otherwise be paid or
payable  upon a  termination  of  employment  under  any  Termination  Agreement
previously  entered into by the Company or any  applicable  severance  plan, the
Company  shall pay to the  individuals  listed on Schedule 6.19 of the Company's
Disclosure  Schedule  in a cash lump sum at the  Effective  Time the amounts set
forth in such Schedule 6.19, less the amount of any applicable  withholding.  In
addition,  at the  Effective  Time  payment  shall  also be made in  respect  of
Previously  Disclosed  obligations  in respect of stock  options that were never
granted to the individual  included on Schedule 6.19of the Company's  Disclosure
Schedule, less the amount of any applicable withholding.

          6.20 Certain Employee Agreements.  The Company shall not terminate the
employment of Messrs. Terrance G. Hodel, Harold B. Bonnikson,  Gary F. Moore and
Martin S. Hughes  (each,  an  "Identified  Employee")  without the prior written
consent of the Acquiror  (such  consent not to be  unreasonably  withheld)  and,
subject to the terms and conditions of this Agreement,  shall use its reasonable
best  efforts  (a) to  maintain  the  continued  employment  of each  Identified
Employee  with the Company  until the  Effective  Date and (b) not in any way to
encourage (or permit the encouragement of) any Identified  Employee to breach or
violate any


                                      -51-

<PAGE>



employment agreement or other arrangement such Identified Employee may have with
the Acquiror or any Subsidiary of it.


                                   ARTICLE VII

                    Conditions to Consummation of the Merger

          7.01 Conditions to Each Party's  Obligation to Effect the Merger.  The
respective  obligation of each of the Acquiror and the Company to consummate the
Merger is subject to the  fulfillment  or written waiver by the Acquiror and the
Company prior to the Effective Time of each of the following conditions:

          (a) Stockholder Approval.  This Agreement shall have been duly adopted
by the affirmative vote of the holders of at least a majority of the outstanding
shares of Company  Common  Stock  entitled to vote  thereon in  accordance  with
Section 251 of the DGCL,  other  applicable law and the Company  Certificate and
the Company By-Laws.

          (b)   Governmental   and  Regulatory   Consents.   All  approvals  and
authorizations  of, filings and  registrations  with, and  notifications to, all
Governmental   Authorities   (except  to  the  extent  that  such   Governmental
Authorities are acting in the capacity of Insurer or Investor)  required for the
consummation  of the Merger and for the  prevention  of any  termination  of any
material  right,  privilege,  license or agreement of either the Acquiror or the
Company or their  respective  Subsidiaries  shall have been obtained or made and
shall be in full force and effect and all waiting periods  required by law shall
have expired;  provided,  however,  that none of the  preceding  shall be deemed
obtained  or made if it shall be subject to any  condition  or  restriction  the
effect of which would have a Material Adverse Effect on the Acquiror  (including
the Company as a Subsidiary after the Merger) or on the Surviving Corporation.

          (c) Third Party  Consents.  All  consents or approvals of all persons,
other than Governmental Authorities (except to the extent that such Governmental
Authorities are acting in the capacity of Insurer or Investor),  required for or
in connection with the execution, delivery and performance of this Agreement and
the  consummation  of the Merger  shall have been  obtained and shall be in full
force and effect,  unless the failure to obtain any such  consent or approval is
not reasonably  likely to have,  individually  or in the  aggregate,  a Material
Adverse Effect on the Surviving Corporation.

          (d) No Injunction. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated,  enforced or entered any statute, rule,
regulation,  judgment,  decree,  injunction or other order  (whether  temporary,
preliminary or


                                      -52-

<PAGE>



permanent)  which is in effect and prohibits  consummation  of the  transactions
contemplated by this Agreement.

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

          (f) Blue Sky Approvals. All permits and other authorizations under the
federal  and state  securities  laws  (other  than that  referred  to in Section
7.01(e)) and other  authorizations  necessary  to  consummate  the  transactions
contemplated  hereby  and to issue the  shares of  Acquiror  Common  Stock  (and
related Acquiror Rights) to be issued in the Merger shall have been received and
be in full force and effect.

          (g) Listing. The shares of Acquiror Common Stock (and related Acquiror
Rights) to be issued in the Merger  shall have been  approved for listing on the
NYSE, subject to official notice of issuance.

          7.02  Conditions to Obligation of the Company.  The  obligation of the
Company to consummate  the Merger is also subject to the  fulfillment or written
waiver  by the  Company  prior to the  Effective  Time of each of the  following
conditions:

          (a) Representations and Warranties. The representations and warranties
of the Acquiror  set forth in this  Agreement  shall be true and correct  (after
giving effect to the standard set forth in Section 5.02 of this Agreement) as of
the date of this Agreement and as of the Effective Date as though made on and as
of the Effective Date (except that  representations and warranties that by their
terms  speak as of the date of this  Agreement  or some other date shall be true
and  correct  only as of such  date),  and the  Company  shall  have  received a
certificate,  dated the Effective Date,  signed on behalf of the Acquiror by the
Chief Executive Officer and the Treasurer of the Acquiror to such effect.

          (b) Performance of Obligations of the Acquiror. The Acquiror, the Bank
and Merger Sub shall have  performed  in all material  respects all  obligations
required  to be  performed  by them  under  this  Agreement  at or  prior to the
Effective  Time,  and the Company shall have received a  certificate,  dated the
Effective Date,  signed on behalf of the Acquiror by the Chief Executive Officer
and the Treasurer of the Acquiror to such effect.

          (c) Opinion of Counsel.  The Company  shall have  received an opinion,
dated the  Effective  Date,  of  Sullivan  &  Cromwell,  special  counsel to the
Acquiror, to the effect that the shares of Acquiror Common Stock to be issued as
Consideration, when issued in


                                      -53-

<PAGE>



accordance  with the terms  hereof,  will be duly  authorized,  validly  issued,
fully paid and nonassessable.

          (d) Tax Opinion of Company's Counsel.  The Company shall have received
an opinion of Simpson Thacher & Bartlett, special counsel to the Company, to the
effect that (i) the Merger constitutes a "reorganization"  within the meaning of
Section  368 of the  Code  and  (ii)  no gain or  loss  will  be  recognized  by
stockholders  of the  Company who receive  shares of  Acquiror  Common  Stock as
Consideration  in exchange for shares of Company Common Stock,  except that gain
or loss  may be  recognized  as to cash  received  in lieu of  fractional  share
interests.

          (e) Accountants'  Letters. The Company shall have received the letters
referred  to in  Section  6.15  from  KPMG  Peat  Marwick  LLP,  the  Acquiror's
independent auditors.

          7.03  Conditions to Obligation of the Acquiror.  The obligation of the
Acquiror to consummate the Merger is also subject to the  fulfillment or written
waiver by the  Acquiror  prior to the  Effective  Time of each of the  following
conditions:

          (a) Representations and Warranties. The representations and warranties
of the Company  set forth in this  Agreement  shall be true and  correct  (after
giving effect to the standard set forth in Section 5.02 of this Agreement) as of
the date of this Agreement and as of the Effective Date as though made on and as
of the Effective Date (except that  representations and warranties that by their
terms  speak as of the date of this  Agreement  or some other date shall be true
and  correct  only as of such  date) and the  Acquiror  shall  have  received  a
certificate,  dated the Effective  Date,  signed on behalf of the Company by the
Chief Executive Officer and the Treasurer of the Company to such effect.

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

          (c) Tax  Opinion  of  Acquiror's  Counsel.  The  Acquiror  shall  have
received  an opinion of Sullivan & Cromwell,  special  counsel to the  Acquiror,
dated  the  Effective  Date,  to  the  effect  that  the  Merger  constitutes  a
"reorganization" within the meaning of Section 368 of the Code.

          (d) Accountants'  Letters. The Acquiror and its directors and officers
who sign the Registration  Statement shall have received the letters referred to
in Section 6.15 from Ernst & Young LLP, the Company's independent auditors.


                                      -54-

<PAGE>
                                  ARTICLE VIII

                                   Termination

          8.01 Termination. This Agreement may be terminated, and the Merger may
be abandoned:

          (a) Mutual  Consent.  At any time prior to the Effective  Time, by the
mutual  consent of the Acquiror  and the  Company,  if the Board of Directors of
each so determines by vote of a majority of the members of its entire Board.

          (b) Breach.  At any time prior to the Effective  Time, by the Acquiror
or the Company,  in each case if its Board of Directors so determines by vote of
a majority of the  members of its entire  Board,  in the event of either:  (i) a
breach by the other party of any  representation  or warranty  contained  herein
(subject to the standard set forth in Section  5.02),  which breach cannot be or
has not been cured  within 30 days  after the  giving of  written  notice to the
breaching  party of such  breach;  or (ii) a breach by the other party of any of
the covenants or agreements  contained herein, which breach cannot be or has not
been cured  within 30 days after the giving of written  notice to the  breaching
party of such breach and which breach would be reasonably  likely,  individually
or in the aggregate, to have a Material Adverse Effect on the breaching party.

          (c) Delay. At any time prior to the Effective Time, by the Acquiror or
the Company,  in each case if its Board of Directors so  determines by vote of a
majority of the members of its entire Board, in the event that the Merger is not
consummated  by December 31, 1997,  except to the extent that the failure of the
Merger then to be  consummated  arises out of or results from the knowing action
or inaction of the party seeking to terminate pursuant to this Section 8.01(c).

          (d) No Approval.  By the Company or the Acquiror,  in each case if its
Board of Directors so  determines  by a vote of a majority of the members of its
entire  Board,  in the  event (i) the  approval  of any  Governmental  Authority
required for consummation of the Merger and the other transactions  contemplated
by this Agreement shall have been denied by final  nonappealable  action of such
Governmental Authority or (ii) any stockholder approval required by Section 6.02
herein is not obtained at the Company Meeting.

          (e) Failure to  Recommend,  Etc. By the  Acquiror,  if (i) at any time
prior to the Company  Meeting  the  Company  Board shall have failed to make its
recommendation  referred to in Section 6.02,  withdrawn such  recommendation  or
modified or changed such  recommendation in a manner adverse to the interests of
the Acquiror (whether in


                                      -55-

<PAGE>
accordance   with  Section  6.02  or   otherwise)  or  (ii)  the  Company  Board
participates  in (or authorizes  participation  in)  negotiations  regarding the
substantive terms of a bona fide formal Acquisition Proposal).

          (f) Acceptance of an Acquisition Proposal. By the Company, if, without
breaching  Section  6.06,  the  Company  shall  contemporaneously  enter  into a
definitive agreement with a third party providing for an Acquisition Transaction
on terms  determined in good faith by the Company Board,  after  consulting with
and  considering  the  written  advice  of the  Company's  outside  counsel  and
financial advisors, to be more favorable to the stockholders of the Company than
the Merger;  provided,  that the right to terminate  this  Agreement  under this
Section  8.01(f) shall not be available to the Company unless it delivers to the
Acquiror  simultaneously  with such  termination  the fee referred to in Section
8.03.

          (g)  Possible  Adjustment.  By the  Company,  if the Company  Board so
determines by a vote of a majority of the members of the entire  Company  Board,
at any time during the five-day period commencing with the  Determination  Date,
if both of the following conditions are satisfied:

                           (i) The Average  Closing  Price on the  Determination
                  Date of shares of Acquiror Common Stock shall be less than the
                  product of 0.80 and the Starting Price; and

                           (ii) (A) The number  obtained by dividing the Average
                  Closing Price on the Determination  Date by the Starting Price
                  (such number, the "Acquiror Ratio") shall be less than (B) the
                  number   obtained   by   dividing   the  Index  Price  on  the
                  Determination Date by the Index Price on the Starting Date and
                  subtracting 0.20 from the quotient in this Section 8(g)(ii)(B)
                  (such number, the "Index Ratio");

subject,  however,  to the following  four  sentences.  If the Company elects to
exercise its termination  right pursuant to this Section 8.01(g),  it shall give
prompt written notice to the Acquiror; provided that such notice of election may
be withdrawn at any time within the aforementioned  five-day period.  During the
five-day period  commencing with its receipt of such notice,  the Acquiror shall
have the option of adjusting  the  Exchange  Ratio to the lesser of (i) a number
equal to a quotient  (rounded to the nearest  one-thousandth),  the numerator of
which is the product of 0.80, the Starting Price and the Exchange Ratio (as then
in effect) and the denominator of which is the Average Closing Price, and (ii) a
number  equal  to a  quotient  (rounded  to  the  nearest  one-thousandth),  the
numerator of which is the Index Ratio  multiplied by the Exchange Ratio (as then
in effect) and the  denominator of which is the Acquiror  Ratio. If the Acquiror
determines  so to increase the Exchange  Ratio within such five-day  period,  it
shall give prompt  written  notice to the Company of its  determination  and the
revised Exchange Ratio, whereupon no termination


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<PAGE>
shall occur pursuant to this Section  8.01(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 the "Exchange Ratio"
shall  thereafter be deemed to refer to the Exchange Ratio as adjusted  pursuant
to this Section 8.01(g).  If the Acquiror or any company  belonging to the Index
Group declares or effects a stock dividend, reclassification,  recapitalization,
split-up,  combination,  exchange of shares or similar  transaction  between the
Starting Date and the Determination Date, the prices for the common stock of the
Acquiror or such  company  shall be  appropriately  adjusted for the purposes of
applying this Section 8.01(g).

          8.02  Effect  of  Termination  and   Abandonment.   In  the  event  of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article  VIII,  no party to this  Agreement  shall have any liability or further
obligation to any other party hereunder except (a) as set forth in Sections 8.03
and 9.01 and (b) that  termination  will not  relieve  a  breaching  party  from
liability  for  any  willful  breach  of  this  Agreement  giving  rise  to such
termination.

          8.03  Termination  Fee.  (a) The Company  hereby  agrees to pay to the
Acquiror,  and the  Acquiror  shall be  entitled  to payment of, a cash fee (the
"Fee") of $15,000,000 following the occurrence of a Fee Trigger Event; provided,
that the Acquiror's right to receive the Fee shall be discontinued if any of the
following (each, a "Fee Termination Event") occurs prior to a Fee Trigger Event:
 
                   (i) The Effective Time;

                  (ii)  Termination  of this  Agreement in  accordance  with the
          provisions hereof, if such termination occurs prior to the occurrence
         of a Preliminary Fee Trigger Event, other than a Listed Termination; or

                  (iii) Fifteen months after  termination of this Agreement,  if
         such  termination  (A)  follows,  or  occurs  at the  same  time  as, a
         Preliminary  Fee Trigger Event (other than,  termination by the Company
         pursuant to (x) Section  8.01(b)  because of a knowing,  intentional or
         grossly  negligent  breach by the Acquiror or (y) Section  8.01(g),  in
         which case the right to receive the Fee shall  terminate at termination
         of this Agreement) or (B) is a Listed Termination.

                  (b) The term "Preliminary Fee Trigger Event" shall mean any of
the following events or transactions occurring on or after the date hereof:

                  (i) The  Company or any  subsidiary  of the  Company,  without
         having  received  the  Acquiror's  prior  written  consent,  shall have
         entered into an agreement to engage in an Acquisition  Transaction with
         any person (the term  "person" for purposes of this Section 8.03 having
         the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the


                                      -57-

<PAGE>
         Exchange Act) other than the Acquiror or any of its Subsidiaries  (each
         an "Acquiror  Person") or the Company Board shall have recommended that
         the  stockholders  of the  Company  approve or accept  any  Acquisition
         Transaction other than the Merger.

                  (ii) Any  person,  other than an Acquiror  Person,  shall have
         acquired  beneficial  ownership  or the  right  to  acquire  beneficial
         ownership of 15% or more of the  outstanding  shares of Company  Common
         Stock (the term  "beneficial  ownership"  for  purposes of this Section
         8.03  having the  meaning  assigned  thereto  in  Section  13(d) of the
         Exchange Act);

                  (iii) The  stockholders  of the  Company  shall have voted and
         failed to adopt this  Agreement  and the Merger at a meeting  which has
         been held for that purpose or any adjournment or postponement  thereof,
         or such meeting shall not have been held in violation of this Agreement
         or shall have been canceled prior to termination of this Agreement,  in
         each case, if, prior to such meeting (or if such meeting shall not have
         been held or shall have been canceled,  prior to such termination),  it
         shall  have been  publicly  announced  that any person  (other  than an
         Acquiror  Person) shall have made, or disclosed an intention to make, a
         bona fide proposal to engage in an Acquisition Transaction;

                  (iv) The Company  Board shall have  withdrawn  or modified (or
         disclosed its  intention to withdraw or modify) in a manner  adverse in
         any respect to the Acquiror its  recommendation  referred to in Section
         6.02,  or the Company or any  Subsidiary  of it shall have  authorized,
         recommended,   proposed  (or  publicly   announced   its  intention  to
         authorize,   recommend  or  propose)  an  agreement  to  engage  in  an
         Acquisition Transaction with any person other than an Acquiror Person;

                  (v) Any person, other than an Acquiror Person, shall have made
         a bona fide  proposal  to the  Company or its  stockholders,  by public
         announcement or written communication that is or becomes the subject of
         public disclosure, to engage in an Acquisition Transaction;

                  (vi) Any  person,  other than an Acquiror  Person,  shall have
         filed with the SEC a registration  statement or tender offer  materials
         with  respect  to a  potential  exchange  or tender  offer  that  would
         constitute an  Acquisition  Transaction  (or filed a preliminary  proxy
         statement  with  the  SEC  with  respect  to a  potential  vote  by its
         stockholders to approve the issuance of shares to be offered in such an
         exchange offer); or

                  (vii) The Company shall have  willfully  breached any covenant
         or obligation  contained in this Agreement in  anticipation of engaging
         in an Acquisition  Transaction,  and following such breach the Acquiror
         would be entitled to terminate this Agreement  (whether  immediately or
         after the giving of notice or passage of time or both).



                                      -58-

<PAGE>
          (c) The term  "Fee  Trigger  Event"  shall  mean any of the  following
events or transactions occurring after the date hereof:

                   (i) The  acquisition by any person (other than an Acquiror 
         Person) of beneficial  ownership  of 25% or more of the  then  
         outstanding  Company  Common Stock; or

                  (ii) The  occurrence  of the  Preliminary  Fee  Trigger  Event
         described in Section 8.03(b)(i), except that the percentage referred to
         in clause (iii) of the definition of "Acquisition Transaction" shall be
         deemed 25%.

                  (d) The Company shall notify the Acquiror  promptly in writing
of its knowledge of the  occurrence  of a  Preliminary  Fee Trigger Event or Fee
Trigger Event; provided,  however, that the giving of such notice shall not be a
condition to the right of the Acquiror to the Fee.

                  (e) The Fee shall be payable, without setoff, by wire transfer
in immediately  available  funds, to an account  specified by the Acquiror,  not
later than three New York City business days following the first occurrence of a
Fee Trigger Event.


                                   ARTICLE IX

                                  Miscellaneous

          9.01  Survival.   No  representations,   warranties,   agreements  and
covenants  contained  in this  Agreement  (other than in this  Article IX) shall
survive the Effective Time or termination of this Agreement if this Agreement is
terminated  prior  to the  Effective  Time;  provided,  however,  that  if  this
Agreement is  terminated  prior to the  Effective  Time,  the  agreements of the
parties contained in Sections  6.05(b),  8.02, 8.03 and Article IX shall survive
such termination.

          9.02 Waiver; Amendment.  Prior to the Effective Time, any provision of
this Agreement may be (a) waived by the party  benefitted by the  provision,  or
(b) amended or  modified at any time,  by an  agreement  in writing  between the
parties hereto approved by their respective  Boards of Directors and executed in
the same manner as this Agreement,  except that, after approval of the Merger by
the stockholders of the Company, no amendment may be made which under applicable
law  requires  further  approval of such  stockholders  without  obtaining  such
required further approval.

          9.03  Counterparts.  This  Agreement  may be  executed  in one or more
counterparts, each of which shall be deemed to constitute an original.


                                      -59-

<PAGE>
          9.04  Governing  Law.  This  Agreement   shall  be  governed  by,  and
interpreted in accordance  with, the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

          9.05  Expenses.  Subject to Section 8.03,  each party hereto will bear
all  expenses  incurred  by  it  in  connection  with  this  Agreement  and  the
transactions   contemplated  hereby,  except  that  printing  expenses  and  SEC
registration fees shall be shared equally between the Company and the Acquiror.

          9.06 Notices. All notices, requests and other communications hereunder
to a party  shall be in  writing  and shall be  deemed  given (a) on the date of
delivery, if personally delivered or telecopied (with confirmation),  (b) on the
first business day following the date of dispatch,  if delivered by a recognized
next-day courier service, or (c) on the third business day following the date of
mailing,  if mailed by registered or certified mail (return receipt  requested),
in each case to such party at its address or telecopy  number set forth below or
such other address or numbers as such party may specify by notice to the parties
hereto.

If to the Company, to:

         President
         North American Mortgage Company
         3883 Airway Drive
         Santa Rose, California 95403
         Facsimile: (704) 542-6721

With a copy to:

         James M. Cotter, Esq.
         Simpson Thacher & Bartlett
         425 Lexington Avenue
         New York, New York  10017
         Facsimile:  (212) 455-2502.

If to the Acquiror, to:

         Gene C. Brooks, Esq.
         Dime Bancorp, Inc.
         509 Fifth Avenue
         New York, New York 10017
         Facsimile: (212) 386-6110


                                      -60-

<PAGE>
With a copy to:

         Mitchell S. Eitel, Esq.
         Sullivan & Cromwell
         125 Broad Street
         New York, New York 10004
         Facsimile:  (212) 558-3588.

          9.07  Entire  Understanding;   No  Third  Party  Beneficiaries.   This
Agreement  (together  with  the  Disclosure  Schedules)  represents  the  entire
understanding   of  the  parties  hereto  with  reference  to  the  transactions
contemplated  hereby  and this  Agreement  supersedes  any and all other oral or
written  agreements  heretofore made.  Except for Section 6.13,  insofar as such
Section  expressly  provides  certain  rights to the  Indemnified  Parties named
therein, nothing in this Agreement,  expressed or implied, is intended to confer
upon any person,  other than the parties hereto or their  respective  successors
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.

                                 *      *      *


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