U.S. SECURITIES AND EXCHANGE COMMISSION
                                  Washington, D.C. 20549

                                       FORM 10-QSB/A1

(Mark One)

[X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 1998

                                            or

[ ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _____________________ to _______________________

Commission File Number:  33-89966

                            TREMONT ADVISERS, INC.
        (Exact name of small business issuer as specified in its charter)
           Delaware                                         06-1210532
State or other jurisdiction                  (I.R.S. Employer Identification No)
or incorporation or organization)            

                       555 Theodore Fremd Avenue, Rye, New York 10580
                   (Address of principal executive offices) (Zip Code)

                                  (914) 925-1140
                            (Issuer's telephone number)

          (Former name, former address and former fiscal year, if changed since 
           last report)

Check whether the issuer (1) filed all reports required to be filed by Section 
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter 
period) that the issuer was required to file such reports, and (2) has been 
subject to such filing  requirements for the past 90 days.

           Yes X           No 

APPLICABLE  ONLY TO ISSUERS  INVOLVED IN BANKRUPTCY  PROCEEDING  DURING THE 
                              PRECEDING FIVE YEARS

     Check  whether the issuer filed all  documents  and reports  required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court. 

          Yes              No

                  APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares  outstanding of the Registrant's Class A Common Stock, 
$0.01 par value, as of the close of business on November 3, 1998 was 1,284,718,
and the number of shares  outstanding of the Registrant's  Class B Common Stock,
$0.01 par value, was 2,934,604 as of the same date.



<PAGE>



                                  INDEX

                         Tremont Advisers, Inc.

PART I - FINANCIAL INFORMATION



Item 1.  Financial Statements (Unaudited)                                   Page

Condensed Consolidated Balance Sheets - September 30, 1998 (unaudited)
and December 31, 1997 (audited)                                               1

Condensed Consolidated Statements of Income -
nine and three months ended September 30, 1998 and 1997                       2

Condensed Consolidated Statement of Shareholders' Equity -                    3
nine months ended September 30, 1998

Condensed Consolidated Statements of Comprehensive Income -
nine and three months ended September 30, 1998 and 1997                       4

Condensed Consolidated Statements of Cash Flows -
nine months ended September 30, 1998 and 1997                                 5

Notes to Condensed Consolidated Financial Statements                          6

Item 2.  Management's Discussion and Analysis                                11

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                   15

Item 4.  Submission of Matters to a Vote of Security Holders                 15

Item 6.  Exhibits and Reports on Form 8-K                                    15

Signature                                                                    15

Exhibit 10.53 - Tremont Advisers, Inc. 1998 Stock Option Plan                16

Exhibit 10.54 - Shareholders' Agreement, dated as of July 17,                
                1998, by and among Tremont Advisers, Inc., 
                Robert J. Parnell and Tremont Investment 
                Management, Inc.                                             25

Exhibit 21.1 - Subsidiaries                                                  57
       
Exhibit 27 - Financial Data Schedule                                         58





<PAGE>



Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits The following  exhibits are included  herein; 
         Exhibit 10.53 - Tremont  Advisers,  Inc. 1998 Stock Option Plan 
         Exhibit 10.54 - Shareholders' Agreement, dated as of July 17, 1998,
                         by and among Tremont Advisers, Inc., Robert J. Parnell
                         and Tremont Investment Management, Inc.

         Exhibit 21.1 - Subsidiaries Exhibit 27 - Financial Data Schedule

(b)  Reports on Form 8-K
     There were no reports on Form 8-K filed during the quarter ended September
     30, 1998.


                                     
Signature

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                            Tremont Advisers, Inc.

Date: November 6, 1998                      /s/ Stephen T. Clayton
                                            Stephen T. Clayton
                                            Chief Financial Officer
                                            (Duly authorized Officer and
                                            Principal Financial and Accounting
                                            Officer)


                                         15

<PAGE>

                                 Exhibit 10.53

                                1998 Stock Plan



                              TREMONT ADVISERS, INC.
                                 1998 STOCK PLAN

         1. Purpose.  The purpose of the Tremont Advisers,  Inc. 1998 Stock Plan
(the  "Plan") is to  encourage  key  employees of Tremont  Advisers,  Inc.  (the
"Company")  and of any  present or future  parent or  subsidiary  of the Company
(collectively, "Related Corporations") and other individuals who render services
to  the  Company  or  a  Related  Corporation,  by  providing  opportunities  to
participate  in the ownership of the Company and its future  growth  through (a)
the grant of options which qualify as "incentive  stock options"  ("ISOs") under
Section  422(b) of the Internal  Revenue Code of 1986,  as amended (the "Code");
(b) the grant of options which do not qualify as ISOs ("Non-Qualified Options");
(c) awards of stock in the Company  ("Awards");  and (d)  opportunities  to make
direct  purchases  of  stock  in  the  Company  ("Purchases").   Both  ISOs  and
Non-Qualified Options are referred to hereafter  individually as an "Option" and
collectively as "Options." Options,  Awards and authorizations to make Purchases
are referred to hereafter  collectively as "Stock  Rights." As used herein,  the
terms  "parent" and  "subsidiary"  mean  "parent  corporation"  and  "subsidiary
corporation,"  respectively,  as those  terms are  defined in Section 424 of the
Code.

         2. Administration of the Plan.

                  (a)  Board or  Committee  Administration.  The  Plan  shall be
administered  by a committee (the  "Committee") of the Board of Directors of the
Company (the  "Board").  The  Committee,  to the extent  required by  applicable
regulations  under Section 162(m) of the Code, shall be comprised of two or more
"outside  directors" (as defined in applicable  regulations  thereunder) who, to
the extent required by Rule 16b-3 promulgated under the Securities  Exchange Act
of 1934,  as  amended,  or any  successor  provision  ("Rule  16b-3"),  shall be
disinterested administrators within the meaning of Rule 16b-3. All references in
this  Plan to the  "Committee"  shall  mean the Board if no  Committee  has been
appointed.  Subject to ratification of the grant or  authorization of each Stock
Right by the Board (if so required by applicable  state law), and subject to the
terms of the Plan,  the  Committee  shall have the authority to (i) determine to
whom (from among the class of employees  eligible  under  paragraph 3 to receive
ISOs) ISOs shall be granted,  and to whom (from  among the class of  individuals
and entities  eligible under  paragraph 3 to receive  Non-Qualified  Options and
Awards and to make Purchases)  Non-Qualified Options,  Awards and authorizations
to make  Purchases  may be granted;  (ii)  determine  the time or times at which
Options or Awards  shall be granted  or  Purchases  made;  (iii)  determine  the
purchase price of shares subject to each Option or Purchase,  which prices shall
not be less than the Minimum  Price  specified in  paragraph  6; (iv)  determine
whether  each Option  granted  shall be an ISO or a  Non-Qualified  Option;  (v)
determine  (subject to  paragraph  7) the time or times when each  Option  shall
become  exercisable  and the  duration of the exercise  period;  (vi) extend the
period  during  which  outstanding  Options may be  exercised;  (vii)  determine
whether restrictions are to be imposed on shares subject to Options,  Awards and
Purchases and the nature of such restrictions,  if any, and (viii) interpret the
Plan and  prescribe  and rescind  rules and  regulations  relating to it. If the
Committee  determines to issue a  Non-Qualified  Option,  it shall take whatever
actions it deems  necessary,  under Section 422 of the Code and the  regulations
promulgated thereunder, to ensure that such Option is not treated as an ISO. The
interpretation  and  construction by the Committee of any provisions of the Plan
or of any  Stock  Right  granted  under  it  shall  be  final  unless  otherwise
determined  by the Board.  The  Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem advisable. No member of
the Board or the Committee shall be liable for any action or determination  made
in good faith with respect to the Plan or any Stock Right granted under it.

                                        16

<PAGE>
                  (b)  Committee  Actions.  The  Committee may select one of its
members as its  chairman,  and shall hold meetings at such time and places as it
may determine. A majority of the Committee shall constitute a quorum and acts of
a majority  of the  members of the  Committee  at a meeting at which a quorum is
present,  or acts  reduced to or  approved  in writing by all the members of the
Committee (if consistent with applicable  state law), shall be the valid acts of
the  Committee.  From  time to time  the  Board  may  increase  the  size of the
Committee  and appoint  additional  members  thereof,  remove  members  (with or
without cause) and appoint new members in substitution therefor,  fill vacancies
however caused,  or remove all members of the Committee and thereafter  directly
administer the Plan.

                  (c) Grant of Stock  Rights to Board  Members.  Subject  to the
provisions of paragraph 3 below,  if applicable,  Stock Rights may be granted to
members of the Board.  All grants of Stock  Rights to members of the Board shall
in all other  respects be made in  accordance  with the  provisions of this Plan
applicable  to  other  eligible  persons.  Consistent  with  the  provisions  of
paragraph 3 below,  members of the Board who either (i) are  eligible to receive
grants of Stock  Rights  pursuant  to the Plan or (ii) have been  granted  Stock
Rights may vote on any matters  affecting the  administration of the Plan or the
grant of any Stock Rights pursuant to the Plan, except that no such member shall
act upon the granting to himself or herself of Stock Rights, but any such member
may be counted in  determining  the  existence of a quorum at any meeting of the
Board  during  which action is taken with respect to the granting to such member
of Stock Rights.

                  (d)  Exculpation.  No member of the Board shall be  personally
liable for  monetary  damages  for any action  taken or any  failure to take any
action in  connection  with the  administration  of the Plan or the  granting of
Stock  Rights under the Plan,  provided  that this  subparagraph  2(d) shall not
apply to (i) any breach of such  member's  duty of loyalty to the Company or its
stockholders,  (ii) acts or omissions not in good faith or involving intentional
misconduct  or a knowing  violation of law,  (iii) acts or omissions  that would
result in  liability  under  Section 174 of the General  Corporation  Law of the
State of Delaware,  as amended,  and (iv) any transaction  from which the member
derived an improper personal benefit.

                  (e) Indemnification. Service on the Committee shall constitute
service as a member of the Board. Each member of the Committee shall be entitled
without  further  act on his or her part to  indemnity  from the  Company to the
fullest  extent  provided by  applicable  law and the Company's  Certificate  of
Incorporation  and/or  By-laws in connection  with or arising out of any action,
suit  or  proceeding  with  respect  to the  administration  of the  Plan or the
granting of Stock Rights thereunder in which he or she may be involved by reason
of his or her being or having been a member of the Committee,  whether or not he
or she continues to be a member of the Committee at the time of the action, suit
or proceeding.

     3. Eligible Employees and Others.  ISOs may be granted only to employees of
the  Company  or any  Related  Corporation.  Non-Qualified  Options,  Awards and
authorizations  to make  Purchases  may be granted to any  employee,  officer or
director  (whether or not also an employee) or  consultant of the Company or any
Related  Corporation.  The Committee may take into  consideration  a recipient's
individual  circumstances  in  determining  whether to grant a Stock Right.  The
granting of any Stock Right to any  individual or entity shall  neither  entitle
that  individual or entity to, nor  disqualify  such  individual or entity from,
participation in any other grant of Stock Rights.


                                        17
<PAGE>

    4.  Stock Rights.

                    (a) Number of Shares  Subject to Rights.  The stock subject
to Stock Rights shall be authorized but unissued shares of Class B Common Stock 
of the Company, par value $.01 per share (the "Common  Stock"), or shares of 
Common Stock reacquired by the Company in any manner.  The aggregate number of
shares which may be issued pursuant to the Plan is 200,000, subject to 
adjustment as provided in paragraph  13. If any Stock Right granted under the
Plan shall expire or terminate for any reason without having bee  exercised in
full or shall cease for any reason to be exercisable in whole or in part, the 
shares of Common Stock subject to such Stock Right shall again be available for
grants of Stock Rights under the Plan.

                  (b) Nature of Awards.  In addition  to ISOs and  Non-Qualified
Options,  the Committee may grant or award other Stock Rights,  as follows:  (i)
Purchases.  Participants  may be granted  the right to  purchase  Common  Stock,
subject to such  restrictions as may be specified by the Committee  ("Restricted
Shares"). Such restrictions may include, but are not limited to, the requirement
of  continued   employment  with  the  Company  or  a  Related  Corporation  and
achievement  of  performance  objectives.  The  Committee  shall  determine  the
purchase price of the Restricted  Shares, the nature of the restrictions and the
performance  objectives,  all of  which  shall  be set  forth  in the  agreement
relating to each right awarded to purchase  Restricted  Shares.  The performance
objectives  shall  consist  of (A) one or more in  business  criteria  and (B) a
target  level or  levels of  performance  with  respect  to such  criteria.  The
performance   objectives  shall  be  objective  and  shall  otherwise  meet  the
requirements of Section 162(m)(4)(C) of the Code. (ii) Awards.  Awards of Common
Stock may be made to participants as a bonus or as additional  compensation,  as
may be determined by the Committee.

         5. Granting of Stock Rights. Stock Rights may be granted under the Plan
at any time on or after  October 1, 1998 and prior to September  30,  2007.  The
date of grant of a Stock Right under the Plan will be the date  specified by the
Committee at the time it grants the Stock Right;  provided,  however,  that such
date shall not be prior to the date on which the  Committee  acts to approve the
grant.  Options  granted  under the Plan are intended to qualify as  performance
based  compensation  to the extent required under proposed  Treasury  Regulation
Section 1.162-27.

                                     18
<PAGE>

         6.       Minimum Option Price; ISO Limitations.

                (a) Price for  Non-Qualified  Options,  Awards and Purchases. 
The exercise price per share specified in the agreement relating to each Non-
Qualified Option granted,  and the  purchase  price  per share of stock  granted
in any Award or authorized  as a  Purchase,  under  the Plan  shall in no event
be less than the minimum legal consideration required therefor under the laws of
any jurisdiction in which the Company or its successors iinterest may be
organized.  Non-Qualified Options granted under the Plan, with an exercise price
less than the fair market value per share of Common Stock on the date of grant, 
are intended to qualify as performance-based compensation under Section 162(m)of
the Code  and any  applicable  regulations  thereunder.  Any such  Non-Qualified
Options granted under the Plan shall be exercisable  only upon the attainment of
a pre-established, objective performance goal established by the Committee.

 
                (b) Price for ISOs. The exercise price per share  specified in
the agreement relating to each ISO granted under the Plan shall not be less than
the fair market  value per share of Common  Stock on the date of such grant.  In
the case of an ISO to be granted to an employee  owning  stock  possessing  more
than ten  percent  (10%) of the total  combined  voting  power of all classes of
stock of the Company or any Related  Corporation,  the price per share specified
in the  agreement  relating  to such ISO shall not be less than one  hundred ten
percent (110%) of the fair market value per share of Common Stock on the date of
grant.  For purposes of determining  stock ownership  under this paragraph,  the
rules of Section 424(d) of the Code shall apply.

                  (c) $100,000 Annual  Limitation on ISO Vesting.  Each eligible
employee may be granted  Options treated as ISOs only to the extent that, in the
aggregate  under this Plan and all  incentive  stock option plans of the company
and any related  Corporation,  ISOs do not become exercisable for the first time
by such  employee  during any calendar  year with respect to stock having a fair
market  value  (determined  at the time the ISOs  were  granted)  in  excess  of
$100,000. The Company intends to designate any Options granted in excess of such
limitation as Non-Qualified Options.

                  (d)  Determination  of Fair Market  Value.  If, at the time an
Option is granted under the Plan, the Company's Common Stock is publicly traded,
"fair  market  value"  shall be  determined  as of the date of grant  or, if the
prices or quotes  discussed in this sentence are  unavailable for such date, the
last  business  day for which such prices or quotes are  available  prior to the
date of grant and shall mean (i) the  average (on that date) of the high and low
prices of the Common  Stock on the  principal  national  securities  exchange on
which the  Common  Stock is  traded,  if the  Common  Stock is then  traded on a
national  securities  exchange;  or (ii) the last  reported  sale price (on that
date) of the Common Stock on The American Stock Exchange, if the Common Stock is
not then  traded on a national  securities  exchange;  or (iii) the  closing bid
price (or  average of bid prices)  last quoted (on that date) by an  established
quotation service for  over-the-counter  securities,  if the Common Stock is not
reported on The  American  Stock  Exchange.  If the Common Stock is not publicly
traded at the time an Option is  granted  under the Plan,  "fair  market  value"
shall mean the fair value of the Common  Stock as  determined  by the  Committee
after  taking  into  consideration  all  factors  which  it  deems  appropriate,


                                       19

<PAGE>
including, without limitation,  recent sale and offer prices of the Common Stock
in private transactions negotiated at arm's length.

         7.  Option  Duration.  Subject to earlier  termination  as  provided in
paragraphs 9 and 10 or in the  agreement  relating to such  Option,  each Option
shall expire on the date specified by the  Committee,  but not more than (i) ten
years  from the date of grant in the case of  Options  generally  and (ii)  five
years from the date of grant in the case of ISOs  granted to an employee  owning
stock  possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(b). Subject to earlier termination as provided in paragraphs 9
and 10,  the term of each  ISO  shall  be the  term  set  forth in the  original
instrument granting such ISO.

     8.  Exercise of Option.  Subject to the  provisions of paragraphs 9 through
12,  each  Option  granted  under  the Plan  shall be  exercisable  as  follows:

                (a) Vesting.  The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such installments as
the Committee may specify.

                (b) Full Vesting of Installments.  Once an installment becomes 
exercisable, it shall remain  exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.  

                (c) Partial  Exercise.  Each Option or installment may be 
exercised at any time or from time to time,  in whole or in part,  for up to the
total number of shares with respect to which it is then exercisable.

                (d)  Acceleration  of  Vesting.  The  Committee  shall have the 
right to accelerate  the date that any  installment  of any Option  becomes 
exercisable; provided  that the  Committee  shall not,  without the  consent of
an  optionee, accelerate the permitted  exercise date of any installment of any 
Option granted to any employee as an ISO if such acceleration  would violate the
annual vesting limitation  contained in Section 422(d) of the Code, as described
in paragraph 6(c).

         9.  Termination  of  Employment.  Unless  otherwise  specified  in  the
agreements  relating to such ISOs,  if an ISO optionee  ceases to be employed by
the  Company  and all  Related  Corporations  other  than by  reason of death or
disability or as otherwise specified in paragraph 10, no further installments of
his or her ISOs shall become exercisable, and his or her ISOs shall terminate on
the earlier of (a) ninety (90) days after the date of  termination of his or her
employment,  or (b) their  specified  expiration  dates.  For  purposes  of this
paragraph 9, employment shall be considered as continuing  uninterrupted  during
any bona fide leave of absence (such as those attributable to illness,  military
obligations or governmental service) provided that the period of such leave does
no exceed 90 days or, if longer,  any period during which such optionee's  right
to reemployment is guaranteed by statute.  A bona fide leave of absence with the
written  approval of the Committee  shall not be considered an  interruption  of
employment   under  this  paragraph  9,  provided  that  such  written  approval
contractually  obligates the Company or any Related  Corporation to continue the
employment of the optionee  after the approved  period of absence.  ISOs granted
under the Plan shall not be affected by an change of employment  within or among
the Company and Related Corporations, so long as the optionee continues to be an
employee of the Company or any Related Corporation. Nothing in the Plan shall be
deemed to give any  grantee  of any Stock  Right  the  right to be  retained  in
employment  or other service by the Company or any Related  Corporation  for any
period of time.


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<PAGE>
         10.      Death; Disability; Voluntary Termination; Breach.

                 (a) Death.  If an ISO optionee ceases to be employed by the 
Company and all Related  Corporations  by  reason  of his or her  death, any ISO
owned by such optionee may be exercised,  to the extent  otherwise  exercisable
on the date of death, by the estate, personal representative  r beneficiary who
has acquired the ISO by will or by the laws of descent and distribution, until
the earlier of (i) the specified expiration date of the ISO or (ii) one (1) year
from the date of the optionee's death.

                  (b)  Disability.  If an ISO optionee  ceases to be employed by
the  Company and all Related  Corporations  by reason of his or her  disability,
such optionee shall have the right to exercise any ISO held by him or her on the
date of termination of employment,  for the number of shares for which he or she
could have  exercised  it on that date,  until the earlier of (i) the  specified
expiration date of the ISO or (ii) one (1) year from the date of the termination
of  the  optionee's  employment.   For  the  purposes  of  the  Plan,  the  term
"disability"  shall mean "permanent and total  disability" as defined in Section
22(e)(3) of the Code or any successor statute.

                  (c)  Voluntary   Termination;   Breach.  If  an  ISO  optionee
voluntarily  leaves the employ of the Company and all  Related  Corporations  or
ceases to be employed by the Company and all Related Corporations by reason of a
finding by the Committee,  after full  consideration  of the facts  presented on
behalf of both the Company and the Optionee,  that the ISO optionee has breached
his or her  employment  or service  contract  with the  Company  or any  Related
Corporation,  or has been  engaged in  disloyalty  to the  Company or any Relate
Corporation, then, in either such event, in addition to immediate termination of
the Option,  the ISO optionee shall  automatically  forfeit all shares for which
the Company has not yet delivered share  certificates upon refund by the Company
of the exercise  price of such Option.  Notwithstanding  anything  herein to the
contrary,  the Company may withhold delivery of share  certificates  pending the
resolution  of  any  inquiry  that  could  lead  to  a  finding  resulting  in a
forfeiture.

     11.  Assignability.  No Stock Right shall be assignable or  transferable by
the grantee except by will, by the laws of descent and  distribution  or, in the
case of  Non-Qualified  Options  only,  pursuant to a valid  domestic  relations
order.  Except as set forth in the previous  sentence,  during the lifetime of a
grantee each Stock Right shall be exercisable only by such grantee.           

     12.  Terms and  Conditions  of Options.  Options  shall be evidenced by
instruments  (which need not be  identical)  in such forms as the  Committee may
from time to time  approve.  Such  instruments  shall  conform  to the terms and
conditions  set forth in  paragraphs  6 through 11 hereof and may  contain  such
other  provisions as the Committee deems  advisable  which are not  inconsistent


                                     21

<PAGE>
with the Plan,  including  restrictions  applicable  to  shares of Common  Stock
issuable  upon  exercise  of  Options.   The  Committee  may  specify  that  any
Non-Qualified  Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may  determine.  The Committee may from time to time confer  authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such  instruments.  The proper officers of
the Company are authorized and directed to take any and all action  necessary or
advisable from time to time to carry out the terms of such instruments.

     13.  Adjustments.  Upon the occurrence of any of the following  events,  an
optionee's  rights with respect to Options  granted to such  optionee  hereunder
shall  be  adjusted  as  hereinafter  provided,  unless  otherwise  specifically
provided in the written  agreement  between the optionee and the Company related
to such Option: 

                 (a) Stock  Dividends and Stock Splits.  If the shares of Common
Stock shall be subdivided  or combined into a greater or smaller  number of 
shares or if the Company  shall  issue  any  shares of Common  Stock as a stock
dividend on its outstanding  Common Stock, the number of shares of Common Stock
deliverable upon the  exercise of Options shall be appropriately increased  or
decreased proportionately, and appropriate adjustments shall be made in the 
purchase price per share to reflect such subdivision, combination or stock 
dividend.

     (b) Consolidations or Mergers. If the Company is to be consolidated with or
acquired by another entity in a merger,  sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"),  the Committee or the board of
directors of any entity assuming the  obligations of the Company  hereunder (the
"Successor  Board"),   shall,  as  to  outstanding  Options,   either  (i)  make
appropriate  provision for the continuation of such Options by substituting on a
equitable  basis for the  shares  then  subject to such  Options  either (A) the
consideration  payable with respect to the outstanding shares of Common Stock in
connection  with  the  Acquisition,   (B)  shares  of  stock  of  the  surviving
corporation  or  (C)  such  other   securities  as  the  Successor  Board  deems
appropriate,  the fair market value of which shall  approximate  the fair market
value  of the  shares  of  Common  Stock  subject  to such  Options  immediately
preceding the Acquisition; or (ii) upon written notice to the optionees, provide
that all Options must be  exercised,  to the extent then  exercisable,  within a
specified number of days of the date of such notice,  at the end of which period
the Options shall  terminate;  or (iii)  terminate all Options in exchange for a
cash payment equal to the excess of the fair market value of the shares  subject
to such  Options  (to the  extent  then  exercisable)  over the  exercise  price
thereof.

                  (c)  Recapitalization  or  Reorganization.  In the  event of a
recapitalization  or  reorganization  of the Company  (other than a  transaction
described in subparagraph (b) above) pursuant to which securities of the Company
or of another  corporation are issued with respect to the outstanding  shares of
Common Stock, an optionee upon exercising an Option shall be entitled to receive
for the purchase  price paid upon such  exercise the  securities he or she would
have  received  if  he  or  she  had   exercised   such  Option  prior  to  such
recapitalization or reorganization.



                                          22


<PAGE>
                  (d) Modification of ISO's.  Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs  (a), (b) or (c) with respect to ISOs
shall be made only after the Committee,  after  consulting  with counsel for the
Company,  determines  whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424 of the Code) or would cause
any adverse tax  consequences  for the  holders of such ISOs.  If the  Committee
determines that such  adjustments  made with respect to ISOs would  constitute a
modification  of such  ISOs or  would  cause  adverse  tax  consequences  to the
holders, it may refrain from making such adjustments.

                  (e) Dissolution or Liquidation. In the event of the proposed 
dissolution or liquidation of the Company,  each Option will terminate
immediately prior to the consummation  of such proposed  action or at such other
 time and subject to such other conditions as shall be determined by the 
Committee.


                  (f)  Issuances of Securities. Except as expressly provided  
herein, no issuance by the Company of shares of stock of any class,or securities
convertible into shares of stock of any class,  shall affect,  and no adjustment
by reason  thereof  shall be made with respect to, the number or price of shares
subject to Options.  No adjustments  shall be made for dividends paid in cash or
in property other than securities of the Company.

                 (g) Fractional  Shares. No fractional shares shall be issued 
under the Plan and the optionee shall receive from the Company cash in lieu of
such  fractional
shares.

                 (h)  Adjustments.  Upon the  happening  of any of the events
described in subparagraphs  (a), (b) or (c) above,  the class and aggregate  
number of shares set  forth  in  paragraph  4 hereof  that are  subject to Stock
Rights which previously have been or subsequently may be granted under the Plan
shall also be appropriately  adjusted to reflect the events  described in such
subparagraphs.  The Committee or the Successor Board shall determine the
specific adjustments to be made under this paragraph 13 and,  subject to 
paragraph 2, its  determination shall be conclusive.

         14. Means of Exercising  Options. An Option (or any part or installment
thereof)  shall be  exercised  by giving  written  notice to the  Company at its
principal  office  address,  or to such  transfer  agent  as the  Company  shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase  price thereof  either (a) in United  States  dollars in
cash or by check,  (b) at the discretion of the Committee,  through  delivery of
shares of Common  Stock  having a fair market  value equal as of the date of the
exercise to the cash exercise price of the Option,  (c) at the discretion of the
Committee,  by delivery of the grantee's personal recourse note bearing interest
payable  not less than  annually  at no less than 100% of the lowest  applicable
Federal rate, as define din Section  1274(d) of the Code,  (d) at the discretion
of the Committee and consistent with applicable law,  through the delivery of an
assignment  to the Company of a sufficient  amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company,  which sale shall
be at  the  participant's  direction  at the  time  of  exercise,  or (e) at the
discretion of the Committee,  by any combination of (a), (b), (c) and (d) above.
If the  Committee  exercises its  discretion  to permit  payment of the exercise


                                     23

<PAGE>

price of an ISO by means of the methods set forth in clauses  (b),  (c),  (d) or
(e) of the preceding sentence,  such discretion shall be exercised in writing at
the time of the grant of the ISO in question.  The holder of an Option shall not
have the rights of a  shareholder  with  respect  to the shares  covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares.  Except as  expressly  provided  above in  paragraph  13 with respect to
changes in capitalization  and stock dividends,  no adjustment shall be made for
dividends  or similar  rights for which the record  date is before the date such
stock certificate is issued.

         15. Term and  Amendment of Plan.  This Plan was adopted by the Board on
September  17, 1998,  subject,  with respect to the  validation  of ISOs granted
under the Plan,  to approval of the Plan by the  stockholders  of the Company at
the next Meeting of Stockholders, or in lieu thereof, by written consent. If the
approval of  stockholders  is not obtained on or prior to August 31,  1999,  any
grants of ISOs  under the Plan made  prior to that date will be  rescinded.  The
Plan shall  expire at the end of the day on September  30,  2007,  (except as to
Options  outstanding  on that date).  Subject to the  provisions  of paragraph 5
above,  Options may be granted  under the Plan prior to the date of  stockholder
approval of the Plan.  The Board may terminate or amend the Plain in any respect
at any time,  except  that,  without the approval of the  stockholders  obtained
within 12 months before or after the Board adopts a resolution  authorizing  any
of the  following  actions:  (a) the total  number of shares  that may be issued
under the Plan may not be increased (except by adjustment  pursuant to paragraph
13);  (b) the  benefits  accruing  to  participants  under  the  Plan may not be
materially  increased;  (c) the requirements as to eligibility for participation
in the Plan may not be materially  modified;  (d) the  provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (e) the provisions
of paragraph  6(b)  regarding the exercise  price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); (f) the expiration date of the Plan may not be extended;  and (g) the Board
may not take any action  which  would cause the Plan to fail to comply with Rule
16b-3. Except as otherwise provided in this paragraph 15, in no event may action
of the Board or  stockholders  alter or impair the rights of a grantee,  without
such grantee's consent, under any Option previously granted to such grantee.

     16.  Application  of Funds.  The proceeds  received by the Company from the
sale of shares  pursuant to Options granted and Purchases  authorized  under the
Plan shall be used for general corporate purposes. 

    
     17. Notice to Company of Disqualifying Disposition. By accepting an ISO
granted under the Plan,  each  optionee  agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying  Disposition (as described
in Sections  421,  422 and 424 of the Code and  regulations  thereunder)  of any
stock  acquired  pursuant to the  exercise  of ISOs  granted  under the Plan.  A
Disqualifying  Disposition is generally any  disposition  occurring on or before
the later of (a) the date two years  following  the date the ISO was  granted or
(b) the date one year following the date the ISO was exercised.

         18.  Withholding  of Additional  Income  Taxes.  Upon the exercise of a
Non-Qualified  Option, the grant of an Award, the making of a Purchase of Common
Stock  for less  than its fair  market  value,  the  making  of a  Disqualifying
Disposition  (as defined in paragraph 17), the vesting or transfer of restricted


                                        24

<PAGE>
stock or  securities  acquired on the  exercise of an Option  hereunder,  or the
making  of a  distribution  or  other  payment  with  respect  to such  stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation  includible in gross income.  The Committee in its  discretion  may
condition (i) the exercise of an Option,  (ii) the grant of an Award,  (iii) the
making of a Purchase  of Common  Stock for less than its fair market  value,  or
(iv) the vesting or transferability  of restricted stock or securities  acquired
by exercising an Option,  on the grantee's making  satisfactory  arrangement for
such withholding. Such arrangement may include payment by the grantee in cash or
by check of the amount of the  withholding  taxes or, at the  discretion  of the
Committee,  by the grantee's  delivery of previously held shares of Common Stock
or the withholding  from the shares of Common Stock otherwise  deliverable  upon
exercise of a Option shares  having an aggregate  fair market value equal to the
amount of such withholding taxes.

     19. Governmental  Regulation.  The Company's obligation to sell and deliver
shares of the Common  Stock  under this Plan is subject to the  approval  of any
governmental  authority required in connection with the authorization,  issuance
or sale of such shares. 

     Government  regulations  may impose  reporting or other  obligations on the
Company  with respect to the Plan.  For example,  the Company may be required to
send tax information  statements to employees and former employees that exercise
ISOs under the Plan,  and the Company  may be  required to file tax  information
returns  reporting the income received by grantees of Options in connection with
the Plan.

         20.  Governing Law. The validity and  construction  of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of Delaware.

  
                                    25

<PAGE>


                           Exhibit 10.54
                       

                       TREMONT INVESTMENT MANAGEMENT, INC.
                               SHAREHOLDERS' AGREEMENT


                  AGREEMENT (the  "Agreement")  made as of the 17th day of July,
1998, by and among TREMONT  ADVISERS,  INC., a corporation  organized  under the
laws of Delaware (U.S.A.),  with offices at 555 Theodore Fremd Avenue,  Rye, New
York 10580 U.S.A.  (hereinafter  referred to as  "Tremont"),  ROBERT J. PARNELL,
residing at 230 Guildwood Parkway, Toronto, Ontario M1E 1P7, Canada (hereinafter
referred  to as  "Parnell")  (Tremont  and  Parnell  are  sometimes  hereinafter
collectively   referred  to  as  the   "Shareholders"   and  individually  as  a
"Shareholder"), and TREMONT INVESTMENT MANAGEMENT, INC., a corporation organized
under  the  laws  of the  Province  of New  Brunswick  and the  laws  of  Canada
applicable  therein,  with its offices located at Suite 5100, One First Canadian
Place, Toronto, Ontario M5X 1K2 Canada (hereinafter sometimes referred to as the
"Corporation").

                                               W I T N E S S E T H :

                  WHEREAS,  the Corporation has been caused to be organized as a
corporation under the New Brunswick Business  Corporations Act (the "Act"), with
an authorized  capital stock of ten thousand (10,000) common shares (the "Common
Stock") and fifty thousand (50,000)  preferred shares (the "Preferred Stock") in
accordance with the intent of the Shareholders as set forth in that certain 
Joint Venture Agreement dated as of June 5, 1998 by and between the Shareholders
(the "Joint Venture Agreement"); and

                  WHEREAS,  the  parties  hereto  are the  owners  of all of the
issued and  outstanding  shares of Common Stock of the  Corporation and the sole
shareholders thereof; and

                  WHEREAS, it is the desire of the parties to make provision for
the management and control of the Corporation,  employment by the Corporation of
Parnell  and the  purchase  and  sale of the  shares  of  Common  Stock  and the
Preferred Stock held by Shareholders; and

                  WHEREAS, the Corporation concurs in the aforesaid
decision of the Shareholders;

                  NOW,  THEREFORE,  in consideration of the mutual covenants and
premises  hereinafter set forth,  the parties hereto hereby consent and agree as
follows:


                                       26

<PAGE>
                              
                                    ARTICLE I
                           ORGANIZATION OF CORPORATION

     1.1  Formation of  Corporation.  Tremont  Investment  Management,  Inc. was
incorporated as a business  corporation  under the Act on July 13, 1998, with an
authorized  capital  stock of ten thousand  (10,000)  shares of Common Stock and
fifty thousand (50,000) shares of Preferred Stock.


                  1.2 Stock Ownership.  As of the date hereof,  each Shareholder
owns  the  following  number  of  shares  of  Common  Stock  of the  Corporation
(collectively,  together  with any other  shares of Common  Stock  issued to any
shareholder, the "Shares"):


                                  % of Shares                     Capital
 Shareholder    # of Shares       Outstanding                     Contribution
         

  Tremont          3,250            65%                        U.S.$32,500.00

  Parnell          1,750            35%                        U.S.$17,500.00


     In  addition,  as of the date hereof,  Tremont  owns ten thousand  (10,000)
fully  paid and  non-assessable  shares of  Preferred  Stock of the  Corporation
(collectively,  together with any other shares of Preferred  Stock issued to any
shareholder,  the  "Preferred  Shares") for which Tremont has made an additional
capital  contribution to the Corporation in the sum of U.S. One Hundred Thousand
Dollars  (U.S.$100,000.00)  or U.S.Ten Dollars ($10.00) per Preferred Share (the
"Preferred  Share  Issue  Price").  The  Preferred  Shares  shall have no voting
rights,  pay no dividends and be  redeemable  in  accordance  with the terms and
conditions set forth in the articles of  incorporation  of the Corporation  (the
"Articles"),  which shall be amended as soon as  practicable  following the date
hereof to reflect such terms and conditions and such other customary  additional
terms  and  conditions  for  the  Preferred  Shares,  and by  execution  of this
Agreement,  each Shareholder  agrees to authorize or cause his or its nominee(s)
on the  board of  directors  of the  Corporation  (each  member  of the board of
directors being referred to individually as a "Director," and together with each
other Director, as the "Directors" or the "Board of Directors"), as described in
Section 3.2(a)  hereof,  to authorize the execution and filing of such amendment
by the Corporation with the appropriate authorities.

                  1.3      Additional Issuances of Stock.

     (a) Additional Capital  Contributions.  Each Shareholder may, but shall not
be required  to,  make  additional  capital  contributions  to the  Corporation,
although,  pursuant to the Joint  Venture  Agreement,  Tremont has indicated its
willingness to make additional capital  contributions  (including its additional
capital  contribution  set forth in Section 1.2 hereof) to the Corporation of at
least U.S. Three Hundred  Thousand Dollars  (U.S.$300,000.00).  Each Shareholder
shall have the right to make additional capital contributions to the Corporation
pro rata in proportion to the  percentage  of Shares of the  outstanding  Common
Stock held by such Shareholder.  Each Shareholder  making an additional  capital
contribution  shall receive in exchange  Preferred Shares at the Preferred Share
Issue  Price.  By  execution  of this  Agreement,  each  Shareholder  agrees  to
authorize,  or  cause  his or  its  nominee(s)  on the  Board  of  Directors  to
authorize,  the issuance of Preferred Shares at the price provided for herein to
each Shareholder making additional capital contributions.


                                   27

<PAGE>

                           (b)      Parnell Clawback.  If, within two (2) years
following the Effective Date (the "Initial  Period"),  the  Corporation  and the
Shareholders  have not  required  Tremont  to make,  and  Tremont  has not made,
additional  capital  contributions  to the  Corporation  of more than  U.S.  Two
Hundred Fifty Thousand Dollars  (U.S.$250,000.00),  then Tremont shall thereupon
transfer or caused to be transferred to Parnell,  such number of Shares owned by
it, or authorize,  or cause its nominees on the Board of Directors to authorize,
the issuance to Parnell of additional Shares from the  Corporation's  authorized
but  unissued   shares  of  Common  Stock,   in  either  case  without   further
consideration,  to cause  Parnell to then own thirty eight  percent (38%) of the
outstanding  Shares.  The  Shareholders  agree to  cause  the  Secretary  of the
Corporation to register such transfer on the books of the Corporation.

                           (c) Tremont  Clawback.  If, within the Initial
Period,  the Corporation and the  Shareholders  have  required,  and  Tremont 
has made,  additional capital contributions to the Corporation in excess of U.S.
Four Hundred Thousand Dollars (U.S.$400,000.00),  and  Parnell  has  elected 
not to make  additional  capital contributions  to the  Corporation  pro rata in
proportion to the  percentage of Shares of the  outstanding  Common  Stock  held
by Parnell  with  respect to all capital contributions required by the
Corporation in excess of U.S. Four Hundred Thousand Dollars  (U.S.$400,000.00),
then Parnell shall thereupon  transfer or cause to be  transferred  to  Tremont,
such  number of Shares  owned by him, or authorize,  or cause his nominee on the
Board of  Directors  to  authorize, the issuance to Tremont of additional shares
from the Corporation's authorized but unissued shares of Common Stock, in either
case without further  consideration, to cause  Tremont  to then own  sixty eight
percent (68%) of the outstanding Shares.  The Shareholders agree to cause the
Secretary of the Corporation to register such transfer on the books of the 
Corporation.

                           (d)   Additional Stock Issuances.  Except as provided
in (a), (b) and (c) hereinabove,  the Corporation may not authorize the issuance
of additional capital stock by the Corporation without the unanimous approval of
the Shareholders.

                  1.4   Restrictions   on  Stock.   All  shares  issued  by  the
Corporation  with the consent of all of the  Shareholders as provided in Section
1.3(d) hereof,  shall be subject to the  restrictions  on sale,  encumbrance and
other  dispositions  as contained in the Articles and by-laws of the Corporation
(the "By-Laws") as well as this Agreement.

                  1.5  Dividends.  No dividends or other distributions shall be
made by the Corporation  on the Shares until each of the issued and  outstanding
Preferred Shares have been redeemed in full in accordance with the Articles at 
the Preferred Share Issue Price.  Thereafter,  such dividends or other
distributions shall be paid to the holders of the Shares as and when  determined
by the Board of Directors,  subject to the Articles and applicable law. Th
parties expressly acknowledge  their  intent,  however,  that  subject to the 
provisions  of this Section 1.5, all of the  Corporation's  legally  available 
funds not otherwise required for the  Corporation's  working capital,  as 
determined by the Board of Directors, shall be paid to the Shareholders as
dividends on the Shares.


                                        28

<PAGE>

                                   ARTICLE II
                               CONDUCT OF BUSINESS

                  2.1 Business of  Corporation.  The  Corporation  will serve as
Tremont's affiliate in Canada and has been formed for the purpose of engaging in
the business of providing  consulting  and  specialized  investment  services to
investment  funds,  investment  managers and investors as well as the management
and  sponsorship  of investment  funds in Canada and in such other  locations as
shall be determined by Tremont and Parnell,  and no other business,  without the
written approval of both Shareholders.

                  2.2      Quorum of Board; Quorum of Shareholders.

     (a) Board of Directors.  The By-Laws of the Corporation  shall provide that
at all  meetings  of the Board of  Directors  a majority  of  Directors  will be
required to constitute a quorum for the  transaction  of any  business,  and all
decisions of the Board of Directors shall require the majority vote in person of
the Board of Directors.

                           (b)     Shareholders.  The By-Laws of the Corporation
shall provide that at all meetings of the Shareholders,  the presence, in person
or by proxy, of the holders of all of the issued and outstanding  shares will be
required to constitute a quorum for the  transaction  of any  business,  and all
decisions of the  Shareholders  shall require the unanimous vote in person or by
proxy of all of the issued and outstanding shares.

                  2.3 Banking.  The Shareholders agree to cause their respective
nominees on the Board of  Directors  to pass a  resolution  to provide  that all
checks,  notes,  drafts,  negotiable  instruments of the  Corporation  and other
instruments  for payment of money may be executed by either the President or the
Chief  Financial  Officer,  signing  alone,  up to U.S.  Five  Thousand  Dollars
(U.S.$5,000.00) and jointly for all amounts in excess thereof.

                  2.4 Access to Records. The business records of the Corporation
shall be available for inspection at all reasonable hours to the Shareholders.

                               

                               ARTICLE III


                           BOARD OF DIRECTORS

                  3.1 Number.  The Shareholders agree that the number of members
of the Board of Directors shall at all times consist of three (3) members.

                  3.2      Appointments.

                        (a)      Vote for Nominees.  The Shareholders agree that
as long as they are Shareholders,  each of them shall vote his or its respective
Shares so that one person nominated by Parnell and two individuals  nominated by
Tremont will at all times be elected to and continue on the Board of Directors.


                                     29


<PAGE>

                           (b)      Removal of Nominees.  Each Shareholder shall
have the right to remove his or its nominee  Director or Directors,  as the case
may be, or any one of them, at any time and from  time-to-time  and to appoint a
successor  nominee Director for each Director so removed in his or her place and
stead,  and each  Shareholder  agrees  to vote his or its  respective  shares to
approve such removals or  appointments.  Any successor  nominee  Director  shall
similarly be subject to removal by Tremont or Parnell, as the case may be.

                  3.3      Initial Board.  The initial members of the Board of
Directors shall be:

                           Robert I. Schulman
                           Robert J. Parnell
                           Stephen T. Clayton

                  3.4  Resignation.   If  either  Shareholder  ceases  to  be  a
Shareholder,   such  Shareholder  shall  simultaneously  with  the  transfer  or
surrender of his or its Shares submit to the Corporation his written resignation
as an officer and as a director, as applicable, and/or the resignation of his or
its nominee director(s), if any.

                  3.5      Directors' Fees.  No Director shall receive a fee
for serving as a director.

                  3.6 Actions Requiring Unanimous Consent. Each Shareholder,  by
its  execution  of this  Agreement,  ratifies and  confirms  that the  unanimous
decision of the Board of Directors  shall be required with respect to any of the
following matters and no such action may be taken without unanimous decision:

                        (a)      recapitalization of the Corporation's Shares;

                        (b)      liquidation or dissolution of the Corporation
or other cessation of the Corporation's business;

                        (c)      voluntary winding-up of the Corporation or
other action by the Corporation for relief under any laws relating
to bankruptcy or insolvency;

                        (d)      reorganization of the Corporation, including,
without  limitation,  the  sale  of  substantially  all  of  the  assets  of the
Corporation,  amalgamation,  merger or consolidation of the Corporation with any
other entity or the spin-off or split up of the Corporation;

                        (e)      subject to Section 1.5 hereof, recommendation
of the amount of any dividend;

                        (f)      approval of any transaction with any 
affiliate of  either  of  the  Shareholders,   or  of  any  transaction  with  a
partner, shareholder, officer or director of any affiliate of either of the
Shareholders, except with respect to the services to be provided by Tremont to


                                     30

<PAGE>

the Corporation as contemplated  in the Joint Venture  Agreement and provided
for in Section 4.6 hereof,  which  are  hereby  approved  by  the  Shareholders
pursuant  to  this Agreement;

     (g) approval of the  Corporation's  purchase of Shares pursuant to Sections
6.1 or 6.4  hereof  (except  that the  vote of any  Director(s)  appointed  by a
selling  Shareholder  shall not be required),  other than in connection with the
exercise  by Parnell of certain put rights  described  in Section 6.4 hereof and
pursuant to which the Corporation is required to purchase  Parnell's  Shares, in
which case, by execution of this  Agreement,  Tremont  agrees to  authorize,  or
cause its nominees on the Board of Directors to authorize,  the purchase of such
Shares by the Corporation;

                           (h)      the increase or decrease in the number of
directors on the Board of Directors as provided in Section 3.1
hereof; or

                           (i)      engaging in any business other than that set
forth in Section 2.1 hereof.

                                   ARTICLE IV
                  OFFICERS AND COMPENSATION; TREMONT'S SERVICES

                  4.1  Appointments.  It  being  in  the  best  interest  of the
Corporation,  the  Shareholders  agree that the  following  officers  are hereby
appointed to and shall continue in (subject, in the case of Parnell, for so long
as he shall be  employed  by the  Corporation  and hold  Shares) the offices set
forth opposite their respective names:


          Chairman and Chief Executive Officer      -        Robert I. Schulman

          President, Chief Operating Officer
          and Chief Investment Officer              -        Robert J. Parnell

   
          Chief Financial Officer
          and Secretary                              -        Stephen T. Clayton


At such time as determined by Parnell,  Parnell may appoint  another  officer or
other  officers  of  the  Corporation,  as  contemplated  in the  Joint  Venture
Agreement, subject to the approval of the Board of Directors.

                  4.2 Employment of Shareholder.  The Corporation  hereby agrees
to employ Parnell as an officer --to wit, President, Chief Operating Officer and
Chief Investment  Officer--and Parnell agrees to accept such employment with the
Corporation  in  such  capacity  subject  to  the  terms  and  conditions  of an
employment agreement,  dated as of the date hereof,  entered into by and between
the Corporation and Parnell (the "Employment Agreement").  Parnell shall perform
such managerial,  operational and  administrative  duties as are assigned him by
the Board of Directors  and as are  consistent  with his  position.  Among other
duties,  Parnell will be responsible  to serve as President and Chief  Operating


                                     31

<PAGE>

Officer of the  Corporation  and  responsible  for the day-to-day  operation and
administration  of  the  Corporation,   including:  the  hiring  and  firing  of
employees;   coordinating  all  activities  of  the  Corporation  with  Tremont,
including  but not limited to all financial  audits and reporting  requirements,
marketing research and administrative and operational matters;  participating in
the design and development of new investment products; doing and performing such
other  things  as are  consistent  with  his  position  and as set  forth in the
Employment Agreement.  Parnell shall devote his full business time and
attention to the business and affairs of the Corporation.

                  4.3  Compensation;  other Terms of  Employment.  Parnell shall
receive such  compensation  from the  Corporation as set forth in the Employment
Agreement.  The Employment  Agreement shall set forth such other terms regarding
Parnell's  employment,  including  without  limitation,  expense  reimbursement,
benefits, disability and termination of employment.

                  4.4  Other  Business  Interests.   During  the  term  of  this
Agreement,  and so long as he is a  Shareholder,  Parnell  shall devote his best
efforts and his entire business time and energy to the performance of the duties
in his  employment  and shall  perform his duties to the best of his  abilities.
Parnell shall not,  during the term hereof,  and so long as he is a Shareholder,
either directly or indirectly,  on his own behalf or in the service or on behalf
of others, engage in any other business or enterprise.

                  4.5      Services Provided by Tremont.

                        (a)      Tremont Services.  In accordance with the Joint
Venture  Agreement,  Tremont hereby agrees to provide the following  services to
the Corporation:

                                (i)     furnish the Corporation with investment
advice with respect to Tremont's and other companies' investment
products;

                                (ii)    counsel the Corporation and furnish it
with advice regarding new investment products developed by Tremont
and Parnell;

                               (iii)    provide marketing services with
respect to the investment management services and products offered
by the Corporation;


                               (iv)     endeavor to introduce clients to the
Corporation that Parnell or the Board of Directors deems
acceptable;

                                (v)     provide advice in the selection of the
Corporation's auditors;

                               (vi)     collaborate with Parnell in the design 
and direction of the Corporation's marketing strategy with respect to
investment services and products provided;

                              (vii)     supervise and develop the design and
preparation of the Corporation's marketing materials; and

                
                                      32
      
<PAGE>

                              (viii)     provide the Corporation with access
to Tremont's hedge fund database.

                           (b)     Cost Recovery.  The Shareholders hereby agree
that  Tremont  shall  be  entitled  to cost  recovery  from the  Corporation  in
connection  with the services  provided in Section  4.6(a)  hereof in accordance
with the following schedule:

                              (i)        no cost recovery with respect to 
services provided during the six (6) month period immediately following the
date hereof;

                              (ii)       all direct costs incurred by Tremont as
furnished by Tremont to the President  during the period  commencing on the date
which is the first day of the seventh month following the date hereof and ending
on the date which is the last day of the twenty fourth month  following the date
hereof; and

                              (iii)      all direct and indirect costs
incurred by Tremont as furnished by Tremont to the  President at any time during
the term of this Agreement  commencing on the date which is the first day of the
twenty fifth month following the date hereof.


                                    ARTICLE V
                  INALIENABILITY OF SHARES; RESTRICTIVE LEGEND

                  5.1  Restrictions  Upon  Transfer.  During  the  term  of this
Agreement,  neither  Shareholder  shall,  directly or indirectly,  sell, assign,
mortgage,  hypothecate,  transfer, pledge, create a security interest in or lien
upon, encumber,  give, place in trust, or otherwise voluntarily or involuntarily
dispose of any Shares or any Preferred Shares (hereinafter sometimes referred to
as a  "Transfer")  now  owned  or  hereafter  acquired  by him or it  except  as
hereinafter  provided.  Any proposed transfer further must be in compliance with
all  requirements  of the Articles and the laws of the Province of New Brunswick
and the laws of Canada as applicable therein.

                  5.2 Transfers to Affiliates.  Notwithstanding anything in this
Agreement to the  contrary,  a Shareholder  may, with the prior written  consent
of the other Shareholder,  which  shall  not be  unreasonably  withheld,  make a
gift of, or transfer all, but not less than all, of such  Shareholder's interest
in his or its Shares or  Preferred  Shares to his  spouse or issue or to any  
corporation, partnership or limited liability company, or any similar Canadian 
entity, all of the equity  interests of which are owned by such  Shareholder or,
in the case of Parnell, his spouse or issue and, also in the case of Parnell, 


                                        33

<PAGE>
all of the  officers and  directors  of which  include only Parnell and his
spouse or issue,  or any trust with  respect  to which all of the  beneficiaries
include  only  such   Shareholder   and/or  his  spouse  or  issue  (a  "Related
Transferee".)  In the  event  of any  transfer  by a  Shareholder  to his or its
Related Transferee of such Shareholder's  Shares,  such Related Transferee shall
receive,  hold and vote such Shares  subject to the terms of this  Agreement and
the rights and obligations  hereunder of the Shareholder from whom or which such
Shares  were  transferred  as  though  such  Shares  were  still  owned  by such
Shareholder,  and such Shareholder (together with his or its Related Transferee)
shall continue to be deemed a single  Shareholder,  and such Related  Transferee
shall not be deemed a Shareholder for the purposes of this Agreement.

                  5.3 Improper  Transfers,  etc. Any  purported  Transfer of the
Shares or Preferred  Shares of the Corporation in violation of the terms of this
Agreement,  whether voluntary or involuntary,  shall be void and the Corporation
shall not recognize or give any effect to such  Transfer.  The  Corporation  may
refuse to transfer on its books any Shares or Preferred  Shares  transferred  in
violation of this Agreement.

                  5.4 Restrictive  Endorsement.  Each  certificate  representing
Shares or Preferred Shares now or hereafter  issued by the Corporation  shall be
subject to this  Agreement and shall have stamped,  printed or typed thereon the
following legend:

                  The  sale,  assignment,   transfer,   pledge,  encumbrance  or
                  hypothecation of the Shares represented by this certificate or
                  any certificate issued in exchange or transfer therefor is and
                  will be subject to a Shareholders'  Agreement dated as of July
                  17, 1998, by and among the Corporation  and its  shareholders,
                  which  Agreement  provides for  restrictions  on the transfer,
                  encumbrance and disposition of the Shares of the  Corporation,
                  a signed  counterpart of which is on file at the office of the
                  Corporation.


                  5.5 No  Transfer  Unless  Transferee  is Bound.  No  purported
Transfer of Shares  pursuant  to this  Agreement  shall be made or be  effective
until the proposed  transferee  executes  and  delivers to the parties  hereto a
written  consent,  in a form approved by the Board of Directors,  to be bound by
this  Agreement  and  is in  compliance  with  all  of the  provisions  of  this
Agreement.  Upon the transferee's  execution and delivery of such consent,  this
Agreement  shall be binding upon the  transferee  as if the  transferee  were an
original signatory to this Agreement.

                                            ARTICLE VI
                  VOLUNTARY AND INVOLUNTARY LIFETIME TRANSFERS

                  6.1      Voluntary Sale of Shares--Bona Fide Offer.

     (a)  Offered  Shares.  In the event  that  either  Shareholder  shall  have
received, and wishes to accept, a bona fide offer from one or more third parties
(with whom or which it is dealing with at arm's  length) to purchase all but not
less  than  all of its  Shares  or  Preferred  Shares  (the  "Offered  Shares"),
including  such offer  received by Tremont  pursuant to its desire to "withdraw"
from the  Corporation,  as  contemplated  by the Joint  Venture  Agreement,  the
Shareholder (the "Selling  Shareholder") shall first offer the Offered Shares to
the Corporation and the other  Shareholder  pursuant to the procedures set forth
in this Section 6.1.

                     (b)      Offer to Corporation and other Shareholder.  In
the event that a Selling  Shareholder  shall be  required  to offer the  Offered
Shares to the  Corporation  and/or  the other  Shareholder  pursuant  to Section



                                        34

<PAGE>
6.1(a),  the Selling  Shareholder shall offer such Shares or Preferred Shares to
the  Corporation  and the  other  Shareholder  by  written  notice  (the  "Offer
Notice"),  which Offer Notice shall be given  simultaneously  to the Corporation
and to the other Shareholder,  advising such Shareholder of his or its intention
to make such  disposition.  The Offer Notice shall (i) set forth the name(s) and
address(es) of the party(ies)  having made such offer (the  "Offerors") and (ii)
specify  the number of Shares or  Preferred  Shares  subject  to the offer,  the
intended  purchase price thereof,  the method of payment  therefor and any other
material terms of such offer. Such options  available to the Corporation  and/or
the other  Shareholder shall be exercisable in accordance with the provisions of
Section 6.1(c) and Section 6.1(e) hereof.

                           (c)      Corporation Option.  The Corporation shall
have the option, exercisable no later than forty-five (45) days after receipt of
the Offer Notice and subject to all applicable laws and regulations  (the
"Corporation  Exercise Period"),  to agree to purchase,  at the price determined
and upon the terms  provided in Section  6.2 hereof,  all or part of the Offered
Shares as indicated in this Section 6.1(c); provided, however, that this Section
6.1(c) shall not apply to any offer made by an Offeror which the Corporation has
reasonable cause to believe may not be a bona fide purchase offer; and provided,
further, that the Corporation shall have the option to purchase less than all of
the  Offered  Shares  only in the event the  balance of the  Offered  Shares are
purchased by the remaining Shareholder as provided in this Section 6.1.


                           (d)      Corporation  Purchase.  If the Corporation 
shall elect to exercise this option,  it shall give a written notice of exercise
to the Selling  Shareholder, no later than five (5) business  days prior to the
expiration  of the aforesaid Corporation Exercise Period, which notice
(hereinafter the "Corporation Exercise Notice") shall specify the number of
shares being purchased by the  Corporation.  In the event the Corporation and/or
the other Shareholder elect to purchase the Offered Shares pursuant to this 
Section 6.1 (each such purchaser shall sometimes hereinafter be referred to as a
"Purchaser"),  then the closing shall take place at  the  registered  office  of
the  Corporation  or  such  other  place  as the Corporation  may  reasonably  
designate (i) in the event the  Corporation  shall elect to purchase  all of the
Offered  Shares,  within sixty (60) days after the giving of such Corporation
Exercise Notice, or (ii) in the event the Corporation shall elect to purchase
less than all of the Offered  Shares,  within sixty (60) days after the giving 
of the  "Shareholder  Exercise  Notice"  (as such term is defined in Section 
6.1(e) hereof).  At the closing,  the purchase price shall be paid and the 
Shares or Preferred  Shares shall be  transferred,  as set forth in 
Section 6.2 hereof.

                           (e)      Shareholder Option. If the Corporation shall
fail to elect to  exercise,  in part or in whole,  its  option to  purchase  the
Offered Shares, then the other Shareholder shall have the option to purchase the
Offered Shares, other than those Shares purchased by the Corporation pursuant to
Section  6.1(d)  hereof.   This  option  to  the  other   Shareholder  shall  be
exercisable,  if at all,  within  the  thirty  (30)  day  period  following  the
expiration  of the  Corporation  Exercise  Period as above  provided  in Section
6.1(c) (the "Shareholder Exercise Period"). If the other Shareholder shall elect
to exercise its option, such Shareholder shall give a written notice of exercise
to the  Corporation and the Selling  Shareholder  prior to the expiration of the
aforesaid Shareholder Exercise Period (the "Shareholder Exercise Notice").

                                      35

<PAGE>
 

                           (f)  Available  Funds.  In the event  that the optio
is exercised by the Corporation  and the  Corporation  does not have available
funds sufficient to enable the Corporation lawfully to make such purchase,  then
the Corporation and the Shareholder  will promptly take all action which may be
necessary and permitted  by law  (including  without  limitation  reducing  the
capital of the Corporation)  in order to make funds  available in an amount 
sufficient to pay suc  sums that may be required on account of the purchase
price.  Each Shareholder,  by its execution of this  Agreement,  agrees to vote
its Shares in such manner as to accomplish  the  availability  of such funds,
and the Selling Shareholder  shall be deemed to have  given the Chief  Executive
Officer of the Corporation his or its proxy for such purpose or, if the Chief 
Executive Officer of the Corporation is the Selling hareholder or there shall b
no person occupying the office of Chief Executi Office such proxy shall be'
deemed given to the Secretary of the Corporation.

     (g) Sale to Third  Party.  In the event  that the  options  granted  to the
Corporation  and the other  Shareholder  pursuant  to this  Section  6.1 are not
exercised as herein  provided,  the Selling  Shareholder  shall,  subject to any
regulatory  approvals as may be  necessary,  have the right to dispose of all of
the  shares  owned by the  Selling  Shareholder  at the  price  and on the terms
specified  in the Offer  Notice  and  subject  to the  terms of this  Agreement;
provided, however, that the offer and sale of the shares shall, in all respects,
comply with the  registration  provisions of (or be exempt from the registration
provisions of) any applicable  securities law and the conclusive written opinion
of the Offeror's  counsel that the offer and sale comply with said  registration
provisions or are exempt therefrom shall be received by the Corporation.  Copies
of all  documents  relating to such sale shall be forwarded to the  Secretary of
the  Corporation no later than five (5) days after the date of the sale. If such
sale is not  consummated  within  sixty  (60) days after the  expiration  of the
option period, the Selling  Shareholder's Shares or Preferred Shares shall again
be subject to all of the terms and provisions of this Agreement.

                  6.2      Purchase Price for Sale under Section 6.1.

                           (a)      Purchase Price.  In the event that one or
more Purchasers (as defined in Section  6.1(d)) elect to purchase Shares or
Preferred Shares from the Selling Shareholder as provided in Section 6.1 
hereinabove,  the purchase  price for the Offered  Shares shall be at the price
and payable on the terms which are  designated in the Offer Notice  provided for
in Section  6.1(b) hereinabove.

     (b) Security.  In order to provide security for the payment of the deferred
portion of the purchase price, if any, the Selling  Shareholder shall deliver at
closing the  certificates  evidencing the ' number of Shares or Preferred Shares
being  purchased by the  Purchaser,  together with duly executed  instruments of
transfer of such shares,  to such person as shall be  acceptable to both parties
as escrow  agent (the "Escrow  Agent").  Upon receipt of payment in full of each
installment of principal and interest on such deferred portion, the Escrow Agent
shall release to the maker of the related note or other evidence of indebtedness
a duly endorsed share transfer certificate with any required transfer tax stamps
affixed  thereto,  representing  that fraction of the Shares or Preferred Shares
which such Purchaser has purchased which corresponds to a fraction the numerator



                                       36

<PAGE>

of which shall equal the  principal  payment made and the  denominator  of which
shall  equal  the  original  principal  amount  of the  Purchaser  note or other
evidence of indebtedness.

                           (c)      Default.  In the event of any default in the
payment of the  deferred  portion of the  purchase  price,  if any,  the Selling
Shareholder  shall give notice thereof to the Escrow Agent, and the Escrow Agent
shall thereupon hold the certificates and share transfer  instruments in respect
of such Shares or Preferred  Shares until there shall be delivered to the Escrow
Agent  a copy  of a  final  judgment  directing  disposition  of the  Shares  or
Preferred Shares or a letter of instructions  signed by the Selling  Shareholder
and the Purchaser  directing  disposition of the Shares or Preferred  Shares. So
long as a Purchaser's  purchased Shares or Preferred Shares shall be held by the
Escrow Agent, he or it shall receive any distributions  thereon to hold the same
upon trust. Until notice of default, the Escrow Agent shall deliver such 
distributions to the Purchaser;  after notice of default, the Escrow Agent shall
hold such distributions  pending  instructions as set forth above. Voting rights
with respect to such Shares or  Preferred  Shares  shall be  exercisable  by the
Purchaser  so long as the shares are held by the Escrow  Agent,  and the Selling
Shareholder  shall  at  Closing  deliver  such  instruments  of  proxy as may be
necessary or appropriate to give effect to the terms of this Section 6.2.

                  6.3 Come - Along. In the event any Shareholder (the "Selling 
Shareholder") shall have given an Offer Notice to the Corporation and the other
Shareholder under Section 6.1 hereof and neither the Corporation  nor the other
Shareholder shall have exercised its rights under Section 6.1, the other
Shareholder may require the proposed purchaser to include such Shareholder in 
such sale and sell its Shares on the same basis as set forth in the Offer
Notice,  pro rata (based upon the percentage of Shares held by the  Shareholder)
and at the same time as the  Selling  Shareholder.  The  other Shareholder shall
give notice of its intention to so "come-along" by giving notice to the Selling
Shareholder within thirty (30) days after the Offer  Notice.  Such sale shall
proceed free of any restrictions pursuant to this Agreement.  If the purchaser 
purchasing Shares and Offered Shares,  if any,  pursuant to the Offer Notice
does not permit the other Shareholder to "comealong" as provided herein, the 
Selling Shareholder shall not be permitted to sell his or its Shares and 
Preferred Shares, if any, pursuant to the Offer Notice, and if such Shares and
Preferred Shares are not then otherwise purchased  pursuant to the terms hereof,
such Shares and Preferred Shares shall again be subject to all of the terms and
conditions of this Agreement.

                  6.4      Additional Options to Purchase Shares.

                      (a)      Parnell's Resignation.  (i)  In the event that
Parnell shall desire to resign from the Corporation for any reason,  in addition
to any other rights the Corporation and Parnell may each have hereunder, Parnell
shall  notify  the  Corporation  and  Tremont by written  notice  (the  "Parnell
Notice"),  which Parnell Notice shall be given simultaneously to the Corporation
and Tremont,  advising the  Corporation  and Tremont of his intention to resign.
Tremont shall  thereupon have a call right (the "Call  Option"),  exercisable in
its sole  discretion,  with  respect to all of Parnell's  Shares (the  "Put/Call
Shares"). Tremont shall have no later than forty-five (45) days after receipt of
the Parnell Notice (the "Tremont Exercise Period") and subject to all applicable
laws and regulations to exercise its Call Option.  Tremont may exercise its Call
Option by giving  written  notice  (the "Call  Notice") to Parnell no later than



                                        37

<PAGE>
five (5) business days prior to the expiration of the aforesaid Tremont Exercise
Period that Tremont has determined to exercise such Call Option to purchase all,
but not less than all, of the Put/Call Shares.

                                   (ii) In the event Tremont shall fail to elect
to exercise its Call Option as provided for in Section 6.4(a)(i) hereof, Parnell
shall thereupon have a put right (the "Put Option"), exercisable in his sole
discretion,  with respect to all of the Put/Call Shares and Tremont shall
thereupon have the option,  and the Corporation  shall thereupon have the 
obligation,  in the event Tremont does not elect to purchase all or any Put/Call
Shares,  to purchase all or the remaining Put/Call Shares. Parnell shall have no
later than thirty (30) days following the expiration of the Tremont Exercise
Period as above provided in Section 6.4(a)(i) (the  "Parnell  Exercise  Period")
and subject to all applicable laws and regulations to exercise its Put Option.
Parnell may exercise its Put Option by giving written notice (the "Put Notice"
to the Corporation and Tremont prior to the expiration of the aforesaid Parnell
Exercise Period that Parnell has determined to exercise such Put Option to sell 
all, but not less than all, of the Put/Call Shares.

                                   (iii) In the event Tremont elects to
exercise its Call Option or Parnell  elects to exercise his Put Option  pursuant
to this Section  6.4(a),  the purchase  price shall be as determined  and on the
terms set forth in Section  6.5(a)  hereof,  and the closing of the  transaction
shall take place at the registered office of the Corporation or such other place
as the  Corporation  may  reasonably  designate,  (A) in the event Tremont shall
elect to exercise its Call Option,  within sixty (60) days after the giving
of the Call Notice, or (B) in the event Parnell shall elect to exercise  its Put
Option,  within  sixty  (60) days after the giving of the Put Notice.

                                   (iv)  In the event Tremont has elected not to
exercise its Call Option and Parnell has elected not to exercise his Put Option,
the Put/Call  Shares shall again be subject to the terms and  conditions of this
Agreement.

                       (b)      Parnell's Death or Disability.  In the event of
the death or "disability" (as such term is defined in the Employment  Agreement)
of Parnell, in addition to any other rights Parnell, or his representative,  may
have hereunder, Tremont and Parnell, or his representative,  as the case may be,
each shall be entitled to  exercise  its Call Option or Put Option,  as the case
may be, as set forth in Section  6.4(a) hereof with respect to Parnell's  Shares
pursuant to the procedures,  and subject to the same  obligations,  set forth in
Section 6.4(a). In the case of this Section 6.4(b),  the Tremont Exercise Period
shall commence upon the date Parnell  becomes  deceased or disabled (or, if such
death or disability was not then notified or known or reasonably apparent to the
Corporation  and Tremont,  after the date of such  notification  or knowledge or
becoming reasonably apparent) at the price determined and on the terms set forth
in Section 6.5(b) hereof, and the closing of the transaction shall take place at
the registered office of the Corporation or such other place as the Corporation
may  reasonable  designate no later than sixty (60) days after the giving of the
Call Notice,  in the event Tremont exercises its Call Option, or the Put Notice,
in the event  Parnell,  or his  representative,  exercises the Put Option as the
case may be.


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<PAGE>

                           (c)      Termination of Parnell's Employment Without
Cause or Non-Renewal of Parnell's Employment  Agreement.  In the event Parnell's
employment with the  Corporation is terminated  without "cause" (as such term is
defined in the Employment  Agreement) or the Corporation elects not to renew the
Employment  Agreement,  at any time  for  reasons  other  than  for  cause  (the
"Corporation  Terminating  Event"),  in addition to any other rights Parnell may
have  hereunder  or  under  the  Employment  Agreement,  the  Corporation  shall
thereupon  have a call  right  (the  "Call  Option"),  exercisable  in its  sole
discretion, with respect to all of Parnell's Shares (the "Callable Shares"). The
Corporation  may exercise its Call Option by giving notice in writing to Parnell
no later  than  forty-five  (45) days  after the date of the  occurrence  of the
Corporation Termination Event of its election to purchase the Callable Shares at
the price  determined  and on the terms set forth in Section  6.5(c) hereof (the
"Call  Notice"),  and the  closing  of the  transaction  shall take place at the
registered  office of the Corporation or such other place as the Corporation may
reasonably  designate no later than sixty (60) days after the giving of the Call
Notice.

                         (d)  Termination of Parnell's  Employment for Cause;
Newcastle  Management Claims.  In the event Parnell's employment shall be
terminated for "cause" (as such term is defined in the Employment Agreement) or
any successful claim is brought, or injunctive  relief is successfully obtained,
by Newcastle Capital Management  Inc. against Parnell which results in his being
prohibited  for a period of greater than one hundred  twenty  (120) days from
engaging on his own behalf or in the service of others in the business in which 
the  Corporation  is engaged or proposes to be engaged (a "Parnell  Termination 
Event"), in addition to any other rights the  Corporation  may have hereunder or
under the Employment Agreement,  the Corporation and Tremont,  to the extent the
Corporation does not elect to  exercise  its  call  rights,  shall  each  have a
call  right (a "Call Option"),  exercisable in its sole discretion, with respect
to all of Parnell's Shares (the "Callable Shares").  The Corporation and/or
Tremont may exercise its or their  Call  Option(s)  by giving  notice in writing
to Parnell no later than forty five (45) days after the date of the occurrence
of the Parnell Termination Event of its or their  election to  purchase  the
Callable  Shares at the price determined  and on the terms set  forth in 
Section 6.5(d) hereof (the "Call Notice"),  and the closing of the transaction 
shall take place at the registered office of the Corporation or such other place
as the Corporation and/or Tremont, as the case may be, may reasonably designate
no later than sixty (60) days after the giving of the Call Notice.

                         (e) Bankruptcy of a Shareholder. In the event of a
bankruptcy or the appointment of a receiver for a Shareholder by any court, or
any  insolvency  or  assignment   proceeding   brought  by,  for  or  against  a
Shareholder,  or the taking  advantage by a  Shareholder  of any  insolvency  or
bankruptcy  statute (a  "Bankruptcy  Action")  shall  occur with  respect to any
Shareholder  (the  "Selling  Shareholder"),  the  Selling  Shareholder  shall be
deemed,  without further action, to have offered all of the Shares and Preferred
Shares then owned by such Shareholder (the "Offered  Shares") to the Corporation
and the remaining  Shareholder  pursuant to the  procedures set forth in Section
6.1 hereof.  The options  available to the Corporation and the other Shareholder
shall be exercisable in writing to the Selling  Shareholder  commencing no later
than thirty (30) days after the date of the occurrence of the Bankruptcy  Action
(or, if such  Bankruptcy  Action was not then  notified  or known or  reasonably
apparent to the  Corporation and the other  Shareholder,  after the date of such



                                        39

<PAGE>
notification  or  knowledge  or  becoming  reasonably  apparent)  at  the  price
determined and on the terms set forth in Section 6.5(d) hereof,  and the closing
of the transaction shall take place no later than sixty (60) days after the date
on which such options are exercised.

                         (f)  Encumbrance of  Shares. In the event all or any of
a Shareholder's Shares or Preferred  Shares becomes subject to an encumbrance,
such Shareholder (the "Selling Shareholder") shall be deemed, without further
action, to have offered all of the Shares and Preferred Shares then owned by
such Shareholder to the Corporation and the remaining  Shareholder in accordanc
with the provisions and procedures of Section 6.4(e) hereof at the price
determined and on the terms set forth in Section  6.5(d) hereof.  If the 
aforesaid  offer is accepted by the Corporation and/or the other Shareholder, 
the closing for such purchase shall be held no later than sixty (60) days after
the date of the exercise of the option.

                         (g)    Material Breach of Agreement.  In the event of
a  material  breach  of this  Agreement  or the  Joint  Venture  Agreement  by a
Shareholder  which is not remedied  within thirty (30) days after written notice
thereof is delivered to such  Shareholder  by the  Corporation  and/or the other
Shareholder, if such breach is capable of remedy, such Shareholder (the "Selling
Shareholder")  shall be deemed,  without further action,  to have offered all of
the Shares then owned by such  Shareholder to the  Corporation and the remaining
Shareholder  in accordance  with the provisions and procedures of Section 6.4(e)
hereof at the price  determined  and on the  terms set forth in  Section  6.5(d)
hereof.  If the aforesaid offer is accepted by the Corporation  and/or the other
Shareholder,  the  closing for such  purchase  shall be held no later than sixty
(60) days after the date of exercise of the option.

                         (h) Failure to Exercise.  In the event the  Corporation
or Parnell, or his representative, as the case may be, shall fail to exercise 
their respective call and put rights, or the Shareholders or the  orporation  
otherwise fail to exercise their respectivoptions to purchase Shares pursuant to
this Section 6.4,  other than in connection  with the exercise of Parnell's put 
rights as set forth in Section  6.4(a)(ii)  and 6.4(b)  hereof,  the Shares and
the Preferred Shares subject to such call and/or put rights or such other 
options shall again be subject to all the terms and provisions of this 
Agreement.

                         (i) Available Funds.  In the event that the
Corporation  or  Parnell  shall  exercise  their  respective  call or put rights
resulting  in the  election or the  obligation  of the  Corporation  to purchase
Shares, or the Corporation otherwise exercises its option to purchase the Shares
and  Preferred  Shares  deemed  offered  pursuant to this  Section  6.4, and the
Corporation  does not have available funds  sufficient to enable the Corporation
lawfully to make such purchase,  then the Corporation and the Shareholders  will
promptly take all action which may be necessary and permitted by law  (including
without  limitation  reducing  the  capital  of the  Corporation)  to make funds
available  in an amount  sufficient  to pay such sums  that may be  required  on
account of the  purchase  price.  Each  Shareholder,  by its  execution  of this
Agreement,  agrees  to vote his or its  Shares  in such a  manner,  or cause its
nominee(s) on the Board of Directors to authorize such action,  as to accomplish
the  availability of such funds,  and the Shareholder  selling his or its Shares
and Preferred  Shares pursuant to this Section 6.4 shall be deemed to have given


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<PAGE>

the Chief  Executive  Officer of the  Corporation his or its proxy for such
purpose or, if there shall be no person  occupying the office of Chief Executive
Officer, such proxy shall be deemed given to the Secretary of the Corporation.

                  6.5      Purchase Price For Purchases and Sales of Shares
Pursuant to Section 6.4.

                           (a)      Parnell's Resignation.  In the event Tremont
shall  exercise  its call  right or  Parnell  shall  exercise  his put  right in
connection  with the  purchase  and sale of Shares  pursuant  to Section  6.4(a)
hereof,  the  purchase  price  for  Parnell's  Shares  to be  purchased  by  the
Corporation shall be an amount equal to the sum of, (i) measured with respect to
a portion of Parnell's  Shares as set forth on Schedule A hereto,  Parnell's pro
rata share in proportion  to his ownership of Shares of the product  obtained by
multiplying the Corporation's  revenue (the "Revenue") for the twelve (12) month
period  ending  on the  last day of the  calendar  month  preceding  the date of
Tremont's  exercise of its call right or Parnell's exercise of his put right, as
the case may be (the  "Revenue  Calculation  Date"),  by a  multiple  of two and
one-half (2.5), and (ii) with respect to the balance of Parnell's Shares, as set
forth on Schedule A hereto,  the book value (the "Book Value") of such Shares as
of the Revenue Calculation Date.

                           (b)      Parnell's Death or Disability.  In the event
Tremont and/or the  Corporation  shall exercise their  respective call rights or
Parnell, or his representative,  as the case may be, shall execute his put right
in connection  with the purchase and sale of Shares  pursuant to Section  6.4(b)
hereof,  the  purchase  price for  Parnell's  Shares to be  purchased by Tremont
and/or the Corporation,  as the case may be, shall be an amount equal to the sum
of, (i) measured  with respect to a portion of Parnell's  Shares as set forth on
Schedule B hereto,  Parnell's  pro rata share in  proportion to his ownership of
Shares of the  product  obtained  by  multiplying  the Revenue as of the Revenue
Calculation  Date,  as such terms are  defined in Section  6.5(a)  hereof,  by a
multiple of three and one-quarter  (3.25),  and (ii) with respect to the balance
of  Parnell's  Shares,  as set forth on  Schedule  B hereto,  the Book Value (as
defined in Section 6.5(a)) thereof as of the Revenue Calculation Date.

                           (c)      Termination of Parnell's Employment without
Cause or  Non-Renewal  of  Parnell's  Employment  Agreement.  In the  event  the
Corporation  shall  exercise its call right in connection  with the purchase and
sale of Shares  pursuant  to  Section  6.4(c)  hereof,  the  purchase  price for
Parnell's Shares to be purchased by the Corporation  shall be an amount equal to
Parnell's  pro rata portion in  proportion  to his  ownership of Shares,  of the
product obtained by multiplying the Corporation's Revenue (as defined in Section
6.5(a) hereof) by a multiple of five (5).

                           (d)      Parnell's Termination for Cause and Other
Triggering Events Set Forth in Section 6.4(d),  6.4(e),  6.4(f) and 6.4(g).  The
purchase  price for Shares and  Preferred  Shares,  if any,  purchased  and sold
pursuant to Section 6.4(d),  6.4(e),  6.4(f) and 6.4(g) hereof shall be the Book
Value (as defined in Section 6.5 (a) hereof)  thereof as shown on the  Financial
Statements.

                           (e)    Book Value.  For purposes of this Section 6.5,
Revenue and Book Value shall be determined by the certified  public  accountants
regularly retained by the Corporation in accordance with U.S. generally accepted
accounting  principles  as adjusted to reflect the  considerations  set forth in
Section 6.5(f)  hereinbelow.  The accountant  shall present the valuation in the



                                        41

<PAGE>

form of a report to the Shareholders and the Corporation  within forty five (45)
days of the Revenue  Calculation Date (or such other date as the accountants may
require). The determination of the Book Value by the certified public accountant
referred to in this subsection  shall be final,  binding and conclusive upon the
Shareholders  and the  Corporation  and shall not be subject to the  arbitration
provisions of this Agreement.

                           (f)      In determining Book Value of the Shares, the
following shall be considered by the accountant:

                                    (i)  Goodwill,  tradenames,  trademarks,  
copyrights and other intangible assets shall be deemed of no value unless 
acquired for a valuable consideration, in which event the cost of the 
acquisition shall be applied.

                                    (ii) All real property,  furniture, fixtures
and equipment shall be valued at its appraised value as of the date of
calculation.

                                    (iii)     Cash in the bank or cash on hand
shall  be  taken  at face  value  and all  negotiable  securities  owned  by the
Corporation shall be taken at market value.

                                    (iv)   Accounts receivable shall be taken at
their net value  after  allowing  for all  customary  discounts  and  reasonable
reserves in the light of actual prior experience and practice.

                                    (v)    All other assets, if any, customarily
mentioned in the books of account of the Corporation shall be taken
at their appraised value.

                                    (vi)  There  shall  be  deducted   from  the
aggregate of the foregoing  assets of the  Corporation  all  liabilities as of 
the date of calculation,  including but not limited to, any and all accrued
wages,  vacation pay (whether or not accrued) and commissions or bonuses to
employees.

                                    (vii)     There shall also be deducted all
taxes of every kind, nature and description,  whether imposed by Federal, state,
provincial  or  municipal  authorities,  which then shall be due and  payable or
which  thereafter may become payable by the Corporation for any periods prior to
the date of calculation.

                                    (viii)    The proceeds of any life insurance
policy, if any, collected upon the death of Parnell,  as contemplated by Section
6.8 hereof, shall not be deemed an asset of the Corporation.  The life insurance
policies  if  any,  owned  by the  Corporation  on  the  life  of any  surviving
Shareholder shall be valued as an asset at not more than cash surrender value.

                  6.6 Purchase Price for Purchases and Sales of Preferred Shares
Pursuant to Section 6.4. The purchase price for each of the Preferred Shares, if
any, purchased pursuant to Section 6.4 hereof shall be the Preferred Share Issue
Price.


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<PAGE>

                  6.7      Payment; Closing

     (a)  Payment.  Payment of the  purchase  price for the Shares or  Preferred
Shares  purchased  pursuant to Section  6.1 or 6.4 hereof  shall be made in cash
unless the  Shareholder  selling his or its Shares and Preferred  Shares and the
Corporation  or  the  other  Shareholder,  as  the  case  may  be,  agree  to an
alternative   method,  in  which  event  delivery  of  the  share   certificates
representing  the Shares or Preferred  Shares and other documents  evidencing or
connected with the sale of such Shares or Preferred  Shares shall be made in the
same manner as is provided for in Section 6.2(b).

                           (b)     Closing.  Any closing pursuant to Section 6.1
or 6.4 hereof shall be held at the registered  office of the Corporation or such
other  place as it may  reasonably  specify.  At such  closing  the  Shareholder
selling his or its Shares and  Preferred  Shares shall assign and deliver to the
Corporation  or the other  Shareholder,  as the case may be, any  certificate or
certificates  representing  the  Shares or  Preferred  Shares  sold by him or it
hereunder, together with share transfer forms, duly executed in blank, free from
any encumbrance,  and with any required transfer tax stamps affixed or paid for.
Payment shall be made for such Shares or Preferred  Shares at the closing at the
price  determined  and on the  terms  set  forth  in  Section  6.2  or  6.5,  as
applicable, unless otherwise provided herein.

                  6.8      Life Insurance.  It is acknowledged that the
Corporation may procure insurance on Parnell's life in order to facilitate the
purchase of his Shares.

                  6.9      Resignations;  Releases.  In the event of the sale by
a Shareholder of all of his or its Shares and Preferred Shares,  pursuant to the
terms, covenants and conditions of this Agreement, then simultaneously with such
sale, he or it shall execute an instrument resigning as a Director or causing 
any Director(s) nominated or appointed by such Shareholder as contemplated 
hereby to so resign and, in the case of Parnell, also resigning as an officer
and/or employee of the Corporation,  and shall also  execute  and/or cause such
parties to execute a release in favor of the Corporation in connection with such
sale, excepting, however, from the release of any of the obligations to pay any 
balance for the Shares in  accordance  with the  provisions  of this  Agreement
relating to the purchase and sale of the Shares.

                  6.10     Additional Rights of Parnell in Connection with
Certain Section 6.4 Events.

                          (a) Tremont's Withdrawal.  Notwithstanding the terms
of Section 6.1 hereof, in the event Tremont  withdraws from the Corporation and 
neither the Corporation nor Parnell elect to purchase  Tremont's  Shares and 
Preferred Shares and such Shares and Preferred Shares are not purchased pursuant
to a third party bona fide purchase offer as contemplated by Section 6.1 hereof,
and the Shareholders elect to dissolve the Corporation in accordance with the 
Joint Venture Agreement and pursuant to Section 8.1 hereof, Parnell, or his 
representative, as the case may be, with respect to Tremont or any successor to,
or transferee from, Tremont or other party to which Tremont has  transferred
the then existing Corporation relationships (the "Corporation Relationships"),
as provided for under the Joint Venture Agreement (the "Successor"),  shall be 
entitled to receive,  and Tremont agrees to cause Parnell or his representative,
as the case may be, to receive, from the  Successor,  in  



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<PAGE>
perpetuity,  twenty five percent (25%) of all future revenues  generated by
the Successor  arising from the  Corporation  Relationships  on the date of such
transfer.

                           (b)      Termination of Parnell's Employment Without
Cause or the  Non-Renewal  of Parnell's  Employment  Agreement and Certain Other
Triggering  Events  Described  in Section  6.5. In the event (i)  Parnell  shall
resign from the Corporation as described in Section 6.4(a) hereof,  (ii) Parnell
shall  become  deceased or disabled as  described  in Section  6.4(b),  or (iii)
Parnell's  employment  with the  Corporation is terminated  without cause or the
Employment  Agreement  is not  renewed  at any time by the  Corporation  for any
reason other than cause as described in Section 6.4(c) hereof,  and in each case
the  Corporation  does not elect to  exercise  its call rights as  described  in
Section 6.4, Parnell,  or his  representative,  as the case may be, shall retain
and hold Parnell's  Shares in compliance with the terms of this  Agreement,  and
shall be entitled to receive,  and the  Corporation  agrees to cause  Parnell to
receive,  twenty five  percent  (25%) of all future  revenues  generated  by the
Corporation or the Successor  arising from the  Corporation  Relationships  then
existing as of the date of the applicable  triggering event described in each of
Sections 6.4(a), 6.4(b) and 6.4(c) hereof (collectively, the "Triggering 
Events").

                           (c)     Definition of Future Revenues.  For the
purposes of Section  6.10(a) and (b) hereof,  "future  revenues"  shall mean all
revenues generated by the Corporation or the Successor, as the case may be, from
accounts  of the  Corporation's  clients  existing  on  the  date  of  Tremont's
withdrawal or any of the applicable  Triggering  Events,  as the case may be, in
connection with future  subscriptions  to, and compounding on, the Corporation's
products and funds  existing at the time of Tremont's  withdrawal  or any of the
applicable Triggering Events, as the case may be, but shall not include revenues
generated by the  Corporation  or the Successor from such accounts in connection
with new and  different  products  or  funds  introduced  following  the date of
Tremont's withdrawal or any of the applicable triggering events, as the case may
be.

                           (d)     Inspection by Parnell.  At all reasonable
times during regular business hours and upon reasonable notice to Tremont or the
Corporation,  as the  case  may  be,  Parnell  or his  representative  shall  be
permitted  to  inspect  the  relevant  books  and  records of Tremont or the
Corporation,  as the  case  may be,  for the  purposes of verifying  Parnell's
entitlements under Section 6.10(a) and (b) hereof.


                                 ARTICLE VII

                             CERTAIN COVENANTS

                  7.1      Non-Solicitations.

                    (a)      Parnell Non-Solicitation.  Parnell agrees that
during the term of this  Agreement and following the earlier of the  termination
of his employment with the Corporation or sale of his Shares or Preferred Shares
and his  ceasing to be a  Shareholder  he will not,  without  the prior  written
consent of Corporation,  either directly or indirectly,  on his own behalf or in
the service or on behalf of others either



                                       44

<PAGE>
                             (i)     solicit, divert or appropriate, or attempt
to solicit, divert or appropriate, to any Competing Business (i.e., any business
which is engaged in the hedge fund,  investment  fund or  investment  management
business,  or the same or  substantially  the same as any other  business of the
Corporation,  the focus of which is in Canada  or its  provinces),  or any other
business,  any client or customer of or investor with the Corporation during the
two (2) years  preceding the  termination  of this  Agreement or the sale of his
Shares or his ceasing to be a Shareholder;

     (ii) solicit,  divert or hire away,  or attempt to solicit,  divert or hire
away, or hire or engage as an independent contractor, any person employed by the
Corporation, whether as a temporary or permanent employee and whether or not
such employment is pursuant to a written agreement; or

                             (iii)   use the "Tremont" name or any
derivation  thereof in connection with the conduct of any business or businesses
development on behalf of himself or in the service or on behalf of others except
as provided in Section 5.5 of the Joint Venture Agreement.

                   (b)      Tremont's Non-Solicitation.  Tremont agrees
that during the term of this  Agreement  and following the sale of its Shares or
its ceasing to be a Shareholder it will not,  without the prior written  consent
of the Corporation,  either directly or indirectly,  on its own behalf or in the
service or on behalf of others either

                             (i)     except with respect to Tremont's
relationships or affiliations set forth on Schedule C attached hereto,  solicit,
divert or  appropriate,  or attempt to solicit,  divert or  appropriate,  to any
Competing Business, or any other business, any client or customer of or investor
with the Corporation  during the two (2) years preceding the termination of this
Agreement or the sale of its Shares or its ceasing to be a Shareholder; or

                                    (ii)  solicit,   divert  or  hire  away,  or
attempt to solicit, divert or hire away, or hire or engage as an 
independent  contractor  any  person  employed  by  Corporation,  whether  as  a
temporary or permanent  employee and whether or not such  employment is pursuant
to a written  agreement  and whether or not such  employment is for a determined
period or is at will.

                  7.2      Agreement Not To Engage in Competing Business.

                           (a)     Parnell's Non-Compete.  Parnell covenants and
agrees that during the term of this Agreement and for a period of six (6) months
from the date of the sale of his Shares or his ceasing to be a  Shareholder,  he
will not,  either  directly or indirectly on his own behalf or in the service or
on behalf of others, engage in any capacity in any Competing Business.

                           (b)     Tremont's Non-Compete.  Tremont covenants and
agrees that during the term of this Agreement and for a period of six (6) months
from the date of the sale of its Shares or its ceasing to be a  Shareholder,  it
will not,  either  directly or indirectly on its own behalf or in the service or
on behalf of others, engage in any capacity in any Competing Business.


                                          45



<PAGE>


                  7.3 Extension of Covenant in the Event of Breach. In the event
of a breach of any of the covenants set forth in Section 7.1 or 7.2 hereof,  the
running of the period of the restriction shall be tolled during the continuation
of any such  breach,  and the running of the period of such  restrictions  shall
commence only upon compliance with the terms of the applicable subsection.

                  7.4 Parnell Not Bound.  Notwithstanding the foregoing,  in the
event that Tremont  withdraws  from the  Corporation as  contemplated  under the
Joint Venture  Agreement  and referred to in Section 6.1 hereof,  whether or not
Parnell elects to purchase  Tremont's  Shares and Preferred  Shares  pursuant to
Section 6.1(e) hereof, or in the event Parnell is terminated without "cause" (as
defined in the Employment  Agreement) or the Employment Agreement is not renewed
at any time by the  Corporation  for any reason other than cause, as referred to
in Section  6.4(d)  hereof,  Parnell  shall have no  obligations  under  Section
7.1(a)(i), 7.1(a)(ii) or 7.2(a) hereof.

                  7.5      Confidential Material.

                           (a) Confidential  Information.  The Shareholders 
acknowledge and agree that Confidential  Information  of the  Corporation  has
been and will be imparted to them,  which if disclosed by them or improperly
used by them will result in harm to  the  Corporation.   For  the  purposes  of 
this Agreement, "Confidential Information"  shall mean all trade  secrets, sales
and marketing information, operations  material and memoranda,  personnel
records, client lists, pricing information, and financial information concernin
or relating to the business, investment funds, accounts, customers, employees,
and affairs of the Corporation and  contact  persons  and  other  information
maintained  by the  Corporation, obtained  by or  furnished,  disclosed  or
disseminated  to a  Shareholder,  or obtained, assembled or compiled by a 
Shareholder or under his or its supervision during the course of his employment
by Corporation or its being a Shareholder of the Corporation, and all physical 
embodiments of the foregoing, all of which are hereby agreed to be the property 
of and  confidential  to the  Corporation,  but Confidential  Information  shall
not include any of the  foregoing to the extent the same (i) is or  becomes 
publicly  known  through no fault or breach of this Agreement,  (ii) can be 
shown by  ritten documentation to have been in the possession of  the  recipient
party, free of any obligation to keep it confidential,  (iii) has been 
independently developed by the recipient party, or (iv) constitutes residuals
held in intangible form in the mind of Parnell or any officer of Tremont who may
be deemed bound by the terms of this Agreement.

                           (b) Removal of Confidential Information.  While he
is a Shareholder and thereafter,  Parnell shall not, without Corporation's prior
written  authorization,  remove or cause to be  removed  from the  Corporation's
premises any Confidential Information or other material whatsoever, belonging to
the  Corporation  for purposes other than for use in connection  with authorized
work Parnell performs for the Corporation.

                           (c) Disclosure of Confidential Information.
Parnell agrees that he will not, either while he is a Shareholder or at any time
after ceasing to be a Shareholder or an employee of the Corporation, without the
prior written consent of the Corporation,  disclose,  except as required by law,
or make  available any  Confidential  Information  to any person or entity,  nor
shall Parnell make or cause to be made, or permit or allow,  either on Parnell's
own  behalf or on behalf of  others,  any use of such  Confidential  Information
other than in the proper  performance  of  Parnell's  duties  hereunder or as an



                                         46

<PAGE>
employee.  All  Confidential  Information  shall be returned to the  Corporation
immediately upon request to this effect or immediately following the termination
of  Parnell's  employment  with the  Corporation  or  Parnell's  ceasing to be a
Shareholder for any reason.

                           (d)   Tremont's Obligation.  As long as Tremont shall
own Shares in the  Corporation  or otherwise be bound by the  provisions of this
Agreement,  it agrees not to  disclose,  divulge or  communicate  to, or for the
benefit  of, any  person,  firm or business  entity,  in any  manner,  except as
required by law,  any  Confidential  Information  or other  material  whatsoever
belonging to the Corporation.

     7.6 Miscellaneous. The Shareholders agree that the covenants and agreements
contained in this Article VII, and the  subsections  of this Article VII, are of
the essence of this  Agreement;  that each of such  covenants is reasonable  and
necessary to protect and preserve the  interests and  properties of  Corporation
and the  business  of  Corporation;  that  irreparable  loss and damage  will be
suffered by  Corporation  should there be a breach of any of such  covenants and
agreements; that each of such covenants and agreements is separate, distinct and
severable not only from the other of such covenants and agreements but also from
the other and remaining provisions of this Agreement;  that the unenforceability
of  any  such   covenant  or   agreement   shall  not  affect  the  validity  or
enforceability  of any other such covenant or agreements or any other  provision
or  provisions  of this  Agreement;  and  that in  addition  to  other  remedies
available  to it,  the  Corporation  shall be  entitled  to both  temporary  and
permanent  injunctions to prevent a breach or contemplated breach of any of such
covenants or agreement.

                                  ARTICLE VIII
                                 INDEMNIFICATION

     8.1 Indemnification by Shareholders.  Acceptance by a Shareholder of all or
part of the purchase  price for his or its Shares shall  constitute an agreement
by such  Shareholder to indemnify the Corporation and its remaining  Shareholder
from and against any and all claims or liabilities which may arise subsequent to
the date of closing  with respect to taxes of any kind or nature found to be due
to any taxing  authority for any periods prior to closing.  It is understood and
agreed that such Shareholder's  liability shall be limited to such proportion as
is  equivalent to his or its  proportionate  stock  interest in the  Corporation
prior to closing.  Such Shareholder shall be entitled to prompt  notification by
the  Corporation  of any and all notices of claims and shall have the right,  at
his or its sole cost and expense,  to  participate in any  proceeding,  legal or
otherwise, with respect to each claim or liability. The indemnification provided
for herein shall be a continuing one which shall survive closing.

                  8.2  Indemnification  by  Corporation.  To the fullest  extent
permitted  by  applicable  law,  the  Corporation  shall  indemnify  all  of the
Corporation's  directors and officers and former  directors  and  officers,  the
Shareholders  and  their  respective  heirs,  representatives,   successors  and
assigns,  against all costs, charges and expenses,  including any amount paid to
settle any action or satisfy a judgment,  reasonably  incurred by him in respect




                                       47

<PAGE>

of any civil,  criminal or  administrative  action or  proceeding to which he is
made a party  by  reason  of being or  having  been a  director  or  officer  or
shareholder of the Corporation (other than with respect to any actions which may
presently be pending or  threatened,  including  the  potential  action or claim
referred to in Section  6.4(d)  hereof) if he acted  honestly  and in good faith
with a view towards the best interests of the Corporation, and, in the case of a
criminal  action or proceeding  that is enforced by a monetary  penalty,  he had
reasonable grounds for believing his conduct was lawful.

                  8.3 Intent.  The  intention  of this  Article VIII is that all
persons  referred to in this section shall have all benefits  provided under the
New Brunswick Business Corporations Act, and any statute that may be substituted
therefor,  to the fullest extent permitted by law, and the Corporation  shall as
soon as reasonably practicable pass all resolutions and take such other steps as
may be required to give full effect to this Article VIII.




                                   ARTICLE IX
                    EFFECTIVE DATE; TERMINATION; LIQUIDATION

                  9.1 Effective Date.  This Agreement shall be deemed  effective
as of the date first above set forth and shall terminate (except with respect to
any right, option,  obligation or duty created or arising hereunder by virtue of
the occurrence of any event prior to the termination of this Agreement,  whether
or not any  such  right,  option,  obligation  or duty  shall  be  continued  or
dependent  upon the lapse of any period of time, the giving of any notice and/or
the occurrence of any other event after the  termination  of this  Agreement) on
the occurrence of the earlier of:

                           (a)      the unanimous agreement of the Shareholders;

                           (b)      cessation of business by the Corporation or
liquidation of the Corporation;

                           (c)      the amalgamation, merger or consolidation of
the Corporation with any other corporation;

                           (d)      the sale of substantially all of the assets
of the Corporation;

                           (e)      the acquisition by any Shareholder of all of
the Shares; or

                           (f)      the failure of the Corporation to obtain
registration  with the Ontario  Securities  Commission (the  "Commission") as an
investment  counsel and portfolio  manager and/or such additional  registrations
with the Commission as the Corporation's business may require as contemplated on
the date hereof within one (1) year of the Effective Date.


                                       48


<PAGE>
                  9.2      Liquidation.

                      (a)      Order of Payment.  Following the termination of
this Agreement,  in the event of a winding-up or liquidation of the Corporation,
the assets of the Corporation  shall,  subject to applicable law, be disposed of
in the following priority:

                               (i)     to the payment in full of all obligations
and liabilities of the Corporation to persons other than the
Shareholders;

                              (ii)     to the payment in full of all obligations
and liabilities of the Corporation to its Shareholders (except in
their capacity as Shareholders);

                             (iii)     to the payment in full of the
outstanding Preferred Shares at the Preferred Share Issue Price per
share;

                              (iv)     to the payment in full of all obligations
to Parnell under the exercise  prior to the date of termination of any put right
by Parnell for which the Corporation is obligated to purchase  Parnell's  Shares
pursuant to Sections 6.4(a) or 6.4(b) hereof; and

                               (v)     the balance to the Shareholders, pro rata
in proportion to the percentage of outstanding Shares owned by each
Shareholder at the time of liquidation.

     (b) Successor Appointed.  Subject to the provisions of Section 6.10 hereof,
in the event of the  termination  of this  Agreement and the  liquidation of the
Corporation  in accordance  with the terms hereof,  the  Shareholders,  by their
execution of this Agreement,  hereby authorize  Tremont to appoint the successor
to, and beneficiary of, the Corporation's  client relationships and affiliations
existing  as at the  date of  liquidation  (excepting,  however,  those  Tremont
relationships  and  affiliations  set forth on Schedule C hereto,  which, to the
extent they may have become  relationships  or  affiliations  of the Corporation
during the term of this  Agreement,  shall revert to Tremont) and to collect and
receive any and all future payments,  fees or revenues which shall be payable to
the Corporation as a result of the transfer of such relationships. Tremont shall
not  appoint a  successor  to,  and  beneficiary  of, the  Corporation's  client
relationships unless such successor executes and delivers to Parnell the written
agreement of such party to be bound by the obligations set forth in this Section
6.10  hereof.  This  Section  9.2(b)  shall  survive  the  termination  of  this
Agreement.



                                    ARTICLE X
                      FURTHER DOCUMENTS; BOOKS AND RECORDS

     10.1 Further Documents.  Each of the Shareholders  agrees to consent to and
approve any  amendment  to the  Articles or By-Laws  which may be  necessary  or
advisable  in order to conform any of the  provisions  of this  Agreement or any
amendments  hereto to the  applicable  laws of 


                                       49



<PAGE>

New Brunswick as now or hereafter enacted.  The Shareholders  further agree
to vote their  Shares and to execute and deliver  such  documents as may be
necessary in order to implement the provisions
of the preceding sentence.

                  10.2 Books and Records. (a) The accounting and taxable year of
the Corporation shall be the calendar year unless otherwise decided by the Board
of Directors.  Parnell shall be  responsible  for keeping  complete and accurate
books of account and records for the  Corporation in accordance  with applicable
laws.  Parnell  shall make the books and records  available  and  accessible  to
accounting personnel of Tremont in order that they may conduct quarterly audits.
Each and  every  transaction  of the  Corporation  shall be  entered  fully  and
accurately and kept at the  Corporation's  principal  place of business for five
(5) years from the transaction date or longer as applicable law may require. The
books of  account  shall be kept in  accordance  with  U.S.  generally  accepted
accounting principles applied in a consistent manner.

                       (b)      All books, records and accounts relating in any
manner to the  Corporation's  affairs,  whether  prepared by any  Shareholder or
otherwise  coming  into any  Shareholder's  possession,  shall be the  exclusive
property of the Corporation and shall be returned immediately to the Corporation
on termination of this Agreement or at the Corporation's request at any time.




                                   ARTICLE XI
                             SUCCESSORS AND ASSIGNS

                  11.1 All of the terms and provisions of this  Agreement  shall
inure to the  benefit of and be binding  upon the  heirs,  successors,  personal
representatives and permitted assigns of the respective Shareholders and parties
hereto.

                  11.2  Termination  of  this  Agreement  shall  not  effect  or
prejudice  any rights or  obligations  which have  accrued or arisen  under this
Agreement prior to the time of termination,  which shall survive the termination
of this  Agreement,  other than with respect to a party  seeking to enforce such
rights  or  obligations   whose  breach  of  this  Agreement   resulted  in  its
termination.

                                   ARTICLE XII
                                  MISCELLANEOUS

     12.1 Notices.  Any notice or other communication under this Agreement shall
be in writing and shall be considered  given when received by the party to which
it is addressed. Such notice shall be sent by personal delivery, electronically,
facsimile transmission or recognized overnight courier, receipt acknowledged, to
the  respective  parties at their  addresses as set forth on Schedule D attached
hereto (or at such other address as any party may have  previously  specified by
notice to the other  parties as the  address to which  notice  shall be given to
it).  The same  shall be deemed  received  on the date of  delivery.  Any notice
delivered  personally,  electronically  or by  facsimile  transmission  shall be
followed on the same day by written notice sent via recognized overnight courier
delivery service.


                                       50


<PAGE>

                  12.2  Mediation  and  Arbitration.  Any  controversy  or claim
arising out of this Agreement,  shall be submitted first to voluntary mediation,
and if mediation is not successful,  then to binding arbitration,  in accordance
with the following dispute resolution procedures:

                        (a)  A dispute shall be submitted to mediation by
written notice to the other party.  In the mediation  process,  the parties will
attempt to resolve their  differences  voluntarily  with the aid of an impartial
mediator,  who will attempt to  facilitate  negotiations.  The mediator  will be
selected by agreement of the parties. If the parties cannot agree on a mediator,
the  parties  shall  request  that a  mediator  be  designated  by the  American
Arbitration  Association  located  in  New  York,  New  York.  Any  mediator  so
designated must be acceptable to all parties.

                             The mediation will be conducted as specified by the
mediator in New York, New York and agreed upon by the parties. The parties agree
to discuss their  differences in good faith and to attempt,  with the assistance
of the mediator, to reach an amicable resolution of the dispute.

                             The parties shall make a good faith effort to
schedule  mediation  to resolve  the  dispute(s)  no later than ninety (90) days
thereafter  and the  mediation  shall  consist of no greater than  nineteen (19)
hours of hearings (or a longer period,  if all of the parties involved  mutually
agree to extend the mediation).

                             The mediation will be treated as a settlement
discussion and therefore will be confidential.  The mediator may not testify for
either party in any later  proceeding  relating to the dispute.  No recording or
transcript shall be made of the mediation proceedings.

                              Each party will bear its own costs in the
mediation.  The fees and expenses of the mediator will be shared equally by the
parties.


                       (b) If a dispute has not been  resolved  within  ninety
(90) days after the written notice beginning the mediation  process (or a longer
period, if all of the parties involved  mutually agree to extend the mediation),
or, in the alternative,  if  mediation  does not take place  within  thirty (30)
days after delivery of the notice of intent to arbitrate, the mediation shall 
terminate and the dispute will be settled by arbitration. The arbitration will
be conducted in New York,  New York in accordance  with the procedures in this 
Agreement and the rules of the American Arbitration Association in effect on the
date of this Agreement.  In the event of a conflict, the provisions of this
Agreement will control.

                       (c) The party desiring the arbitration shall give
written  notice to the other party of such desire.  Within ten (10) days of such
notice, each party shall designate a single arbitrator.  Within ten (10) days of
the  designation of the two (2) arbitrators as  aforedescribed,  the arbitrators
shall jointly designate a third arbitrator.  The parties shall thereafter submit
the dispute to the three (3) designated arbitrators for resolution.

                       (d) In the event the above-mentioned does not take
place within the specified time, then the arbitration will be conducted before a


                                       51


<PAGE>
panel  of  three  arbitrators,  regardless  of the  size of the  dispute,  to be
selected as provided in the rules of the American Arbitration  Association.  Any
issue  concerning the extent to which any dispute is subject to arbitration,  or
concerning  the  applicability,   interpretation,  or  enforceability  of  these
procedures,  including any contention  that all or part of these  procedures are
invalid or  unenforceable,  shall be governed by the  relevant  laws of New York
resolved by the  arbitrators.  No  potential  arbitrator  may serve on the panel
unless  he or she  has  agreed  in  writing  to  abide  and be  bound  by  these
procedures.

                          (e)      The arbitrators may not award non-monetary or
equitable relief of any sort;  provided,  however,  that nothing herein shall be
construed to prohibit any party  hereto from seeking  non-monetary  or equitable
relief  of any sort in any court  having  jurisdiction.  In no event,  shall the
arbitrators  have  power to make an award or impose a remedy  that  could not be
made or imposed by a court deciding the matter in the same jurisdiction.

                          (f)      No discovery will be permitted in connection
with the arbitration unless it is expressly  authorized by the arbitration panel
upon a showing of substantial need by the party seeking discovery.

                          (g)      All aspects of the arbitration shall be 
treated as confidential.  Neither the parties nor the  arbitrators may disclose 
the existence, content or results of the arbitration, except as necessary to 
comply with legal or regulatory requirements. Before making any such disclosure,
a party shall give written notice to all other parties and shall afford such
parties a reasonable opportunity to protect their interests.

                          (h)      The result of the arbitration will be binding
on the parties, and judgment on the arbitrators' award may be
entered in any court having jurisdiction.

     12.3  Binding  Effect;  Conflict  with  Joint  Venture  Agreement.  (a) The
Shareholders agree that, notwithstanding any conflicting provisions contained in
the  Articles,  By-Laws or other  corporate  documents of the  Corporation,  the
provisions of this Agreement shall be fully and completely  binding upon each of
them.

                          (b)      The Shareholders agree that in the event of
any conflict  between the terms of this  Agreement and the Joint Venture  
Agreement, the terms of this Agreement shall govern.

                  12.4 Entire  Agreement.  This  Agreement  embodies  the entire
agreement  and  understanding  of the  parties  hereto in respect of the subject
matter contained herein. There are no restrictions,  promises,  representations,
warranties,  covenants, or undertakings, other than those expressly set forth or
referred to herein.  This  Agreement  supersedes  all prior  agreements  and the
understandings between the parties with respect to such subject matter.

                  12.5  Modification.  Neither  this  Agreement  nor  any of its
provisions  may be changed,  modified,  or  cancelled  except by mutual  written
consent of all the undersigned.




                                        52

<PAGE>
                  12.6 Law Governing.  This  Agreement  shall be governed by and
construed  and  enforced in  accordance  with the laws of the State of New York,
without regard to New York's conflict of laws principles.

                  12.7 Approvals. This Agreement has been presented to a meeting
of the  Shareholders  of the  Corporation  duly called and held for approval and
execution  thereof,  and has been approved and the execution thereof  authorized
upon the terms and conditions  contained herein. All the parties hereto agree to
execute and deliver to each other upon request any and all future instruments or
documents  which may be requisite or desirable to effectuate  the intent and the
provisions of this Agreement.

                  12.8  Construction.  All pronouns and any  variations  thereof
shall be deemed to refer to the masculine,  feminine, neuter, singular or plural
as the identity of the person or persons may require.

                  12.9  Unenforceable  Provisions.  If any of the  provisions of
this  Agreement are or become  unenforceable,  the  remainder of this  Agreement
shall  nevertheless  remain binding to the fullest extent possible,  taking into
consideration the purposes and spirit of this Agreement.

                  12.10 Captions. The captions set forth above in this Agreement
are for  convenience  only  and  shall  not  limit  or  define  the text of this
Agreement.

                  12.11 No Waiver.  The waiver of any breach of this
Agreement by any party at any time shall not be effective unless in
writing,  and no such waiver shall  constitute the waiver of the same or another
breach on a subsequent occasion.

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

                  12.13 Best Efforts. Subject to the terms and conditions herein
provided,  each of the parties hereto agrees to use his reasonable  best efforts
under the circumstances to take, or cause to be taken, all action, and to do, or
cause to be done,  individually  and in cooperation  with each other, all things
necessary,  proper or  advisable to  consummate  and make  effective  all of the
actions  contemplated by this Agreement.  In case at any time any further action
is necessary or  desirable  to carry out the  purposes of this  Agreement,  each
party  hereto shall take all such  necessary  action to be taken or done by such
party. The parties hereby agree to execute, verify, acknowledge and deliver such
documents,  and agree to take such other action, as may be reasonably  necessary
or appropriate to carry out the transactions provided for herein.

                  12.14 No Defense.   The existence of any claim, demand, action
or cause of action by a Shareholder against the Corporation, or any parent, 
subsidiary or affiliate of the Corporation, whether predicated upon this 
Agreement or otherwise, shall not constitute a defense to the enforcement by
Corporation of any of its rights hereunder.



                                      53

<PAGE>

         IN WITNESS  WHEREOF,  this  Agreement  has been executed by the parties
hereto, or through their respective duly authorized  representatives,  as of the
day and year first above written.



                               ------------------------------
                                Robert J. Parnell


                                TREMONT ADVISERS, INC.

                                By:___________________________
                                   Name:
                                   Title:


                                TREMONT INVESTMENT MANAGEMENT, INC.


                                By:___________________________
                                   Name:
                                   Title:


                                     54
<PAGE>

<TABLE>
        <S>                                                                                 <C>


                                   SCHEDULE A

                                Vesting Schedule


==========================================================================================================================
                                                  Percentage Points
                                                        of                                 Percentage Points of
                                                 Parnell's Interest                       Parnell's Interest
          Years From(1) - To                              for                                    for
                                                 "Revenue Multiple"                        Put/Call at "Book
                                                      Put/Call                                  Value"
--------------------------------------------------------------------------------------------------------------------------
<5 years                                                 0%                                       35%
--------------------------------------------------------------------------------------------------------------------------
5 years - 6 years                                       10%                                       25%
--------------------------------------------------------------------------------------------------------------------------
6 years - 7 years                                       20%                                       15%
--------------------------------------------------------------------------------------------------------------------------
7 years - 8 years                                       30%                                       5%
--------------------------------------------------------------------------------------------------------------------------
>8 years                                                35%                                       0%
==========================================================================================================================

--------

1             Measured from the date of this Shareholders' Agreement.


</TABLE>

                                                      55

<PAGE>


                                   SCHEDULE B

                                Vesting Schedule

<TABLE>
<S>                                                       <C>

==========================================================================================================================
                                                  Percentage Points
                                                         of                              Percentage Points of
                                                 Parnell's Interest                        Parnell's Interest
          Years From(2) - To                            for                                       for
                                                 "Revenue Multiple"                        Put/Call at "Book
                                                      Put/Call                                   Value"
--------------------------------------------------------------------------------------------------------------------------
<2 years                                                 0%                                       35%
--------------------------------------------------------------------------------------------------------------------------
2 years - 3 years                                       10%                                       25%
--------------------------------------------------------------------------------------------------------------------------
3 years - 4 years                                       20%                                       15%
--------------------------------------------------------------------------------------------------------------------------
4 years - 5 years                                       30%                                       5%
--------------------------------------------------------------------------------------------------------------------------
>5 years                                                35%                                       0%
==========================================================================================================================

--------
2             Measured from the date of this Shareholders' Agreement.

</TABLE>
                                                      56

<PAGE>


                                    Exhibit 21.1

                                    Subsidiaries



                                        Jurisdiction of
Subsidiary                              Incorporation              Percent Owned
----------                              ---------------            -------------

Tremont Partners, Inc.                   Connecticut                     100%

Tremont (Bermuda) Limited                Bermuda                         100%

Tremont Securities, Inc.                 New York                        100%

Tremont Futures, Inc.                    Delaware                        100%

Tremont Investment Management, Inc.      Province of New Brunswick        65%

























                                      57