1
 BUSDOCS:705358.3
                              Employment Agreement
                              ---------- ---------

THIS  EMPLOYMENT  AGREEMENT (the "Agreement") is made and entered into as of the
1st  day  of  October  1998  and effective the 31st day of December 1998, by and
between CHANCELLOR CORPORATION, a Massachusetts corporation (the "Company"), and
FRANKLYN  E.  CHURCHILL  (the  "Employee").

                                 R E C I T A L S

     The  Company  desires  to  obtain  the  services  of  the  Employee  in the
employment  of  the Company on the terms and subject to the conditions set forth
in  this  Agreement,  and the Employee desires to make his services available to
the  Company  on  the  terms  and  subject  to  the conditions set forth in this
Agreement.

                                A G R E E M E N T

     NOW,  THEREFORE,  in  consideration  of the premises, agreements and mutual
covenants  set  forth herein, the parties hereto, intending to be bound legally,
hereby  agree  as  follows:

1.     DEFINITIONS.  The  following  terms  when used herein, unless the context
otherwise  requires,  shall  be  defined  as  follows:

1.1.     "Cause"  shall  have  the  meaning  set  forth  in  Section 5.1 hereof.

1.2.     "Confidential  Information" shall have the meaning set forth in Section
7.1  hereof.

1.3.     "Term"  shall  have  the  meaning  set  forth  in  Section  3  hereof.

2.     EMPLOYMENT.

2.1.     General.  The Company hereby agrees to employ the Employee as President
and  Chief  Operating  Officer  of  the Company during the Term on the terms and
subject  to  the conditions contained in this Agreement, and the Employee hereby
agrees  to  accept  such  employment  on the terms and subject to the conditions
contained  in  this  Agreement.

2.2.     Duties  of  Employee.  During  the  Term, the Employee shall diligently
perform  all  duties  and  responsibilities  as  may  be  assigned to him by the
Chairman of the Board and Chief Executive Officer, and shall exercise such power
and  authority  as  may  from  time  to  time  be delegated to him thereby.  The
Employee  shall  devote his full business time and attention to the business and
affairs of the Companies as necessary to perform his duties and responsibilities
hereunder,  render  such  services  to the best of his ability, and use his best
efforts  to  promote  at  all  times  the  interests  of  the  Companies.

3.     TERM.

3.1.     Subject  to  the provisions of Section 5 of this Agreement, the Company
shall  employ the Employee for a term of three (3) years (the "Term") commencing
as  of  the  date  first  written  above  (the  "Effective  Date").

3.2.     The  Term of this Agreement may automatically renew for a period of two
(2)  years  (the "Renewal Term") upon the Employee satisfactorily fulfilling the
duties  as  described  in  the  above  Section  2.2  hereof.

 3.3.     The  Term  of  this  Agreement  shall  accelerate  and  any  and  all
compensation  due  to  the  Employee  under  Section 4.1 and Section 4.5 hereof,
including  the Renewal Term as described in the above Section 3.2 hereof and all
stock  options  granted  to  the Employee pursuant to the Incentive Stock Option
Agreement,  dated  June  30,  1998,  by and between the Company and the Employee
("ISO  Agreement"),  shall become immediately due and payable to the Employee if
an event whereby any new person (within the meaning of Section 13(b) of the 1934
Securities  Exchange  Act) becomes the beneficial owner (directly or indirectly)
of  securities  of  the  Company representing Fifty (50%) percent or more of the
combined  voting  of  the Company's then outstanding securities entitled to vote
generally  in  the  election  of  directors.

3.4.     The Employee's continued employment with the Company after the Term and
Renewal  Term will have no specific duration and that either the Employee or the
Company  may  terminate  the  Employee  at  any  time,  with  or  without cause.

4.     COMPENSATION.

4.1.     Salary.  The  Employee  shall receive an annual salary of Three Hundred
Fifty  Thousand  Dollars ($350,000.00) during the Term, and such salary shall be
payable  in  equal  installments  consistent  with  the Company's normal payroll
schedule  commencing  on  either the first or fifteenth day of the month, as the
case  may  be, following the Effective Date.  The Employee's annual salary shall
be  subject  to  such  increases  as shall be approved by the Company's Board of
Directors  in  its  sole  discretion.

4.2.     Benefits.  During  the  Term,  the  Employee  shall  be  entitled  to
participate  in  all  plans  adopted  for  the  general benefit of the Company's
employees,  such  as  stock  option  plans,  401(k) plans, pension plans, profit
sharing  plans,  medical  plans, group or other insurance plans and benefits, to
the  extent that the Employee is and remains eligible to participate therein and
subject to the eligibility provisions of such plans in effect from time to time.
For  each  calendar year during the Term, the Employee shall be entitled to four
(4)  weeks of paid vacation at such times as shall be mutually acceptable to the
Employee  and  the  Company,  and  to sick and holiday time as prescribed by the
established  Chancellor  policies  in  effect  from  time  to  time.

4.3.     Withholding.  Notwithstanding  any  provision  in this Agreement to the
contrary,  all  payments  required  to  be  made by the Company hereunder to the
Employee in connection with the Employee's employment hereunder shall be subject
to  withholding  of such amounts relating to taxes as the Company may reasonably
determine  it  should  withhold pursuant to any applicable law or regulation. In
lieu  of  withholding such amounts, in whole or in part, the Company may, in its
sole discretion, accept other provisions for the payment of taxes, provided that
the  Company  is  satisfied  that  all  requirements  of  law  affecting  its
responsibilities  to  withhold  have  been  satisfied.


4.4.     Reimbursement  of  Expenses.  The  Company  agrees  to  reimburse  the
Employee  for  all  reasonable business expenses (including, without limitation,
reasonable  travel  and  entertainment expenses) incurred by the Employee in the
discharge  of  his  duties  hereunder,  subject  to  the Company's reimbursement
policies in effect from time to time. The Employee agrees to maintain reasonable
records  of  his  business  expenses  in such form and detail as the Company may
request and to make such records available to the Company as and when requested.

4.5.     Bonus.  The  Company  agrees to pay the Employee a minimum annual bonus
("Bonus")  in  the  amount  of  Three  Hundred  and  Fifty  Thousand  Dollars
($350,000.00)  based  on  performance  of the Employee pursuant to his duties as
described  in  Section  2.2  hereof.  The Employee's Bonus shall be based on the
profits  of  the  Company,  its  stock  price  and/or  at  the discretion of the
Company's  Chairman  and  Chief  Executive  Officer.

5.     TERMINATION.

5.1.     Termination by the Company for Cause.  Notwithstanding any provision in
this  Agreement to the contrary, this Agreement may be terminated by the Company
for  "Cause"  at  any time during the Term hereof, and such termination shall be
effective immediately upon written notice to the Employee.  For purposes of this
Agreement,  "Cause"  for  the termination of the Employee's employment hereunder
shall  be  deemed  to exist only if, in the reasonable judgment of the Company's
Board  of  Directors:  (a)  the  Employee  commits  fraud, theft or embezzlement
against  any  of  the  Companies;  (b)  the Employee commits a felony or a crime
involving  moral  turpitude;  (c)  the Employee discloses trade secrets or other
proprietary  information of Chancellor or any subsidiary or affiliate thereof to
any unauthorized person or entity; (d) the Employee breaches any non-competition
or  non-solicitation  agreement  with  Chancellor or any subsidiary or affiliate
thereof;  (e)  the  Employee  breaches any of the terms of this Agreement (other
than  those  referenced in clauses (c) and (d) of this Section 5.1) and fails to
cure  such breach within twenty (20) days after the receipt of written notice of
such breach from the Company; or (f) the Employee engages in gross negligence or
willful  misconduct  that  causes harm (or could reasonably be expected to cause
harm)  to the business and operations of Chancellor or a subsidiary or affiliate
thereof.  Upon  any termination pursuant to this Section 5.1, the Employee shall
be  entitled  to be paid solely the Employee's salary then in effect through the
effective  date  of termination, and the Company shall have no further liability
or  other  obligation  of  any  kind  whatsoever  to  the  Employee  hereunder.

5.2.     Termination by the Company Without Cause.  The Company may, in its sole
and  absolute  discretion, terminate the employment of the Employee hereunder at
any  time  without  "Cause"  (as  such term is defined in Section 5.1 above), or
otherwise  without any cause, reason or justification, provided that the Company
provides  to  the  Employee at least ninety (90) days' prior written notice (the
"Termination Notice") of such termination.  In the event of any such termination
by  the  Company, (a) the Employee's employment with the Company shall cease and
terminate  on the date specified in the Termination Notice (or, if no date is so
specified,  on  the  date  which  is ninety (90) days following the date of such
notice),  and  (b)  the Employee shall be entitled to receive and be paid (i) in
the  case of a termination under this Section 5.2 at any time prior to or on the
third  anniversary  of  the Effective Date, the Employee's entire salary, at the
rate in effect as of the effective date of such termination and in equal monthly
installments, through such third anniversary, and thereafter fifty percent (50%)
of the Employee's salary, at the rate in effect as of the effective date of such
termination  and  in equal monthly installments, during the then remaining Term,
and (ii) in the case of termination under this Section 5.2 at any time after the
third  anniversary  of the Effective Date, fifty percent (50%) of the Employee's
salary,  at  the rate in effect as of the effective date of such termination and
in equal monthly installments, during the then remaining Term, payable in either
of the cases set forth in clauses (i) and (ii) over the applicable period at the
Company's regular and customary intervals for the payment of salaries as then in
effect  and in equal monthly installments, and the Company shall have no further
liability  or other obligation of any kind whatsoever to the Employee hereunder.

5.3.     Death of the Employee.  In the event that the Employee shall die during
the Term, the Employee's employment with the Company shall immediately cease and
terminate and the Employee's estate, heirs (at law), devisees, legatees or other
proper  and  legally  entitled  descendants,  or  the  personal  representative,
executor,  administrator  or other proper legal representative on behalf of such
descendants,  shall  be  entitled  to  receive and be paid solely the Employee's
salary  through  the  date  of  death,  and  the  Company  shall have no further
liability  or other obligation of any kind whatsoever to the Employee hereunder.
Additionally,  they shall also be entitled to elect to exercise all vested stock
options pursuant to the ISO Agreement.  In the event that this Section 5.3 shall
conflict  with  any  provision  of the ISO Agreement then this Agreement and the
provisions  as  described  in  this  Section  5.3  shall  prevail.

5.4.     Disability  of  the  Employee.  In  the event that the Employee becomes
incapacitated during the Term by reason of sickness, accident or other mental or
physical  disability  such that he is substantially unable to perform his duties
and  responsibilities hereunder for a period of ninety (90) consecutive days, or
for  shorter  or  intermittent periods aggregating one hundred twenty (120) days
during  any  12-month period (a "Disability"), the Company thereafter shall have
the  right,  in  its  sole  and absolute discretion, to terminate the Employee's
employment under this Agreement by sending written notice of such termination to
the  Employee  or  his  legal  guardian or other proper legal representative and
thereupon  his  employment  hereunder  shall  immediately  cease  and terminate;
provided, however, that notwithstanding the foregoing, the Employee's employment
      --
shall  not  be  terminated  as  aforesaid  if  the  Company's Board of Directors
determines,  in  its  reasonable  judgment,  that  after the termination of such
Disability,  the  Employee  is able to resume his duties and responsibilities to
the  Company  in  accordance  with  the  terms  hereof in the manner theretofore
provided.  In  the event of any such termination, the Employee shall be entitled
to  receive  and  be  paid  the  Employee's  salary  then  in effect through the
effective  date  of termination, as well as the amount of Fifty (50%) percent of
the  remaining  amount  due  under this Agreement, including the Renewal Term as
described  in  the  above  Section  3.2  hereof  in  monthly  installments.

5.5.     Termination  by  the Employee.  Provided that the Company does not have
"Cause"  to  terminate  the Employee pursuant to Section 5.1 above, the Employee
may  terminate  the Employee's employment with the Company hereunder at any time
and  for any reason. Employee must provide to the Company written notice of such
termination not less than ninety (90) days prior to the date such termination is
to be effective. Upon any termination pursuant to this Section 5.5, the Employee
shall be entitled to be paid solely the Employee's salary then in effect through
the  effective  date  of  termination,  and  the  Company  shall have no further
liability  or other obligation of any kind whatsoever to the Employee hereunder.

6.     AGREEMENT  NOT TO COMPETE. The Employee agrees that in the event that the
Employee's  employment  with  the  Company  is  terminated  either  (a)  at  the
expiration  of  the full five (5) year Term, or (b) at any time during the fifth
year of the Term (the actual effective date of such employment termination being
referred  to  herein  as the "Termination Date"), the Employee shall not, for an
additional  one  (1)  year period commencing as of the Termination Date, without
the  prior  written  consent  of  the Company, (a) engage anywhere in the United
States,  directly  or  indirectly,  alone  or  as a shareholder (other than as a
holder of less than 3% of the capital stock of any publicly traded corporation),
member,  partner,  manager,  officer,  director,  employee or consultant, in any
business  that  is  engaged  or becomes engaged in the business of Chancellor as
existing  on  the  Effective  Date,  (b)  divert  or  attempt  to  divert to any
competitor  of  Chancellor or any Affiliate of any such competitor, any customer
or  client,  or prospective customer or client, of Chancellor, or (c) solicit or
encourage,  or  attempt  to  solicit or encourage, any employee of Chancellor to
leave  its  employ  for  employment  by  or  with  either Employee or Employee's
Affiliates,  or  any  competitor  of  Chancellor or any of any such competitor's
Affiliates.  If at any time the provisions of this Section 6 shall be determined
to  be  invalid or unenforceable, by reason of being vague or unreasonable as to
area,  duration  or  scope  of  activity,  this  Section  6  shall be considered
divisible  and  shall  become  and  be  immediately  amended  to only such area,
duration  and  scope  of  activity  as  shall be determined to be reasonable and
enforceable  by the court or other body having jurisdiction over the matter; and
the Employee agrees that this Section 6 as so amended shall be valid and binding
as though any invalid or unenforceable provisions had not been included therein.

7.     OWNERSHIP  AND  NON-DISCLOSURE  AND  NON-USE OF CONFIDENTIAL INFORMATION.

7.1.     As  used  in  this Agreement, "Confidential Information" shall mean all
customer  sales and marketing information, customer account records, proprietary
receipts  and/or  processing  techniques,  information  regarding  vendors  and
products,  training  and operations memoranda and similar information, personnel
records, pricing information, financial information and trade secrets concerning
or  relating  to  the  business,  accounts,  customers, employees and affairs of
Chancellor,  or  any  subsidiary or affiliate thereof, obtained by or furnished,
disclosed or disseminated to the Employee, or obtained, assembled or compiled by
the Employee or under his supervision during the course of his employment by the
Company,  and all physical embodiments of the foregoing, all of which are hereby
agreed  to  be  the property of and confidential to Chancellor, but Confidential
Information  shall not include any of the foregoing to the extent the same is or
becomes  publicly  known  through  no  fault  or breach of this Agreement by the
Employee.

7.2.     The Employee acknowledges and agrees that all Confidential Information,
and  all  physical  embodiments  thereof,  are  confidential to and shall be and
remain the sole and exclusive property of Chancellor. Upon request by any of the
Company, and in any event upon termination of the Employee's employment with the
Company  for  any  reason  whatsoever,  as  a  prior condition to the Employee's
receipt  of  any  final salary or benefit payments hereunder, the Employee shall
deliver  to  the  Company  all  property  belonging  to Chancellor or any of its
subsidiaries  or  affiliates,  including,  without  limitation, all Confidential
Information  (and  all  embodiments  thereof),  then  in his custody, control or
possession, but any forfeiture of such salary or benefit shall not be considered
a  satisfaction  or  a  release  of  or  liquidated damages for any claim(s) for
damages against the Employee which may accrue to the Company, as a result of any
breach  of  this  Section  7  by  the  Employee.

7.3.     The  Employee agrees that he will not, either during the Term or at any
time thereafter, without the prior written consent of the Company, use, disclose
or  make  available  any  Confidential  Information to any person or entity, nor
shall  he  use,  disclose, make available or cause to be used, disclosed or made
available,  or permit or allow, either on his own behalf or on behalf of others,
any  use or disclosure of such Confidential Information other than in the proper
performance of the Employee's duties hereunder.  Notwithstanding anything to the
contrary  set  forth  herein, after the expiration of the non-competition period
set  forth herein, the Employee shall be permitted to utilize the customer lists
of  the  Company  for  any  purpose  whatsoever.


8.     INVENTIONS.  The  Employee shall disclose promptly to the Company any and
all  conceptions  and  ideas  for inventions, improvements, business methods and
systems, and valuable discoveries, whether patentable or not, that are conceived
or  made  by  the  Employee, solely or jointly with another, during the Term and
that  are directly related to the business or activities of the Company and that
the  Employee conceives as a result of his employment by the Company, regardless
of  whether or not such ideas, inventions, or improvements qualify as "works for
hire."  The  Employee  hereby  assigns  and  agrees  to assign all his interests
therein  to  the  Company  or  their  nominees.  Whenever  requested to do so by
Chancellor,  the Employee shall execute any and all applications, assignments or
other instruments that such Company shall deem necessary to apply for and obtain
Letters  Patent  of  the  United  States  or any foreign country or to otherwise
protect  Chancellor's  interest  therein.

9.     AGREEMENT  NOT  TO  SOLICIT OR HIRE EMPLOYEES.  The Employee agrees that,
during  the  Term,  or  Renewal  Term  as the case may be, and for two (2) years
thereafter,  he will not, either directly or indirectly, on his own behalf or in
the  service  or  on  behalf  of  others,  solicit,  divert  or hire, attempt to
solicit, divert or hire or induce or attempt to induce to discontinue employment
with  the Company or any subsidiary or affiliate thereof, any person employed by
the Company or any subsidiary or affiliate thereof, whether or not such employee
is a full time employee or a temporary employee of the Company or any subsidiary
or  affiliate  thereof  and  whether  or not such employment is for a determined
period  or  is  at  will.

10.     REASONABLENESS  OF  RESTRICTIONS.  In  the  event  that  any  provision
relating  to  time  period  or  geographic  area of any restriction set forth in
Sections  6,  7,  8  or  9  shall  be  declared  by     a  court  of  competent
jurisdiction  to  exceed the maximum time period or area of restriction     that
the  court  deems  reasonable  and  enforceable,  the  time  period  or  area of
restriction  which     the court finds to be reasonable and enforceable shall be
deemed to become, and thereafter shall be, the maximum time period or geographic
area  of  such  restriction.

11.     ENFORCEABILITY.  Any  provision  of  Sections  6,  7,  8  or  9 which is
prohibited  or unenforceable in any jurisdiction shall, as to such jurisdiction,
be  ineffective  to  the  extent of such prohibition or unenforceability without
invalidating  the  remaining  provisions  hereof,  but  shall be enforced to the
maximum extent permitted by law, and any such prohibition or unenforceability in
any  jurisdiction shall not invalidate or render unenforceable such provision in
any  other  jurisdiction.

12.  INJUNCTION.  It is recognized and hereby acknowledged by the parties hereto
that  a  breach  or  threat  of  breach  by the Employee of any of the covenants
contained  in Sections 6, 7, 8 or 9of this Agreement will cause irreparable harm
and  damage  to  the  Company,  the  monetary  amount  of which may be virtually
impossible  to  ascertain.  As  a  result,  the  Employee  recognizes and hereby
acknowledges  that  the Company shall be entitled to an injunction fromany court
of  competent jurisdiction enjoining and restraining any violation or threatened
violation  of  any or all of the covenants contained in Sections 6, 7, 8 or 9 of
this Agreement by the Employee or any of his affiliates, associates, partners or
agents,  either  directly or indirectly, and that such right to injunction shall
be  cumulative  and  in  addition  to  whatever  other  remedies the Company may
possess.

13.  ASSIGNMENT; BINDING EFFECT. The Employee shall not assign any of his rights
or  obligations pursuant to this Agreement to any other person without the prior
written  consent  of  the Company, which consent may be unreasonably withheld or
delayed.  Subject  to  the foregoing, this Agreement shall be for the benefit of
and  binding  upon  the  parties  hereto  and  their  respective heirs, personal
representatives,  legal  representatives,  successors  and  assigns.

14.     EMPLOYER'S  AUTHORITY.  The  relationship  between the parties hereto is
that  of  employer  and employee. The Employee agrees to observe and comply with
the rules and regulations of the Company, as adopted by the Company from time to
time with respect to the performance of the duties of the Employee. The Employee
acknowledges  that  he  has  no  authority  to enter into any contracts or other
obligations  that  are  binding  upon  the  Company  unless  such  contracts  or
obligations  are authorized by the Board of Directors of Chancellor. The Company
shall have the power to direct, control and supervise the duties to be performed
by  the  Employee,  the  manner  of  performing  said  duties,  and  the time of
performing  said  duties.

15.  GOVERNING  LAW.  This  Agreement, the rights and obligations of the parties
hereto,  and  any  claims or disputes relating thereto, shall be governed by and
construed  in  accordance  with  the  laws of the Commonwealth of Massachusetts,
excluding  the  choice  of  law  rules  thereof.

16.  ARBITRATION  OF DISPUTES.  The Employee agrees that any legal disputes that
may  occur between him and the Company, and that arise out of, or are related in
any way to his employment with the Company and his performance of services under
this  Agreement  or the termination of this Agreement, and which disputes cannot
be  resolved informally, shall be resolved exclusively through final and binding
private  arbitration  before an arbitrator mutually selected by the Employee and
the  Company, with each party to bear its own costs and attorney's fees.  If the
Employee  and  the  Company  are  not  able  to  agree upon an arbitrator within
twenty-one  (21) days after either the Employee or the Company has made a demand
for  arbitration,  the  matter  will  be submitted for arbitration to the Boston
office  of  the American Arbitration Association pursuant to the rules governing
employee  dispute  resolution  in effect as of October 1, 1998.  Notwithstanding
the foregoing, in no event shall a demand for arbitration be made after the date
when  institution of legal or equitable proceedings based on such claim, dispute
or  other  matter  in  question  would  be  barred  by the applicable statues of
limitation.

17.     ENTIRE  AGREEMENT.  This  Agreement  constitutes  the  entire  agreement
between  the  parties  hereto  with  respect  to  the  subject matter hereof and
supersedes  all prior agreements, understandings and arrangements, both oral and
written,  between  the  parties hereto with respect to such subject matter. This
Agreement  may  not  be  modified  or  amended  in  any way, unless by a written
instrument  signed  by  both  the  Company  and  the  Employee.

18.     NOTICES.  Any  notice  required  or  permitted  to  be  given under this
Agreement  shall  be  in  writing  and  shall  be deemed to have been given upon
receipt  or  actual  delivery  by  hand or after sent by certified United States
mail,  return  receipt  requested,  postage prepaid, or by a reputable overnight
courier  service,  addressed  as  follows:


i)     If  to  the  Employee:

Franklyn  E.  Churchill
c/o  Chancellor  Corporation
210  South  Street
10th  Floor
Boston,  MA  02111
Fax:  617-422-5851

ii)     If  to  the  Company:

c/o  Peter  J.  Mullen,  Clerk
Chancellor  Corporation
210  South  Street
10th  Floor
Boston,  MA  02111
Fax:  617-422-5851

     or  to  such  other  addresses as either party hereto may from time to time
give  notice  of  to  the  other  party  hereto  in  the  aforesaid  manner.

19.     DAMAGES.  Nothing  contained  herein  shall  be  construed  to  prevent
Chancellor  or  the  Employee from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or  provision  of  this  Agreement. In the event that either party hereto brings
suit  for the collection of any damages resulting from, or the injunction of any
action  constituting,  a  breach  of  any  of  the  terms  or provisions of this
Agreement,  then  the  non-prevailing party shall pay all reasonable court costs
and  attorneys'  fees  of  the  other  party.

20.     SECTION  HEADINGS.  The section headings contained in this Agreement are
for  reference  purposes  only  and  shall  not affect in any way the meaning or
interpretation  of  this  Agreement.

21.     NO  THIRD  PARTY  BENEFICIARY.  Nothing  expressed  or  implied  in this
Agreement  is intended, or shall be construed, to confer upon or give any person
or  entity  other  than  the parties hereto and their respective heirs, personal
representative,  legal  representative,  successors  and  assigns  any rights or
remedies  under  or  by  reason  of  this  Agreement.

22.     WAIVER.  No  delay  or  failure at any time on the part of Chancellor in
exercising  any  right, power or privilege under this Agreement, or in enforcing
any  provision  of  this  Agreement,  shall  impair  any  such  right,  power or
privilege,  or  be  construed  as a waiver of any default or as any acquiescence
therein,  or shall affect the right of Chancellor thereafter to enforce each and
every  provision  of  this Agreement in accordance with its terms. The waiver by
either  party  hereto  of a breach or violation of any term or provision of this
Agreement  shall  neither operate nor be construed as a waiver of any subsequent
breach  or  violation.

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

CHANCELLOR  CORPORATION


By:  /s/  Brian  M.  Adley
---------------------------------------------
Name:  Brian  M.  Adley
Title:  Chairman  of  the  Board,  Chancellor  Corporation


EMPLOYEE

By:  /s/  Franklyn  E.  Churchill
---------------------------------------------
Name:  Franklyn  E.  Churchill