<PAGE>   1
                    ASSET AND LIABILITY ALLOCATION AGREEMENT


                              NEW LONDON TRUST, FSB


                           DATED AS OF APRIL 12, 1999


                                     BETWEEN


                             LAKE SUNAPEE BANK, FSB


                                       AND

                              MASCOMA SAVINGS BANK

                                       AND

                                  CARGILL BANK
<PAGE>   2
                                TABLE OF CONTENTS

                                                                        Page No.

                                    ARTICLE I
                                   DEFINITIONS

                                   ARTICLE II
                            ALLOCATION OF BANK ASSETS

2.1   Allocation of Bank Assets..............................................-2-

                                   ARTICLE III
                         ALLOCATION OF BANK LIABILITIES

3.1   Allocation of Bank Liabilities.........................................-4-

                                   ARTICLE IV
                                    EMPLOYEES

4.1   Allocation of Employees................................................-4-
4.2   Compliance with Terms of Stock Purchase Agreement......................-4-
4.3   Corporate Center Obligations...........................................-5-
4.4   Retention Pay Obligations..............................................-5-

                                    ARTICLE V
                                 PURCHASE PRICE

5.1   Allocation of Purchase Price...........................................-5-
5.2   Allocation of Reductions in Purchase Price.............................-5-
5.3   Allocation of Delay Penalty............................................-5-
5.4   Closing Dividend.......................................................-5-
5.5   Allocation of Post-Closing Adjustment..................................-5-

                                   ARTICLE VI
                              POST-CLOSING MATTERS

6.1   Mutual Cooperation.....................................................-6-
6.2   Post Closing Data Processing...........................................-6-
6.3   Referrals..............................................................-6-
6.4   Non-Solicitation of Bank Employees.....................................-6-
6.5   Non-Solicitation of Branch Customers...................................-7-
6.6   Duty to Furnish Information............................................-7-
6.7   Deposits and Loan Payments Inadvertently Received......................-7-
6.8   Obligation to Update Schedules Prior to Closing........................-7-
6.9   Conduct of Business....................................................-7-
6.10  Regulatory Approvals...................................................-7-
6.11  Adjustments in Bank Assets and Bank Liabilities........................-8-


                                       -i-
<PAGE>   3
                                   ARTICLE VII
                                 INDEMNIFICATION

7.1   Allocation of Indemnification Payments.................................-9-

                                  ARTICLE VIII
                               GENERAL PROVISIONS

8.1   Entire Agreement; Modification; Waiver.................................-9-
8.2   Counterparts...........................................................-9-
8.3   Headings...............................................................-9-
8.4   Governing Law.........................................................-10-
8.5   Addresses of Notice...................................................-10-
8.6   Expenses..............................................................-11-
8.7   Publicity.............................................................-11-
8.8   Severability..........................................................-11-
8.9   Consent to Jurisdiction: Waiver of Jury Trial.........................-11-
8.10  Damages; Enforcement of the Agreement.................................-12-
8.11  Binding Nature; Assignment............................................-12-
8.12  No Third Party Rights.................................................-12-


                                      -ii-
<PAGE>   4
                                    SCHEDULES

Schedule 2.1(b)     -    Loans 
Schedule 2.1(b)(i)  -    Loan Loss Reserves 
Schedule 2.1(c)(i)  -    Leases 
Schedule 2.1(c)(ii) -    Realty 
Schedule 2.1(d)     -    Personalty
Schedule 2.1(e)     -    Records 
Schedule 2.1(f)     -    Contracts 
Schedule 2.1(i)     -    Securities
Schedule 2.1(j)     -    Accounts Receivable 
Schedule 2.1(k)     -    FHLB Stock 
Schedule 2.1(m)     -    Data Processing Equipment 
Schedule 2.1(o)     -    NYCE Stock 
Schedule 3.1(a)     -    Allocation of Deposit Liabilities 
Schedule 3.1(b)     -    Borrowings
Schedule 3.1(d)     -    Sold Loans and Mortgage Servicing Contracts
Schedule 3.1(e)     -    Other Bank Liabilities
Schedule 4.1        -    Allocation of Bank Employees
Schedule 4.3        -    Corporate Center Obligations
Schedule 5.1        -    Purchase Price
Schedule 6.2        -    Post Closing Data Processing


                                      -iii-
<PAGE>   5
                    ASSET AND LIABILITY ALLOCATION AGREEMENT

            THIS ASSET AND LIABILITY ALLOCATION AGREEMENT (the "Agreement") is
made as of April 12, 1999, by and among Cargill Bank, a Connecticut chartered
savings and loan association with its main offices in Putnam, Connecticut
("CB"), Lake Sunapee Bank, fsb, a federally chartered savings bank with its main
offices in Newport, New Hampshire ("LSB") and Mascoma Savings Bank, a federally
chartered savings bank with its main offices in Lebanon, New Hampshire ("MSB").
CB, LSB and MSB are referred to herein individually as a "Bank Party" and
collectively as the "Bank Parties."

                                    PREAMBLE

            WHEREAS, the Sun Life Assurance Company of Canada (U.S.), a Delaware
corporation with its principal place of business in Wellesley, Massachusetts
("Sun"), and New London Trust, FSB, a federally chartered savings bank with its
main office in New London, New Hampshire ("Target") have entered into a Stock
Purchase Agreement with PM Holdings Inc., a Connecticut corporation with its
main office in Hartford, Connecticut ("PMH"), PM Trust Holding Company, a
Connecticut corporation with its main office in Hartford, Connecticut ("PMTH"),
and Bank Parties of even date (the "Stock Purchase Agreement"), a true copy of
which attached hereto as Exhibit A, which Stock Purchase Agreement provides for
the sale to PMH and PMTH of all of the capital stock of Target;

            WHEREAS, PMH and PMTH have entered into a Purchase and Assumption
Agreement with Bank Parties of even date (the "Purchase and Assumption
Agreement"), a true copy of which is attached hereto as Exhibit B, whereby Bank
Parties have agreed to purchase from Target, immediately after the consummation
of the sale of Target Outstanding Stock (as defined in the Stock Purchase
Agreement) pursuant to the Stock Purchase Agreement, all of the Target's Bank
Business (as defined in the Purchase and Assumption Agreement); and

            WHEREAS, Bank Parties desire to reach an agreement regarding the
allocation of the Bank Assets (as defined in the Purchase and Assumption
Agreement) and Bank Liabilities (as defined in the Purchase and Assumption
Agreement) among Bank Parties such that (i) each Bank Party is transferred an
amount of Bank Assets that is equal to the amount of Bank Liabilities that it
assumes and that (ii) the Bank Assets and Bank Liabilities transferred represent
the portion of the Bank Business for which each party has agreed to pay its
share of the Purchase Price (as defined in the Stock Purchase Agreement and the
Purchase and Assumption Agreement) and to set forth certain other agreements in
conjunction with their entering into the Stock Purchase Agreement and the
Purchase and Assumption Agreement.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, subject to the terms and conditions set forth herein, the
parties agree as follows:


                                       -1-
<PAGE>   6
                                    ARTICLE I
                                   DEFINITIONS

      Terms not otherwise defined herein shall have the meaning specified in the
Stock Purchase Agreement or the Purchase and Assumption Agreement, as
appropriate.


                                   ARTICLE II
                            ALLOCATION OF BANK ASSETS

2.1   Allocation of Bank Assets. Bank Parties shall allocate all of Target's
      right, title and interest in and to the Bank Assets existing as of the
      Closing Date among Bank Parties as follows:

      (a)   Cash on Hand. All Cash shall be allocated to the Bank Party
            acquiring the Banking Office at which such Cash is located.

      (b)   Loans. The Loans shall be allocated among Bank Parties in accordance
            with Schedule 2.1(b).

            (i)   Loan Loss Reserves. The loan loss reserves shall be allocated
                  as provided in Schedule 2.1(b)(i); provided, however, any
                  excess loan loss reserves shall be subject to the provisions
                  of Section 13.3 of the Purchase and Assumption Agreement.

            (ii)  Other Real Estate Owned. Other Real Estate Owned will be
                  allocated to the Bank Party acquiring the Banking Office at
                  which the borrowing relationship with respect to such Other
                  Real Estate Owned is maintained.

      (c)   Real Property.

            (i)   Leases. All Banking Office Leases and Tenant Leases shall be
                  allocated in accordance with Schedule 2.1(c)(i).

            (ii)  Realty. All real estate, buildings, fixed assets and
                  improvements related to the Banking Offices shall be allocated
                  as set forth in Schedule 2.1(c)(ii).

      (d) Personalty. All Personalty shall be allocated in accordance with
Schedule 2.1(d).

      (e)   Records. Except as set forth in Schedule 2.1(e), all books and
            records related to the portion of the Bank Business acquired by a
            Bank Party shall be allocated to that Bank Party.

      (f)   Contracts. Contract rights, licenses, permits, approvals,
            authorizations and franchises shall be allocated as set forth on
            Schedule 2.1(f). Any prepaid contract expense shall be allocated by
            Banking Office.


                                       -2-
<PAGE>   7
      (g)   Safe Deposit Box Assets and Agreements. All Safe Deposit Agreements
            shall be allocated to the Banking Office at which the related safe
            deposit box is located.

      (h)   Lease Improvements. Lease improvements (to the extent not otherwise
            included as Personalty) shall be allocated to the Banking Office in
            which they are located.

      (i)   Securities. The Securities shall be allocated as agreed by Bank
            Parties at Closing as set forth on Schedule 2.1(i) to be prepared at
            that time to further the objectives stated in the Preamble to this
            Agreement.

      (j)   Accounts Receivable. The Accounts Receivable shall be allocated as
            agreed by Bank Parties at Closing as set forth on Schedule 2.1(j) to
            be prepared at that time to further the objectives stated in the
            Preamble to this Agreement.

      (k)   FHLB Stock. FHLB Stock shall be allocated as set forth on Schedule
            2.1(k).

      (l)   Day Care Center. LSB and MSB shall assume joint responsibility for
            the administration and disposition of the Day Care Center. After the
            Closing, the Day Care Center shall be renamed the "New London Day
            Care Center." LSB and MSB intend to divest themselves of the Day
            Care Center as soon as practicable after the Closing Date. Until
            such time as such divestiture occurs, LSB and MSB shall allocate all
            profits and operating expenses equally between them and promptly pay
            any amounts due. LSB shall be assigned the Lease related to the Day
            Care Center and shall have a primary responsibility for the
            administration of the Day Care Center and shall account to MSB for
            all profits and operating expenses.

      (m)   Data Processing Equipment, Tapes and File Packages. All data
            processing equipment, software programs and the related property
            shall be allocated as provided in Schedule 2.1(m).

      (n)   Subsidiaries. Ownership of the Subsidiaries shall be allocated as
            follows: (i) 80 South Main Street Corporation to MSB; (ii) NLT
            Services, Inc. to LSB; and (iii) New London Trust Financial Service
            Corporation to CB.

      (o)   NYCE Stock. All NYCE Stock owned by Target on the Closing Date shall
            be allocated as set forth in Schedule 2.1(o).

      (p)   FDIC Insurance Premiums. All insurance premiums paid by Target to
            the FDIC which are allocated to insurance coverage for Deposit
            Liabilities of the Banking Offices on the Closing Date shall be
            allocated to Bank Parties in proportion to the deposit liabilities
            assumed by Bank Parties.

      (q)   Other Bank Assets. All other Bank Assets shall be allocated in
            accordance with Schedule 2.1(q). Any Bank Assets allocated to any
            Bank Party pursuant to Section


                                       -3-
<PAGE>   8
            2.1(c) of the Purchase and Assumption Agreement shall be allocated
            pursuant to Section 6.11 of this Agreement.


                                   ARTICLE III
                         ALLOCATION OF BANK LIABILITIES

3.1   Allocation of Bank Liabilities. Bank Parties shall allocate the Bank
      Liabilities existing as of the Closing Date among the Bank Parties as set
      forth below. Such allocations may be amended by LSB and MSB to make
      adjustments in the allocation of Bank Liabilities pursuant to the
      provisions of Section 11.6(b) of the Purchase and Assumption Agreement.

      (a)   Deposit Liabilities. At the Closing, the Deposit Liabilities
            (including IRAs) shall be allocated to each Banking Office acquired
            in accordance with Schedule 3.1(a).

      (b)   Borrowings. All borrowings from the FHLB of Boston shall be
            allocated as set forth on Schedule 3.1(b).

      (c)   Sold Loans and Mortgage Servicing Contracts. Any liabilities arising
            from sold loans or mortgage servicing contracts shall be allocated
            in accordance with Schedule 3.1(c). A proportionate share of the
            loan loss reserves of CB, LSB or MSB received from Target shall be
            used to compensate the CB, LSB or MSB, as applicable, for any actual
            loss incurred with respect to the sold loans or loan servicing
            contract liability allocated to it. An actual loss in excess of the
            loan loss reserves, if any, shall be allocated as provided in
            Section 13.3 of the Purchase and Assumption Agreement

      (d)   Other Bank Liabilities. All other Bank Liabilities shall be
            allocated in accordance with Schedule 3.1(e). Any Bank Liability
            allocated to any Bank Party pursuant to Section 2.2(c) of the
            Purchase and Assumption Agreement shall be allocated pursuant to
            Section 6.11 of this Agreement.


                                   ARTICLE IV
                                    EMPLOYEES

4.1   Allocation of Employees. Each Bank Party shall be allocated responsibility
      for the individual Bank Employees, including without limitation the
      Assumed Severance Obligations and continued coverage insurance plans
      related to the individual Bank Employees allocated to it, in accordance
      with Schedule 4.1.

4.2   Compliance with Terms of Stock Purchase Agreement Each Bank Party agrees
      to comply with the provisions of the Stock Purchase Agreement and the
      Purchase Assumption Agreement relating to the Bank Employees allocated to
      it.


                                       -4-
<PAGE>   9
4.3   Corporate Center Obligations. Each Bank Party shall be allocated
      responsibility in accordance with Schedule 4.3 for its portion of the
      Assumed Severance Obligations with respect to the Corporate Center
      Employees.

4.4   Retention Pay Obligations. Each of Bank Parties shall be responsible for
      reimbursing Target at Closing for an amount not to exceed 25% of the "stay
      for pay" amount referred to in Section 2.5.5 of the Stock Purchase
      Agreement.


                                    ARTICLE V
                                 PURCHASE PRICE

5.1   Allocation of Purchase Price. The Purchase Price of $25.2 million shall be
      allocated among Bank Parties in accordance with Schedule 5.1.

5.2   Allocation of Reductions in Purchase Price. In the event that the Purchase
      Price is reduced pursuant to Section 2.3.2(ii) of the Stock Purchase
      Agreement, (including a reduction based on Sun's election to utilize the
      Y2K Deposit Measurement Period), the Deposit Reduction Amount and the
      Post-Closing Deposit Reduction Amount, if any, shall be allocated among
      Bank Parties in proportion to the decline in the average deposit account
      balance of the Deposit Liabilities assumed by each Bank Party as set forth
      in Schedule 3.1.

5.3   Allocation of Delay Penalty. In the event that Bank Parties become liable
      to PMTH for an upward adjustment to the Purchase Price pursuant to Section
      3.4 of the Purchase and Assumption Agreement because of any delay caused
      by or attributable to acts or omissions of a Bank Party, the upward
      adjustment in the Purchase Price shall be allocated to and paid to PMTH or
      PMH by the Bank Party to which such delay is attributable.

5.4   Closing Dividend. In calculating the Closing Dividend in accordance with
      Section 2.9 of the Stock Purchase Agreement, Bank Parties agree to
      cooperate in determining any required disposition of the Securities.

5.5   Allocation of Post-Closing Adjustment. Any post-closing adjustment paid or
      received by Bank Parties pursuant to Section 3.3 of the Purchase and
      Assumption Agreement shall be divided equally among Bank Parties.


                                       -5-
<PAGE>   10
                                   ARTICLE VI
                              POST-CLOSING MATTERS

6.1   Mutual Cooperation. In order to accomplish an orderly transition relative
      to the processing of debits and credits to the Bank Assets and Bank
      Liabilities assumed by Bank Parties under this Agreement, each Bank Party
      agrees to cooperate in good faith in the post-transfer processing of
      checks, drafts, deposit tickets for Deposits Liabilities made prior to and
      after the Closing Date, and payments of principal and interest received by
      Bank Parties after the Closing Date with respect to the Loans. Bank
      Parties intend that the Uniform Commercial Code as in effect in the State
      of New Hampshire, applicable federal regulations and usual banking
      practices shall govern the processing of items. Other than PMTH or PMH,
      the provisions of this Agreement constitute an agreement between Bank
      Parties only, and no third party shall be, or shall be deemed to be,
      entitled to rely on, or to receive any direct or indirect benefit from,
      any of the provisions hereof.

6.2   Post Closing Data Processing. Each Bank Party agrees to provide to the
      others data processing and transfer services to help insure the proper
      transfer of customer information and transactions up through all data
      processing conversions and for a reasonable time thereafter. Each Bank
      Party agrees to act in good faith in facilitating the conversion and
      transfer of data processing and other information concerning the Bank
      Assets and Bank Liabilities to the other Bank Parties. Each Bank Party
      shall designate an individual to serve as liaison from the date hereof
      through a future date that shall be generally agreed upon by all Bank
      Parties as the final conversion date. LSB agrees to provide transitional
      data processing services to other Bank Parties as set forth in Schedule
      6.2, which shall be prepared prior to Closing. After the conversion of the
      data processing systems, any data processing licensing obligations,
      equipment or hardware to be disposed will first be offered to Bank Parties
      for purchase at book value and thereafter liquidated. Any gain or loss
      associated with the disposition of such equipment shall be divided equally
      between Bank Parties.

6.3   Referrals. Each Bank Party agrees that for a 180 day period following the
      Closing Date, it will refer any customers seeking to transact business
      related to Bank Assets or Bank Liabilities allocated to another Bank Party
      to seek such services exclusively from the appropriate Bank Party.

6.4   Non-Solicitation of Bank Employees. Each Bank Party agrees that from the
      date hereof through the first anniversary of the Closing Date, it shall
      not, directly or indirectly, solicit for employment, retain as an
      independent contractor or consultant, induce to terminate employment or
      otherwise interfere with employment relationships with any Bank employee
      who is employed by another Bank Party pursuant to Article IV hereof;
      provided that nothing in this Agreement shall be construed to prevent any
      Bank Party from advertising employment or consulting opportunities in
      media of general circulation or publication in the geographic area
      surrounding such Bank Party. It is expressly acknowledged that a Bank
      Party may employ as an employee or retain as an independent contractor or
      consultant any Bank employee who shall terminate his or her employment
      with a Bank


                                       -6-
<PAGE>   11
      Party, provided there is no direct or indirect inducement or interference
      by, or other pre-termination contact with, a Bank Party. The terms of this
      Section 6.4 shall not prohibit a Bank Party from hiring a Bank employee
      who has been terminated by another Bank Party after the Closing Date.

6.5   Non-Solicitation of Branch Customers. Each Bank Party agrees that from the
      date hereof through 180 days following the Closing Date, it shall not
      solicit Branch Customers through advertising specifically referencing or
      targeted to such Branch Customers in a way which is reasonably likely to
      induce such Branch Customers to transfer Deposit Liabilities or Loans from
      Target to a Bank Party or from one Bank Party to another Bank Party;
      provided that nothing in this Agreement shall be construed to prevent any
      Bank Party from (a) engaging in advertising, solicitations, or marketing
      campaigns not primarily directed to or targeted at Branch Customers, (b)
      responding to unsolicited inquiries by Branch Customers with respect to
      banking or other financial services, and (c) providing notices or
      communications relating to the transactions contemplated hereby.

6.6   Duty to Furnish Information. Each Bank Party shall FURNISH THE OTHER BANK
      PARTIES WITH INFORMATION IN ITS POSSESSION, RELATED TO THEIR RESPECTIVE
      ALLOCATED SHARE OF THE BANK BUSINESS WHICH INFORMATION IS REASONABLY
      NECESSARY TO ENABLE THEM TO EXERCISE THEIR RIGHTS AND PERFORM THEIR DUTIES
      UNDER THIS AGREEMENT, THE STOCK PURCHASE AGREEMENT AND THE PURCHASE AND
      ASSUMPTION AGREEMENT.

6.7   Deposits and Loan Payments Inadvertently Received. Each Bank Party shall
      make all reasonable efforts to facilitate the acceptance after the Closing
      Date of any deposits or loan payments for accounts allocated to another
      Bank Party. Each Bank Party shall agree to accept deposits and loan
      payments after the Closing Date for accounts allocated to another Bank
      Party for a period not to exceed 90 days. Bank Parties shall undertake
      reasonable measures to facilitate the timely crediting of deposits and
      payments.

6.8   Obligation to Update Schedules Prior to Closing. From time to time prior
      to the Closing Date, Bank Parties will supplement or amend the Disclosure
      Schedules delivered in connection herewith with respect to any matter
      hereafter arising which is necessary to reflect a change in the allocation
      of Bank Assets and Bank Liabilities assumed by Bank Parties.

6.9   Conduct of Business. During the period from the date of this Agreement
      through 180 days following the Closing Date, each Bank Party agrees to
      conduct its business in good faith in the usual, regular and ordinary
      course consistent with past practices and to take no action which would
      adversely affect or delay the ability of the other Bank Parties to perform
      their obligations under this Agreement.


                                       -7-
<PAGE>   12
6.10  Regulatory Approvals.

      (a)   As soon as practicable after the date hereof, Bank Parties shall use
            all reasonable efforts to prepare all necessary documentation, to
            effect all necessary filings and to obtain all necessary permits,
            consents, approvals and authorizations of all third parties and
            governmental bodies necessary to consummate the transactions
            contemplated by this Agreement. Bank Parties will each cooperate
            with the other and will each furnish the other and the other's
            counsel with all information concerning themselves, their
            subsidiaries, directors, officers and stockholders and such other
            matters as may be necessary or advisable in connection with any
            application, petition or any other statement or application made by
            or on behalf of a Bank Party to any governmental body in connection
            with the transactions contemplated by this Agreement. Bank Parties
            shall have the rights to review and approve in advance all
            characterizations of the information relating to themselves, as the
            case may be, and any of their respective subsidiaries, which appear
            in any filing made in connection with the transactions contemplated
            by this Agreement with any governmental body. In addition, Bank
            Parties shall each furnish to the other a final copy of each such
            filing made in connection with the transactions contemplated by this
            Agreement with any governmental body.

      (b)   If, between the date of this Agreement and the Closing Date, either
            (i) LSB or MSB determine that a Herfindahl-Hirschmann Index change
            with regard to the Banking Offices or deposit liabilities to be
            assumed by each of LSB and MSB under this Agreement will create an
            impermissible competitive effect, or (ii) a government agency, the
            approval of which will be a requirement to Closing, so indicates,
            LSB and MSB shall cooperate to amend this Agreement so as to
            re-allocate certain Bank Assets and/or Bank Liabilities to each of
            LSB and MSB to eliminate the impermissible competitive effect.

6.11  Adjustments in Bank Assets and Bank Liabilities. While it is the intent of
      Bank Parties to allocate the Bank Business between Bank Parties,
      respectively, Bank Parties recognize that there may be certain assets and
      liabilities that are not easily allocated between Bank Parties that may be
      identified between the date of this Agreement and the Closing Date or may
      be identified after the Closing. In such case, Bank Parties will endeavor
      in good faith to allocate any such asset or liability equitably between
      each other in such a manner as to carry out the intent of this Agreement.
      As a general principle, Bank Parties agree that any such asset or
      liability that is incidental to or a consequence of an asset or liability
      assigned to a Banking Office will belong to the Bank Party acquiring the
      related asset or liability. Any other asset or liability that relates to
      more than one Banking Office shall be allocated between Bank Parties based
      on the relative benefit or burden derived from such asset or liability to
      the Banking Offices except that if such relative benefit or burden cannot
      be ascertained, then Bank Parties shall share equally in such benefit or
      burden. If Bank Parties are unable to agree on an allocation after a good
      faith effort, the matter shall be referred to arbitration pursuant to
      Section 14.16 of the Purchase and Assumption Agreement.


                                       -8-
<PAGE>   13
                                   ARTICLE VII
                                 INDEMNIFICATION

7.1   Allocation of Indemnification Payments.

      (a)   Except as otherwise provided in this Agreement, in the event that
            Bank Parties become liable to PMTH or PMH pursuant to Article XII of
            the Purchase and Assumption Agreement, such liability shall be
            allocated to and paid by each Bank Party in proportion to the
            liability attributable to it. If the liability cannot be
            proportioned among Bank Parties, such liability will be allocated
            evenly among Bank Parties.

      (b)   In the event that PMTH or PMH becomes liable to Bank Parties
            pursuant to Article XII of the Purchase and Assumption Agreement,
            the amount payable to Bank Parties by PMTH or PMH shall be allocated
            among Bank Parties in proportion to the losses incurred by each Bank
            Party for which such indemnification is being paid.

      (c)   In the event that Sun becomes liable to Bank Parties pursuant to
            Article XIII of the Stock Purchase Agreement, the amount payable to
            Bank Parties by Sun shall be allocated among Bank Parties in
            proportion to the losses incurred by each Bank Party for which such
            indemnification is being paid.


                                  ARTICLE VIII
                               GENERAL PROVISIONS

8.1   Entire Agreement; Modification; Waiver. This Agreement, including all
      Schedules hereto and the agreements and other documents referred to herein
      and therein, constitutes the entire agreement of the parties pertaining to
      the subject matter contained herein and this Agreement supersedes all
      prior or contemporaneous agreements, representations and understandings of
      the parties. No supplement, modification or amendment to, or waiver of
      this Agreement shall be binding unless executed in writing by Bank
      Parties. No waiver of any provision of this Agreement shall be deemed or
      shall constitute a waiver of any other provision, whether or not similar,
      nor shall any waiver constitute a continuing waiver.

8.2   Counterparts. This Agreement may be executed in two or more counterparts,
      each of which shall be deemed an original, but all of which together shall
      constitute one and the same instrument.


                                       -9-
<PAGE>   14
8.3   Headings. The headings of the Sections, Articles, and Schedules of this
      Agreement are inserted for convenience only and shall not constitute a
      part of this Agreement.

8.4   Governing Law. This Agreement shall be governed by and construed in
      accordance with the laws of the State of New Hampshire without giving
      effect to the principles of conflict of laws thereof.

8.5   Addresses of Notice. All notices, requests, demands and other
      communications provided for under this Agreement and under the related
      documents shall be in writing (including telegraphic communication) and
      mailed (by registered or certified mail, return receipt requested, or
      delivered by Federal Express or other similar express overnight delivery
      service), or telegraphed, telecopied or delivered to the applicable party
      at the addresses indicated below.

If to LSB:
            Lake Sunapee Bank, fsb
            9 Main Street (PO Box 9)
            Newport, NH 03773-0029
            Attention:  Stephen W. Ensign, President and Chief Executive Officer
            Telecopier: (603) 863-9571

            With a copy to:   Richard A. Schaberg, Esq.
                              Thacher Proffitt & Wood
                              1700 Pennsylvania Avenue, NW
                              Washington, DC 20006
            Telecopier:       (202) 347-6238

If to MSB:
            Mascoma Savings Bank
            67 North Park Street
            Lebanon, NH 03776-0435
            Attention: Stephen F. Christy
            Telecopier: (603) 448-1470

            With a copy to:   W. John Funk, Esq.
                              Gallagher, Callahan & Gartrell
                              214 North Main Street
                              Concord, NH 03301
            Telecopier:       (603) 226-3334

If to CB:
            Cargill Bank
            Westbank Tower, 225 Park Avenue
            West Springfield, MA 01089
            Attention: Donald Chase
            Telecopier:  (413) 747-1456


                                      -10-
<PAGE>   15
            With a copy to:   Richard A. Schaberg, Esq.
                              Thacher Proffitt & Wood
                              1700 Pennsylvania Avenue, NW
                              Washington, DC 20006
                              Telecopier:  (202) 347-6238

      or, to each party, at such other address that party designates in a
      written notice to the other party in accordance with this section. All
      such notices, requests, demands or other communications shall be deemed
      delivered (i) if sent by messenger, upon personal delivery to the party to
      whom the notice is directed, (ii) if sent by telecopier, upon electronic
      or telephonic confirmation of receipt from the receiving telecopier
      machine, (iii) if sent by reputable overnight courier, one business day
      after delivery to such courier, or (iv) if sent by mail, three 3 business
      days following deposit in the United States mail, postage prepaid,
      certified mail, return receipt requested.

8.6   Expenses. Except as otherwise provided herein, each Bank Party shall pay
      its own out-of-pocket expenses incurred in connection with this Agreement,
      including legal, accounting and investment banking, whether or not the
      transactions contemplated by this Agreement are consummated. In the event
      that expenses incurred in connection with this Agreement are not
      attributable to a particular Bank Party, such expenses shall be allocated
      equally among Bank Parties.

8.7   Publicity. Except as may be required by law or by the rules or regulations
      of any governmental authority or securities exchange prior to the Closing
      Date, neither party shall, directly or indirectly, make or cause to be
      made any public announcement or disclosure, or issue any notice, relating
      to any of the transactions contemplated by this Agreement, unless approved
      by the other in advance. Both parties will limit the distribution of
      information relative to this transaction to those persons who must be
      aware of the Agreement for the performance of their duties.

8.8   Severability. If any paragraph, section, sentence, clause, phrase, word or
      covenant contained in this Agreement shall become illegal, null or void,
      or against public policy, for any reason, or shall be held by any court of
      competent jurisdiction to be illegal, null or void, or against public
      policy, the remaining paragraphs, sections, sentences, clauses, phrases,
      words and covenants contained in this Agreement shall not be affected.

8.9   Consent to Jurisdiction: Waiver of Jury Trial. EACH PARTY HERETO, TO THE
      EXTENT IT MAY LAWFULLY DO SO, HEREBY SUBMITS TO THE JURISDICTION OF THE
      COURTS OF THE STATE OF NEW HAMPSHIRE AND THE UNITED STATES DISTRICT COURT
      FOR THE DISTRICT OF NEW HAMPSHIRE, AS WELL AS TO THE JURISDICTION OF ALL
      COURTS FROM WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE
      AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING
      ARISING OUT OF SUCH PARTY'S OBLIGATIONS UNDER OR WITH RESPECT TO THIS
      AGREEMENT OR ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS


                                      -11-
<PAGE>   16
      CONTEMPLATED HEREBY, AND EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY
      HAVE AS TO VENUE IN ANY SUCH COURTS.

      EACH PARTY HERETO HEREBY WAIVES TRIAL B JURY IN ANY ACTION, PROCEEDING OR
      COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONCERNED WITH THIS AGREEMENT OR
      ANY OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY. NO
      PARTY HERETO, NOR ANY ASSIGNEE OR SUCCESSOR OF A PARTY HERETO, SHALL SEEK
      A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER
      LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY
      OF THE AGREEMENTS, INSTRUMENTS OR DOCUMENTS CONTEMPLATED HEREBY. NO PARTY
      WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN
      WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL A CANNOT BE OR HAS NOT
      BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY
      THE PARTIES HERETO, AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
      NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT
      THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
      INSTANCES.

8.10  Damages; Enforcement of the Agreement.

      (a)   Any Bank Party suffering or incurring any loss, fee, cost, expense,
            liability or obligation which has a material adverse effect on the
            Bank Assets or Bank Liabilities allocated to it herein ("Damages"),
            which arise from the actions or omissions of another Bank Party or
            Bank Parties, shall be entitled to prompt payment for the amount of
            any Damages from such other Bank Party or Bank Parties.

      (b)   The parties agree that irreparable damage would occur in the event
            that any of the provisions of this Agreement were not performed in
            accordance with their specific terms or were otherwise breached. It
            is accordingly agreed that the parties shall be entitled to an
            injunction or injunctions to prevent breaches of this Agreement and
            to enforce specifically the terms and provisions hereof in any court
            of the United States or any state having jurisdiction, this being in
            addition to any other remedy to which they are entitled at law or in
            equity.

8.11  Binding Nature; Assignment. This Agreement shall be binding upon and inure
      to the benefit of the parties hereto and their permitted successors and
      assigns; provided, however, that neither this Agreement nor any rights,
      privileges, duties or obligations of the parties hereto may be assigned by
      an such party prior to the Closing Date unless expressly pursuant to
      Section 14.6 of the Purchase and Assumption Agreement.

8.12  No Third Party Rights. Other than with respect to PMTH and PMH, this
      Agreement is not intended, nor shall it be construed, to create any
      express or implied third party


                                      -12-
<PAGE>   17
      beneficiary rights in any person, including present and former employees
      of Target, the Bank Employees, or any beneficiaries or dependents thereof.


                                      -13-
<PAGE>   18
      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                    LAKE SUNAPEE BANK, FSB


                                    By: /s/ Stephen W. Ensign
                                        --------------------------------

                                    MASCOMA SAVINGS BANK


                                    By: /s/ Stephen F. Chritsy
                                        --------------------------------
                                            President


                                    CARGILL BANK


                                    By: /s/ Gary L. Briggs
                                        --------------------------------
                                            Executive Vice President


                                       S-1