claims, the responses to the claims, and the proposed settlement agreement

 

                   INTRODUCTION TO AND REVIEW OF RTC'S CLAIMS

     The following introduction and review of the RTC's investigation, proposed
claims, the responses to the claims, and the proposed settlement agreement is
set forth in accompaniment to our opinion, of which it is an integral part.  We
express no opinion on the completeness or accuracy of the information furnished
to us.  We have only relied upon this information to determine the legal issues
on which we are rendering this opinion.

     REPRESENTATION BY COUNSEL.  As you know, Westminster and the Named
Directors have been represented by Martin C. Washton, of the law firm of Gibson,
Dunn & Crutcher, 333 South Grand Avenue, Los Angeles, California 90071-3197.  In
connection with the RTC's investigation, the RTC retained a private outside law
firm, Preuss Walker & Shanagher, 595 Market Street, 16th Floor, San Francisco,
California 94105.  The RTC also employed its own internal counsel, Robert W.
Helstowski, in the investigation.

          THE TOLLING AGREEMENTS.  On December 15, 1993, the RTC, Westminster
and the Named Directors entered into a series of agreements (the "Tolling
Agreements," attached as Attachment A), with respect to possible claims by the
RTC.  The Tolling Agreements indicate that the RTC "is investigating and
considering whether claims should be asserted against [the Named Directors and]
Westminster] arising out of, based upon, or relating to [their] service as a
director/officer of FarWest Savings, its parent, affiliates and subsidiaries,
including FarWest Financial Corporation and/or a shareholder thereof....."  The
Tolling Agreements further indicate that the RTC deferred final decision
regarding the filing of claims or causes of action and that the Tolling
Agreements were entered into in order to facilitate an orderly process of
investigation and potential settlement negotiations.

     The Tolling Agreements identify the claims subject to its provisions (the
"Subject Claims") as "limited to those concerning the receipt and/or allocation
of tax refunds, overhead or other expenses by FarWest Financial and/or [the]
Named Directors], as well as loans, subordinated debt, corporate securities and
high-yield bonds extended or purchased by FarWest in the 1987 - January 11, 1991
time period."

     The Tolling Agreements provide that the running of statutes of limitations
and other periods governing the assertion of the Subject Claims are suspended
during the term of the Tolling Agreements.  The term was initially set to expire
on June 30, 1994.  The expiration date has been extended by agreement of the
parties from time to time, with the most recent extension set to expire on
February 15, 1995.  The Tolling Agreements specified that no claims which had
expired before the Tolling Agreements would be revived by them.

          The Tolling Agreements require that, prior to filing a suit on the
Subject Claims and before April 15, 1994, the RTC will provide notice of the
decision to commence an action, itemizing all claims in sufficient detail to
allow Westminster and the Named Directors to submit a factual and legal
response.  The Tolling Agreements also required the RTC to provide Westminster
and the Named Directors access to all of the business records of FarWest Savings

and FarWest Financial to permit them an opportunity to present a detailed
defense submission during the term of the Tolling Agreements.

     THE RTC'S INVESTIGATION.  We have learned of certain aspects of the RTC's
investigation described in the Tolling Agreements which may bear on your
consideration.

     The RTC subpoenaed Westminster for documents relating to its investigation.
After a thorough search for documents responsive to the subpoena, Mr. Washton
wrote to the RTC to indicate that none of the subpoenaed records were in the
possession, custody or control of Westminster, and were believed to be in the
possession of the RTC, "since all such documents were seized by the RTC in
connection with documents taken from the Newport Beach and Century City offices
of FarWest Financial Corporation and FarWest Savings.  SEE Mr. Washton's May 20,
1994 letter, and the declaration of Lillian Cremeans, attached to this letter as
Attachment B.

     In addition to those documents, the RTC also requested documents in the
possession of Mr. Washton's firm concerning accounting records from Deloitte &
Touche in connection with a 1992 document production (as part of the GOLDMAN V.
BELZBERG litigation).

     In addition to the documents subpoenaed from Westminster and these
individuals, the RTC interviewed numerous individuals, including the following:
Messrs.  Kemper, Green, Kayne, Lyon, Behrle, Charles "Chic" Hall, and Frank
Henry, and a loan file paralegal.  Each individual was asked for any documents
pertaining to their service.

     In addition to the interviews conducted by the RTC, formal depositions
under oath were taken in front of a court reporter of at least William Belzberg
and Jack Herz.

     According to the transcript of the deposition of Mr. Belzberg, the RTC
inquired of Mr. Belzberg about various subjects, including the following: the
present business of Westminster, various business entities owned or controlled
by Mr. Belzberg's brothers, Mr. Belzberg's financial statement and asset
disclosure, the GOLDMAN V. BELZBERG litigation and settlement, why FarWest
Savings failed, FarWest Savings' management structure from the mid-'80's
forward, the line of authority for approval of new loans, the role and function
of the Executive Committee before and after Mr. Kayne was hired, FarWest
Savings' high-yield bond portfolio, the BRT loans by FarWest Savings, FarWest
Savings' responses to reports of examination, the reliability of board minutes,
the Butterfield & Mason loan, the Dove Valley loan, the Hidden Lake loan, J.H.
Financial and the relationship with Jack Herz, Mr. Behrle's responsibilities and
compensation in connection with J.H. Financial, the proposed going-private
transaction for FarWest Financial, loans made outside of California, insurance
coverage for the costs in connection with the RTC claims, indemnification of
Directors, commercial versus residential lending, Executive Committee review of
loan submissions, Executive Committee procedures, overhead and payroll
allocation between FarWest Savings and FarWest Financial, income tax allocation
between FarWest Savings and FarWest Financial, the sale of the Newport Beach
headquarters building, and numerous

                                       -2-

borrowers or their principals (including Edward Matthews, Inawell Corporation,
Lincor, Aldo and Karen Baccala, J.L. Construction, Bill Walters, Yehuda Netanel,
IDM, Mike Chaupen, Continental American, Preferred Entity, Extra Low, Pacific
Savings Bank, California Communities, Charles Blutch, Cooper Fellman, Stratham,
Seaview Associates, Warmington, Wellsford, Warren Ashmann, Paul Hoekenga,
Robertson Homes, Western Village Lakewood Associates, Pacific Scene, Cambio,
Murray Properties, Jan Developments, Stuart Nolan, Aaron Katz, Rosenberg &
Bortz, Binaford, Unified Capital, Robert Van Santen, RWR Developments, U.S.
Homes, Regent Properties, Drever McIntosh, Rancho Verde Village, American
Investors, Guaranty Service Corp., Bristol House Partnership, Stonemark Islander
Limited Partnership, Richard Hall, Vista Poinsettia Park Apartments, Bayfront
Development, and John Baldwin).

     THE RTC CLAIMS.  On April 15, 1994, the RTC gave notice of the RTC's
decision to commence an action against Westminster and the Named Directors.  A
copy of the RTC's "Claims Notice" is attached as C. You are urged to review the
Claims Notice carefully for a complete statement of the claims and their basis.
The following is a brief review of the Claims Notice.

     The RTC stated it intended to bring an action against Westminster and the
Named Directors "arising out of, based upon or relating to their status as
majority shareholder, director and/or officer of FarWest Savings, its parent,
affiliates and subsidiaries." The Claims Notice stated that

     [t]he claims ... relate to [FarWest Savings'] overpayment of interest to']
     Westminster on certain subordinated debt, the RTC's right to a portion of
     tax refunds paid or to be paid Westminster, allocation of expenses, and
     losses related to certain loans and investments undertaken by [FarWest]
     Savings] prior to its closure, including loans/investments with Butterfield
     & Mason, J.L. Construction Company and Jack Herz.

     In general, the claims and amounts were based upon the following
allegations.

          1.   Subordinated Debt.  The RTC claims that Westminster purchased
     $5.2 million of FarWest Savings' subordinated debt, originally issued in
     1984, commencing in 1988.  The RTC alleges the debt was purchased for the
     purpose of retirement, but that interest continued to be paid on the debt
     until it was retired at year end 1989.  The total amount of interest
     "overpayment" alleged "is expected to exceed $1.4 million."

          2.   Tax Refunds and Overhead Allocation.  The RTC claims that there
     were tax overpayments in the years 1986-1991, and that it is entitled to a
     portion of the refunds that have been claimed or received.  The RTC alleges
     there were no tax allocation agreements between Westminster and FarWest
     Savings and its subsidiaries and that tax payments were made with funds
     obtained primarily from FarWest Savings.  Additionally, the RTC claims that
     there were no allocation agreements with respect to legal, accounting and
     other professional services, and that most of Westminster's employees
     during Mr.

                                       -3-

     Kayne's tenure occupied offices in Century City, where expenses were paid
     by FarWest Savings, including rent, utilities, security, office equipment
     and certain salaries.  The RTC claimed in excess of $1 million for the
     overhead, and a proportionate share of the tax refunds in an amount to be
     determined.

          3.   The RTC claimed that FarWest Savings incurred losses on certain
     loans and acquisitions that were "extremely risky and uncertain, and
     incompatible with [FarWest Savings'] balance sheet and deteriorating']
     capital position." The RTC alleged that "[t]he failure of Messrs.
     Belzberg, Kayne and Behrle to insist on primarily loan committee review of
     certain of these projects eliminated virtually all peer review, resulting
     in the [alleged] losses."

               a.   Butterfield & Mason.  FarWest Savings entered into a
          $5,000,000 line of credit agreement with Butterfield & Mason Mortgage
          Company, Inc. ("Butterfield & Mason").  This corporation was formed
          and owned by Warren Ashmann.  The RTC alleges that the "loan appears
          to have been based solely on the recommendation/direction of Fred
          Kayne and his relationship with Warren Ashmann." The initial line of
          credit was $5 million, but it was increased over time to a total of
          $35 million, and that a total of $37.75 million was extended.  The RTC
          alleges that the purpose of the line of credit was the financing of
          Butterfield & Mason's real estate loans secured by real estate in
          California and western states.  The RTC further alleges that (1) the
          line was to be secured by a collateral assignment of Butterfield &
          Mason's assets, (2) 20% of the commitment would be backed by outside
          collateral, and (3) Mr. Ashmann would give a guarantee of 50% of the
          deficiency following exhaustion of collateral.  In addition, the terms
          of the credit line provided for quarterly interest payments and an
          annual payment of 50% of Butterfield & Mason's profits.

               The RTC alleges that, in early 1990, Butterfield & Mason's loans
          were in various states of default, but FarWest Savings did not advise
          Mr. Ashmann that it would discontinue making advances until July of
          1990.  In October of 1990, Butterfield & Mason failed to make its
          quarterly interest payment, and the loan was put on a non-accrual
          status and classified as substandard.  In July 1992, Butterfield &
          Mason filed a petition under Chapter 11 of the Bankruptcy Code.

               The RTC alleges that "Farwest did not conduct its normal
          underwriting analysis with respect to this very risky line of credit."
          Further, the RTC alleges that FarWest Savings did not obtain updated
          financial information during the period when the credit line was
          increased several times, that the value of pledged collateral did not
          support the indebtedness, and that not all of the pledged collateral
          had been properly assigned to FarWest Savings, as required.

                                       -4-

               The RTC alleges that $17 million of the $37.75 million advanced
          on the line was repaid, and after further payments and collateral
          recoveries, there remained an estimated principal loss of
          approximately $16.8 million.  Expenses to carry the collateral
          properties plus lost interest raised the potential total damages to in
          excess of $25 million.

               b.   J.H. Financial Investments.  Beginning in April 1988, the
          RTC alleged, FarWest Savings contracted with a real estate broker
          named Jack Herz (and his company, J.H. Financial) to acquire
          properties to "flip" for immediate profit.  Under this arrangement,
          allegedly, Mr. Herz was to locate investment opportunities, FarWest
          Savings (through its subsidiary American Capital Fidelity Corp.) would
          take title to the property and provide any equity funds necessary to
          complete the transaction, and Mr. Herz, through J.H. Financial, would
          provide all management for the purchased real estate.

               As a part of the transaction, the RTC alleges that Mr. Behrle was
          to receive 5% of the net profit upon sale of the properties and that
          First City Industries, a company in the Belzberg ownership chain,
          invoiced FarWest Savings and was paid 75% of the cost of Behrle's
          staff for their work on these investments.  The total paid in these
          regards was $181,942.32, the RTC alleges.

               The RTC alleges that the transactions under this arrangement were
          approved by the Executive Committee but were not run through the
          normal channels of supervision and underwriting; that the
          documentation was inadequate; that management did not conduct
          feasibility studies, market analyses, and internal asset reviews;
          and that when the properties were acquired, in no case was a buyer
          committed to purchasing the property.  The RTC alleges that four
          properties were purchased by FarWest Savings under some portion of
          this arrangement, that none were profitable, and that Mr. Herz
          received a total of $478,660 from FarWest for advances on profits and
          office expenses. One of the properties purchased under this
          arrangement is a three-story office building located at 10350 Santa
          Monica Boulevard, in Los  Angeles, California.  The RTC alleges that
          the total loss over time is $4.15 million.

               c.   Panorama Partners.  In November 1988, FarWest Savings
          entered into a partnership entitled Panorama Partners to purchase a
          vacant department store in Panorama City, Los Angeles County, for a
          purchase price of $9 million.  The RTC alleges FarWest Savings
          contributed $7 million, that the transaction was, like the Herz
          transactions, intended to be "flipped," but there was not a signed
          resale contract when the property was acquired.  The RTC alleges that
          one of FarWest Savings' partners was Mark Mandelbaum, who is a "Behrle
          associate." The RTC estimates the loss at $4 million in connection
          with this acquisition.

                                       -5-

               d.   J.L. Construction.  The RTC alleged that, beginning in 1988,
          FarWest entered into a lending relationship with J.L. Construction
          Company, owned by James Franklin.  FarWest Savings allegedly extended
          a total of five loans totalling approximately $48.6 million between
          March and September of 1989, and a sixth loan of $5.5 million was
          extended to a "straw borrower" of Franklin's, Aldo Baccala, at FarWest
          Savings' suggestion, in October of 1989 in order to avoid loan-to-one-
          borrower regulations.  The RTC alleges that although FarWest Savings
          "followed standard underwriting procedures with respect to these
          loans, the Executive Committee ignored the excessive concentration of
          credit to a young developer with a history of aggressive risk-taking
          and inability to complete projects on budget." The RTC identified
          anticipated losses on the J.L. Construction loans, including the
          Baccala loan, totalling $18,473,510.

               With regard to the Baccalas, the RTC alleged that J.L.
          Construction assigned all of its interest in a purchase agreement to
          the Baccalas and on the same day, the Baccalas signed a loan
          application with FarWest Savings.  Subsequently, J.L. Construction and
          the Baccalas signed an agreement whereby the Baccalas would acquire
          the property as J.L. Construction's assignee, retaining $100,000 of
          the proceeds of a second purchase loan in return for their
          participation in the transaction.

     Following receipt of the Claims Notice, Mr. Washton requested access to
"all business records of Far West and Far West Financial, and particularly those
which relate to the subordinated debt, tax refunds, overhead allocation, and the
specific loans and investments identified in [the Claims Notice]." A copy of Mr.
Washton's request is attached as Attachment __. A number of subsequent requests
were made by Mr. Washton in an attempt to obtain the documents.

     The RTC ultimately -- albeit tardily -- complied with Mr. Washton's request
for access to documents.  These documents remain in Mr. Washton's possession,
and are available for your review.  In general, they contain copies of certain
minutes of Westminster and FarWest Savings Board of Directors meetings, copies
of certain policies and procedures manuals of FarWest Savings, copies from the
loan files of Butterfield & Mason, copies from the files of J.L. Construction
and the J.H. Financial transactions, among others.

     THE RESPONSE TO THE RTC'S CLAIMS.  Following Gibson, Dunn & Crutcher's
investigation, Mr. Washton prepared and submitted a 59-page, single-spaced
response to the Claims Notice on July 18, 1994.  This "Claims Response" is
attached as Attachment E. You are urged to review the Claims Response carefully.

     In short, the Claims Response denied liability, and asserted that the RTC,
as receiver for FarWest Savings, was liable to Westminster for in excess of
$12.4 million, based upon the following findings and allegations.

                                       -6-

      The Claims Response stated that 20 binders of indices of FarWest Savings
documents had been reviewed, that the contents of 150 boxes of materials had
been reviewed, and that more than 30 boxes of documents had been copied in order
to evaluate the RTC's claims.  In addition, former FarWest Savings employees
knowledgeable about the issues raised by the RTC were solicited for assistance.
Mr. Washton asserted that the RTC must not have been able to spend the time
examining the pertinent records before drafting the Claims Notice or did not
know where to look in FarWest Savings' records.  The RTC "has chosen only a
handful of transactions, which represent less than 1% of the assets of the
entire association - which exceed $4 billion.  Nor has the RTC given any
indication that it considered the plethora of profitable transactions which made
millions for FarWest Savings, or the fact that FarWest was constantly subject to
detailed oversight by the Office of Thrift Supervision and state regulatory
agencies during its operations."

     The Claims Response argued that the RTC disregarded the extensive banking
and business experience of the Executive Committee members of FarWest Financial,
as well as its diligence.  Similarly, the Claims Response stated that the RTC
ignored the substantial investment stake of some of the members of the Executive
Committee in the success of FarWest.  The Claims Response addressed the
substantive merit of the claims without any significant treatment of purely
legal defenses, such as the lapse of the statute of limitation before the
parties entered into the tolling agreement.  But, referring to a recent United
States Supreme Court decision, the Claims Response argued that state (rather
than federal) statutes of limitations will likely apply, and that the California
limitations period for "common law negligence claims of the type you have
alleged" expired before the Tolling Agreements became effective.

     Concerning each of the RTC's allegations, Mr. Washton responded as follows:

          1.   Subordinated Debt.  "FarWest Financial purchased $6.2 million of
     subordinated notes from FarWest Savings for investment purposes in 1988 and
     1989.  FarWest Savings paid interest on these notes to FarWest Financial,
     just as it did to others who purchased the notes.  Effective at the end of
     1989, and not before, FarWest Financial made a capital contribution to
     FarWest Savings by legally retiring the debt.  From that time on, no more
     interest payments were made by FarWest Savings on the notes." The Claims
     Response noted that because FarWest Savings and FarWest Financial are
     different legal entities, under SEC and GAAP requirements for reporting for
     consolidated accounting, inter-company transactions were eliminated for
     accounting purposes only, but that such payments continued to be made
     lawfully.

               The Claims Response indicated that "decision to legally retire
     the debt was first discussed as early as late November 1989," citing a
     memorandum from Charles Green to Fred Kayne dated November 24, 1989.  The
     contribution is discussed in the December 1989 Board Book, under "Financial
     Highlights," which stated "effective December 31, 1989, the Company made a
     capital contribution to the Association in the form of the Association's
     subordinated notes formerly purchased by the Company.  The

                                       -7-

     notes were effectively retired by the Association." The Claims Response
     also identified consolidated statements of financial condition contained in
     FarWest Savings' December 31, 1988 10-K, March 31, 1989 10-Q, June 30, 1989
     10-Q, September 30, 1989 10-Q, which show the entire $65 million face value
     of the subordinated note as a liability until the December 31, 1989 10-K,
     when they were retired, as indicated in Note 11 to the December 31, 1989
     10-K.

          2.   Tax Refunds.  The Claims Response stated that "[f]rom 1987 on,
     FarWest Financial made ALL state and federal tax payments for FarWest
     Savings with its own funds, and thus any tax refunds appropriately belonged
     to FarWest Financial.  Indeed, given that FarWest Financial paid millions
     of dollars of tax obligations of FarWest Savings which have not been
     reimbursed, FarWest Financial presently is owed said reimbursement by
     FarWest Savings and fully intends to pursue a claim in this regard for $4.6
     million."

               The Claims Response stated that it had "conducted an extensive
     investigation of the RTC's claims by examining general ledger transactions,
     account analysis documents, cash accounts reconciliations, cancelled checks
     and check copies, tax returns as filed with taxing authorities, and various
     other materials." Thus, the Claims Response indicated that FarWest
     Financial was entitled to all of the $2.2 million refund received by
     FarWest Financial on or about December 31, 1990 from the California
     Franchise Tax Board for tax payments made in 1989.  In addition, the Claims
     Response noted that FarWest Financial has federal refund applications
     pending for tax year 1988 and California State tax refunds for the years
     1987, 1988 and 1989.  Having paid all these taxes, FarWest Financial
     claimed it was entitled to the refunds, and that if the refunds were not
     adequate, it would look to FarWest Savings for the remainder of the amount
     advanced on its behalf.

          3.   Allocation of Overhead Expenses.  The Claims Response states that
     "FarWest Financial had its own financial resources, including over $40
     million in stock proceeds, and kept its expenses separate from those of
     FarWest Savings." In addition, the Claims Response stated that "FarWest
     Financial paid a significant amount of its expenses using checks drawn on
     its operating checking account which was maintained with FarWest Savings."
     The Claims Response attached backup information from "check copies of these
     accounts and found payments for rent, utilities, supplies, inter-company
     liabilities, equipment, and similar expense items." The Claims Response
     stated "FarWest Financial used its own corporate resources when issuing
     these checks, not those of FarWest Savings."

          With respect to FarWest Financial's expenses paid using checks drawn
     on FarWest Savings funds, entries were made as inter-company accounts
     receivable and payable on the books of the individual entities "to
     acknowledge the temporary advance of funds as owing between the two
     entities" and that "management attempted to settle" the intercompany
     receivables and payables through the actual writing of checks on a regular
     basis.

                                       -8-

     "Review of General Ledger #2995-0550134 (FarWest Financial payable to
     FarWest Savings) during the 1989-90 time frame shows the above-described
     activity," the Claims Response concluded.

          The Claims Response stated that the inter-company transactions and
     payroll expenses were paid using FarWest Savings checks (as a "common
     paymaster") and adjusted between the companies by inter-company accounts.
     "FarWest Financial used its available financial resources, such as its
     operating checking account and the stock proceeds deposit account, to
     regularly retire its obligations to FarWest Savings.

          4.   J.H. Financial Investments.  The Claims Response states that
     there were three, not four, properties purchased in association with J.H.
     Financial (specifically, 500 South Sepulveda Boulevard, 19935 Ventura
     Boulevard and 10350 Santa Monica Boulevard).  "Numerous other transactions
     proposed by J.H. Financial were rejected because, after review by Keenan
     Behrle, they were not considered appropriate."

          The Claims Response reviewed, over 14 single-spaced pages, documents
     and information located pertaining to each of these three properties,
     detailing the origination of each transaction, the due diligence performed,
     the offers made and received, and the funds spent and received.  The Claims
     Response asserted that "two of the subject transactions generated
     significant positive cash flow for FarWest [Savings], resulting in profits
     of about a half million dollars (after taking into consideration FULL
     recoupment of all overhead, profits and commissions paid to J.H.
     Financial)." They also provided additional benefits, in that FarWest's
     Valley office was relocated to the Ventura Boulevard location and the Santa
     Monica property was considered for the future corporate headquarters for
     FarWest Savings, given that there were no options for additional space at
     FarWest Savings' Century City location.

          In the remaining transaction (at Santa Monica Boulevard), the Claims
     Response asserted that the transaction could in no way be considered
     reckless.  Offers were received for more than the purchase price in place
     before the transaction, offers for more than the purchase price were
     received afterward, another transaction in a less desirable location (on
     Sepulveda) returned a higher price, and a building across the street from
     the subject property sold about the same time for substantially more (per
     square foot).

          Concerning Mr. Behrle, the Claims Response pointed out a resolution
     unanimously approved at FarWest Savings' Board meeting on February 8, 1989.
     A copy of the minutes of that meeting and that resolution are attached to
     this letter as Attachment F. According to the resolution, Mr. Behrle's role
     and compensation had been discussed and approved by the Board (after he was
     asked to leave the room). The following members were present and voted
     their approval of the resolution: Messrs. Belzberg, Green, Baum, Hall,
     Indick, Kayne, Muh and Nathan and Mrs. George (Mr. Ziffren was absent).

                                       -9-

          Mr. Behrle, the resolution noted, had engaged and would continue to
     engage in extensive "efforts in identifying certain properties which made
     attractive investments for the Association," including "consulting,
     analytic, advisory, managerial and other services," and, although he was a
     Director and member of the Executive Committee, his efforts "are not and
     have not been adequately compensated." Mr. Behrle's interest was in
     "realized profit only." Thus, the Claims Response stated, "Mr.  Behrle's
     interest was directly aligned with that of FarWest -- to engage in
     profitable transactions." The resolution concluded "the bonus was fair and
     reasonable under the circumstances." Mr. Behrle's efforts on behalf of the
     Association were described (some 30% of his time).  The Claims Response
     stated that Mr. Behrle's total earnings were $14,000 under this plan.

          Mr. Behrle's staff also devoted time and efforts to the projects, the
     Claims Response stated.  Thus, "30% of Mr. Behrle's payroll and related
     office expenses were paid by FarWest Savings because this was the amount of
     time 'dedicated' to the work for FarWest."

          5.   Panorama Partners.  The Claims Response pointed out that the
     purchase of this property in August, 1990, was the result of a great deal
     of research, including, among other things, inspection reports, visits by
     Executive Committee members, and market research performed by the partners
     who were experienced in real estate investments.  There was a signed resale
     contract (together with joint escrow instructions) at the time the purchase
     by Panorama Partners was made and the institution was in a very positive
     financial position (before FIRREA).  Subsequently there were many offers
     and four contracts to purchase the property for more than the $9 million
     purchase price.  An appraisal two years after the purchase of the property
     valued the property at $1.39 million over the purchase price.  The Claims
     Response stated that the RTC declined a $12 million offer in February 1991,
     and has not responded to subsequent offers.

          6.   The Baccalas' Loan and J.L. Construction.  The Claims Response
     noted that the RTC had withdrawn its claims regarding all J.L. Construction
     loans (for River Run, Metro Center II and Dublin Meadows).  The RTC
     declined Westminster's and the Named Directors' request to review those
     loan files.  The remaining claim concerned the Baccala Loan.

          The Claims Response denied that the Baccala loan was reckless.  The
     loan amount was $5.55 million, while the purchase price was $11.27 million
     (I.E., there was a 50.75% equity to cost ratio and a 58% loan to value
     ratio).  The loan was approved following all underwriting standards, as the
     RTC acknowledged in the Claims Notice.  The loan was approved by the
     Executive Committee, according to the minutes of the September 19, 1989
     meeting, which stated "[t]he strength of the transaction is the low LTV
     [loan to value ratio] of 58%.  Underwriting performed a limited economic
     analysis using Borrower's proforma rents and expenses.  Based upon these
     numbers, an NOI of 10.9% and DSC of 1.04 were calculated."

                                      -10-

           The Executive Committee, the Claims Response states, had no knowledge
     whatsoever that J.L. Construction may have been involved, as there is
     nothing the executive summary prepared by the Major Loans Group that
     mentions J.L. Construction Company, and there is similarly nothing in the
     Major Loans Group's recommendation to the Executive Committee.  There was
     no FarWest Savings construction loan commitment.  No interest of J.L.
     Construction was recorded on the property.  The equity of $5.72 million was
     provided by SLGH Investments, Inc., which took a second trust deed on the
     property, and by Property Mortgage Company, Inc., which took a third trust
     deed in the property.  There was no evidence that the Executive Committee
     knew of the contract between the Baccalas and J.L. Construction.  In fact,
     the first document that appears in the file mentioning the agreement is a
     letter from J.L. Construction's legal counsel dated April 9, 1991, after
     the RTC took over FarWest Savings.  The RTC contacted J.L. Construction in
     July, 1991 to obtain a copy of the referenced agreement, which was, in
     fact, executed after the loan was made to the Baccalas.

          An RTC internal memorandum questioned the appropriateness of the loan
     because of a discrepancy between two appraisals, but the Claims Response
     pointed out that each appraisal was based upon different total land areas.

          Last, the Baccala loan would not, the Claims Response argued, have
     violated loan-to-one-borrower regulations, and that such regulations had
     not been proposed, let alone finalized, by the Office of Thrift Supervision
     as of the date of the loan.

          7.   Butterfield & Mason Line of Credit.  The Claims Response stated
     that the Butterfield & Mason proposal was received in the ordinary course
     of business on July 7, 1988, and that Warren Ashmann was not a personal or
     social friend of Mr. Kayne, although Mr. Kayne knew him as a member of the
     business community and through charitable affairs.  Mr. Kayne, along with
     Charles Green, Chief Financial Officer and Executive Vice President (and a
     member of the Executive Committee), met with Mr. Ashmann, and presented the
     proposal to the Executive Committee.  Mr. Belzberg also met with Mr.
     Ashmann.  The Executive Committee approved the proposed transaction.

          Mr. Green was charged with negotiating the terms and documentation of
     the transaction.  He hired the Manatt, Phelps law firm to assist him.  In
     November 1988, after three months of negotiation, the transaction was
     documented in a 29-page agreement (totalling 100 pages with exhibits), a
     21-page guarantee, and related documents.  The due diligence that had been
     performed included credit and related reports from Murphy and Maconachy,
     Inc. and Research Reports, Inc., as well as financial statements and tax
     returns for Warren Ashmann and all of his interests, totalling some two
     inches thick.

          Mr. Ashmann and his wife guaranteed 50% of the "Repayment Deficiency"
     as that term was defined in the guarantee.  To further secure the loan the
     Ashmanns granted a security interest in collateral originally worth $2.0
     million, and the stock of Butterfield

                                      -11-

     & Mason, as well as a first priority lien in the underlying collateral.
     FarWest Savings was to receive interest at the prime rate plus 1.5%, plus
     FarWest Savings would be paid 50% of the net profits annually.  FarWest
     Savings received $1.0 million for the first year's profits.  The Ashmann's
     security and eligible collateral increased proportionately to the increases
     in the credit line, the Claims Response stated.

          The subsequent increases in the line were reviewed and approved by
     Charles Hall and Charles Green and/or Fred Kayne.  As the Claims Response
     noted, each modification was accompanied by appropriate analyses, charts of
     "Eligible Collateral" and "Eligible Loans," portfolio summaries, default
     rates, collateral valuation worksheets, and status reports.  Modification F
     in April 26, 1990 noted that "[s]ince inception, there have not been any
     losses associated with Butterfield & Mason's direct lending program."

          According to the Claims Response, necessary documentation for each
     advance was assembled and reviewed by the Servicing Department, as with any
     other loan.  Mr. Hall had extensive personal involvement in reviewing the
     properties on which loans were made, and Mr. Green met with Butterfield &
     Mason personnel and visited properties, according to the Claims Response.

          The Claims Response drew attention to the manner in which further
     advances on the line were terminated; the fact that threats of litigation
     followed; and Butterfield & Mason's proposed settlement and workout that
     the RTC did not accept.  In August 1990, Mr. Ashmann was informed that
     FIRREA prevented FarWest Savings from making further advances.  He insisted
     that FarWest had to honor its obligation to provide funds, which were
     needed to work out some of the loans.  When Butterfield & Mason defaulted,
     it informed FarWest Savings that it was using its funds for workouts.  On
     January 8, 1991, Butterfield & Mason submitted a five-page 14-point
     settlement proposal.  An "Analysis of Proposed Settlement Agreement" was
     performed by the RTC by a special FarWest Savings work-out group, which
     reviewed the proposal favorably.  The RTC also received a legal evaluation
     of the transaction by the firm of Neumeyer Landrum & Dillion, and a
     detailed estimate of value of the primary and secondary collateral.
     Nevertheless, the RTC did not accept the proposed settlement.

          Subsequently, the RTC appointed a workout specialist, Robert D.
     Saunders, who placed primary responsibility for deficiencies on Butterfield
     & Mason, not FarWest Savings.  Mr. Saunders stated that it was a "principal
     issue" whether FarWest Savings should have advanced more money under the
     line of credit, not whether existing advances could be justified.  Mr.
     Saunders also conducted an extensive review of the books and records of
     Butterfield & Mason and a search for assets of the Ashmanns, which revealed
     complete financial information and disclosures about assets.  The RTC
     ultimately kept Mr. Ashmann in place, subject to provisions of a July 1,
     1991 Modification and Settlement Agreement.  The Claims Response concluded
     its review of the Butterfield &

                                      -12-

     Mason loan by questioning how, in light of the RTC's conduct, it could make
     accusations against the Named Directors.

          8.   FarWest Financial's (Westminster's) Claims.  The Claims Response
     claimed the RTC was liable on three matters to FarWest Financial
     (Westminster).  First, the taxes (summarized above), in the amount of $4.6
     million, plus interest for four years or more, as reduced by the
     anticipated refunds.  Second, FarWest Financial had accounts with FarWest
     Savings which never paid interest, and had the secondary stock offering
     proceeds (originally $41 million) in an intercompany payable account, on
     which it received no interest.  The amount of interest owed was estimated
     at nearly $7 million, plus interest for four or more years.  Third, FarWest
     Financial funded $1.3 million in total bonus accruals, only $517,000 of
     which was ever paid.  The excess amount of $791,300 is due to FarWest
     Financial, with interest for four years.

     THE CLAIMS REPLY.  On September 1, 1994, the RTC sent a reply to Mr.
Washton ("The Claims Reply," which is Attachment G), addressing the arguments in
the Claims Response.

     THE PROPOSED SETTLEMENT AGREEMENT.  Following the Claims Reply, Mr. Washton
met with representatives and lawyers for the RTC beginning on September 14,
1994, and on numerous subsequent occasions.  Following these meetings, a
proposed settlement agreement and release (the "Proposed Settlement Agreement"
is attachment H) emerged.  You are urged to review the Proposed Settlement
Agreement carefully.

     The Settlement Agreement contains the following terms (this description is
not a substitute for a careful reading of the entire agreement).  Westminster
will pay to the RTC $4.0 million.  The parties will mutually release all claims
(including unknown claims) relating to the claims asserted in the Claims Notice,
the Named Directors' service as directors and/or officers of FarWest Savings,
and/or Westminster's status as a shareholder of FarWest Savings.  Westminster
and the Named Directors waive the right to any dividends from the RTC's
resolution of FarWest Savings.  The RTC retains rights against all debtors to
FarWest Savings and against other officers or directors of FarWest Savings and
attorneys, accounts, officials and other professionals.  The RTC does not
release anyone from criminal liability or restitution or administrative or other
governmental action.  The RTC pledges specific cooperation in obtaining tax
refunds.  There is no admission of liability or violation of any law.

                                      -13-

                                TOLLING AGREEMENT

     This Tolling Agreement, effective as of the 15th day of December, 1993 (the
"Effective Date"), is made by and between Westminster Capital ("Westminster")
and the Resolution Trust Corporation, in all of its capacities, including  but
not limited to its corporate capacity its capacity as conservator or receiver
of FarWest Savings and Loan Association ("FarWest"), and its other capacities as
set forth in 12 U.S.C. Section 1821(d), (collectively the "RTC").

     WHEREAS, the RTC is investigating and considering whether claims should be
asserted against Westminster arising out of, based upon or relating to
Westminster's status as the parent corporation of FarWest, its affiliates and
subsidiaries, under its prior name FarWest Financial Corporation, and

     WHEREAS, in reliance upon this Tolling Agreement, the RTC is continuing its
investigation and deferring final decision regarding the filing of claims or
causes of action against Westminster respecting FarWest.

     NOW, THEREFORE, in order to facilitate an orderly process of investigation
and potential settlement negotiations, the RTC and Westminster, in consideration
of the mutual promises and covenants set forth herein and for other good and
valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, agree as follows:

          1.   The term of this Tolling Agreement (the "Term") shall be from
December 15, 1993, through the earlier of June 30, 1994, or the 30th day after
the date of written notice of termination is given by either party.

          2.   The claims covered by this Tolling Agreement ("Subject Claims")
shall be limited to those concerning the receipt and/or allocation of tax
refunds, overhead or other expenses by FarWest Financial and/or Westminster, as
well as loans, subordinated debt, corporate securities and high-yield bonds
extended or purchased by FarWest in the 1987-January 11, 1991 time period.

          3.   Westminster agrees that the running of any statute of
limitations, laches or any other period relating to the timing of assertion of
the Subject Claims by the RTC against Westminster shall be suspended during the
Term of this Tolling Agreement as to any lawsuit or claim which RTC files
against Westminster.

          4.   Westminster agrees that the running of any statute of
limitations, laches or any other period relating to the timing of assertion of
claims by the RTC against Westminster shall be suspended during the Term of this

Agreement as to any lawsuit or claim which RTC files against Westminster within
thirty (30) days after the expiration or termination of the Term hereof arising
out of or related to FarWest ("RTC Suit").

          5.   If RTC does not commence suit against Westminster before the
expiration or termination of the Term hereof, or any later date mutually agreed
on by the parties in a written amendment to this Tolling Agreement, then
Westminster may assert in defense any defense based upon any statute of
limitations, laches or any other period relating to the timing of assertion of
claims that it has or would have had including, but not limited to, the
expiration of any statute of limitations during the tolling period of this
Agreement.

          6.   Prior to filing a Suit on the Subject Claims, and no later than
April 15, 1994, RTC will provide Westminster written notice of its decision to
commence such an action.  Such notice shall itemize all claims in sufficient
detail to allow Westminster to submit a legal and factual response to the
claims.

          7.   The RTC shall provide Westminster and its counsel access to all
of the business records of FarWest and FarWest Financial Corporation so as to
afford it an opportunity to present a detailed defense submission to the RTC
during the term of this Tolling Agreement.  Westminster shall provide the RTC
and its counsel access to all of its business records relating to FarWest or
FarWest Financial in connection with the RTC's ongoing investigation.

          8.   Prior to filing any lawsuit on the Subject Claims against any
party, the RTC will provide Westminster with an opportunity to meet with the
senior RTC legal and business representatives who would have to approve the
filing of claims for purposes of presenting legal and factual defenses
consistent with any written submission made by Westminster.

          9.   Any notice to be provided to Westminster in connection with this
Agreement shall be addressed as follows and delivered by confirmed facsimile
transmission, messenger or overnight mail service to:

                         Martin C. Washton, Esq.
                         GIBSON, DUNN & CRUTCHER
                         333 South Grand Avenue
                         Los Angeles, CA  90071

Any notice to be provided to the RTC in connection with this Tolling Agreement
shall be addressed as follows and delivered by confirmed facsimile
transmission, messenger or overnight mail service to:

                         Robert Helstowski, Esq.
                         RESOLUTION TRUST CORPORATION
                         Legal Department
                         4000 MacArthur Blvd., 5th Floor
                         Newport Beach, CA 92260

          10.  No RTC Suit will be filed during the Term of this Tolling
Agreement.

          11.  This Tolling Agreement shall not in any manner revive any claims
or causes of action that may be barred by, or limit in any way, the assertion of
any defense based upon, any statute of limitations, laches or any other period
relating to the timing of assertion of claims prior to December 15, 1993.  Nor
shall this Agreement revive any claim or cause of action brought as assignee
that was barred prior to assignment.  This Tolling Agreement shall not in any
way effect the RTC's right to assert the revival of applicable statutes of
limitations by operation of law or statute.

          12.  In computing any period of time prescribed by this Tolling
Agreement, the day of the act or event from which the designated period of time
begins to run shall not be included.

          13.  The parties hereto represent and warrant that the terms, extent
and duration of this Tolling Agreement are reasonable and that they will not
challenge or contest the authority of the parties to agree to suspend the
running of or waiver or not to assert the defense of any applicable statute of
limitations, laches period or other period relating to timing as set forth
therein.

          14.  By entering into this Tolling Agreement, Westminster does not
admit that RTC has rights in the capacities listed herein, and this Tolling
Agreement shall not be construed as an admission by either party that valid
claims or defenses exist against either party.

          15.  Westminster represents and warrants that it and the person
executing this Tolling Agreement have the authority to execute this Tolling
Agreement and that the signature which appears below binds Westminster to the
terms of this Tolling Agreement.

          16.  The RTC represents and warrants that it and the person executing
this Tolling Agreement have the authority to execute this Tolling Agreement, and
that the signature which appears below binds the RTC to the terms of this
Tolling Agreement.

          17.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of the RTC (including, but
not limited to, any acquiror of the business or assets of the RTC).

          16.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of FarWest Financial
Corporation and/or Westminster (including, but not limited to, any acquiror of
the business or assets of FarWest Financial Corporation or Westminster).

          19.  Nothing in this Tolling Agreement shall prejudice the rights of
the RTC or Westminster to assert any claims or defenses, including statute of
limitations, laches and other defenses based on timing of assertion of claims
against any person or entity other than the RTC and Westminster.

          20.  This Tolling Agreement, including its terms, shall remain
confidential by and between the parties hereto and their attorneys.  Westminster
agrees to provide the RTC with a list of Westminster's shareholders within five
days of signing this Tolling Agreement in order to allow for verification of the
confidentiality of said Tolling Agreement.

          21.  This Tolling Agreement contains the full and complete agreement
of the parties hereto and may not be altered or amended, except in writing
executed by representatives of both the RTC and Westminster.

          22.  In entering into this Tolling Agreement, the parties represent
that they have been represented by counsel who are the attorneys of each party's
own choice in the negotiation and drafting of this agreement.  Accordingly, this
Tolling Agreement shall not be strictly construed against any party, and the
rule of construction of contracts resolving any ambiguities against the drafting
party shall be inapplicable.  The parties further represent that the terms of
this Tolling Agreement have been completely read and explained to them by their
attorneys, and that those terms are fully understood and voluntarily accepted by
them.

          23.  This Tolling Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but also which together
will constitute one and the same instrument.

WESTMINSTER CAPITAL

By:  /s/ W. Belzberg                         Date:   12/30/93
   ----------------------------------              ----------------------------

Name:   William Belzberg
      -------------------------------

Title:    Chairman
      -------------------------------

RESOLUTION TRUST CORPORATION,
in all of its capacities:

By:                                          Date:
   ----------------------------------              ----------------------------
     Robert W. Helstowski Esq.

Title: Its Attorney

                                TOLLING AGREEMENT

     This Tolling Agreement, effective as of the 15th day of December, 1993 (the
"Effective Date"), is made by and between William Belzberg ("Belzberg") and the
Resolution Trust Corporation, in all of its capacities, including but not
limited to its corporate capacity, its capacity as conservator or receiver of
FarWest Savings and Loan Association ("FarWest"), and its other capacities as
set forth in 12 U.S.C. Section 1821(d), (collectively the "RTC").

     WHEREAS, the RTC is investigating and considering whether claims should be
asserted against Belzberg arising out of, based upon or relating to Belzberg's
service as a director/officer of FarWest, its parent, affiliates and
subsidiaries, including FarWest Financial Corporation and/or a shareholder
thereof (hereinafter collectively "FarWest").

     WHEREAS, in reliance upon this Tolling Agreement, the RTC is continuing its
investigation and deferring final decision regarding the filing of claims or
causes of action against Belzberg respecting FarWest.

     NOW, THEREFORE, in order to facilitate an orderly process of investigation
and potential settlement negotiations, the RTC and Belzberg, in consideration of
the mutual promises and covenants set forth herein and for other good and
valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, agree as follows:

          1.   The term of this Tolling Agreement (the "Term") shall be from
December 15, 1993, through the earlier of June 30, 1994, or the 30th day after
the date of written notice of termination is given by either party.

          2.   The claims covered by this Tolling Agreement ("Subject Claims")
shall be limited to those concerning the receipt and/or allocation of tax
refunds, overhead or other expenses by FarWest Financial and/or Belzberg, as
well as loans, subordinated debt, corporate securities and high-yield bonds
extended or purchased by FarWest in the 1987-January 11, 1991 time period.

          3.   Belzberg agrees that the running of any statute of limitations,
laches or any other period relating to the timing of assertion of the Subject
Claims by the RTC against Belzberg shall be suspended during the Term of this
Tolling Agreement as to any lawsuit or claim which RTC files against Belzberg.

          4.   Belzberg agrees that the running of any statute of limitations,
laches or any other  period relating to the timing of assertion of claims by the
RTC against Belzberg shall be suspended during the Term of this Agreement as to
any

lawsuit or claim which RTC files against Belzberg within thirty (30) days after
the expiration or termination of the Term hereof arising out of or related to
FarWest ("RTC Suit").

          5.   If RTC does not commence suit against Belzberg before the
expiration or termination of the Term hereof, or any later date mutually agreed
on by the parties in a written amendment to this Tolling Agreement, then
Belzberg may assert in defense any defense based upon any statute of
limitations, laches or any other period relating to the timing of assertion of
claims that it has or would have had including, but not limited to, the
expiration of any statute of limitations during the tolling period of this
Agreement.

          6.   Prior to filing a Suit on the Subject Claims, and no later than
April 15, 1994, RTC will provide Belzberg written notice of its decision to
commence such an action.  Such notice shall itemize all claims in sufficient
detail to allow Belzberg to submit a legal and factual response to the claims.

          7.   The RTC shall provide Belzberg and his counsel access to all of
the business records of FarWest and FarWest Financial Corporation so as to
afford him an opportunity to present a detailed defense submission to the RTC
during the term of this Tolling Agreement.  Belzberg shall provide the RTC and
its counsel access to all of his business records relating to FarWest or FarWest
Financial in connection with the RTC's ongoing investigation.

          8.   Prior to filing any lawsuit on the Subject Claims against any
party, the RTC will provide Belzberg with an opportunity to meet with the senior
RTC legal and business representatives who would have to approve the filing of
claims for purposes of presenting legal and factual defenses consistent with any
written submission made by Belzberg.

          9.   Any notice to be provided to Belzberg in connection with this
Agreement shall be addressed as follows and delivered by confirmed facsimile
transmission, messenger or overnight mail service to:

                         Martin C. Washton, Esq.
                         GIBSON, DUNN & CRUTCHER
                         333 South Grand Avenue
                         Los Angeles, CA 90071

Any notice to be provided to the RTC in connection with this Tolling Agreement
shall be addressed as follows and delivered by confirmed facsimile transmission,
messenger or overnight mail service to:

                         Robert Helstowski, Esq.
                         RESOLUTION TRUST CORPORATION
                         Legal Department
                         4000 MacArthur Blvd., 5th Floor
                         Newport Beach, CA  92260

          10.  No RTC Suit will be filed during the Term of this Tolling
Agreement.

          11.  This Tolling Agreement shall not in any manner revive any claims
or causes of action that may be barred by, or limit in any way, the assertion of
any defense based upon, any statute of limitations, laches or any other period
relating to the timing of assertion of claims prior to December 15, 1993.  Nor
shall this Agreement revive any claim or cause of action brought as assignee
that was barred prior to assignment.  This Tolling Agreement shall not in any
way effect the RTC's right to assert the revival of applicable statutes of
limitations by operation of law or statute.

          12.  In computing any period of time prescribed by this Tolling
Agreement, the day of the act or event from which the designated period of time
begins to run shall not be included.

          13.  The parties hereto represent and warrant that the terms, extent
and duration of this Tolling Agreement are reasonable and that they will not
challenge or contest the authority of the parties to agree to suspend the
running of or waiver or not to assert the defense of any applicable statute of
limitations, laches period or other period relating to timing as set forth
therein.

          14.  By entering into this Tolling Agreement, Belzberg does not admit
that RTC has rights in the capacities listed herein, and this Tolling Agreement
shall not be construed as an admission by either party that valid claims or
defenses exist against either party.

          15.  Belzberg represents and warrants that he has the authority to
execute this Tolling Agreement and that the signature which appears below binds
Belzberg to the terms of this Tolling Agreement.

          16.  The RTC represents and warrants that it and the person executing
this Tolling Agreement have the authority to execute this Tolling Agreement, and
that the signature which appears below binds the RTC to the terms of this
Tolling Agreement.

          17.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of the RTC (including, but
not limited to, any acquiror of the business or assets of the RTC).

          18.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of Belzberg (including, but
not limited to, any acquiror of the business or assets of Belzberg).

          19.  Nothing in this Tolling Agreement shall prejudice the rights of
the RTC or Belzberg to assert any claims or defenses, including statute of
limitations, laches and other defenses based on timing of assertion of claims
against any person or entity other than the RTC and Belzberg.

          20.  This Tolling Agreement, including its terms, shall remain
confidential by and between time parties hereto and their attorneys.

          21.  This Tolling Agreement contains the full and complete agreement
of the parties hereto and may not be altered or amended, except in writing,
executed by representatives of both the RTC and Belzberg.

          22.  In entering into this Tolling Agreement, the parties represent
that they have been represented by counsel who are the attorneys of each party's
own choice in the negotiation and drafting of this agreement.  Accordingly, this
Tolling Agreement shall not be strictly construed against any party, and the
rule of construction of contracts resolving any ambiguities against the drafting
party shall be inapplicable.  The parties further represent that the terms of
this Tolling Agreement have been completely read and explained to them by their
attorneys, and that those terms are fully understood and voluntarily accepted by
them.

          23.  This Tolling Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but also which together
will constitute one and the same instrument.

WILLIAM BELZBERG

By:  /s/ W. Belzberg                         Date:   12/30/93
   ----------------------------------              ----------------------------

Name:
      -------------------------------

Title:
      -------------------------------

RESOLUTION TRUST CORPORATION,
in all of its capacities:

By:                                          Date:
   ----------------------------------              ----------------------------
     Robert W. Helstowski Esq.

Title: Its Attorney

                                TOLLING AGREEMENT

     This Tolling Agreement, effective as of the 15th day of December, 1993 (the
"Effective Date"), is made by and between Keenan Behrle ("Behrle") and the
Resolution Trust Corporation, in all of its capacities, including but not
limited to its corporate capacity, its capacity as conservator or receiver of
FarWest Savings and Loan Association ("FarWest"), and its other capacities as
set forth in 12 U.S.C. Section 1821(d), (collectively the "RTC").

     WHEREAS, the RTC is investigating and considering whether claims should be
asserted against Behrle arising out of, based upon or relating to Behrle's
service as a director/officer of FarWest, its parent, affiliates and
subsidiaries, including FarWest Financial Corporation and/or a shareholder
thereof (hereinafter collectively "FarWest").

     WHEREAS, in reliance upon this Tolling Agreement, the RTC is continuing its
investigation and deferring final decision regarding the filing of claims or
causes of action against Behrle respecting FarWest.

     NOW, THEREFORE, in order to facilitate an orderly process of investigation
and potential settlement negotiations, the RTC and Behrle, in consideration of
the mutual promises and covenants set forth herein and for other good and
valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, agree as follows:

          1.   The term of this Tolling Agreement (the "Term") shall be from
December 15, 1993, through the earlier of June 30, 1994, or the 30th day after
the date of written notice of termination is given by either party.

          2.   The claims covered by this Tolling Agreement ("Subject Claims")
shall be limited to those concerning the receipt and/or allocation of tax
refunds, overhead or other expenses by FarWest Financial and/or Behrle, as well
as loans, subordinated debt, corporate securities and high-yield bonds extended
or purchased by FarWest in the 1987-January 11, 1991 time period.

          3.   Behrle agrees that the running of any statute of limitations,
laches or any other period relating to the timing of assertion of the Subject
Claims by the RTC against Behrle shall be suspended during the Term of this
Tolling Agreement as to any lawsuit or claim which RTC files against Behrle.

          4.   Behrle agrees that the running of any statute of limitations,
laches or any other period relating to the timing of assertion of claims by the
RTC against Behrle shall be suspended during the Term of this Agreement as to
any

lawsuit or claim which RTC files against Behrle within thirty (30) days after
the expiration or termination of the Term hereof arising out of or related to
FarWest ("RTC Suit").

          5.   If RTC does not commence suit against Behrle before the
expiration or termination of the Term hereof, or any later date mutually agreed
on by the parties in a written amendment to this Tolling Agreement, then Behrle
may assert in defense any defense based upon any statute of limitations, laches
or any other period relating to the timing of assertion of claims that it has or
would have had including, but not limited to, the expiration of any statute of
limitations during the tolling period of this Agreement.

          6.   Prior to filing a Suit on the Subject Claims, and no later than
April 15, 1994, RTC will provide Behrle written notice of its decision to
commence such an action.  Such notice shall itemize all claims in sufficient
detail to allow Behrle to submit a legal and factual response to the claims.

          7.   The RTC shall provide Behrle and his counsel access to all of the
business records of FarWest and FarWest Financial Corporation so as to afford
him an opportunity to present a detailed defense submission to the RTC during
the term of this Tolling Agreement.  Behrle shall provide the RTC and its
counsel access to all of his business records relating to FarWest or FarWest
Financial in connection with the RTC's ongoing investigation.

          8.   Prior to filing any lawsuit on the Subject Claim against any
party, the RTC will provide Behrle with an opportunity to meet with the senior
RTC legal and business representatives who would have to approve the filing of
claims for purposes of presenting legal and factual defenses consistent with any
written submission made by Behrle.

          9.   Any notice to be provided to Behrle in connection with this
Agreement shall be addressed as follows and delivered by confirmed facsimile
transmission, messenger or overnight mail service to:

                         Martin C. Washton, Esq.
                         GIBSON, DUNN & CRUTCHER
                         333 South Grand Avenue
                         Los Angeles, CA 90071

Any notice to be provided to the RTC in connection with this Tolling Agreement
shall be addressed as follows and delivered by confirmed facsimile transmission,
messenger or overnight mail service to:

                         Robert Helstowski, Esq.
                         RESOLUTION TRUST CORPORATION
                         Legal Department
                         4000 MacArthur Blvd., 5th Floor
                         Newport Beach, CA 92260

          10.  No RTC Suit will be filed during the Term of this Tolling
Agreement.

          11.  This Tolling Agreement shall not in any manner revive any claims
or causes of action that may be barred by, or limit in any way, the assertion of
any defense based upon, any statute of limitations, laches or any other period
relating to the timing of assertion of claims prior to December 15, 1993.  Nor
shall this Agreement revive any claim or cause of action brought as assignee
that was barred prior to assignment.  This Tolling Agreement shall not in any
way effect the RTC's right to assert the revival of applicable statutes of
limitations by operation of law or statute.

          12.  In computing any period of time prescribed by this Tolling
Agreement, the day of the act or event from which the designated period of time
begins to run shall not be included.

          13.  The parties hereto represent and warrant that the terms, extent
and duration of this Tolling Agreement are reasonable and that they will not
challenge or contest the authority of the parties to agree to suspend the
running of or waiver or not to assert the defense of any applicable statute of
limitations, laches period or other period relating to timing as set forth
therein.

          14.  By entering into this Tolling Agreement, Behrle does not admit
that RTC has rights in the capacities listed herein, and this Tolling Agreement
shall not be construed as an admission by either party that valid claims or
defenses exist against either party.

          15.  Behrle represents and warrants that he has the authority to
execute this Tolling Agreement and that the signature which appears below binds
Behrle to the terms of this Tolling Agreement.

          16.  The RTC represents and warrants that it and the person executing
this Tolling Agreement have the authority to execute this Tolling Agreement, and
that the signature which appears below binds the RTC to the terms of this
Tolling Agreement.

          17.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of the RTC (including, but
not limited to, any acquiror of the business or assets of the RTC).

          18.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of Behrle (including, but
not limited to, any acquiror of the business or assets of Behrle).

          19.  Nothing in this Tolling Agreement shall prejudice the rights of
the RTC or Behrle to assert any claims or defenses, including statute of
limitations, laches and other defenses based on timing of assertion of claims
against any person or entity other than the RTC and Behrle.

          20.  This Tolling Agreement, including its terms, shall remain
confidential by and between the parties hereto and their attorneys.

          21.  This Tolling Agreement contains the full and complete agreement
of the parties hereto and may not be altered or amended, except in writing
executed by representatives of both the RTC and Behrle.

          22.  In entering into this Tolling Agreement, the parties represent
that they have been represented by counsel who are the attorneys of each party's
own choice in the negotiation and drafting of this agreement.  Accordingly, this
Tolling Agreement shall not be strictly construed against any party, and the
rule of construction of contracts resolving any ambiguities against the drafting
party shall be inapplicable.  The parties further represent that the terms of
this Tolling Agreement have been completely read and explained to them by their
attorneys, and that those terms are fully understood and voluntarily accepted by
them.

          23.  This Tolling Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but also which together
will constitute one and the same instrument.

KEENAN BEHRLE

By:  /s/ Keenan Behrle                       Date:   1/5/94
   ----------------------------------              ----------------------------

Name:   Keenan Behrle
      -------------------------------

Title:
      -------------------------------

RESOLUTION TRUST CORPORATION,
in all of its capacities:

By:                                          Date:
   ----------------------------------              ----------------------------
     Robert W. Helstowski Esq.

Title: Its Attorney

                                TOLLING AGREEMENT

     This Tolling Agreement, effective as of the 15th day of December, 1993 (the
"Effective Date"), is made by and between Fred Kayne ("KAYNE") and the
Resolution Trust Corporation, in all of its capacities, including but not
limited to its corporate capacity, its capacity as conservator or receiver of
FarWest Savings and Loan Association ("FarWest"), and its other capacities as
set forth in 12 U.S.C. Section 1821(d), (collectively the "RTC").

     WHEREAS, the RTC is investigating and considering whether claims should be
asserted against Kayne arising out of, based upon or relating to Kayne's service
as a director/officer of FarWest, its parent, affiliates and subsidiaries,
including FarWest Financial Corporation and/or a shareholder thereof
(hereinafter collectively "FarWest").

     WHEREAS, in reliance upon this Tolling Agreement, the RTC is continuing its
investigation and deferring final decision regarding the filing of claims or
causes of action against Kayne respecting FarWest.

     NOW, THEREFORE, in order to facilitate an orderly process of investigation
and potential settlement negotiations, the RTC and Kayne, in consideration of
the mutual promises and covenants set forth herein and for other good and
valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, agree as follows:

          1.   The term of this Tolling Agreement (the "Term") shall be from
December 15, 1993, through the earlier of June 30, 1994, or the 30th day after
the date of written notice of termination is given by either party.

          2.   The claims covered by this Tolling Agreement ("Subject Claims")
shall be limited to those concerning the receipt and/or allocation of tax
refunds, overhead or other expenses by FarWest Financial and/or Kayne, as well
as loans, subordinated debt, corporate securities and high-yield bonds extended
or purchased by FarWest in the 1987-January 11, 1991 time period.

          3.   Kayne agrees that the running of any statute of limitations,
laches or any other period relating to the timing of assertion of the Subject
Claims by the RTC against Kayne shall be suspended during the Term of this
Tolling Agreement as to any lawsuit or claim which RTC files against Kayne.

          4.   Kayne agrees that the running of any statute of limitations,
laches or any other period relating to the timing of assertion of claims by the
RTC against Kayne shall be suspended during the Term of this Agreement as to
any

lawsuit or claim which RTC files against Kayne within thirty (30) days after the
expiration or termination of the Term hereof arising out of or related to
FarWest ("RTC Suit").

          5.   If RTC does not commence suit against Kayne before the expiration
or termination of the Term hereof, or any later date mutually agreed on by the
parties in a written amendment to this Tolling Agreement, then Kayne may assert
in defense any defense based upon any statute of limitations, laches or any
other period relating to the timing of assertion of claims that it has or would
have had including, but not limited to, the expiration of any statute of
limitations during the tolling period of this Agreement.

          6.   Prior to filing a Suit on the Subject Claims, and no later than
April 15, 1994, RTC will provide Kayne written notice of its decision to
commence such an action.  Such notice shall itemize all claims in sufficient
detail to allow Kayne to submit a legal and factual response to the claims.

          7.   The RTC shall provide Kayne and his counsel access to all of the
business records of FarWest and FarWest Financial Corporation so as to afford
him an opportunity to present a detailed defense submission to the RTC during
the term of this Tolling Agreement.  Kayne shall provide the RTC and its counsel
access to all of his business records relating to FarWest or FarWest Financial
in connection with the RTC's ongoing investigation.

          8.   Prior to filing any lawsuit on the Subject Claims against any
party, the RTC will provide Kayne with an opportunity to meet with the senior
RTC legal and business representatives who would have to approve the filing of
claims for purposes of presenting legal and factual defenses consistent with any
written submission made by Kayne.

          9.   Any notice to be provided to Kayne in connection with this
Agreement shall be addressed as follows and delivered by confirmed facsimile
transmission, messenger or overnight mail service to:

                         Martin C. Washton, Esq.
                         GIBSON, DUNN & CRUTCHER
                         333 South Grand Avenue
                         Los Angeles, CA 90071

Any notice to be provided to the RTC in connection with this Tolling Agreement
shall be addressed as follows and delivered by confirmed facsimile transmission,
messenger or overnight mail service to:

                         Robert Helstowski, Esq.
                         RESOLUTION TRUST CORPORATION
                         Legal Department
                         4000 MacArthur Blvd., 5th Floor
                         Newport Beach, CA 92260

          10.  No RTC Suit will be filed during the Term of this Tolling
Agreement.

          11.  This Tolling Agreement shall not in any manner revive any claims
or causes of action that may be barred by, or limit in any way, the assertion of
any defense based upon, any statute of limitations, laches or any other period
relating to the timing of assertion of claims prior to December 15, 1993.  Nor
shall this Agreement revive any claim or cause of action brought as assignee
that was barred prior to assignment.  This Tolling Agreement shall not in any
way effect the RTC's right to assert the revival of applicable statutes of
limitations by operation of law or statute.

          12.  In computing any period of time prescribed by this Tolling
Agreement, the day of the act or event from which the designated period of time
begins to run shall not be included.

          13.  The parties hereto represent and warrant that the terms, extent
and duration of this Tolling Agreement are reasonable and that they will not
challenge or contest the authority of the parties to agree to suspend the
running of or waiver or not to assert the defense of any applicable statute of
limitations, laches period or other period relating to timing as set forth
therein.

          14.  By entering into this Tolling Agreement, Kayne does not admit
that RTC has rights in the capacities listed herein, and this Tolling Agreement
shall not be construed as an admission by either party that valid claims or
defenses exist against either party.

          15.  Kayne represents and warrants that he has the authority to
execute this Tolling Agreement and that the signature which appears below binds
Kayne to the terms of this Tolling Agreement.

          16.  The RTC represents and warrants that it and the person executing
this Tolling Agreement have the authority to execute this Tolling Agreement, and
that the signature which appears below binds the RTC to the terms of this
Tolling Agreement.

          17.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of the RTC (including, but
not limited to, any acquiror of the business or assets of the RTC).

          18.  The provisions of this Tolling Agreement will be binding and
effective with respect to any successor in interest of Kayne (including, but not
limited to, any acquiror of the business or assets of Kayne).

          19.  Nothing in this Tolling Agreement shall prejudice the rights of
the RTC or Kayne to assert any claims or defenses, including statute of
limitations, laches and other defenses based on timing of assertion of claims
against any person or entity other than the RTC and Kayne.

          20.  This Tolling Agreement, including its terms, shall remain
confidential by and between the parties hereto and their attorneys.

          21.  This Tolling Agreement contains the full and complete agreement
of the parties hereto and may not be altered or amended, except in writing
executed by representatives of both the RTC and Kayne.

          22.  In entering into this Tolling Agreement, the parties represent
that they have been represented by counsel who are the attorneys of each party's
own choice in the negotiation and drafting of this agreement.  Accordingly, this
Tolling Agreement shall not be strictly construed against any party, and the
rule of construction of contracts resolving any ambiguities against the drafting
party shall be inapplicable.  The parties further represent that the terms of
this Tolling Agreement have been completely read and explained to them by their
attorneys, and that those terms are fully understood and voluntarily accepted by
them.

          23.  This Tolling Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but also which together
will constitute one and the same instrument.

FRED KAYNE

By:  /s/ Fred Kayne                          Date:   1/5/94
   ----------------------------------              ----------------------------

Name:   Fred Kayne
      -------------------------------

Title:
      -------------------------------

RESOLUTION TRUST CORPORATION,
in all of its capacities:

By:                                          Date:
   ----------------------------------              ----------------------------
     Robert W. Helstowski Esq.

Title: Its Attorney

                      [PREUSS WALKER & SHANAGHER LETTERHEAD]

                                 January 27, 1995

Martin C. Washton, Esq.
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, CA 90071

RE:  RTC: FARWEST SAVINGS
     OUR FILE NO. 34253\0447

Dear Marty:

     This will confirm the agreement between our respective clients to further
extend the Tolling Agreement between the RTC, Westminster Capital, Inc., William
Belzberg, Keenan Behrle and Fred Kayne until and including February 15, 1995.

     We understand that you have conferred with each of your clients,
Westminster, Belzberg, Behrle and Kayne, and upon your signature and return of a
copy of this letter, represent that you are authorized on their behalf to enter
into this further extension agreement.  Similarly, we have the authority from
the RTC to enter into this further extension.  Bob Helstowski of the RTC will
also sign a copy of this letter.

     Thank you for your courtesy and cooperation in this regard.  Please sign
and return this letter by fax and mail.  Please call with any questions or
comments.

                                        Very truly yours,

                                        /s/ Denis F. Shanagher
                                        Denis F. Shanagher

DFS:shl

ACKNOWLEDGED AND AGREED:

Dated:  1/30      , 1995                Dated:                    , 1994
      ------------                            --------------------

/s/ Robert W. Helstowski
-----------------------------------     ---------------------------------------
ROBERT W. HELSTOWSKI                    MARTIN WASHTON

                    [PREUSS WALKER & SHANAGHER LETTERHEAD]

                                 January 27, 1995

Martin C. Washton, Esq.
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, CA 90071

RE:  RTC: FARWEST SAVINGS
     OUR FILE NO. 34253\0447

Dear Marty:

     This will confirm the agreement between our respective clients to further
extend the Tolling Agreement between the RTC, Westminster Capital, Inc., William
Belzberg, Keenan Behrle and Fred Kayne until and including February 15, 1995.

     We understand that you have conferred with each of your clients,
Westminster, Belzberg, Behrle and Kayne, and upon your signature and return of a
copy of this letter, represent that you are authorized on their behalf to enter
into this further extension agreement.  Similarly, we have the authority from
the RTC to enter into this further extension.  Bob Helstowski of the RTC will
also sign a copy of this letter.

     Thank you for your courtesy and cooperation in this regard.  Please sign
and return this letter by fax and mail.  Please call with any questions or
comments.

                                        Very truly yours,

                                        /s/ Denis F. Shanagher
                                        Denis F. Shanagher

DFS:shl

ACKNOWLEDGED AND AGREED:

Dated:            , 1994                Dated:    1/27            , 1994
      ------------                            --------------------

                                        /s/ Martin Washton
-----------------------------------     ---------------------------------------
ROBERT W. HELSTOWSKI                    MARTIN WASHTON

                      [GIBSON, DUNN & CRUTCHER LETTERHEAD]

                                  May 20, 1994

                           VIA TELECOPY AND U.S. MAIL

(213) 229-7380                                                     T 87126-00165

Robert W. Helstowski
Senior Attorney
Legal Division
Resolution Trust Corporation
4000 MacArthur Boulevard
Newport Beach, California  92660-2516

          Re:  Far West Savings
               Your Reference No. 2188
               -----------------------

Dear Mr. Helstowski:

          This will respond to your letter dated May 13, 1994.

          First, enclosed please find a copy of the subject declaration we
discussed.  Please note that Westminster Capital, Inc. (erroneously served as
Westminster, Inc. with the wrong address) has caused a thorough search for
documents responsive to the subpoena to be performed and has not located any
documents responsive to the subpoena in its possession, custody or control.
Again, the documents responsive to the subject subpoena are believed to be in
the possession of the Resolution Trust Corporation, since all such documents
were seized by the RTC in connection with documents taken from the Newport Beach
and Century City offices of Far West Financial Corporation and Far West Savings
& Loan.  The Century City office WAS open until RTC took over, and indeed for a
significant time afterwards as well.

          Since Westminster Capital, Inc. would like to review the subject
records as soon as possible in order to reply to the letter from Mr. Shanagher
dated April 15, 1994, please provide Westminster with a copy of all documents
responsive to

GIBSON, DUNN & CRUTCHER
Robert W. Helstowski
May 20, 1994
Page 2

the subpoena as soon as possible.  This type of cooperation is anticipated in
the terms of the Tolling Agreement.

          Second, I was not involved in the production by Deloitte & Touche in
1992.  However, I have looked into the matter you raised.  We appear to have in
our possession accounting records for both Far West Financial Corporation and
Far West Savings & Loan, and it is believed that these accounting records (for
both entities) were previously produced for your review.  I thus would ask that
you review your records to confirm whether the accounting documents for Far West
Financial Corporation are already in your possession. Of course, we are willing
to make such records again available for your review at your convenience should
you not be able to locate them.

          Thank you for your time and attention to these matters.

                                   Very truly yours,

                                   /s/ David A. Battaglia
                                   David A. Battaglia

DAB/ayb
cc:  Dennis F. Shanagher (via facsimile)
     Martin C. Washton, Esq.

                         DECLARATION OF LILLIAN CREMEANS
               I, Lillian Cremeans, hereby declare as follows:
               1.   I am the Assistant Secretary of Westminster Capital, Inc.,
previously known as Far West Financial Corporation.  I have worked at
Westminster Capital, Far West Financial Corporation, and Far West Savings & Loan
for over 17 years.  My business address is 9665 Wilshire Boulevard, Suite M-10,
Beverly Hills, California 90212.
               2.   I have reviewed this subpoena addressed to Westminster, Inc.
dated April 26, 1994, issued by Robert W. Helstowski, senior attorney,
Resolution Trust Corporation.  I have caused a search for the documents
responsive to the subpoena to be performed.  The search has revealed no
documents responsive to the subpoena maintained at the offices of Westminster
Capital, Inc., or in the possession, custody, or control of Westminster Capital,
Inc.
               3.   It is believed that all documents responsive to the subject
subpoena are presently in the possession of the Resolution Trust Corporation.
It is believed that the documents responsive to the subpoena were seized by the
Resolution Trust Corporation in connection with documents taken from the Newport
Beach and Century City offices of Far West Financial Corporation and Far West
Savings & Loan.
               I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct and that this declaration was
executed on May 18, 1994, in Los Angeles, California.

                                             /s/ Lillian Cremeans
                                        ---------------------------------------
                                                  Lillian Cremeans

                    [PREUSS WALKER & SHANAGHER LETTERHEAD]

                                 April 15, 1994

PRIVILEGED AND CONFIDENTIAL - FRE 408

VIA FACSIMILE

Martin Washton, Esq.
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, CA 90071

RE:  RTC: FARWEST SAVINGS
     OUR FILE NO. 34253\0447

Dear Marty:

     Pursuant to the terms of the Tolling Agreements currently in effect between
the Resolution Trust Corporation ("RTC") and your clients, Westminster Capital
("Westminster") and Messrs. William Belzberg, Keenan Behrle and Fred Kayne, the
purpose of this letter is to provide written notice of the RTC's decision to
commence an action against your clients following the termination of the Tolling
Agreements, arising out of, based upon or relating to their status as majority
shareholder, director and/or officer of FarWest Savings and Loan ("FarWest"),
its parent, affiliates and subsidiaries.  This letter is submitted for the
purposes of settlement, and is considered confidential, privileged and subject
to the provisions of Federal Rules of Evidence Section 408.

The claims are itemized below.  Is short summary, they relate to FarWest's
overpayment of interest to Westminster on certain subordinated debt, the RTC's
right to a portion of tax refunds paid or to be paid Westminster, allocation of
expenses, and losses related to certain loans and investments undertaken by
FarWest prior to its closure, including loans/investments with Butterfield &
Mason, J.L. Construction Company and Jack Herz.  The RTC will provide you and
your clients access to the appropriate records of FarWest and FarWest Financial
in its possession so as to afford an opportunity to present a detailed
submission in defense of the claim during the term of the Tolling Agreements.

Martin Washton, Esq.
April 15, 1994
Page 2

                                SUBORDINATED DEBT

     In 1984, FarWest issued $35 million of fixed rate and $30 million of
variable rate subordinated debt through a public offering underwritten by Drexel
Burnham Lambert.  Commencing in 1988, FarWest Financial (now Westminster) made
purchases of certain of this debt for the purpose of retirement thereof.
Westminster disclosed the retirement of the debt in its consolidated financial
statements.  However, the RTC's records show that FarWest continued to pay
interest on that retired debt to Westminster.

     As appears in Westminster's September 30, 1988 10-Q and its year-end 10-K,
Westminster purchased $5.2 million of the subordinated debt in the last half of
1988 including $1.1 million of fixed rate and $4.1 million of variable rate
notes.  An additional $11.05 million of fixed rate debt was purchased and
retired by Westminster during 1989; $50,000.00 in the first quarter, $1 million
in the second quarter and $10 million in the third quarter.  Although the debt
was purchased and retired in the quarters mentioned above, FarWest continued to
pay interest on that debt through year-end 1989.  A total of $173,250.00 in
additional interest was paid on the fixed rate debt ostensibly retired in
September of 1988.  An additional $604,032.50 was paid on the variable rate
notes repurchased at the same time.  Between September 30, 1989 and year-end,
$592,893.26 in interest was paid to Westminster by FarWest in connection with
the $11.5 million in debt repurchased during that year.  The additional amounts
of overpayment for the interim months has not been fully calculated at this
time.  The total amount of interest overpayment is expected to exceed $1.4
million.

                       TAX REFUNDS AND OVERHEAD ALLOCATION

     As you may be aware, there have been ongoing negotiations between the RTC,
Westminster and the state and federal tax authorities regarding the alleged
overpayment of taxes for the years 1986-1991.  In late 1990, Westminster
received a refund in excess of $2.22 million from the California Franchise Tax
Board for year-end 1989, arising from additional losses attributable to American
Capital Fidelity Corporation ("ACFC").  That refund was provided to Westminster
and was not passed through to ACFC due to the alleged receivables due from ACFC
at the time.  However, the RTC notes that there was not in place any tax
allocation agreement between Westminster and FarWest or any of its subsidiaries.
Moreover, it appears that tax payments were made with funds obtained primarily
from FarWest.  Similarly, the RTC notes that there was no allocation agreement
between Westminster and FarWest for legal, accounting and other professional
services, and that most of Westminster's employees during Mr. Kayne's tenure

Martin Washton, Esq.
April 15, 1994
Page 3

occupied offices in Century City.  All expenses necessary for Westminster's
conduct of business at that location were paid by FarWest, including rent,
utilities, security, office equipment and certain salaries.

     Westminster continues to pursue the recovery of refunds for the 1986-1989
tax years in connection with adjustments for loan fee income, negative
amortization of loan interest income, bad debt reduction and most significantly,
the lower of cost or market adjustments with respect to ACFC's inventory of
securities.  In the absence of any tax allocation agreement, it is the RTC's
position that any tax refund should be appropriately allocated to the subsidiary
which generated the refund.  In this instance, ACFC will have generated the
majority of the refunds and will be entitled to its proportionate share thereof.
At this point the actual amount of the share to be allocated to the RTC is
unknown since the taxing authorities have not yet decided the refund issue.
Likewise, FarWest paid significant Westminster expenses, in excess of $1
million, in violation of regulatory provisions that prohibit such payments,
including but not limited to Section 23A and B of the Federal Reserve Act.

                              LOANS AND INVESTMENTS

     As FarWest's profits deteriorated in the late 1980's, certain of FarWest's
executive officers, namely Messrs. Belzberg, Behrle and Kayne, approved of and
engaged in increasingly speculative loan and investment transactions on behalf
of FarWest.  These transactions were extremely risky and uncertain, and
incompatible with FarWest's balance sheet and deteriorating capital position.
In most instances, they were made outside of established lending and investment
procedures, without adequate underwriting, and solely upon the recommendation/
direction of one or more members of the executive committee.  The failure of
Messrs. Belzberg, Kayne and Behrle to insist on primary loan committee review of
certain of these projects eliminated virtually all peer review, resulting in the
losses described below.

     A.    BUTTERFIELD & MASON

     On November 3, 1988, Charles Green and Fred Kayne of FarWest approved a $5
million line of credit agreement with Butterfield & Mason Mortgage Company, Inc.
(BMMC), a corporation formed and owned by Warren Ashmann.  The purpose of the
line of credit was to provide the funds for BMMC's financing of real estate
loans secured by real estate in California and other Western states.  The line
was to be secured by 1) a collateral assignment of all assets owned or acquired
by BMMC, 2) a minimum of 20% of the commitment amount in outside

Martin Washton, Esq.
April 15, 1994
Page 4

collateral, and 3) the personal guarantee of Mr. Ashmann to cover 50% of any
deficiency following exhaustion of the collateral.  The terms provided for the
payment of interest quarterly and an annual distribution of 50% of BMMC's
profits.

     On January 9, 1989, Kayne approved an increase in the line to $10 million
and a reduction in the interest rate from 2.0% over prime to 1.5%. On March 6,
1989, the loan amount was increased to $15 million. On April 5, 1989, the loan
amount was further increased to $20 million.  Subsequent increases to $25
million and $30 million were made on May 5, 1989 and September 7, 1989,
respectively, with Kayne's approval and/or direction.  It should also be noted
that on at least six different occasions FarWest consented to BMMC's extension
of credit in excess of the lending limit established under the operative
agreements.  FarWest did not obtain updated financial information regarding BMMC
during this period.  The security obtained by FarWest ranged from second to
sixth deeds of trust, apparently at the discretion of BMMC.

     In early 1990 FarWest became aware that certain BMMC loans were in various
stages of default.  However, it was not until July of 1990 that FarWest advised
Ashmann that it would discontinue making advances on the line of credit, noting
that the value of pledged collateral did not support the indebtedness and that
not all the pledged collateral bad been properly assigned to Far West as
required.  BMMC was unable to make its quarterly interest payment on October 1,
1990.  The loan was put on non-accrual status and classified as substandard at
that time.  On July 2, 1992, BMMC filed a Chapter 11 bankruptcy petition.

     In conducting its underwriting with respect to this loan arrangement,
FarWest received financial statements for entities in which Mr. Ashmann had
interests. There is no evidence that any of the asset values therein were
substantiated, liabilities matched with credit reports and/or tax returns, or
that any cash flow analysis was performed.  FarWest did order a Business
Credibility Report on BMMC, which found no information.  This should not have
been any surprise since BMMC was a newly formed entity for this venture.  There
were no personal financial statements of Mr. Ashmann found in the credit file,
nor was there any documentation of any effort to verify or analyze any financial
information regarding Ashmann.  FarWest did not require independent appraisals
of the properties it took as collateral for extensions of the line of credit.
Instead, FarWest accepted so-called internal appraisals from BMMC, apparently
performed by Mr. Ashmann, who himself lacked any appraisal credentials.
Collateral property types included retail and commercial shopping centers,
single family homes, apartments, vacant land and condominiums.  Finally, FarWest
did not

Martin Washton, Esq.
April 15, 1994
Page 5

attempt to obtain or approve financial statements from the underlying borrowers
prior to funding on the line.  In short, there was no proper evaluation of the
sources of repayment on the line of credit, the borrower, the guarantor or the
collateral.  FarWest did not conduct its normal underwriting analysis with
respect to this very risky line of credit.  Instead, this loan appears to have
been based solely on the recommendation/direction of Fred Kayne and his
relationship with Warren Ashmann.

     A total of $37.75 million was advanced on this line, secured by second,
third, fourth and even fifth or sixth collateral positions on approximately
twenty properties.  Approximately $17 million was repaid to FarWest, leaving net
advances of approximately $20.75 million.  Following BMMC's bankruptcy, the RTC
has received an additional approximately $.95 million, reducing net advances to
$19.7 million.  Unfortunately, due to the amount of deficiencies and
insufficient equity, only four of the collateral properties appear to have any
hope of residual value.  The RTC estimates the net realizable value of its
collateral to be $1.67 million.  A further reduction for an RTC lien on certain
bank account proceeds results in an estimated principal loss of approximately
$16.8 million.  The addition of the RTC's expenses to carry the collateral
properties and lost interest raises the total potential damages to in excess of
$25 million.

     B.   HERZ DIRECT INVESTMENTS

     In April of 1988, FarWest contracted with real estate broker Jack Herz, an
associate of William Belzberg and Keenan Behrle, to acquire certain selected
real estate properties to "flip" for immediate profit.  Herz was to locate an
investment opportunity, after which FarWest, through ACFC, would take title to
the property and provide any equity funds necessary to complete the transaction.
Herz, through his company JH Financial, was to provide all management for the
purchased real estate.  There was an inherent conflict of interest in that
Keenan Behrle was to receive an additional 5% of the net profit upon sale of the
properties.  In addition, First City Industries, a company in the Belzberg
ownership chain, invoiced FarWest and was paid 75% of the cost of Behrle's staff
for their "work" on these investments.  The total paid in that regard was
$181,942.32.

     All subsequent transactions involved properties that management expected to
resell within a short period of time at a gain; however in no case was a buyer
committed to purchasing the property when FarWest closed escrow on its purchase.
Investments were approved by the Executive Committee but were not run through
the normal channels of supervision and underwriting.  Documentation of all
investments was inadequate and there is no indication that management

Martin Washton, Esq.
April 15, 1994
Page 6

conducted a feasibility study, market analysis or an internal asset review.
Appraisals were not ordered prior to or upon acquisition of any of these
investments.  It appears that complete reliance was placed upon the
representations of Jack Herz and his relationship with Messrs. Belzberg and
Behrle.  Four properties were purchased by FarWest under some portion of this
arrangement.  None were profitable, especially given that Herz received a total
of $478,660.00 from FarWest for advances on profits and office expenses.

     One of the properties purchased in June of 1989 by FarWest pursuant to this
arrangement was a 3-story, 42,725 square foot office building located at 10350
Santa Monica Boulevard in Los Angeles, California.  The purchase price was $10
million.  After purchase, it developed that the property had a number of repair
and improvement items necessary to make it marketable.  An appraisal in August
of 1990 estimated the value at only been $7.7 million to $8.3 million.  The
property was ultimately sold as part of a bulk sale of assets in 1993.  The RTC
received cash of approximately $1 million from the sale and the purchaser
assumed the $5.1 million trust deed debt.  With the inclusion of carrying costs,
the total loss at this time appears to be $4.15 million.

     In November of 1988, FarWest entered into a partnership entitled Panorama
Partners for the purchase of a 149,247 square foot vacant department store
located in Panorama City, Los Angeles County.  The purchase price was $9
million, of which FarWest contributed $7 million.  Although Mr. Herz was not
involved in this transaction, the concept was the same -- a purchase for
immediate resale, although there was no signed resale contract.  The transaction
was located and brought to FarWest by Behrle.  FarWest's partners included Mark
Mandelbaum, a Behrle associate.  An appraisal was not ordered prior to or upon
purchase, and there was no underwriting of the project.  FarWest again relied
upon the recommendation of Mr. Behrle.  No buyer has ever entered into a
contract to purchase the property.  Problems have developed regarding zoning
entitlements, as well as with asbestos removal.  The value of the property is
considered minimal at this time, and the RTC is conservatively estimating a loss
in excess of $4 million.

     C.   LOANS TO J. L. CONSTRUCTION

     Commencing in 1988, FarWest entered into a lender relationship with J.L.
Construction Company, owned by James Franklin.  J. L. Construction was
essentially a sole proprietorship, to which FarWest later extended five loans
totalling approximately $48.6 million between March and September of 1989.  A
sixth loan of $5.55 million was extended to a straw borrower of Franklin's, Aldo
Baccala, at FarWest's suggestion, in October of 1989 in order to avoid loan-to-
one

Martin Washton, Esq.
April 15, 1994
Page 7

borrower regulations.  By this time Mr. Kayne had promoted Frank Henry to
Executive Vice President for screening of the three loan production groups'
proposals, and to act at Kayne's close direction.

     Although FarWest followed standard underwriting procedures with respect to
these loans, the executive committee ignored the excessive concentration of
credit to a young developer with a history of aggressive risk-taking and
inability to complete projects within budget.  At the same time J.L.
Construction was obtaining more than the maximum credit from FarWest, it was
extending itself further with projects financed by other institutions. FarWest
did not monitor J.L. Construction's change in financial status from the date of
one loan to the next, the progress of projects or the extent of J.L.
Construction's total commitments.  If this analysis had been undertaken, a
majority of the loans and subsequent losses would have been avoided since it was
clear that J.L. Construction did not have the experience or personnel to
complete projects located in both Northern and Southern California. While
FarWest was aware of J.L. Construction's equity partner, no effort was made to
ensure that J.L. Construction had money in any of the projects.  The anticipated
losses on the J.L. Construction loans include the following: River Run -
$951,008.00; Metro Center II - $3,969,747.00; Dublin Meadows - $5,640,341.00;
and Corona Village (Baccala) - $7,912,414.00.

     The Corona Village loan was particularly reckless.  On May 15, 1989, J.L.
Construction Company entered into an agreement with Pacific Promenade, Ltd., to
purchase the collateral property.  In subsequent conversations with FarWest
Executive officers concerning a loan on the property, James Franklin was
informed by Frank W. Henry that due to the loan-to-one-borrower regulations,
Franklin should get someone else into the deal that FarWest could put on title
and the loan.  This turned out to be one of the only loans secured by raw land
made in California by FarWest.

     On September 6, 1989, J.L. Construction Company assigned all its interest
in the purchase agreement to the Baccalas.  On the same date, the Baccalas
signed a loan application with FarWest.  On October 1, 1989, J.L. Construction
and the Baccalas signed an Agreement whereby, among other things, the Baccalas
would acquire the subject property as J.L. Construction Company's assignee; and
that the Baccalas would retain $100,000.00 of the proceeds of a second purchase
loan as consideration for their participation in the acquisition and subsequent
resale to J.L. Construction. There is no evidence that the Baccalas had any
involvement in the loan transaction other than signing the required loan
documents.  James Franklin participated in all levels of obtaining the loan,
arranging required

Martin Washton, Esq.
April 15, 1994
Page 8

documentation and arranging all secondary loans.  The Baccalas never invested
any of their own money into this project.

     As noted above, the RTC will provide you and your clients access to the
appropriate records in its possession so as to afford you an opportunity to
present a detailed response to the claims.  In turn, the RTC desires to review
Westminster's records with respect to the issues indicated above at the earliest
opportunity.  We look forward to discussing the mechanics in that regard at your
earliest convenience.

                                        Very truly yours,

                                        /s/ Denis F. Shanagher
                                        Denis F. Shanagher
DFS:ahl
Encls.
cc:   Robert W. Helstowski

                     [GIBSON, DUNN & CRUTCHER LETTERHEAD]

                                 April 19, 1994

                                  VIA FACSIMILE

(213) 229-7418                                                     T 87126-00165

Denis F. Shanagher, Esq.
Preuss Walker & Shanagher
595 Market Street
16th Floor
San Francisco, CA 94105

               Re:  RTC: Far West Savings
                    Your File No. 34253/0447

Dear Denis:

          We are in receipt of your letter of April 15 and on behalf of our
clients we would like to request access to all business records of Far West and
Far West Financial, and particularly those which relate to the subordinated
debt, tax refunds, overhead allocation, and the specific loans and investments
identified in your letter.  You have indicated that the documents are maintained
at the RTC's headquarters in Newport Beach.  We are prepared to commence our
examination of those records on Monday, April 25, 1994.  Please advise us when
and where the documents will be available for examination.

          Thank you for your cooperation.

                                        Sincerely,

                                        /s/ Martin C. Washton
                                        Martin C. Washton

MCW/mcq
LL941090.042
bcc: Mr. William Belzberg
     Mr. Keenan Behrle
     Mr. Fred Kayne
     April McGandy Evans, Esq. (w/encls.)
     David A. Battaglia (w/encls.)

                     [GIBSON, DUNN & CRUTCHER LETTERHEAD]

                                December 23, 1994

                                OVERNIGHT EXPRESS

(213) 229-7396                                                     T 87126-00165

Hunter T. Carter, Esq.
Arent Fox Kintner Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, District Of Columbia 20036-5339

               Re:  RTC: Far-West Savings

Dear Mr. Carter:

          Mr. Washton requested that the enclosed April 15, 1994, letter from
Denis Shanagher of RTC and Mr. Washton's July 18, 1994, response be sent to you.

                                        Very truly yours,

                                        /s/ Edward J. Perez
                                        Edward J. Perez
                                        Paralegal

EJP/ejp

cc: M. C. Washton, Esq.

                     [PREUSS WALKER & SHANAGHER LETTERHEAD]

                                 April 15, 1994

PRIVILEGED AND CONFIDENTIAL - FRE 408

VIA FACSIMILE

Martin Washton, Esq.
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, CA 90071

RE:  RTC: FARWEST SAVINGS
     OUR FILE NO. 34253\0447

Dear Marty:

     Pursuant to the terms of the Tolling Agreements currently in effect between
the Resolution Trust Corporation ("RTC") and your clients, Westminster Capital
("Westminster") and Messrs. William Belzberg, Keenan Behrle and Fred Kayne, the
purpose of this letter is to provide written notice of the RTC's decision to
commence an action against your clients following the termination of the Tolling
Agreements, arising out of, based upon or relating to their status as majority
shareholder, director and/or officer of FarWest Savings and Loan ("FarWest"),
its parent, affiliates and subsidiaries.  This letter is submitted for the
purposes of settlement, and is considered confidential, privileged and subject
to the provisions of Federal Rules of Evidence Section 408.

     The claims are itemized below.  Is short summary, they relate to FarWest's
overpayment of interest to Westminster on certain subordinated debt, the RTC's
right to a portion of tax refunds paid or to be paid Westminster, allocation of
expenses, and losses related to certain loans and investments undertaken by
FarWest prior to its closure, including loans/investments with Butterfield &
Mason, J.L. Construction Company and Jack Herz.  The RTC will provide you and
your clients access to the appropriate records of FarWest and FarWest Financial
in its possession so as to afford an opportunity to present a detailed
submission in defense of the claim during the term of the Tolling Agreements.

Martin Washton, Esq.
April 15, 1994
Page 2

                                SUBORDINATED DEBT

     In 1984, FarWest issued $35 million of fixed rate and $30 million of
variable rate subordinated debt through a public offering underwritten by Drexel
Burnham Lambert.  Commencing in 1988, FarWest Financial (now Westminster) made
purchases of certain of this debt for the purpose of retirement thereof.
Westminster disclosed the retirement of the debt in its consolidated financial
statements.  However, the RTC's records show that FarWest continued to pay
interest on that retired debt to Westminster.

     As appears in Westminster's September 30, 1988 10-Q and its year-end 10-K,
Westminster purchased $5.2 million of the subordinated debt in the last half of
1988, including $1.1 million of fixed rate and $4.1 million of variable rate
notes.  An additional $11.05 million of fixed rate debt was purchased and
retired by Westminster during 1989; $50,000.00 in the first quarter, $1 million
in the second quarter and $10 million in the third quarter.  Although the debt
was purchased and retired in the quarters mentioned above, FarWest continued to
pay interest on that debt through year-end 1989.  A total of $173,250.00 in
additional interest was paid on the fixed rate debt ostensibly retired in
September of 1988.  An additional $604,032.50 was paid on the variable rate
notes repurchased at the same time.  Between September 30, 1989 and year-end,
$592,893.26 in interest was paid to Westminster by FarWest in connection with
the $11.5 million in debt repurchased during that year.  The additional amounts
of overpayment for the interim months has not been fully calculated at this
time.  The total amount of interest overpayment is expected to exceed $1.4
million.

                       TAX REFUNDS AND OVERHEAD ALLOCATION

     As you may be aware, there have been ongoing negotiations between the RTC,
Westminster and the state and federal tax authorities regarding the alleged
overpayment of taxes for the years 1986-1991.  In late 1990, Westminster
received a refund in excess of $2.22 million from the California Franchise Tax
Board for year-end 1989, arising from additional losses attributable to American
Capital Fidelity Corporation ("ACFC").  That refund was provided to Westminster
and was not passed through to ACFC due to the alleged receivables due from ACFC
at the time.  However, the RTC notes that there was not in place any tax
allocation agreement between Westminster and FarWest or any of its subsidiaries.
Moreover, it appears that tax payments were made with funds obtained primarily
from FarWest.  Similarly, the RTC notes that there was no allocation agreement
between Westminster and FarWest for legal, accounting and other professional
services, and that most of Westminster's employees during Mr. Kayne's tenure

Martin Washton, Esq.
April 15, 1994
Page 3

occupied offices in Century City.  All expenses necessary for Westminster's
conduct of business at that location were paid by FarWest, including rent,
utilities, security, office equipment and certain salaries.

     Westminster continues to pursue the recovery of refunds for the 1986-1989
tax years in connection with adjustments for loan fee income, negative
amortization of loan interest income, bad debt reduction and most significantly,
the lower of cost or market adjustments with respect to ACFC's inventory of
securities.  In the absence of any tax allocation agreement, it is the RTC's
position that any tax refund should be appropriately allocated to the subsidiary
which generated the refund.  In this instance, ACFC will have generated the
majority of the refunds and will be entitled to its proportionate share thereof.
At this point the actual amount of the share to be allocated to the RTC is
unknown since the taxing authorities have not yet decided the refund issue.
Likewise, FarWest paid significant Westminster expenses, in excess of $1
million, in violation of regulatory provisions that prohibit such payments,
including but not limited to Section 23A and B of the Federal Reserve Act.

                              LOANS AND INVESTMENTS

     As FarWest's profits deteriorated in the late 1980's, certain of FarWest's
executive officers, namely Messrs. Belzberg, Behrle and Kayne, approved of and
engaged in increasingly speculative loan and investment transactions on behalf
of FarWest.  These transactions were extremely risky and uncertain, and
incompatible with FarWest's balance sheet and deteriorating capital position.
In most instances, they were made outside of established lending and investment
procedures, without adequate underwriting, and solely upon the recommendation/
direction of one or more members of the executive committee.  The failure of
Messrs. Belzberg, Kayne and Behrle to insist on primary loan committee review of
certain of these projects eliminated virtually all peer review, resulting in the
losses described below.

     A.    BUTTERFIELD & MASON

     On November 3, 1988, Charles Green and Fred Kayne of FarWest approved a $5
million line of credit agreement with Butterfield & Mason Mortgage Company, Inc.
(BMMC), a corporation formed and owned by Warren Ashmann.  The purpose of the
line of credit was to provide the funds for BMMC's financing of real estate
loans secured by real estate in California and other Western states.  The line
was to be secured by 1) a collateral assignment of all assets owned or acquired
by BMMC, 2) a minimum of 20% of the commitment amount in outside

Martin Washton, Esq.
April 15, 1994
Page 4

collateral, and 3) the personal guarantee of Mr. Ashmann to cover 50% of any
deficiency following exhaustion of the collateral.  The terms provided for the
payment of interest quarterly and an annual distribution of 50% of BMMC's
profits.

     On January 9, 1989, Kayne approved an increase in the line to $10 million
and a reduction in the interest rate from 2.0% over prime to 1.5%. On March 6,
1989, the loan amount was increased to $15 million. On April 5, 1989, the loan
amount was further increased to $20 million.  Subsequent increases to $25
million and $30 million were made on May 5, 1989 and September 7, 1989,
respectively, with Kayne's approval and/or direction.  It should also be noted
that on at least six different occasions FarWest consented to BMMC's extension
of credit in excess of the lending limit established under the operative
agreements.  FarWest did not obtain updated financial information regarding BMMC
during this period.  The security obtained by FarWest ranged from second to
sixth deeds of trust, apparently at the discretion of BMMC.

     In early 1990 FarWest became aware that certain BMMC loans were in various
stages of default.  However, it was not until July of 1990 that FarWest advised
Ashmann that it would discontinue making advances on the line of credit, noting
that the value of pledged collateral did not support the indebtedness and that
not all the pledged collateral had been properly assigned to FarWest as
required.  BMMC was unable to make its quarterly interest payment on October 1,
1990.  The loan was put on non-accrual status and classified as substandard at
that time.  On July 2, 1992, BMMC filed a Chapter 11 bankruptcy petition.

     In conducting its underwriting with respect to this loan arrangement,
FarWest received financial statements for entities in which Mr. Ashmann had
interests. There is no evidence that any of the asset values therein were
substantiated, liabilities matched with credit reports and/or tax returns, or
that any cash flow analysis was performed.  FarWest did order a Business
Credibility Report on BMMC, which found no information.  This should not have
been any surprise since BMMC was a newly formed entity for this venture.  There
were no personal financial statements of Mr. Ashmann found in the credit file,
nor was there any documentation of any effort to verify or analyze any financial
information regarding Ashmann.  FarWest did not require independent appraisals
of the properties it took as collateral for extensions of the line of credit.
Instead, FarWest accepted so-called internal appraisals from BMMC, apparently
performed by Mr. Ashmann, who himself lacked any appraisal credentials.
Collateral property types included retail and commercial shopping centers,
single family homes, apartments, vacant land and condominiums.  Finally, FarWest
did not

Martin Washton, Esq.
April 15, 1994
Page 5

attempt to obtain or approve financial statements from the underlying borrowers
prior to funding on the line.  In short, there was no proper evaluation of the
sources of repayment on the line of credit, the borrower, the guarantor or the
collateral.  FarWest did not conduct its normal underwriting analysis with
respect to this very risky line of credit.  Instead, this loan appears to have
been based solely on the recommendation/direction of Fred Kayne and his
relationship with Warren Ashmann.

     A total of $37.75 million was advanced on this line, secured by second,
third, fourth and even fifth or sixth collateral positions on approximately
twenty properties.  Approximately $17 million was repaid to FarWest, leaving net
advances of approximately $20.75 million.  Following BMMC's bankruptcy, the RTC
has received an additional approximately $.95 million, reducing net advances to
$19.7 million.  Unfortunately, due to the amount of deficiencies and
insufficient equity, only four of the collateral properties appear to have any
hope of residual value.  The RTC estimates the net realizable value of its
collateral to be $1.67 million.  A further reduction for an RTC lien on certain
bank account proceeds results in an estimated principal loss of approximately
$16.8 million.  The addition of the RTC's expenses to carry the collateral
properties and lost interest raises the total potential damages to in excess of
$25 million.

     B.   HERZ DIRECT INVESTMENTS

     In April of 1988, FarWest contracted with real estate broker Jack Herz, an
associate of William Belzberg and Keenan Behrle, to acquire certain selected
real estate properties to "flip" for immediate profit.  Herz was to locate an
investment opportunity, after which FarWest, through ACFC, would take title to
the property and provide any equity funds necessary to complete the transaction.
Herz, through his company JH Financial, was to provide all management for the
purchased real estate.  There was an inherent conflict of interest in that
Keenan Behrle was to receive an additional 5% of the net profit upon sale of the
properties.  In addition, First City Industries, a company in the Belzberg
ownership chain, invoiced FarWest and was paid 75% of the cost of Behrle's staff
for their "work" on these investments.  The total paid in that regard was
$181,942.32.

     All subsequent transactions involved properties that management expected to
resell within a short period of time at a gain; however in no case was a buyer
committed to purchasing the property when FarWest closed escrow on its purchase.
Investments were approved by the Executive Committee but were not run through
the normal channels of supervision and underwriting.  Documentation of all
investments was inadequate and there is no indication that management

Martin Washton, Esq.
April 15, 1994
Page 6

conducted a feasibility study, market analysis or an internal asset review.
Appraisals were not ordered prior to or upon acquisition of any of these
investments.  It appears that complete reliance was placed upon the
representations of Jack Herz and his relationship with Messrs. Belzberg and
Behrle.  Four properties were purchased by FarWest under some portion of this
arrangement.  None were profitable, especially given that Herz received a total
of $478,660.00 from FarWest for advances on profits and office expenses.

     One of the properties purchased in June of 1989 by FarWest pursuant to this
arrangement was a 3-story, 42,725 square foot office building located at 10350
Santa Monica Boulevard in Los Angeles, California.  The purchase price was $10
million.  After purchase, it developed that the property had a number of repair
and improvement items necessary to make it marketable.  An appraisal in August
of 1990 estimated the value at only between $7.7 million to $8.3 million.  The
property was ultimately sold as part of a bulk sale of assets in 1993.  The RTC
received cash of approximately $1 million from the sale and the purchaser
assumed the $5.1 million trust deed debt.  With the inclusion of carrying costs,
the total loss at this time appears to be $4.15 million.

     In November of 1988, FarWest entered into a partnership entitled Panorama
Partners for the purchase of a 149,247 square foot vacant department store
located in Panorama City, Los Angeles County.  The purchase price was $9
million, of which FarWest contributed $7 million.  Although Mr. Herz was not
involved in this transaction, the concept was the same -- a purchase for
immediate resale, although there was no signed resale contract.  The transaction
was located and brought to FarWest by Behrle.  FarWest's partners included Mark
Mandelbaum, a Behrle associate.  An appraisal was not ordered prior to or upon
purchase, and there was no underwriting of the project.  FarWest again relied
upon the recommendation of Mr. Behrle.  No buyer has ever entered into a
contract to purchase the property.  Problems have developed regarding zoning
entitlements, as well as with asbestos removal.  The value of the property is
considered minimal at this time, and the RTC is conservatively estimating a loss
in excess of $4 million.

     C.   LOANS TO J. L. CONSTRUCTION

     Commencing in 1988, FarWest entered into a lender relationship with J.L.
Construction Company, owned by James Franklin.  J. L. Construction was
essentially a sole proprietorship, to which FarWest later extended five loans
totalling approximately $48.6 million between March and September of 1989.  A
sixth loan of $5.55 million was extended to a straw borrower of Franklin's, Aldo
Baccala, at FarWest's suggestion, in October of 1989 in order to avoid
loan-to-one

Martin Washton, Esq.
April 15, 1994
Page 7

borrower regulations.  By this time Mr. Kayne had promoted Frank Henry to
Executive Vice President for screening of the three loan production groups'
proposals, and to act at Kayne's close direction.

     Although FarWest followed standard underwriting procedures with respect to
these loans, the executive committee ignored the excessive concentration of
credit to a young developer with a history of aggressive risk-taking and
inability to complete projects within budget.  At the same time J.L.
Construction was obtaining more than the maximum credit from FarWest, it was
extending itself further with projects financed by other institutions. FarWest
did not monitor J.L. Construction's change in financial status from the date of
one loan to the next, the progress of projects or the extent of J.L.
Construction's total commitments.  If this analysis had been undertaken, a
majority of the loans and subsequent losses would have been avoided since it was
clear that J.L. Construction did not have the experience or personnel to
complete projects located in both Northern and Southern California. While
FarWest was aware of J.L. Construction's equity partner, no effort was made to
ensure that J.L. Construction had money in any of the projects.  The anticipated
losses on the J.L. Construction loans include the following: River Run -
$951,008.00; Metro Center II - $3,969,747.00; Dublin Meadows - $5,640,341.00;
and Corona Village (Baccala) - $7,912,414.00.

     The Corona Village loan was particularly reckless.  On May 15, 1989, J.L.
Construction Company entered into an agreement with Pacific Promenade, Ltd., to
purchase the collateral property.  In subsequent conversations with FarWest
Executive officers concerning a loan on the property, James Franklin was
informed by Frank W. Henry that due to the loan-to-one-borrower regulations,
Franklin should get someone else into the deal that FarWest could put on title
and the loan.  This turned out to be one of the only loans secured by raw land
made in California by FarWest.

     On September 6, 1989, J.L. Construction Company assigned all its interest
in the purchase agreement to the Baccalas.  On the same date, the Baccalas
signed a loan application with FarWest.  On October 1, 1989, J.L. Construction
and the Baccalas signed an Agreement whereby, among other things, the Baccalas
would acquire the subject property as J.L. Construction Company's assignee; and
that the Baccalas would retain $100,000.00 of the proceeds of a second purchase
loan as consideration for their participation in the acquisition and subsequent
resale to J.L. Construction. There is no evidence that the Baccalas had any
involvement in the loan transaction other than signing the required loan
documents.  James Franklin participated in all levels of obtaining the loan,
arranging required

Martin Washton, Esq.
April 15, 1994
Page 8

documentation and arranging all secondary loans.  The Baccalas never invested
any of their own money into this project.

     As noted above, the RTC will provide you and your clients access to the
appropriate records in its possession so as to afford you an opportunity to
present a detailed response to the claims.  In turn, the RTC desires to review
Westminster's records with respect to the issues indicated above at the earliest
opportunity.  We look forward to discussing the mechanics in that regard at your
earliest convenience.

                                        Very truly yours,

                                        /s/ Denis F. Shanagher
                                        Denis F. Shanagher
DFS:ahl
Encls.
cc:   Robert W. Helstowski

                     [GIBSON, DUNN & CRUTCHER LETTERHEAD]

                                  July 18, 1994

(213) 229-7418                                                     T 87126-00165

Robert W. Helstowski, Esq.
Senior Attorney
Resolution Trust Corporation
4000 MacArthur Boulevard, 5th Floor
Newport Beach, California  92660

Denis F. Shanagher, Esq.
Preuss, Walker & Shanagher
595 Market Street, 16th Floor
San Francisco, California 94105

          Re:  RTC:  FarWest Savings
               Your File No. 34253/0447
               ------------------------

Dear Counsel:

          This letter is intended to respond to the "charges" raised in your
letter dated April 15, 1994 (Exhibit 1) concerning FarWest Savings and Loan
("FarWest Savings"), its former parent FarWest Financial Corporation ("FarWest
Financial"), and their affiliates and subsidiaries.  For purposes of this
response, we represent Westminster Capital Corporation (formerly FarWest
Financial Corporation) and Messrs. William Belzberg, Keenan Behrle and Fred
Kayne.
          As you are aware, we have spent a great deal of time investigating and
evaluating the issues raised in your April 15 letter.  We have reviewed more
than 20 binders of indices of FarWest documents, examined the contents of more
than 150 boxes of materials, and copied documents amounting to more than 30
boxes for closer examination.  We have also

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 2

solicited the assistance of former FarWest employees knowledgeable about the
issues you raised.

          Our review of these materials leads us to the inevitable conclusion
that you were not able to spend the time examining the pertinent records before
drafting the April 15 letter, and otherwise did not know where to look in the
FarWest records in the RTC's possession.  For instance, you state that FarWest
has no records of payment of expenses by FarWest Financial for Century City, no
personal financial statements of Warren Ashmann, little or no documentation
reflecting diligence in the J.H. Financial transactions, and no signed resale
agreements for the Panorama City property, among other examples.  These
documents and more were located in your possession.

          You contend that FarWest Savings is entitled to tax refunds when it
did not even pay the taxes in the relevant years, that none of the J.H.
Financial transactions were profitable when two of three were very profitable
(and the third would have made $3 million had the RTC accepted an outstanding
offer), and that the Baccala loan was somehow "reckless" although proper
underwriting standards were followed and the loan-to-value ratio was far below
what is considered appropriate even today, post-FIERRA.  The entire section of
the RTC letter dealing with "Loans and Investments" is prefaced by the
unsupported allegation that FarWest was in a "deteriorating capital position"
and thus that the subject transactions were inappropriate.  In reality, FarWest
was in a secure capital position -- perhaps the healthiest it had ever been --
until it was legislated into a difficult financial position by FIERRA, and all
but one of the loans and investments identified occurred before FIERRA was
passed.

          Our clients believe that if the RTC had spent the time to do a
thorough investigation, you would not have asserted the claims raised in your
letter of April 15.  We are confident that the claims reserved in our clients'
Tolling Agreements would have been resolved.

          At the outset, we observe that the RTC has chosen only a handful of
transactions, which represent less than one percent of the assets of the entire
association -- which exceeded $4 billion.  Nor has the RTC given any indication
that it considered the plethora of profitable transactions which made millions
for FarWest Savings, or the fact that FarWest was constantly subject to detailed
oversight by the

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 3

Office of Thrift Supervision and state regulatory agencies during its
operations.

          The RTC also disregards the extensive, banking and business experience
of the Executive Committee members of FarWest Financial, as well as its
diligence.  The Executive Committee met roughly forty times per year.  It was
comprised of an unusual blend of people who had very strong real estate,
financial, lending, business and management expertise.  As Chairman of the
Board, William Belzberg had extensive experience in real estate and lending
ventures and was considered a very knowledgeable investor.  Fred Kayne was the
former Senior Managing Partner of the Los Angeles office of Bear Stearns & Co.,
Inc.  He held this position for eight years.  He was also a founding director
and Chairman of the Investment Committee of First Los Angeles Bank.  Charles
Green had been the Chief Financial Officer of FarWest since 1985.  Prior to that
time, he was an Executive Vice President of the First Interstate Bank of Denver
for a number of years.  He is now Senior Vice President and Chief Credit Officer
of Bank of America in Los Angeles.  Keenan Behrle was a senior partner at a
major law firm in Los Angeles who specialized in real estate and corporate law.
He also was a senior real estate executive for First City Industries,
supervising acquisition of land and large development projects, and was an
extremely knowledgeable and respected businessman.  David Blackford had
extensive banking experience, and is now the Executive Vice President of the
largest bank in Arizona in charge of lending.

          Not only was the Executive Committee extremely experienced, but some
of its members had a substantial investment stake in the success of FarWest.
William Belzberg and his family were major shareholders, owning approximately
50% of its stock.  The family had bought these shares in about 1972 and never
sold a share.  Similarly, Fred Kayne had bought 40,000 shares of FarWest
Financial at $12 when he joined the Board in 1987 and held the shares until
after he resigned.  Both Mr. Belzberg and Mr. Kayne thus had a vested interest
in building the value of the savings and loan over the long term.

     While this letter will provide you with a specific response to the RTC's
claims in its April 15 letter, we have not been able to evaluate all pertinent
materials because relevant files have not been located by the RTC.  However, we
feel that we have enough information to give a detailed substantive response to
your inquiries, which should be sufficient to put your concerns to rest.

Robert W. Helstowski, Esq.
Denis P. Shanagher, Esq.
July 18, 1994
Page 4

          Note that this letter is not intended to address all pertinent legal
issues. We seek only to address the substantive merit of the claims raised
without any significant treatment of purely legal defenses, which we believe
also would be dispositive.  For example, although virtually all (if not all) of
the claims asserted in the letter of April 15 had lapsed for limitation purposes
before the parties entered into the subject tolling agreements, this is not
dealt with in detail in this response -- although it is worth mention in light
of a recent decision.  The RTC seized FarWest on or about January 15, 1991, and
the parties entered into their tolling agreement on January 15, 1994 as of
December 15, 1993.  By virtue of O'MELVENY & MYERS V. FDIC, 1994 U.S.LEXIS 4446,
62 U.S.L.W. 4487 (June 13, 1994), state statutes of limitations will now likely
apply, as opposed to 12 U.S.C.A. sec. 1821(d)(14), with respect to the pursuit
of state law claims after the takeover.  California Code of Civil Procedure
section 339 provides for a two year statute of limitations for all common law
negligence claims of the type you have alleged.  In these respects, we further
note that many of the issues you raise, such as the direct investments, are
outside the scope of the tolling agreements. (Of course, any attempt by the RTC
to avoid the mandate of the statute of limitations by labeling the claims as
fraud would be unprofessional and a gross distortion of the true facts, as
demonstrated more fully below.)

          An objective examination of the facts does not support the claims
raised in your April 15 letter.  As set forth in the detailed response below,
and in the voluminous exhibits referenced herein and attached hereto for your
convenience, in most cases the assertions of fact contained in the letter are
simply not correct.  Indeed, it appears that FarWest Savings owes FarWest
Financial substantial sums of money, not the other way around.  In other cases,
the analysis and conclusions are inappropriate.  Our clients welcome a close
examination of the pertinent records attached hereto and in the possession of
the RTC.

                                       I.
                                SUBORDINATED DEBT

          The RTC contends that FarWest Savings continued to pay interest to
FarWest Financial on subordinated debt through year-end 1989, although it
contends that the debt was retired in early 1989. (Letter dated April 15, 1994
at p. 2 -- Exhibit 1).  The RTC contends that the total amount of

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 5

interest overpayment exceeds $1.4 million. (ID.) The RTC simply does not
understand the underlying transaction, as covered by SEC and GAAP requirements
of consolidated accounting which call for the elimination of intercompany
transactions for accounting purposes ONLY.

          FarWest Savings was a different legal entity than FarWest Financial.
As the RTC observes by insisting on proper allocation of expenses between the
two companies (SEE next section, INFRA), they were affiliated but independent
entities.  The investment by FarWest Financial in the subordinated notes of
FarWest Savings was made under prudent investment guidelines to increase and
maximize FarWest Financial's return on its then available liquid funds.
FarWest Financial made investments in other corporate debt securities during
1988 to 1990 under the same guidelines and intent -- to maximize return.

          FarWest Financial purchased $16.25 million of subordinated notes from
FarWest Savings for investment purposes in 1988 and 1989.  FarWest Savings paid
interest on these notes to FarWest Financial, just as it did to others who
purchased the notes.  Effective at the end of 1989, and not before, FarWest
Financial made a capital contribution to FarWest Savings by legally retiring the
debt.  From that time on, no more interest payments were made by FarWest Savings
on the notes.

          The contentions of the RTC demonstrate a misunderstanding of
consolidated accounting principles.  While purchasing the debt of a subsidiary
company causes certain accounting elimination adjustments to be made in the
consolidation process, the adjustments cannot be interpreted to have effected a
formal legal retirement of the debt.  As demonstrated in the monthly financial
statements of FarWest Savings and FarWest Financial, as well as in the quarterly
and annual reports submitted to the SEC and Office of Thrift Supervision
("OTS"), the subordinated notes were surrendered by FarWest Financial to FarWest
Savings on December 31, 1989, and they remained as a legal liability up until
that time. FarWest savings appropriately owed interest on the debt until the
notes were legally surrendered.

       As the sole owner of 100% of the capital stock of FarWest Savings and
various other legal entities, FarWest Financial was required under SEC rules and
Generally Accepted Accounting Principles ("GAAP") to issue consolidated
financial

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 6

statements to its shareholders.  Consolidated statements were issued each month
internally, and quarterly in accordance with SEC requirements.  Consolidation
guidelines called for the elimination of all material intercompany transactions
(profit and loss and balance sheet) that existed between the individual
companies in the consolidated group.  As a matter of accounting practice, the
eliminating entries are not "recorded" on the books of any one of the entities
involved in the consolidation.

          A constructive elimination of the debt for purposes of consolidated
accounting is not only appropriate, it is required.

          The theory behind the preparation of consolidated financial
          statements may be stated quite simply: when a parent company
          has a controlling interest in a subsidiary, permitting it to
          direct the subsidiary's policies and its management -- and
          in particular to direct the subsidiary to pay a dividend --
          the assets, liabilities, and operations of the two companies
          should be presented in one set of consolidated financial
          statements as though they had operated as a single company.
          This general approach was articulated originally by the
          American Institute of Accountants (forerunner of the AICPA)
          in 1929, and 30 years later it was formally promulgated in
          ARB 51, which with few amendments is still the authority for
          today's practice.

(Burton, Palmer & Kay, HANDBOOK OF ACCOUNTING AND AUDITING (1984).
Specifically, the general rules of consolidation discussed in paragraph 6 of
Accounting Research Bulletin No. 51 state, "In the preparation of consolidated
statements, intercompany balances and transactions should be eliminated.  This
includes intercompany account balances, securities holdings, sales and
purchases, interest, dividends, etc. . . ." (ARB No. 51 -- Exhibit 2).

          There is no doubt that this constructive retirement for purposes of
consolidation applies to bonds as well.  "From the point of view of a
consolidated entity, the purchase of an affiliate's bonds by another affiliate
constitutes

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 7

constructive retirement of the bonds." (Griffin, Williams & Larson, ADVANCED
ACCOUNTING, p. 288 (3d ed. 1977) (Exhibit 3).  Despite this constructive
retirement for purposes of consolidated financial statements, the "ISSUING
CORPORATION IS OBLIGED TO CONTINUE THE PAYMENT OF INTEREST [ON THE BONDS]."
(ID.) (emphasis added).

          These were the accounting principles that were relied upon in
preparing the consolidated financial statements.  FarWest Financial followed the
provisions of Accounting Research Bulletin No. 51 in that all intercompany items
were eliminated.  Of course, while there was an "effective retirement of the
debt" for purposes of consolidation, this is wholly irrelevant for purposes of
determining whether an outstanding debt existed in the first instance between
the parent and the subsidiary.

          The decision to legally retire the debt was first discussed as early
as late November 1989.  A memorandum from Charles Green to Fred Kayne dated
November 24, 1989 notes that "FWFC holds $16.25 Mil (face value) of FWS $65 Mil
sub debt issue due 1994 . . . . We estimate the interest due FWFC from FWS re
this $16.25 Mil of face value debt at $2.4 Mil annually." (Memorandum from Green
dated 11/24/89 at p. 1 -- Exhibit 4).  The memo continues, "FWFC could
contribute this debt down to FWS and create tangible net worth [and] core
capital. . . .   In the future, benefits will arise resulting from (a) avoidance
of the $2.4 Mil of annual interest expense and (b) the deduct to RNW in 1991 of
the 1992 $7 Mil sinking fund payment." (ID.)

          Once the decision to make the contribution to FarWest Savings was
made, there were minimal changes to the Board Report schedules.  This is because
the consolidated statements thereto already reflected the transaction via
elimination and consolidating entries. In the December 1989 Board Book, the
contribution is discussed in the "Financial Highlights," which state, "During
1989, FarWest Financial Corporation (the "Company") purchased $16.25 million of
FarWest Savings (the "Association") subordinated notes which resulted in a
pretax gain on early extinguishment of debt of $3.0 million [because the notes
were purchased $3 million below par value] . . . .  Effective December 31, 1989,
the Company made a capital contribution to the Association in the form of the
Association's subordinated notes formerly purchased by the Company.  The notes
were effectively retired by the Association." (Exhibit 5).

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 8

          The whole process is perhaps best reflected in the financial reports
filed with public regulatory agencies.  FarWest Financial and FarWest Savings
were required to submit quarterly reports and annual reports to the SEC and OTS,
respectively.  As mentioned above, the financial statements that were included
in these periodic filings had to be prepared in accordance with GAAP.  This
meant that all statements had to be prepared on a consolidated basis.
Therefore, similar to the consolidating schedules in the Board Reports, at the
consolidated FarWest Savings level the entire amount of the face value of the
subordinated notes ($65 million) would be shown as a liability until such time
that the notes were contributed to FarWest Savings by FarWest Financial in
December 1989.  This is reflected by the following:

          FarWest Savings' December 31, 1988 10-K, page 37 (Exhibit 6):

          Consolidated Statements of Financial Condition for FarWest Savings
          properly show the entire $65 million as outstanding.

          FarWest Savings' March 31, 1989 10-Q, page 1 (Exhibit 7):

          Consolidated Statements of Financial Condition for FarWest Savings
          properly show the entire $65 million as outstanding.

          FarWest Savings' June 30, 1989 10-Q, page 1 (Exhibit 8):

          Consolidated Statements of Financial Condition for FarWest Savings
          properly show the entire $65 million as outstanding.

          FarWest Savings' September 30, 1989 10-Q, page 1 (Exhibit 9):

          Consolidated Statements of Financial Condition for FarWest Savings
          properly show the entire $65 million as outstanding.

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 9

          FarWest Savings' December 31, 1989 10-K, page 62 (Exhibit 10):

          Consolidated Statements of Financial Condition for FarWest Savings
          properly showing $48.75 million as outstanding as FarWest Financial
          has legally surrendered the $16.25 million face value of notes it
          held.

          FarWest Savings' December 31, 1989 10-K, pages 83-84 (Exhibit 11):

          Note 11 to Consolidated Financial Statements of FarWest Savings
          discusses purchases of notes by FarWest Financial and the capital
          contribution effective December 31, 1989.

          The retirement of the debt would also be evidenced in the OTS monthly
and quarterly Thrift Financial Reports ("TFRs").  The TFRs were comprehensive
reports detailing financial information for FarWest Savings on an
unconsolidated, single entity basis.  Throughout the relevant period (June 1988
to December 1989), we have been advised that these reports evidence the
"unretired" nature of the subordinated notes and the fact that the notes were
"eliminated" only in consolidated statements.  Upon the legal contribution of
the notes effective December 31, 1989, the TFRs would show a reduction of the
debt to $48.75 million.  Copies of the TFRs have not been made available by the
RTC at this time.

                                       II.
                                   TAX REFUNDS

          The RTC contends that it is entitled to a $2.2 million refund from the
California Franchise Tax Board received by FarWest Financial in late 1990, and
perhaps two additional refunds, because the tax payments were made by FarWest
Savings or from funds obtained from FarWest Savings. (Letter dated April 15 at
pp. 2-3.)

          The RTC's contentions are wrong.  From 1987 on, FarWest Financial made
ALL state and federal tax payments for FarWest Savings with its own funds, and
thus any tax refunds appropriately belonged to FarWest Financial.  Indeed, given
that FarWest Financial paid millions of dollars of tax

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 10

obligations of FarWest Savings which have not been reimbursed, FarWest Financial
presently is owed said reimbursement by FarWest Savings and fully intends to
pursue a claim in this regard for $4.6 million.

          We have conducted an extensive investigation of the RTC's claims by
examining general ledger transactions, account analysis documents, cash account
reconciliations, canceled checks and check copies, tax returns as filed with
taxing authorities, and various other materials.  A review of these materials
confirms that the combined federal and state tax payments made by FarWest
Financial during the applicable period were in excess of $17 million. (SEE
Charts entitled Analysis of Tax Liability Accounts -- Exhibits 12 and 13, and
Back-Up Information -- Exhibit 14).  It appears that the RTC is somehow unaware
of FarWest Financial's deposit accounts maintained at FarWest Savings which
provided the funds to make these payments.  The RTC also appears to be unaware
of the $40 million stock offering proceeds received by FarWest Financial in
April 1986, "deposited" at FarWest Savings and recorded in an intercompany
receivable account, and subsequently used to fund dividend payments, tax
payments, payoffs of "due to" FarWest Savings' accounts, and for investment
purposes.

          The refund for $2.2 million received by FarWest Financial on or about
12/31/90 from the California Franchise Tax Board was for tax payments made in
1989. (State Tax Activity -- Exhibit 12).  In this respect, FarWest Financial
paid ALL tax payments of FarWest Savings to the California Franchise Tax Board
from 1987 through 1989, and FarWest Savings paid absolutely NO MONEY to the
Franchise Tax Board in these years. (ID.) You will further note that in 1986,
FarWest Savings did pay its own taxes, and appropriately received its own refund
in October 1987 from the California Franchise Tax Board. (ID.) FarWest Financial
received no part of this 1986 refund. (ID.)

          The same is true with regard to federal taxes.  From 1987 through
1989, FarWest Financial paid all of the federal taxes of FarWest Savings out of
its own funds. (Federal Tax Activity -- Exhibit 13).  FarWest Savings paid
absolutely no part of these tax liabilities in those years. (ID.) In 1987,
FarWest Savings did make a payment for 1986 taxes to the IRS, and it also
received the appropriate refund in December 1987. (ID.) FarWest Financial
received no part of this 1986 tax refund. (ID.)

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 11

          Indeed, a review of the tax records for FarWest Financial and FarWest
Savings demonstrate exactly the opposite of the RTC's contentions.  It is
FarWest Financial that is owed substantial sums of money from FarWest Savings
because FarWest Financial paid all of FarWest Savings' tax liabilities from 1987
through 1989, but has not been reimbursed for these liabilities.  Nor has it
been able to recover tax refunds owed because of the RTC's failure to cooperate.

          In the years 1986, 1988, 1989, and 1990, FarWest Financial was
generating tax losses on a stand alone basis, principally because of its
overhead payments. (SEE 10-K Reports to the SEC, reflecting losses of $185,000,
$1.6 million, $1 million and $1.7 million in those years respectively.  Taxable
losses in those years were also confirmed.) Thus, ALL of the tax liabilities
reflected in the payments to state and federal authorities belonged to FarWest
Savings in those years.   In 1987, FarWest Financial had a small amount of
earnings ($394,000), and 83% of the tax liabilities in that year were
attributable to FarWest Savings and 17% was attributable to FarWest Financial.
(Analysis of Income Tax Returns -- Exhibits 15 and 16).  The current amount due
to FarWest Financial from FarWest Savings in this respect is over $1.9 million
in state taxes and over $2.7 million in federal taxes, plus interest. (ID.).

          Currently, FarWest Financial has federal refund applications pending
for tax year 1988.  FarWest Savings has no claim to these refunds, as it did not
pay the 1988 taxes to the IRS.  In fact, to the extent FarWest Financial does
not prevail in collecting the full refund from the IRS, a claim for any
remainder can be made against FarWest Savings, since the tax is allocable to
FarWest Savings and was paid by FarWest Financial.

          Similarly, FarWest Financial has applied for state refunds for the
years 1987, 1988, and 1989.  All of these refunds are due to FarWest Financial,
because it paid all the taxes in those years.  Again, FarWest Financial has a
claim against FarWest Savings for the difference between any refunds and any
remaining taxes allocable to FarWest Savings.

          In conclusion, the facts are directly opposite to the RTC's claims.
During the indicated period, it was FarWest Financial, not FarWest Savings, that
was making the actual payments of tax.  Refunds were, and should be in the
future, given to the entity that wrote the checks and incurred the

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 12

losses.  An analysis of the actual tax allocation demonstrates that it is
FarWest Savings which owes FarWest Financial $4.6 million for payment of taxes,
rather than any claim going in the other direction.

                                      III.
                         ALLOCATION OF OVERHEAD EXPENSES

          The RTC contends that all of the expenses for FarWest Financial's
office operations in Century City were paid for by FarWest Savings, "including
rent, utilities, security, office equipment and certain salaries." (Letter dated
April 15 at pp. 2-3.) The RTC alleges that FarWest Savings is owed "in excess of
$1 million" in this respect. (ID.)

          Again, the RTC is simply in error.  Apparently, the RTC is misinformed
about the methods by which FarWest Financial paid its own operating expenses and
has not followed the intercompany receivable and payable accounts.  The fact of
the matter is that FarWest Financial had its own financial resources, including
over $40 million in stock proceeds, and kept its own expenses separate from
those of FarWest Savings.

          FarWest Financial paid a significant amount of its expenses using
checks drawn on its operating checking account which was maintained with FarWest
Savings.  The account number was 16-135683, and sometime in 1988 or 1989 it was
changed to 01-316892. (Back-Up Information -- Exhibit 14).  We have reviewed
check copies of these accounts and found payments made for rent, utilities,
supplies, intercompany liabilities, equipment, and similar expense items. (ID.)
In addition, expense payments made using FarWest Financial checks were recorded
in the books and records under the responsibility code ("RC") number 134. (ID.)
FarWest Financial used its own corporate resources when issuing these checks,
not those of FarWest Savings.

          While it is true that some FarWest Financial expenses were actually
paid using checks drawn on FarWest Savings funds, it is also true that
concurrent with issuing a FarWest Savings' check to pay a FarWest Financial
expense, an intercompany accounts receivable (FarWest Savings account #1995-134-
055) and intercompany accounts payable (FarWest Financial account #2995-055-134)
entry would be recorded and to keep the books of the individual companies in
balance to acknowledge the temporary advance of funds as owing between

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 13

the two entities. (ID.) Management attempted to "settle" the intercompany
receivables and payables through the actual writing of checks on a regular
basis.  Review of general ledger #2995-0550134 (FarWest Financial Payable to
FarWest Savings) during the 1989-1990 time frame shows the above described
activity. (ID.)

          In accounting for these intercompany transactions, it was deemed
convenient to process only one Accounts Payable run using FarWest Savings'
checks, and then concurrently posting the intercompany entries to balance the
books.  By paying off the intercompany account due, FarWest Financial paid its
own expenses.  Again, FarWest Financial used its available financial resources,
such as its operating checking account and the stock proceeds deposit account,
to regularly retire its obligations to FarWest Savings.

          FarWest Financial paid its allocated payroll expenses in this fashion
as well.  Such expenses were funded by FarWest Savings as the common company
paymaster.  The payroll intercompany accounts, #1997/#2997, operated similarly
to the #1995/#2995 accounts, with FarWest Savings funding FarWest Financial's
payroll expenses and then recording the intercompany due to and due from
entries. (ID.) The liability on FarWest Financial's books was paid off on a
regular basis.  Documentation of these payments exists in the general ledger
history statements (microfiche) maintained by the RTC.

          In conclusion, the RTC apparently does not understand the manner by
which FarWest Financial paid its own operating expenses.  There is no doubt
FarWest Financial paid its own way, contrary to the RTC's contention.

                                       IV.
                           J.H. FINANCIAL INVESTMENTS

          The characterization by the RTC of the investments involving J.H.
Financial Company and Jack Herz are similarly in error.  First, the RTC asserts
that "[f]our properties were purchased by FarWest" through some arrangement with
J.H. Financial and Mr. Herz.  FarWest only engaged in THREE such transactions,
as follows: 500 S. Sepulveda Boulevard, 19935 Ventura Boulevard and 10350 Santa
Monica Boulevard.  Numerous other transactions proposed by J.H. Financial were
rejected because, after review by Keenan Behrle, they were not considered
appropriate.

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 14

          Second, and perhaps most important, the RTC asserts that "none [of
these transactions] were profitable." This is grossly inaccurate, since two of
the subject transactions generated significant positive cash flow for FarWest,
resulting in profits of about a half million dollars (AFTER taking into
consideration FULL recoupment of all overhead, profits and commissions paid to
J.H. Financial).

          In no way can the remaining transaction, the one at Santa Monica
Boulevard, be considered reckless, particularly when it is considered that (1)
there were offers on the property for sums well in excess of FarWest's purchase
price BEFORE the transaction was consummated; (2) subsequent offers and
appraisals were well in excess of the purchase price paid by FarWest; (3)
FarWest had just closed the Sepulveda Boulevard transaction for a substantial
profit, where it paid a higher price in a less favorable location; and (4) the
building across the street on Santa Monica Boulevard sold at about the time of
the transaction for substantial sums (per square foot) in excess of what FarWest
paid for the Century City property.

          Furthermore, the properties on Ventura Boulevard and Santa Monica
Boulevard provided substantial additional benefits to FarWest, which benefits
were principal bases for the purchase decisions.  FarWest's Valley office was
relocated to the much improved offices at the Ventura Boulevard location and
provided additional needed space.  The Santa Monica property also provided much
needed additional space in Century City, and it was considered to be the future
corporate headquarters for FarWest (particularly given that there were no
options for additional space in FarWest's then existing leasehold in Century
City).

          The RTC's other allegations concerning a purported conflict of
interest by Mr. Behrle, reimbursement payments to First City, and alleged
failure to recoup payments made to J.H. Financial are also without merit.

500 SEPULVEDA BOULEVARD

          The RTC's assertion that this transaction was not profitable is simply
wrong.  The transaction speaks for itself.  The deal resulted in a,net profit of
over  $200,000 to FarWest, AFTER taking into consideration ALL closing, legal
and inspection costs, all overhead advances to J.H. Financial (for a period of
11 months), and J.H. Financial's and Mr.

Robert W. Helstowski, Esq.
Denis P. Shanagher, Esq.
July 18, 1994
Page 15

Behrle's profit participation in the transaction. (SEE Letter of Lyon to Herz
dated 5/4/89 -- Exhibit 17) (indicating a net profit to ACFC of $203,048.) A
brief summary of the transaction follows.

          Initially, in July 1988, J.H. Financial tied up the property with an
offer to purchase for $11.75 million, with the Seller to carry $9.5 million for
five years. (Purchase Contract -- Exhibit 18.) During July and August, J.H.
Financial and Mr. Behrle conducted extensive due diligence on the property,
including a physical inspection, toxic studies, verification of income and
expenses, and market evaluation. (Memorandum from Herz dated 1/5/89 -- Exhibit
19.) Utilizing these studies, J.H. Financial then went back to renegotiate the
deal.  ID.

          The deal was renegotiated as of August 31, 1988 for a new price of
$11.5 million. (ID.; Amendment to Purchase Contract -- Exhibit 20.) Again, no
final commitments were made.  In early October, Mr. Herz met with various
officers of FarWest Savings to discuss in detail the transaction, at which time
it was emphasized that FarWest wanted additional concessions to consummate the
deal, including concessions regarding tenant improvements and leasing
commissions. (Exhibit 19.) When J.H. Financial went back to the Seller to try to
negotiate these points, it was told it "would consider them and get back" to it.
(ID.) J.H. Financial then abruptly received cancellation instructions from the
Seller to the effect that J.H. Financial was not serious about purchasing the
property. (ID.) The Seller indicated that it was putting the property back on
the market. (ID.)

          The matter then went briefly to litigation.  J.H. Financial filed a
LIS PENDENS to protect FarWest Financial's interest in the property. (ID.) After
numerous meetings and phone conversations, the parties agreed to settle the
matter without further litigation and the Seller agreed to sell the property for
$10.1 million cash. (ID.; Purchase Contract dated 12/21/88 -- Exhibit 21.) This
deal was much stronger than the original one, even foregoing the previous
financing, due to the $1 million reduction or more. (SEE Exhibit 19.) (At the
time, J.H. Financial already had an offer on the property from Municicorp for
$11.1 million.) (ID.) Escrow was to close by March 15, 1989.

          Shortly after the new purchase agreement was executed for the
property, a new offer on the property was

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 16

received for a total purchase price of $10.6 million, or $500,000 more than
FarWest Savings was to pay for the property. (Purchase Contract -- Exhibit 22.)
The terms of this sale were approved by Fred Kayne and William Belzberg.  The
escrow was altered accordingly so that it became a joint escrow, and the
transaction closed in March of 1989. (Escrow Instructions -- Exhibit 23.)

          In connection with the transaction, a short-term loan was made to the
ultimate purchaser of the property in the sum of $8.5 million. (Promissory Note
-- Exhibit 29.) All underwriting requirements were met, and all lending
procedures were followed, in connection with the loan.  In this respect, an
independent appraisal of the property was conducted, which included a summary of
sales comparables, lease comparables, and actual lease rates at the location.
(Appraisal dated 2/24/94 -- Exhibit 24.) An in-house appraisal review was also
conducted. (In-House Appraisal dated 3/8/89 -- Exhibit 25.) Intensive
environmental analyses had been conducted previously and were relied upon in
connection with the loan. (Environmental Analyses -- Exhibit 26.) The file on
the loan transaction also contains substantial additional material, comprising
all lease contracts and files for the subject premises, as well as financial and
income statements and tax returns for the prospective buyer.  A summary of all
of this information was presented in an extensive "loan brief," which ultimately
was approved by the Executive Committee by March 7, 1989. (Loan Brief dated
2/24/89 -- Exhibit 27; Executive Committee Minutes dated 3/7/89 -- Exhibit 28.)

          This loan was paid off in full in June 1990. (Pay-Off Documents --
Exhibit 30.) The calculation of profits to FarWest in connection with this
transaction of over $200,000 do not include the amount of interest and other
payments made by the purchaser in connection with the loan, although these too
should be taken into consideration in evaluating the total profitability of the
transaction.

19935 VENTURA BOULEVARD/WOODLAND HILLS

          The RTC's assertion that this transaction was not profitable is also
erroneous.  "In September 1990 ACFC sold an office building in Sherman Oaks,
California to the Centaurus Capital Corp. The sale was approved by the OTS and
produced approximately $500,000 in eventual profits." (SEE Memorandum of Lyon
dated 3/6/91 -- Exhibit 31.) (SEE ALSO Memorandum of Lyon dated 9/14/90 --
Exhibit 32 ("[t]here is approximately

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 17

$500,000 of gross profit based on the current contract prices"); Memorandum of
Lyon dated 9/21/90 -- Exhibit 33 ("In a phone conversation with Polly Cortez of
the OTS on September 18, 1990, the approval was given from Ms. Cortez allowing
ACFC to close the transaction as structured")).  The actual profit involved in
the transaction was $561,000, AFTER taking into account the profit/commission
paid to J.H. Financial of $114,000. (Exhibit 32 at Chart I.)

          The purchase originally came about because FarWest Savings' lease for
its offices in the Valley was to expire in 1988. (Memorandum of Herz dated
8/16/90 -- Exhibit 34.) J.H. Financial contracted to buy a building owned by
Investment Savings & Loan on Ventura Boulevard in February 1988. (ID.) J.H.
Financial called various financial institutions to inquire into their desire to
lease the building, and it had numerous institutions interested, including
FarWest. (ID.) This is probably because the offices not only were in excellent
condition, they had extremely high visibility from both the Ventura Freeway and
Ventura Boulevard. (ID.)

          J.H. Financial's and Mr. Herz's first contact with FarWest Savings
concerning the office building -- and indeed his first contact at all with
FarWest -- was with the person in charge of the branch location in Tarzana.
(ID.)  Afterwards, Mr. Herz met with representatives of FarWest's Newport Beach
office. (ID.; Letter from Herz dated 3/8/88 -- Exhibit 35.) Mr. Herz also met
with Mr. Belzberg in early March concerning the location. (ID.) Prior to making
these various contacts, nobody from J.H. Financial, including Mr. Herz, had ever
been introduced to Mr. Belzberg or Mr. Behrle, and Mr. Herz certainly was not
their "associate."

          J.H. Financial originally proposed leasing the subject property to
FarWest. However, Mr. Belzberg and the members of the Executive Committee
thought it would be best to consider purchasing the location, since FarWest
Savings would be the principal tenant on the property and because it would
guarantee high visibility for the financial institution.

          An inspection of the building revealed no significant problems.
(Inspection Report -- Exhibit 36.) Comparables and lease rates were thoroughly
analyzed, and obviously FarWest knew the costs associated with the Tarzana
office. (SEE, E.G., Comparables -- Exhibit 37.) The proposed transaction was
discussed by the Executive Committee on April 26, 1988, and more detailed
discussions occurred

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 18

afterwards. (Executive Committee Minutes dated 4/26/88 -- Exhibit 38.)

          The purpose of this transaction was not to resell the building for
immediate profit, but to ensure that FarWest Savings had adequate office space
in the Valley, as well as to maximize FarWest's visibility in the Valley.  The
deal was consummated in November 1988 with a purchase of both the building and
an adjacent parking lot for $4.275 million. (Escrow Instructions -- Exhibit 39.)
FarWest occupied about two floors of the building, and J.H. Financial also
leased offices in the building.

          Obviously, it was in FarWest's interest to continue to monitor to see
if it could sell the building for a profit, as with any real estate investment.
To this end, J.H. Financial continued to solicit and receive offers on the
property.  To this end, J.H. Financial received the following offers:

          Projects West Corporation, 11/21/89, $3.65 million, building
          only.  (Exhibit 40.)

          Sonne Investments, 11/23/89, $4 million, building only.
          (Exhibit 41.)

          Westway Properties, 1/11/90, $4.275 million, building only.
          (Exhibit 42.)

          North American Fund, Inc., 1/31/90, $3.55 million, building
          only. (Exhibit 43.)

          Thomas D. Long, 3/6/90, $3.75 million, building and
          easement. (Exhibit 44.)

          Messrs.  Sarebanne and Esfantiari, 5/17/90, $4.83 million.
          (Exhibit 45.)

          There can be no question that FarWest Savings got a good deal on the
property at the time.  An independent appraisal of the building conducted in
November 1989 estimated the value of the building  and the adjacent parking lot
at $4.5 million in a market that had "softened" considerably from a year
earlier. (Appraisal dated 11/18/89 -- Exhibit 46.) That appraisal indicated that
the value was "composed of $3.0 million for the existing building . . . plus
$1.5 million for the adjacent land. . . ." (ID. at "Overview".) An in-house

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 19

appraisal conducted by FarWest at the same time estimated the value of the
building between $2.9 and $3.3 million, with the value of the adjacent land
between $1.2 and $1.5 million, for a total of between $4.1 and $4.8 million --
or a mean value of $4.45 million. (In-House Appraisal dated 11/3/89 -- Exhibit
47.) Another appraisal conducted in September 1990 placed the value of the
building, without the parking lot, at $3.1 million. (Appraisal dated 9/10/90 --
Exhibit 48.) The book value of the building at the time of the purchase was $3.2
million, and the book value of the adjacent parking lot was $1.0 million.
(Exhibit 32 at Chart I.) The offers received and appraisals conducted on the
property, in a market that had weakened considerably, demonstrated the value of
the original transaction.

          In June 1990, J.H. Financial received an offer to purchase the
building for $3.8 million, with an option to purchase the adjacent land for
between $1.05 and  $1.1 million. (Purchase Offer dated 6/13/90 -- Exhibit 49.)
Because this offer represented a substantial premium to FarWest Savings, and
because FarWest would be able to continue to maintain its offices in the
building under the purchase contract, it agreed to this sale.  The preliminary
escrow instructions were signed in July 1990 for a total purchase price, after
some negotiation, of $3.875 million for the building and roughly $1.0 million
for the option to purchase the adjacent land. (Purchase Contract dated 7/16/90
-- Exhibit 50.) The sale was approved by the Board of Directors on September 19,
1990. (Board Resolution dated 9/19/90 -- Exhibit 51.) The transaction closed
soon thereafter. (Escrow Instructions -- Exhibit 52.) This transaction not only
represented more than a half million dollar premium from the original purchase
price, it was far in excess of the values of the building (set forth above)
calculated by recent appraisals.

          In early April 1991, the purchaser of the Woodland Hills Building,
Centaurus Capital Corporation, indicated that it was interested in acquiring the
adjacent parking lot by means of its option to purchase, executed in connection
with the original transaction. (Letter from Centaurus dated 4/4/91 -- Exhibit
53.) "The terms of the purchase would essentially be the same as was negotiated
for the purchase of the three story building at 19935 Ventura Boulevard." (ID.)
The proposal was to purchase the parking lot for $1 million with a downpayment
of either 10% or 20% of the purchase price, "to be negotiated." (ID.) The next
day, the RTC acknowledged receipt of the proposal and indicated, "We will
respond to you

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 20

as soon as possible." (Letter from Beier dated 4/5/91 -- Exhibit 53.) Rather
then accepting the offer immediately, given that the book value for the parking
lot was $1 million, the RTC spent a month analyzing the transaction.  During
this delay, two separate memoranda concluded that the proposal "appears to be
the most advantageous to both FarWest Savings, F.A. and the Resolution Trust
Corporation. (RTC Memorandum dated 5/10/91 at p. 3 -- Exhibit 54; RTC Memorandum
dated 5/24/91 at p. 3 -- Exhibit 55.) The Proposal was "recommended for approval
as presented herein." (ID.) These analyses also correctly stated that "the
likelihood of finding a buyer willing to pay more than the proposed $1,100,000
price is minimum, as this lot has the most value to the owner of the adjacent
building (Centaurus)." (ID.)

          Yet, despite these recommendations, the RTC STILL did not accept the
Proposal, and inexplicably did not even respond to Centaurus.  A note on one
draft a memorandum dated May 24, 1991, indicates "Get Legal," and thus the
proposal was sent to the RTC's legal department. (RTC Memorandum dated 7/5/91 --
Exhibit 56.) This course of action is particularly baffling given that the legal
department was asked to consider whether the Option Agreement was binding and
whether FarWest could repudiate the Option Agreement!

          Yet, the RTC did not stop there.  Legal analyses, which was performed
THREE MONTHS after the original offer, concluded that FarWest was under no
obligation to honor the Option Agreement since it appeared from the proposal
that the purchaser wanted to make minor changes to the original transaction,
such as negotiating whether the downpayment would be 10% or 20% (where the
Option Agreement calls for a 20% downpayment). (Exhibit 56.) In a subsequent
legal memorandum, written five weeks later, the RTC's legal department concluded
that "a failure to exercise the option according to its terms results in an
AUTOMATIC termination of the agreement," AND THUS A LETTER WAS DRAFTED AND SENT
BY THE RTC REJECTING THE OFFER TO PURCHASE THE ADJACENT PARKING LOT. (RTC
Memorandum dated 8/19/91 -- Exhibit 57; Letter from Parish dated 8/26/91 --
Exhibit 58.) This letter is dated August 26, 1991. (Exhibit 58.)

          It took four and one half months for the RTC to get around to
responding to the subject offer, and then the RTC REJECTED the offer.  Any
failure to maximize the return on the property adjacent to the Woodland Hills
building is a direct result of the questionable conduct of the RTC.  Appraisals
on

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 21

the parking lot conducted a few months after the proposal was received indicated
that the value of the property was between $825,000 and $900,000. (Appraisals --
Exhibits 59 and 60.) Further, even if the RTC had sold the adjacent parking lot
for $500,000, -- $500,000 less than proposed offer -- the total sales price for
both Woodland Hills parcels would have exceeded the original purchase price paid
by FarWest Savings.

10350 SANTA MONICA BOULEVARD/CENTURY CITY

          The RTC has alleged that the investment in the Santa Monica Boulevard
office building adjacent to Century City was unsupported and undocumented and
that investment procedures were not followed. (Letter dated April 15, 1994,
p. 5).  The RTC has alleged that the investment took place in "complete
reliance" on the representations of Jack Herz and his purported relationship
with Messrs. Belzberg and Behrle. (ID. at p. 6).

          Simply put, none of the RTC's assertions are accurate.  Before this
investment in the Century City office building was made, two separate
inspections of the building were conducted; lease analyses were performed by
Cushman & Wakefield, Coldwell Banker, Marcus & Millichap, and The Goodglick
Company; a space and area analysis was performed by Space Metrix, Inc.; sales
comparable analyses were performed by Coldwell Banker, Commercial Real Estate
Services, Cushman & Wakefield and independently by J.H. Financial; a West Los
Angeles market analysis was performed by Cushman & Wakefield; sales listings
were analyzed by J.H. Financial; and financing options were evaluated by
Sonnenblick-Goldman Corporation.

          As with the property in Woodland Hills, the principal purpose of this
transaction was not to resell the building for immediate profit.  The Century
City office of FarWest had simply run out of space, and there were no options in
its existing lease for additional space.  A search had been conducted for some
time in the Century City area by members of the Executive Committee and others
to obtain additional space.  The Executive Committee not only wanted to obtain
space in the near term, it was interested in the building for purposes of moving
its entire corporate headquarters in Century City.  That is why it had such an
extensive space and area analysis done of the entire building.

          Of course, should the opportunity present itself to resell the
building at a substantial profit, FarWest would not

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 22

look a gift horse in the mouth.  It was prudent business practice to investigate
all options, including immediate resale of the building, in connection with this
investment.  If the building could be promptly resold at a profit, this would
generate additional income to FarWest.  If it could not be resold, then it would
allow FarWest to obtain needed space and would function as its new corporate
headquarters.  Since the building was an excellent deal, there was simply no
downside in the transaction.  This purchase was considered by the Executive
Committee on a fully informed basis and in a normal fashion for direct
investments.

          Indeed, even before the purchase of the property by FarWest Savings
was consummated, J.H. Financial was in serious negotiations with two separate
entities and had received written offers well in excess of FarWest's actual
purchase price.  After the sale to FarWest, numerous additional offers were made
on the property well in excess of the purchase price.

          In late February 1989, J.H. Financial obtained exclusive rights to
purchase the office building at 10350 Santa Monica Boulevard in the Century City
area. (Memorandum of Herz dated 3/6/89 -- Exhibit 61); Purchase Contract --
Exhibit 95.) The building had approximately 42,700 rentable square feet. (ID.)
J. H. Financial was under contract at $10 million firm with an assumable loan of
approximately $5.1 million at 9.25% interest due in four years. (ID.) "The
property has approximately 42,700 gross rentable with outstanding signage
possibilities.  This building sets up ideally for an owner/user." (ID.)

          In evaluating the transaction, J.H. Financial compared it to the sale
of the Sepulveda property, which was just a short distance away.  In this
respect, Mr. Herz indicated:

          I think the building compares favorably with Sepulveda in
          economic terms.  We paid $10,100,000 for Sepulveda for
          approximately 44,500 at $230 a foot versus $234 for 42,700
          for this property.  Sepulveda has no financing, this one has
          an assumable loan lower than current market rate.  Location-
          wise this one is definitely stronger due to its very close
          proximity to Century City and its Santa Monica Boulevard
          address.  Also, I understand the

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 23

          property across the street immediately West sold for $310 a
          foot a year ago.

(ID.) (SEE ALSO Memorandum from Herz dated August 16, 1990 -- Exhibit 34) (the
office building at 10350 Santa Monica Boulevard "was very similar to Sepulveda
both in size and our ability to sell the investment to an owner/user.  The only
major difference was that 10350 had a better location than 500 South Sepulveda
due to its close proximity to Century City")).

          J.H. Financial further indicated that it was in the process of
performing a great deal of work to further evaluate the potential merit of the
transaction.  Mr. Herz stated, "I am conducting our due diligence presently
which includes inspections, lease abstracts, etc." (Exhibit 61.) He further
states, "Keenan and myself plan to go in tonight at 6:00 p.m. to see some of the
suites." (ID.)

          In a subsequent memorandum dated March 22, 1989, Mr. Herz indicated
that he has "been proceeding ahead with the due-diligence on 10350 Santa Monica
Boulevard." (Memorandum of Herz dated 3/22/89 -- Exhibit 62).  Mr. Herz stated
that he was enclosing "a copy of the updated inspection report that comments on
items that have been repaired per the original report's recommendations and
additional items that should be fixed." He also enclosed "a package that Greg
Johnson [of J.H. Financial] has put together which includes a summary of the
property, income and expense analysis and back up assumptions." (ID.) Herz
further indicated that he has researched comparable sales. (ID.)

          In his March 22 memorandum, Mr. Herz commented on the results of J.H.
Financial's research, which was made at the request of FarWest.  He stated, "I
feel after researching comparable sales and our experience with 500 South
Sepulveda, that we could ask in the $12 million range (approximately $280/square
foot)." (ID.) He indicated that he had already received an offer on the
property.  "We have already received an unsolicited written offer from Jan
Development Company/Ed Czuker for $10.5 million which is their starting offer
and they are expecting a counter."  (ID.) He further stated that if the building
is not sold immediately, his analysis showed it would still be profitable.  "If
we are not able to sell the building within six months from the close of escrow
than we would be looking at a breakeven for 1989 and move into approximately
7.5% cash on cash return in 1990.  This would be predicated on putting $200,000
into the building for tenant

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 24

improvements and leasing commissions from existing cash flow." (ID.) Finally,
Mr. Herz concluded,

          I recommend the purchase of this building because I think
          our downside is very minimal based on our cost per foot and
          the fact that we are probably buying at replacement cost or
          below.  Additionally, location being as good as it is and
          the lack of 40-50,000 square foot buildings on the Westside
          should put us in a strong position to make a substantial
          profit.

(ID.)

          Before the investment was considered by the Executive Committee of
FarWest Savings, it insisted that J.H. Financial have performed numerous
independent analyses and studies.  First, a thorough inspection by construction
Consultants Company was performed indicating a repair cost of only $5,900.
(Inspection Reports -- Exhibit 63.) This same company performed a follow-up
inspection a few weeks later indicating that the building was overall in good
condition. (ID.) (After all, the building was only eight years old.) A prior
inspection by the same company a year earlier came to similar conclusions.
(Inspection Report -- Exhibit 64.) "[T]he improvements are in good condition,
the building is structurally sound, and the construction appears to have been
performed satisfactorily using good quality and appropriate materials." (ID.) In
addition, a space and area analysis for the entire building was conducted by
Space Metrix, Inc. to verify square footage and analyze usable area. (Space and
Area Analyses -- Exhibit 65.) In this respect, Space Metrix notes, "We
physically measured the location of all core walls, columns, window mullion
conditions, corridors, and the tenant dividing walls of each office." (ID.)

          Various area rent analyses were then conducted by reputable entities
to determine comparable lease rates, an important element in purchasing an
office building.  The analysis performed by Cushman & Wakefield in this respect
is more than 30 pages in length and contains rental rates on 180 different
leases in Century City office buildings. (Lease Analysis -- Exhibit 66.) A
similar analysis performed by Coldwell Banker is 42 legal pages in length and
contains comparable lease rates for almost 400 locations. (Lease Analysis --
Exhibit 67.) A separate analysis performed by

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 25

Marcus & Millichap evaluated lease rates at nine locations on Santa Monica
Boulevard. (Lease Analysis -- Exhibit 68.)

          Prior to the purchase of the building, experts also were retained to
analyze comparable sales.  Coldwell Banker Commercial Real Estate Services
performed a number of analyses of comparable sales indicating a price per square
foot of between $300 and $440 on comparable property. (Comparable Sales Analysis
-- Exhibit 69.) As part of its engagement, Coldwell Banker analyzed more than 30
separate transactions.  A separate comparable sale analysis also indicated sales
rates in excess of $300. (Comparable Sales Analysis -- Exhibit 70.) Cushman &
Wakefield was retained to render a West Los Angeles Market Report analyzing
market activity, lease rates, and other construction projects. (Market Report --
Exhibit 71.) For Century City, this report concluded, "Activity is expected to
increase in Century City as large areas of space become available attracting
large users and satisfying the growth of current tenancy." (ID.)

          J.H. Financial also analyzed comparable sales and listings in the
Century City area. (Comparable Sales -- Exhibit 72.) Again, comparables
indicated sales and listing rates of $300 per square foot and above on average.
(ID.) Moreover, as Mr. Herz indicated, the building directly across the street
had sold for over $300 per square foot a short time earlier. (Exhibit 61.)
(Note that FarWest Savings purchased the subject building for $234 a square
foot.)

          The appraisal report for 500 Sepulveda Boulevard, as well as the in-
house appraisal analysis of that property, was also relied upon in connection
with the subject transaction. (SEE Exhibits 24 and 25.) In this respect, the
Sepulveda property was located very close and in the same market as the
Century City property.  The Sepulveda property was purchased a few months early
for $230 a foot and sold for much more.  Clearly, the Sepulveda property was not
in nearly as good a location as the property at Santa Monica Boulevard.

          Even before the Executive Committee considered the transaction, and
indeed only shortly after J.H. Financial locked up the property, J.H. Financial
received an offer to purchase for $10.5 million from a respected development
group, Jan Development Company. (Purchase Offer dated 3/20/89 -- Exhibit 73.)
This was the same group that was a serious contender to purchase the building
at Selpuveda Boulevard just a few months before, and J.H. Financial was very
familiar with

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 26

them.  Similarly, before the transaction closed, J.H. Financial received another
offer to purchase from Wilshire Pacific Properties for $10.25 million, and he
also received an oral offer to purchase from TCW Realty for $11.0 million.
(Purchase Offer dated 3/26/90 -- Exhibit 74; Letter re T&W Realty -- Exhibit
92.) Again, J.H. Financial had just participated in the purchase of the property
at Sepulveda Boulevard for $10.1 million with approximately the same square
footage, and while Sepulveda had no financing, the $10 million transaction in
Century City had an assumable loan lower than the current market rate.

          Further, in connection with the transaction, Cushman & Wakefield was
retained to perform a projection investment analysis concerning the subject
property. (Projection Investment Analysis -- Exhibit 75.) After running the
numbers numerous different ways, it was concluded that the rate of return on the
transaction was "120.7% on Cash invested of $4,889,000 based on a proposed
acquisition price of $10 million," assuming that the property was purchased on
June 1, 1989 and was sold on December 31, 1992. (ID.) (Even with an $11 million
purchase price, and assuming the property was not sold for eight years, Cushman
& Wakefield estimated a rate of return of 14.6%. (ID.)) Another analysis was
performed by the Goodglick Company concerning how the purchase of the Santa
Monica Boulevard property compared to the lease of additional space at 1999
Avenue of the Stars. (Purchase-Lease Comparison -- Exhibit 76.) Over a ten year
period, it was estimated that the savings to FarWest realized through the
purchase of the Santa Monica Boulevard property were nearly $4 million. (ID.)
Finally, Sonnenblick-Goldman Corporation was retained to evaluate various
mortgage financing vehicles available in connection with the transaction.
(Letter from Phillips dated 5/30/89 -- Exhibit 70.)

          This extensive research occurred before the Executive Committee of
FarWest Savings considered the transaction.  The proposed purchase of the Santa
Monica office building received an enormous level of attention and was the
subject of regular discussion.  Messrs.  Herz and Behrle kept senior officers
and directors informed of the diligence in connection with the subject
transaction.  The proposed investment came before the Executive Committee of
FarWest on March 28, 1989, but it had been discussed in detail, and extensive
diligence had been performed, prior to that time. (Executive Committee Minutes
dated 3/28/89 -- Exhibit 78.)

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 27

          At the Executive Committee meeting, members took into consideration
not only the studies and analyses performed in connection with the transaction,
they also took into consideration the fact that there were outstanding offers on
the property in excess of the purchase price and that J.H. Financial had been
extremely successful just a short time earlier in making a profit on the
Sepulveda property for FarWest.  They took into consideration J.H. Financial's
extensive experience in the commercial real estate community.  J.H. Financial
and Mr. Herz had been investing in Southern California real estate for
approximately 20 years, with heavy emphasis over the previous ten years in
office buildings, apartments, and shopping centers.  The Executive Committee
members also considered that the purchase allowed the FarWest Savings' office in
Century City to obtain additional needed space in the short term, and would
function as a new corporate headquarters in the long term.

          Following the close of the transaction in June, J.H. Financial
actively engaged in marketing the property.  Through regular advertising in
major newspapers, as well as through contacts in the brokerage community, J.H.
Financial received an enormous amount of interest in the building.  It received
more than 250 inquiries concerning the building, and a separate commercial
brokerage firm received numerous additional inquiries as well. (Lists of
Inquiries -- Exhibits 79 and 80.) A large number of offers were made on the
subject property, two of which proceeded to escrow shortly after the deal was
consummated.  These offers are as follows:

          Equitec Properties Company, 7/25/89, $10.75 million, cash.
          (Exhibit 81.)

          Safety Investment, 9/13/89, $11.12 million. (Exhibit 82.)

          Sepp Financial, Ltd., 10/4/89, $11.3 million. (Exhibit 83.)

          Tower Holdings, Inc., 11/15/89, $11.3 million. (Exhibit 84.)

          Projects West Corporation, 11/21/89, $10.5 million. (Exhibit
          85.)

          City Center Group of Companies, 12/14/89, $10.9 million.
          (Exhibit 86.)

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 28

          Projects West Corporation, 2/6/90, Escrow agreement executed
          for $10.5 million. (Exhibit 87.)

          Wilshire Pacific Properties, 4/19/90, $10.25 million,
          accepted. (Exhibit 88.)

          Wilshire Pacific Properties, 4/23/90, Escrow instructions.
          (Exhibit 89.)

          Spectrum Partners, 5/18/90, $10.2 million. (Exhibit 90.)

          Spectrum Partners, 6/6/90, $10.2 million, accepted. (Exhibit
          91.)

          Based upon the extensive analysis performed by numerous independent
entities concerning the transaction, the extensive diligence as reflected in the
documentation, and the offers (and acceptances) on the property both before and
after FarWest's purchase, under no circumstances can the subject transaction be
considered reckless.  It was entered into only with great care and only after an
enormous amount of work.

          Of course, it is wholly inappropriate for the RTC to attempt to make
FarWest's Executive Committee the guarantor of the real estate market in
Southern California.  At the time this investment was made, all indicators,
confirmed by independent analyses, were that the transaction was a prudent one.
At the time, no one expected the commercial real estate market in Southern
California to totally collapse.

MR.  BEHRLE'S EFFORTS AND COMPENSATION

          The RTC also has asserted that Mr. Behrle had a conflict of interest
because he was to receive a small percentage of the net profits for his
extensive work in evaluating the various transactions proposed by J.H.
Financial.  First, the RTC fails to note that every member of the Board of
Directors not only was fully informed of Mr. Behrle's potential interest in the
profits of the subject transactions, but they expressly approved this
arrangement.  At the Board of Directors' meeting held on February 8, 1989, AND
AFTER MR. BEHRLE WAS ASKED TO LEAVE THE ROOM (AS REFLECTED IN THE MINUTES), the
Board addressed a proposed resolution to grant and approve of Mr. Behrle's
interest. (Board Minutes dated 2/8/89 at pp. 4-5 and Resolution attached thereto
--

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 29

Exhibit 93).  It was noted that Mr. Behrle had and would engage in extensive
"efforts in identifying certain properties which made attractive investments for
the Association," and to this extent was to provide "consulting, analytic,
advisory, managerial and other services ('advisory services') to FarWest
Savings. . . ." (ID. at Resolution.) It was further observed that Mr. Behrle was
"a Director and member of the Executive Committee of the Board of Directors of
FarWest Savings" and that his extensive efforts in attempting to identify
potentially lucrative investments "are not and have not been adequately
compensated." (ID.)

          After it was clarified that the interest of Mr. Behrle was in
"realized profit only" -- I.E., only after FarWest Savings made money would Mr.
Behrle be compensated, it was determined by the independent members of the Board
that "the bonus was fair and reasonable under the circumstances." (ID. at
Minutes.) The Board Resolution was "unanimously approved" by all uninterested
directors. (ID.)

          There thus can be no dispute that the Board and the Executive
Committee thereof were fully aware and approved of Mr. Behrle's interest in the
subject transactions.  They obviously took this into consideration in evaluating
the proposed investments.  Again, almost every member of the Board, and
certainly every member of the Executive Committee, was an experienced and
knowledgeable businessperson.  Nor can it be said that Mr. Behrle ever voted on
any of the J.H. Financial investments when they came before the Executive
Committee; that was not how the Executive Committee was conducted.

          Mr. Behrle's payment for his efforts was to be received IF AND ONLY IF
FarWest Savings made profit.  If FarWest Savings did not make money on a
transaction, then Mr. Behrle would receive nothing.  Thus, Mr. Behrle's interest
was directly aligned with that of FarWest -- to engage in profitable
transactions.  His interest was never in conflict with that of FarWest by
definition.

          Mr. Behrle was contacted by J.H. Financial on a constant basis
concerning different proposed transactions, and Mr. Behrle exercised his
business acumen and real estate experience to reject all but a few of these
proposed investments.  The remaining transactions made business sense at the
time as set forth above, not only to Mr. Behrle but to

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 30

the other uninterested and experienced members of the Executive Committee who
approved of them.

          It should further be noted that Mr. Behrle earned only $14,000 because
of his interest in any of the J.H. Financial transactions.  The only transaction
in which he received any profit compensation was the sale of 500 South Sepulveda
Boulevard.  He did NOT receive any compensation for the sale of the Woodland
Hills building, although it was even more profitable.

          For all of these reasons, Mr. Behrle's small profit participation in
the subject transactions was perfectly appropriate.

FIRST CITY REIMBURSEMENT

          In connection with his new responsibilities in attempting to locate
real estate investments for FarWest, Mr. Behrle spent a substantial amount of
time and effort -- approximately 30% of his time -- working for FarWest.
(Memorandum of Lyon to Green dated 3/28/89 -- Exhibit 97).  This was 30% of the
time he was not working for his other employers, First City Industries and First
City Development. (Obviously, First City had absolutely no interest in any of
the J.H. Financial investments, and received no benefit from Mr. Behrle's work
on these projects.) Thus, it was perfectly appropriate for 30% of Mr. Behrle's
payroll and other expenses to be allocated to FarWest, which is exactly what
occurred.

          Mr. Behrle's work involved not only communicating on a regular basis
with J.H. Financial about potential investments and evaluating them, but also
involved investigating and examining the condition of subject buildings, lease
and lease rates therein, comparable sales rates, comparable lease rates, area
and market conditions, and the identity and background of potential buyers and
their qualifications.  Mr. Behrle evaluated numerous transactions proposed by
J.H. Financial.  He also spent a considerable time participating in the
negotiation of various transactions, as well as keeping the FarWest officers
and-directors fully informed about the potential investments and their nature.

          Since Mr. Behrle was spending at least 30% of his time working for
FarWest in attempting to locate potential real estate investments, and since the
offices of First City

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 31

and its staff were being utilized in this respect, it was only fair to allocate
expenses accordingly.  In this respect, Mr. Behrle did not receive any extra
income; rather, First City was reimbursed for 30% of Mr. Behrle's payroll and
related office expenses since Mr. Behrle and his office were NOT engaged in
First City projects -- Mr. Behrle and his office were working for FarWest
Savings.  This overhead allocation is not only wholly appropriate, it is
consistent with the RTC's insistence in an earlier portion of its April 15
letter that a company be reimbursed for all expenses incurred in connection with
the work for another entity. (Letter dated April 15 at p. 3).

          It was NOT the case that First City incurred and "was paid 75% of the
cost of Behrle's 'staff' for their 'work' on these investments," as the RTC
asserts. (ID. at p. 5).  The RTC has missed the point entirely.  Charles Green
asked this very question in a memorandum dated March 13, 1989 -- whether First
City was being reimbursed for 75% of its expenses by FarWest Savings.  The RTC
simply ignored the answer, contained in the memorandum from Val Lyon dated
March 28, 1989. (SEE Exhibit 94.) After evaluating the allocation, Mr. Lyon
concluded that "we pay 75% of the 40% allocated away" from First City
Industries. (ID.) In other words, 30% of Mr. Behrle's payroll and related office
expenses were paid by FarWest Savings because this was the amount of time
"dedicated" to the work for FarWest.  Mr. Lyon also correctly notes that this
transaction was not an intercompany charge since neither FarWest Financial nor
FarWest Savings is a subsidiary of First City Industries.  Hence, this expense
allocation is perfectly fair and appropriate.

RECOUPMENT OF J.H. FINANCIAL'S ADVANCES

          All of the advances for profits and office expenses made to J.H.
Financial were fully recouped through profits made in the Sepulveda Boulevard
and Ventura Boulevard transactions.  The RTC notes that J.H. Financial received
$478,660 in advances in this respect.  The RTC does not observe, however, that
$214,816 of this amount was recouped by FarWest Savings in connection with the
sale of the Sepulveda Boulevard property. (Memorandum of Lyon dated 5/4/89 at
entries for "J.H. Financial Operation Pmts." and "Jack J.H. Financial" --
Exhibit 17).  After the recoupment of these advances, the profits made by
FarWest Savings in connection with the transaction where $203,048. (ID. at entry
entitled "ACFC").  In addition, the sale of the Woodland Hills building was made
at a profit of over $500,000 to FarWest Savings,

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 32

thereby resulting in a full recoupment of the additional J.H. Financial balance
with a substantial profit of roughly $250,000 to boot (without taking into
consideration the money earned in leasing the subject building before it was
sold, since it generated income in excess of the debt service). (Exhibits 31-
33.)

          It also should be noted that of the monthly overhead allocation made
to J.H. Financial, roughly $4,000 of it was being paid back to FarWest Savings
every month for rent, resulting in an additional recoupment of $40,000 or more.
(SEE, E.G., J.H. Financial Lease Agreement -- Exhibit 96).  Further, the monthly
overhead payments advanced to J.H. Financial for its work in attempting to
locate and negotiate real estate investments for FarWest Savings on a full-time
basis were not nearly enough to cover actual overhead costs of J.H. Financial.
J.H. Financial's actual costs were in the neighborhood of $18,000 to $19,000.
In addition to the identification of overhead expenses set forth in J.H.
Financial's agreement with FarWest dated April 1, 1988 (SEE J.H. Financial
Agreement at Chart A -- Exhibit 97), which amount to $13,800, J.H. Financial
paid $2,000 more in rent (note: directly to FarWest Savings), retained an
employee to conduct due diligence at a cost of roughly $2,500 per month, and
paid substantial additional sums per month for advertising expenses.  Again,
during this period J.H. Financial and its office were engaged FULL-TIME in
attempting to locate real estate investments for FarWest Savings. (SEE J.H.
Financial Agreement at Paragraph 2.1 -- Exhibit 97) (J.H. Financial shall
furnish to FarWest his "entire and exclusive" efforts).

          Although J.H. Financial was working exclusively for FarWest and
thereby incurring substantial overhead expenses, FarWest insisted in negotiating
the J.H. Financial Agreement in such a way as to allow it to recoup these
expenses rather than pay outlays.  It further insisted that it recoup these
expenses BEFORE net profits on a transaction were calculated.  If J.H. Financial
and its staff became employees of FarWest Savings, the overhead costs incurred
would have been substantially in excess of what was actually paid, to say
nothing of employment benefits.

                                       V.
                          PANORAMA PARTNERS' INVESTMENT

          The RTC's contentions regarding Panorama Partners, contained in one
paragraph on page 6 of its April 15 letter,

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 33

similarly misconstrue the actual circumstances.  A great deal of careful
consideration was given prior to this investment, and there can be no doubt
that, at the time, the transaction was an extremely favorable one.  Contrary to
the RTC's assertion in its April 15 letter, there WAS a signed resale contract
(complete with joint escrow instructions) at the time the purchase of the
property by Panorama Partners was made, which contract provided for payment of
$2.75 million in excess of the purchase price of Panorama Partners.  This
investment also was made when the institution was in a very positive financial
position, before FIERRA was passed.

          Moreover, contrary to the RTC's assertion that "[n]o buyer has ever
entered into a contract to purchase the property," there were at least four
underlying contracts entered into to purchase the property for millions of
dollars in excess of the $9 million purchase price paid by Panorama Partners in
November of 1988.  There were also numerous additional offers to purchase the
property in this respect.  Indeed, an appraisal of the property in August of
1990, nearly two years after the original purchase, placed the value of the
property at $10.39 million, or $1.39 million above the original purchase price.

          Particularly troublesome is not the decision to enter into the
transaction, but the RTC's decision in February of 1991 to "decline," without
any serious consideration, a $12 million offer to purchase the property by a
respected buyer.  This rejection of a serious offer appears to have occurred
notwithstanding a favorable written recommendation of Mr. Mandelbaum.

          In connection with the original purchase of the property, a great deal
of research was conducted.  First, a thorough written audit of the property was
conducted by ICF Technology Incorporated. (Inspection Report dated 8/10/88 --
Exhibit 98.) The report found no significant problems.  Another extensive
written report performed by Diagnostic Engineering Inc. also was evaluated.
(Inspection Report dated 10/29/87 -- Exhibit 99.) While this report concluded
that there was some evidence of asbestos in pipe elbow insulation and various
floor tiles (and not in other building materials), the total cost to address
these items was only $15,580. (ID. at p. 1.) Various members of the Executive
Committee also personally inspected the premises.

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 34

          In evaluating the investment, significant research was performed
concerning comparable sales in the area by various of the Panorama Partners.  In
this respect, Joseph Haddad, one of the principal partners in the transaction,
was a very experienced real estate syndicator and the owner of real estate
approximating $100 million.  His expertise in this respect was well known, and
his analysis of the transaction was thought to be reliable.  In addition, Zvi
Ryzman was an experienced and respected investor who also assisted in evaluating
the transaction.  Various brokers were consulted to determine market prices.
Various of the Panorama Partners had done very similar deals in the same area,
and their experiences were extremely useful.  As significant was the fact that
major real estate syndicators, the other partners, were willing to invest $2
million of their own cash into the investment.

          Also taken into consideration were the numerous offers that had been
received by various of the other Panorama Partners for the purchase of the
property as of November 1988, when the investment was considered and finalized
by FarWest.  All of these offers were for millions of dollars above the proposed
$9 million purchase price.  In this respect, Mr. Mandelbaum had locked up the
property with a purchase agreement in July 1988, and he thus was able to begin
to solicit interest in reselling the property.  The following offers on the
property were made to the Panorama Partners before the ultimate purchase for $9
million in November 1988:

     Fifty-Fivecal Inc.       8/2/88    $11 million              cash
     (Exhibit  100)

     VISA Development Co.     8/11/88   $11.75 million           cash
     (Exhibit  101)

     B.W. Brody Company       8/19/88   $11 million
     (Exhibit  102)

     B.W. Brody Company       10/10/88  $11.75 million
     (Exhibit  103)

Indeed, two of these offers resulted in signed purchase contracts for the
property.  A signed agreement with Fifty-Fivecal Corporation was executed on
April 3, 1988 to purchase the property for $11 million. (Purchase Contract --
Exhibit 104.) Similarly, a signed purchase contract was executed with B.W.
Brody, a major construction firm, on

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 35

October 12, 1988 to purchase the property for $11.75 million. (Exhibit 103.)

          On October 17, 1988, a purchase agreement with joint escrow
instructions was executed by B.W. Brody Construction Company and Panorama
Partners. (Escrow Instructions -- Exhibit 105.) This resale agreement with
joint escrow instructions was pending at the time that Panorama Partners
purchased the property in November of 1988 (Exhibit 106), and certainly was a
principal inducement to make the investment.  Amended escrow instructions were
filed in November of 1988, and on January 12, 1989, a revised purchase agreement
with joint escrow instructions was executed with B.W. Brody Construction for a
sale price of $12.15 million. (Revised Escrow Instructions -- Exhibit 107.)

          The BRODY transaction apparently failed because of zoning changes on
the property which occurred AFTER the property was originally purchased by
Panorama Partners. (Letter from Brody dated 2/24/89 -- Exhibit 108.) In this
respect, an Interim Control Ordinance, adopted by the Los Angeles City Council
on December 20, 1988, prohibited the issuance of building permits for the
construction of commercial or industrial structures, or the development of
residential uses, on a tract of land encompassing the subject property for a
period of one year. (Interim Control Ordinance -- Exhibit 109.) The final
ordinance was passed by the Los Angeles City Council on October 4, 1989,
although it was "disapproved by the Director of Planning . . . on behalf of the
City Planning Commission with the recommendation that it NOT be adopted."
(Final Ordinance -- Exhibit 110).  Obviously, none of the Panorama Partners have
any control over the vagaries of the Los Angeles City Council.

          After the Brody deal fell through, the Panorama Partners continued to
receive numerous substantial offers on the subject property.  All of these
offers were for millions of dollars in excess of the $9 million purchase price.
These offers are as follows:

     Gross Enterprises             6/2/89    $11 million
     (Exhibit 111)

     Gross Enterprises             7/17/89   $11.5 million
     (Exhibit 112)

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 36

     Lincoln Property Company      7/27/89   $12.5 million
     (Exhibit  113)

     Puma Development, Inc.        7/26/89   $10   million
     (Exhibit  114)

     Gross Enterprises             8/23/89   $12.5 million
     (Exhibit  115)

     Michael Robbins               1/16/89   $12   million
     (Exhibit  116)

     Hopkins Development Co.       6/19/90   $11.85 million
     (Exhibit  117)

     Projects West Corporation     12/12/90  $13   million
     (Exhibit  118)

     Projects West Corporation     2/4/91    $12   million
     (Exhibit  119)

of these offers, two of them were accepted and resulted in signed purchase
agreements.  On November 30, 1989, Panorama Partners entered into a purchase
agreement with escrow instructions with Michael Robbins for a purchase price of
$12 million. (Purchase Contract -- Exhibit 120.) On March 27, 1990, Panorama
Partners entered into a purchase agreement with escrow instructions with Gross
Enterprises, Inc. for a purchase price of $12.5 million. (Purchase Contract --
Exhibit 121.) Unfortunately, neither of these purchase contracts came to
fruition for various reasons.  They do demonstrate that this certainly could not
be considered a reckless investment.

          This is confirmed by a detailed appraisal of the property conducted on
August 6, 1990, at the request of the office of Thrift Supervision. (Appraisal
-- Exhibit 122.) The appraisal analyzed improved sale comparables, land sale
comparables, rental comparables, and cost and income capitalization analyses.
(ID.) The appraisal concluded unequivocally that the value of the property was
$10.39 MILLION at that time, in a real estate market that had softened somewhat
from November of 1989. (ID.) An in-house examination of the appraisal and a
field inspection of the subject property by the Major Loan Appraisal Department
at FarWest care to the written conclusion that the appraisal was

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 37

accurate. (In-House Appraisal Review dated 8/17/90 -- Exhibit 123.)  "This
appraisal report is in compliance with Association Policy and established
appraisal practice.  I have, therefore, APPROVED this report.  Development and
support of all appropriate approaches to value are adequate.  The associated
value indications are within acceptable ranges." (ID. at p. 1.)

          Our clients are particularly concerned that the RTC is attempting lay
blame at their feet when it was the RTC that rejected, apparently without any
substantive analysis, a $12 million offer by a respected buyer to purchase the
property in March 1991.  In this respect, Projects West Corporation made a
written offer to purchase the site for $12 million on February 4, 1991. (Exhibit
119.) The offer contained an option to allow Projects West to conduct additional
diligence in connection with the transaction. (ID.) The offer was accompanied by
an extensive resume of Projects West Corporation illustrating their expertise
and experience in acquisition and development projects, and it included a list
of select Projects West developments, numerous properties owned by Projects
West, numerous properties managed by Projects West, an entire developer's team
for the project, and accounting, legal, banking, and construction lending
references. (Projects West Resume -- Exhibit 124.) As an example of the
experience of Projects West, its chairman had over 27 years experience in the
real estate development business, owning, operating, and managing over 7,000
apartments and 2,000,000 square feet of residential/industrial space. (ID.) The
resume also notes, "The list of the over 300 buildings owned and directly
supervised by [the chairman] from 1967 to 1984 is available on request." (ID.)

          On February 11, 1991, Mr. Mandelbaum sent the offer letter he received
to FarWest Savings recommending that it be accepted. (Letter of Mandelbaum dated
2/11/91 -- Exhibit 125.) He stated explicitly, "I would recommend signing letter
and we should talk about the offer." (ID.) A handwritten note on the Mandelbaum
letter, apparently written in-house at FarWest savings, states "Let's go over
this." (ID.) However, there is no documentation whatsoever of any substantive
review of the proposal in any of the files produced by the RTC.  Nor is there
any indication that anyone at the RTC called to check on any references of
Projects West or called to obtain additional information concerning the
experience of Projects West.  No counter-offer was ever made.  Rather, on an RTC

GIBSON, DUNN & CRUTCHER

Robert, W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 38

asset review sheet, it is simply noted that the "Disposition of Offer" is
"DECLINED." (RTC Status Sheet -- Exhibit 126.) It is also noted that any
"Counter Offer" is also "DECLINED." (ID.) This is true despite the fact that the
asset review sheet states expressly that the appraised value of the subject
building was $10.39 million on July 1990, and thus that the amount of the
subject offer was almost $2 million more than the appraised value. (ID.)

          The only evidence of any communication whatsoever with Projects West
concerning the offer is a communication dated February 15, 1991 which indicates
that "we will initiate analyses to determine whether or not the proposal meets
our requirements." (Letter from Bossio dated 2/15/91 -- Exhibit 127.) It states
further, "In any event, you will be contacted as soon as possible with respect
to the status of your proposal." (ID.) There is no evidence that Projects West
was ever contacted.  Rather, in a letter to another potential purchaser, written
two weeks later, who similarly submitted a written offer for the building, the
RTC similarly declines to substantively respond. (Letter from Bossio dated
3/26/91 -- Exhibit 128.) This letter states, "As you are aware, we are
currently under Resolution Trust Corporation ("RTC") Conservatorship.  At this
time, it has been determined that it is in everyone's best interest to hold
acceptance, rejection or counter to any and all proposals for the purchase of
this property until all facts are known and current." The letter concludes, "We
understand the problems associated with the delay of this type and appreciate
the inconvenience it may cause you.  Hopefully, you will still have interest at
such time as we can properly respond." There is no evidence that the RTC ever
got back to any of these potential purchasers.

          The conduct of the RTC in refusing to respond affirmatively to these
offers, although it was in possession of a complete appraisal of the property,
is without justification.  Complaints about the "inability of the IPR [the RTC's
management firm] and the RTC to take any concrete steps to sell the property"
continued into 1992.  As stated by an interested party, "I am aware of several
offers, but find it incomprehensible why you do not either accept one of the
offers or do something to solicit new offers.  The solution is certainly not to
sit on your hands and do nothing." (Letter from Haddad dated 5/27/92 -- Exhibit
129.)

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 39

                                       VI.
                                 BACCALAS' LOAN

          We have been informed that the RTC does not intend to pursue any
issues in its letter dated April 15, 1994, concerning the J.L. Construction
loans for River Run, Metro Center II and Dublin Meadows.  In this respect, in
response to our clients' request to examine the loan files relating to these
transactions, which were not produced by the RTC, we were informed that the RTC
is not making a claim with respect to any of the above-referenced loans made to
J.L. Construction Company. (Letter from Battaglia dated 6/23/94 -- Exhibit 130.)
We were informed that the only loan at issue in the section of the April 15
letter entitled "Loans to J.L. Construction" is a loan to Aldo and Karen
Baccala, and we have confirmed this to you in writing. (ID.) We thus will only
address the Baccalas' loan in this section.

          On the face of the loan package, it is simply preposterous for the RTC
to assert that the Baccala loan was somehow reckless. Out of a total purchase
price of $11.27 million, the subject loan on entitled property was $5.55
million, WITH AN EQUITY TO COST RATIO OF 50.75%. (Executive Committee Minutes
dated 9/19/89 -- Exhibit 131; Executive Loan Summary dated 9/8/89 -- Exhibit
132; Recommendations to Executive Committee dated 9/15/89 -- Exhibit 133.) The
loan to value ("LTV") ratio was only 58%, far below what OTS regulations
considered to be a favorable loan even today after FIERRA. (ID.) Today's OTS
regulations provide that a loan to value ratio for entitled land ("Land
Development") of up to 75% is appropriate. (12 CFR Section 563.101 at Appendix
A to subpart D of part 563, entitled "Interagency Guidelines for Real Estate
Lending.") Even if the subject loan were for "raw land" as the RTC mistakenly
asserts, a loan to value ratio of up to 65% is deemed appropriate by the
Office of Thrift Supervision. Obviously, the OTS standards were implemented to
reflect what loans were appropriate, and it is absurd to suggest that a party
can be deemed "reckless" in making a loan which is so clearly within even the
strictest OTS standards imposed under FIERRA.

          If that were not enough, the loan per unit on the Baccala loan is
$12,065, OR 69% OF AVERAGE SALE COMPARABLES PER UNIT, which was $17,500 at the
time the loan was made. (Exhibits 131-133.) Further, there can be no question
but that all underwriting standards were followed in connection with the subject
loan, which even the RTC admits. (Letter

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 40

dated April 15 at p. 7.) In this respect, appraisals on the subject property
placed the value at or about the purchase price for the property itself.
Further, FarWest Savings not only had a first trust deed on the property, it
also had a RECOURSE loan against all of the assets of the Baccalas.  In this
respect, "The Borrowers were a credit worthy real estate broker and has
experience in land banking for developers." (Exhibit 133.)

          The proposed loan was the first item of business at the Executive
Committee meeting of September 19, 1989. (Exhibit 131.) As reflected in the
minutes, the loan was fully evaluated by the experienced members of the
Committee and received approval after discussion. (ID.) The minutes state, "The
strength of the transaction is the low LTV of 58%.  Underwriting performed a
limited economic analysis using Borrower's proforma rents and expenses.  Based
upon these numbers, an NOI of 10.9% and DSC of 1.04 were calculated." (ID. at
p. 2.)

          Further, the Executive Committee had no knowledge whatsoever that J.L.
Construction may somehow be involved in the transaction, or that a previous loan
to J.L. Construction had been rejected.  There is nothing in the Executive
Summary prepared by the Major Loans Group that even mentions J.L. Construction
Company (Exhibit 132), and there is nothing in the recommendation from the Major
Loans Group to the Executive Committee that mentions J.L. Construction. (Exhibit
133.) Further, there is nothing in the minutes of the Executive Committee
meeting where the loan was approved which in any way references J.L.
Construction. (Exhibit 131.) To the contrary, the "[e]quity contribution by PMC"
was discussed, and it was noted that there was "[n]o FarWest construction loan
commitment." (ID. at p. 2.) No interest of J.L. Construction was ever recorded
on the property, as is evident by the RTC's title search dated April 15, 1992,
which reflects no such interest. (Title Search -- Exhibit 134.)

          It is also simply wrong to suggest that the Baccalas brought nothing
to the transaction.  The Baccalas brought $5.72 million in cash, all of which
was subordinate to the interest of FarWest Savings. (Exhibits 131-133.) This
money was provided by S.L.G.H. Investments, Inc., which took a second trust deed
on the property, and apparently by Property Mortgage Company, Inc., which took a
third trust deed in the property. (Exhibit 134.) These investors apparently felt
that there was sufficient equity and promise in the property

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 41

to make substantial investments.  That it was their money at risk, instead of
Mr. Baccala's, is immaterial.  Again, the entire hard cash investment was
subordinate to FarWest Savings.

          After an extensive analysis, which included an evaluation of financial
statements, appraisals, environmental reports, land sales comparables, and an
extensive financial analysis, the Major Loans Division concluded, "The site
enjoys an excellent location within the master planned community of Corona
Hills.  Based upon the facts presented above, we feel this is a good transaction
for the Association and recommend approval as presented." (Exhibit 133.)

          It has been suggested to the RTC that the $9.5 million appraisal in
connection with the underwriting was somehow concocted to "[cover] the purchase
transaction," and this apparently is a principal basis of a claim of
recklessness by the RTC.    (SEE Memorandum from Swartz to Helstowski dated
12/14/93 -- Exhibit 135.) Ms. Swartz concludes, "The appraisals certainly raise
questions in my mind about unsound lending practices in justifying a sales
transaction with an appraisal in the like amount." (ID. at p. 2.) In this
respect, Ms. Swartz suggests that there are questions about the value given an
appraisal from J.L. Construction dated August 16, 1989, "reflecting the land
value 'as is' at $6,875,000." (ID. at p. 1.) "Prudent underwriting should have
dictated meaningful dialogue and requests for the [reconciliation of the] great
variances between the two appraisals."

          Not only did the Executive Committee have nothing whatsoever to do
with underwriting in connection with the loan, but Ms. Swartz's analysis, upon
which the RTC apparently bases its conclusion of recklessness, is simply
incorrect.  It is true that FarWest Savings conducted an extensive in-house
appraisal review of the subject property in September of 1989 and concluded that
its market value was  $9.5 million, or $20,696 per proposed unit. (In-House
Appraisal dated 9/15/89 -- Exhibit 136.) Note that the land area for the
proposed Baccala loan was 21 acres, upon which construction of 460 apartment
dwelling units was to take place. (ID. at V.) Contrary to the contentions of Ms.
Swartz, the independent appraisal conducted two weeks earlier came to a
VIRTUALLY IDENTICAL CONCLUSION considering different comparables.  It is true
that this independent appraisal concluded that the property appraised had a land
value of $6.875 million.

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 42

(Appraisal dated 8/16/89 -- Exhibit 137.) However, this appraisal was for a
smaller plot of land, not for the larger tract of land proposed to be purchased
by the Baccalas.  This appraisal was for a "land area" of 15.6 acres and for a
development project of only 336 apartment units. (ID. at "Summary Salient Facts
& Conclusions.")

          Extrapolating the independent appraisal to the full acreage of the
Baccala loan, the appraised value of the subject property becomes $9.26 million.
Indeed, the independent appraisal indicates that the price per unit is $20,193.
(ID. at p. 32.) Multiply this by the number of units to be constructed in
connection with the Baccala loan, and the appraisal values the subject property
at $9.29 million using this method.  Thus, both the in-house appraisal and the
independent appraisal conducted two weeks earlier were virtually identical for
substantive purposes, placing the value of the subject property at more than $9
million, with an equity to cost ratio of approximately 50%.

          Indeed, appraisals as late as June 1991 conducted by the RTC indicated
that the subject property had value in excess of the amount of the FarWest loan.
(Appraisal dated 6/19/91 -- Exhibit 138; Appraisal dated 6/28/91 -- Exhibit
139.) At the same time, the appraisal noted that the real estate markets in
Southern California had taken a significant downturn as the region suffered from
the significant recession.  "Since acquisition in 1989, the market has taken a
significant down-turn in value trending.  This is evidenced by the fact that
there have been little to no apartment land acquisitions that have occurred
since the subject acquisition." (ID. at p. 11.) (SEE ALSO Appraisal dated
December 19, 1992 at p. 36 ("primarily because of the recession and soft housing
market, recent Inland Empire raw high density residential land sales are
scarce")).

          It is inappropriate and unfair for the RTC to assert that this or any
other loan was "reckless" because of the unprecedented downturn in the real
estate market in Southern California since 1989, particularly in the commercial
real estate market.  The Executive Committee of FarWest Savings can hardly be
considered the guarantors of economic fortune.  Should the RTC be considered
reckless in not promptly disposing of this and other property when it took over
FarWest Savings in January 1991, as commercial real estate values continued to
decline even more precipitously than before?

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 43

          This was a loan where all OTS guidelines for loan to value ratios were
observed, where the underwriting of the transaction was properly performed,
where two separate appraisals placed the value of the property at 50% above the
subject loan, where there was a substantial hard cash investment of more than $5
million which was subordinate to FarWest's interests, and where FarWest not only
had recourse against the subject collateral but also against the substantial
additional property and assets of the Baccalas.  This loan was fully analyzed
and approved by the underwriting department, and the Major Loans Group, and
based on this recommendation it was ultimately approved by the Executive
Committee after discussion.

          This loan was not made to J.L. Construction Company.  It was made to
the Baccalas who personally guaranteed the loan with their individual assets, as
well as with the property itself.  The hard cash of more than $5 million put in
the transaction did not come from J.L. Construction Company, it came from
S.L.G.H. Investments.  The Executive Committee which considered the loan
certainly had no knowledge of any past, pending or future involvement by J.L.
Construction Company.  Indeed, the first document that appears in the file that
even mentions an Agreement between J.L. Construction and the Baccalas is a
letter from legal counsel dated April 9, 1991, after the RTC took over FarWest
Savings and long after the loan was made. (Letter from Klausner dated 4/9/91 --
Exhibit 140.)  Indeed, because there was no reference to this Agreement in any
files of FarWest Savings, the RTC contacted J.L. Construction in July 1991 to
obtain a copy of the Agreement. (Letter from Moss dated 7/18/91 -- Exhibit 141.)
Upon review, it is not surprising that the Agreement was not in FarWest's loan
files.  The Agreement was executed AFTER the loan to the Baccalas was made.
(Agreement dated 10/18/91 Exhibit 142.) Moreover, the terms of the Agreement
were contingent on J.L. Construction obtaining a construction loan. (ID. at
Paragraph 5.) FarWest never made any such loan to J.L. Construction.  The
purchasers and owners of the property were very clearly the Baccalas.

          Nor can the loan conceivably be said to violate the provisions
covering the loan to one borrower limitation.  First and foremost, J.L.
Construction was NOT the borrower.  The loan was made and secured by the
Baccalas with additional hard cash provided by other investment entities. (Loan
Documents -- Exhibit 143.) Of course, the Baccalas were going to have to secure
the services of a construction company in

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 44

order to develop the land -- that does not mean that the loan made by FarWest
Savings is deemed to made to that construction entity.  The applicable
regulation defines "one borrower" to mean "[a]ny person or entity that is, or
upon the making of a loan will become, the obligor on a loan.  Provided that a
guarantor shall not be included within the meaning of 'obligor' if, in
connection with a loan or other extension of credit, the insured institution has
determined, in good faith, that the primary obligor has qualified for the loan
or extension of credit irrespective of the existence of the guarantor." (12 CFR
Section 563.9-3(a)(1)(a) (1989)).  The Baccalas were the sole obligors on the
subject loan.  They are the ones that qualified for the loan irrespective of
anyone else.

          Second, even if the $5.5 million loan had been to J.L. construction
(which it clearly was not), this would not have violated the loan to one
borrower regulations in effect at the time.  It must be remembered that as of
the date of the subject loan, the new loan to one borrower limitations had not
even been proposed, let alone finalized, by the Office of Thrift Supervision.
It was on March 27, 1990, that the OTS published "Interim Final" regulations,
effective immediately, that interpret the loan to one borrower limitations
contained in FIRREA. (55 Fed. Reg. 11294 (March 27, 1990)).  The comment period
for these regulations closed on May 29, 1990.  The OTS published final
regulations on July 10, 1990. (55 Fed. Reg. 28144.) Indeed, the OTS did not
provide any guidelines concerning interpretation of the loan to one borrower
limitations of FIRREA until it issued Thrift Bulletin 32-2 on December 27, 1989,
two months after the subject loan was made.  Further, in Thrift Bulletin 32
issued in September 1989, the Bulletin advised that issues such as "the capital
and other differences" between national banks standards and savings association
standards are unresolved and under review by the OTS. (Thrift Bulletin 32
(September 1989)).  The OTS advised savings associations that "no determination
has yet been made" concerning the applicability of the lending limitation
regulations and interpretations of the Office of the Comptroller of the
Currency.  Indeed, even as late as March 1990, hearings were held in Congress
concerning the loan to borrower provision because of an apparent regulatory
impasse between the OTS and the OCC on the issue of establishment of a
transition period for implementation of the loan to one borrower provisions.
(House Banking Committee, Subcommittee on General Oversight and Investigations,
on 2/7/90.)

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 45

          Since the RTC has not produced any files relating to the prior
application by J.L. Construction Company for a loan on the subject property, it
cannot be determined why that particular loan was denied.  It is apparent from
an appraisal in the Baccala file that the J.L. Construction application
concerned property different from that in the Baccala application. (Exhibit
137.)

          Although no loans to J.L. Construction Company are at issue, it must
be emphasized that "the company had an extremely positive history in the
construction industry, and did not have "a history of aggressive risk-taking" as
the RTC asserts.  A Credit Review for J.L. Construction Company dated April 18,
1990, notes that the company has succeeded [as a development company] as
demonstrated by the following: to date, the company has built, sold and paid off
5 apartment projects, totalling 1,030 units for an aggregate sales price of
$80,050,000.  The company has sold an additional 750 units, or 4 apartment
project[s], currently in escrow, three of which are substantially complete.
Finally, J.L. Construction has completed another two projects, totalling 514
apartment units, currently in lease-up (at least 74% leased) and being marketed
for sale." (Credit Review dated 4/18/90 at p. 2 -- Exhibit 144.) Further, the
review notes that the balance sheet for J.L. Construction reflected 1989 total
assets of $182,918,000. (ID. at p. 3.) Experience with other lenders and
references indicates that J.L. Construction was well respected at the time. (ID.
at pp. 1-2.) The Credit Review concluded, "Based on J.L. Construction Company's
historically financial performance, FarWest's specific experience and that of
other lenders, J.L. Construction Company builds a quality project quickly,
selects superior sites and is able to sell these projects, some well in advance
of completion, at a significant profit." (ID. at p. 4.) While the construction
company did experience some cost overruns, these overruns "have typically' been
funded by J.L. Construction Company, primarily through cash-flow or equity
partners.  In spite of these overruns, the company has shown considerable,
positive net income." (ID.)

                                      VII.
                       BUTTERFIELD & MASON LINE OF CREDIT

          The allegations of the RTC with regard to Butterfield & Mason are
similarly in error.  At the outset, it must be noted again that FarWest Savings
was in a secure capital position when the transaction was entered into and
during the time modifications were made.  FarWest was not put

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 46

into a more difficult financial position until it was legislated out of
significant investment markets by FIERRA.  Further, as emphasized in more detail
above, the RTC gives no credit to the extensive experience of the members of the
Executive Committee in evaluating and approving the original line of credit.  Of
course, the Executive Committee was not involved in the day to day
administration of the line of credit, to the extent the RTC's claims are related
to such conduct.

          On July 7, 1988, Warren Ashmann sent a proposal to Fred Kayne at
FarWest Savings and Loan "requesting a line of credit to continue my financing
business." (Proposal dated 7/18/88 -- Exhibit 145.) This proposal arrived at
FarWest in the same manner that numerous other proposals arrived, in the
ordinary course of business.  At the time, Fred Kayne knew of Warren Ashmann as
a member of the business community and through charitable affairs.  Ashmann was
NOT a personal or social friend of Kayne's.

          Initially, Fred Kayne, C.E.O. and a member of the Executive Committee,
met with Ashmann about the proposal, thought it had promise, and referred it to
Charles Green for his review.  Mr. Green was then C.F.O., Executive Vice
President and member of the Executive Committee.  After meeting with Ashmann,
Charles Green also believed that Ashmann's proposal had merit and presented it
to the full Executive Committee, with Fred Kayne's approval. (All of the
Executive Committee minutes for this period of time are not in the files
produced by the RTC.  These minutes reflect a thorough consideration of the
proposed transaction by Executive Committee members.) After presentation to the
Executive Committee, William Belzberg, Chairman of the Board and member of the
Executive Committee, also met with Warren Ashmann to discuss the proposal.
Ultimately, the Executive Committee approved the deal.

          Charles Green, CFO, Executive Vice President, and member of the
Executive Committee, was put in charge of negotiating the details of the Ashmann
deal and getting proper attorney review and documentation, and he thus became
the supervising officer.  Mr. Green hired the experienced law firm of Manatt,
Phelps to assist him in this respect.  The process of arranging the transaction
took over three months of review and negotiation.  A deal was signed in November
1988.  The documentation for this deal was carefully drafted (comprising about
100 pages with exhibits, including a 29-page agreement

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 47

(Exhibit 146), a 21-page guarantee (Exhibit 147), and related documents (Exhibit
148)).

          Before the deal was consummated, extensive due diligence on Warren
Ashmann and his business interests was performed.  At least two investigation
firms were retained to evaluate Mr. Ashmann and obtain credit and related
information, the respected firm of Murphy and Maconachy, Inc. and Research
Reports, Inc.  Both these firms issued favorable reports. (Investigation Reports
-- Exhibits 149 and 150.) Moreover, and contrary to the express representations
in the RTC's April 15 letter, all of Mr. Ashmann's pertinent financial
information was obtained and evaluated, including financial statements and tax
returns for all of his interests.  This information is TWO INCHES thick.
(Ashmann Financial Information -- Exhibits 151 to 153.)

          Butterfield & Mason was a small privately held mortgage company that
would lend money on first, second, and third trust deeds, often obtaining
multiple collateral for the loan.  It would do its own internal appraisals and
evaluations, document the transactions, and fund the deals.  The principals had
a successful record of lending in this manner with a history of good quality
borrowers.

          The nature of the deal between FarWest Savings and Butterfield & Mason
was as outlined in the Manatt, Phelps agreement of approximately 100 pages,
including exhibits, and can be summarized as follows:

          1.   Initially, the transaction was to be a $5.0 million revolving
               loan.  It was documented in the form of a Note and Revolving
               Credit Agreement ("RCA") signed by Charles Hall, Sr. Vice
               President, and dated as of November 3, 1988 (Exhibit 146);

          2.   This loan was increased from $5 million to $10 million.  It was
               documented in the Amended and Restated Revolving Credit Agreement
               dated as of November 3, 1988, and signed by Charles Hall, Sr.
               vice President (Exhibit 154);

          3.   Mr. Ashmann and his wife guaranteed 50% of the Repayment
               Deficiency as defined in paragraph 6.3 of the guarantee (Exhibits
               147 and 154);

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 48

          4.   To secure the obligations of the Ashmann guarantee, the Ashmanns
               granted a security interest in "eligible collateral" initially
               worth $2.0 million, and in the stock of Butterfield & Mason.
               (ID.) (There were later modifications which are described below
               increasing the "eligible collateral");

          5.   To further secure the RCA, a first priority security agreement
               was also granted in the underlying collateral (IE., the loans
               made by Butterfield & Mason) (ID.);

          6.   FarWest was to receive Prime plus 1.5% plus 50% of the net
               profits. (ID.) IN THIS RESPECT, FARWEST RECEIVED A CHECK FOR $1.0
               MILLION IN NET PROFIT AFTER THE FIRST YEAR (I.E., IN 12/89)
               (Letter from Ashmann dated 12/28/89 -Exhibit 155);

          7.   It was contemplated at the outset that this deal would evolve and
               that it was going to be funded in $5.0 million increments as
               approved and recommended by the supervising officers of the
               savings and loan and the ACFC subsidiary.  A Loan Brief plus
               supporting materials was prepared, reviewed and approved by three
               individuals prior to the advance of the original $5 million to
               Butterfield & Mason. (Loan Brief dated 11/3/88 -- Exhibit 167.)

                     Charles Hall and Charles Green and/or Fred Kayne reviewed,
               and at least two of these three individuals (and often all three)
               approved, all modifications to the Revolving Line of Credit,
               including all requests and applications for increases in the
               line. (Modifications -Exhibits 156 to 166.) All standard internal
               procedures of the financial institution were followed and the
               applications for additional loans were approved and documented in
               accordance with the Board of Directors' guidelines and the
               approval process set up by FarWest Savings.

                    Additional steps were taken to modify the Loan Brief
               whenever additional advances or

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 49

               modifications were sought.  An analysis was performed, charts of
               Eligible Collateral and Eligible Loans were provided, default
               rates were discussed, portfolio summaries were performed,
               Collateral Valuation worksheets were prepared, status reports
               were provided, checks and balances were maintained in place, and
               all standard procedures implemented for this type of investment
               were followed in connection with these Modifications.  It is
               interesting to note that in Modification "F" dated April 26,
               1990, it states on page 3: "Since inception, there have not been
               any losses associated with Butterfield & Mason's direct lending
               program." (Exhibit 156.)

                    Specific procedures were instituted for funding and
               servicing the loan, and these procedures were followed.  A
               summary of these "Butterfield & Mason Loan Documents/Procedures"
               is set forth in a memo dated January 24, 1990 from Charles
               Hall/Jeneco Johnson to St. John Bannon. (Memorandum from Chic
               Hall dated 1/24/90 -- Exhibit 168.) However, the important
               attachments to this memorandum were not produced by the RTC.
               Indeed, almost ALL of the written documentation which preceded
               each increase in the credit line was not produced by the RTC.

          5.   As each $5.0 million loan increment occurred after the initial
               $10 million, it was required that Ashmann's security and
               "eligible collateral" was to be increased by a relative
               percentage as follows:

               a.   The loan was increased from $10.0 to $15.0 million on 3/2/89
                    and Ashmann's security and eligible collateral was increased
                    from $2.0 to $3.0 million (Exhibits 169 and 170);

               b.   The loan was increased from $15.0 to $20.0 million on 4/89
                    and Ashmann's security and eligible collateral was increased
                    from $3.0 to $4.0 million (Exhibits 171 and 172).;

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 50

               c.   The loan was increased from $20.0 to $25.0 million on 6/7/89
                    and Ashmann's security and eligible collateral was increased
                    from $4.0 to $5.0 million (Exhibits 173 and 174);

               d.   At all times, the Ashmanns were responsible for 50% of the
                    repayment deficiency under Paragraph 6.3 of their guaranty.
                    (SEE Exhibits 147 and 154).

          Charles Green was initially in charge of over-all supervision of the
Butterfield & Mason program as Supervising Officer.  Charles Hall, Senior Vice-
President of the Savings and Loan and ACFC and an experienced loan officer,
signed the loan agreement and was put in charge of the day-to-day supervision by
Charles Green.  Mr. Hall had two people working for him on the Butterfield &
Mason matter, Jenece Johnson and Janet Hansen, both of whom were also in
constant contact with Butterfield & Mason.  This group of three people would
obtain and assemble the necessary written documentation, obtain the necessary
approvals for any increases and forward the package to the Loan Servicing
Department.  Only then could Butterfield & Mason obtain an advance.

          FarWest Savings administered the Butterfield & Mason program through
its Servicing Department.  All payments and receipts of funds, filings and
recordings of all documents, and the handling of all money, collateral,
documents and confirmation with the Butterfield & Mason agreements were handled
by the Servicing Department, just as with any other loan that was outstanding
with FarWest Savings or the ACFC subsidiary.  The Loan Servicing Department
would not service a loan or modification unless it assured itself that the
internal funding procedures had been previously followed.  The Loan Servicing
Department was a check and balance on the Loan Officers and acted as an
independent department.  From time to time, the Loan Servicing Department would
be asked to do an audit.

          Charles Green and Charles Hall had extensive lending experience and
the Servicing Department had full knowledge and experience on how to proceed.
Mr. Hall was brought in from Denver, Colorado and relocated to the Century City
office, close to where Butterfield & Mason was located, and a substantial
portion of Mr. Hall's job was to supervise the Butterfield & Mason project.
This loan got a higher degree of

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 51

attention than most other accounts due to Mr. Hall's considerable involvement.
He personally visited many of the underlying properties that constituted the
collateral on this deal.  Charles Green met with Butterfield & Mason people and
supervised the program.  He also visited some of the properties which
constituted the underlying loan collateral on at least two occasions.

          In August 1990, Butterfield & Mason was advised that no more money
could be loaned to it due to FIRREA.  Mr. Ashmann became very angry and told
Kayne that FarWest was obligated to continue funding the Butterfield & Mason
program.  He also threatened a major lawsuit against FarWest.  Ashmann also
stated to Kayne that in his opinion, all of the money outstanding to FarWest
would ultimately be collected if FarWest lived up to its agreement.  Ashmann
pointed out that some individual loans would go bad, but that the interest and
income on the others, plus the profit percentages owed to FarWest, would cover
those losses.  Ashmann also said that he thought that he had a $9.0 million
reserve with FarWest to help him with the workouts that would be required, and
he insisted that FarWest was obligated to fund these loans and the workouts.

          Kayne informed the Executive Committee of Ashmann's threats to sue,
and Ashmann's belief that no money would be lost if the program continued.  In
August of 1990, there was IN EXCESS OF $5.5 million of Ashmann's security in
place, plus his guarantee.  In October of 1990, Butterfield & Mason defaulted on
its loan and advised FarWest that the reason for the default was that
Butterfield & Mason was using its funds for workouts on its loans, rather than
paying back its obligations to FarWest.

          Subsequent to Butterfield & Mason's default in the revolving loan
program in October 1990, there were extensive meetings and communications
between Butterfield & Mason and FarWest work-out officers regarding the
situation.  The Butterfield & Mason loan account was placed in the workout
section and a special senior group of officers conduct its review.

          On January 8, 1991, Butterfield & Mason submitted a "proposal for
settlement" of the disputes between Butterfield & Mason and Warren and Amy
Ashmann on the one hand, and FarWest Savings, FarWest Financial and ACFC on the
other.  This proposal was a detailed, five-page, 14-point

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 52

proposal, with exhibits. (Memorandum of Whitting dated 1/24/91 at attachment --
Exhibit 175.)

          Thereafter, a detailed "Analysis of Proposed Settlement Agreement" was
performed for the RTC by the special FarWest work-out group. (Exhibit 175 at
attachment.) This Analysis provides in brief as follows:

          1.   In Paragraph 1, the unpaid balance on the line of credit is
               stated to be $22,348,336.  Paragraph 1 also states: "In any case,
               THE FINANCIAL BENEFITS WHICH FARWEST WOULD RECEIVE UNDER THE
               TERMS OF THIS SETTLEMENT PROPOSAL MORE THAN MAKE UP FOR THE
               ABATED INTEREST" (emphasis added).

          2.   Paragraph 2, Page 2 of the Analysis, provides that the Exhibit A
               loans (of the Butterfield & Mason proposal) represent the best
               loans in Butterfield & Mason's portfolio because the borrowers
               under the Exhibit A loans are the most financially solid, the
               most communicative and have the most equity; each of the Exhibit
               A loans has been performing exceptionally well; the Exhibit A
               loans will require only minimal management by FarWest; and the
               Exhibit A loans have been appraised by FarWest on a continual
               basis and FarWest has all the information which it needs to
               continue managing them.  HENCE, IT IS TO FARWEST'S BENEFIT TO
               ACCEPT ASSIGNMENT OF THOSE LOANS AND THE UNDERLYING COLLATERAL IN
               EXCHANGE FOR A CORRESPONDING REDUCTION OF THE OUTSTANDING
               PRINCIPAL BALANCE OF THE LINE OF CREDIT" (emphasis added).  These
               Exhibit A loans totaled $9,746,200.  Therefore, if they had been
               accepted in reduction, as offered, the net balance due on the
               note would have been $12,602,136.

          3.   On Page 3, Paragraphs 4-5, it is stated in the Analysis that:
               "The SETTLEMENT PROPOSAL IS EXTREMELY BENEFICIAL TO FARWEST
               because FarWest would receive assignment of the best loans of
               B&M's portfolio and, WITHOUT ANY COST TO FARWEST (except for the
               relatively insubstantial overhead payment and retention sum
               referenced in paragraphs 5 and 6 of the

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 53

               settlement proposal), FarWest would also receive the benefit of
               B&M's efforts to liquidate the remaining Exhibit D loans. . . .
               B&M is in the best position to liquidate the Exhibit D loans
               because it is intimately familiar with them and because B&M has
               great expertise in managing and liquidating loans" (emphasis
               added).

          4.   Page 4, Paragraph 5 provides, "As owner of the Exhibit A loans,
               FarWest can manage and liquidate them as it sees fit, without
               having to incur continuing liability for interfering with B&M's
               business as it has in the past."

          5.   Paragraph 7 on Page 5 provides: "FarWest's release of the Exhibit
               C collateral would leave FarWest with approximately $3 million in
               personal security against an outstanding balance on the Line of
               Credit in the sum of $12,499,436, after the Exhibit A loan
               assignments are credited.  This would leave FarWest with personal
               collateral with an aggregate value equal to 24% of the
               outstanding balance on the Line of Credit, WHICH WOULD PROVIDE
               FARWEST WITH EVEN MORE SECURITY THAN THEY HAD UNDER THE REVOLVING
               CREDIT AGREEMENT AND GUARANTEE, where the Ashmanns agreed to put
               up personal collateral with a value equal to only 15% of the
               outstanding balance. [Paragraph] In addition, the ASHMANNS
               OVERCOLLATERALIZED THE LINE OF CREDIT IN THE SUM OF APPROXIMATELY
               $1,300,000 in that the Ashmanns pledged collateral worth
               approximately $5,800,000, while the revolving credit agreement
               required collateral worth only $4,500,000" (emphasis added).

          6.   On Page 8 of this Analysis, it provides: "THE PROPOSED SETTLEMENT
               GIVES FARWEST AN OPPORTUNITY TO RECOUP THE ENTIRE OUTSTANDING
               BALANCE OF THE LINE OF CREDIT AND TO RECEIVE ADDITIONAL PROCEEDS
               IN THE FORM OF ACCRUED INTEREST, ACCRUED POINTS, AND PROFIT
               INTEREST GENERATED BY THE EXHIBIT A AND EXHIBIT D LOANS, WITHOUT
               MAKING ANY FURTHER ADVANCES AND WITHOUT INCURRING THE COSTS AND
               LIABILITIES ASSOCIATED

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 54

               WITH LITIGATION BETWEEN THE PARTIES.  UNDER THE SETTLEMENT
               PROPOSAL, FARWEST RECEIVED ESSENTIALLY ALL OF THE "UPSIDE"
               RESULTING FROM B&M'S LIQUIDATION OF ITS LOAN PORTFOLIO, AT NO
               COST TO FARWEST, EXCEPT THAT FARWEST MUST MAKE MINIMAL
               REIMBURSEMENT TO B&M FOR THE OPERATING COST WHICH IT WILL INCUR
               IN PERFORMING ITS OBLIGATIONS AS SPECIFIED IN THE SETTLEMENT
               PROPOSAL" (emphasis added).

          7.   On Page 9, the Analysis also states: "FarWest's refusal to
               advance further sums under the Line of Credit in August of 1990
               has effectively denied B&M the ability to do business.
               Thereafter, FarWest did not cooperate with B&M in its efforts to
               liquidate its loan portfolio.  AS A RESULT, FARWEST HAS PUT B&M
               BETWEEN THE PROVERBIAL 'ROCK AND A HARD PLACE' FOR SOME TIME.
               The proposed settlement allows FarWest to avoid liability for
               such conduct or requiring B&M to liquidate the loan portfolio for
               the benefit of FarWest."

In addition to this analysis, also supplied to the RTC was a legal evaluation of
the transaction by the firm of Neumeyer, Landrum & Dillion as well as a detailed
estimate of value of the primary collateral and secondary collateral under the
transaction. (Exhibit 175 at attachment.)

          On January 24, 1991, the RTC received a memo entitled, "Outline of
Butterfield & Mason Structures and Problems." It contained a copy of the
Neumeyer, Landrum & Dillion legal evaluation of the transaction, the borrower's
proposal for settlement dated January 8, 1991, and the FarWest Savings'
estimated value of primary collateral and secondary collateral, among numerous
other documents. (Exhibit 175.) It was indicated that the primary collateral
consisted of loans funded through the letter of credit for Butterfield & Mason
in the amount of $22,348,336; that real estate owned by Ashmann or affiliates in
the amount of $5,432,157 was placed as secondary collateral; that there were
personal guarantees of Warren and Amy Ashmann; and that there was a profit
participation in Butterfield & Mason Mortgage Company.

          Despite all of this data in the possession of the RTC, THE RTC
INEXPLICABLY REFUSED TO ACCEPT THE BUTTERFIELD & MASON PROPOSAL.  This, despite
the fact that the "proposed

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 55

settlement [gave] FarWest an opportunity to recoup the entire outstanding
balance of the Line of Credit, and to receive additional proceeds in the form of
accrued interest, accrued points and profit interests . . . without making any
further advances and without incurring the costs and liabilities associated with
litigation between the parties." (Exhibit 175 at attachment.) The RTC's refusal
to enter into this settlement cannot be explained or justified.

          Between January 24, 1991 and July 1, 1991, the RTC appointed a workout
specialist by the name of Robert D. Saunders to prepare a detailed "CRC Case
Memorandum" of the Butterfield & Mason loan with ACFC. (Case Memorandum dated
5/10/91 -- Exhibit 176.) Notably, Mr. Saunders places primary responsibility for
any deficiencies upon Butterfield & Mason, not FarWest.  The Memorandum also
notes that it was a "principal issue" whether FarWest should have advanced MORE
money under the line of credit, not whether existing advances could be
justified. (ID. at p. 5.)

          We are advised that Mr. Saunders spent a tremendous amount of time
with Mr. Ashmann at Butterfield & Mason, practically living with him for weeks,
examined the books and records of Butterfield & Mason to his heart's content and
looked into every nook and cranny of the transaction.  In a memorandum dated
July 1, 1991 to Mr. Saunders from Jeffrey E. Thomas, attorney, it is stated that
Mr. Saunders had conducted:

               An examination of the books and records of BM by an
          outside professional accounting firm to confirm the prior
          representation of Warren Ashmann with respect to the
          business affairs of BM [and]

               An asset search of B&M, its related entities and the
          Ashmanns to confirm that no other substantial assets exist
          which may be used to satisfy or secure the debt to FarWest.

(Memorandum of Thomas dated 7/l/91 -- Exhibit 178.) The Thomas memorandum
concludes that:

          Mr. Saunders has advised us that: 1) An accounting firm has
          examined the books and records of Butterfield and he is
          satisfied that Ashmann did not make any material

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 56

          misrepresentations concerning the affairs of the business;
          and, 2) An asset search firm had conducted a search and has
          not discovered any undisclosed substantial assets.  The
          conditions to entering in the agreement appear to have been
          met.

(ID. at p. 2.) Based upon the Saunders Case Memorandum and the Thomas
Memorandum, the RTC entered into a Modification and Settlement Agreement dated
July 1, 1991 with the Ashmanns and Butterfield & Mason. (Modification and
Settlement Agreement - Exhibit 177.)

          It is thus quite clear that after the RTC conducted its own detailed
investigation, which included an examination of the books and records of
Butterfield & Mason by an outside professional accounting firm and which
confirmed the prior representations of Warren Ashmann with respect to the
business affairs of Butterfield & Mason, the RTC gave the Butterfield & Mason
transaction a clean bill of health.  In addition, it formally agreed to retain
Warren Ashmann in the same position as he was in since the beginning of the
FarWest Butterfield & Mason program, subject only to the modifications of the
revolving credit agreement which are set forth in the Modification and
Settlement Agreement of July 1, 1991.  This conduct unequivocally confirms the
propriety of the revolving credit agreement transaction between Butterfield &
Mason and FarWest that was instituted as of November 3, 1988. Furthermore, it
is also quite apparent from a review of the above facts that had the RTC
accepted the recommendation of FarWest's work-out officers in mid-January,
1991, FarWest would likely have come out of this entire transaction WITH NO
LOSS, AND POSSIBLY A PROFIT.

          Based on the above information, it is difficult to understand how the
RTC could at this time, three years after undertaking a detailed investigation
with outside professionals, make the subject accusations against Messrs.
Belzberg, Kayne and Behrle.  There is absolutely no evidence that any of these
individuals were reckless in connection with this transaction.

                                      VIII.
                           FARWEST FINANCIAL'S CLAIMS

          Because of our urgency in reviewing the voluminous materials relevant
to the RTC's claims and in providing this

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 57

response, we have not sought to evaluate all of the claims that FarWest
Financial has against FarWest Savings.  However, even a cursory review of
various records we have been provided reveals substantial claims for millions of
dollars by FarWest Financial.

          First, as emphasized in Section II above, FarWest Financial paid all
of the tax liabilities of FarWest Savings from 1987 through 1989.  FarWest
Financial thus is owed $4.6 million in this respect, plus interest for four
years or more, which may be reduced by subsequent refunds from state and federal
taxing authorities.

          Second, over the years 1986 to 1989, FarWest Financial maintained its
general checking and dividend disbursement checking accounts at FarWest Savings.
No interest on these accounts was paid to FarWest Financial, and thus these
accounts were at no interest cost to FarWest Savings.  In April 1986, FarWest
Financial completed a secondary offering of common stock which raised
approximately $41 million of new capital for FarWest Financial.  Upon receipt of
the net proceeds from the offering, FarWest Financial decided to "deposit" the
funds on account with FarWest Savings.  The proceeds check was actually endorsed
by FarWest Financial over to FarWest Savings.  Because of certain savings
account system constraints (inability to hold more than $9,999,999.99 in any one
savings/checking account), a decision was made to record the funds in
intercompany receivable and payable accounts maintained on the general ledger
("GL") system.  On FarWest Financial's books, available liquid funds always
included the amount it maintained in GL #1995-055-134, Intercompany Accounts
Receivable.  Likewise, FarWest savings maintained a liability payable to FarWest
Financial in GL #2995-134-055.

          As illustrated in Exhibit 179, FarWest Financial's "deposit" balances
of checking accounts and the GL receivable remained at a significant level for
the entire four-year period.  The average monthly balance was  $27.3 million.
At no time did FarWest Financial receive any interest on these funds from
FarWest Savings.  The bottom section of Exhibit 179 is a calculation of the
approximate interest income that would have accrued to FarWest Financial had the
funds been maintained in an interest bearing account.  This income is calculated
using the weighted average cost of all interest bearing liabilities of FarWest
Savings. (Supporting detail for Exhibit 179 is

GIBSON, DUNN & CRUTCHER

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 58

contained in general ledger accounts maintained by FarWest Savings.)

          The economic benefit to FarWest Savings and detriment to FarWest
Financial are quite clear.  FarWest Savings had the use of funds for its own
investment purposes at zero cost.  FarWest Financial had a significant deposit
of funds that was realizing zero return on investment.  The amount of
outstanding interest owed by FarWest Savings to FarWest Financial is NEARLY $7
MILLION, PLUS INTEREST FOR MORE THAN FIVE YEARS.

          Third, in 1989 FarWest Financial funded to FarWest Savings
approximately $1.3 million in total bonus accruals, of which only $517,500 was
actually paid out to employees of FarWest Financial. (Memorandum of Lyon dated
8/1/90 -Exhibit 180.) The excess amount funded of $791,300 still remains on the
books of FarWest Savings as an accrued expense and has not been refunded back to
FarWest Financial, as it should have been.

          For seven months in 1989, FarWest Financial and subsidiaries recorded
a monthly accrual for discretionary bonuses that were to be paid in January
1990. (ID.) It was an accounting practice to record the total consolidated
accrual into a single general ledger account (#2687-001-094) on the books of
FarWest Savings, even though a portion of accrued expense was on the books of
FarWest Financial.  This was accomplished by the posting of intercompany
payables and receivables to keep the individual company's books in balance.
These intercompany payable and receivable accounts were "settled" at least once
a year, and sometimes more often.  The payable to FarWest Savings from FarWest
Financial for seven months of bonus accruals, or $1.3 million, was paid by
FarWest Financial through available funds on deposit (off-line account #2022-
134-055) at FarWest Savings. (ID.) Thus, as of December 31, 1989, FarWest
Financial had fully funded $1.3 million to FarWest Savings as its contribution
for projected discretionary bonuses for FarWest Financial employees.  These
funds were to be paid out by FarWest Savings as a "common paymaster" for the
FarWest group of companies.

          In January 1990, bonus payments were made to employees.  Of the $1.3
million contribution made by FarWest Financial, only $517.5 thousand was
actually paid out to employees of FarWest Financial, leaving an amount remaining
on the books of FarWest Savings of $791,262. (ID.) This

Robert W. Helstowski, Esq.
Denis F. Shanagher, Esq.
July 18, 1994
Page 59

obligation, WITH INTEREST FOR FOUR YEARS, remains due and owing from FarWest
Savings to FarWest Financial.

                                   CONCLUSION

          Our clients' extensive investigation of the issues raised by the RTC
in the letter dated April 15 reveals that the RTC's asserted claims wholly lack
merit.  In most respects, they are factually inaccurate and result from a
confusion or misunderstanding concerning the operations of FarWest Savings and
FarWest Financial. Other conclusions are simply not supported by the available
records and are otherwise inappropriate.  It also appears that the RTC is
attempting to pass the blame, when it is responsible for various losses.

          Furthermore, FarWest Financial has substantial claims against FarWest
Savings, as significant sums of money remain due and owing to FarWest Financial.
These sums total more than $12 million.

          We are confident that a close examination of the exhibits supplied
with this submission and other documents in the possession of the RTC will
clarify all of the subject matters for you. If the RTC elects to pursue this
matter further, we look forward to meeting with the RTC's authorized officers so
we can present and discuss this submission in accordance with the terms of our
clients' Tolling Agreements.

                                        Very truly yours,

                                        /s/ Martin C. Washton
                                        Martin C. Washton
                                        of Gibson, Dunn & Crutcher

MCW/ljm

                       MINUTES OF THE REGULARLY SCHEDULED
                          BOARD OF DIRECTORS MEETING OF
                      FARWEST SAVINGS AND LOAN ASSOCIATION

                                February 8, 1989

          The regularly scheduled meeting of the Board of Directors of FarWest
Savings and Loan Association was held at 1800 Avenue of the Stars, Los Angeles,
California on February 8, 1989 pursuant to notice duly given.  Present at the
meeting were: William Belzberg, Keenan Behrle, Charles H. Green, Dwight C. Baum,
Monty Hall, Victor H. Indiek, Fred Kayne, Robert Muh, James Nathan, Barbara C.
George.  Absent from the meeting was Lester Ziffren.  The meeting was called to
order at 10:35 a.m. by the Chairman, William Belzberg.  The Chairman requested
that Kurt C. Kemper act as secretary of the meeting and to take the minutes
thereof.

          The Chairman noted that the first item on the agenda was a review and
approval of the minutes of the previous meeting.  Mr. Kayne stated that the
minutes of the previous meeting contained a reference to the association's
proposed consideration of establishing a general loss reserve with respect to
investment securities in an amount equal to 1.5% of the portfolio.  Mr. Kayne
stated that that proposal had been carefully evaluated by the association and
discussed with its independent auditors and that a determination had been made
that the establishment of loss reserves in that amount at this time was not
justified.  He added that this proposal would be continuously reviewed and
should change be warranted in the future, it would be implemented.  Mr. Muh
indicated that the minutes of the previous meeting discussed a proposed bank
account for FarWest Mortgage Company of Colorado and the question was whether
appropriate controls had been established over that account.  Mr. Green stated
that internal audit and others had carefully reviewed the situation and it was
clear that there were satisfactory controls over the account.  The Chairman then
enquired whether there was any further discussion of the minutes.  There being
none, upon motion made and duly seconded, the minutes of the previous meeting
were approved as supplemented without having been read.

          The Chairman noted that the next item to be taken up was a review of
the actions of the Executive Committee of the Board of Directors taken since the
previous meeting.  Mr. Belzberg asked if there were any questions.  Mr. Muh
enquired whether the association carefully monitored its loan concentrations.
Mr. Indiek responded that loan concentrations were carefully reviewed and that
procedures were in place to avoid excess concentrations.  Mr. Belzberg enquired
whether there was any further discussion.  There being none, upon motion duly
made and seconded, the actions taken by the Executive Committee since the
previous meeting were unanimously ratified, confirmed and approved.

          Mr. Belzberg stated that the next item to be taken up was the review
of major loans in excess of $5 million.  Mr. Indiek indicated that he would be
happy to answer any questions raised by the directors with respect to the loans.
Mr. Kayne noted that the bulk of the loans reviewed by the directors were
construction loans since the association was able to acquire such assets on
favorable terms and advantageous rates.  In addition, Mr. Kayne noted that the
association had a "proven track record" with respect to construction lending and
was satisfied as to its understanding of the risk profile of such assets.  The
Chairman asked if there was any further discussion.  There being none, the
Chairman called on Mr. Green to deliver his report with respect to the asset
review process.

                                       -2-

          Mr. Green stated that the asset review process had been very extensive
and had required the participation of many officers and employees.  As a result
of the process, the problem assets in the major loan portfolio had been reviewed
and the directors were welcome to look at any of the work of the department.  In
addition, all securities with yields of 15% or greater had been reviewed.
Approximately 35% of the securities portfolio had been reviewed.  With respect
to the corporate debt portfolio, approximately 25% of that portfolio had been
reviewed.  With respect to major loans, approximately $500 million of loans had
been reviewed or 21% of the portfolio.  Every asset on the sensitive asset list
had been analyzed. On an aggregate basis, the Asset Review Department had
examined approximately $700 million of assets or roughly 26% of the aggregate
asset portfolio.  Each review was approved by three different people.  The final
analysis of an asset review was accomplished by Messrs.  Indiek, Green and the
Association's Chief Underwriter, Norman MacLeod.  Mr. Green added that the asset
review process remains under review in order to make it more efficient.  Mr.
Nathan asked how current the file information was.  Mr. Green stated that the
objective was to update the file information with respect to the assets on a
quarterly basis.  Mr. Nathan asked whether an extensive review was done on each
asset each quarter.  Mr. Green stated that if the asset was properly performing
in accordance with current appraisal, net realizable value or other information,
it was not examined further.  Mr. Behrle indicated that with respect to the
investment security portfolio, yield was not the only criteria.  Mr. Green
agreed and said that yield was a criteria employed to evaluate otherwise
performing assets.  Assets which were sensitive for other reasons were evaluated
for those reasons.  Mr. Kayne stated that the task accomplished by the Asset
Review Department and the Credit Review Committee had been herculean.  In
addition, it was to the credit of management that independent of the asset
review process reserves recommended by management had been within $5 million of
the level ultimately recommended by the Asset Review Committee.

          Mr. Hall enquired whether the loss reserves taken with respect to the
investment portfolio reflected management's decision to limit losses.  Mr. Kayne
stated that because it was the intent of the company to hold such assets until
maturity.  The point of loss reserves with respect to such securities was to
address permanent impairment.  Mr. Muh suggested that the results of the
quarterly asset review activity be discussed with the Audit Committee of the
Board of Directors in order that the Board could be kept informed in that
matter.

          The Chairman enquired whether there was any further discussion.  There
being none, the Chairman then called on Mr. Green to deliver his report with
respect to the Corporate Banking Department.  Mr. Green stated that
approximately 22 transactions valued at $225 million had been consummated in
1988.  The Department had earned approximately  $1.25 million in fee income
during the period and average assets totalled approximately $100 million.  Rates
earned with respect to such assets were roughly prime plus 150 basis points or
LIBOR plus 250 basis points.  Mr. Kayne stated that the Corporate Banking
Department had established itself as a well run diversified business.  In
addition, the analytical and other strengths in that Department had helped
augment the Investment Division since the Corporate Banking area frequently lent
to the same borrowers as the Investment Division did.  Mr. Muh asked whether the
indicated pay offs and other details were actually realized by the company.  Mr.
Green stated that the directors would be furnished with an updated report to
show the eventual disposition of the assets.  Mr. Kayne stated that from a
lender's standpoint, one of the problems faced by the association was that the
association was frequently prepaid

                                       -3-

because of the strength of the credit.  The Chairman then asked if there was any
further discussion.  There being none, the Chairman then called on Mr. Green to
deliver his report with respect to the Investment Division.  Mr. Green stated
that at December 31, 1988, the Investment Division was responsible for
approximately $646 million of assets with a mark to market loss on the portfolio
equal to approximately $18.4 million.  Yields during 1988 had increased to 13.2%
from 11.9% during 1987.  Mr. Green added that the Investment Division's assets
had also been reviewed by the asset review team and it was believed that all
potential weaknesses had been identified.  Mr. Kayne stated that the Investment
Division was increasing its staff with the addition of several senior analysts
that the association had an ongoing commitment to the business.  The Chairman
then asked if there was any further discussion.

          There being none, the Chairman called on Mr. Green to deliver his
report with respect to the investment in the AGIO partnership.  Mr. Green stated
that during the fall of 1988 the decision had been made to invest approximately
$20 million in a partnership engaged in the securities arbitrage business.
During 1988, FarWest had made approximately $800,000 profit and there was
additional unrealized profit in the portfolio.  During January, 1989, it was
expected that an additional $600,000 profit would be realized.  Mr. Green drew
the directors, attention to a prior investment in Denver in the Janus
organization which had been successful for the association.  Mr. Green added
that every effort had been made to allay any regulatory concerns with respect to
the AGIO investment partnership since our agreement provides for daily review
and supervision of transactions.  Mr. Kayne added that the original proposal had
been to employ the principals in the AGIO investment partnership directly but
that these individuals had preferred to work on an independent contractor basis.
In addition, the association was evaluating whether additional funds would be
invested with AGIO.  The Chairman then asked if there was any further
discussion.  There being none, the Chairman then called on Mr. Kayne to deliver
his report with respect to the 1989 Business Plan.

          Mr. Kayne stated that the 1989 Plan had been furnished to the
directors under separate cover for their review.  Mr. Kayne stated that the Plan
assumed relatively flat interest rates and that the association's growth during
1989 would be in construction loans and in certain investment securities.  Mr.
Kayne added that on a net basis both would be relatively flat during 1989 to
preserve the capital position of the association.  The Plan called for
approximately  $1.5 billion of new assets with approximately $700 million of
loans sold or securitized during the year.  Mr. Kayne then mentioned page 7 of
the materials furnished to the directors concerning the association's cost of
funds.  Mr. Indiek stated that the association was in the upper third of its
competition with respect to the rates it paid.  Because the association was a
relatively high cost borrower, profitability was affected.  Mr. Indiek stated
that a key objective in reducing the association's cost of funds was to sell or
securitize assets to bring liquidity to the association's portfolio.  Once
liquidity had been established, interest rates on deposits could possibly be
reduced over time.  By obtaining a 20 basis point reduction in the association's
overall cost of funds, the association could earn an additional $10 million at
the margin.  Mr. Hall enquired why rates paid by the association were so high.
Mr. Kayne stated that FarWest's competitive position was not strong enough to
allow it to compete against the major banks and S&L's which provide the full
range of services.  FarWest's depositors tended to bank at FarWest because of
the rates paid and not because of

                                       -4-

the full range of financial services offered.  Mr. Kayne emphasized that to the
extent that the association's cost of funds could be managed effectively,
profitability would be substantially enhanced.  Mr. Belzberg asked when steps
would be taken to reduce interest rates.  Mr. Indiek responded that
approximately during the third quarter of 1989 it was expected that substantial
efforts will be made through the retail system to reduce the association's cost
of funds.  Mr. Belzberg asked what the prospects for further asset
securitizations were.  Mr. Indiek responded that approximately $200 million of
additional assets would be securitized during the next 120 days.

          Mr. Kayne then drew the directors' attention to the analysis of
general and administrative expenses contained on page 14 of the materials
furnished to the directors.  Mr. Indiek stated that the association expected to
increase its staff by approximately 45 people during 1989.  Mr. Belzberg asked
what those people would be doing.  Mr. Indiek responded that staff increases
were expected in several different areas and that some new employees were not
increases at all but simply replacements of people who had left.  Mr. Indiek
indicated that great care was taken in filling these staffing positions and that
with the completion of the data processing conversion significant overhead costs
could be reduced.  At that juncture, Mr. Baum left the meeting because of a
scheduling conflict.  The Chairman then enquired whether there was any further
discussion.  There being none, the Chairman then called on Mr. Kemper to deliver
his report with respect to criminal referrals.

          Mr. Kemper stated that the discussion of criminal referrals had been
supplied to the directors for their review and that he would be happy to answer
any questions.  There ensued a general discussion at the conclusion of which the
Chairman asked if there was any further comment.  There being none, the Chairman
then called on Mr. Indiek to deliver his commentary with respect to the Asset
Liability Committee.

          Mr. Indiek stated that the Asset Liability Committee was comprised of
Mr. Green, Mr. Indiek, and the Association's Chief Financial Officer, Mr. Struck
and various asset deployment personnel.  The Committee reviewed credit risk as
well as interest rate risk.  A primary objective of the Asset Liability
Committee was to identify acceptable rates of return and was profiled to
establish an overall strategic policy for the association.  Mr. Kayne emphasized
that the Asset Liability Committee exercised overall management of the asset and
liability deployment plans of the company.  The Chairman then asked if there was
any further discussion.  There being none, the Chairman then called on Mr.
Indiek to deliver his report with respect to the impending audit by the FHLB.
Mr. Indiek stated that the Federal Home Loan Bank Board had indicated that they
would commence their audit by the end of February 1989. It was expected that the
examination would focus on specific areas and not become immersed in minutia.
There was no reason to expect any surprises and it was hoped that the asset
review effort would meet with the FHLB's approval.  The Chairman asked if there
was any further discussion.  There being none, the Chairman called on Mr. Kayne
and Mr. Kemper to deliver their report with respect to regulatory matters.

          At that juncture, Mr. Kemper and Mr. Kayne summarized the pending
legislative and regulatory proposals facing FarWest Savings and Loan
Association.  Mr. Kayne emphasized that recapitalization of the FSLIC and
stability occasioned  thereby would have a very favorable impact on the
industry.  Mr. Kayne added that continuing concerns whether the association's
empowerments and authorities would be reduced could substantially affect the
overall value of the franchise of FarWest Savings.  At the conclusion of Mr.
Kayne's remarks, there ensued a general discussion.  Then Mr. Belzberg asked if
there was any further question or comment.  There being none, he noted that the
next item on the agenda was a discussion of the compensation arrangement of Mr.
Behrle.  Mr. Belzberg stated

                                       -5-

that FarWest Savings and Loan Association had agreed to compensate one of its
directors, Mr. Keenan Behrle, for his efforts in identifying certain properties
which made attractive investments for the association.  Mr. Behrle is expected
to be compensated at a rate equal to 5% of the net profit of the transactions in
which he is involved.  Mr. Belzberg emphasized that while Mr. Behrle had not, in
fact, received any compensation pursuant to the arrangement, it was proposed to
pay Mr. Behrle on that basis.  Mr. Muh asked whether the profit distribution was
out of realized or unrealized profit.  Mr. Belzberg emphasized that it was out
of realized profit only.  Mr. Muh asked whether losses were netted against
gains.  Mr. Kayne stated that if a loss were actually incurred, Mr. Behrle would
not be compensated to that extent.  He added that the realistic potential for
loss was possibly on a deposit to secure purchase.  Mr. Kayne asked Mr. Kemper
to work out the details with Mr. Behrle and Mr. Belzberg.  The Chairman then
asked if there was any further discussion.  There being none, upon motion made
and duly seconded, the resolution set forth as Exhibit 1 of these minutes was
unanimously approved.  Mr. Belzberg asked Mr. Kemper to note in the minutes that
Mr. Behrle had been absent from the room during the discussion and took no part
in it.  The Chairman then noted that the next item to be taken up was a
resolution setting the time, date, and place of the Annual Shareholders' Meeting
of FarWest Savings and Loan Association.

          Mr. Kemper stated that since FarWest Financial Corporation was the
sole shareholder of FarWest Savings and Loan Association, it was the tradition
to hold the FarWest Savings Annual Meeting immediately after the FarWest
Financial Corporation Annual Meeting.  The Chairman then asked if there was any
discussion.  There being none, upon motion made and duly seconded, the
resolution set forth as Exhibit 2 of these minutes was unanimously adopted.  The
Chairman asked if there was any further business.

          Mr. Indiek stated that management was proposing to sell the Via
Valiente branch of FarWest Savings and to sell and to consolidate the West
Hollywood branch of FarWest Savings.  Mr. Indiek said that the amount expected
to be received was approximately 3.5% discount of the deposit base.  The terms
of the sale were otherwise standard terms in the industry.  Mr. Belzberg asked
whether management was taking steps to optimize the association's investment in
these properties.  Mr. Indiek stated that he would review the situation and
present any recommendations for the development of branch properties to the
Executive Committee.  The Chairman then asked if there was any further
discussion.  There being none, upon motion made and duly seconded, the
resolutions set forth as Exhibits 3 and 4 to these minutes were unanimously
adopted.

          The Chairman enquired whether there was any other business to be
brought before this meeting.  There being none, upon motion made and duly
seconded, the meeting was adjourned at 12:17 p.m.

          By:  /s/ Kurt C. Kemper
             -----------------------------
             Kurt C. Kemper, Secretary

                              Approved:  /s/ W. Belzberg
                                       -----------------------------
                                       William Belzberg, Chairman

0045JT

                                                                       EXHIBIT I

                            RESOLUTION ADOPTED BY THE
                              BOARD OF DIRECTORS OF
                      FARWEST SAVINGS AND LOAN ASSOCIATION

                                February 8, 1989

          WHEREAS, Keenan Behrle is a Director and a member of the Executive
Committee of the Board of Directors of FarWest Savings and Loan Association; and

          WHEREAS, Keenan Behrle has provided consulting, analytic, advisory,
managerial and other services ("advisory services") to FarWest Savings and Loan
Association in connection with identifying certain real estate investments; and

          WHEREAS, Keenan Behrle's efforts in that capacity are not and have not
been adequately compensated.

          RESOLVED, that FarWest Savings and.Loan Association will pay to Keenan
Behrle a bonus of 5% of the net profit realized from the proceeds of certain
sales and other transactions recognized from the real estate investments with
Jack Herz with respect to which Keenan Behrle provides "advisory services"; and

          RESOLVED, that the bonus is fair and reasonable under the
circumstances; and

          RESOLVED, the Chairman of the Board of Directors is authorized to make
such adjustments to the bonus arrangement as may be necessary or appropriate
from time to time so long as this Board of Directors is advised of such
adjustments; and

          RESOLVED, that any aspect of this arrangement which violates any
applicable law or regulation is specifically null and void.

0149JT

                     [PREUSS WALKER & SHANAGHER LETTERHEAD]

                                September 1, 1994

PRIVILEGED AND CONFIDENTIAL - FRE 408

VIA FACSIMILE AND U.S. MAIL

Martin C. Washton, Esq.
GIBSON, DUNN & CRUTCHER
333 South Grand Avenue
Los Angeles, CA 90071

RE:  RTC: FARWEST SAVINGS
     OUR FILE NO. 34253\0447

Dear Marty:

     The purpose of this letter is to set forth a short reply to certain of the
matters set forth in your letter of July 18, 1994.  As you know, we are
scheduled to meet with you on September 14, 1994 to discuss our clients'
respective positions in more detail.  Our expectation is that your clients will
be available by telephone and that you will be in a position to discuss a
financial resolution of this matter during that meeting.

     After careful consideration of the material set forth in your letter, as
well as the exhibits thereto, the RTC continues to evaluate its claims as having
substantial value.  This letter is submitted for the purposes of settlement, and
is considered confidential, privileged and subject to the provisions of Federal
Rules of Evidence Section 408.

     In short summary, RTC's claims relating to losses involving the subject
loans and investments undertaken by FarWest prior to its closure, including
loans/investments with Butterfield & Mason ("B&M"), Panorama Partners and Jack
Herz, total in excess of $25,000,000.  If RTC succeeds in proving at trial that
even one of these loans/investments was improper, there is significant exposure
to your clients for the losses arising therefrom.

Martin Washton, Esq.
September 1, 1994
Page 2

     Although this issue was argued extensively in your letter, we do not
believe the O'MELVENY decision will either change the law as to mitigation or be
a defense to damages causation in these type of cases, and in any event the
attempt to "quickly flip" the direct investment properties had proven a failure
long before RTC's involvement.  Therefore, the main thrust of this short reply
is to address the liability contentions, rather than causation or damage issues
in your July 18 letter, so that our meeting can focus on a pre-filing resolution
of this matter.

                              LOANS AND INVESTMENTS

     A.   BUTTERFIELD & MASON

     Messrs.  Belzberg, Kayne and Behrle assert that due care was exercised in
the creation and administration of the lending relationship between FarWest and
Butterfield & Mason.  The evidence demonstrates to the contrary.  From the
outset, FarWest was precluded from junior lien lending by the applicable federal
regulations.  However, perhaps as a result of the relationship between Fred
Kayne and/or members of his family and Warren Ashmann, FarWest entered into a
line of credit relationship whereby its funds were essentially the sole
capitalization of Mr. Ashmann's business -- junior lien lending.  FarWest could
not possibly have properly investigated Mr. Ashmann's capabilities, since he had
absolutely no qualifications as an appraiser and his business acumen was
unproven.  Moreover, your letter does not dispute that the due diligence process
of two of FarWest's three loan committees were intentionally bypassed in this
instance.

     Butterfield & Mason's payment of $1 million to FarWest for "net profits" at
year-end 1989 was essentially a sham.  That payment was simply a return of cash
from FarWest's line of credit, and given as an incentive to convince FarWest to
provide further increases in the line.  In reality, FarWest's ability to recoup
its funds was totally dependent on a continual rise in real estate values and
the integrity of the purported assignments to FarWest of the primary and
secondary collateral by Mr. Ashmann.  In fact, there was no effort by B&M to
obtain loan repayments from borrowers, and the real estate market could not
possibly grow at the necessary rate to assure payment of second, third and
fourth deeds of trust. Furthermore, FarWest had unfavorable experience with some
of the B&M borrowers, as several of them were in default on its senior liens,
and it was known by Charles Hall and reported directly to Fred Kayne that a
majority of the secondary collateral was not properly assigned to FarWest in the
first instance. Management also repeatedly allowed B&M to avoid adhering to most
of the other terms of its loan documents.

Martin Washton, Esq.
September 1, 1994
Page 3

     In any event, it appears that the RTC was justified in its decisions with
respect to B&M. As a result of the misrepresentations and mismanagement/
misappropriation of collateral by Ashmann, the RTC has been required to and did
obtain an order freezing the assets of Ashmann and B&M on July 21, 1994.  This
order and the recent decision relating to mitigation in RTC V. MOSKOWITZ are
attached.

     B.   INVESTMENTS

          The subject transactions are all situations wherein Messrs Belzberg,
Kayne and Behrle used their influence and control to avoid the normal bottom-up
scrutiny of the appropriate FarWest personnel and Committee structure.  For
example, in no instance were any of the target transactions submitted to the
review of FarWest Realty Advisors, an affiliate of ACFC, which had been
established in 1988 for that very purpose, Indeed, in a January 17, 1989
memorandum with respect to Panorama Partners, Charles Green inquired as to why
FarWest Realty Advisors was not involved in the transaction.  He also asked why
ACFC was a general partner when FarWest Realty Advisors was "forced" to set up
subsidiaries for these type of direct investments.

     Corporate assets also appear to have been wasted in connection with the J.R
Financial relationship. Mr. Behrle and First City Properties were reimbursed for
their time in evaluating the J.H. Financial investments when the existing
FarWest Realty Advisors staff could have handled the assignment at no cost to
the institution.  If one examines the length of time it took to close the
subject transactions, it was virtually impossible for appropriate due diligence
to occur.  How and when was it decided to put ACFC into the transactions, rather
than First City?

     It should be noted that in an effort to hide the losses in connection with
the J.H. Financial relationship, FarWest also allocated all of the overhead and
administration costs to the 500 Sepulveda transaction, which was the only
investment to arguably generate any profit.

     The July 18 letter argues in connection with the Panorama Partners
transaction that extensive due diligence was conducted prior to the formation of
the partnership and the closing of escrow.  It is argued that the zoning issues
did not arise until after the close of escrow.  However, contrary to these
assertions, the RTC can demonstrate that Mr. Belzberg and others discussed the
zoning issue with Mr. Mandelbaum prior to consummation of the transaction and
were aware that there would likely be a moratorium on changing the approved use
for the

Martin Washton, Esq.
September 1, 1994
Page 4

involved building.  There is also evidence that Belzberg read and acknowledged a
newspaper article relating to the zoning issue well prior to the closing of the
purchase.  Moreover, the RTC can and will demonstrate that Mr. Mandelbaum did
not have the ability or experience to develop the property. Finally, the
assertion that there were agreements to resell the property is illusory, since
the purported agreements had so many contingencies as place in doubt their
validity.  In fact, these were merely offers, some from individuals clearly
unable to perform.  The Brody agreement, the only one with real potential, did
not formally materialize until many months after the ACFC partnership commitment
and, again, fell through because of the zoning problem.

                       TAX REFUNDS AND OVERHEAD ALLOCATION

     Westminster's position is that since it made the physical payment of the
involved taxes for FarWest during the 1997-1989 period, it is entitled to any
and all refunds flowing therefrom.  However, there is competent authority that
it is the subsidiary which generates the refund and provides the initial source
funds to pay the tax that is so entitled.  SEE, E.G., BOB RICHARDS CHRYSLER-
PLYMOUTH V. ENGLAND 473 F.2d 262 (9th Cir. 1973).  In the present case, the
refunds have been previously generated through lower of cost or market
adjustments/write-offs taken by ACFC, a FarWest subsidiary.

     Westminster also asserts that it has a separate claim or right to a set-off
for certain of the tax payments for which it has not been reimbursed.  However,
even assuming that such a liability does exist, Westminster will be required to
submit the claim to the FarWest receivership, the time for which may have
already run.  In any event, the alleged claim for reimbursement may not be used
as a set-off in any action to be brought by the RTC.  SEE, E.G., RTC V. MIDWEST
FEDERAL SAVINGS, 4 F.3d 1990 (9th Cir. 1993).

     Moreover, the exhibits supplied by Westminster on the issue, as well as
other documents reviewed by the RTC and its consultants, do not show that
Westminster funds were used to pay the tax liabilities.  Instead, they support
the RTC's position that FarWest was the source of the tax funds.  For example,
exhibit 13 to your letter of July 18 purports to be an "Analysis of Tax
Liability Account Payments and Refunds."  The schedule shows an $800,000 payment
on 3/14/89 to the IRS by Westminster.  That amount was posted to a Deferred
Federal Income Tax (FIT) Liability account #2320-000-134 and as a credit in
Westminster's operating cash account #025-000-134.  However, five days later,
the amount was reversed and recorded as an intercompany payable to FarWest

Martin Washton, Esq.
September 1, 1994
Page 5

Savings, as reflected in account #2995-055-134.  In short, the payment was
ultimately structured so that the funds came from the savings and loan.

     The RTC comes to a similar conclusion when examining the records relating
to the $200,000 payment made 4/17/89.  Westminster's check for $200,000, a
$500,000 check to the Franchise Tax Board and others in the series #6312-6324
were combined for a total credit to the operating account of $745,892.40, which
was posted on 4/17/99.  On the next day, the same amount was combined with other
amounts and reversed out of Westminster's operating cash account into a
intercompany liability account to FarWest Savings.  Again, the net effect was
FarWest's payment of the taxes.

     In addition, Exhibit 14 to the July 18 letter demonstrates that the
purported overhead payments by Westminster were ultimately not completed.  For
example, between March and the end of June, 1988, Westminster made a number of
payments to satisfy its intercompany receivable to FarWest.  However, on July
31, 1988, approximately $6.8 million of those payments were reversed in order to
avoid the $6.3 million overdraft in Westminster's cash account #1025-010-134.
In fact, through accounting entries, Westminster was able to create the
appearance of the pay-off of intercompany receivables and overhead expenses,
when in fact all payments came from FarWest.

     Those examples are indicative of the review of this issue by the RTC and
its consultants.  In most instances, after sorting through the numerous
accounting antics, the end result is the conclusion that FarWest Savings
provided the cash for the payment of state and federal tax liabilities, and that
it was engaged in the prohibited act of allowing the parent to borrow funds
through the use of intercompany accounts.

     As you know, the RTC and your clients entered into an agreement tolling all
applicable status of limitations as of December 15, 1993.  The tolling
agreements are scheduled to expire on September 15, 1994.  By our calculations,
as of December 15, 1994, there were still 26 days remaining with respect to the
three-year statute of limitations as it applies to this matter.  Thus, by our
calculations, upon the expiration of the tolling agreements on September 15, the
RTC will have until October 10, 1994 to file its complaint in this matter under
the three-year statute of limitations.  Please advise if the RTC's position in
that regard is incorrect.

     In addition, it should be noted that we believe the direct investment
claims to be covered under the terms of the tolling agreements. First, the
general

Martin Washton, Esq.
September 1, 1994
Page 6

language and intent of the agreements was to cover any and all potential claims
against your clients arising from FarWest.  Second, several of the investments
included loans as part of their structure.  In any event, FDIC V. MCSWEENEY 976
F.2d 532 (9th Cir. 1992) provides a four-year statute of limitations for actions
alleging breach of fiduciary duty, which claims will be made in connection with
the direct investments in this case.

     Two final points - we have only chosen to address the highest dollar loss
claims in a written fashion.  Further, we are prepared to demonstrate the
personal attention and involvement of Messrs. Belzberg, Behrle and Kayne in
these transactions in considerably more detail at the appropriate juncture in
our discussions, if necessary.

     If you have any questions or comments, please do not hesitate to call or
write.

                                        Very truly yours,

                                        /s/ Denis F. Shanagher
                                        Denis F. Shanagher

DFS:ahl

cc:   Robert W.  Helstowski

Encls.

                        SETTLEMENT AGREEMENT AND RELEASE

     This Settlement Agreement is entered into this ____ day of _________, 1994,
by and between Resolution Trust Corporation (hereinafter the "RTC") in its
corporate capacity and William Belzberg, Fred Kayne, Keenan Behrle (hereinafter
"Directors") and Westminster Capital Corporation (hereinafter "Westminster").

                              W I T N E S S E T H:

     WHEREAS, FarWest Savings & Loan Association (the "Association") was a
savings and loan corporation organized and existing under the laws of the State
of California and having its principal office in Newport Beach, California; and

     WHEREAS, on January 11, 1991, the Office of Thrift Supervision ("OTS")
determined that the Association was insolvent and issued an order providing for
the closing of the Association and appointing the RTC as Receiver; and

     WHEREAS, the RTC accepted appointment as receiver of the Association as
tendered by OTS, whereupon possession and control of all of the affairs, books,
records, and assets of the Association passed to the RTC, including, but not
limited to, claims and causes of action against the directors, officers and/or
shareholders of the Association; and

     WHEREAS, on March 20, 1992, the assets of the Association, including, but
not limited to claims and causes of action against the directors, officers
and/or shareholders of the Association were transferred to the RTC in its
corporate capacity; and

     WHEREAS, on December 15, 1993, the Directors, Westminster and FarWest
entered into a Tolling Agreement with respect to certain potential claims and
causes of action, which Tolling Agreement has been extended by the parties
hereto through and including January 1, 1995.

     WHEREAS, on April 15, 1994, the RTC notified the Directors and Westminster
of its claims of breach of fiduciary duty, negligence and breach of contract
arising from certain loans, direct investments and tax refunds which resulted in
damages to FarWest in excess of $20 million ("hereinafter the "Claims"). All of
the Claims related to conduct of the Directors in the course of their official
duties and did not include self-dealing, intentional misconduct or conduct in an
individual or personal capacity. The Directors and Westminster denied and
continue to deny any breach of their fiduciary responsibility, the commission of
any acts of negligence, and/or any breach of contract; and

     WHEREAS, all parties to this Settlement Agreement, each denying liability
to the other, and each balancing the risk of the Claims against the chance of
recovery, have agreed and do hereby agree to compromise and settle all of their
claims, causes of action and differences therein on the terms set forth in this
Settlement Agreement;

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual
promises contained herein and other good and valuable consideration, the parties
hereto agree as follows:

     1.   PAYMENT OF MONEY.  Upon the execution of this Settlement Agreement,
the Directors and Westminster shall pay to the RTC the sum of four million and
no/100 dollars ($4,000,000.00).

     2.   MUTUAL RELEASE.

          a.   All parties to this Settlement Agreement and Release do hereby
release and forever discharge all other parties to this Agreement, their heirs,
executors, predecessors, successors and assigns, from any and all claims, cross-
claims, demands, actions or causes of

action, known or unknown, which they may have an/or may hereafter acquire or
which may hereafter accrue, in any way related to the Claims asserted in the
RTC's April 15, 1994 notification, the Directors' service as directors and/or
officers of the Association, and/or Westminster's status as a shareholder of the
Association.

          b.   All parties to this Settlement Agreement and Release shall bear
their own attorneys' fees and costs incurred in connection with the Claims.

     3.   WAIVER OF DIVIDENDS.  The Directors and Westminster waive any right
they may have to share in any dividends or distributions from the receivership
estate of the Association to which they might otherwise be entitled as a
shareholder or creditor of the Association.

     4.   RETENTION OF RIGHTS.  The RTC shall retain all rights to recover from
any debtor, direct obligor, endorsers or guarantors or person otherwise liable
upon any underlying obligations to the Association, including those debts which
form the basis of the claims and losses asserted by the RTC herein. Nothing in
this Settlement Agreement and Mutual Release shall release any claims the RTC
may have against any other officer or director of FarWest or any claim against
any attorneys, accountants, officials or other professionals who provided
services to FarWest and/or RTC in any capacity. The parties acknowledge and
agree that: (i) RTC cannot and does not purport to have the ability to release
any party hereto and any other person for criminal liability and/or order of
criminal restitution; and (ii) RTC cannot and does not purport to have the
ability to release any party hereto or any other person with respect to any
administrative action which may be brought by any other governmental authority.

     5.   COOPERATION.  The RTC shall cooperate with Westminster in any
application or proceeding to recover tax payments made by Westminster to the
State of California on behalf of Far West Savings.  Said cooperation shall be
limited to the execution of an agreement in the form attached hereto as Exhibit
A and the execution of any additional documents reasonably necessary to carry
out the purpose of said agreement.

     6.   RELEASE OF UNKNOWN CLAIMS.  The parties hereby acknowledge that they
may have sustained or acquired, and may sustain or acquire in the future,
claims, demands, damages, losses, accounts, reckonings, debts, liabilities,
indemnities, agreements, obligations, actions, causes of action, settlement
costs, attorney fees, court costs and expenses of a presently unknown and
unforeseen nature which arise from or relate to the Claims, the facts, events,
occurrences, situations and circumstances which gave rise to the Claims, or any
of the actions or inactions of the Directors or Westminster with respect to the
subject matter of the Claims, and they fully, forever and irrevocably release
and discharge one another therefrom. The parties similarly waive any and all
rights and benefits conferred by any statute, regulation, or principle of common
law or civil law of any state or territory of the United States or of any
foreign country which is similar, comparable or equivalent to Section 1542 of
the California Civil Code, which provides as follows:

          "A general release does not extend to claims which the
          creditor does not know or suspect to exist in his favor at
          the time of executing the release, which if known by him
          must have materially affected his settlement with the
          debtor."

This Settlement Agreement provides a full, final and complete release by the
parties of the matters described in this Settlement Agreement, regardless of
whether those matters are presently known, unknown, foreseen or unforeseen.

     7.   NO ADMISSION OF LIABILITY.  This Settlement Agreement shall not be
treated or construed as an admission of liability, or a violation of any
applicable law, rule, regulation or order of any kind by any party for any
purpose, including, but not limited to, any purpose related to the Claims.

     8.   RTC REPRESENTATIONS.  The RTC represents and warrants that it has the
sole power to execute and deliver this Settlement Agreement on behalf of the
RTC, and it has secured all necessary authorizations for the execution and
delivery of this Settlement Agreement, including, but not limited to, all
necessary governmental approvals and consents, and that the person executing
this Settlement Agreement on behalf of the RTC has the full and complete power
and authority of the RTC to do so.

     9.   REPRESENTATIONS AND WARRANTIES.  Each party represents and warrants
that he or it has not assigned or released to any other person or entity, either
directly or indirectly, including, without limitation, by subrogation or by
operation of law, any of the items or matters which he or it releases in this
Settlement Agreement.

     10.  APPLICABLE LAW.  To the extent federal law does not control, this
Settlement Agreement shall be governed by and construed in accordance with the
laws of the State of California.

     11.  NO PURCHASE OF LOANS.  This Settlement Agreement shall not be
construed or interpreted as a sale of any loans, claims or related rights to the
Directors or Westminster.  The RTC shall have the right to prosecute, settle,
compromise or otherwise deal with any of the assets, claims, or rights sold and
transferred to the RTC as a result of the closure of the Association as it sees
fit.

     12.  WRITTEN MODIFICATION.  Any modification of this Settlement Agreement
and any waiver of any condition existing pursuant to this Settlement Agreement
shall be contained in writing signed by each of the parties and shall be
effective only for the purposes specified in that writing and only upon the
conditions specified in that writing.

     13.  BINDING EFFECT.  This Settlement Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective legal
representatives, successors and assigns.

     14.  LEGAL PROCEEDINGS.  In the event any legal proceeding is instituted in
connection with any controversy arising out of this Settlement Agreement or the
enforcement of any rights hereunder, or this Settlement Agreement is
successfully asserted as a defense in any legal proceeding, the prevailing party
shall be entitled to recover, in addition to costs, such sums as the court may
adjudge reasonable as attorney fees, including attorney fees on any appeal.

     15.  COUNTERPARTS.  This Settlement Agreement may be executed by the
parties hereto in one or more counterparts, each of which shall be considered a
complete original.

     16.  INTEGRATION.  This Settlement Agreement constitutes a final and
complete statement of the agreement between the parties, and fully supersedes
all prior agreements or negotiations, written or oral.

PREUSS WALKER & SHANAGHER               RESOLUTION TRUST CORPORATION,
                                        in its Corporate Capacity

By ______________________________       By _________________________________
    DENIS F. SHANAGHER                     Its
    Attorneys for RESOLUTION
    TRUST CORPORATION

GIBSON, DUNN & CRUTCHER                 WESTMINSTER CAPITAL
                                        CORPORATION

By ______________________________       By _________________________________
     MARTIN C. WASHTON                     Its
     Attorneys for WESTMINSTER
     CAPITAL CORPORATION,
     WILLIAM BELZBERG,
     FRED KAYNE and
     KEENAN BEHRLE

                                        ____________________________________
                                             WILLIAM BELZBERG

                                        ____________________________________
                                             FRED KAYNE

                                        ____________________________________
                                             KEENAN BEHRLE 

Basic Info X:

Name: claims, the responses to the claims, and the proposed settlement agreement
Type: Proposed Settlement Agreement
Date: March 31, 1995
Company: WESTMINSTER CAPITAL INC
State: Delaware

Other info:

Date:

  • year end 1989
  • 1986-1991
  • July 1992
  • April 1988
  • December 31 , 1990
  • August , 1990
  • February 1991
  • July , 1991
  • 15th day of December , 1993
  • December 15 , 1993 , through the earlier of June 30 , 1994
  • 1987-January 11 , 1991
  • January 27 , 1995
  • February 15 , 1995
  • May 13 , 1994
  • May 20 , 1994
  • April 26 , 1994
  • May 18 , 1994
  • April 19 , 1994
  • Monday , April 25 , 1994
  • December 23 , 1994
  • September 30 , 1988
  • last half of 1988
  • first quarter
  • second quarter
  • September of 1988
  • late 1980
  • January 9 , 1989
  • March 6 , 1989
  • April 5 , 1989
  • May 5 , 1989
  • September 7 , 1989
  • July of 1990
  • October 1 , 1990
  • July 2 , 1992
  • April of 1988
  • June of 1989
  • October of 1989
  • May 15 , 1989
  • September 6 , 1989
  • October 1 , 1989
  • January 15 , 1991
  • January 15 , 1994
  • 1994 U.S.LEXIS 4446
  • June 13 , 1994
  • year-end 1989
  • end of 1989
  • 30 years later
  • November 24 , 1989
  • 112489
  • March 31 , 1989
  • June 30 , 1989
  • September 30 , 1989
  • June 1988
  • December 1989
  • October 1987
  • December 1987
  • 1987 through 1989
  • 1986 , 1988
  • 1997 # 2997
  • 1995 # 2995
  • August 31 , 1988
  • March 15 , 1989
  • March of 1989
  • March 7 , 1989
  • September 18 , 1990
  • February 1988
  • April 26 , 1988
  • 112389
  • November 1989
  • 111889
  • September 1990
  • June 1990
  • September 19 , 1990
  • April 1991
  • May 24 , 1991
  • August 26 , 1991
  • August 16 , 1990
  • March 22 , 1989
  • June 1 , 1989
  • December 31 , 1992
  • 112189
  • March 13 , 1989
  • March 28 , 1989
  • April 1 , 1988
  • February of 1991
  • July 1988
  • April 3 , 1988
  • October 12 , 1988
  • October 17 , 1988
  • November of 1988
  • January 12 , 1989
  • December 20 , 1988
  • October 4 , 1989
  • November 30 , 1989
  • August 6 , 1990
  • November of 1989
  • March 1991
  • February 4 , 1991
  • February 11 , 1991
  • July 1990
  • February 15 , 1991
  • September 19 , 1989
  • April 15 , 1992
  • August 16 , 1989
  • September of 1989
  • June 1991
  • December 19 , 1992
  • January 1991
  • April 9 , 1991
  • July 1991
  • March 27 , 1990
  • May 29 , 1990
  • July 10 , 1990
  • December 27 , 1989
  • September 1989
  • March 1990
  • April 18 , 1990
  • July 7 , 1988
  • November 1988
  • April 15 letter
  • April 26 , 1990
  • January 24 , 1990
  • August 1990
  • October of 1990
  • October 1990
  • August of 1990
  • January 8 , 1991
  • January 24 , 1991
  • July 1 , 1991
  • November 3 , 1988
  • mid-January , 1991
  • April 1986
  • December 31 , 1989
  • January 1990
  • December 31 , 1988
  • January , 1989
  • third quarter of 1989
  • February 1989
  • February 8 , 1989
  • July 18 , 1994
  • September 14 , 1994
  • July 21 , 1994
  • January 17 , 1989
  • five days later
  • next day
  • June , 1988
  • July 31 , 1988
  • September 15 , 1994
  • December 15 , 1994
  • October 10 , 1994
  • September 1 , 1994
  • March 20 , 1992
  • January 1 , 1995
  • April 15 , 1994

Organization:

  • FarWest Savings < PAGE
  • GOLDMAN V. BELZBERG
  • Continental American , Preferred Entity
  • Pacific Savings Bank
  • Western Village Lakewood Associates
  • Rosenberg & Bortz
  • Robert Van Santen
  • Rancho Verde Village
  • Guaranty Service Corp.
  • Bristol House Partnership
  • Stonemark Islander Limited Partnership
  • Vista Poinsettia Park Apartments
  • the Claims Notice
  • American Capital Fidelity Corp.
  • FarWest Savings Board of Directors
  • Dunn & Crutcher's
  • United States Supreme Court
  • FarWest Savings ' Century City
  • FarWest Savings ' Board
  • SLGH Investments , Inc.
  • Butterfield & Mason Line of Credit
  • Research Reports , Inc.
  • Butterfield -11- < PAGE > & Mason
  • Butterfield & Mason defaulted
  • Neumeyer Landrum & Dillion
  • Butterfield & -12- < PAGE > Mason
  • FarWest Financial Westminster
  • Robert W. Helstowski Senior Attorney Legal Division Resolution Trust Corporation 4000 MacArthur Boulevard Newport Beach
  • Deloitte & Touche
  • Martin C. Washton , Esq
  • Westminster , Inc.
  • Westminster Capital , Inc.
  • Far West Financial Corporation
  • Far West Savings & Loan
  • Martin C. Washton Martin C. Washton MCWmcq LL941090.042 bcc
  • Arent Fox Kintner Plotkin & Kahn 1050 Connecticut Avenue
  • District Of Columbia
  • Drexel Burnham Lambert
  • Butterfield & Mason Mortgage Company , Inc.
  • Pacific Promenade , Ltd.
  • 5th Floor Newport Beach
  • FarWest Savings Your File No
  • FarWest Financial for Century City
  • Page 3 Office of Thrift Supervision
  • Bear Stearns & Co.
  • Investment Committee of First Los Angeles Bank
  • Chief Financial Officer of FarWest
  • First Interstate Bank of Denver
  • Senior Vice President and Chief Credit Officer of Bank of America
  • O'MELVENY & MYERS V. FDIC
  • California Code of Civil Procedure
  • American Institute of Accountants
  • Burton , Palmer & Kay
  • Griffin , Williams & Larson
  • Consolidated Statements of Financial Condition
  • Consolidated Financial Statements of FarWest Savings
  • California Franchise Tax Board
  • FarWest Financial Payable
  • 19935 Ventura Boulevard
  • Centaurus Capital Corp
  • Investment Savings & Loan on Ventura Boulevard
  • Cushman & Wakefield , Coldwell Banker
  • The Goodglick Company
  • Jan Development CompanyEd Czuker
  • Space Metrix , Inc.
  • Page 25 Marcus & Millichap
  • Coldwell Banker Commercial Real Estate Services
  • Santa Monica Boulevard
  • T & W Realty
  • Equitec Properties Company
  • Sepp Financial , Ltd.
  • Tower Holdings , Inc.
  • City Center Group of Companies
  • Wilshire Pacific Properties
  • First City Development
  • First City < PAGE > GIBSON
  • First City Industries
  • ICF Technology Incorporated
  • Diagnostic Engineering Inc.
  • VISA Development Co.
  • Brody Construction Company
  • Interim Control Ordinance
  • Los Angeles City Council
  • City Planning Commission
  • Puma Development , Inc.
  • Hopkins Development Co.
  • Gross Enterprises , Inc.
  • Major Loan Appraisal Department
  • In-House Appraisal Review
  • Projects West Corporation
  • DUNN & CRUTCHER Robert
  • Executive Committee Minutes
  • Property Mortgage Company , Inc.
  • Executive Committee of FarWest Savings
  • Major Loans Group
  • House Banking Committee , Subcommittee on General Oversight and Investigations
  • Credit Review for J.L
  • Maconachy , Inc.
  • Ashmann Financial Information
  • FarWest Savings and Butterfield & Mason
  • Restated Revolving Credit Agreement
  • Butterfield & Mason ID
  • FarWest Savings administered the Butterfield & Mason
  • Loan Servicing Department
  • Executive Committee of Ashmann
  • B & M's
  • Butterfield & Mason Structures
  • Neumeyer , Landrum & Dillion
  • BUTTERFIELD & MASON PROPOSAL
  • Saunders Case Memorandum
  • FarWest Butterfield & Mason
  • Intercompany Accounts Receivable
  • FarWest Savings of
  • Martin C. Washton Martin C. Washton of Gibson , Dunn & Crutcher
  • FarWest Mortgage Company of Colorado
  • Asset Review Department
  • Credit Review Committee
  • Asset Review Committee
  • Audit Committee of the Board of Directors
  • Corporate Banking Department
  • the Association 's Chief Financial Officer
  • Asset Liability Committee
  • Federal Home Loan Bank Board
  • FarWest Savings Annual Meeting
  • FarWest Financial Corporation Annual Meeting
  • Executive Committee of the Board of Directors of FarWest Savings and Loan Association
  • FarWest Savings and.Loan Association
  • PREUSS WALKER & SHANAGHER LETTERHEAD
  • Federal Rules of Evidence Section
  • INVESTMENTS A. BUTTERFIELD & MASON
  • First City Properties
  • FarWest Realty Advisors
  • Martin Washton , Esq
  • Westminster Capital Corporation
  • FarWest Savings & Loan Association
  • California Civil Code
  • the State of California
  • WALKER & SHANAGHER RESOLUTION TRUST CORPORATION

Location:

  • Stratham
  • Warmington
  • Pacific Scene
  • Cambio
  • Binaford
  • Indick
  • Belzberg
  • 5th Floor Newport Beach
  • Wilshire Boulevard
  • Beverly Hills
  • Far West
  • Washington
  • Los Angeles County
  • Northern and Southern California
  • 16th Floor San Francisco
  • Panorama City
  • Arizona
  • Charles Green
  • Sherman Oaks
  • Ventura Freeway
  • Ventura Boulevard
  • Tarzana
  • Valley
  • F.A
  • Parish
  • West Los Angeles
  • Santa Monica Boulevard
  • Phillips
  • South Sepulveda Boulevard
  • Val Lyon
  • Woodland Hills
  • Los Angeles City Council
  • Bossio
  • Haddad
  • Dublin Meadows
  • Battaglia
  • Corona Hills
  • Baccalas
  • Manatt
  • Phelps
  • Colorado
  • Century City
  • FIRREA
  • Butterfield
  • GIBSON
  • Esq
  • Denver
  • West Hollywood
  • U.S.
  • South Grand Avenue Los Angeles
  • Ashmann
  • PLYMOUTH
  • E.G.
  • Westminster
  • United States

Money:

  • $ 5,000,000
  • $ 18,473,510
  • $ 12.4 million
  • $ 6.2 million
  • $ 517,000
  • $ 35 million
  • $ 5.2 million
  • $ 4.1 million
  • $ 11.05 million
  • $ 50,000.00
  • $ 173,250.00
  • $ 604,032.50
  • $ 592,893.26
  • $ 2.22 million
  • $ 15 million
  • $ 30 million
  • $ 37.75 million
  • $ 20.75 million
  • $ .95 million
  • $ 19.7 million
  • $ 1.67 million
  • $ 16.8 million
  • $ 25 million
  • $ 181,942.32
  • $ 478,660.00
  • $ 7.7 million
  • $ 8.3 million
  • $ 4.15 million
  • $ 48.6 million
  • $ 951,008.00
  • $ 3,969,747.00
  • $ 5,640,341.00
  • $ 7,912,414.00
  • $ 100,000.00
  • $ 4 billion
  • $ 1.4 million
  • $ 2.4 Mil
  • $ 65 million
  • $ 16.25 million
  • $ 48.75 million
  • $ 17 million
  • $ 2.2 million
  • $ 185,000
  • $ 1.6 million
  • $ 1.7 million
  • $ 394,000
  • $ 1.9 million
  • $ 2.7 million
  • $ 40 million
  • half million dollars
  • $ 11.1 million
  • $ 10.6 million
  • $ 8.5 million
  • $ 561,000
  • $ 114,000
  • $ 3.65 million
  • $ 4.275 million
  • $ 3.55 million
  • $ 3.75 million
  • $ 4.83 million
  • $ 4.5 million
  • $ 2.9
  • $ 3.3 million
  • $ 1.5 million
  • $ 4.8 million
  • $ 4.45 million
  • $ 3.1 million
  • $ 3.2 million
  • $ 3.8 million
  • $ 1.05
  • $ 1.1 million
  • $ 3.875 million
  • $ 1,100,000
  • $ 825,000
  • $ 900,000
  • $ 5.1 million
  • $ 10,100,000
  • $ 310
  • $ 280square
  • $ 5,900
  • $ 440
  • $ 300
  • $ 234
  • $ 230
  • $ 11.0 million
  • $ 10.1 million
  • $ 4,889,000
  • $ 4 million
  • $ 10.75 million
  • $ 11.12 million
  • $ 11.3 million
  • $ 10.9 million
  • $ 10.5 million
  • $ 10.25 million
  • $ 10.2 million
  • $ 14,000
  • $ 214,816
  • $ 203,048
  • $ 250,000
  • $ 40,000
  • $ 18,000
  • $ 19,000
  • $ 13,800
  • $ 2,000
  • $ 2,500
  • $ 2.75 million
  • $ 1.39 million
  • $ 15,580
  • $ 11.75 million
  • $ 12.15 million
  • $ 11 million
  • $ 11.5 million
  • $ 11.85 million
  • $ 13 million
  • $ 12.5 million
  • $ 10.39 million
  • $ 2 million
  • $ 11.27 million
  • $ 5.55 million
  • $ 12,065
  • $ 17,500
  • $ 5.72 million
  • $ 6,875,000
  • $ 9.5 million
  • $ 20,696
  • $ 6.875 million
  • $ 9.26 million
  • $ 20,193
  • $ 9.29 million
  • $ 9 million
  • $ 80,050,000
  • $ 182,918,000
  • $ 2.0 million
  • $ 1.0 MILLION
  • $ 10.0
  • $ 15.0 million
  • $ 3.0 million
  • $ 20.0 million
  • $ 4.0 million
  • $ 25.0 million
  • $ 5.0 million
  • $ 9.0 million
  • $ 5.5 million
  • $ 9,746,200
  • $ 12,602,136
  • $ 3 million
  • $ 12,499,436
  • $ 1,300,000
  • $ 5,800,000
  • $ 4,500,000
  • $ 22,348,336
  • $ 5,432,157
  • millions of dollars
  • $ 4.6 million
  • $ 41 million
  • $ 9,999,999.99
  • $ 27.3 million
  • $ 7 MILLION
  • $ 517,500
  • $ 791,300
  • $ 1.3 million
  • $ 517.5
  • $ 791,262
  • $ 12 million
  • $ 500 million
  • $ 5 million
  • $ 225 million
  • $ 1.25 million
  • $ 100 million
  • $ 646 million
  • $ 18.4 million
  • $ 600,000
  • $ 1.5 billion
  • $ 700 million
  • $ 10 million
  • $ 200 million
  • $ 25,000,000
  • $ 1 million
  • $ 800,000
  • $ 200,000
  • $ 500,000
  • $ 745,892.40
  • $ 6.8 million
  • $ 6.3 million
  • $ 20 million
  • no100 dollars
  • $ 4,000,000.00

Person:

  • Frank Henry
  • GOLDMAN V. BELZBERG
  • Edward Matthews
  • Lincor
  • Bill Walters
  • Yehuda Netanel
  • Mike Chaupen
  • Charles Blutch
  • Cooper Fellman
  • Paul Hoekenga
  • Stuart Nolan
  • Aaron Katz
  • Richard Hall
  • John Baldwin
  • Phelps
  • Murphy
  • s W. Belzberg
  • Robert Helstowski
  • Fred Kayne Date
  • Robert W. Helstowski Esq
  • Bob Helstowski
  • ROBERT W. HELSTOWSKI MARTIN WASHTON
  • David A. Battaglia David A. Battaglia
  • Dennis F. Shanagher
  • Lillian Cremeans
  • Fred Kayne April McGandy Evans
  • Hunter T. Carter
  • Denis Shanagher
  • Edward J. Perez Edward J. Perez
  • M. C. Washton
  • Mark Mandelbaum
  • Aldo Baccala
  • Frank W. Henry
  • James Franklin
  • David Blackford
  • <
  • Denis P. Shanagher
  • Polly Cortez
  • Thomas D. Long
  • Sarebanne
  • Beier
  • Greg Johnson
  • MR. BEHRLE
  • Behrle's
  • Lyon
  • Jack J.H
  • Joseph Haddad
  • Zvi Ryzman
  • Michael Robbins
  • GIBSON
  • Aldo and Karen Baccala
  • Baccalas
  • Swartz
  • Klausner
  • Moss
  • MASON
  • Charles HallJeneco Johnson
  • John Bannon
  • Jenece Johnson
  • Janet Hansen
  • Amy Ashmann
  • Robert D. Saunders
  • Jeffrey E. Thomas
  • Thomas Memorandum
  • Charles H. Green
  • Dwight C. Baum
  • Monty Hall
  • Victor H. Indiek
  • Robert Muh
  • James Nathan
  • Barbara C. George
  • Lester Ziffren
  • Norman MacLeod
  • Kurt C. Kemper
  • Jack Herz
  • Warren Ashmann
  • Messrs Belzberg
  • Charles Green
  • Brody
  • BOB RICHARDS
  • Denis F. Shanagher Denis F. Shanagher
  • Robert W. Helstowski Encls
  • MARTIN C. WASHTON
  • KEENAN BEHRLE
  • WILLIAM BELZBERG

Time:

  • 6:00 p.m.
  • 10:35 a.m.
  • 12:17 p.m.

Percent:

  • 2.0 %
  • one percent
  • 100 %
  • 83 %
  • 17 %
  • 10 %
  • 20 %
  • 9.25 %
  • 7.5 %
  • 120.7 %
  • 14.6 %
  • 40 %
  • 30 %
  • 50.75 %
  • 65 %
  • 69 %
  • 58 %
  • 10.9 %
  • 74 %
  • 50 %
  • 24 %
  • 1.5 %
  • 15 %
  • 35 %
  • 21 %
  • 26 %
  • 13.2 %
  • 11.9 %
  • 3.5 %