Exhibit 10.202


                        RECEIVABLES PURCHASE AGREEMENT

      THIS RECEIVABLES  PURCHASE  AGREEMENT (this  "Agreement") is entered into
         as  of  June  30,   1999,   by  and   between   LITCHFIELD   FINANCIAL
         CORPORATION,  a  Massachusetts  corporation  with its chief  executive
         office  at  430  Main  Street,   Williamstown,   Massachusetts   01267
         ("Seller")  and FIRST  MASSACHUSETTS  BANK,  N.A. a  national  banking
         association  with a place  of  business  located  at 99  West  Street,
         Pittsfield, Massachusetts 01201(the "Purchaser").

      WHEREAS,  the  Seller  now owns the  consumer  receivables  specified  on
Schedule   1   hereto   (the   "Receivables")   representing   purchase   money
indebtedness  of  purchasers  (each a  "Consumer")  of fee simple  interests in
real property (each a "Property");

      WHEREAS,   the   Receivables   were  acquired  by  the  Seller  from  the
originators of the Receivables (each an "Originator");

      WHEREAS,  the Seller desires to sell the  Receivables to the Purchaser in
accordance with the terms and conditions of this Agreement;

      WHEREAS,  the  Purchaser  desires to purchase  the  Receivables  from the
Seller in accordance with the terms and conditions of this Agreement; and

      WHEREAS,  the  Purchaser  desires to engage  the  Seller to  service  the
Receivables  upon the sale of the  Receivables  to the Purchaser and the Seller
desires to perform such services;

      NOW  THEREFORE,  for  and in  consideration  of the  foregoing,  and  the
covenants  and  agreements  hereinafter  set forth and other good and  valuable
consideration,   the  legal  adequacy  and   sufficiency  of  which  is  hereby
acknowledged,  the  parties  hereto,  intending  to be  legally  bound  hereby,
hereby agree:

      1.   Definition   of   Receivable;   Sale  and   Purchase  of  Eligible
Receivables.  (a) As used herein, the term "Receivable" shall mean with respect
to each Receivable  specified on Schedule 1 hereto:  each and every  promissory
note,  instrument,  installment  sales  contract,  contract for deed,  purchase
contract,  or other  evidence of  indebtedness  executed  and  delivered by the
Consumer or any other  Obligor  (as  defined in  paragraph 4 below) to evidence
the obligation to repay  indebtedness,  each mortgage,  deed of trust, or other
security  instrument,  if any,  creating a first lien on the  related  Property
(each a "Mortgage"),  each other  instrument,  document,  guarantee,  contract,
or agreement of whatever  nature  evidencing  or securing the  indebtedness  of
the Consumer and each other Obligor  incurred in  connection  with the purchase
of a Property,  all  guarantees or reserves  provided by  Originators  securing
the  Receivables,  and all payments,  revenues,  proceeds,  property,  contract
rights,  general  intangibles,  claims,  powers,  benefits and remedies arising
from, or in any way related to, any of the foregoing.

      (b) Subject to the terms and conditions of this  Agreement,  the accuracy
of all  representations  and warranties of the Seller contained herein, and the
payment  of the  Purchase  Price  (as  defined  in  Paragraph  3 below)  by the
Purchaser  to the  Seller  on the  Closing  Date (as  defined  in  Paragraph  2
below),  the Seller hereby agrees to sell to the  Purchaser,  and the Purchaser
hereby agrees to purchase from the Seller,  the Receivables.

      2. Closing Date;  Conditions  Precedent to Purchase of  Receivables.  The
"Closing  Date" with respect to the  Receivable  shall be the date on which the
purchase  and  sale  of  the  Receivables  shall  occur  and  be  funded.  As a
condition to closing,  the Seller shall have  delivered to the Purchaser or its
designee or  collateral  agent the  documents  with respect to each  Receivable
specified on Schedule A hereto.

      In addition,  the obligation of the Purchaser to purchase the Receivables
is subject to the fulfillment of each of the following conditions:

      (a) all  Receivable  Documents (as defined in paragraph 4 below) shall be
in form and  substance  satisfactory  to the Purchaser and shall have been duly
executed by all parties  thereto,  with the signatures  properly  notarized and
the  instruments  in proper  form for  recordation,  as  required,  and,  where
applicable,  shall have been recorded;  provided that the Seller shall have (i)
15 days from the Closing Date to deliver to the  Purchaser  the original  files
comprising the  Receivable  Documents and (ii) 90 days from the Closing Date to
have filed in the  appropriate  recording  office(s)  any executed  assignments
necessary for  assigning the  Receivables  or the  Receivable  Documents to the
Purchaser;

      (b) all  representations  and warranties of the Seller  contained  herein
shall be true and correct as of the Closing Date; and

      (c)  the  Seller  shall  be  in  compliance   with  all  of  its  duties,
obligations and covenants contained herein.

      3. Purchase  Price.  The purchase price (the  "Purchase  Price") for each
Receivable  shall be the outstanding  principal amount of the Receivable on the
Closing Date.  The Purchase  Price shall be paid by the Purchaser to the Seller
in  immediately  available  funds on the  Closing  Date.  In  addition,  on and
after the Closing  Date the Seller  shall be  entitled  to a deferred  purchase
price (the "Deferred  Purchase  Price") payable in arrears on the 25th business
day of each month equal to the aggregate  remaining cash  collections  from the
Receivables  in the  previous  calendar  month  (each  a  "Remittance  Period,"
provided that the first  Remittance  Period shall  commence on the Closing Date
and end on July 31,  1999) after  payment to the  Purchaser  of (i) the greater
of (A) all  principal  collected  in  respect  of the  Receivables  during  the
Remittance  Period or (B) all  scheduled  principal  payments due to be paid in
respect of the  Receivables  during  the  Remittance  Period and (ii)  interest
accrued on the  outstanding  principal  balance of the  Receivables  during the
Remittance  Period  at a rate  equal to the LIBOR  Rate  plus 180 basis  points
(the  "Pass-through  Rate") (the foregoing required payment to the Purchaser on
each  Remittance   Date  is  referred  to  herein  as  the  "Required   Monthly
Payment").  As used herein  "LIBOR Rate" shall mean the rate  published in The
Wall Street  Journal  under "Money Rates" (or if such  publication  shall cease
to  publish  such  rate,  then  the rate  published  in such  other  nationally
recognized  publication  as the Purchaser may from time to time specify) as the
average of the interbank  offered rates for U.S.  Dollar deposits in the London
interbank  market  for a term  of 90  days,  based  on  quotations  at 5  major
banks.  The LIBOR Rate for each day of a  Remittance  Period  shall be the rate
so published on the first business day of such Remittance Period.

      Payment to LFC of the  Deferred  Purchase  Price on any  Remittance  Date
shall be  subordinate  to the payment to the Purchaser of the Required  Monthly
Payment on such  Remittance  Date. In the event  collections on the Receivables
during any  Remittance  Period are  insufficient  to pay the  Required  Monthly
Payment  on  the  related   Remittance   Date  after   giving   effect  to  the
subordination  of the Deferred  Purchase  Price,  the Seller shall advance such
shortfall  to the  Purchaser.  Any  such  advance  shall be  reimbursed  to the
Seller  on  subsequent  Remittance  Dates  prior  to  payment  of the  Required
Monthly Payment on such  Remittance  Date. The Seller's  repurchase  obligation
in  Paragraph  7 hereof  shall be  reduced  to the  extent of any  unreimbursed
advances.

      4.  Representations  and  Warranties.  To induce the Purchaser to execute
this  Agreement  and  to  purchase  the  Receivables,   the  Seller  makes  the
following  warranties and  representations  to the Purchaser and its successors
and  assigns,  each  of  which  is  true  and  correct  as of the  date of this
Agreement and on and as of the Closing Date,  with the  understanding  that all
of the  warranties  and  representations  contained  herein shall  survive each
closing of the purchase and sale of Receivables hereunder:

      (a) With respect to each Receivable:

      (i)  each  promissory  note,  instrument,   installment  sales  contract,
contract  for  deed,  purchase  contract,  or other  evidence  of  indebtedness
evidencing the  obligation to repay  indebtedness,  each Mortgage,  if any, and
each  other  instrument,   document,  guarantee,   contract,  or  agreement  of
whatever  nature   evidencing  or  securing  each   Receivable   (each  of  the
foregoing a "Receivable  Document") has been duly executed  and/or  endorsed by
the  Consumer  and/or  any other  person or  entity  that is or who may  become
obligated  under the  Receivable  whether  as the maker or  guarantor  (each an
"Obligor").  All  recordings  or filings  required  to  effectively  assign all
right,  title and interest in and to the  Receivable to the Purchaser have been
recorded  or filed or will be  filed  and  recorded  during  the 90 day  period
referred to in Paragraph  2(a)(ii) above. Each Receivable  Document  represents
the genuine,  legal, valid and binding obligation of each Obligor,  enforceable
against each Obligor by the holder of the  Receivable  in  accordance  with its
terms.  Each party to the  Receivable  Documents  had legal  capacity  to enter
into the  Receivable and to execute and deliver the  Receivable  Documents.  No
fraud,  omission,  misrepresentation  or similar  occurrence  with respect to a
Receivable has taken place on the part of any person;

      (ii)  the  Receivable  is not and  will not be  subject  to any  right of
rescission,  set-off,  recoupment,   counterclaim  or  defense,  including  the
defense of usury,  whether or not arising out of  transactions  relating to the
Receivable,  and no  Obligor  has  asserted  either  orally or in  writing  any
illegality,  breach,  defense,  set-off or counterclaim or otherwise  disputed,
contested or repudiated the Receivable or the related Property;

      (iii) immediately  prior to the purchase by the Purchaser,  the Seller is
the sole owner of the  Receivable,  and the Seller has good,  indefeasible  and
marketable  title  thereto,  and has  full  right  to  transfer  and  sell  the
Receivable  to the  Purchaser,  free  and  clear  of any  encumbrance,  equity,
participation  interest,  lien, pledge, charge, claim or security interest, and
has full right and  authority  subject to no interest or  participation  of, or
agreement with, any other party,  to sell and assign each  Receivable  pursuant
to this  Agreement.  Upon the sale of each  Receivable,  the  Seller  will have
transferred  and conveyed good,  indefeasible  and  marketable  title in and to
such  Receivable to the Purchaser  free and clear of any  encumbrance,  equity,
participation   interest,    lien,   pledge,   charge,   claim,   or   security
interest;

      (iv) the related  Mortgage,  if any,  secures and creates a first lien on
an  estate  in fee  simple  in real  property  and is a valid,  subsisting  and
enforceable  first  lien  on the  related  Property,  and the  Property  is not
subject to any other lien,  mortgage,  security  interest claim or encumbrance.
The related  Property has not been released  from the lien of the Mortgage,  in
whole or in part,  except in  consideration  of  principal  payments  which are
reflected in the principal balance of the Receivable;

      (v) the  solicitation,  origination  and servicing of the  Receivable did
not,  and the  terms and  conditions  of the  Receivable  as of any date do not
and will not,  contravene or violate any applicable  laws, rules or regulations
(including,  without  limitation,  laws,  rules  and  regulations  relating  to
usury,  consumer  protection,  truth in  lending,  fair  credit  billing,  fair
credit reporting, real estate settlement procedures,  disclosure,  equal credit
opportunity,  fair debt  collection  practices and privacy) and no party to the
related  Receivable  Documents  is in  violation  of  any  such  law,  rule  or
regulation.  At the time of origination of the  Receivable,  the Originator was
qualified to transact  business  and in good  standing in the  jurisdiction  in
which the Receivable was originated;

      (vi) the Receivable is  denominated  and payable in United States dollars
in the United States and relates to a Property located  in the United States;

      (vii) no payment,  in whole or in part,  on the  Receivable  is more than
30 days contractually past due;

      (viii) the  Receivable  was  originated by the related  Originator in the
ordinary  course  of its  business  and  the  Originator  and the  Seller  have
fulfilled  all  of  their  obligations  in  respect  thereof.   The  Receivable
evidences a purchase money  obligation  incurred by the Consumer solely for the
purpose of financing the Consumer's purchase of the related Property;

      (ix) the  Receivable  is required to be paid pursuant to the terms of the
related  Receivable  Documents,  has not been paid in full or been compromised,
adjusted,   extended,    re-negotiated,    released,   cancelled,    satisfied,
subordinated,  rescinded  or  modified,  and  is  not  subject  to  compromise,
adjustment,   extension,    satisfaction,    subordination,    rescission,   or
modification.  The Seller has not waived the  performance by any Obligor of any
action,  if the  Obligor's  failure  to perform  such  action  would  cause the
Receivable to be in default,  nor has the Seller  waived any default  resulting
from any action or inaction by the Obligor;

      (x) there are no  proceedings  or  investigations  pending or  threatened
(a)  asserting the  invalidity of the  Receivable or (b) seeking to enforce the
payment of the  Receivable or (c) involving the  condemnation  or public taking
of the Property related to the Receivable;

      (xi)  no   Obligor  is  subject   to  any   bankruptcy,   insolvency   or
reorganization law or proceeding;

      (xii)  the  Mortgage,   if  any,   contains   customary  and  enforceable
provisions  such as to render  the rights and  remedies  of the holder  thereof
adequate for the  realization  against the related  Property of the benefits of
the  security  provided  thereby.  There is no  homestead  or  other  exemption
available  to a  Consumer  that  would  interfere  with  the  right to sell the
related Property at a trustee's sale or the right to foreclose the Mortgage;

      (xiii)  each  Obligor  is a natural  person  and  citizen  of the  United
States or Canada and meets the Seller's creditworthiness standards; and

      (xiv) To the best of the Seller's  knowledge  the related  Property  does
not possess the  presence of  Hazardous  Materials  and neither the current nor
any proposed  operation of the  Property is likely to cause the  production  or
location   upon  the   Property  of  Hazardous   Materials.   As  used  herein,
"Hazardous  Materials"  means (a) those  substances  as defined  as  "hazardous
substances,"  "hazardous  materials,"  "toxic  substances," or "solid waste" in
CERCLA,  RCRA,  and the  Hazardous  Materials  Transportation  Act,  49  U.S.C.
Section 1801 et. seq., and in the  regulations  promulgated  pursuant  thereto;
(b) those  substances  designated as a "hazardous  substance" under or pursuant
to the Federal Water  Pollution  Control Act, 33 U.S.C.  S1257, et seq., and in
the regulations  promulgated  pursuant thereto;  (c) those substances listed in
the United  States  Department  of  Transportation  Table (40 CFR  172.101  and
amendments  thereto)  or  by  the  Environmental   Protection  Agency  (or  any
successor  agency)  as  hazardous  substances  (40 CFR Part 302 and  amendments
thereto);  and (d) such other substances and materials  classified as hazardous
or toxic under any local, state or federal law or regulation;

      (b) The Seller is duly organized,  validly  existing and in good standing
under  the  laws of the  Commonwealth  of  Massachusetts  and has all  licenses
necessary  to carry on its  business as now being  conducted  and is  licensed,
qualified  and in good  standing  in each  state  wherein it owns or leases any
material   properties  if  the  laws  of  such  state   require   licensing  or
qualification  in order  to  conduct  business  of the  type  conducted  by the
Seller,  and in any event the Seller and its  business  and  operations  are in
full  compliance  with  all  applicable  federal,  state  and  local  laws  and
regulations;  the  Seller  has the full  power,  authority  and legal  right to
hold,  transfer  and convey the  Receivables  and to execute and  deliver  this
Agreement and to perform its  obligations  hereunder;  the execution,  delivery
and  performance  of this Agreement  (including all  instruments of transfer to
be delivered  pursuant to this  Agreement)  by the Seller and the  consummation
of the transactions  contemplated  hereby have been duly and validly authorized
by all  necessary  action;  this  Agreement  and  all  agreements  contemplated
hereby have been duly executed and delivered and constitute  the valid,  legal,
binding and enforceable  obligations of the Seller,  regardless of whether such
enforcement  is sought in a proceeding  in equity or at law; and all  requisite
corporate  action has been taken by the Seller to make this  Agreement  and all
agreements   contemplated   hereby   valid  and  binding  upon  the  Seller  in
accordance with their terms;

      (c) The consummation of the  transactions  contemplated by this Agreement
are in the  ordinary  course  of  business  of the  Seller,  and the  transfer,
assignment,  and conveyance of the  Receivables by the Seller  pursuant to this
Agreement  are not  subject  to the  bulk  transfer  or any  similar  statutory
provisions in effect in any applicable jurisdiction;

      (d) Neither the  execution  and delivery of this  Agreement,  the sale of
the  Receivables  to  the  Purchaser,  the  consummation  of  the  transactions
contemplated  hereby,  nor the  fulfillment of or compliance with the terms and
conditions of this  Agreement,  will conflict with or result in a breach of any
of  the  terms,   conditions  or  provisions  of  the  Seller's  organizational
documents or any legal  restriction  or any  agreement or  instrument  to which
the Seller is now a party or by which it is bound,  or  constitute a default or
result  in an  acceleration  under  any  of the  foregoing,  or  result  in the
violation  of any law,  rule,  regulation,  order,  judgment or decree to which
the  Seller  or  its  property  is  subject,  or  result  in  the  creation  or
imposition  of any lien,  charge or  encumbrance  that  would  have an  adverse
effect  upon any of its  properties  pursuant  to the  terms  of any  mortgage,
contract,  deed of trust or other  instrument,  or impair  the  ability  of the
Purchaser  to  realize  on  the   Receivables   or  impair  the  value  of  the
Receivables;

      (e) There is no action,  suit,  proceeding,  or investigation  pending or
threatened  against  the Seller  which,  either in any one  instance  or in the
aggregate,  may  result  in  any  material  adverse  change  in  the  business,
operations,  financial  condition,  properties  or assets of the Seller,  or in
any material  impairment  of the right or ability of the Seller to carry on its
business  substantially as now conducted,  or in any material  liability on the
part of the Seller,  or which  would draw into  question  the  validity of this
Agreement  or  the  Receivables  or of  any  action  taken  or to be  taken  in
connection with the  obligations of the Seller  contemplated  herein,  or which
would be likely to impair  materially  the  ability  of the  Seller to  perform
under the terms of this Agreement;

      (f)  No  consent   of  any  other   party  and  no   consent,   approval,
authorization or order of, or
registration or filing with, or notice to any court or  governmental  agency or
body is required for the  execution,  delivery or  performance by the Seller of
or  compliance  by  the  Seller  with  this   Agreement  or  the  sale  of  the
Receivables  or the  consummation  of the  transactions  contemplated  by  this
Agreement,  or if  required,  such  approval  has  been  obtained  prior to the
Closing Date;

      (g) All information  heretofore or  contemporaneously  herewith furnished
by the Seller to the Purchaser  for the purposes of or in connection  with this
Agreement or any related  document or any  transaction  contemplated  hereby or
thereby  is, and all  information  hereafter  furnished  by or on behalf of the
Seller to the Purchaser  will be, true and accurate in every  material  respect
on the date as of which such  information  is dated or  certified;  and none of
such  information  is or will be  incomplete  by omitting to state any material
fact necessary to make such information not misleading;

      (h)  The  Seller  has   delivered  to  the   Purchaser   such   financial
information  as  requested  by the  Purchaser  (including  audited or unaudited
financial  statements).  All  such  financial  statements  fairly  present  the
pertinent  results of operations and changes in financial  position for each of
the  periods  requested  and the  financial  position  at the end of each  such
period  of  the  Seller  and  its   subsidiaries  and  have  been  prepared  in
accordance with generally accepted accounting  principles  consistently applied
throughout  the  periods  involved,  except as set forth in the notes  thereto.
There  has  been  no  material  adverse  change  in the  business,  operations,
financial  condition,  properties or assets of the Seller since the date of the
Seller's financial statements delivered to the Purchaser;

      (i) The Seller has not dealt with any broker,  investment  banker,  agent
or other  person that may be  entitled to any  commission  or  compensation  in
connection with the sale of the Receivables;

      (j) The  Seller  understands  and  agrees  that  the  Purchaser,  without
independent  investigation,  is  relying  upon the  above  representations  and
warranties in purchasing the  Receivables  from the Seller.  The Seller further
agrees that the foregoing  representations  and warranties  shall be continuing
in nature  and shall  remain in full  force and  effect  until such time as the
Receivables shall be paid in full.

      5.  Protective  Covenants.  So  long  as any of  the  Receivables  remain
outstanding, the Seller shall:

      (a) Take no actions which are inconsistent with the Purchaser's  purchase
of the  Receivables  hereunder  and  take  all  actions  as may  reasonably  be
requested  to  further  prove  and  demonstrate   the  Purchasers   definitive
purchase and the Seller's definitive sale of the Receivables hereunder;

      (b) Upon the request of the  Purchaser,  execute or cause the  execution,
acknowledgment  and delivery of such further  instruments  (including,  without
limitation,  declarations  of no set-off)  and do such  further  acts as may be
necessary,  desirable  or  proper to carry out more  effectively  or  otherwise
further the purposes of this Agreement;

      (c)  Not  take  any  action  with  respect  to any  Receivable  which  is
inconsistent with the
provisions and the purpose of this Agreement; and

      (d) Not solicit any Customer to refinance any performing Receivable.

      6.  Repurchase  Obligation.  All  Receivables  purchased by the Purchaser
hereunder are sold by the Seller to the  Purchaser  subject to the right of the
Purchaser  to require  the Seller to  repurchase  at the  Repurchase  Price (as
hereinafter  defined) (i) any  Receivable for which the Seller has breached any
representation  or warranty  contained in paragraph  4(a) (each an  "Ineligible
Receivable")  and (ii) any  Receivable  which at any time becomes more than one
hundred  and  twenty  (120)  days  contractually  past due or which at any time
becomes  more than  ninety  (90) days  contractually  past due with  respect to
which no payment  has been made in the  preceding  90 days  (each a  "Defaulted
Receivable").  The obligation of the Seller to purchase  Defaulted  Receivables
shall be limited to 10% of the  principal  balance  of the  Receivables  at the
Closing Date (subject to reinstatement  in the amount of any recovery  proceeds
received  by the  Seller  from the  liquidation  of any  Defaulted  Receivables
repurchased  by the  Seller).  Immediately  upon  any  Receivable  becoming  an
Ineligible  Receivable or a Defaulted  Receivable,  the Seller shall repurchase
the Ineligible  Receivable or Defaulted  Receivable at a price (the "Repurchase
Price")  equal  to  the  then  outstanding  principal  amount  of  the  related
Receivable  together  with all  accrued  and  unpaid  interest  accrued  at the
Pass-through  Rate to the date of  repurchase.  The Seller  shall  have  thirty
(30)  days  after  the  date  of  notice  by the  Purchaser  to  repurchase  an
Ineligible  Receivable  or Defaulted  Receivable.  Upon the  repurchase  of any
Ineligible  Receivable or Defaulted Receivable  hereunder,  the Purchaser shall
convey and  transfer  back to the  Seller,  without  recourse  or  warranty  of
whatever nature, the Ineligible Receivable or Defaulted Receivable.

      7.  Servicing.   (a)  The Purchaser hereby engages and authorizes the
Seller to service and administer the Receivables in accordance with the terms
of this Paragraph 7.  The  Seller agrees that (i) its servicing of the
Receivables shall be carried out in accordance with the Seller's credit
criteria and prudent, customary and usual procedures of financial
institutions which service assets similar to the Receivables and, (ii) to the
extent more exacting, the procedures which the Seller would use if the
Receivables were beneficially owned by the Seller.  The Seller, and its
officers, employees, and agents and representatives shall be responsible for
servicing of the Receivables, including, without limitation, the processing,
application and collection of payments due under the Receivable, the
accounting functions with regard to the Receivables, and such other
administrative actions as the Seller and the Purchaser shall deem necessary
and desirable.

      (b)  Subject to the provisions herein, the Seller shall have full power
and authority, acting alone and subject only to the specific requirements and
prohibitions of this Paragraph  7, to do and take any and all actions, or to
refrain from taking any such actions and to do any and all things in
connection with such servicing and administration which it may deem necessary
or desirable, including, without limitation, calculating and compiling
information required in connection with any report to be delivered pursuant
to this Paragraph 7. Without limiting the generality of the foregoing, but
subject to the provisions of this Paragraph 7, the Seller is hereby
authorized and empowered by the Purchaser on behalf of and for the benefit of
the Purchaser (i) to execute and deliver, in the Seller's own name, on behalf
of the Purchaser, any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other comparable
instruments, with respect to the Receivables, including, without limitation,
consenting to sales, transfers or encumbrances of the collateral or
assignments and assumptions of the Receivable Documents, all in accordance
with the terms of the Receivables and the Receivable Documents, (ii) take any
and all actions or refrain from taking any action to enforce, foreclose upon,
exercise any right, remedy or privilege in respect of, manage, administer,
settle, compromise, or amend, modify, supplement, otherwise deal with the
Receivables and the Receivable Documents and (iii) grant or withhold consent
or approvals under the Receivables and the Receivable Documents, including,
without limitation (A) the right to approve any amendment,  modification
(including any modification to any Receivable having a balloon principal
payment to provide for monthly amortization payments), or waiver of any
provision of the Receivable Documents; (B) controlling of the collection and
enforcement of the Receivable Documents or realization thereon by suit,
foreclosure, set-off, or otherwise; (C) consulting with legal counsel
(including counsel for the Obligor), independent public accountants and other
experts; (D) the employing of agents and attorneys-in-fact; (E) inspection of
the subject real property; (F) the disbursement of insurance proceeds for the
repair of damaged property; (G) the performance of such other matters as the
Seller may deem necessary.   Notwithstanding the foregoing, the Purchaser
shall be notified of any proposed material modification to the terms of a
Receivable covered by this Agreement and such a material modification may be
made only if the Purchaser consents to such material modification.

      (c)   In connection with its servicing and administration of the
Receivables, the Seller will provide the Purchaser with periodic reports in a
form agreeable to the Purchaser. Such reports will be delivered on such
periodic basis as will be agreed by the parties from time to time, but in no
event less often than monthly.

      (d)  After the occurrence of an event of default under a Receivable, or
 an event which with the lapse of time would be an event of default under a
 Receivable, the Purchaser shall be notified of such event and shall have the
 right, but not the obligation, to administer, manage, perform, and enforce
 the terms of such Receivable and the related Receivable Documents (including,
 without limitation, the right to foreclose on any Mortgage securing such loan
 and security). The Purchaser may exercise such rights directly or indirectly,
 by directing the Seller as to the desired course of action with regard to
 such Receivable, or employ others to do so. The Purchaser shall not have the
 foregoing rights with respect to Receivables that have been repurchased by
 the Seller.

      (e)  The Seller's and the Purchaser's obligations hereunder shall
terminate with respect to a Receivable at the close of business at the
earliest of (i) the date that the obligations of the Obligor to make payments
or perform with respect to a Receivable shall have been irrevocably satisfied
in full in accordance with the terms of the Receivable  Documents and all
obligations under this Agreement are satisfied; or (ii) the repurchase of a
Receivable by Seller in accordance with Section 6 hereof (except for the
obligation to reinstate the Seller's repurchase obligation under Paragraph 6
hereof in the event of any recoveries in respect of such Receivable) or (iii)
with respect to each Receivable, the Purchaser's assignment of its interest
in the Receivable; provided, however, this Agreement shall remain in full
force and effect with respect to the remaining Receivables.  The parties may
also terminate this Agreement at any time upon mutual agreement.

      (f) The Seller, in its capacity as servicer, shall have the right to
purchase all, but not less than all, of the Receivables at any time after
which the outstanding principal amount of the Receivables is equal to or less
than 10% of the outstanding principal balance of the Receivables on the
Closing Date. The purchase price for such Receivables shall be the Repurchase
Price on the date of purchase.

      8.  Relationship  of  Parties.  The  relationship  between the Seller and
the  Purchaser  is  and  shall  be  that  of a  seller  and  purchaser,  not  a
debtor-creditor  relationship.  Neither  this  Agreement  nor  the  performance
hereof  shall be deemed as creating a joint  venture or a  partnership  between
the  Seller  and  the  Purchaser  or any  employer-employee,  agency  or  other
relationship  of any nature.  Each  transfer of a Receivable  to the  Purchaser
hereunder  constitutes  an outright  sale and  assignment,  negotiated at arm's
length,  by the  Seller  to the  Purchaser  of all of the  Seller's  legal  and
equitable  ownership  interest in such  Receivable and in no way shall any such
transfer  be  construed  as an  extension  of  credit by the  Purchaser  to the
Seller or any Obligor.  The Purchaser  does not in any respect  assume or incur
any   obligation,   liability  or  tax  of  the  Seller  with  respect  to  the
Receivables or otherwise.

      9.  Notices. Any notice, approval, consent or other communication under
this Agreement shall be in writing and shall be considered given when (1)
delivered personally, or (2) mailed by registered or certified mail, return
receipt requested or (3) transmitted by telecopy with a confirming copy sent
by overnight mail or courier service to the parties at the addresses
indicated below (or at such other address as a party may specify by notice to
the others pursuant hereto).  Notice given by a party's counsel shall be
considered notice given by that party.

           (a)  If to the Seller, to it at:

                Litchfield Financial Corporation
                430 Main Street
                Williamstown, MA 01267
                Attention:  James Shippee
                Telecopier No. 413-458-1015

           (b)  If to the Purchaser, to it at:

                First Massachusetts Bank
                99 West Street
                Pittsfield, MA 01201
                Attention:  Richard Henderson
                Telecopier No. 413-442-6983


           (c)  In each, with a copy to:

                Cain, Hibbard, Myers & Cook, PC
                66 West Street
                Pittsfield, MA 01201
                Attention: Michael E. MacDonald, Esquire
                Telecopier No. 413-443-7694

                     and

                Litchfield Financial Corporation
                430 Main Street
                Williamstown, MA 01267
                Attention:  John J. Malloy, Esquire
                Telecopier 413-458-1015


      10. Rights of the  Purchaser.  The Seller shall,  upon the request of the
Purchaser or the Purchaser's  assigns,  do everything  reasonably  necessary or
advisable  to put the  Purchaser  in a position  to enforce  the payment of all
Receivables  and security  interests or  instruments  covered by this Agreement
(including  the  execution  of separate  endorsements  and  assignments)  or to
exercise  all  other  rights  and  remedies  that the  Seller  would  have with
respect to the  Receivables  and  security  interests  or  instruments  but for
their purchase by and assignment to the Purchaser.

      11.  Intention as True Sale.  It is the express  intention of the parties
hereto that the sale and purchase of  Receivables  hereunder  is to  absolutely
be  categorized as a true sale of the  Receivables  rather than a conveyance as
security for the  repayment of  indebtedness.  However,  to the extent that the
transfers  described  herein are  subsequently  determined or found not to be a
sale  under  applicable  law,  it is fully and  completely  intended  that this
agreement shall  constitute a security  agreement under applicable law and that
the  Seller  does  hereby  grant to the  Purchaser  and shall be deemed to have
granted to the Purchaser a first priority  security  interest in (i) all of the
Seller's  right,   title  and  interest  in,  to  and  under  the  Receivables,
including  without  limitation all payments of interest and principal  received
by the Seller  subsequent  to the date of  delivery of the  Receivables  to the
Purchaser,  (ii) all of the  Seller's  right,  title  and  interest  in, to and
under the Receivables  Documents related to the Receivables,  if any, which are
being  conveyed and assigned to the  Purchaser by the Seller,  (iii) all of the
Seller's   servicing   records  as  they   relate  to   Receivable   which  are
contemporaneously  being  delivered to the  Purchaser  by the Seller,  (iv) all
other  property  rights of whatever  nature being conveyed by the Seller to the
Purchaser  hereunder,  and (v) any  interest  on or  other  proceeds  from  the
foregoing  and  all   replacements  and   substitutions   associated  with  the
foregoing.

      12.  No  Third-Party   Beneficiary.   Notwithstanding   anything  to  the
contrary  contained  herein,  the parties hereto hereby  expressly  acknowledge
and agree  that the  terms  and  provisions  set  forth in this  Agreement  are
intended  to inure  solely  to the  benefit  of the  parties  hereto  and their
respective successors and assigns.

      13. Entire  Agreement;  Amendments.  This  Agreement  contains the entire
agreement  between  the  parties  concerning  the  sale  and  purchase  of  the
Receivables,  and merges and extinguishes all prior agreements,  understandings
and  negotiations,  and no  amendments or  modifications  hereof shall be valid
unless they are in writing and signed by all of the parties hereto.

      14.   Assignment;   Binding   Effect.   All  of  the  terms,   covenants,
conditions,  representations  and warranties  hereof shall inure to the benefit
of, and be binding upon, the successors and assigns of the parties hereto.

      15. Interpretation.  Whenever the context requires, all words used in the
singular  will be  construed  to have been used in the plural,  and vice versa,
and each gender will include any other gender.  All paragraph  headings are for
convenience  only and do not  define  or limit  any  terms or  provisions.  The
invalidity  or   unenforceability  of  any  one  or  more  provisions  of  this
Agreement  will in no way affect any other term or  provision.  This  Agreement
shall not be  construed  more  strictly  against any one party than against any
other  party,  merely by virtue of the fact that it may have been  prepared  by
counsel for one of the  parties,  it being  recognized  that all of the parties
hereto  and  their  respective  counsel  have  contributed   substantially  and
materially to the preparation of this Agreement.

      16.  Choice of Law.  This  Agreement  and the  transactions  contemplated
hereunder  shall be governed by and  interpreted in accordance with the laws of
the  Commonwealth  of  Massachusetts,   without  regard  to  the  choice-of-law
provisions thereof.

      17.  WAIVER  OF  JURY  TRIAL;  SUBMISSION  TO  JURISDICTION.  EACH OF THE
SELLER AND THE  PURCHASER  WAIVES ITS RIGHT TO A JURY TRIAL IN THE EVENT OF ANY
DISPUTE  OR  LITIGATION   ARISING  HEREUNDER  OR  UNDER  ANY  RELATED  DOCUMENT
EXECUTED IN CONNECTION  HEREWITH.  THE PARTIES  HERETO  COVENANT AND AGREE THAT
THE SOLE AND  EXCLUSIVE  JURISDICTION  AND  VENUE FOR ANY AND ALL  MATTERS  AND
DISPUTES  ARISING  HEREUNDER  SHALL  OCCUR AND TAKE PLACE IN THE U.S.  DISTRICT
COURT FOR THE DISTRICT OF  MASSACHUSETTS,  WESTERN  SECTION OR A  MASSACHUSETTS
STATE COURT LOCATED IN BERKSHIRE COUNTY, MASSACHUSETTS.

      18.  Multiple  Counterparts.  This  agreement may be executed in multiple
counterparts,  each of  which,  when  read  collectively,  shall  constitute  a
single document.

      IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.

                          FIRST MASSACHUSETTS BANK
           _______________
           _______________By: /s/ Richard Henderson
           _______________Title: Vice President

           _______________LITCHFIELD FINANCIAL CORPORATION
           _______________
           _______________By: /s/ John Malloy
           _______________Title: Senior Vice President