STOCK REDEMPTION AGREEMENT

     AGREEMENT  made  as  of this 7th day of August, 1998, by and between VESTEX
CAPITAL  CORPORATION,  a  closely held corporation having its principal place of
business  at 210 South Street, Boston, MA  02111 ("Vestex" or the "Shareholder")
and  CHANCELLOR  CORPORATION  (the "Corporation"), a publicly traded corporation
with  its  principal  place  of  business at 210 South Street, Boston, MA 02111.
Shareholder  and  Corporation  may be referred to collectively as the "Parties".

     1.     Statement  of  Intent.  Shareholder  is  the  present  owner  of
eighty-seven  percent  (87%)  of the issued and outstanding shares of the common
stock  of  the  Corporation.  Shareholder  also owns both Series A and Series AA
preferred  stock of the Corporation. (See Exhibit A for the specific holdings of
Shareholder  in  the  Corporation.)

     Shareholder  is  a  closely held corporation wholly owned by Brian M. Adley
("Shareholder's  Owner").

     The  Corporation  desires  to  provide  for the orderly continuation of the
business  and  affairs  of  the  Corporation  if  Shareholder's  Owner  dies.

     Shareholder's  Owner desires to assure liquidity for his family if and when
he  dies  owning  stock  in  the  Corporation.

     THEREFORE,  in  consideration of the mutual covenants herein contained, the
Parties  enter  into  this  Agreement  on  the  terms  set  forth  below.

     2.     Disposition  of  Shares  Upon  Death.  At the death of Shareholder's
Owner,  the  Corporation  shall purchase, and the personal representative of the
estate of the deceased Shareholder's Owner shall join with Shareholder and sell,
all the shares of stock of the Corporation owned by Shareholder at the price and
upon  the terms and limitations set forth in paragraph 3 of this Agreement. Such
transaction  shall take place as soon as practicable after Shareholder's Owner's
death,  but  no  later  than  three  (3)  months  after  such  date.

     3.     Price  and  Terms  for  Purchase  and  Sale  of  Shares.

          3.1     Price.  The  price  per share to be paid upon the purchase and
sale  of  shares of the common stock of the Corporation (including any converted
preferred) shall be its market value at the closing of the market on the date of
death  of  Shareholder's  Owner,  and  if  such  date  falls on a weekend day or
holiday,  the  market  value  on the next business day closest to such date. Any
unconverted  preferred  stock in the Corporation then owned by Shareholder shall
be  valued as follows, unless the then market value on conversion is greater, in
which  case the greater value shall prevail: (a) Preferred Series A at $1.90 per
share;  (b)  Preferred  Series  AA  at  50  per share. The Corporation agrees to
purchase  all  of the stock of Shareholder's Owner, provided, however, that such
obligation  to  purchase  shall  not  exceed  Ten Million Dollars ($10,000,000).

          3.2     Terms.  The  purchase  price  to  be  paid for any purchase of
shares  pursuant to this Agreement shall, except as expressly provided otherwise
by  mutual  agreement  of  the  Parties,  be  paid  by  the  Corporation  to the
Shareholder  in  cash  or  certified  check  at  the  closing  of  the  sale.

     4.     Insurance  Policies. The Corporation agrees to purchase and maintain
a  policy  or  policies  of life insurance on the life of Shareholder's Owner to
fund its obligations under this Agreement. Neither Shareholder nor Shareholder's
Owner  shall  possess any incidents of ownership in any such policy insuring his
life.  Such  policy or policies will be the sole property of the Corporation. No
Shareholder nor any successor, transferee, assignee, or personal repre-sentative
of  Shareholder or Shareholder's Owner shall have any collateral interest in any
such  policy  insuring  his  own  life.

     5.     Termination  of  Agreement.  This Agreement shall terminate upon the
first  to  occur  of  the  following  events:

          5.1     The execution of an agreement to revoke this Agreement, signed
by  the  duly authorized representatives of the Parties and Shareholder's Owner;
or

          5.2     The  adoption  of  a  plan  of  sale  or  liquidation  by  the
Corporation,  or the bankruptcy, receivership, or dissolution of the Corporation
(but  such  termination  shall  not  extinguish the rights or obligations of the
Parties  arising  out  of  any  event  occurring  before  such  termination); or

          5.3     The  complete  termination  of  all ownership of shares in the
Corporation  by  the  Shareholder,  and  the  satisfaction  of  all  obligations
respecting  such  termination,  if  any,  as  provided  in  this  Agreement;  or

          5.4     The  death  of Shareholder's Owner and the satisfaction of all
obligations  here-under  by  the  Parties.

     6.     Amendment.  This  Agreement  is  the  entire understanding among the
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Parties  and  may  be  altered,  amended  or  revoked only by subsequent written
instrument  executed  by  all  the  living  parties.

     7.     Persons  Bound.  This  Agreement is binding upon the Corporation and
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the Share-holder and their heirs, legal representatives, transferees, successors
and  assigns.  The  Corporation  and  Shareholder  agree  to execute any and all
additional  documents  necessary  to  effectuate the purposes of this Agreement.

     8.     Benefit.  This  Agreement  is  for the benefit of the Parties, their
heirs,  executors,  administrators,  successors,  assigns  and  transferees.

     9.     Notices.  Shareholder  and the Corporation, through their Presidents
or  other  authorized  officers,  shall  give prompt notice to each other of all
offers,  acceptances,  refusals,  and  exercise of options made pursuant to this
Agreement.  All  notices,  writings, offers, acceptances, refusals, payments, or
agreements  given  or required to be given under this Agreement shall be made in
writing  and  sent by registered or certified mail, return receipt requested, to
the  principal  business office of the Corporation and to the last known address
of  Shareholder  appearing on the books of the Corporation, with like notice to:
Attorney Sheila B. Giglio, 239 Common Street, Belmont, MA  02178 if intended for
Shareholder;  and to: Attorney John D. Colucci, 100 Cummings Center, Suite 332J,
Beverly,  MA  01915  if  intended  for the Corporation. Any such notice or other
writing  shall  be  deemed  given and received upon the expiration of three days
following  such  mailing  with  proper  postage  affixed.

     10.     Execution  of  Other  Documents.  The  parties agree to execute and
deliver  all proxies, stock transfer agent agreements, authorizations, documents
and  instruments  which  are  necessary to carry out the terms and conditions of
this  Agreement.

     11.     Massachusetts  Law.  This Agreement shall be construed and enforced
in  accordance  with  the  laws  of  the  Commonwealth  of  Massachusetts.

     12.     Heading  and  Gender  Neutral. Any headings are inserted solely for
the  convenience  of  reference  and are not a part of this Agreement, nor shall
they  affect  its meaning, construction or effect. Any pronoun reference to "he"
or  "she"  shall  be  read  as  to  accommodate  the  gender  of  the  Parties.

     13.     Prior  Agreement.  This  Agreement  revokes all previous agreements
among  the  parties  to  the  extent  they  are  inconsistent  herewith.

     IN  WITNESS  WHEREOF,  the Parties have hereunto set their hands and seals,
the  Corporation  by  its duly authorized officers, the day and year first above
written.

CHANCELLOR  CORPORATION                VESTEX  CAPITAL  CORPORATION



By:  /s/  Jonathan  C.  Ezrin          By:  /s/  Brian  M.  Adley____________
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     Jonathan  C.  Ezrin,  Treasurer   Brian  Adley,  President