Exhibit10.197









                          LOAN AND SECURITY AGREEMENT


      THIS LOAN AND SECURITY AGREEMENT (the "Agreement") dated as of May 28,
1999 by and between Litchfield Financial Corporation, a Massachusetts
corporation having its chief executive offices at 430 Main Street,
Williamstown, Massachusetts 01267, LFC Realty, Inc., a Delaware corporation
having its chief executive offices at 430 Main Street, Williamstown,
Massachusetts 01267 (hereinafter referred to, individually and collectively,
as the "Borrower") and MetroWest Bank, a Massachusetts savings bank having
its chief executive offices at 15 Park Street, Framingham, Massachusetts
01701 (the "Bank");

                        W I T N E S S E T H:

                              Recitals

      On the terms and subject to the conditions set forth in this Agreement,
the Bank has agreed to provide to the Borrower a secured revolving credit
facility.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

S1.   DEFINITIONS AND RULES OF INTERPRETATION.

S2.   Definitions.  In addition to those terms which are defined elsewhere in
this Agreement, the following terms contained in this Agreement shall have
the meanings set forth below.

      Agreement has the meaning specified in the Preamble and all amendments,
modifications, restatements and supplements hereto.

      Availability means, at the time of reference, an amount equal to the
lesser of (a) the Bank's Credit Commitment, and (b) the Collateral Value of
the Borrowing Base.

      Balance Sheet Date means December 31, 1998.

      Borrowing Base means the borrowing base amount determined by the Bank
pursuant to S3 hereof.

      Borrowing Base Certificate means a Borrowing Base Certificate in
substantially the form of Exhibit B hereto.

      Business Day means any day which is not a Saturday, Sunday or any other
day on which banking institutions in Boston, Massachusetts are permitted or
required by law to remain closed.



      Closing Date means May 28, 1999.

      Collateral means all property, and all proceeds thereof, from time to
time subject to the security interests created hereby securing the
indebtedness evidenced by the Note and the other obligations of the Borrower
hereunder, including, without limitation, the following:

(1)   All Mortgage Loans, Mortgage Notes, Mortgages and other Collateral
      Documents deposited with or possessed by or for the account of the Bank
      hereunder, or held for delivery to the Bank hereunder, or delivered by
      the Bank to the Borrower or a purchaser for purposes of correction or
      sale, and all proceeds thereof;

(2)   All payments and prepayments of principal, interest and other income due
      or to become due on all Mortgage Loans, and all proceeds therefrom, and
      the benefits and proceeds and all the right, title and interest of every
      nature whatsoever of the Borrower in and to such property including,
      without limitation, the following:

S2.1. All rights, liens and security interests existing with respect to, or as
security for, all Mortgage Loans;

S2.2. All hazard insurance policies, title insurance policies and condemnation
proceeds with respect to any Mortgage Notes and with respect to property
securing any Mortgage Loans; and

S2.3. All prepayment premiums and late payment charges;

(3)   All files, surveys, certificates, correspondence, appraisals, computer
      programs, tapes, discs, cards, accounting records, and other records,
      information and data of the Borrower relating to Mortgage Loans and
      necessary or desirable for the Bank to have to administer, service or
      sell such Mortgage Loans;

(4)   The Proceeds Account;

(5)   All other Related Assets; and

(6)   Any other property and proceeds thereof that may, from time to time
      hereafter, be subject to the security interests created by the Loan
      Documents.

      Collateral Documents means those documents required to be delivered to
the Bank in order for Mortgage Loans to be deemed to be Qualified Mortgage
Collateral.



     Collateral Value means, with respect to any Qualified Mortgage
Collateral, an amount equal to the aggregate of (a) sixty-five percent (65%)
of the Origination Price of any Pre-Sold Mortgage Loans and (b) fifty percent
(50%) of the Origination Price of any Spec Mortgage Loans.

      Credit means the line of credit established by this Agreement.

      Credit Commitment means the Bank's commitment to make Loans to the
Borrower in the maximum aggregate amount of $5,000,000.00, as the same may be
reduced from time to time pursuant to the terms of the Agreement.

      Default has the meaning set forth in S11 hereof.

      Drawdown Date means the date on which any Loan is made or is to be made.

      Event of Default has the meaning set forth in S11 hereof.

      Financing Statements means financing statements for filing under the
Uniform Commercial Code necessary to perfect the Bank's security interests in
the Collateral.

      Generally Accepted Accounting Principles or GAAP means, (1) when used in
general, principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, as shall be
concurred in by independent certified public accountants of recognized
standing whose report expresses an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles)
as to financial statements in which such principles have been applied; and
(2) when used with reference to the Borrower, such principles shall include
(to the extent consistent with such principles) the accounting practices
reflected in the financial statements for the year ended on the Balance Sheet
Date.

      Indebtedness means all obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles  should be
classified upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including, in any event and
whether or not so classified: (a) all debt and similar monetary obligations,
whether direct or indirect; (b) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; and (c) all guarantees, endorsements
and other contingent obligations whether direct or indirect in respect of
indebtedness of others, including any obligation to supply funds to or in any
manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of
enabling the debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligations to reimburse the issuer in respect of any
letters of credit.

      Loan Documents means this Agreement, the Security Documents and the Note.



 Loan or Loans means the loans made by the Bank to the Borrower pursuant
to this Agreement.

      Loan Request means a written request for a Loan made pursuant to S2.5 of
this Agreement, substantially in the form of Exhibit C hereto.

      Mortgage means a mortgage or deed of trust on a real property.

      Mortgage Collateral means Mortgage Notes pledged to the Bank by the
Borrower pursuant to this Agreement.

      Mortgage Loan means a loan secured by a Mortgage.

      Mortgage Note  means a note, bond or other evidence of indebtedness
secured by a Mortgage.

      Net Proceeds means the total amount of proceeds realized by the Borrower
or seller (as appropriate) on account of any sale or other disposition of any
Mortgage Loan or Underlying Property, minus any reasonable customary closing
costs, approved by the Bank in each instance (in its reasonable discretion)
normally associated with said disposition.

      Note means the promissory note delivered to the Bank pursuant to this
Agreement, substantially in the form of Exhibit D hereto, including all
amendments and allonges thereto and any replacements and renewals thereof.

      Obligations means all indebtedness, obligations and liabilities of the
Borrower to the Bank under this Agreement or any of the other Loan Documents
or in respect of any of the Loans or the Note or other instruments at any
time evidencing any thereof, whether existing on the date of this Agreement
or arising or incurred hereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise.

      Origination Price means the unpaid principal amount of a Mortgage Note.

      Pre-Sold Mortgage Loan means those Mortgage Loans for which the
Underlying Property is the subject of a Purchase and Sale Agreement, to which
the Borrower has certified certain terms thereof to the Bank substantially in
the form of Exhibit A hereto.

      Pre-Sold Mortgage Loan Certificate means a Pre-Sold Mortgage Loan
Certificate in substantially the form of Exhibit A hereto.



      Proceeds Account means a non-interest paying demand deposit account
established for the Borrower with the Bank in which the Bank is granted a
security interest.  Such account shall be in the name of the Bank and only
the Bank will have the right to withdraw funds from such account.

      Purchase and Sale Agreement means an arms-length, fair market value
agreement between the mortgagor of any Mortgage Loan and a bona-fide third
party purchaser of the Underlying Property to which the purchaser has agreed
to buy and the mortgagor has agreed to sell.

      Qualified Mortgage Collateral means a Mortgage Loan satisfying the
following requirements:

(1)   The following documents have been delivered to the Bank:

                (a)  The original Mortgage Note endorsed in blank by the
           Borrower.

                (b)       A true copy of Mortgage, with evidence of
           appropriate recording and/or filing.

                (c)  An executed assignment from the Borrower in recordable
           form of the Mortgage securing the Mortgage Note.  All prior and
           interim assignments of the Mortgage shall have been duly recorded
           if, in the opinion of the Bank, local requirements require
           recordation.  If a recorded assignment is required but not yet
           available, the Borrower shall instead deliver a copy of each such
           assignment and either an Officer's Certificate certifying that such
           copy is a true copy and that such assignment has been duly recorded
           or delivered for recordation or evidence of a recorder's receipt.

                (d)  A marked-up title policy or a title insurance binder or
           title certificate which is in full force and effect and meets the
           requirements of subsection (ii)(b), below.

(2)   Within thirty (30) days after initial delivery of such Mortgage Notes a
      mortgagee title insurance policy insuring that the Mortgage is a valid
      first lien on the real estate and being otherwise acceptable to the Bank
      in its discretion as to insurer, form and content shall be delivered to
      the Bank.

(3)   Such Mortgage Loan is a binding and valid obligation of the obligor
      thereon, in full force and effect and enforceable in accordance with its
      terms.

(4)   Such Mortgage Loan is free of any default of any party thereto
      (including the Borrower), counterclaims, offsets and defenses and from
      any rescission, cancellation or avoidance, and all right thereof,
      whether by operation of law or otherwise.


(5)   No payment under such Mortgage Loan is more than thirty (30) days past
      due.

(6)   Such Mortgage Loan is in all respects as required by and in accordance
      with all applicable laws, and regulations governing the same, including,
      without limitation,  Fair Credit Reporting Act and Regulations, the
      Federal Truth-in-Lending Act and Regulation Z, the Federal Equal Credit
      Opportunity Act and Regulation B, the Federal Real Estate Settlement
      Procedures Act and Regulation X, the Federal Debt Collection Practices
      Act and any federal or state usury laws and regulations.  All
      disclosures required by law, federal, state or local, were  properly
      made by the Borrower (or, to the best of Borrower's knowledge, by the
      respective loan originator) prior to the closing of the Mortgage Loan.

(7)   All advance payments and other deposits on such Mortgage Loan have been
      paid in cash, and no part of such sums has been loaned, directly or
      indirectly, by the Borrower to the obligor thereon.

(8)   At all times such Mortgage Loan will be owned by the Borrower free and
      clear of all liens, encumbrances, charges, rights and interests of any
      kind, except pursuant to this Agreement, and the Bank has a perfected
      security interest in such Mortgage Loan.

(9)   An appraisal has been obtained by the Borrower as of a date which is no
      later than ninety (90) days prior to the origination of the subject
      Mortgage Loan, and such appraisal satisfies all appraisal requirements
      specified in 12 CFR 34.1 through 34.47 and requirements of other bank
      regulatory agencies.

(10)  Such Mortgage Loan is genuine, in all respects as appearing on its face
      or as represented in the books and records of the Borrower, and all
      information set forth therein is true and correct, and the current
      principal balance reflects only proceeds of such Mortgage Loan which
      have been fully disbursed.

(11)  The property covered by such Mortgage Loan is insured against loss or
      damage by fire and all other hazards normally included within standard
      extended coverage in accordance with the provisions of such Mortgage
      Loan with the Borrower named as loss payee thereon, and the Borrower has
      furnished a letter of certification to the Bank (to be renewed annually)
      indicating that fire and hazard insurance will be held on behalf of the
      Bank for each Mortgage Loan.



(12)  The property covered by such Mortgage Loan is free and clear of all
      liens except in favor of the Borrower (which has assigned any and all
      such liens to the Bank)  and (1) the lien of current real property taxes
      and assessments not yet due and payable; (2) covenants, conditions and
      restrictions, rights of way, easements and other matters of the public
      record, as of the date of recording, acceptable to mortgage lending
      institutions generally and specifically referred to in a lender's title
      insurance policy delivered to the Borrower and (i) referred to or
      otherwise considered in the appraisal made for the Borrower or (ii)
      which do not materially adversely affect the appraised value of such
      property as set forth in such appraisal; and (3) other matters to which
      like properties are commonly subject which do not materially interfere
      with the benefits of the security intended to be provided by such
      Mortgage Loan or the use, enjoyment, value or marketability of the
      related property.

(13)  Such Mortgage Loan was underwritten in compliance with the Underwriting
      Standards set forth on Exhibit F  hereto.

(14)  The Mortgage Note requires monthly payments of principal and/or
      interest, has a maximum maturity date of thirty years from its
      origination, and either (A) fully amortizes over the term thereof, or
      (B) provides for the amortization of principal over no greater than a
      thirty (30) year schedule.

(15)  Such Mortgage Loan is otherwise satisfactory to the Bank.

(16)  There is no agreement with the mortgagor regarding any variation of the
      interest rate and schedules of payment (except as described in the
      Mortgage Note and Mortgage) or other terms and conditions of the
      Mortgage Loan, no mortgagor has been released from liability on the
      Mortgage Note, and no property has been released from the Mortgage
      (except in consideration of an appropriate proportionate principal
      payment which is reflected in the books and records of the Borrower).
      If the Mortgage Loan is a variable rate loan, the Borrower represents
      and warrants as of each Drawdown Date that all applicable notices
      required by law or regulation have been provided to the mortgagor and
      that the right to future changes in the interest rate and payment
      schedules has not been waived by the Borrower or any previous holder of
      the Mortgage Loan.

(17)  There are no mechanic's lien or similar liens or claims which have been
      filed for work, labor or material affecting the subject property which
      are or may be liens prior to or equal with the lien of the Mortgage.

(18)  The subject property is free of material damage and waste and is in
      average repair and there is no proceeding pending or threatened for the
      total or partial condemnation of the subject property, and the subject
      property is free and clear of all hazardous material to the best of
      Borrower's knowledge.

(19)  The Borrower has no knowledge of any fact as to any Mortgage Loan which
      it has failed to disclose which would materially and adversely affect
      the value or marketability of such Mortgage Loan.



(20)  The Borrower has no knowledge of any impediments to title that adversely
      affect the value, enjoyment or marketability of the Underlying Property.

(21)  Intentionally omitted.

(22)  To the best of Borrower's knowledge, no hazardous or toxic materials or
      wastes or products regulated by law or ordinance or asbestos or asbestos
      products or materials or polychlorinated biphenyls or urea formaldehyde
      insulation have ever been used or employed in the construction, use or
      maintenance of the Underlying Property or have ever been stored, treated
      at or disposed of on the Underlying Property.  However, in the event it
      has been determined that asbestos or asbestos products or asbestos
      materials have been used or employed in construction, use, or
      maintenance of the Underlying Property, a duly qualified appraiser or
      engineer must state that the material is in good repair or has been
      removed.

(23)  To the best of Borrower's knowledge, there has not occurred nor has any
      person or entity alleged that there has occurred upon the Underlying
      Property any spillage, leakage, discharge or release into the air, soil
      or groundwater of any hazardous materials or regulated wastes.


(24)  All taxes, filing fees and similar fees assessed by any state or local
      authority in connection with the execution, delivery or recording of the
      Mortgage have been paid.

      Related Assets means any and all documents, instruments, collateral
agreements and assignments and endorsements for all documents, instruments
and collateral agreements, referred to in the Mortgage Notes and/or Mortgages
or related thereto, including, without limitation, guaranties, current
insurance policies (flood insurance, if applicable; hazard insurance; title
insurance and other applicable insurance policies) covering the subject
property or relating to the Mortgage Notes and all files, books, papers,
ledger cards, reports and records, including, without limitation, loan
applications, mortgagor financial statements, credit reports and appraisals,
relating to the Mortgage Loans.  In all cases, the Related Assets shall be
the original documents.

      Security Documents means all documents delivered to the Bank which
evidence the Obligations and Collateral therefor.

      Spec Mortgage Loans means those Mortgage Loans to which the Underlying
Property is not the subject of a Purchase and Sale Agreement. The Borrower
agrees that Spec Mortgage Loans will account for not more than 40% of all
Qualified Mortgage Loans.  In the event that the aggregate of all Spec
Mortgage Loans exceeds 40% of the Qualified Mortgage Loans, such additional
Spec Mortgage Loans will not be available for inclusion in the Collateral
Value.



   Termination Date  means the date which is the earlier to occur of (i)
729 days after the Closing Date or (ii) the date on which the Bank
accelerates the Obligations as the result of the occurrences of an Event of
Default.

      Transmittal Letter means a letter from the Borrower to the Bank
substantially in the form of Exhibit E hereto.

      Underlying Property means a parcel or parcels of land and improvement
thereon encumbered by a Mortgage.

      Uniform Commercial Code means the Uniform Commercial Code as enacted in
the Commonwealth of Massachusetts, as amended from time to time (M.G.L., c.
106, S9-101 et seq.)

S3.   Rules of Interpretation.

S3.1. A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.

S3.2. The singular includes the plural and the plural includes the singular.

S3.3. A reference to any law includes any amendment or modification to such
law.

S3.4. A reference to any person includes its permitted successors and
permitted assigns.

S3.5. Accounting terms not otherwise defined herein have the meanings assigned
to them by generally accepted accounting principles applied on a consistent
basis by the accounting entity to which they refer.

S3.6. The words "include," "includes" and "including" are not limiting.

S3.7. All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code
as in effect in Massachusetts, have the meanings assigned to them therein.

S3.8. Reference to a particular "S" refers to that section of this Agreement
unless otherwise indicated.

S3.9. The words "herein", "hereof", "hereunder" and words of like import shall
refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
S1.1.






S4.   THE CREDIT FACILITY.

S5.   Commitment to Make Loans.

S5.1. Subject to the terms and conditions set forth in this Agreement, the
Bank agrees to lend to the Borrower and the Borrower may borrow, repay, and
reborrow from time to time between the Closing Date and the Termination Date
upon notice by the Borrower to the Bank given in accordance with S2.5, such
sums as are requested by the Borrower up to a maximum aggregate principal
amount outstanding (after giving effect to all amounts requested) at any one
time equal to the Bank's Credit Commitment; provided, that the sum of the
outstanding amount of the Loans (after giving effect to all amounts
requested) shall not at any time exceed Availability.

S5.2. Upon the occurrence of any Default or Event of Default which is
continuing, the Bank shall have no obligation to make any Loans to the
Borrower hereunder.

S6.   Advances in Excess of Availability.  The Bank does not have any
obligation to make any Loan such that the outstanding principal balance of
the Loans exceeds Availability.  The making of Loans and the providing of
financial accommodations by the Bank in excess of Availability is for the
benefit of the Borrower and does not affect the obligations of the Borrower
hereunder; such Loans constitute Obligations.  The making of any such Loans
in excess of Availability on any one occasion shall not obligate the Bank to
make any such Loans on any other occasion nor to permit such Loans to remain
outstanding.

S7.   Note. At the time of the making of the first Loan hereunder, the
Borrower shall deliver to the Bank its original Note, payable to the order of
the Bank in a principal amount equal to the Bank's Credit Commitment, and
dated the date of delivery.  The Note shall be in the form of Exhibit D
hereto, shall mature on the Termination Date, and shall bear interest as set
forth herein.

S8.   Interest on Loans.  Prior to the occurrence of an Event of Default, the
outstanding principal amount of the Loans shall bear interest at the rate per
annum equal to the aggregate of (a) the Bank's Corporate Base Rate (b) plus
one percent (1.00%).  Interest shall be payable (i) monthly in arrears on the
first day of each calendar month of each year, commencing July 1,1999, and
(ii) on the Termination Date.  As used herein, the Bank's Corporate Base Rate
refers to that rate of interest announced from time to time by the Bank as
its Corporate Base Rate, with changes in such rate to be effective, for
purposes of calculation hereunder, on the same date such changes are made
generally effective by the Bank to loans made by it.



S9.   Requests for Loans.  The Borrower shall give to the Bank written notice
in the form of Exhibit C hereto (or telephonic notice confirmed in a writing
in the form of Exhibit C hereto) of each Loan requested hereunder (a "Loan
Request") no less than one (1) Business Day prior to the proposed Drawdown
Date of any Loan.  Each Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Loan requested from
the Bank on the proposed Drawdown Date.  Each of the representations and
warranties made by or on behalf of the Borrower to the Bank in this Agreement
or any other Loan Document shall be true and correct in all material respects
when made and shall, for all purposes of this Agreement, be deemed to be
repeated on and as of the date of the submission of any Loan Request and on
and as of the Drawdown Date of such Loan (except to the extent of changes
resulting from transactions contemplated or permitted by this Agreement and
the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse and to
the extent that such representations and warranties expressly relate to an
earlier date).  All Loans will be advanced by wire transfer in accordance
with procedures approved by the Bank in each instance.

S10.  Maturity of the Loans. The Loans shall mature and shall be due and
payable on the Termination Date.  The Borrower promises to pay on the
Termination Date, and there shall become absolutely due and payable on the
Termination Date, all Loans outstanding on such date, together with any and
all accrued and unpaid interest thereon.

S11.  Mandatory Prepayments. If at any time the outstanding amount of the
Loans shall exceed Availability, the Borrower shall immediately pay to the
Bank in cash, or deliver to the Bank additional Collateral Documents meeting
the requirements of this Agreement, or both, so that the sum of the cash paid
and the Collateral Value of the Mortgage Loans related to the Collateral
Documents so delivered shall equal or exceed the amount by which the
outstanding amount of the Loans exceeds Availability.  Any cash so paid shall
be deemed to be the payment of principal on the Loans and shall be applied by
the Bank in accordance with the provisions of S4.2 hereof.


S12.  DETERMINATION OF BORROWING BASE; COLLATERAL DOCUMENTS.

S13.  Inclusion of Qualified Mortgage Collateral in Borrowing Base. The
Borrower may, from time to time, transmit to the Bank Collateral Documents
together with a Transmittal Letter, in duplicate, in the form of Exhibit E
hereto.  If the Bank, in its discretion, determines that such Collateral
Documents and the related Mortgage Loans meet the requirements of this
Agreement and that such Mortgage Loans are Qualified Mortgage Collateral, the
Collateral Value of such Qualified Mortgage Collateral shall be included in
the Borrowing Base, subject to the limitations set forth in this S3.1. In
addition, the Bank reserves the right, in its sole discretion, at any time,
to exclude Mortgage Loans from the Borrowing Base, whether or not the
Collateral Documents have been delivered and whether or not the Borrowing
Base limitations have been met.



S14.  Custody of Collateral Documents. The Borrower will deliver to the Bank
or its custodian, as directed by the Bank, the Mortgage Notes and other
Collateral Documents with respect to all Mortgage Collateral included in the
Borrowing Base.

S15.  Pre-Sold Mortgage Loans.  In order for any Mortgage Loan to be
characterized as a Pre-Sold Mortgage Loan, the Borrower must deliver to the
Bank, in addition to any other documents, certificates or other instruments
which must be delivered pursuant to this Agreement, a Pre-Sold Mortgage Loan
Certificate substantially in the form of Exhibit A hereto. In the event that
any Mortgage Loan is not characterized by the Bank as a Pre-Sold Mortgage
Loan, then the Mortgage Loan shall be a Spec Mortgage Loan.




S16.  CERTAIN GENERAL PROVISIONS.

S17.  Method of Payment.

S17.1.     All payments and prepayments of principal and all payments of
interest and fees shall be made by the Borrower in immediately available
funds.

S17.2.     All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding.  If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of
the other Loan Documents, the Borrower will pay to the Bank, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable
the Bank to receive the same net amount which the Bank would have received on
such due date had no such obligation been imposed upon the Borrower.  The
Borrower will deliver promptly to the Bank certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan Document.

S17.3.     All payments of interest hereunder shall be by wire transfer to the
Bank.

S18.  Application of Payments. For the purposes of interest calculations,
payments of immediately available funds made by the Borrower to the Bank
prior to midnight on any Business Day will be credited as of such Business
Day.


S19.  Computations. All computations of interest on the Loans and on any fees
shall, unless otherwise expressly provided herein, be based on a 360-day year
and paid for the actual number of days elapsed.  Any rate of interest which
is determined with reference to the Base Rate shall vary from time to time as
the Base Rate varies, any change in the rate of interest to become effective
on the date of the announcement of the change in the Base Rate.  Whenever a
payment hereunder or under any of the other Loan Documents becomes due on a
day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue
during such extension.

S20.  Interest After Default; Late Fees.

S20.1.     After the occurrence of an Event of Default (and continuing for so
long as an Event of Default continues), principal and (to the extent
permitted by applicable law) interest on the Loans and all other amounts
payable hereunder or under any of the other Loan Documents shall bear
interest, at the Bank's option, compounded monthly and payable on demand at a
rate per annum equal to the Bank's Corporate Base Rate plus 5%.  In no event,
however, shall the interest rate hereunder exceed 18%.

S20.2.      Without derogating from the right of the Bank to accelerate the
Loans in the event of any default in the payment of any amounts due hereunder
or under any of the other Loan Documents, if any payment due hereunder or
under any of the other Loan Documents is not received by the Bank within
fifteen (15) days of the due date for such payment, the Borrower shall pay to
the Bank, on demand, a late charge equal to the greater of five percent (5%)
of the amount of such payment or Fifteen Dollars ($15.00).

S21.  Interest Limitation.  Notwithstanding any other term of this Agreement
or the Note or any other document referred to herein or therein, the maximum
amount of interest which may be charged to or collected from any person
liable hereunder or under the Note by the Bank shall be absolutely limited
to, and shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the
extent applicable, the provisions of Section 5197 of the Revised Statutes of
the United States of America, as amended, 12 U.S.C. Section 85, as amended),
so that the maximum of all amounts constituting interest under applicable
law, howsoever computed, shall never exceed as to any person liable therefor
such lawful maximum, and any term of this Agreement, the Note, or any other
document referred to herein or therein which could be construed as providing
for interest in excess of such lawful maximum shall be and hereby is made
expressly subject to and modified by the provisions of this paragraph.



S22.  Additional Costs, Etc. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to the Bank by any central bank or other fiscal, monetary
or other authority (whether or not having the force of law), shall impose on
the Bank any tax, levy, impost, duty, charge fees, deduction or withholdings
of any nature or requirements with respect to this Agreement, the other Loan
Documents, the Loans, the Bank's Credit Commitment, or any class of loans or
commitments of which any of the Loans or the Credit Commitment forms a part,
and the result of any of the foregoing is:

(1)   to increase the cost to the Bank of issuing, renewing, extending or
      maintaining the Loans or the Bank's Credit Commitment; or

(2)   to reduce the amount of principal, interest or other amount payable to
      the Bank hereunder on account of the Bank's Credit Commitment or the
      Loans; or

(3)   to require the Bank to make any payment or to forego any interest or
      other sum payable hereunder, the amount of which payment or foregone
      interest or other sum is calculated by reference to the gross amount of
      any sum receivable or deemed received by the Bank from the Borrower
      hereunder,

then, and in each such case, the Borrower will, upon demand made by the Bank
at any time and from time to time and as often as the occasion therefor may
arise, pay to the Bank the additional amounts as will be sufficient to
compensate the Bank for such additional cost, reduction, payment or foregone
interest or other sum (after the Bank shall have allocated the same fairly
and equitably among all customers of any class generally affected thereby).


S23.  DELIVERY OF COLLATERAL FOR SALE.

S24.  Sale of Mortgage Collateral; Delivery to Purchasers. So long as no Event
of Default has occurred and is continuing, any Mortgage Loan may be sold upon
request of the Borrower, provided that such sale is evidenced by a bona-fide
agreement to an unaffiliated third-party purchaser and is for adequate
consideration (provided that after giving effect to such sale the Borrower is
in compliance with the terms contained in all of the Loan Documents).  The
Borrower may direct the delivery of any of the Mortgage Loans for the purpose
of sale and the Bank agrees to release its lien in the Mortgage Loan upon
payment to the Bank (for credit against the Obligations of the Borrower under
this Agreement) of all Net Proceeds realized by the Borrower on account of
any such sale or disposition, or such lesser amount thereof necessary to
cause the outstanding balance of the Loans not to exceed the Availability.



S25.  Sale of Underlying Property; Delivery to Purchasers. So long as no Event
of Default has occurred and is continuing, any Underlying Property may be
sold upon request of the Borrower, provided that such sale is evidenced by a
bona-fide agreement to an unaffiliated third-party purchaser and is for
adequate consideration (provided that after giving effect to such sale the
Borrower is in compliance with the terms contained in all of the Loan
Documents) the Bank agrees to release its lien against the subject Underlying
Property upon payment to the Bank (for credit against the Obligations of the
Borrower under this Agreement) of all Net Proceeds realized by the Borrower
on account of any such sale or disposition, or such lesser amount thereof
necessary to cause the outstanding balance of the Loans not to exceed the
Availability.

S26.  Proceeds.  All Net Proceeds of the sale of Collateral shall be paid
directly to the Bank or its designee and applied to the payment of the
Obligations.  Any balance shall be deposited in the Proceeds Account.  If
proceeds are inadvertently remitted to the Borrower, it shall receive the
proceeds in trust for the Bank subject to the security interests created
hereby, and immediately remit the proceeds to the Bank.


S27.  COLLATERAL SECURITY.

S28.  To secure the repayment of the Obligations and the performance of the
Borrower's other obligations to the Bank hereunder and under the other Loan
Documents, the Borrower hereby grants to the Bank a security interest in the
Collateral.

S29.  Unless a Default or Event of Default shall have occurred and then be
continuing, the Borrower shall be entitled to receive and collect directly
all sums payable to the Borrower in respect of the Collateral (such as
regularly scheduled principal and interest payments) except proceeds from the
prepayment, sale or other disposition thereof shall be deposited in to the
Proceeds Account as provided in Section 5.2 hereof.

S30.  Upon and during the occurrence of a Default or Event of Default, the
Bank shall be entitled to receive and collect all sums payable to the
Borrower in respect of any Collateral and (a) the Bank may, at its option, in
its own name or in the name of the Borrower or otherwise, demand, sue for,
collect or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, (b) the Borrower shall,
if requested by the Bank, forthwith pay to the Bank all amounts thereafter
received by the Borrower upon or in respect of any of the Collateral,
advising the Bank of the source of such funds, and (iii) all amounts so
received and collected by the Bank shall be applied to the Loans as provided
herein.

S31.  The Borrower appoints the Bank as the Borrower's attorney-in-fact, with
full power of substitution, for the purpose of taking such action and
executing such documents, in the name of Borrower or otherwise, as the Bank
may deem necessary or advisable to accomplish the purposes of this Agreement,
which appointment is coupled with an interest and is irrevocable.  The Bank
agrees promptly to notify Borrower after any such action or execution of
instruments, provided that the failure to give such notice shall not affect
the validity of such action or execution of instruments.

S32.  Any item of Collateral (including Related Assets to any Mortgage Loan)
held by the Borrower shall be held in trust by the Borrower for the benefit
of, and as bailee for, the Bank, and shall be delivered to the Bank promptly
upon the Bank's request.



S33.  This Agreement shall create a continuing security interest in the
Collateral and shall: (i) remain in full force and effect until payment in
full of the Borrower's Note; (ii) be binding upon the Borrower, its
successors and assigns; and (iii) inure to the benefit of the Bank and its
successors, transferees and assigns.


S34.  REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank as follows:

S35.  Corporate Authority; Etc.

S35.1.     Incorporation; Good Standing. Each party comprising the Borrower
(i) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (ii) has all
requisite power to own its property and conduct its business as now conducted
and as presently contemplated, and (iii) is in good standing as a foreign
entity and is duly authorized to do business in each jurisdiction where the
nature of its properties or its business requires such qualifications.  Each
party comprising the Borrower is duly licensed or approved to conduct a
mortgage banking business under the laws of all states in which it conducts
business and which require such licenses or approvals, and no such license or
approval has been revoked or suspended, or an application therefor denied.

S35.2.     Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is or is to
become a party and the consummation of the transactions contemplated hereby
and thereby (i) are within the authority of the Borrower, (ii) have been duly
authorized by all necessary proceedings on the part of the Borrower, (iii) do
not conflict with or result in any breach or contravention of any provision
of law, statute, rule or regulation to which the Borrower is subject or any
judgment, order, writ, injunction, license or permit applicable to the
Borrower, (iv) do not conflict with any provision of the charter documents or
bylaws of, or any agreement or other instrument binding upon, the Borrower,
and (v) will not result in the imposition of any liens or encumbrances on any
of the assets of the Borrower other than liens or security interests granted
to the Bank pursuant to the Loan Documents.
S35.3.     Enforceability.  The execution and delivery of this Agreement and
the other Loan Documents to which the Borrower is or is to become a party
will result in valid and legally binding obligations of the Borrower
enforceable against it in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor
may be brought.



S36.  Governmental Approvals. The execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents to which the Borrower
is or is to become a party, the consummation of the transactions contemplated
hereby and thereby and the validity and enforceability hereof and thereof do
not require the approval or consent of, or filing with, any governmental
agency or authority.

S37.  No Default or Event of Default. No Default or Event of Default has
occurred and is continuing and the Borrower is not in default in any respect
under any obligation for borrowed money or in default under any other
contract, agreement or obligation which default could result in an impairment
of the ability of the Borrower to fulfill its obligations hereunder or an
impairment of its financial position or business prospects.

S38.  Financial Statements. The Borrower has furnished to the Bank a
consolidated balance sheet of the Borrower as of the Balance Sheet Date, and
a statement of income for the fiscal year then ended, accompanied by an
auditor's report.  Such balance sheet and statement of income have been
prepared in accordance with generally accepted accounting principles and
fairly present the financial condition of the Borrower as at the close of
business on the date thereof and the results of operations for the fiscal
year then ended.  There are no contingent liabilities of the Borrower as of
such date involving material amounts, known to the officers of the Borrower,
not disclosed in said balance sheet and the related notes thereto.

S39.  No Material Changes, Etc. Since the Balance Sheet Date, there have been
no changes in the assets, liabilities, financial condition or business of the
Borrower other than changes in the ordinary course of business, the effect of
which has not been in any case, or in the aggregate materially adverse.

S40.  Taxes. The Borrower has filed all tax returns required to be filed with
the United States and each State and possession of the United States where
the Borrower is qualified to do business and in all other jurisdictions where
such filings are required, and all taxes, assessments and other governmental
charges due have been fully paid (except for payment of those amounts with
respect to which the Borrower has contested in good faith by appropriate
proceedings and has established adequate reserves in accordance with
generally accepted accounting principles), and no extensions of the time of
payment have been requested.  The Borrower has paid or set up on its books
reserves adequate for the payment of federal and state income and withholding
tax liabilities.



S41.  Litigation.  There are no actions, suits, proceedings or investigations
of any kind pending or threatened against the Borrower before any court,
tribunal or administrative agency or board that, if adversely determined,
might, either in any case or in the aggregate, materially adversely affect
the properties, assets, financial condition or business of the Borrower or
materially impair the right of the Borrower to carry on business
substantially as now conducted by it, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the balance sheet of the Borrower, or which question the
validity or enforceability of this Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.

S42.  Disclosure. Neither this Agreement nor any document delivered to the
Bank hereunder by the Borrower or on its behalf to induce the Bank to enter
into this Agreement contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein
not misleading.

S43.  Franchises, Patents, Copyrights, Etc. The Borrower possess all
franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct of
its business substantially as conducted without known conflict with any
rights of, or by, others.

S44.  No Materially Adverse Contracts, Etc. The Borrower is not subject to any
charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial condition of
the Borrower. The Borrower is not a party to any contract or agreement that
has or is expected, in the judgment of the Borrower's officers, to have any
materially adverse effect on the business of the Borrower.

S45.  Compliance With Other Instruments, Laws, Etc.  The Borrower is not in
violation of any provision of its charter or other organization documents,
by-laws, or any agreement or instrument to which it may be subject or by
which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases
in a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or
business of the Borrower.

S46.  Perfection of Security Interest.  All filings, assignments, pledges and
deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Bank's security interest in the Collateral.  The
Collateral and the Bank's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses.  The Borrower
is the owner of the Collateral in which it has granted a security interest to
the Bank free from any lien, security interest, encumbrance and any other
claim or demand.


S47.  AFFIRMATIVE COVENANTS OF THE BORROWER.  The Borrower covenants and
agrees that from the date hereof and as long as the Credit remains in effect
or any indebtedness is outstanding hereunder:

S48.  Punctual Payment. The Borrower will duly and punctually pay or cause to
be paid the principal and interest on the Loans and all and fees provided for
in this Agreement and the Note as well as all other sums owing pursuant to
the Loan Documents.
S1.



S49.  Maintenance of Office. The Borrower will maintain its chief executive
office in Williamstown, Massachusetts, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Bank, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.

S50.  Records and Accounts. The Borrower will (a) keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with generally accepted accounting principles and (b)
maintain accounts and reserves for all taxes (including income taxes),
depreciation and amortization of its properties, contingencies, and other
reserves, all in accordance with generally accepted accounting principles.

S51.  Financial Statements, Certificates and Information.  The Borrower will
deliver to the Bank:

S51.1.     as soon as available, but in any event not later than ninety (90)
days after the end of each fiscal year of each party comprising the Borrower,
the consolidated audited balance sheet of the Borrower at the end of such
year, and the related audited statements of earnings and cash flows for such
year, setting forth in comparative form the figures for the previous fiscal
year and all such statements to be in reasonable detail, prepared in
accordance with generally accepted accounting principles, and accompanied by
an auditor's report prepared by an independent certified public accountant
acceptable to the Bank together with a written statement from such
accountants to the effect that they have read a copy of this Agreement, and
that, in making the examination necessary for said certification, they have
obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or
Event of Default, they shall disclose in such statement any such Default or
Event of Default;

S51.2.     as soon as available, but in any event not later than forty-five
(45) days after the end of each of fiscal quarters of each party comprising
the Borrower, copies of the consolidated unaudited balance sheet of the
Borrower as at the end of such quarter, and the related unaudited statements
of income and cash flows for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with generally
accepted accounting principles, together with a certification by the
principal financial or accounting officer of each party comprising the
Borrower that the information contained in such financial statements fairly
presents the financial position of the Borrower on the date thereof (subject
to year-end audit adjustments);

S51.3.     from time to time such other financial data and information as the
Bank may reasonably request.

S51.4.     Notices.

S51.5.     Defaults. The Borrower will promptly notify the Bank in writing of
the occurrence of any Default or Event of Default, which writing will contain
a detailed description of such Default or Event of Default and the action to
be taken by the Borrower in response thereto.  If any person shall give any
notice or take any other action in respect of a claimed default (whether or
not constituting an Event of Default) under this Agreement or under any note,
evidence of indebtedness, indenture or other obligation to which or with
respect to which the Borrower is a party or obligor, whether as principal or
surety, and such default would permit the holder of such note or obligation
or other evidence of indebtedness to accelerate the maturity thereof, which
acceleration would have a material adverse effect on the Borrower, the
Borrower shall forthwith give written notice thereof to the Bank, describing
the notice or action, the nature of the claimed default, and the action to be
taken by the Borrower in response thereto.

S51.6.     Notification of Claims against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Bank in writing of any
setoff, claims, withholdings or other defenses to which any of the
Collateral, or the rights of the Bank with respect to the Collateral, are
subject.

S51.7.     Notice of Litigation and Judgments. The Borrower will give notice
to the Bank in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower or to which the Borrower is or is to
become a party involving any claim against the Borrower that could reasonably
be expected to have a materially adverse effect on the Borrower and stating
the nature and status of such litigation or proceedings.  The Borrower will
give notice to the Bank, in writing, in form and detail satisfactory to the
Bank, (i) immediately upon (and in any event within three (3) days of) the
commencement thereof, notice of any litigation questioning the validity or
enforceability of the Loan Documents, and (ii) within ten (10) days of any
judgment not covered by insurance, final or otherwise, against the Borrower
in an amount in excess of $10,000.00.

S52.  Existence; Maintenance of Properties. The Borrower will do or cause to
be done all things necessary to preserve and keep in full force and effect
its existence as a corporation.  The Borrower will do or cause to be done all
things necessary to preserve and keep in full force all of its rights and
franchises.  The Borrower (a) will cause all of its properties used or useful
in the conduct of its business or the business to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will continue to engage primarily in the businesses now conducted by it and
in related businesses.



S53.  Insurance.  The Borrower will maintain with financially sound and
reputable insurers, insurance with respect to its properties and its business
against such casualties and contingencies as the Bank shall require, each of
which policies shall be in form and with such companies and in such amounts
as are acceptable to the Bank, including, without limitation, maintenance of
its mortgage banker's blanket bond or individual errors and omissions policy
and indemnity bond. Such insurance shall be endorsed in each case to require
not less than 30 days' prior notice by the insurer in the event of
cancellation to the Bank at the address first written above.

S54.  Taxes. The Borrower will pay or cause to be paid and discharged, before
the same shall become overdue, all taxes, assessments and other governmental
charges imposed upon it or on any of its real properties, sales and
activities or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that, if unpaid, might
by law become a lien or charge upon any of such properties; provided that any
such tax, assessment, charge, levy or claim with respect to properties need
not be paid if the validity or amount thereof shall currently be contested in
good faith by appropriate proceedings and if the Borrower shall have set
aside on its books adequate reserves with respect thereto; and provided
further that the Borrower will pay all such taxes, assessments, charges,
levies or claims forthwith upon the commencement of proceedings to foreclose
any lien that may have attached as security therefor.

S55.  Inspection of Properties and Books. The Borrower shall  permit the Bank,
or any designated representative of the Bank, to visit and inspect any of the
properties of the Borrower to examine the books of account of the Borrower
(and to make copies thereof and extracts therefrom) and to discuss the
affairs, finances and accounts of the Borrower with, and to be advised as to
the same by, its officers, all at such reasonable times and intervals as the
Bank may reasonably request.  The Bank may conduct the foregoing
examinations, visitations, inspections and discussions at the Borrower's
expense at such reasonable times and intervals as the Bank may reasonably
request.

S56.  Compliance with Laws, Contracts, Licenses, and Permits.  The Borrower
will comply with (a) all applicable laws and regulations now or hereafter in
effect wherever its business is conducted, (b) the provisions of its
corporate charter, and other charter documents and by-laws, (c) all material
agreements and instruments to which it is a party or by which it or any of
its properties may be bound and (d) all applicable decrees, orders, and
judgments.  If at any time while any Loan or the Note is outstanding or the
Bank has any obligation to make Loans hereunder, any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of
any government shall become necessary or required in order that the Borrower
may fulfill any of its obligations hereunder, the Borrower will immediately
take or cause to be taken all reasonable steps within the power of the
Borrower to obtain such authorization, consent, approval, permit or license
and furnish the Bank with evidence thereof.


S57.  Further Assurances. The Borrower will cooperate with the Bank and
execute such further instruments and documents as Bank shall reasonably
request to carry out to the Bank's satisfaction the transactions contemplated
by this Agreement and the other Loan Documents.

S58.  Appraisals. The Borrower will obtain appraisals for each Underlying
Properties which appraisals will satisfy the requirements of 12 CFR 34.1 -
34.47, and the requirements of any other bank regulatory agency to which the
Bank is subject.  The Borrower will hold such appraisals as agent for the
Bank.  In addition, the Borrower will, at the request of the Bank, deliver
originals or copies of such appraisals to the Bank.

S59.  Use of Proceeds.  The Borrower will use the proceeds of all Loans for
its general working capital purposes.

S60.  Qualified Mortgage Collateral.  Each Mortgage Loan submitted by the
Borrower to the Bank, or the Bank's custodian, for inclusion in the Borrowing
Base will be a Qualified Mortgage Loan at the time of such submission.


S61.  CONDITIONS TO INITIAL LOAN. The obligations of the Bank to make the
initial Loan hereunder shall be subject to the satisfaction of the following
conditions precedent:

S62.  Certified Copies of Organization Documents. The Bank shall have received
from the Borrower a copy, certified as of a recent date by a duly authorized
officer of Borrower to be true and complete, of the corporate charter and any
other organization documents of the Borrower as in effect on such date of
certification.

S63.  By-laws; Resolutions. All action on the part of the Borrower necessary
for the valid execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents to which it is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory
to the Bank shall have been provided to the Bank.  The Bank shall have
received from the Borrower true copies of its by-laws and the resolutions
adopted by its board of directors authorizing the transactions described
herein, each certified by its secretary as of a recent date to be true and
complete and not amended, modified or rescinded, and in full force and effect.

S64.  Incumbency Certificate; Authorized Signers. The Bank shall have received
from the Borrower an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of the Borrower and giving the name and
bearing a specimen signature of each individual who shall be authorized:

S64.1.     to sign, in the name and on behalf of the Borrower, each of the
Loan Documents to which the Borrower is or is to become a party;
S1.1.


S64.2.     to make Loan Requests; and

S64.3.     to give notices and to take other action on behalf of the Borrower
under the Loan Documents.

S65.  Opinion of Counsel Concerning Organization and Loan Documents.  The Bank
shall have received a favorable opinion addressed to the Bank and dated as of
the Closing Date, in form and substance satisfactory to the Bank from
independent counsel to the Borrower as to the matters described on Exhibit G
hereto.

S66.  Good Standing Certificates; Licenses. The Bank shall have received a
certificate of good standing of the Borrower issued as of a recent date by
the Secretary of State (and if applicable, the Department of Revenue) of the
State in which the Borrower is incorporated, together with satisfactory
opinions as to the currently effective licenses or approvals (if required) to
conduct a mortgage banking business in each such State.

S67.  Borrowing Base Certificate. The Bank shall have received the initial
Borrowing Base Certificate dated as of the Closing Date.

S68.  Note.  The Bank shall have original of the Note duly executed and
delivered by the Borrower.

S69.  Insurance.   The Bank shall have received true copies of documents
evidencing the insurance required by S8.7 hereof.

S70.  Other Documents. The Bank shall have received a copy of such other
documents as the Bank in its sole discretion may require.

S71.  UCC Lien Searches. The Bank shall have received the UCC Perfection
Certificate in the form of Exhibit H hereto, dated as of the Closing Date,
signed by the Borrower's chief financial officer, and the results of the UCC
lien searches of the Borrower in the appropriate States reflected thereon.


S72.  CONDITIONS TO ALL LOANS. The following conditions must be satisfied or
waived in writing by the Bank, prior to the making of any Loan:

S73.  Notice.  Receipt by the Bank of the Loan Request required by S2.5 hereof.

S74.  Collateral Documents. The Bank shall have received the Collateral
Documents required by S3 hereof.



S75.  Borrowing Base Certificate. The Bank shall have received an updated
Borrowing Base Certificate dated as of the Drawdown Date.

S76.  Representations and Warranties. The representations and warranties made
by the Borrower in this Agreement and in the other Loan Documents and all
other representations in writing made hereafter by or on behalf of the
Borrower in connection with the transactions contemplated by this Agreement
shall be true as of the date as of which they were made and shall also be
true at and as of the time each such Loan is requested (except to the extent
of changes resulting from transactions contemplated by this Agreement and
changes occurring in the ordinary course of business which are not materially
adverse singly or in the aggregate to the Borrower taken as a whole, and to
the extent that such representations and warranties relate expressly to an
earlier date).

S77.  No Defaults. After giving effect to the requested Loan, no event shall
have occurred and be continuing and no condition shall exist which
constitutes, or with the giving of notice or lapse of time or both, would
constitute, an Event of Default.

S78.  No Legal Impediment.  No change shall have occurred in any law or
regulations thereunder or interpretations thereof which in the opinion of
special counsel for the Bank would make it illegal for the Bank to make Loans
hereunder.

S79.  Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents
incident thereto shall be reasonably satisfactory in form and substance to
the Bank and to special counsel to the Bank such special counsel shall have
received all such counterpart originals or certified or other copies of such
documents as either of them may reasonably request.

S80.  Availability Not Exceeded.  Following the funding of the requested Loan,
the aggregate principal amount of Loans outstanding will not exceed the
Availability.


S81.  EVENTS OF DEFAULT; ACCELERATION; ETC.

S82.  Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both
is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:

S82.1.     the Borrower shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment,
including, without limitation, any mandatory prepayments required pursuant to
S2.7 hereof;



S82.2.     the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;

S82.3.     the Borrower shall fail to comply with any of its covenants
contained in S8  hereof or any of the other covenants contained in the Loan
Documents;

S82.4.     the Borrower shall fail to perform any other term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this S11) for fifteen (15) days after written
notice of such failure has been given to the Borrower by the Bank;

S82.5.     any representation or warranty of the Borrower in this Agreement or
any of the other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Agreement shall prove to
have been false in any material respect upon the date when made or deemed to
have been made or repeated;

S82.6.     the Borrower shall fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed money or credit
received, or fail to observe or perform any term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing
borrowed money or credit received for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof;

S82.7.     the Borrower shall make an assignment for the benefit of creditors,
or admit in writing its inability to pay or generally fail to pay its debts
as they mature or become due, or shall petition or apply for the appointment
of a trustee or other custodian, liquidator or receiver of the Borrower or of
any substantial part of the assets of the Borrower or shall commence any case
or other proceeding relating to the Borrower under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect,
or shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against the Borrower and the
Borrower shall indicate its approval thereof, consent thereto or acquiescence
therein;

S82.8.     a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;



S82.9.     if any involuntary proceeding shall be commenced, against the
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law or similar law of any
jurisdiction, now or hereafter in effect, and the Borrower has not discharged
such proceeding within sixty (60) days after commencement thereof;

S82.10.    there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
uninsured final judgment against the Borrower that, with other outstanding
uninsured final judgments, undischarged, against the Borrower, exceeds in the
aggregate $50,000.00;

S82.11.    if any of the Loan Documents shall be canceled, terminated, revoked
or rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of each Bank party
thereto, or interested therein, or any action at law, suit in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents shall
be commenced by or on behalf of the Borrower, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or ruling
to the effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof; or

S82.12.    the Borrower shall be indicted for a federal crime, a punishment
for which could include the forfeiture of any assets of the Borrower;

then, and in every such event, so long as the same may be continuing, the
Bank may, by notice in writing to the Borrower declare all amounts owing with
respect to this Agreement and the Note to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived
by the Borrower.

S83.  Termination of Commitments. If any one or more Events of Default
specified in S11.1(g), S11.1(h), S11.1(i) hereof shall occur, the Credit
Commitment shall forthwith terminate and the Bank shall be relieved of all
obligations to make Loans to the Borrower.  If any other Event of Default
shall have occurred and be continuing, the Bank may, by notice to the
Borrower, terminate the Credit Commitment hereunder, and, upon such notice
being given, the Credit Commitment hereunder shall terminate immediately and
the Bank shall be relieved of the further obligations to make Loans.  No
termination of Credit Commitment hereunder shall relieve the Borrower of any
of the Obligations or any of its existing obligations to the Bank arising
under other agreements or instruments.


S84.  Rights of Enforcement.  The Bank shall have all of the rights and
remedies of a secured party upon default under the UCC, in addition to which
the Bank shall have all and each of the following rights and remedies:



S84.1.     To collect the Collateral with or without the taking of possession
of any of the Collateral;

S84.2.     To take possession of all or any portion of the Collateral.

S84.3.     To sell, lease, or otherwise dispose of any or all of the
Collateral, with or without the taking of possession of any of the
Collateral.

S84.4.     To apply the Collateral or the proceeds of the Collateral towards
(but not necessarily in complete satisfaction of) the Obligations.

S84.5.     To exercise all or any of the rights, remedies, powers, privileges,
and discretions under all or any of the Loan Documents.

S85.  Sale of Collateral.  (a) Any sale or other disposition of the Collateral
may be at public or private sale upon such terms and in such manner as the
Bank deems advisable, having due regard to compliance with any statute or
regulation which might affect, limit, or apply to the Bank's disposition of
the Collateral.

           (b)  Unless the Collateral threatens to decline speedily in value,
or is of a type customarily sold on a recognized market (in which event the
Bank may provide the Borrower with such notice as may be practicable under
the circumstances), the Bank shall give the Borrower at least seven (7) days
prior written notice of the date, time, and place of any proposed public
sale, and of the date after which any private sale or other disposition of
the Collateral may be made.  The Borrower agrees that such written notice
shall satisfy all requirements for notice to the Borrower which are imposed
under the UCC or other applicable law with respect to the Bank's exercise of
the Bank's rights and remedies upon default.

           (c)  The Bank may purchase the Collateral, or any portion of it at
any sale held under this Article.

S86.  Occupation of Business Location.  In connection with the Bank's exercise
of the Bank's rights under this Article, the Bank may enter upon, occupy, and
use any premises owned or occupied by the Borrower.  The Bank shall not be
required to remove any of the Collateral from any such premises upon the
Bank's taking possession thereof.  In no event shall the Bank be liable to
the Borrower for use or occupancy by the Bank of any premises pursuant to
this Article, nor for any charge (such as wages for the Borrower's employees
and utilities) incurred in connection with the Bank's exercise of the Bank's
rights and remedies.

S87.  Assembly of Collateral.  The Bank may require the Borrower to assemble
the Collateral and make it available to the Bank at the Borrower's sole risk
and expense at a place or places which are reasonably convenient to the Bank.






S88.  Remedies.

S88.1.     Without limiting the foregoing remedies upon the occurrence of any
Event of Default, the Bank may exercise any and all rights it has under this
Agreement and the Note and any other documents or instruments executed or
delivered as collateral therefor or in connection therewith, under law or
equity, and proceed to protect and enforce the Bank's rights by any actions
of law, suit and equity or other appropriate proceeding, whether for specific
performance, or for an injunction against a violation of any covenant
contained herein or in the Loan Documents or in furtherance of the exercise
any power granted hereby or thereby or by law.

           (b)  No remedy herein conferred upon the Bank or the holder of the
Note is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.

S89.  Appointment as Attorney-in-Fact.  The Borrower hereby irrevocably
constitutes and appoints the Bank, exercisable upon the occurrence (and
during the continuance) of any Event of Default, as the Borrower's true and
lawful attorney, with full power of substitution, to convert the Collateral
into cash at the sole risk, cost, and expense of the Borrower, but for the
sole benefit of the Bank.  The rights and powers granted the Bank by the
within appointment include but are not limited to the right and power to:

S89.1.     Prosecute, defend, compromise, or release any action relating to
the Collateral;

S89.2.     Endorse the name of the Borrower in favor of the Bank upon any and
all checks, drafts, notes, acceptances, or other items or instruments; sign
and endorse the name of the Borrower on, and receive as secured party, any of
the Collateral; and

S89.3.     Sign the name of the Borrower on any notice to the obligors on the
Collateral; sign the Borrower's name on any proof of claim in bankruptcy
against any obligor on the Collateral.

S90.  No Obligation to Act.  The Bank shall not be obligated to do any of the
acts or to exercise any of the powers authorized herein, but if the Bank
elects to do any such act or to exercise any of such powers, it shall not be
accountable for more than it actually receives as a result of such exercise
of power, and shall not be responsible to the Borrower for any act or
omission to act except for any act or omission to act as to which there is a
final determination made in a judicial proceeding (in which proceeding the
Bank has had an opportunity to be heard) which determination includes a
specific finding that the subject act or omission to act had been grossly
negligent or in actual bad faith.

S91.  Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Event of Default, the Bank
receives any monies in connection with the enforcement of any of the security
interest granted to the Bank hereunder, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:

S91.1.     First, to the payment of, or (as the case may be) the reimbursement
of, the Bank for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Bank in connection with the collection of such monies by the Bank, for the
exercise, protection or enforcement by the Bank of all or any of the rights,
remedies, powers and privileges of the Bank under this Agreement or any of
the other Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Bank against any taxes or liens which
by law shall have, or may have, priority over the rights of the Bank to such
monies;

S91.2.     Second, to the payment of (i)  any Obligations owing to the Bank
for the payment of interest, principal, fees and expenses, and (ii) all other
Obligations in such order or preference as the Bank may determine; provided,
that the Bank may in its discretion make proper allowance to take into
account any Obligations not then due and payable;

S91.3.     Third, upon payment and satisfaction in full or other provision for
payment in full satisfactory to the Bank and the Bank of all of the
Obligations, to the payment of any obligations required to be paid pursuant
to S9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and

S91.4.     Fourth, the excess, if any, shall be returned to the Borrower or to
such other persons as are entitled thereto.


S92.  SETOFF.  Regardless of the adequacy of any Collateral, during the
continuance of any Event of Default, any deposits (general or specific, time
or demand, provisional or final, regardless of currency, maturity, or the
branch where such deposits are held, but not including any custodial accounts
held for the benefit of others) or other sums credited by or due from the
Bank to the Borrower and any securities or other property of the Borrower in
the possession of the Bank may be applied to or set off against the payment
of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower to the Bank.


S93.  EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein (b) any taxes (including
any interest and penalties in respect thereof) payable by the Bank (other
than taxes based upon the Bank's net income imposed by the jurisdiction in
which its office is located), including any recording, mortgage, documentary
or intangibles taxes in connection with the security interest granted
hereunder and the other Loan Documents, or other taxes payable on or with
respect to the transactions contemplated by this Agreement or any other Loan
Document, including any taxes payable by the Bank after the Closing Date (the
Borrower hereby agreeing to indemnify the Bank with respect thereto), (c) all
title insurance premiums, appraisal fees, and the reasonable fees, expenses
and disbursements of the Bank's counsel or any local counsel to the Bank
incurred in connection with the preparation or enforcement of the Loan
Documents and other instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or
hereunder, (d) the reasonable out-of-pocket fees, expenses and disbursements
of the Bank incurred by the Bank in connection with the administration or
interpretation of the Loan Documents and other instruments mentioned therein,
(e) all reasonable out-of-pocket expenses (including reasonable attorneys'
fees and costs, which attorneys may be employees of the Bank and the fees and
costs of appraisers, engineers, or other experts retained by the Bank in
connection with any enforcement proceedings) incurred by the Bank in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or the administration thereof, and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to the Bank's relationship with the Borrower,
and (f) all reasonable out-of-pocket fees, expenses and disbursements of the
Bank incurred in connection with UCC searches, UCC filings and/or mortgage
recordings.  The covenants of this S11 shall survive payment or satisfaction
of payment of amounts owing with respect to the Note.


S94.  INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless the
Bank from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of
this Agreement or any of the other Loan Documents or the transactions
contemplated hereby or thereby including, without limitation, (a) any claims
or actions commenced against the Bank by virtue of its entry into or
participation in any Loan Document, (b) any actual or proposed use by the
Borrower of the proceeds of any of the Loans, (c) any actual or alleged
infringement of any patent, copyright, trademark, service mark or similar
right of the Borrower comprised in the Collateral, (d) the Borrower's
entering into or performing this Agreement or any of the other Loan
Documents, in each case including, without limitation, the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred
in connection with any such investigation, litigation or other proceeding.
In litigation, or the preparation therefor, the Bank shall be entitled to
select its own counsel and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel.  If, and to the extent that the obligations of the Borrower under
this S14 are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law.  The provisions of this S14 shall
survive the repayment of the Loan and the termination of the obligations of
the Bank hereunder.

S95.  SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations
and warranties made herein, in the Note, in any of the other Loan Documents
or in any documents or other papers delivered by or on behalf of the Borrower
pursuant hereto or thereto shall be deemed to have been relied upon by the
Bank, notwithstanding any investigation heretofore or hereafter made by any
of them, and shall survive the making by the Bank of any of the Loans, as
herein contemplated, and shall continue in full force and effect so long as
any amount due under this Agreement or the Note or any of the other Loan
Documents remains outstanding or the Bank has any obligation to make any
Loans.  The indemnification obligations of the Borrower provided herein and
the other Loan Documents shall survive the full repayment of amounts due and
the termination of the obligations of the Bank hereunder and thereunder to
the extent provided herein and therein.  All statements contained in any
certificate or other paper delivered to the Bank at any time by or on behalf
of the Borrower pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower hereunder.


S96.  NAME CHANGE AND ASSIGNMENT BY BORROWER. The Borrower shall give the Bank
30 days prior written notice of any change of name of the Borrower.  All the
terms of this Agreement, the other Loan Documents, and the Note shall be
binding upon and inure to the benefit of the successors and assigns of the
Borrower; provided that the Borrower shall not assign or transfer its rights
under any of such documents without the prior written consent of the Bank,
other than any assignment or transfer required as a matter of law or in
connection with a merger or consolidation of the Borrower.


S97.  ASSIGNMENT AND PARTICIPATION.

S98.  Conditions to Assignment by the Bank. Except as provided herein, the
Bank may assign all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of Credit Commitment and the
same portion of the Loans at the time owing to it, and the Note held by it).
From and after the effective date specified in any assignment agreement, the
assignee thereunder shall be a party hereto and, to the extent provided in
such assignment, have the rights and obligations of the Bank hereunder and
this agreement shall be amended to reflect such assignment.

S99.  Participations.  The Bank may sell Participations to one or more banks
or other entities in all or a portion of the Bank's rights and obligations
under this Agreement and the other Loan Documents.

S100. Pledge By Lender. The Bank may at any time pledge all or any portion of
its interest and rights under this Agreement (including all or any portion of
its Note) to any of the Federal Reserve Banks organized under S4 of the
Federal Reserve Act, 12 U.S.C. S341.  No such pledge or the enforcement
thereof shall release the Bank from its obligations hereunder or under any of
the other Loan Documents.

S101. No Assignment by the Borrower. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents, other than
any assignment or transfer required as a matter of law or in connection with
a merger or consolidation of the Borrower.

S102. Disclosure. The Borrower agrees that in addition to disclosures made in
accordance with standard banking practices the Bank may disclose information
obtained by the Bank pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder.


S103. NOTICES, ETC.  Except as otherwise expressly provided in this Agreement,
all notices and other communications made or required to be given pursuant to
this Agreement or any of the other Loan Documents shall be in writing and
shall be delivered by hand, mailed by United States registered or certified
first class mail, postage prepaid, sent by overnight courier, or sent by
facsimile and confirmed by delivery via one of the other acceptable means of
delivery of notices, addressed as follows:

S103.1.    if to the Borrower,

                Litchfield Financial Corporation
                430 Main Street
                Williamstown, Massachusetts 01267
                Fax:  (413) 458-1015
                Attention:Amy S. Backiel, Vice President

                and

                LFC Realty, Inc.
                430 Main Street
                Williamstown, MA  01267
                Fax: (413) 450-1015
                Attention:    Amy S. Backiel

(1)   if to the Bank,
                MetroWest Bank
                15 Park Street
                Framingham, Massachusetts 01701
                Fax: (508) 879-8237
                Attention:Mr. Barry D. Bliss, Vice President

                with a copy to:
                Riemer & Braunstein LLP
                Three Center Plaza
                Boston, Massachusetts 02108
                Fax: (617) 723-6831
                Attention:Michael S. Fallman, Esquire

Any such notice or demand shall be deemed to have been duly given or made and
to have become effective:

(2)   if delivered by hand, overnight courier or facsimile to a responsible
      officer of the party to which it is directed, at the time of the receipt
      thereof by such officer or the sending of such facsimile; and

(3)   if sent by registered or certified first-class mail, postage prepaid, on
      the third Business Day following the mailing thereof.


S104. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT AND
EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF SUCH COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).  THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED IN S19 HEREOF.  THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

S105. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.


S106. COUNTERPARTS. This Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of which
together shall constitute one instrument.  In proving this Agreement it shall
not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.


S107. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding
of the parties with respect to the transactions contemplated hereby and
thereby.  Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in S24 hereof.


S108. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.  THE BORROWER HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING
OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OF THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.  EXCEPT TO THE EXTENT
EXPRESSLY PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  THE BORROWER (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE BANK HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO
WHICH IT ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.

S109. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by
this Agreement may be given, and any term of this Agreement or of any other
Loan Document or other instrument related hereto or thereto or mentioned
herein or therein may be amended, and the performance or observance by the
Borrower of any terms of this Agreement or such other Loan Document or other
instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Bank.  No
waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon.  No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto.  No notice
to or demand upon the Borrower shall entitle the Borrower to other or further
notice or demand in similar or other circumstances.
S110. SEVERABILITY. The provisions of this Agreement are severable, and if any
one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Agreement in any jurisdiction.

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as an
instrument under seal as of the date first written above.

                                    LITCHFIELD FINANCIAL CORPORATION


                                    By:  /s/ Amy S. Backiel
                                    Title: Vice President

                                    LFC REALTY, INC.


                                    By:  /s/ Amy S. Backiel
                                    Title:  Vice President


                                    METROWEST BANK

                                    By: /s/ Barry Bliss
                                    Title:  Vice President