SECURITIES AND EXCHANGE COMMISSION
                                Washington D.C. 20549
                                                                        
                                     FORM 10-KSB

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

For the fiscal year ended:               Commission file number: 33-89966
December 31, 1998

                            TREMONT ADVISERS, INC.
            (Name of small business issuer in its charter)

Delaware                                              06-1210532
(State or other jurisdiction                          (I.R.S. Employer
of incorporation or organization)                     Identification No.)

555 Theodore Fremd Avenue, Rye, New York              10580
(Address of Principal Executive Offices)              (Zip Code)

                Issuer's telephone number, including area code: (914) 925-1140

                Securities registered pursuant to Section 12(b) of the Act: None

                Securities registered pursuant to Section 12(g) of the Act: None

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes x No .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Issuer's knowledge, in the definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. x

State issuer's revenues for its most recent fiscal year = $10,656,100

The aggregate market value of the Class A Common Stock held by nonaffiliates of
the Issuer was approximately $4,307,800, based upon the average bid and ask
prices of such stock on March 8, 1999, quoted by the National Quotation Bureau,
LLC in the over-the counter market. The aggregate market value of the Class B
Common Stock held by nonaffiliates of the Issuer was approximately $6,523,400,
based upon the average bid and ask prices of such stock on March 8, 1999, quoted
by the National Quotation Bureau, LLC in the over-the-counter market.

The number of outstanding shares of the Issuer's Class A Common Stock, $.01 par
value was 1,284,718 as of March 8, 1999 and the number of outstanding shares of
the Issuer's Class B Common Stock, $.01 par value was 2,947,104 as of March 8,
1999.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                        None

<PAGE>



                                                 TABLE OF CONTENTS



PART I   ....................................................................  1

         Item 1.  Description of Business....................................  1
         Item 2.  Description of Properties..................................  8
         Item 3.  Legal Proceedings..........................................  8
         Item 4.  Submission of Matters to a Vote of Security Holders........  9

PART II  .................................................................... 10

         Item 5.  Market For the Registrant's Common Equity and Related
                    Stockholder Matters...................................... 11
         Item 6.  Management's Discussion and Analysis....................... 12
         Item 7.  Financial Statements....................................... 20
         Item 8.  Changes in and Disagreements With Accountants on
                    Accounting and Financial Disclosure...................... 43

PART III ......................................   ........................... 44

         Item 9.  Directors and Executive Officers of the Registrant......... 44
         Item 10. Executive Compensation..................................... 45
         Item 11. Security Ownership of Certain Beneficial 
                    Owners and Management.................................... 50
         Item 12. Certain Relationships and Related Transactions............. 54
         Item 13. Exhibits, List and Reports on Form 8-K..................... 57

EXHIBIT INDEX................................................................ 62


<PAGE>

                                  PART I

Item 1. Description of Business

General

          Tremont  Advisers,  Inc.  (the  "Company" or  "Tremont")  is a holding
company  incorporated  in the State of Delaware on June 18, 1987.  The Company's
clients are investment funds,  investment managers,  institutional investors and
high-net worth  individuals to whom the Company's  subsidiaries  provides advice
concerning  the  organization  and management of their  investment  portfolio or
programs.  The Company also provides specialized  investment services,  sponsors
and manages its own  proprietary  single-manager  and  multi-manager  investment
funds, and provides marketing and business  development  consulting  services to
investment  management  firms and individual  investment  advisers.  The Company
derives  a  significant   portion  of  its  revenues  from  consulting  services
agreements  with  single-manager  and multi- manager  investment  funds or their
sponsors and advisers.

          The Company's principal domestic  subsidiary,  Tremont Partners,  Inc.
("TPI"),  is registered as an investment  adviser under the Investment  Advisers
Act of 1940, as amended (the  "Advisers  Act") and serves either as a co-general
partner or general  partner of, and provides  investment  advisory  services to,
three investment limited partnerships.

          Tremont  (Bermuda)  Limited ("TBL"),  the Company's  principal foreign
subsidiary,  is based in  Hamilton,  Bermuda and  provides  investment  advisory
services  to  several  multi-manager  offshore  funds.  It also acts as the fund
sponsor, primary placement agent and, in some cases, administrator, for a select
group of offshore funds managed by U.S.-based money managers.

          Tremont  Securities,  Inc.  ("TSI") is a registered  broker dealer and
which  assists the  Company's  other  subsidiaries  in the  purchase and sale of
investment funds and other equities and facilitates soft-dollar arrangements.

          On July 13, 1998, the Company formed  Tremont  Investment  Management,
Inc.  ("TIMI"),  an investment adviser and portfolio manager located in Toronto,
Canada.  TIMI, which is 65% owned by the Company, is registered with the Ontario
Securities Commission as an investment counsel and portfolio manager, as well as
a limited market dealer under the Securities Act (Ontario).

          On July 14, 1998, the Company formed Tremont Futures,  Inc. ("TFI"), a
commodity  pool  operator and  commodity  trading  adviser  registered  with the
Commodity Futures Trading Commission and the National Futures  Association.  TFI
serves as a general  partner to one investment  limited  partnership  which also
receives advice from TPI.

          On March 11,  1999,  the Company  acquired all of the  outstanding
ordinary (common) shares of TASS Management Limited ("TASS"), a London,  England
-  based  company  specializing  in  the  sale  of  electronic  databases.  (See
"Management's  Discussion  and  Analysis - Business  Combination"  and  "Certain
Relationships and Related Transactions - Business Combination.")

Subsidiaries' Services and Operations

          The Company's  primary  objectives  are to develop and sponsor its own
proprietary  single-manager  and multi-manager  investment funds and to maintain
and expand its services for single-manager and multi-manager investment programs
or  funds.  The  Company  conducts  its  business  through  the  activities  and
operations of its  subsidiaries,  TPI, TBL, TSI, TIMI, TFI and TASS.  Since each
subsidiary  markets its services to a distinct  and  separate  group of clients,
some clients may utilize the services of more than

                                    1


<PAGE>
one of the Company's subsidiaries.  At present, the Company's principal revenues
are  derived  from TPI and TBL which have been  actively  engaged in seeking new
single-manager  and  multi-manager  investment  fund  clients.  The Company will
continue to develop its own proprietary investment funds, as well as develop its
own distribution for select global and institutional markets.

          The significant operations during fiscal 1998 of each of the Company's
then subsidiaries are summarized below.

          1. TPI. TPI was formed in 1984 as an asset  management  firm assisting
pension and profit  sharing  plans in the design and  structure  of  specialized
investment programs. TPI specializes in non-traditional approaches to management
and its client base includes financial intermediaries,  individuals and pension,
retirement and profit sharing plans.  TPI also provides  consulting  services to
several multi-manager investment funds, as well as to institutional and high net
worth  investors,  although  its primary  clients  have been and  continue to be
rendered  to plan  sponsors  or managers  of  single-manager  and  multi-manager
investment   funds.   During  the  years  ended  December  31,  1998  and  1997,
approximately 61% and 53%, respectively,  of the Company's consolidated revenues
have been derived from TPI's operations.  The principal services rendered by TPI
are set forth below.

                         A.  Proprietary  Investment  Funds.  TPI is the general
partner or co-general partner of three domestic limited partnerships to which it
also provides  investment advisory and management services for asset-based fees.
Revenues from these proprietary products accounted for approximately 31% and 19%
of the Company's consolidated revenues for the years ended December 31, 1998 and
1997, respectively. TPI's proprietary investment funds are as follows:

     The Broad  Market  Fund,  L.P.  ("BMF") is a Delaware  limited  partnership
formed to achieve capital growth through hedged investments.  TPI is the general
partner and receives a monthly  management  fee based upon BMF's net asset value
as of the end of each month.  At December 31, 1998,  approximate net asset value
was $187.7 million, of which $807,200 was contributed by TPI.

                         The  Broad  Market  Prime  Fund,  L.P.  ("BMPF")  is  a
Delaware  limited  partnership  formed  to  achieve  capital  growth  through  a
leveraged investment strategy. TPI is the general partner and receives a monthly
management  fee based upon  BMPF's net asset  value as of the end of each month.
TPI is also  reimbursed for certain  allocable  expenses.  At December 31, 1998,
BMPF's  approximate  net asset value was $149.1  million,  of which  $56,700 was
contributed by TPI.

                         GamTree,  L.P. ("GamTree") is a multi-manager  Delaware
limited   partnership   formed  to  achieve  long-term  capital  growth  through
diversified  asset  management.  TPI and an  affiliate  of one of the  Company's
principal  shareholders,  GAMCO  Investors,  Inc.,  are  co-general  partners of
GamTree and receive a quarterly  management  fee based upon  GamTree's net asset
value as of the end of each  quarter.  In  addition,  the general  partners  may
receive an  incentive  allocation  based upon the net asset value of the capital
accounts  of the  limited  partners  at the end of each year if there is a gross
profit,  after  obtaining  certain  pre-established  benchmarks,  from GamTree's
investment  activities  in the  relevant  fiscal  year.  At December  31,  1998,
GamTree's  approximate  net asset value was $1.6 million,  of which $177,600 was
contributed by TPI.

          During  1998,  TPI also  served  as the  general  partner  of The F.W.
Thompson  Fund,  L.P.  However,  due to  its  weak  performance  this  fund  was
dissolved.  In addition,  effective  July 1, 1998,  TPI resigned as a co-general
partner of the Meridian Horizon Fund, L.P., ("Meridian"). Subsequently, Meridian
hired TPI as a consultant and as its administrator.



                                    2
<PAGE>


                         B.  Non-Proprietary  Investment Funds. TPI's consulting
services to its non- proprietary  investment  funds or their sponsors  accounted
for  approximately  24% and 19% of the Company's  consolidated  revenues for the
years ended December 31, 1998 and 1997, respectively.  TPI has been instrumental
in the organization and structure of its current major single-manager and multi-
manager investment fund clients.  TPI assists the sponsor in the organization of
these funds by: (i) establishing investment objectives and guidelines consistent
with the client's purposes and market;  (ii) defining suitable asset classes for
investment;  (iii)  negotiating  fees and  other  arrangements  with  investment
advisers  and  other   professionals   rendering  services  to  the  funds;  and
(iv) providing advise regarding fund structure and administration.

          Upon  organization  of  a  fund,  TPI:  (i)  monitors  its  investment
performance,   including  the  performance  of  its  investment  advisers;  (ii)
recommends  the retention or  replacement  of such  investment  advisers;  (iii)
furnishes  specialized reports requested by the sponsor or managers of the fund;
and  (iv)  provides  other  administrative  services  as  required.  In  several
instances TPI is also the  investment  adviser to a fund and, in that  capacity,
advises the fund as to the investment of its portfolio assets.

          TPI also renders advisory  services to investment  partnerships,  bank
trust funds,  and insurance  companies in the selection of their  investments in
other investment  partnerships,  funds, and/or separate accounts. In addition to
receiving management fees, TPI may receive consulting fees based on the value of
assets of funds under  management  of its  investment  fund clients for which it
provides its consulting or advisory services.  From time to time, TPI receives a
performance  fee at the end of a fund's first fiscal year and yearly  thereafter
in addition to the fees received  based on assets under  management.

                         C.  Institutional  and High  Net-Worth  Investors.  TPI
renders  consulting  services and  investment  advice to  corporate  pension and
profit-sharing  plans,  state and local retirement  systems,  and high net worth
individuals.   Such  services  may  include:   (i)  designing  and  implementing
investment programs, which includes establishing objectives and guidelines; (ii)
identifying  and selecting  appropriate  investment  advisers for such programs;
(iii) monitoring the performance of such programs; and/or (iv) administering the
reporting involved in such programs. TPI generally receives annual retainer fees
or asset-based fees for these services.

                         D. Investment Adviser Research Program. TPI maintains a
continuing  research program  evaluating and reviewing both domestic and foreign
investment  advisers and advisory firms. TPI's employees meet with and interview
over 250 advisory individuals and firms each year. Interviews are conducted with
each adviser or the senior investment  personnel of an advisory firm in order to
evaluate  such  factors  as  investment  approach,  style,  personnel  turnover,
delegation of investment decision making  responsibilities,  and the number and
type of  accounts  under  management.  As a  result  of this  research,  TPI has
developed a  proprietary  computerized  database  of more than 2,000  investment
advisers and investment advisory firms, including domestic equity, international
equity and fixed income advisers,  mutual funds,  private limited  partnerships,
and offshore funds. This database allows TPI to monitor and evaluate  investment
management performance and to simulate the match of a fund's objectives with the
investment  characteristics  of different or combined  investment  advisers.  In
addition,  TPI  utilizes its  database in advising  clients in the  selection of
appropriate investment advisers and investment programs.

          2. TBL.  TBL is as an  exempted  company  organized  under the laws of
Bermuda to provide investment  management  services to offshore  investors.  TBL
currently  provides  investment  consulting  and  advisory  services  to several
multi-manager  offshore  funds and acts as the fund  sponsor and, in some cases,
administrator,  for a select group of offshore funds managed by U.S. based money
managers.  For the years ended  December 31, 1998 and 1997,  TBL  accounted  for
approximately 33% and 40%, respectively, of the Company's consolidated revenues.
Given the growth during recent years


                                      3

<PAGE>

in the amount of money invested in offshore funds,  management believes that TBL
will continue to be a significant  contributor to the Company's  revenues in the
future. The services rendered by TBL are set forth below.

                         A. Proprietary  Investment Funds. TBL is the sponsor or
co-sponsor of several offshore  mutual-funds.  TBL provides  investment advisory
and  management  services to these funds and  receives  asset based fees for its
services.  Revenues from these proprietary  products accounted for approximately
15% and 7% of the  Company's  consolidated  revenues for each of the years ended
December  31, 1998 and 1997,  respectively.  TBL's  proprietary  products are as
follows:

     Kingate Global Fund,  Ltd.- Class B Shares  ("Kingate") is a British Virgin
Islands  hedge fund  marketed  to high net worth  individuals  who accept a high
degree of risk in their investment. TBL receives compensation at the end of each
month from Kingate's Class B Shares based on a percentage of the net asset value
of the shares  owned by investors  introduced  to Kingate by TBL. As of December
31,  1998,  Kingate's  approximate  net asset value was $666.2  million of which
$126.3 million was attributable to investors introduced by TBL.

                         American  Masters Fund Ltd. - Twin Series  ("AMF-Twin")
is a Cayman Island exempt company that employs a market neutral strategy to seek
market-like  returns with an insignificant or slightly  negative  correlation to
market  direction.  At the end of each quarter TBL receives a percentage  of the
management fees paid to AMF-Twin. As of December 31, 1998, AMF's approximate net
asset of value was $32.2 million.

                         American   Masters  Fund   "Hilspen   Series"   Limited
("AMF-Hilspen")  is an open-end  investment  company  which was  organized as an
exempted  company  under the laws of the Cayman  Islands.  AMF-Hilspen  seeks to
significantly  outperform  traditional  equity indices by attempting to identify
the best and worst performing styles among Big Cap Value, Big Cap Growth,  Small
Cap Value and Small Cap Growth companies.  As AMF-Hilspen's  investment manager,
TBL  receives  monthly   compensation   based  upon  AMF-Hilspen's  net  assets.
AMF-Hilspen opened January 1, 1999 with $34 million of initial capital.
 
                           B.       Insurance Products.

                         Tremont  International  Insurance,  Ltd.  ("TIIL") is a
Cayman Island  insurance  company which offers a variety of insurance  products,
including variable life insurance policies and deferred variable  annuities,  to
customers who are not residents of the Cayman Islands. In July 1997, Mutual Risk
Management,  Ltd. ("MRM"), an international risk management company, invested $5
million in TIIL.

     Tremont MRM Services  Limited ("TMRM") was formed under Bermuda law by TBL,
MRM and The  Anglo  Dutch  Insurance  Company  Limited,  a  Cayman  Island  life
insurance company ("Anglo-Dutch"), to provide product development, marketing and
administrative  services to TIIL. MRM invested $1 million in TMRM and received a
20%  interest  therein.  TBL owns 24.5% of TIIL and 40% of TMRM.  As a result of
certain transactions described below in "Management's  Discussion and Analysis -
Liquidity and Capital Resources," MRM indirectly owns Class B Common Stock equal
to 19.4% of the aggregate of the Company's  outstanding Class A Common Stock and
Class B Common Stock.

                         Tremont Broad Market, LDC (the "Fund") is an open-ended
investment  company  registered  in the Cayman  Islands as an  exempted  limited
duration  company.   The  Fund  seeks  long-term  capital  growth  and  is  open
exclusively to insurance companies. TBL, as investment advisor and


                                   4

<PAGE>

administrator,  receives  compensation  on a monthly  basis.  As of December 31,
1998, the Fund's approximate net asset value was $18.4 million.

                         C. Placement  Agent  Services.  Until 1998, TBL offered
placement  agent  services to a select  group of  offshore  mutual  funds.  This
activity was  discontinued  when the Company decided to focus its efforts on the
development of additional  proprietary  investment  products.  However, TBL will
continue to receive  placement agent fees from  pre-existing  clients as long as
they remain invested in the funds in which TBL placed them.

          3.  TSI.  TSI  is a  broker-dealer  registered  under  the  Securities
Exchange Act of 1934, as amended. TSI acts as an introducing broker for security
transactions  initiated by nonaffiliated  companies and facilitates  soft-dollar
arrangements.  TSI sells private investment  partnerships,  variable annuity and
variable life products. TSI accounted for approximately 6% and 7%, respectively,
of consolidated revenues for the years ended December 31, 1998 and 1997.

          4. TFI. TFI was formed in July 1998 and is a commodity  pool  operator
and commodity  trading  advisor  registered  with the Commodity  Futures Trading
Commission and the National Futures Association to be the general partner of the
first domestic limited  partnership in the Company's  "American Masters" series.
Effective  September 1, 1998, the American  Masters  Market  Neutral Fund,  L.P.
("AMM") became the newest addition to the Company's domestic line of proprietary
products. AMM was formed to achieve long term capital appreciation  irrespective
of stock market  volatility.  TFI receives a monthly  management  fee based upon
AMM's net asset value as of the end of each month.  At December 31, 1998,  AMM's
approximate  net asset value was $1.2 million of which $614,600 was  contributed
by TFI.
 
          5. TIMI.  TIMI, a 65% owned  subsidiary of the Company,  was formed in
Canada in July, 1998 and is registered with the Ontario Securities Commission as
an investment counsel and portfolio manager,  as well as a limited market dealer
under the Securities Act (Ontario).  TIMI is the sponsor of The Tremont  Masters
Fund, a Canadian fund launched in February, 1999 with $500,000.

Clients

     The Company's  principal  clients continue to be investment funds formed by
or with the  assistance  of TPI or TBL,  or the  sponsors  and  managers of such
investment  funds.  Investment  funds include limited  partnerships,  bank trust
funds and offshore  mutual funds.  TPI and TBL consulting  agreements  with non-
proprietary   investment  fund  clients  accounted for approximately  29% of the
Company's  consolidated  revenues for each of the years ended  December 31, 1998
and 1997.

          The significant  non-proprietary  client relationships of the Company,
by subsidiary, are described below.

                  1.       TPI

                         The DaimlerChrysler Minority Equity Trust (the "Trust")
is  a  multi-manager  program  using  minority  owned  and  operated  investment
management  firms.  TPI advises the Trust on the  selection  and  monitoring  of
managers,  as well as on the allocation of funds among them. TPI's  compensation
is based upon a  percentage  of the  Trust's  net asset value at the end of each
month. As of December 31, 1998, the Trust had a net asset value of approximately
$420.8 million.

                         Meridian   Horizon  Fund,   L.P.   ("Meridian")   is  a
multi-manager  Delaware limited  partnership  employing  diversified  investment
strategies utilizing a multi-manager approach. Effective July

 
                                  5
<PAGE>

1, 1998, TPI resigned as a co-general partner of Meridian.  Subsequent  to TPI's
resignation, Meridian hired TPI as a consultant and to be its administrator. TPI
receives  compensation  from Meridian based on a percentage of Meridian's assets
at the end of each month,  as well as a fixed  consulting  fee. At December  31,
1998,  Meridian's  approximate  net asset  value was  $244.3  million,  of which
$378,600 was contributed by TPI's.

                         Security  Equity Life  Insurance  Company is a New York
based company offering a Group Flexible Premium Variable Life Insurance contract
with separate  accounts for different  investments.  TPI acts as the  investment
manager of one of these separate  accounts using a multi-manager  approach.  The
primary  investment  objective  of this  account  is to  achieve  above-average,
long-term  capital growth.  At December 31, 1998, the account had an approximate
net asset value of $52.5  million.  TPI receives  compensation  from the account
based upon a percentage account's net assets.

     Preferred Investors, L.P. ("Preferred") is a multi-manager Delaware limited
partnership  designed for high-net worth individuals who accept a high degree of
risk in their investment.  Preferred focuses on investment  strategies that tend
to  counterbalance  one  another  during  periods of both  market  strength  and
weakness. TPI serves as consultant to Preferred's general partner and assists in
the  monitoring  and  selection  of the  Preferred's  investment  vehicles.  TPI
receives  compensation  from the general  partner  based on a percentage  of the
Preferred's  assets  at  the  end  of  each  month.  As of  December  31,  1998,
Preferred's approximate net asset value was $182.0 million.

                         Sage Capital, L.P. ("Sage") is a multi-manager Delaware
limited  partnership  composed  of a diverse  selection  of  skilled  investment
managers. TPI serves as consultant to Sage's general partners and assists in the
monitoring   and  selection  of  Sage's   investment   vehicles.   TPI  receives
compensation from Sage's general partners based on a percentage of Sage's assets
at the end of each month. As of December 31, 1998, Sage had a net asset value of
approximately $93.5 million.

                  2.       TBL

                         Starvest Fund,  Ltd.  ("Starvest")  is a  Bermuda-based
hedge  fund that is  marketed  to high net worth  individuals  who accept a high
degree of risk in their  investment.  TBL serves as its  investment  advisor and
receives  compensation based on a percentage of Starvest's average net assets at
the end of each month.  In addition,  TBL is entitled to a performance  fee when
and if Starvest's  sponsor  receives a performance  fee. The performance fee for
the year ended December 31, 1998 is subject to adjustment  pending completion of
Sage's final audit. As of December 31, 1998, Sage's  approximate net asset value
was $115.4 million.

                         Credit  Suisse  Financial  Products.   Credit  Suisse's
Master Fund ( the "Fund") is a multi-manager  limited  partnership  advised by a
diverse group of skilled investment managers. The Fund is a principal guaranteed
funds of funds, designed for high-net worth individuals with low risk tolerance.
Its portfolio  funds have been selected to counter balance each other in periods
of market  strengths  and  weaknesses.  TBL serves as a consultant to the Fund's
general  partner and  assists in the  monitoring  and  selection  of  investment
vehicles. TBL receives a fee based on the percentage of the Fund's assets at the
end of each month.  As of December 31, 1998,  the Fund's  approximate  net asset
value was $268.9 million.

          The  percentage  of  revenues  that any client pays to the Company can
fluctuate  substantially  over time due to the nature of the capital markets and
the nature of the fee arrangements  with the client. As the Company continues to
grow,  it is  expected  that total  revenue  will be less  dependent  on any one
client.



                                    6
<PAGE>

          The Company, through its subsidiaries,  enters into written agreements
with its clients.  Under these  agreements,  TPI's and TBL's fees are  typically
based on a percentage of assets under  management  or a percentage  based on the
performance of the fund. The fees are payable  periodically,  usually monthly or
quarterly.  In certain instances,  TPI and TBL receive an initial fixed fee from
multi-manager  investment  funds for its services in organizing the fund.  Other
arrangements are based on annual retainer fees payable  periodically  during the
term of the consulting  agreement or as a single fee for  individual  consulting
projects.  Fees for offshore placement agent services are based on assets placed
in the offshore  funds by TBL. TBL may receive a one-time fixed fee for services
rendered in organizing the offshore funds from these clients.  Several contracts
entered into by TBL require the payment of asset-based  fees to TBL, for so long
as investors placed by TBL remain investors, which period may be well beyond the
termination of a particular contract.

          The  Company's  ability to  generate  and  sustain  revenues  from its
multi-manager  investment fund clients is primarily dependent on the size of the
assets under  management in each fund and on the  continuation of its agreements
with the funds.  Each of these agreements is generally  terminable upon 30 to 60
days written  notice,  or on the expiration of a stated term of up to two years,
subject to earlier termination in certain  circumstances.  Other annual retainer
or ongoing  agreements are also generally  terminable on short-term  notice from
clients.

          Although the Company  expects that its  multi-manager  investment fund
agreements  will  continue  for the  duration  of such  funds,  there  can be no
assurance  that an  arrangement  will not be earlier  terminated  by the client.
During 1998, TBL terminated its  relationship  with two clients whose businesses
had  ceased  operations.  In 1997,  TPI and TBL agreed to  terminate  consulting
relationships  with three  clients  for what they  believed  to be the  clients'
internal business reasons. These terminations have not resulted in a significant
loss of revenues.  However,  the Company will continue to endeavor to expand its
client base and further diversify its consulting business in an effort to reduce
the  adverse  impact  of  termination  with  respect  to any  one or more of its
clients.
 
Competition

          The  Company  encounters  intense  competition  in all  aspects of the
securities  business  and  competes  directly  with other  securities  firms,  a
significant  number of which have substantially  greater capital,  resources and
services.  There has recently been increasing  competition from commercial banks
and insurance  companies.  The Company  believes that the principal  competitive
factors in the securities  industry are the quality and ability of  professional
personnel,  as well as the relative price of services and products offered.  The
Company  believes  that there are several  important  factors  which  affect the
success of the Company among investment  consulting firms. These factors include
the abilities and reputations of the consulting and professional personnel,  the
ability to develop new  investment  management  products  and  technologies  for
clients, and the marketing of existing services.

          The  Company  is  committed  to  maintaining  the  firm's  competitive
position through the continued involvement of its professional management in all
aspects of business development.

Regulation

          The Company is subject to or restricted  by various  federal and state
governmental laws or regulations relating to the investment  consulting services
rendered to its clients.  To the extent that the Company  renders such services,
it is subject  to  compliance  with the  Advisers  Act and state law,  including
limitations  on the  amount of fees  charged  by it and the  transactions  to be
effected by it. Even though  management  believes  the Company is in  compliance
with applicable  regulations,  changes in the regulations may affect the expense
of operation and require adjustments in the Company's business

 
                                        7
<PAGE>

procedures to ensure compliance. TPI is registered as an investment adviser with
the Securities and Exchange  Commission  (the  "Commission")  under the Advisers
Act.  However,  such registration does not imply in any manner that TPI has been
approved by the  Commission or any state or foreign  regulatory  authority,  nor
imply that TPI's  qualifications  have been passed upon by the Commission or any
state regulatory authority.

          The Company may be deemed, in certain  instances,  to be a "fiduciary"
for its  clients  and  their  funds  under  ERISA and U.S.  Department  of Labor
regulations.  In such event,  the Company could be subject to certain  sanctions
and fines for its noncompliance with a particular law and its regulations.

          The Company obtains a significant amount of its revenues from sponsors
and  managers  of single-  manager and  multi-manager  investment  funds.  These
sponsors and managers are subject to regulation under the Investment Company Act
and the Advisers Act  respecting  the amount of the fees that they may charge to
their  funds.  Since the Company is generally  paid out of the fees  received by
such  sponsors  or  managers,  any  regulatory  limits on such fees has a direct
impact  on  the  fees  to  be  received  by  the  Company.   In  addition,   the
aforementioned  acts generally require that the agreements  between the sponsors
or managers and their funds be terminable by the funds on 30 to 60 days' notice.
Accordingly,  the Company's agreements with these sponsors and managers are also
subject to such termination provisions.

Employees

          At December 31, 1998,  the Company had 31 full-time  employees  and no
part-time employees.

Item 2. Description of Properties

          The Company  owns no real  property  but leases 10,910 square feet for
executive offices.  This lease expires August 2002 and requires monthly payments
of  approximately  $22,700.  

          TBL's lease for corporate  offices was renewed through  February 2000.
The lease for this  3,250  square  foot  office  requires  monthly  payments  of
approximately $5,800.

Item 3. Legal Proceedings.

          Payroll Express.  In 1991, the Company engaged KPM, Inc. d/b/a Payroll
Express  ("Payroll  Express")  to  perform  certain  data  processing  services,
including  preparing  Forms 941 and filing them with  Internal  Revenue  Service
("IRS") and paying payroll and other taxes on behalf of the Company. The Company
terminated  its  relationship  with Payroll  Express upon being  informed by the
Chapter 11 Trustee for Payroll Express that the Company had suffered a potential
loss as a result of a fraudulent  scheme  undertaken by Payroll  Express and its
principal, David S. Kast. It appears that Payroll Express failed to make certain
payments  to the  IRS on the  Company's  behalf  and  falsely  and  fraudulently
misrepresented  to the Company the dollar  amount of taxes  actually paid to the
IRS. It also appears that a  substantial  portion of these funds  (approximately
$400,000) was wrongfully  appropriated  by Payroll  Express and Kast. This theft
has created an additional federal tax liability for the Company in the amount of
$307,500  for the years 1995 and 1996.  These sums do not  include  interest  or
penalties  since the Company has been  informed by the IRS that,  based upon its
initial review of this matter, interest and penalties may not be assessed.


 
                                      8
<PAGE>

          The  Company  is  cooperating  with  the  authorities  in its  ongoing
criminal  investigation  of  Payroll  Express  and Kast and has filed a Proof of
Claim in the Payroll Express  bankruptcy  proceeding.  The Company also believes
that, subject to a $50,000 deductible, its losses are covered by a fidelity bond
issued by the Gulf Insurance Group ("Gulf"). A Proof of Loss seeking recovery of
the  Company's  losses and  reimbursement  for  professional  fees  incurred  in
connection  with this matter has been filed with Gulf which is in the process of
investigating  the Company's  claim.  The Company is not aware of any reason for
denial of coverage by Gulf.

          Vasu.  In May 1998, a law suit was  initiated  against the Company and
its  wholly-owned  subsidiary,  Tremont  Securities,  Inc., in the United States
Bankruptcy  Court  District  of  Connecticut,  by  Richard  M. Coan as Chapter 7
Trustee  for William  Vasu and Linda M. Vasu  alleging  breach of  contract  and
defamation.  The  Company has filed a motion to compel  arbitration  of the case
under the rules of the National  Association of Securities Dealers,  Inc. and to
move jurisdiction to New York.

          The case is in the early stages and the Company  intends to defend its
position  vigorously.  The  Company  believes  that the suit is  without  merit;
however,  should the plaintiff  prevail,  the Company believes that it is likely
that the damages will not be material to the  Company's  consolidated  financial
condition or operations.

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

          No matter was submitted to a vote of the holders of either the Class A
Common Stock or Class B Common Stock in the fourth quarter of 1998.

                                   9
<PAGE>

                                                      PART II

Item 5. Market For the Registrant's Common Equity and Related Stockholder
    Matters
 
          The Class A Common Stock  ("TMAVA") and Class B Common Stock ("TMAVB")
are closely held and thinly traded.  The Class A Common Stock and Class B Common
Stock are quoted on the OTC Bulletin Board.

          The quotations are dealer prices without retail  mark-ups,  mark-downs
or commissions and may not represent  actual  transactions.  The following table
sets forth the range of high and low bid prices of the Class A Common  Stock and
Class B Common Stock, respectively, from January 1, 1997 through March 8, 1999.

 
                                  10
<PAGE>
<TABLE>

<S>                                                                 <C>         <C>

                                        Price Range of Class A Common Stock

                                                                        Bid Prices
                                                                      High        Low

1997

January 1, 1997 - March 31, 1997                                     $3.75      $3.75
April 1, 1997 - June 30, 1997                                         4.25       3.75
July 1, 1997 - September 30, 1997                                     4.25       3.25
October 1, 1997 - December 31, 1997                                   6.25       3.25

1998

January 1, 1998 - March 31, 1998                                     $6.25      $4.63
April 1, 1998 - June 30, 1998                                         8.25       4.13
July 1, 1998 - September 30, 1998                                     8.00       4.75
October 1, 1998 - December 31, 1998                                   7.75       2.00

1999

January 1, 1999 - March 8, 1999                                     $10.00      $6.00

                                        Price Range of Class B Common Stock

                                                                        Bid Prices
                                                                      High        Low

1997

January 1, 1997 - March 31, 1997                                    $ 2.50     $ 2.50
April 1, 1997 - June 30, 1997                                         3.50       1.88
July 1, 1997 - September 30, 1997                                     3.50       3.50
October 1, 1997 - December 31, 1997                                   4.75       3.50

1998

January 1, 1998 - March 31, 1998                                     $4.75      $4.50
April 1, 1998 - June 30, 1998                                         9.25       2.13
July 1, 1998 - September 30, 1998                                     8.00       4.00
October 1, 1998 - December 31, 1998                                   8.13       4.00

1999

January 1, 1999 - March 8, 1999                                     $10.50      $6.25


</TABLE>
                                                        11

<PAGE>

Holders

     As of March 8, 1999 there were  approximately  301 holders of record of the
Company's  Class A Common Stock and  approximately  272 holders of record of the
Company's Class B Common Stock.

Dividends

          Since its organization,  the Company has not paid any dividends on its
Class A Common  Stock or its  Class B Common  Stock nor does it plan to do so in
the foreseeable future.

Item 6. Management's Discussion and Analysis

Financial Condition

          The Company  believes its  relationships  with its present clients are
stable.  The  agreements  with the Company's  single-manager  and  multi-manager
investment  funds  generally are terminable upon 30 to 60 days' notice or on the
expiration of a stated term of up to two years,  subject to earlier  termination
in certain  circumstances.  At December 31, 1998, the Company  expected that its
arrangements with its larger  single-manager  and multi-manager  investment fund
clients  will  continue  for the  duration of such funds and the Company has not
received  any  notice  that  any  of  such  clients  intends  to  terminate  its
arrangement  after  December 31, 1998.  There can be no assurance  that any such
arrangement  will not be earlier  terminated  by the client.  The Company is not
currently  aware of any  event or  events  which  would  cause  its  clients  to
terminate their arrangements with the Company. Several contracts entered into by
TBL  require  the payment of  asset-based  fees to TBL so long as the  investors
placed by TBL remain  investors  in those  funds,  which may be well  beyond the
termination of a particular contract.

          The Company  believes that its product  development  efforts in fiscal
1998, as well as client  relationships formed abroad, have placed the Company in
a good position for 1999 and  thereafter.  Management  expects to concentrate on
developing  new  proprietary  products and taking full  advantage of its growing
relationships  world-wide  to increase its  revenues and to develop  independent
product  distribution  channels.  Profitability  is dependent  on the  Company's
ability to maintain existing consulting relationships.

Results of Operations

          The Company's  revenues are derived from  consulting  and  specialized
investment  services  provided to  institutional  and other clients,  as well as
management  fees  from  certain  funds  under  management.  Consulting  fees are
generally a function of the amount of assets under management and the percentage
fees charged to clients. Management fees are based on a percentage of the assets
of the managed fund and are usually paid on a monthly or  quarterly  basis.  The
Company also receives asset- based fees for investments placed by TBL in certain
offshore mutual funds. The Company provides other consulting  services generally
on a fixed fee basis,  whether as annual  retainer fees or single  project fees.
The Company's principal operating expenses consist of its costs of personnel and
independent consultants.

Fiscal year ended December 31, 1998 compared to Fiscal year ended 
   December 31, 1997.

          Consulting  fees earned by the Company for the year ended December 31,
1998 increased by $3,957,700,  or approximately  67.8%,  from $5,840,300 for the
year ended December 31, 1997 to $9,798,000 for the year ended December 31, 1998.
At the Company's  primary domestic  subsidiary,  TPI,  consulting fees increased
from $3,437,500 for the year ended December 31, 1997 to $6,469,300 for the

 
                                    12
<PAGE>

year ended  December  31, 1998,  due largely to  increases in revenues  from its
proprietary products such as The Broad Market Fund, L.P. ($421,300 increase) and
The Broad Market  Prime Fund,  L.P.  ($1,476,000  increase).  In addition,  1998
consulting  fees also  increased due to increases in fees from non-  proprietary
investment funds, such as The Meridian Horizon Fund, L.P.  ($471,600  increase),
The  DaimlerChrysler  Minority  Equity Trust Fund  ($354,800  increase)  and The
Security Equity Life Insurance program ($263,700 increase). Consulting fees also
increased when Tremont  Securities,  Inc. ("TSI") realized fees from the sale of
limited  partnerships.  These fees  amounted to $105,600 and  $173,000,  for the
years ended  December  31, 1998 and 1997,  respectively.  During the years ended
December 31, 1998 and 1997, certain proprietary investment funds accounted for a
significant  percentage of the Company's consolidated revenues: The Broad Market
Fund, L.P.  accounted for  approximately  14.7% and 17%,  respectively,  and The
Broad  Market  Prime  Fund,  L.P.  accounted  for  approximately  15.8%  and 3%,
respectively, of consolidated revenues.

          At the Company's foreign  subsidiary,  TBL,  consulting fees increased
from  $2,229,800 for the year ended December 31, 1997 to $3,223,100 for the year
ended  December  31,  1998.  This  increase  was  primarily  due to increases in
revenues from  proprietary  products,  such as the Class B Shares of the Kingate
Global Fund, Ltd.  ($681,100  increase) and Tremont Broad Market,  LDC ($126,800
increase),  as well as the  commencement  of  revenues  from  new  institutional
clients ($434,200 increase). The increase in the Company's revenues resulted
primarily  from  increases  in the value of the  assets  within  the  respective
investment vehicles.

          Performance  fees for the year ended  December 31, 1998 were $434,600,
compared  to  $884,300  for the year ended  December  31,  1997.  This  $449,700
decrease is primarily due to the  unfavorable  changes in the market  conditions
during  part of 1998,  as a result of which  fewer  clients  outperformed  their
pre-established  bench marks. The significant  performance fees earned by TBL in
1998 were from Cambridge Energy Fund International Ltd.  ($242,900) and Starvest
Fund Ltd. ($38,300).  The sole significant fee earned by TPI in 1998 was $50,000
from The Dillon Flaherty  Market Neutral Fund, L.P. The performance  fees earned
for the  year  ended  December  31,  1998  are  subject  to  adjustment  pending
completion  of  final  audit  of  the  respective  funds.   Management   expects
performance   fee  revenue  to  increase   during  periods  of  positive  market
conditions,  but management cannot predict with any accuracy whether such income
from  performance  fees will  continue  in the  future  due to  changing  market
conditions and other outside factors.

          Commissions   increased  by  $121,400  or  approximately  40.2%,  from
$302,100 for the year ended  December 31, 1997,  as compared to $423,500 for the
year ended December 31, 1998. This increase  resulted from TSI having additional
clients and more trading activity in 1998.

          Operating  profits at TBL were  $874,700  and  $490,200  for the years
ended  December  31, 1998 and 1997,  respectively.  The  increase  in  operating
profits from 1997 to 1998  ($384,500)  was primarily  due to increased  revenues
from assets raised in proprietary products such as the Class B Shares of Kingate
Global Fund Ltd., and American Masters Fund Limited - TWIN Series.  Identifiable
assets of TBL were  $2,282,800  and  $1,531,700  at December  31, 1998 and 1997,
respectively.

          Compensation expense increased for the year ended December 31, 1998 by
$823,100,  or approximately  24.8%, over the similar period in 1997, as a result
of the Company's  continued  efforts to attract and retain qualified  employees.
Compensation  expense  primarily  increased due to salary  increases for certain
employees that became effective January 1, 1998, increased health care costs due
to the increase in the number of employees  during the year,  and an increase in
bonuses granted by the Company to its employees.  At December 31, 1998 and 1997,
respectively,  the  Company  had 31 and  27  full-time  employees.  As  part  of
compensation  expense,  $1,150,000 and $701,000 for the years ended December 31,
1998 and 1997, respectively, were attributable to employee bonuses.

 
                                   13
<PAGE>


          General  and  administrative   expenses  consist  primarily  of  rent,
telecommunications,  travel and  entertainment,  outside  professional  fees and
other related expenses.  General and administrative expenses were $2,684,500 and
$1,506,900  for the years ended  December 31, 1998 and 1997,  respectively.  The
increases in general and  administrative  expenses  were  primarily due to costs
related to the Company's continued expansion to service its business growth. The
largest  component of the general and  administration  expense  increase was the
Company's outside  professional fees,  including legal and accounting  expenses.
Such fees increased $440,600, or 143%, from $309,100 for the year ended December
31, 1997 to $749,700 for the year ended December 31, 1998. Part of this increase
is as a result of the  Company  expanding  its  businesses  and  forming two new
subsidiaries,  Tremont Futures,  Inc., a registered  commodity pool operator and
commodity trading adviser, and Tremont Investment Management, Inc., a registered
investment adviser in Toronto, Canada. In addition,  professional fees increased
in 1998 due to the defense of the lawsuit filed against the Company in May 1998,
the  Payroll  Express  Company  bankruptcy  investigation,   amendments  to  the
Company's  Certificate of  Incorporation,  amendments to TSI's NASD  Restriction
Agreement, as well as other items in the normal course of business.

          Consulting expenses increased by $242,100,  approximately  21.6%, from
$1,119,000 for the year ended December 31, 1997 to $1,361,000 for the year ended
December  31, 1998 as a result of the  increase in revenues  from  clients  that
participate in revenue sharing arrangements. For example, TSI has an arrangement
for  securities  clearance  services  with a clearing  broker  dealer  whereby a
certain percentage of the commissions  earned is shared.  Also, TPI and TBL have
revenue sharing arrangements with respect to certain clients whose products were
launched during late 1997.
 
          The  increase in  depreciation  is a result of fixed  asset  purchases
during the year ended December 31, 1998.  These purchases  totaled  $229,200 and
consisted of computer  equipment  for the new  employees  hired during the year,
software  purchases,  as well as a computer  system network for TBL. At December
31, 1998, the Company has  commitments  for additional  capital  expenditures of
approximately $80,000.

          Equity in earnings  of limited  partnerships  decreased  by $32,700 or
approximately  15.2%,  from  $215,100  for the year ended  December  31, 1997 to
$182,400  for the year  ended  December  31,  1998,  as a result of  unfavorable
investment  results from certain  limited  partnerships,  as well as unfavorable
market conditions during part of 1998.

          Loss from operations of joint  ventures,  net increased by $105,000 or
approximately  89.6% from  $117,100  for the year  ended  December  31,  1997 to
$222,100  for the year  ended  December  31,  1998,  primarily  as a result of a
twenty-five  percent  owned  joint  venture  operation   incurring   significant
operating  costs  during  the year  and  less  than  anticipated  revenues  from
operations. The Company closed this joint venture effective December 31, 1998.

          Other  income,  net  increased  by  $36,700  or  approximately  26.6%,
primarily due to higher interest rates and the higher amounts of investable cash
and cash  equivalents  provided by operations and invested in 1998 than in 1997.
In 1998 and 1997,  other  income,  net included loss from other  investments  of
$2,035 and $10,500, respectively.

          Profitability  is  dependent on the ability of the Company to maintain
existing  client  relationships,  several  of  which  currently  account  for  a
significant  portion  of  the  Company's  revenues,  to  increase  assets  under
management for its clients, and to market its services to new accounts.


 
                                     14
<PAGE>


Fiscal year ended December 31, 1997 compared to Fiscal year ended
     December 31, 1996.

          Consulting  fees earned by the Company for the year ended December 31,
1997 increased by $1,557,300,  or  approximately  36.4%, as compared to the year
ended December 31, 1996. At the principal domestic  subsidiary,  TPI, consulting
fees  increased  from  $2,599,700  for  the  year  ended  December  31,  1996 to
$3,437,500 for the year ended  December 31, 1997,  primarily due to increases in
revenues  from The Broad Market Fund,  L.P.  ($619,100),  The Broad Market Prime
Fund, L.P. ($210,500) and The Security Equity Life program ($187,800). These and
other  increases  were  partially  offset by declines in  revenues,  including a
decline in  revenues  from Pine  Street  Associates,  L.P.  ($100,000)  and from
Minority Equity Trust ($320,000 resulting from a 1996 one-time termination fee),
among others. Consulting fees also increased domestically in 1997 as a result of
a 1996  amendment of TSI's  restriction  agreement with the NASD so that TSI may
sell  limited  partnership  interests.  For the year ended  December  31,  1997,
consulting  fees from this activity  equalled  $173,000.  During the years ended
December  31,  1997  and  1996  certain  clients  accounted  for  a  significant
percentage of the Company's  consolidated  revenues: The Broad Market Fund, L.P.
accounted for approximately 17% and 10%, respectively,  of consolidated revenues
and revenues  from related  entities  accounted for  approximately  28% and 20%,
respectively, of consolidated revenues.

          At  the  foreign  subsidiary,  TBL,  consulting  fees  increased  from
$1,683,400 for the year ended December 31, 1996 to $2,229,800 for the year ended
December 31, 1997.  This increase is primarily due to increases in revenues from
the Class B Shares of the  Kingate  Global  Fund,  Ltd.  ($322,100)  and Winston
Partners II Offshore Ltd.  ($91,100),  as well as the  commencement  of revenues
from Tremont MRM Services,  Ltd. ($154,800).  These and other increases in TBL's
revenues,  were  partially  offset by declines in revenues from Global  Advisors
Portfolio,  N.V. ($230,000),  among others. The increase or decrease in revenues
was  primarily  as a result of increases or decreases in the value of the assets
within the respective investment vehicles.

          Performance  fees for the year ended  December 31, 1997 were  $884,300
compared  to  $780,700  for the year ended  December  31,  1996.  This  $103,600
increase is primarily due to the underlying  investment  vehicles  outperforming
pre-established  benchmarks.  The significant  performance fees earned by TBL in
1997 were from Starvest  Fund Ltd.  ($191,800),  B.P.  Overseas  Partners,  Ltd.
($102,300) and Cambridge Energy Fund  International  Ltd.  ($131,300).  The sole
significant  performance  fee earned by TPI in 1997 was  $246,500  from The F.W.
Thompson Fund, L.P. The performance  fees earned for the year ended December 31,
1997  are  subject  to  adjustment  pending  completion  of  final  audit of the
respective funds.

          Each of Global Advisors Portfolio,  N.V. and Global Advisors Portfolio
II, N.V.  terminated TBL as their advisor  effective as of the close of business
on  November  15,  1996 and,  as a result,  no further  fees were,  nor will be,
generated from them after that date. Management believes these terminations will
not have a material future impact on the Company. Management expects performance
fee  revenue to  increase  during  periods of positive  market  conditions,  but
management cannot predict with any accuracy whether such income from performance
fees will  continue in the future due to changing  market  conditions  and other
outside factors.

          Commissions increased $72,000 for the year ended December 31, 1997, or
approximately  31%, as compared to the year ended December 31, 1996, as a result
of TSI having additional clients and more trading activity in 1997.

          Operating  profits at TBL were  $490,200  and  $625,800  for the years
ended December 31, 1997 and 1996, respectively. The decrease in operating profit
from 1996 to 1997 ($135,559) was primarily

 
                                        15                                     
<PAGE>

due to an  investment  gain of  $130,900  in 1996  which  did not recur in 1997.
Identifiable  assets of TBL were  $1,531,700 and $1,563,800 at December 31, 1997
and 1996, respectively.

          Compensation expense increased for the year ended December 31, 1997 by
$624,200,  or approximately 23%, over the similar period in 1996, as a result of
the  Company's  continued  efforts to attract  and retain  qualified  employees.
Compensation  expense  primarily  increased due to salary  increases for certain
employees that became effective  January 1, 1997 and increased health care costs
due to the  increase  in the number of  employees  during  the year.  As part of
compensation  expense,  $701,000 and  $780,800 for the years ended  December 31,
1997 and 1996, respectively, were attributable to bonuses granted by the Company
to its employees.

          General  and  administrative   expenses  consist  primarily  of  rent,
telecommunications,  travel and  entertainment,  outside  professional  fees and
other related expenses.  General and administrative expenses were $1,506,800 and
$1,306,000  for the  years  ended  December  31,  1997 and  1996,  respectively,
representing 21.4% and 24.7% of revenues, respectively. The increases in general
and administrative expenses were primarily due to costs related to the Company's
continued  expansion to service its business growth. The decrease,  however,  in
general and administrative  expense as a percentage of revenues was attributable
to the increase in revenues from the Company's proprietary  products,  expansion
of its client base, and the positive results from cost containment measures.

          Consulting  expenses  increased by $476,400  during the year 1997,  as
compared to the similar period of 1996, primarily as a result of the increase in
revenues from the clients that participate in revenue sharing arrangements.  For
example,  TSI  has an  arrangement  for  securities  clearance  services  with a
clearing broker dealer whereby a certain percentage of the commissions earned is
shared;  this  agreement  became  effective  in June  1995  when  TSI  became  a
registered  broker dealer.  Also, TPI and TBL have revenue sharing  arrangements
with respect to certain clients whose products were launched during 1997.
 
          The increase in  depreciation  and  amortization  is a result of fixed
asset purchases during the year ended December 31, 1997. These purchases totaled
$299,700 and consisted of computer  equipment for the new employees hired during
the year, software  purchases,  as well as a computer system network for TBL. At
December 31, 1997,  the Company has no  significant  commitments  for additional
capital expenditures.

          Other  income  decreased  for the  year  ended  December  31,  1997 by
$131,100 over 1996. Other income in 1996 includes an investment gain of $130,900
resulting  from the  exercise of warrants  to purchase  57,639  shares of common
stock of an  unaffiliated  public  corporation  and the subsequent  sale of such
shares. At December 31, 1997, TBL owned warrants to purchase common stock of the
same unaffiliated  public  corporation at $3.78 per share until October 19, 1998
(87,500  shares),  and 18,750  shares at $3.63 per share until October 30, 1998,
respectively. Such warrants have been valued at zero on December 31, 1997.

Liquidity and Capital Resources

          At December  31,  1998,  the Company had  $1,893,800  in cash and cash
equivalents  and  working  capital of  $2,992,900,  as compared to cash and cash
equivalents of $820,800 and working capital of $1,819,300 at December 31, 1997.

          Cash flows  provided by operating  activities  was  $1,799,600 for the
year ended December 31 1998, compared to cash flows used by operating activities
of $56,300 for the year ended  December 31, 1997.  The increase in cash provided
by operations was primarily as a result of profitable operations, the

 
                                      16
<PAGE>

increase in accounts payable, and the decrease in receivable from officer offset
by  increases  in  accounts  receivable  and other  assets.  Cash  flows used in
investing   activities   were   $1,109,600   and  $397,900  in  1998  and  1997,
respectively.  1998  and 1997  cash  flows  used in  investing  activities  were
investments in limited partnerships and joint ventures,  as well as the purchase
of fixed assets offset partially by the sale of limited  partnership  interests,
joint venture interests and other investments.
 
          Cash flows  provided  by  financing  activities  of  $383,000  in 1998
resulted  from the issuance of 137,500  shares of the  Company's  Class B Common
Stock  through the exercise of certain  stock options by employees and directors
of the Company.

     The Company  owns options  expiring in 2001 to purchase  8,000 shares of an
unregistered  investment  adviser  specializing in 401(k) investment  allocation
advice  over the  Internet.  The options were granted at $10 per share and were
fully vested at December  31,  1998.  The options have a five year term and have
been valued at zero by the Company at December 31, 1998.

          The Company  owns  30,000  shares of a  nonpublic  financial  services
company as a result of an  employee's  participation  as a board  member of such
company.  As a result of  consulting  services  performed  for this entity,  TPI
received $36,000 and $56,200, respectively for the years ended December 31, 1998
and 1997. At December 31, 1998,  the Company valued these shares of common stock
at zero.

          The  Company  believes  that it has  adequate  capital  resources  and
working  capital to bring to market the  products it  developed in late 1998 and
those it expects to develop in early  1999,  and that the  revenue  stream  from
these products, as well as from existing products, will be sufficient to support
future growth. The Company has no material short or long term debt obligations.

Facilities

          On October 1 1997, the Company moved to a larger  facility and entered
into a lease  agreement for new executive  offices.  The Company was  completely
released from its obligation under the old lease. The lease for the new facility
expires August 31, 2002 and requires monthly payments of approximately  $17,100.
Effective  October 1, 1998, the Company leased  additional  office space for its
corporate offices.  This new lease is for 2,688 square feet, expires August 2002
and requires monthly payments of approximately $5,600.

          TBL's lease for corporate  offices extends through  February 2000. The
lease requires monthly lease payments of approximately $5,800.

Investments in Limited Partnerships

          The  Company,  through its  subsidiaries,  is invested in five limited
partnerships at December 31, 1998 and 1997 as follows:


 
                                       17
<PAGE>
<TABLE>
<S>                                       <C>                  <C>                             <C>         <C> 

                                                         Fair Value of
                                                         Investments at                               Rate of Return
         Fund                               December 1998             December 1997                 1998      1997

The Broad Market Fund, L.P.                 $     807,200              $    688,600                 17.2%    16.4%
The Broad Market Prime Fund, L.P.                  56,700                       --                  20.6      7.8(1)
Gamtree, L.P.                                     177,600                   186,700                 (4.9)    16.1
The Meridian Horizon Fund, L.P.                   378,600                   299,500                 17.2     17.6
The F.W. Thompson Fund, L.P.                           --                    46,700                (18.2)    21.9
American Masters Market
  Neutral Fund, L.P.                              614,600                        --                  1.7(2)     --
                                             ------------              ------------
                                            $   2,034,700              $  1,221,500
                                             ============              ============

</TABLE>

(1) Rate of return for period July 1, 1997 (date of formation)  through December
31, 1997.

(2) Rate of return for period  September  1, 1998  (date of  formation)  through
December 31, 1998.

          The significant proprietary products of the Company are as follows:

          The Broad Market Fund, L.P. is a Delaware limited  partnership  formed
to achieve capital growth through hedged investments.

          The Broad Market Prime Fund,  L.P. is a Delaware  limited  partnership
formed to achieve capital growth through a leveraged investment strategy.

     American  Masters  Market  Neutral Fund,  L.P. is a Delaware  multi-manager
limited   partnership   formed  to  achieve  long  term   capital   appreciation
irrespective of stock market volatility.

          During 1998,  TPI was the general  partner of The F.W.  Thompson Fund,
L.P.  However,  due to its weak  performance,  this  partnership was closed.  In
addition,  effective July 1, 1998,  TPI resigned as a co-general  partner of The
Meridian  Horizon Fund,  L.P.,  ("Meridian").  Subsequently,  TPI was hired as a
consultant to Meridian and as its administrator.

Business Combination

     On March 11, 1999,  the Company  acquired all of the  outstanding  ordinary
(common) shares of TASS Management Limited ("TASS"),  a London,  England - based
company specializing in the sale of electronic databases. Tremont issued 190,477
shares of its Class B Common Stock in exchange for the TASS common shares.  TASS
thus became another subsidiary of the Company, although its preferred stock will
not be owned by the Company. TASS serves a large institutional client base whose
subscribers include money center banks, investment banks, private banks, central
banks,  foundations,  endowments,  insurance  companies,  prime brokers,  family
offices,  academics,  government  agencies and high-net worth  individuals.  The
acquisition  will be  accounted  for using the  purchase  method of  accounting.
Accordingly,  the  excess  of cost  over the  fair  market  value of net  assets
acquired (approximately $1.7 million) will be amortized on a straight line basis
over a ten  year  period.  The  operations  of  TASS  will  be  included  in the
consolidated statement of operations from the date of closing.  In connection 
with the acquisition, employment agreements were entered into with two key
employees of TASS, who were also granted options to purchase shares of the
Company's Class B Common Stock and certain registration rights.

Inflation

          The impact of  inflation  on the  Company's  revenues  and  results of
operations has not been significant.


 
                                      18
<PAGE>


Impact of Year 2000

          The Year 2000 issue is the result of computer  programs  being written
using two digits rather than four to determine the applicable year. Any computer
programs  that have date  sensitive  software or embedded  chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a  system  failure  or  miscalculations   causing  significant   disruptions  of
operations,  including,  among other  things,  a temporary  inability to process
transactions  or engage in similar normal business  activities.  Based on recent
assessments,  the  Company  determined  that it will be  required  to  modify or
replace  certain  portions of its  software  and certain  hardware so that those
systems  will  properly  utilize  dates beyond  December  31, 1999.  The Company
presently  believes that with  modifications or replacements of certain existing
software and certain hardware, the Year 2000 Issue can be mitigated. However, if
such  modifications  and replacements are not made, or are not completed timely,
the Year 2000  Issue  could  have a  material  impact on the  operations  of the
Company.

          The  Company's  plan to  resolve  the Year  2000  Issue  involves  the
following four phases: assessment,  remediation, testing, and implementation. To
date,  the Company has fully  completed its assessment of all systems that could
be significantly  affected by the Year 2000. The completed  assessment indicated
that certain of the Company's significant  information  technology systems could
be affected,  particularly  the network  computing  platform's  operating system
software,  certain spreadsheet  applications and the Company's proprietary Hedge
Fund  Research  database  software.  In  addition,   the  Company  has  gathered
information about the Year 2000 compliance  status of its significant  suppliers
and subcontractors and continues to monitor their compliance.

          To date the Company has completed approximately 25% of the remediation
phase and expects to complete  software  reprogramming  and replacement no later
than June 30, 1999. Once software is reprogrammed or replaced,  the Company will
begin testing and  implementation.  These phases run  concurrently for different
systems. To date, the Company has completed approximately 10% of its testing and
has implemented none of its remediated systems.  Completion of the testing phase
for all  significant  systems is expected by June 30, 1999, with 100% completion
targeted for September 30, 1999.
 
          The Company has queried its  important  suppliers  and  subcontractors
that do not share  information  systems with the Company (external  agents).  To
date,  the Company is not aware of any external agent Year 2000 issue that would
materially  impact the Company's  results of operations,  liquidity,  or capital
resources.  However,  the Company has no means of ensuring that external  agents
will be Year 2000 ready. The inability of external agents to complete their Year
2000 resolution process in a timely fashion could materially impact the Company.
The effect of non-compliance by external agents is not determinable.

          In the event that the Company does not complete any additional  phases
of the  remediation  process,  the Company  would be able to provide the minimum
necessary  level of  investment  research  information  which is critical to its
consulting  services,  and it would be able to process the  relevant  accounting
transactions.  In addition,  disruptions in the economy generally resulting from
Year 2000  Issues  could  also  materially  adversely  effect  the  Company.  In
particular,   unexpected  volatilities  within  the  investment  industry  could
adversely  impact the  Company's  revenues due to a  significant  portion of the
Company's  revenues  being based  solely upon the net asset value of funds under
management.  The amount of potential lost revenue cannot be reasonably estimated
at this time.

          The Company  will utilize  both  internal  and  external  resources to
reprogram,  replace, test and implement the software and operating equipment for
Year 2000 modifications. The total cost of the Year

 
                                       19
<PAGE>

2000 project is estimated at $400,000 and is being funded through operating cash
flows.  To date,  the  Company  has  incurred  approximately  $70,000,  which is
capitalized for the new systems and equipment.  Of the total  remaining  project
costs,  approximately  $290,000 is  attributable to the purchase of new software
and  hardware,  which will be  capitalized.  The  remaining  $40,000  relates to
consulting fees which will be expensed as incurred.

          Management  of the  Company  believes it has an  effective  program in
place to resolve the Year 2000 issue in a timely  manner.  As noted  above,  the
Company has not  completed all  necessary  phases of the Year 2000 program,  but
expects  to be  completed  in  the  third  quarter  of  1999.  The  Company  has
contingency plans for certain critical applications and is working on such plans
for  others.  These  contingency  plans  involve,  among other  actions,  manual
workarounds, and adjusting staffing strategies.

Forward Looking Statements

          Certain  statements  in  this  Management's  Discussion  and  Analysis
constitute  "forward  looking  statements"  within the  meaning  of the  Private
Securities  Litigation  Reform  Act of 1995.  Such  forward  looking  statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance, or achievements of the Company to be materially
different from any future results,  performance,  or  achievements  expressed or
implied by such forward looking  statements.  These forward  looking  statements
were based on various  factors and were  derived  utilizing  numerous  important
assumptions  and  other  factors  that  could  cause  actual  results  to differ
materially  from those in the forward  looking  statements,  including,  but not
limited  to:  uncertainty  as to the  Company's  future  profitability  and  the
Company's ability to develop and implement  operational and financial systems to
manage rapidly  growing  operations,  competition in the Company's  existing and
potential  future  lines of  business,  and other  factors.  Other  factors  and
assumptions  not identified  above were also involved in the derivation of these
forward  looking  statements,  and the failure of such other  assumptions  to be
realized,  as well as other  factors,  may also cause  actual  results to differ
materially  from those  projected.  The Company  assumes no obligation to update
these  forward  looking  statements  to  reflect  actual  results,   changes  in
assumptions  or  changes  in  other  factors   affecting  such  forward  looking
statements.

Item 7. Financial Statements.                                               Page

Reports of Independent Auditors.............................................. 21
Consolidated Balance Sheets as of December 31, 1998 and 1997 ................ 23
Consolidated Statements of Income for the years ended
   December 31, 1998 and 1997 ............................................... 24
Consolidated Statements of Shareholder' Equity for the years ended
   December 31, 1998 and 1997 ............................................... 25
Consolidated Statements of Cash Flows for the years ended
   December 31, 1998 and 1997 ............................................... 26
Notes to Consolidated Financial Statements................................... 27


 
                                     20


<PAGE>



                     Report of Independent Auditors


Shareholders and Board of Directors
Tremont Advisers, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Tremont
Advisers,  Inc. as of December 31, 1998 and 1997,  and the related  consolidated
statements of income,  shareholders'  equity,  and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  The  financial  statements of The Broad Market
Fund,  L.P.  (a limited  partnership  in which the  Company  had a .43% and .51%
interest at December 31, 1998 and 1997, respectively) have been audited by other
auditors  whose reports have been furnished to us; insofar as our opinion on the
consolidated  financial statements relates to data included for The Broad Market
Fund, L.P., it is based solely on their reports.  In the consolidated  financial
statements, the Company's investment in The Broad Market Fund, L.P. is stated at
$807,200  and  $688,600 at December  31,  1998 and 1997,  respectively,  and the
Company's  equity in the net income of The Broad Market Fund,  L.P. is stated at
$118,600  and  $128,700,  for the  years  ended  December  31,  1998  and  1997,
respectively.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that our  audits,  and the  reports  of other  auditors,  provide a
reasonable basis for our opinion.

In our  opinion,  based on our audits and the  reports  of other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material respects, the consolidated financial position of Tremont Advisers, Inc.
at December 31, 1998 and 1997, and the consolidated  results of their operations
and their cash flows for the years then  ended,  in  conformity  with  generally
accepted accounting principles.


                                                       Ernst & Young LLP
White Plains, New York
March 5, 1999

                                    21



<PAGE>

To the Partners of
The Broad Market Fund, L.P.



     We have audited the  statement  of financial  condition of The Broad Market
Fund,  L.P. (a limited  partnership)  as of December 31, 1998 and 1997,  and the
related statements of income,  changes in Partners' capital,  and cash flows for
the two years then ended (not presented herein).  These financial statements are
the  responsibility of the General Partner.  Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the financial position of The Broad Market Fund, L.P.
as of December  31, 1998 and 1997,  the results of its  operations  and its cash
flows for each of the two years then ended in conformity with generally accepted
accounting principles.



Goldstein Golub Kessler LLP
New York, New York


February 13, 1999


                                             22
<PAGE>



                                                  Tremont Advisers, Inc.

                                                Consolidated Balance Sheets


<TABLE>


    <S>                                                                                     <C>                    <C>    
                                                                                            1998                   1997
                                                                                         ---------------------------------------
Assets
Current assets:
   Cash and cash equivalents                                                            $ 1,893,800          $    820,800
   Accounts receivable, less allowance for bad debts of $35,000 and
     $25,000                                                                              2,111,600             2,011,400
   Receivable from officer                                                                    -                   200,000
   Income taxes receivable                                                                   82,800                 -
   Prepaid expenses and other assets                                                        327,900               123,100
                                                                                         ---------------------------------------
Total current assets                                                                      4,416,100             3,155,300

Investments in limited partnerships (cost -- $1,428,600 and $803,400)                     2,034,700             1,221,500
Other investments (cost -- $469,900 and $457,700)                                           200,300               174,800

Fixed assets:
   Furniture and equipment                                                                  893,200               706,600
   Leasehold improvements                                                                    82,700                53,700
   Less accumulated depreciation                                                           (526,200)             (359,100)
                                                                                         ---------------------------------------
Fixed assets, net                                                                           449,700               401,200

Other assets                                                                                192,900                29,000
                                                                                         ---------------------------------------
Total assets                                                                            $ 7,293,700           $ 4,981,800
                                                                                         =======================================

Liabilities and Shareholders' Equity Current liabilities:
   Accounts payable                                                                     $   283,300           $    50,500
   Accrued expenses                                                                       1,111,200             1,112,800
   Income taxes payable                                                                        -                    1,200
   Deferred income taxes payable                                                             29,000               171,500
                                                                                         ---------------------------------------
Total current liabilities                                                                 1,423,500             1,336,000

Deferred income taxes payable                                                               559,400               160,600

Minority interest                                                                               -                  -

Redeemable preferred stock:
   Series A Preferred Stock, $1 par value, 650,000 shares
     authorized, none issued and outstanding                                                    -                  -

Shareholders' equity:
   Preferred Stock, $1 par value, 350,000 shares authorized, issued
     and outstanding - none                                                                     -                  -
   Class A Common Stock, $0.01 par value, 5,000,000 shares
     authorized, 1,284,718 shares issued and outstanding                                     12,800                12,800

   Class  B  Common  Stock,  $0.01  par  value,  10,000,000  shares  authorized,
     2,939,604 and 2,802,104 shares issued and
     outstanding                                                                             29,400                28,000

   Additional paid in capital                                                             5,106,900             4,725,300
   Retained earnings (deficit)                                                              167,000            (1,280,900)
   Cumulative foreign currency translation adjustment                                        (5,300)            -
                                                                                         ---------------------------------------
Total shareholders' equity                                                                5,310,800             3,485,200
                                                                                         ---------------------------------------
Total liabilities and shareholders' equity                                              $ 7,293,700           $ 4,981,800
                                                                                         =======================================



</TABLE>


See accompanying notes.

                                      23



<PAGE>





                                                  Tremont Advisers, Inc.

                                             Consolidated Statements of Income


<TABLE>

  <S>                                                                                          <C>            <C> 
                                                                                               1998                1997
                                                                                       ----------------------------------------
Revenues:
Consulting fees                                                                         $ 9,798,000           $5,840,300
Performance fees                                                                            434,600              884,300
Commissions                                                                                 423,500              302,100
                                                                                       ----------------------------------------
Total revenues                                                                           10,656,100            7,026,700

Expenses:
Compensation                                                                               4,148,100           3,325,000
General and administrative                                                                 2,684,500           1,506,900
Consulting                                                                                 1,361,100           1,119,000
Depreciation                                                                                 180,700             137,800
                                                                                       ----------------------------------------
Total expenses                                                                             8,374,400           6,088,700

Equity in earnings of limited partnerships                                                   182,400             215,100
Loss from operations of joint ventures, net                                                 (222,100)           (117,100)
Other income, net                                                                             50,600              13,800
Minority interest                                                                             17,500              -
                                                                                       ----------------------------------------

Income before income taxes                                                                 2,310,100           1,049,800
Provision for income taxes                                                                   862,200             349,900
                                                                                       ----------------------------------------
Net income                                                                               $ 1,447,900         $   699,900
                                                                                       ========================================


Net income per common share                                                              $      0.35         $      0.18
                                                                                           ------------------------------------

Net income per common share - assuming dilution                                          $      0.33         $      0.17
                                                                                           ====================================




See accompanying notes.
                                               24

</TABLE>

<PAGE>





                            Tremont Advisers, Inc.

                    Consolidated Statements of Shareholders' Equity


<TABLE>


               <S>                                     <C>                      <C>                 <C>                 <C>  
                                                   Common Stock              Additional           Retained              Total
                                                     Par Value                 Paid in            Earnings          Shareholders'
                                              Class A         Class B           Capital            (Deficit)            Equity
                                              -------------------------------------------------------------------------------------

Balance at December 31, 1996                   $12,800         $26,000          $4,004,000      $(1,980,800)         $2,062,000

   Issuance of Class B Common Stock-MGL
     purchase (202,365 shares)                 -                 2,000             721,300            -                 723,300

   Net income                                  -               -                -                   699,900             699,900
                                              -------------------------------------------------------------------------------------

Balance at December 31, 1997                    12,800          28,000           4,725,300        1,280,900)          3,485,200

   Comprehensive income:

     Net income                                -               -                -                 1,447,900           1,447,900

     Foreign currency translation adjustment   -               -                -                     -                  (5,300)
                                              -------------------------------------------------------------------------------------

   Comprehensive income                                                                                               1,442,600

   Issuance of Class B Common Stock -
     Director Options (7,500 shares)           -                  100              28,000             -                  28,100

   Issuance of Class B Common Stock -
     Employee Options (130,000 shares)         -                1,300             227,500             -                 228,800

   Income tax benefits related to exercise of
     options                                   -                  -               126,100              -                126,100
                                              -------------------------------------------------------------------------------------

Balance at December 31, 1998                   $12,800        $29,400          $5,106,900      $    167,000          $5,310,800
                                              =====================================================================================
</TABLE>
See accompanying notes.



                                                  25



<PAGE>





                                                  Tremont Advisers, Inc.

                                           Consolidated Statements of Cash Flows

<TABLE>


   <S>                                                                                            <C>               <C>        
                                                                                                     Year ended December
                                                                                                              31
                                                                                                    1998               1997
                                                                                             --------------------------------------
Operating activities
Net income                                                                                    $ 1,447,900          $ 699,900
Adjustments to reconcile net income to net cash provided
   (used) by operating activities:
     Depreciation                                                                                 180,700            137,800
     Equity in earnings of limited partnerships                                                  (182,400)          (215,100)
     Loss from operations of joint ventures, net                                                  222,100            117,100
     Loss from other investments                                                                    2,000             10,600
     Deferred income taxes                                                                        256,300            138,000
     Allowance for bad debts                                                                       10,000             -
     Foreign currency translation adjustment                                                       (5,300)            -
     Changes in operating assets and liabilities:
       Accounts receivable                                                                       (110,200)          (591,900)
       Receivable from officer                                                                    200,000           (200,000)
       Income taxes, net                                                                          (84,000)            (1,900)
       Accounts payable                                                                           232,800            (40,100)
       Accrued expenses                                                                            (1,600)           (19,200)
       Prepaid expenses and other assets                                                         (368,700)           (91,500)
                                                                                             --------------------------------------
Net cash provided (used) by operating activities                                                1,799,600            (56,300)

Investing activities
Purchase of fixed assets                                                                         (229,200)          (299,700)
Investments in limited partnerships                                                              (710,000)          (685,000)
Withdrawals from limited partnerships                                                              79,200            550,000
Investments in other investments                                                                 (289,600)           (56,800)
Proceeds from sale of other investments                                                            40,000             93,600
                                                                                             --------------------------------------
Net cash used by investing activities                                                          (1,109,600)          (397,900)

Financing activities
Net proceeds from issuance of Class B Common Stock                                                -                  723,300
Exercise of Class B Common Stock Options                                                          256,900            -
Tax benefits from exercise of stock options                                                       126,100            -
                                                                                             --------------------------------------
Net cash provided by financing activities                                                         383,000            723,300

Net increase in cash and cash equivalents                                                       1,073,000            269,100
Cash and cash equivalents at beginning of year                                                    820,800            551,700
                                                                                             --------------------------------------
Cash and cash equivalents at end of year                                                       $1,893,800         $  820,800
                                                                                             ======================================



</TABLE>
See accompanying notes.

                                         26

<PAGE>





                               Tremont Advisers, Inc.

                  Notes to Consolidated Financial Statements

                                   December 31, 1998



1. Basis of Presentation

     The  consolidated  financial  statements  include  the  accounts of Tremont
Advisers,  Inc.  ("the  Company")  and its  wholly-owned  subsidiaries,  Tremont
Partners,  Inc., ("TPI"), Tremont (Bermuda) Limited ("TBL"), Tremont Securities,
Inc.  ("TSI") and Tremont Futures,  Inc.  ("TFI").  The  consolidated  financial
statements  also include the  accounts of Tremont  Investment  Management,  Inc.
("TIMI"), a 65% owned subsidiary.  TPI is an investment advisor registered under
the  Investment  Advisers Act of 1940,  as amended.  TBL is  incorporated  under
Bermuda law and provides advisory  services to clients located offshore.  TSI, a
registered  broker-dealer,  assists  customers  in  the  purchase  and  sale  of
investments in other entities. TIMI, formed on July 13, 1998, is registered with
the  Ontario  (Canada)  Securities  Commission  as  an  investment  counsel  and
portfolio  manager,  and as a limited  market  dealer under the  Securities  Act
(Ontario).  On July 14, 1998, the Company formed TFI. TFI is registered with the
Commodity Futures Trading  Commission and the National Futures  Association as a
commodity pool operator and commodity trading advisor.

The Company is a holding  company,  specializing  in investment  management  and
consulting  services through its wholly-owned and  majority-owned  subsidiaries.
The Company advises  institutional  investors,  high net worth individuals,  and
investment   managers  on  their   organization  and  management  of  investment
portfolios  and  programs.  The  Company  also  sponsors  and  manages  its  own
proprietary single-manager and multi-manager investment funds.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
its majority owned  subsidiaries.  All material  intercompany  transactions  and
accounts have been eliminated in consolidation.

Fair Value of Financial Instruments

The  estimated  fair value of amounts  reported  in the  consolidated  financial
statements  have been  determined  by using  available  market  information  and
appropriate valuation  methodologies.  The carrying value for all current assets
and current  liabilities  approximates  fair value  because of their  short-term
nature. The fair value of long-term  investments also approximate their carrying
value.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from such estimates.


                                   27


<PAGE>





                           Tremont Advisers, Inc.

                Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

Revenue Recognition

Consulting  fees are  recorded as earned and are  derived  from  consulting  and
specialized  investment services provided to institutional and other clients, as
well as fees  earned  from  certain  funds  under  management.  These  fees  are
generally a percentage of the amount of assets under  management as well as fees
for investments  placed by TBL in certain  offshore funds.  The Company provides
other  consulting  services  generally  on a fixed fee  basis,  either as annual
retainer fees or single  project fees.  The revenues from such other  consulting
arrangements  are recognized  ratably over the contract terms.  Performance fees
are recorded  based on the  achievement  of investment  performance in excess of
established  benchmarks and are recognized  only when they are no longer subject
to market  conditions.  Commissions  earned by TSI are  recorded on a trade date
basis.

Cash and Cash Equivalents

The Company  considers  all highly liquid  investments  with a maturity of three
months or less at the time of purchase to be cash  equivalents.  At December 31,
1998,  cash and  cash  equivalents  is  comprised  primarily  of  deposits  with
financial  institutions.  Such  deposits are  generally in excess of the amounts
covered by FDIC insurance.

Concentrations of Credit Risk

The  Company's  accounts   receivable  are  not  concentrated  in  any  specific
geographic  region,  but  are  concentrated  in  the  investment  industry.  The
Company's  exposure to credit risk  associated  with  nonpayment by customers is
affected by conditions within the investment industry.

Investments

The equity method of accounting is used for investments in limited  partnerships
and investments in joint ventures.

Fixed Assets

Fixed  assets  are  stated  at  cost.   Depreciation   is  provided   using  the
straight-line  method over the estimated useful lives of the related assets (3-5
years). During 1998, $13,600 of fully depreciated fixed assets were written off.


                                   28



<PAGE>





                                Tremont Advisers, Inc.

                   Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

Income Taxes

The  provision  for income  taxes  includes  federal and state  taxes  currently
payable  and  those  deferred  because  of  temporary  differences  between  the
financial  statement  and tax  basis of  assets  and  liabilities.  A  valuation
allowance is recorded  based on available  evidence  when it is more likely than
not that some portion or all of the deferred tax assets will not be realized.

Minority Interest

The Company presently owns 65% of TIMI. For financial  reporting  purposes,  the
assets,  liabilities  and earnings of TIMI have been  included in the  Company's
consolidated  financial statements.  The joint venture partner's 35% interest in
TIMI has been recorded as minority interest.

Stock Compensation

In 1997, the Company adopted Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock-Based Compensation". As permitted under this
standard,  the Company has elected to follow Accounting Principles Board Opinion
No. 25 ("APB 25"),  "Accounting for Stock Issued to Employees" in accounting for
its stock options and other stock-based  employee awards.  The Company derives a
tax  deduction  measured by the excess of the market value over the option price
at the date  nonqualified  options  are  exercised.  The  related tax benefit is
credited to  additional  paid in capital.  Pro forma  information  regarding net
income and earnings per share,  as  calculated  under the provision of SFAS 123,
are disclosed in Note 8.

Foreign Currency Translation

The Company  accounts for  translation  of foreign  currency in accordance  with
Statement  of  Financial   Accounting   Standards   No.  52  "Foreign   Currency
Translation."  The assets and liabilities of the Company's  Canadian  subsidiary
are translated at the current  exchange rate as of the balance sheet date, while
capital  accounts are translated at historical  rates. The revenues and expenses
are  translated  using an average  exchange rate during the period.  Adjustments
resulting  from these  translations  are  reflected  as a separate  component of
shareholders'   equity   titled   "Cumulative   foreign   currency   translation
adjustment."

Earnings Per Share

Basic  earnings per share is computed  based on the weighted  average  number of
common shares  outstanding.  Diluted earnings per share reflects the increase in
the  weighted  average  common  shares  outstanding  that would  result from the
assumed  exercise of outstanding  stock options,  calculated  using the treasury
stock method.

Reclassifications

Certain prior year balances have been  reclassified  to conform with the current
year's presentation.


                                         29



<PAGE>





                          Tremont Advisers, Inc.

              Notes to Consolidated Financial Statements (continued)



3. Prepaid Expenses and Other Assets

<TABLE>
     <S>                                                                         <C>                     <C>
                                                                                       December 31
                                                                             1998                      1997
                                                                          -------------------------------------------

Current:
  Insurance receivable                                                     $257,500                $     -
  Prepaid expenses                                                           70,400                   123,100
                                                                          -------------------------------------------
                                                                           $327,900                $  123,100
                                                                          ===========================================

Non-Current:
  Deferred acquisition costs                                               $162,900                $      -
  Security deposits                                                          30,000                    29,000
                                                                          -------------------------------------------
                                                                           $192,900                $   29,000
                                                                          ===========================================

</TABLE>
Payroll  Express,  the Company's  payroll  preparation  and withholding tax data
processing  service   from  1991  through  September  1998,  filed  Chapter  11
bankruptcy.  Payroll  Express  engaged in a fraudulent  scheme by diverting  the
Company's  federal payroll tax withholdings  amounting to $307,500 for the years
ended December 31, 1995 and 1996.

The  Company  is  cooperating  with  the  authorities  in the  ongoing  criminal
investigation of Payroll Express and its principal and filed a proof of claim in
the Payroll  Express  bankruptcy.  The Company also believes that its losses are
covered by its  fidelity  bond.  A proof of loss,  which  seeks  recovery of the
Company's losses and reimbursement for related professional fees, has been filed
with its  insurance  provider.  Included in other assets at December 31, 1998 is
$257,500 which represents a receivable from the insurance  provider  pursuant to
this claim.  This amount  reduced the related  loss of $307,500  recorded by the
Company in general and administrative expenses.

The Company has agreed to acquire TASS  Management  Limited  ("TASS"),  a London
based company specializing in alternative  investment and research services (see
Note 16). The  acquisition is expected to be completed  during the first half of
1999.  Accordingly,  acquisition costs of $162,900 incurred through December 31,
1998,  primarily legal and accounting  professional  fees, have been recorded as
deferred acquisition costs at December 31, 1998.

4. Investments in Limited Partnerships

The Broad Market Fund,  L.P.--The  Broad Market Fund L.P. is a Delaware  limited
partnership  ("Broad  Market  Fund")  that  was  organized  for the  purpose  of
achieving  capital growth through hedged  investments.  At December 31, 1998 and
1997, TPI, the General Partner,  had an investment of $807,200 (cost - $423,600)
and $688,600 (cost - $423,600),  respectively, in the Broad Market Fund. For the
years ended December 31, 1998 and 1997, TPI's  proportionate  share of the Broad
Market Fund's  income  ($118,600  and  $128,700,  respectively)  is reflected in
equity in earnings of limited  partnerships  in the  consolidated  statements of
income. At December 31, 1998 and 1997, TPI's investment in the Broad Market Fund
represented .43% and .51%, respectively,  of the Broad Market Fund's net assets.
The summarized  audited  financial  information of the Broad Market Fund,  based
solely on the report of other auditors, is as follows:

                                   30

<PAGE>





                                  Tremont Advisers, Inc.

                    Notes to Consolidated Financial Statements (continued)



4. Investments in Limited Partnerships (continued)
<TABLE>


   <S>                                                                          <C>                      <C>          
                                                                                         December 31
                                                                              1998                  1997
                                                                          ---------------------  ----------------------

Total assets                                                               $198,415,000         $162,511,000
Total liabilities                                                            10,725,000           28,568,000


                                                                                   Year ended December 31,

                                                                                  1998                  1997
                                                                          -------------------------------------------

Net investment income                                                      $   3,794,000        $   2,658,000
Net realized gain on investments                                              22,101,000           15,765,000
                                                                          -------------------------------------------
Net income                                                                 $  25,895,000        $  18,423,000
                                                                          ===========================================


</TABLE>
GamTree,  L.P.--GamTree,  L.P., a Delaware limited  partnership  ("GamTree") was
organized  for  the  purpose  of  achieving  long-term  capital  growth  through
diversified asset  management.  At December 31, 1998 and 1997, TPI, a Co-General
Partner  with GAMCO  Investors,  Inc.,  an affiliate  of a  shareholder,  had an
investment  of  $177,600  (cost -  $100,000)  and  $186,700  (cost -  $100,000),
respectively,  in GamTree. For the years ended December 31, 1998 and 1997, TPI's
proportionate   share  of  GamTree's (loss)/income   (($9,100)   and  $28,300,
respectively) is reflected in equity in earnings of limited  partnerships in the
consolidated  statements of income.  At December 31, 1998,  TPI's  investment in
GamTree represented 12.6% of GamTree's net assets.

Meridian Horizon Fund,  L.P.--Meridian  Horizon Fund, L.P. is a Delaware limited
partnership  ("Meridian") that was organized for the purpose of achieving a high
total return and preservation of capital  utilizing a multi-manager  approach to
investing.  At December  31, 1998 and 1997,  TPI had an  investment  of $378,600
(cost $250,000) and $299,500 (cost $250,000),  respectively,  in Meridian, which
represents .16% and .23%, respectively,  of Meridian's net assets. For the years
ended December 31, 1998 and 1997, TPI's proportionate share of Meridian's income
($79,100  and  $47,900,  respectively),  is  reflected  in equity in earnings of
limited partnerships in the consolidated statements of income. Effective July 1,
1998,  Meridian's Limited Partnership Agreement was amended and restated whereby
TPI resigned as a co-general partner.

The F.W.  Thompson Fund,  L.P.--At  December 31, 1998,  The F.W.  Thompson Fund,
L.P., a Delaware  limited  partnership,  was closed  resulting in a $5,600 loss,
which  is  included  in  equity  in  earnings  of  limited  partnerships  in the
consolidated  statements  of income.  At December  31, 1998 and 1997,  TPI,  the
General  Partner,  had no  investment  and an  investment  of  $46,700  (cost  -
$29,800),  respectively.  For the years ended December 31, 1998 and 1997,  TPI's
proportionate share of the limited  partnership's  (loss)/income(($22,500) and
$10,100,   respectively)   is   reflected  in  equity  in  earnings  of  limited
partnerships in the consolidated statements of income.

The Broad Market Prime Fund, L.P.--The Broad Market Prime Fund, L.P., a Delaware
limited  partnership  ("BMPF"),  was  formed on July 1, 1997 for the  purpose of
achieving capital growth through a leveraged  investment  strategy.  At December
31, 1998, TPI, as General  Partner,  had an investment of $56,700 (cost $50,000)
representing .03% of the funds' net assets. TPI had no investment at December
31, 1997 in this fund.  In addition,  the Company has a commitment to fund up to
1% of the limited partnership losses if and when such losses occur. For the year
ended December 31, 1998, TPI had $6,700 of equity  earnings  related to BMPF and
none in 1997.

                                        31
<PAGE>





                                  Tremont Advisers, Inc.

                     Notes to Consolidated Financial Statements (continued)



4. Investments in Limited Partnerships (continued)

The aggregated summarized unaudited financial information of GamTree,  Meridian,
the Thompson Fund and BMPF is as follows:
<TABLE>
   
   <S>                                                                           <C>                <C>
                                                                                         December 31
                                                                              1998                  1997
                                                                          --------------------- -------------------

Total assets                                                               $482,073,000         $249,504,000
Total liabilities                                                            86,271,000           60,805,000


                                                                                   Year Ended December 31

                                                                                  1998                 1997
                                                                          --------------------- -------------------

Net investment loss                                                        $ (8,726,000)        $ (2,509,000)
Net realized and unrealized gain on investments                              59,593,000           16,488,000
                                                                          -----------------------------------------
Net income                                                                 $ 50,867,000          $13,979,000
                                                                          =========================================


</TABLE>
American  Masters  Market  Neutral  Fund,  L.P.  --Effective  September 1, 1998,
American Masters Market Neutral Fund, L.P. ("AMF") became the newest addition to
the Company's line of proprietary products.  This domestic multi-manager limited
partnership   was  formed  for  the  purpose  of  achieving  long  term  capital
appreciation irrespective of stock market volatility. TFI is the General Partner
of the  limited  partnership  and,  as  such,  is  involved  in  the  day-to-day
management of the  partnership.  At December 31, 1998,  TFI had an investment of
$614,600 (cost - $605,000) in AMF representing 54.7% of the funds' net assets.
The summarized unaudited financial information of AMF is as follows:


<TABLE>

   <S>                                                                                              <C>                      
                                                                                                December 31
                                                                                                    1998
                                                                                               --------------------

Total assets                                                                                    $1,158,000
Total liabilities                                                                                   34,000


                                                                                                 Period ended
                                                                                                  December 31
                                                                                                     1998
                                                                                               --------------------

Net investment loss                                                                             $  (18,000)
Net realized and unrealized gain on investments                                                     36,000
                                                                                               --------------------
Net income                                                                                      $   18,000
                                                                                               =====================


                                        32                              
</TABLE>

<PAGE>





                               Tremont Advisers, Inc.

                   Notes to Consolidated Financial Statements (continued)



5. Other Investments

At December 31, 1998 and 1997,  TBL's investment  representing  24.5% of Tremont
International  Insurance Ltd. ("TIIL"), a Cayman Islands corporation,  formed in
July 1996, was $61,200 (cost - $62,300).  TIIL offers certain deferred  variable
annuities,  variable life insurance and other  insurance  contracts to customers
not resident in the Cayman  Islands.  For the period ended December 31, 1998 and
1997,  TBL's  proportionate  share of  operating  income  was  none and  $1,000,
respectively.

In July 1997,  TBL formed with Mutual Risk  Management,  an  international  risk
management  company  ("MRM") and another  party,  and acquired a 40% interest in
Tremont MRM Services Limited ("TMRM"),  a company incorporated under the laws of
Bermuda.  TMRM  provides  product  development,   marketing  and  administrative
services to TIIL.  At December 31, 1998 and 1997,  TBL's  investment  was $3,700
(cost -  $4,800)  and for the  period  ended  December  31,  1998  and  1997 its
proportionate share of operating losses was none and $1,100, respectively.

At December 31, 1998 and 1997, TBL's investment in American Master Fund Limited,
a Cayman  Islands  exempt  Company,  which was  incorporated  in July 1991,  was
$49,400  (cost -  $50,000)  and  $51,400  (cost -  $50,000),  respectively.  The
principal activity of this Company is to operate as an investment fund to invest
primarily in offshore investment vehicles. The Fund's investment objective is to
achieve a high total rate of return by  utilizing  the  expertise of a number of
investment managers, while preserving capital for its investors.

TBL  has  a  40%  interest  ($6,000  cost)  in an  offshore  non-public  venture
("investee")  that is  developing  an  independent  electronic  commerce  online
community to service the needs of the hedge fund industry. At December 31, 1998,
TBL's investment was written down to zero to account for its proportionate share
of operating losses of $126,400. Also included in other investments is a $67,000
advance from TBL to the investee.

In October  1994,  TBL entered  into an agreement  to form  N-Compass  Financial
Services Limited, a joint venture,  to provide  investment  advisory services to
offshore  clients.  For the  years  ended  December  31,  1998 and  1997,  TBL's
proportionate  share (40%) of operating losses of the joint venture were $12,700
and $83,500,  respectively. The investment in this joint venture at December 31,
1998 and 1997 was none and $10,400 (cost - $277,200), respectively.

At December 31, 1998,  the Company has  options,  expiring in 2001,  to purchase
8,000  shares  of  a  nonpublic  company.  This  registered  investment  adviser
specializes  in 401(k)  investment  allocation  advice  over the  internet.  The
options  were  granted at $10 per share and have vested as of December 31, 1998.
The  options   have  been  valued  at  zero  at  December  31,  1998  and  1997,
respectively.

At December 31, 1998, the Company owns a beneficial interest in 30,000 shares of
a nonpublic financial services company formed in 1996. Such shares were received
by the Company as a result of an employee's  participation  as a board member of
such company.  As a result of consulting  services  performed for this nonpublic
entity, TPI has received $33,000 and $56,200,  respectively, for the years ended
December  31, 1998 and 1997.  At December 31, 1998 and 1997,  respectively,  the
shares of common stock have been valued at zero.

                                     33


<PAGE>





                                Tremont Advisers, Inc.

           Notes to Consolidated Financial Statements (continued)



5. Other Investments (continued)

At December  31, 1998 and 1997,  the Company has other  investments  aggregating
$19,000 (cost - $2,600) and $48,100 (cost - $63,400), respectively. During 1998,
the  Company had net losses of $222,100  from joint  ventures.  Included in this
amount is realized  losses of $237,400  of which  $203,400  relates to a certain
twenty-five percent owned joint venture that was discontinued effective December
31, 1998.

6. Accrued Expenses

Accrued expenses consist of the following:


<TABLE>

   <S>                                                                          <C>                      <C>
                                                                                         December 31

                                                                                  1998                  1997
                                                                          --------------------- ---------------------

Professional and consulting fees                                           $   579,300          $   741,100
Compensation                                                                   300,000              200,000
Note payable                                                                    39,800               87,800
Employee benefit plan                                                          110,000               46,600
Printing and graphics                                                           37,500               18,000
Other                                                                           44,600               19,300
                                                                          -------------------------------------------
                                                                           $ 1,111,200          $ 1,112,800
                                                                          ===========================================

</TABLE>
7. Shareholders' Equity

The  Company's  Class A Common  Stock and Class B Common  Stock are  entitled to
equal rights and privileges, except that:

a.   with respect to voting rights,  each Class A Common Stock shareholder is
     entitled  to four votes for each share held of record,  while the Class B
     Common Stock shareholders are entitled to one vote for each share held of 
     record; and,

b.   upon  liquidation,  dissolution  or winding up of the  Company,  before any
     distribution  in respect of the Class B Common Stock,  the  shareholders of
     the Class A Common  Stock are  entitled  to receive an amount  equal to the
     aggregate  liquidation  preference of $0.40 per share.  The shareholders of
     the Class B Common  Stock are then  entitled  to $0.40 per  share,  and the
     remaining  assets of the Company are then  distributed in equal amounts per
     share.

In July 1997,  the Company  entered  into a series of  transactions  whereby MRM
indirectly  acquired  an equity  interest  in the  Company.  In June  1997,  MGL
Investment Ltd. ("MGL"), a wholly-owned  subsidiary of MRM, began a tender offer
to purchase 615,000 shares of outstanding  Class B Common Stock, par value $0.01
at a price of $3.75 per share.  This  transaction  was completed on July 7, 1997
for the entire 615,000 shares. In addition, pursuant to a certain stock purchase
agreement,  the Company sold to MGL 202,365  shares of its Class B Common Stock,
par value $0.01 at a price of $3.75 per share. The transaction was completed for
net proceeds of $723,300, which is net of $35,600 of costs incurred. As a result
of these  transactions,  MRM then indirectly owned,  through MGL, Class B Common
Stock equal to 20% of the  aggregate of the Company's  outstanding  Class A 
Common Stock and Class B Common Stock.

                                      34

<PAGE>





                                    Tremont Advisers, Inc.

                   Notes to Consolidated Financial Statements (continued)



7. Shareholders' Equity (continued)

On  August 7,  1998,  the  Company  amended  its  Certificate  of  Incorporation
increasing  the  authorized  number of shares of Class B Common Stock,  $.01 par
value  per  share,  from  five  million   (5,000,000)   shares  to  ten  million
(10,000,000) shares. The amendment also provided that all or any shares of Class
A Common Stock,  $.01 par value per share, be convertible,  at the option of the
holder thereof, into an equivalent number of shares of Class B Common Stock.

8. Stock Options

On September 17, 1998,  the  Company's  Board of Directors  adopted,  subject to
shareholder  approval,  the Tremont  Advisers,  Inc. 1998 Stock Option Plan (the
"1998 Plan"). The 1998 Plan provides for the issuance of up to 200,000 shares of
Class B Common Stock in connection  with stock options and other awards  granted
under such plan. The 1998 Plan  authorizes the grant of incentive  stock options
and  non-qualified  stock  options  and stock  rights.  The  exercise  price for
incentive  stock  options  shall not be less than the fair  market  value of the
underlying  shares on the date of grant.  The exercise  price for  non-statutory
stock  options  and  stock  rights  shall  not be less  than the  minimum  legal
consideration required therefore under the laws of any jurisdiction in which the
Company,  or its  successors  in interest,  may be  organized.  The 1998 Plan is
administered  by a committee of the Board of  Directors.  The  committee has the
authority to determine the employees to whom awards will be made,  the amount of
awards,  and the other terms and  conditions  of the awards.  As of December 31,
1998,  23,400  incentive  stock  options at $8.00 per share have been granted to
employees under the 1998 Plan.  These options have a five year term and vest and
become exercisable on the following  schedule:  25 percent on the date of grant,
25 percent on the first  anniversary  of the date of grant and 50 percent on the
second anniversary of the date of grant.

During May and June 1997,  options to purchase  145,000 shares of Class B Common
Stock were granted to the directors and certain executive employees at $3.75 per
share.  The options vest and become  exercisable on the following  schedule:  25
percent on the date of the agreement, 25 percent on the first anniversary of the
execution  of the  agreement  and 50 percent on the  second  anniversary  of the
agreement.  In the event of the  termination of the directors or employees,  the
Company  will have the  option,  exercisable  no later than seven days after the
date of  termination,  to purchase all of the directors or employees  shares and
vested options. The purchase price for each share of stock shall be equal to the
best bid price on the date of such termination,  and the purchase price for each
option  shall be the  greater of (i)  $3.75,  or (ii) the amount of the best bid
price for a share of stock on the date of such  termination  less $3.75.  During
1997,  13,334 of such  options  lapsed due to the  termination  of an  employee.
During 1998,  directors  exercised options and purchased 7,500 shares of Class B
Common Stock at $3.75 per share.

During  1994,  an option to purchase  10,000  shares of Class B Common  Stock at
$2.00 per share was granted to an employee.  During 1998, the employee exercised
options and  purchased  5,000 shares of Class B Common Stock at $2.00 per share.
The  employee's  remaining  5,000  options  are fully  vested and expire  during
December  1999,  unless they are exercised  prior  thereto.  In the event of the
termination  of the  employee's  employment,  the Company  will have the option,
exercisable no later than seven days after the date of termination,  to purchase
all of the  employee's  stock and vested  options.  The purchase  price for each
share  of  stock  shall  be  equal  to the  best  bid  price on the date of such
termination,  and the purchase price for each option shall be the greater of (i)
$2.00 or (ii) the amount of the best bid price for a share of stock on the date
of such termination less $2.00.


                                      35

<PAGE>





                             Tremont Advisers, Inc.

                Notes to Consolidated Financial Statements (continued)



8. Stock Options (continued)

In 1994,  the Board of Directors  granted to the president  and chief  operating
officer an option to purchase  275,000  shares of Class B Common  Stock at $1.75
per share,  the then  current  fair market  value of the stock.  The options are
fully  vested and expire on the  anniversary  of the grant date in 2001.  During
August  1998,  125,000  of these  options  were  exercised.  In the event of the
termination of the executive's employment, TPI will have the option, exercisable
no later than seven days after the date of  termination,  to purchase all of the
executive's stock and vested options.  The purchase price of each share of stock
shall be equal to the best bid  price on the date of such  termination,  and the
purchase  price for each  option  shall be the  greater of (i) $1.75 or (ii) the
amount  of the  best  bid  price  for a  share  of  stock  on the  date  of such
termination less $1.75.

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related  Interpretations
in accounting for its employee stock options  because,  as discussed  below, the
alternative  fair value  accounting  provided for under FASB  Statement No. 123,
"Accounting  for  Stock-Based  Compensation,"  requires use of option  valuation
models that were not developed for use in valuing employee stock options.  Under
APB 25,  because the exercise  price of the  Company's  employee  stock  options
equals  the  market  price of the  underlying  stock on the  date of  grant,  no
compensation expense is recognized.

Pro forma information regarding net income and earnings per share is required by
Statement  123, and has been  determined as if the Company had accounted for its
employee stock options under the fair value method of that  Statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following  weighted-average  assumptions for 1998;
risk-free interest rate of 5.0%;  dividend yield of 0%; volatility factor of the
expected   market  price  of  the  Company's   common  stock  of  .83%,   and  a
weighted-average expected life of the options of 5 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.


                                36


<PAGE>





                           Tremont Advisers, Inc.

           Notes to Consolidated Financial Statements (continued)



8. Stock Options (continued)

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information for 1998 and 1997 follows:

<TABLE>

   <S>                                                                          <C>                 <C>                     

                                                                                1998                1997
                                                                       ------------------------------------------

Pro forma net income                                                         $1,337,100       $     640,900

Pro forma earnings per share
  Basic                                                                  $         0.32       $        0.16
  Diluted                                                                $         0.30       $        0.16


A summary of the Company's stock option activity and related information for the
years ended December 31 follows:

                                                             1998                                         1997
                                               -----------------------------------------    ----------------------------------------
                                                                Weighted-Average                           Weighted-Average
                                                     Options     Exercise Price                Options      Exercise Price
                                               -------------------------------------------    -----------------------------------

Outstanding - beginning of year                 416,666           $2.39                       285,000          $1.76
Granted                                          23,400            8.00                       145,000           3.75
Exercised                                      (137,500)           1.87                        -
Lapsed                                          -                                             (13,334)          3.75
                                                ---------                                     ---------
Outstanding - end of year                       302,566           $3.06                       416,666          $2.39
                                                ==========                                    =========

Exercisable at end of year                      222,510           $2.47                       322,916          $1.99

Weighted-average fair value of options
   granted during the year                                        $5.51                                        $1.71


The following table summarizes stock options outstanding at December 31, 1998:

  Exercise Price                               Average                 Average
      Range               Options              Life (a)            Exercise Price
-----------------------------------------------------------------------------------------------

 $1.75 - $2.00             155,000               2.2                    $1.76
          3.75             124,166               3.4                     3.75
          8.00             23,400                4.9                     8.00
----------------------------------------------------------------------------------------------
 $1.75 - $8.00             302,566               2.9                    $3.06
===============================================================================================

(a)  Average contractual life remaining in years.


9. Other Income, Net
                                                                       1998               1997
                                                                    --------------------------------------
Interest income                                                     $52,600             $ 24,400

Loss from other investments                                          (2,000)             (10,600)
                                                                   ---------------------------------------
                                                                    $50,600             $ 13,800
                                                                   =======================================


                                                     37

</TABLE>

<PAGE>





                                   Tremont Advisers, Inc.

                   Notes to Consolidated Financial Statements (continued)



10. Income Taxes

The provision for income taxes is summarized as follows:

<TABLE>

   <S>                                                                <C>                 <C>

                                                                     1998               1997
Current:                                                           ---------------------------------------
   Federal                                                          $450,000            $158,000
   State                                                             155,900              53,900
                                                                   ---------------------------------------
                                                                     605,900             211,900
Deferred:
   Federal                                                           249,500             128,700
   State                                                               6,800               9,300
                                                                   ---------------------------------------
Total tax expense                                                   $862,200            $349,900
                                                                   =======================================

</TABLE>

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's  deferred tax  liabilities  and deferred tax assets as of December
31, 1998 and 1997 are as follows:

<TABLE>
   <S>                                                                  <C>                 <C>

                                                                        1998                1997
                                                                     -----------------------------------------
Deferred tax liabilities:
 Tax over book depreciation                                         $  25,600           $  23,500
 Unrealized appreciation in limited partnerships                       33,100               9,600
 Undistributed earnings of foreign subsidiary                         536,100             306,700
                                                                      ----------------------------------------
Total deferred tax liabilities                                        594,800             339,800

Deferred tax assets:
 Net operating loss carryforward of foreign subsidiary                 36,000              -
 Bad debt reserves                                                      4,100               4,000
 Organization costs                                                     2,300               3,700
 Valuation allowance                                                  (36,000)                 -
                                                                      ----------------------------------------
Total deferred tax assets                                               6,400               7,700
                                                                      ----------------------------------------
Net deferred tax liability                                           $588,400            $332,100
                                                                     =========================================


</TABLE>
The income tax provision gives effect to permanent differences between financial
and taxable income,  resulting in a higher effective tax rate than the statutory
income tax rate. The  reconciliation of income tax attributable to income before
income  taxes  computed at the U.S.  federal  statutory  tax rates to income tax
expense is:

<TABLE>

  <S>                                                                 <C>            <C>            <C>                 <C>   
                                                                             1998                              1997

                                                                 Amount           Percent            Amount           Percent

Statutory federal income tax rate                               $785,400           34.0            $356,900            34.0
State taxes, net of federal benefit                              107,400            4.6              41,700             4.0
Permanently reinvested foreign income                            (68,000)          (2.9)            (68,000)           (6.6)
Change in valuation allowance                                     36,000            1.6                 -                -
Other                                                              1,400             -               19,300             1.9
                                                               -------------------------------------------------------------------

                                                                $862,200           37.3            $349,900            33.3
                                                               ===================================================================

                                          38                               
</TABLE>
<PAGE>
                              Tremont Advisers, Inc.

              Notes to Consolidated Financial Statements (continued)

10. Income Taxes (continued)

In 1998, the Company made estimated federal income tax payments of $415,000.  In
1998 and 1997,  the Company paid  $154,700 and $53,700,  respectively,  in state
income, minimum and capital taxes.

Deferred  income  taxes  were not  provided  on  certain  undistributed  foreign
earnings  (cumulatively  $400,000 at  December  31,  1998) of TBL  because  such
undistributed  earnings are expected to be reinvested  indefinitely overseas. If
these amounts were not considered  permanently  reinvested,  additional deferred
taxes of approximately $136,000 would have been provided.

At  December  31,  1998  and  1997,  the  Company  had  no  net  operating  loss
carryforwards  for U.S.  federal tax purposes.  At December 31, 1998,  TIMI, the
Canadian  subsidiary,  has  generated  a net  operating  loss  of  approximately
$80,000, against which a full valuation allowance has been recorded.

11. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>

<S>                                                                                       <C>                   <C>         

                                                                                         1998                 1997
                                                                                      ------------------------------------------
Numerator:
   Net income - numerator for basic and dilutive earnings per share
     (income available to common stockholders)                                         $1,447,900           $   699,900

Denominator:
   Denominator for basic earnings per share - weighted average                          4,139,664             3,985,640
     shares

Effect of dilutive securities:
   Employee stock options                                                                 215,935               136,928
                                                                                      ------------------------------------------

Denominator for diluted earnings per share - adjusted weighted
   average shares and assumed conversions                                               4,355,599             4,122,568
                                                                                      =================== ======================

Basic earnings per share                                                               $     0.35            $     0.18
                                                                                      ==========================================

Diluted earnings per share                                                             $     0.33            $     0.17
                                                                                      ==========================================


</TABLE>

12. Contingencies

The Company is being sued by a former  employee  for alleged  breach of contract
and defamation.  The Company  believes that the suit is without merit;  however,
should the plaintiff  prevail,  the Company  believes that it is likely that the
damages will not be material to the Company's  consolidated  financial condition
or results of operations.


                                        39

<PAGE>
                                Tremont Advisers, Inc.

                 Notes to Consolidated Financial Statements (continued)

13. Commitments

On December 9, 1998,  the Company  entered  into a amendment  to the  employment
contract  with the Chairman of the Board of  Directors  that expires on December
31, 1999. Under the terms of this agreement, the Chairman is entitled to receive
a minimum  annual base salary of  $380,000.  In  addition,  the  Chairman  could
receive incentive  compensation,  to be determined by the Board of Directors, at
the end of each fiscal year.

On December 9, 1998,  the Company  entered into an  amendment to the  employment
contract  with the  President  and Chief  Operating  Officer of the Company that
expires on December 31, 1999.  Under the terms of such  amended  agreement,  the
executive is entitled to receive a minimum  annual base salary of  $342,000.  In
addition,  the executive will receive incentive  compensation equal to an amount
pursuant to a predetermined percentage of the incentive compensation paid to the
Company's Chairman of the Board of Directors.

On July 17, 1998, TIMI entered into an employment  agreement with the President,
Chief Operating  Officer and Chief  Investment  Officer that expires on July 31,
2000. Under the terms of the Agreement,  the executive is entitled to receive an
annual  salary of $125,000 for the period  commencing  August 1, 1998 and ending
July 31,  1999 and  $150,000  for the  period  commencing  on August 1, 1999 and
ending on July 31, 2000.

In September  1997,  the Company  moved to a larger  facility and entered into a
lease agreement for its executive offices.  The Company was completely  released
from its  obligation  under the old lease (which  required  monthly  payments of
approximately  $8,450).  The lease for the new facility  expires August 31, 2002
and requires  monthly payments of approximately  $17,100.  Effective  October 1,
1998, the Company leased additional office space for its corporate offices. This
new lease expires August 31, 2002 and requires monthly payments of approximately
$5,600.

TBL's lease for corporate  offices  expires  during  February  2000.  Such lease
requires monthly payments of approximately $5,800.

Rent  expense for the years ended  December  31, 1998 and 1997 was  $343,500 and
$218,000, respectively. Future minimum obligations under noncancelable operating
leases at December  31, 1998 is:  1999-$382,000,  2000-$317,400,  2001-$300,600,
2002-$196,800 and 2003-$3,700.

14. Employee Benefit Plan

The Company has a defined contribution plan, the Tremont Advisers 401(k) Savings
Plan (the "Plan"),  which has been designed to provide  retirement  benefits for
the Company's employees. All employees who have attained the age of eighteen and
who have  completed  one month of  service  with the  Company  are  eligible  to
participate  in the Plan. An employee may elect to defer up to 15% of his or her
compensation  per  year  to  contribute  to  the  Plan  and  may  allocate  such
contributions  among eight  investment  mutual  funds and the Class A or Class B
Common Stock of the Company.

     On September 17, 1998, the Board of Directors amended the Tremont Advisers,
Inc. 401(k) Savings Plan,  effective January 1, 1998, to allow employer matching
contributions and to allocate the Company's employer discretionary contributions
based   upon  the   Company's   fiscal   year   profitability,   as  related  to
pre-established  financial  objectives.  The Company's matching contribution for
the year ending  December  31,  1998 will be 25 cents for each $1 a  participant
contributes  as an employee  salary  deferral up to a limit of 6.25% of eligible
compensation  ($160,000 maximum for 1998).  Company  contributions  will be made
annually,  subsequent  to year  end,  based  upon  the  previous  year's  salary
deferrals.

                                   40

<PAGE>





                            Tremont Advisers, Inc.

           Notes to Consolidated Financial Statements (continued)



14. Employee Benefit Plan (continued)

For the years ended December 31, 1998 and 1997, the Company's expenses under the
Plan were $110,000 and $46,600, respectively.

15. Segment and Geographic Data

The Company  operates  principally  in a single  segment.  It  provides  various
alternative  investment  services  using a single and  multi-manager  investment
approach to placing  investment  funds with  independent  asset  managers.  This
segment  consists of one operating  unit that provides  services to two types of
clients:  the  Company's  proprietary  investment  funds  sponsored  by  certain
subsidiaries  and  to  nonaffiliated  investment  fund  sponsors,  institutional
investors and high net-worth individual investors.

For  the  proprietary   investment  funds   (typically   structured  as  limited
partnerships)   the  Company  serves  as  the  general  or  co-general   partner
participating  in  organizing  the  funds,   selecting  the  asset  classes  for
investment and providing the day-to-day  management and  administration  for the
operation of the funds, other than making direct investment decisions.

For the  non-affiliated  investment fund sponsors,  institutional  investors and
high net-worth investors the Company provides the following services: consulting
regarding the organization of funds,  establishment of investment objectives and
guidelines, definition of suitable asset classes, negotiation of fees with asset
managers and other  professionals,  monitoring  of  investment  performance  and
periodic reporting to clients.

The following  table provides a summary of the types of fees earned with respect
to each of the two primary client types discussed above.

<TABLE>

  <S>                                                                      <C>            <C>

                                                                       1998               1997
Revenues

Proprietary investment funds
    Asset-based fees                                                $ 4,928,200         $2,170,900
    Performance-based fees                                                -                260,300
                                                                   ---------------------------------------
Total revenue from proprietary investment funds                       4,928,200          2,431,200

Consulting clients
   Asset-based fees                                                   3,688,000          2,953,400
   Performance-based fees                                               434,600            624,000
   Annual retainer and special project fees                             996,800            568,500
   Administration fees                                                  185,000            147,500
                                                                   ---------------------------------------
                                                                      5,304,400          4,293,400

Other revenue (1)                                                       423,500            302,100
                                                                   ---------------------------------------

Total consolidated revenues                                         $10,656,100        $ 7,026,700
                                                                   =======================================

             (1) Other revenue  consists of commissions  earned through TSI (the
Company's wholly-owned introducing broker/dealer).

                                                                                                                       27
</TABLE>


               
                                       41




<PAGE>





                                Tremont Advisers, Inc.

              Notes to Consolidated Financial Statements (continued)



15. Segment and Geographic Data (continued)

<TABLE>

  <S>                                        <C>                 <C>

                                                 Revenues (a)
                                    ---------------------------------------
                                         1998                1997
                                    ------------------------------------------

United States                         $ 7,107,900         $4,224,800
Bermuda                                 3,548,200          2,801,900
Canada                                      -                   -
                                    ------------------------------------------
Consolidated total                    $10,656,100         $7,026,700
                                    ==========================================


</TABLE>
      (a)  Revenues are  attributed  to  countries  based on the location of the
           subsidiary performing the services.

Long-lived assets are substantially all located in the United States.

During the periods presented in the consolidated  statements of income,  certain
clients  accounted  for a significant  percentage of the Company's  consolidated
revenues.  For the years ended  December  31, 1998,  and 1997,  the Broad Market
Fund, L.P. accounted for approximately 15% and 17%, respectively of consolidated
revenues. In addition,  for the years ended December 31, 1998 and 1997 the Broad
Market Prime Fund, L.P. accounted for approximately 16% and 3%, respectively, of
consolidated  revenues. For the years ended December 31, 1998 and 1997, revenues
from other related  entities (see Note 4) accounted for  approximately 7% and 8%
of consolidated revenues, respectively.

16. Subsequent Events

On March 11, 1999, the Company  entered into a definitive  agreement to purchase
all of the outstanding  shares of TASS  Management  Limited  ("TASS"),  a London
based company  specializing in alternative  investment and research services for
approximately $1.4 million. The transaction, which is expected to be consummated
in the first half of 1999,  will be accounted  for using the purchase  method of
accounting.  Accordingly,  the excess of cost over the fair market  value of net
assets acquired, (approximately $1.7 million),  will be amortized on a straight
line  basis over ten  years.  The  operations  of TASS will be  included  on the
statement  of income of the Company  from the date of the  closing.  The Company
expects to finance this transaction by issuing  approximately  190,500 shares of
Class B Common Stock.  TASS had unaudited  revenues of $1,632,500  and unaudited
net income of $84,900 for the year ended December 31, 1998.

Subsequent  to December 31, 1998,  an employee  exercised  options and purchased
5,000 shares of Class B Common Stock at $3.75 per share.

                                     42



<PAGE>


Item 8. Changes in and Disagreements With Accountants on Accounting and
      Financial Disclosure.


                            Not Applicable



                                     43
<PAGE>

                                 PART III

Item 9. Directors and Executive Officers of the Registrant.

The present Directors and Executive Officers of the Company are set forth below:

<TABLE>
<S>                                <C>              <C>

    Name                            Age              Position
Sandra L. Manzke                    50               Chairman of the Board of Directors
                                                     and Chief Executive Officer
Robert I. Schulman                  53               Director, President and Chief Operating Officer
John L. Keeley, Jr.                 58               Director
Alan A. Rhein                       56               Director
Richard O'Brien                     41               Director
Jimmy L. Thomas                     57               Director
Suzanne S. Hammond                  52               Secretary and Treasurer
Stephen T. Clayton                  38               Chief Financial Officer
Bruce D. Ruehl                      38               Senior Vice President-Director of Manager Research

</TABLE>

          All directors of the Company hold office until the next annual meeting
of stockholders  of the Company and until their  successors are duly elected and
qualified,  or until their  earlier  death,  resignation  or removal.  Executive
officers  are elected by the Board of  Directors on an annual basis and serve at
the  discretion  of the Board of  Directors.  Sandra  L.  Manzke  and  Robert I.
Schulman are the only officers subject to the terms of an employment  agreement.
There  are no  family  relationships  among any of the  directors  or  executive
officers of the Company.

          Sandra L.  Manzke  is the  Company's  Chairman  of the Board and Chief
Executive  Officer.  Ms.  Manzke was one of the  principal  founders  of Tremont
Partners, Inc. ("TPI") in 1984 and has been its Chairman and President since its
inception.  When the  Company  acquired  TPI in 1987,  Ms.  Manzke also became a
director of the Company and,  prior to becoming its Chief  Executive  Officer in
May 1994, was its President.  Ms. Manzke has served as a director of the Company
since 1987 and also serves as Director of Tremont (Bermuda) Limited ("TBL").

          Robert I. Schulman became the Company's  President and Chief Operating
Officer as of May 31, 1994.  He has been a Director of the Company since October
1993. Mr. Schulman also became President, Chief Executive Officer and a Director
of Tremont  Securities,  Inc.  as of June 1994.  Prior to May 31,  1994,  he was
Executive  Vice  President,  Director  of  Products & Services  at Smith  Barney
Shearson. Mr. Schulman is a member of the Company's Audit Committee.

          John L. Keeley,  Jr. became a Director of the Company in January 1994.
Mr.  Keeley  is  President,  Treasurer  and  a  Director  of  Keeley  Investment
Corporation, a registered broker-dealer. He has held these positions since 1977.
He is also  President,  Treasurer  and a  Director  of Keeley  Asset  Management
Corporation, a registered investment advisor, Keeley Small Cap Value Fund, Inc.,
an open-  end  mutual  fund,  various  investment  partnerships  and the John L.
Keeley,  Jr.  Foundation.  Mr.  Keeley also  became a Director of the  Marquette
National  Corporation  in 1994.  Mr. Keeley is a member of the  Company's  Audit
Committee.

          Alan A.  Rhein,  became a Director  of the  Company in June 1997.  Mr.
Rhein is a founding  principal of Lockwood  Financial  Group Ltd., an investment
management  consulting  firm,  and is President and Chief  Executive  Officer of
Lockwood Financial  Services,  the broker-dealer  division of Lockwood Financial
Group Ltd. In 1993, Mr. Rhein was recruited by Prudential Securities to serve as
Executive  Vice  President in charge of their entire Retail Branch  system.  Mr.
Rhein is a member of the Company's Audit Committee.


                                        44
<PAGE>


          Richard O'Brien, 41, became a Director of the Company in June 1998. He
has been the Vice  President,  Secretary  and  General  Counsel  of Mutual  Risk
Management  Ltd.,  since March 1995.  From 1990 until  1995,  Mr.  O'Brien was a
partner in Dunnington,  Bartholow & Miller, a law firm located in New York City.
Mr. O'Brien is a member of the Company's Audit Committee.

          Jimmy L. Thomas became a Director of the Company in November 1994. Mr.
Thomas  retired in 1998 and prior to  retirement  was Senior  Vice  President  -
Financial  Services and Treasurer of Gannett Co., Inc.  since  December 1991. He
also serves on the Regional Advisory Board of Marine Midland Bank. Mr. Thomas is
a member of the Company's Audit Committee.

          Suzanne S. Hammond has been the Secretary and Treasurer of the Company
since August 1991. Ms. Hammond also currently serves as a Senior Vice President,
Treasurer and Secretary of TPI, and as a Director of TBL.

          Stephen T.  Clayton  joined the  Company on January  10,  1994 and was
appointed Chief  Financial  Officer on January 19, 1994. Mr. Clayton also became
the Financial and  Operations  Principal and a Director of TSI in June 1994, and
Chief Financial Officer and Director of TFI and TIMI in 1998.

          Bruce D. Ruehl  joined the  Company in August  1993 and was  appointed
Senior Vice President- Director of Manager Research of TPI in 1994.

Item 10. Executive Compensation.

          The following  table sets forth the annual and long-term  compensation
for the Company's  Chief Executive  Officer and other  executive  officers whose
total cash  compensation  exceeded $100,000 for services rendered to the Company
and its  subsidiaries  for the fiscal year ended  December  31, 1998 (the "Named
Officers").


                                        45

<PAGE>

<TABLE>
<S>                                    <C>                        <C>   

                                            Summary Compensation Table
                                                Annual Compensation
---------------------------------------------------------------------------------------------------------------------
                                                                            Long Term Compensation

                                         Annual Compensation
                                                                    -------------------------------------------------
                                                                               Awards           Payouts
---------------------------------------------------------------------------------------------------------------------

</TABLE>
<TABLE>
<S>                        <C>     <C>           <C>       <C>        <C>          <C>          <C>     <C>          


                                                             Other    Restricted   Securities
Name and                                           Bonus     Annual     Stock      Underlying     LTIP    All other
Principal Position                 Salary          Bonus    Compen-    Award(s)     Options/     Payout    Compen-
                           Year    ($)(a)         ($)(b)    sation ($)    ($)        SARs (#)      ($)    sation ($)
---------------------------------------------------------------------------------------------------------------------
Sandra L. Manzke,          1998   373,000          310,000     -          -             -          -          -
Chief Executive Officer
                         --------------------------------------------------------------------------------------------
                           1997   362,000          135,000     -          -          35,000        -          -
                         --------------------------------------------------------------------------------------------
                           1996   262,500          325,000     -          -             -          -          -
---------------------------------------------------------------------------------------------------------------------
Robert I. Schulman,        1998   335,700          279,000     -          -             -          -       295,000
Chief Operating
Officer
                         --------------------------------------------------------------------------------------------
                           1997   326,250          121,500     -          -          25,000        -          -
                         --------------------------------------------------------------------------------------------
                           1996   236,250          292,500     -          -             -          -          -
---------------------------------------------------------------------------------------------------------------------
Bruce D. Ruehl, Senior     1998   150,000          150,000     -          -           4,000        -          -
Vice President and
Director of Manager
Research for TPI
                         --------------------------------------------------------------------------------------------
                           1997   140,000          100,000     -          -          10,000        -          -
                         --------------------------------------------------------------------------------------------
                           1996    85,000           55,000     -          -             -          -          -
---------------------------------------------------------------------------------------------------------------------
Stephen T. Clayton         1998   130,000           65,000     -          -           2,500        -       12,650
Chief Financial Officer
                         --------------------------------------------------------------------------------------------
                           1997   120,000           50,000     -          -          10,000        -          -
                         --------------------------------------------------------------------------------------------
                           1996   110,000           32,500     -          -             -          -          -
---------------------------------------------------------------------------------------------------------------------
Suzanne S. Hammond,        1998   107,000           20,000     -          -           2,000        -          -
Secretary and Treasurer
                         --------------------------------------------------------------------------------------------
                           1997   100,417           14,000     -          -             -          -          -
                         --------------------------------------------------------------------------------------------
                           1996    85,000            7,000     -          -             -          -          -
---------------------------------------------------------------------------------------------------------------------

</TABLE>

(a) On December 9, 1998, the Company  entered into an amendment to Ms.  Manzke's
employment  agreement dated  September 15, 1995.  Under the terms of the amended
agreement  which expires on December 31, 1999, Ms. Manzke is entitled to receive
a minimum  annual base salary of $380,000.  In addition,  Ms. Manzke may receive
incentive  compensation to be determined by the Board of Directors.  On December
9, 1998,  the Company  entered into an amendment  to Mr.  Schulman's  employment
agreement dated April 22, 1994. Under the terms of this amended  agreement which
expires on December 31, 1999, Mr. Schulman is entitled to receive minimum annual
base compensation of $342,000. In addition,  Mr. Schulman must receive incentive
compensation  equal 90% of the incentive  compensation paid to Ms. Manzke in any
year.

(b) A portion of the bonuses for Ms.  Manzke,  Mr.  Ruehl,  Mr.  Clayton and Ms.
Hammond,  which accrued in 1997 were  actually paid in 1998.  These amounts were
$150,000, $20,000, $12,000 and $6,000,  respectively.  In addition, a portion of
the bonuses for Ms. Manzke and Mr.  Schulman which accrued in 1996 were actually
paid in 1997. These amounts were $75,000 and $67,500, respectively.


                                             46
<PAGE>


Aggregated Option Exercises in Last Fiscal Year 
and Fiscal Year End Option Values

Presented  below is  information  with respect to  unexercised  stock options to
purchase the  Company's  Class B Common  Stock held by each Named  Officer as of
December 31, 1998.

<TABLE>
<S>                       <C>                  <C>            <C>              <C>


                                                              Number of
                                                              Securities       Value of
                                                              Underlying       Unexercised In-
                                                              Unexercised      the-Money Options
                                                              Options at       at December 31,
                                                              December 31,     1998
                                                              1998 (#)         ($)
                           Shares Acquired on   Value         Exercisable/     Exercisable/
Name                       Exercise (#)         Realized ($)  Unexercisable    Unexercisable
------------------------------------------------------------------------------------------------
Sandra L. Manzke                   -                -          17,500/17,500   $74,400/$74,400

Robert I. Schulman              125,000          $295,000      162,500/12,500  $990,600/$53,100

Bruce D. Ruehl                     -                -           6,000/8,000    $21,300/$21,300

Stephen T. Clayton               5,000           $12,650        10,625/6,875   $51,300/$21,300

Suzanne S. Hammond                 -                -            500/1,500          --/--

</TABLE>

Directors' Compensation

          Directors of the Company who are salaried  employees of the Company do
not receive any additional compensation for serving as a director.  Non-employee
directors  of the Company  receive  $2,500 for each Board of  Directors  meeting
attended and $1,250 for each telephonic Board Meeting attended.

Employment   Contracts,   Termination   of  Employment  and  Change  in  Control
Arrangements.

          The Company and Sandra L. Manzke,  the Company's Chairman of the Board
and Chief  Executive  Officer,  entered  into an  amended  employment  agreement
pursuant to which Ms.  Manzke is  entitled to a minimum  base salary of $380,000
per  annum.  She is also  entitled  to a bonus  as  determined  by the  Board of
Directors. Ms. Manzke's employment may be terminated due to illness,  disability
or other  incapacity  such that she is unable to perform her duties for a period
of ninety (90) consecutive days. If her employment is so terminated, she will be
entitled to receive her base salary and accrued  bonus until  December 31, 1999.
In the event of her death, her right to compensation will cease.

          In the event of the  termination  of Ms.  Manzke's  employment for any
reason,  including  death,  the Company  shall have the  option,  provided it is
exercised  within ninety (90) days, to reacquire all of Ms.  Manzke's  shares of
capital  stock in the Company for a price per share equal to the market value on
the date of such  termination.  Ms.  Manzke has agreed that she will not sell or
dispose of her stock in the Company  without first offering to sell the stock to
the Company at a price per share equal to its then market value.

          Robert I. Schulman,  the President and Chief Operating  Officer of the
Company,  entered into an amendment,  as of December 9, 1998, to his  employment
agreement. The amended agreement expires

                                             47

<PAGE>

on December 31, 1999 and will be automatically  renewed from year to year unless
either party  terminates it in a timely  manner.  Mr.  Schulman is entitled to a
minimum  base  salary of  $342,000  plus a bonus as the Board of  Directors  may
determine;  provided,  however, that in no event will Mr. Schulman's base salary
in any year be less than 90% of the base salary  payable to Ms.  Manzke for such
year and in no event will Mr. Schulman's bonus be less than 90% of the incentive
compensation  payable to Ms. Manzke in such year. If Mr. Schulman is disabled or
his employment is terminated by the Company  without cause or by him with cause,
then he will be entitled  to receive  his base  salary and  accrued  bonus until
December 31, 1998. In the event his employment is terminated by the Company with
cause or by him  without  cause,  or in the  event of his  death,  his  right to
compensation will cease upon the date of termination or death.

          Upon  executing his  employment  agreement in 1994,  Mr.  Schulman was
granted options to purchase 275,000 shares of the Company's Class B Common Stock
at an exercise  price of $1.75 per share,  the then current fair market value of
the Class B Common  Stock.  The options are fully  vested and will expire on the
anniversary  of the  grant  date in  2001.  During  August  1998,  Mr.  Schulman
exercised  options to purchase and  purchased  125,000  shares of Class B Common
Stock.  In the event Mr.  Schulman's  employment is  terminated  for any reason,
including the expiration of the employment agreement,  any unvested options will
lapse;  vested but unexercised  options will remain  outstanding and exercisable
under the original terms and conditions, subject to an option in favor of TPI to
purchase all of Mr.  Schulman's stock no later than seven days after the date of
termination  for a per  share  price  equal to the best bid price on the date of
termination  and the purchase  price for each option shall be the greater of (i)
$1.75 or (ii) the  amount of the best bid  price for a share of Common  Stock on
the date of  termination  less $1.75.  Mr.  Schulman has agreed that he will not
dispose of the Class B Common  Stock he acquires  pursuant to the options or the
unexercised  options  without first offering them to TPI for the per share price
applicable in the case of the termination of his employment.

          On July 17,  1998,  TIMI  entered into an  employment  agreement  with
Robert  Parnell,  the President,  Chief Operating  Officer and Chief  Investment
Officer  that expires on July 31, 2000.  Under the terms of the  agreement,  Mr.
Parnell  is  entitled  to receive an annual  salary of  $125,000  for the period
commencing  August 1, 1998 and ending July 31, 1999 and  $150,000 for the period
commencing on August 1, 1999 and ending on July 31, 2000.

Class B Options

          During  May and June  1997,  options  to  purchase  20,000  shares and
125,000  shares,  respectively,  were  granted  to  the  directors  and  certain
executive  employees at $3.75 per share.  At September 30, 1997,  13,334 options
lapsed due to an employee's  termination  of employment.  The remaining  options
have vested or will vest and become  exercisable on the following  schedule:  25
percent on the date of the grant,  25  percent on the first  anniversary  of the
grant and 50  percent  on the second  anniversary  of the grant.  In the event a
director or employee  ceases to serve as such, the Company will have the option,
exercisable  no later  than  seven  days  after the date of  termination  of the
relationship,  to purchase all of the director's or employee's  vested  options.
The purchase  price for each share of Class B Common Stock shall be equal to the
best bid price on the date of such termination,  and the purchase price for each
option  shall be the  greater of (i)  $3.75,  or (ii) the amount of the best bid
price for a share of Class B Common Stock on the date of such  termination  less
$3.75.

          In December 1994,  options to purchase 10,000 shares of Class B Common
Stock were granted to an officer. These options are fully vested and will expire
on December 15, 1999, the fifth anniversary


                                    48
<PAGE>

of the date of grant. In the event the officer's  employment is terminated,  the
Company  will have the  option,  exercisable  no later than seven days after the
date of termination,  to purchase all of the officer's stock and vested options.
The purchase  price for each share of Class B Common Stock shall be equal to the
best bid price on the date of such termination,  and the purchase price for each
option  shall be the  greater  of (i)  $2.00 or (ii) the  amount of the best bid
price for a share of Class B Common Stock on the date of such  termination  less
$2.00.

          As of December 31, 1998,  options to purchase  150,000  shares,  5,000
shares and  61,666  shares of Class B Common  Stock for $1.75,  $2.00 and $3.75,
respectively, were exercisable by the Company's directors and executives.

1998 Stock Option Plan

          On  September  17, 1998,  the  Company's  Board of Directors  adopted,
subject to shareholder  approval,  the Tremont Advisers,  Inc. 1998 Stock Option
Plan (the "1998 Plan"). The 1998 Plan provides for the issuance of up to 200,000
shares of Class B Common Stock in connection with stock options and other awards
granted under such plan. The 1998 Plan  authorizes the grant of incentive  stock
options,  non-qualified  stock options and stock rights.  The exercise price for
incentive  stock  options  shall not be less than the fair  market  value of the
underlying  shares on the date of grant.  The exercise  price for  non-statutory
stock  options  and  stock  rights  shall  not be less  than the  minimum  legal
consideration required therefore under the laws of any jurisdiction in which the
Company,  or its  successors  in interest,  may be  organized.  The 1998 Plan is
administered  by a committee of the Board of  Directors.  The  committee has the
authority to determine the employees to whom awards will be made,  the amount of
awards,  and the other terms and  conditions  of the awards.  As of December 31,
1998,  23,400  options have been granted at $8.00 per share under the 1998 Plan.
These options have a five year term and will vest and become  exercisable on the
following  schedule:  25% on the date of grant, 25% of the first  anniversary of
the  date of the  grant  and 50% on the  second  anniversary  of the date of the
grant. At December 31, 1998, 5,850 options were exercisable by employees.

Indemnification for Certain Liabilities

          The By-Laws of the Company  provide that the Company may indemnify its
directors  and  officers  to the  fullest  extent  permitted  by the laws of the
Delaware  General  Corporation  Law against  all  expenses,  liability  and loss
(including  attorneys'  fees,  judgment,  fines and amounts paid in  settlement)
incurred by them in any  action,  suit or  proceeding  arising out of certain of
their actions or omissions in their capacities as directors or officers. Article
Seven of the Company's Restated Certificate of Incorporation provides that, with
certain exceptions,  no director of the Company may be liable to the Company for
monetary  damages as a result of a breach of his fiduciary duties as a director.
The Company has acquired  directors' and officers'  liability  insurance for its
directors and officers.

          The Delaware  Supreme Court has held the directors'  duty of care to a
corporation and its shareholders  requires the exercise of an informed  business
judgment.   Having  become  informed  of  all  material  information  reasonably
available to them,  directors  must act with  requisite care in the discharge of
their duties. The Delaware General Corporation Law permits a corporation through
its  certificate  of  incorporation  to exonerate  its  directors  from personal
liability to the  corporation  or its  shareholders  for monetary  damages for a
breach of their fiduciary duty of care as a director,  with certain  exceptions.
The  exceptions  include a breach of the  director's  duty of  loyalty,  acts or
omissions not in good faith or which involve  intentional  misconduct or knowing
violation of law, improper declaration of dividends and


                                   49
<PAGE>

transactions from which the director derived an improper  personal  benefit.  As
noted above, the Company's Restated Certificate of Incorporation  exonerates its
directors,  acting in such  capacity,  from  monetary  liability  to the  extent
permitted by this statutory  provision.  This limitation of liability  provision
does  not  eliminate  a  shareholder's  right  to seek  non-monetary,  equitable
remedies such as an injunction or rescission in order to redress an action taken
by directors.  However,  as a practical  matter,  equitable  remedies may not be
available  in all  situations,  and there may be instances in which no effective
remedy is available.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

          The following  table contains  information  relating to the beneficial
ownership  of Common  Stock by  members of the Board of  Directors,  and by such
members  and by the  Company's  officers  as a group,  as well as certain  other
beneficial owners as of March 8, 1999. Information as to the number of shares of
Common  Stock  owned and the  nature of  ownership  has been  provided  by these
individuals  and is not within  the  direct  knowledge  of the  Company.  Unless
otherwise  indicated,  the named individuals  possess sole voting and investment
power with respect to the shares  listed.  The  following  information  has been
furnished  to the  Company  or is  based on  Schedules  13D,  or any  amendments
thereto, received by the Company as filed with the Commission.


                                   50
<PAGE> 

<TABLE>
<S>                              <C>                  <C>                   <C>               <C>     


Name and Address of                           Number of
Beneficial Owner                            Shares Owned                              % of

                                    Class A           Class B               Class A           Class B


Sandra L. Manzke (1)              183,600              390,076               14%                14%
555 Theodore Fremd Avenue
Rye, New York

Robert I. Schulman(2)               1,964              359,751                 *                 13
555 Theodore Fremd Avenue
Rye, New York

John L. Keeley, Jr. (3)            81,590              350,427                 6                 13
401 South LaSalle Street
Chicago, Illinois

Alan Rhein (4)                        -                 12,500                 -                  *
405 Park Avenue
New York, New York

Jimmy L. Thomas                       -                 45,000                 -                  2
1100 Wilson Boulevard
Arlington, VA  22234

Suzanne S. Hammond (5)                -                 24,332                 -                  *
555 Theodore Fremd Avenue
Rye, New York

Stephen T. Clayton (6)                759               31,792                 *                  1
555 Theodore Fremd Avenue
Rye, New York

Bruce D. Ruehl (7)                    201              107,370                 *                  4
555 Theodore Fremd Avenue
Rye, New York

Mario J. Gabelli (8)              569,039              196,695                44                  7
Gabelli Funds, Inc.
555 Theodore Fremd Avenue
Rye, New York

Lynch Corporation (9)                 -                116,189                 -                  4
8 Sound Shore Drive
Greenwich, CT

MGL Investments Ltd. (10)             -                817,365                 -                 29
One Logan Square
Suite 1400
Philadelphia, PA

Directors and Officers
as a group:                       268,114            1,321,248               20%                47%


*   Less than one percent.


 </TABLE>
                                        51

<PAGE>

(1) Includes 10,000 shares of Class A Common Stock held by the Tremont Advisers,
Inc.,  401(k) Savings Plan for the benefit of Ms. Manzke.  The 390,076 shares of
Class B Common Stock include  43,425 shares held by the Tremont  Advisers,  Inc.
401(k)  Savings Plan for the benefit of Ms. Manzke and 17,500  shares  represent
certain stock options granted to Ms. Manzke by the Company that have vested.

(2) The shares of Class A Common  Stock are held by the Tremont  Advisers,  Inc.
401(k)  Savings Plan for the benefit of Mr.  Schulman.  Of the 359,751 shares of
Class B Common Stock,  162,500 shares represent certain stock options granted to
Mr.  Schulman by the Company  that have vested and 8,454  shares are held by the
Tremont Advisers, inc. 401(k) Savings Plan for the benefit of Mr. Schulman.

(3) The  81,590  shares of Class A Common  Stock are  beneficially  owned by Mr.
Keeley.  Of the 350,427 shares of Class B Common Stock reported,  162,500 shares
reported are beneficially  owned by Mr. Keeley and include 20,000 shares held in
the name of his wife,  10,000 shares held by the John L. Keeley Jr.  Foundation,
35,000 shares held by the KIC Profit Sharing Plan & Trust for the benefit of Mr.
Keeley  for which Mr.  Keeley is  Trustee,  and  35,000  shares  held by the KIC
Pension Plan & Trust for the benefit of Ms.  Keeley and for which Mr.  Keeley is
Trustee and 2,500 shares  represent  certain stock options granted to Mr. Keeley
by the Company  that have  vested.  Of the  remaining  85,426  shares of Class B
Common Stock, 65,712 shares are owned by Kamco Limited Partnership No. 1 ("KLP")
and 19,714 shares held by JGJ Partnership of which Mr. Keeley is a partner.  Mr.
Keeley is the sole general partner of KLP, an investment  partnership  organized
under the laws of Illinois.  Mr. Keeley is deemed to have a beneficial ownership
of securities owned beneficially by each of the foregoing entities.

(4) The 12,500  shares of Class B Common Stock  represent  certain stock options
granted to Mr. Rhein by the Company that have vested.

(5) Of the  24,332  shares  of Class B Common  Stock  beneficially  owned by Ms.
Hammond, 1,500 shares are held by the Tremont Advisers, Inc. 401(k) Savings Plan
for the benefit of Ms.  Hammond and 500 shares  represent  certain stock options
granted to Ms. Hammond that have vested.

(6) The 759  shares of Class A Common  Stock are held by the  Tremont  Advisers,
Inc. 401(k) Savings Plan for the benefit of Mr. Clayton. Of the 31,792 shares of
Class B Common Stock,  10,625 shares represent  certain stock options granted to
Mr.  Clayton  by the  Company  that have  vested,  3,666  shares are held by the
Tremont  Advisers,  Inc.  401(k) Savings Plan for the benefit of Mr. Clayton and
3,500  shares  are  held  in the  name  of  his  wife,  for  which  Mr.  Clayton
specifically disclaims beneficial ownership.

(7) The 201  shares of Class A Common  Stock are held by the  Tremont  Advisers,
Inc.  401(k) Savings Plan for the benefit of Mr. Ruehl. Of the 107,370 shares of
Class B Common Stock, 1,370 shares are held by the Tremont Advisers, Inc. 401(k)
Savings  Plan for the benefit of Mr. Ruehl and 6,000  shares  represent  certain
stock options granted to Mr. Ruehl by the Company that have vested.

(8) Includes  325,385 shares of Class A Common Stock and 2,267 shares of Class B
Common Stock owned by family trusts or  partnerships  over which Mr. Gabelli has
sole voting power and investment power. Does not include shares listed elsewhere
in this  table  which  are held by Lynch  Corporation  ("Lynch"),  of which  Mr.
Gabelli  specifically  disclaims  beneficial  ownership.   Mr.  Gabelli  is  the
principal shareholder,  as well as the Chairman of the Board and Chief Executive
Officer,  of Gabelli Funds, Inc. ("GFI"), a registered  investment adviser under
the Investment  Advisers Act of 1940, as amended and the ultimate parent company
for a  variety  of  operating  companies  engaged  in  various  aspects  of  the
securities business,  including GAMCO Investors,  Inc. ("GAMCO"), a wholly-owned
subsidiary of GFI and a registered investment adviser; Gabelli Securities,  Inc.
("GSI"),  a  majority-owned  subsidiary  of GFI;  and  Gabelli &  Company,  Inc.
("Gabelli  &  Company"),  a  wholly-owned  subsidiary  of GSI  and a  registered
broker-dealer.  Mr.  Gabelli is also  Chairman of the Board and Chief  Executive
Officer of GAMCO and a  registered  representative  of  Gabelli & Company.  GFI,
GAMCO,  GSI and Gabelli & Company are herein  referred to as "affiliates" of Mr.
Gabelli.  Acting in these  capacities,  Mr. Gabelli has the authority for making
voting and investment decisions on behalf of the affiliates and, therefore,  may
be deemed to be the  beneficial  owner of shares of the Company owned by or held
in accounts  of such  affiliates.  Of the  remaining  243,654  shares of Class A
Common Stock owned by Mr. Gabelli and  affiliates of Gabelli,  42,000 shares are
held by Gabelli Securities, Inc. and 105,275 shares are held by shareholders of
Gabelli  Funds,  Inc.  (including  Mr.  Gabelli),  which shares are subject to a
stockholders  agreement  appointing  Mr. Gabelli a proxy with voting power until
June 2001.
                                   52
<PAGE>

     (9) Mr.  Gabelli is  Chairman of the Board and Chief  Executive  Officer of
Lynch, and he and his affiliates and their clients are principal shareholders of
Lynch.  Mr. Gabelli may be deemed to be a beneficial  owner of the shares of the
Company  owned  by  Lynch  by  virtue  of his and  certain  affiliated  parties'
significant  beneficial  ownership  of the common stock of Lynch.  Mr.  Gabelli,
however, specifically disclaims beneficial ownership of all of the shares of the
Company's Common Stock held by Lynch.

     (10) In July 1997, Mutual Risk Management  ("MRM"),  an international  risk
management  company,  indirectly  acquired an equity interest in the Company. In
July 1997, MGL  Investments  Ltd.  ("MGL"),  a  wholly-owned  subsidiary of MRM,
purchased 615,000 shares of outstanding Class B Common Stock at a price of $3.75
per share pursuant to a tender offer.  In addition,  the Company  simultaneously
sold MGL 202,365  shares of Class B Common  Stock at a price of $3.75 per share.
As a result of these transactions, MRM then indirectly owned, through MGL, Class
B Common Stock equal to 20% of the aggregate of the Company's  outstanding Class
A Common Stock and Class B Common Stock.


                                    53
<PAGE>

Item 12. Certain Relationships and Related Transactions.

Certificate of Incorporation Amendment

          On  August  7,  1998,   the  Company   amended  its   Certificate   of
Incorporation  increasing  the  authorized  number  of  shares of Class B Common
Stock,  $.01 par value per share,  from five million  (5,000,000)  shares to ten
million  (10,000,000)  shares.  The amendment  also provided that Class A Common
Stock,  $.01 par value per share,  be  convertible,  at the option of the holder
thereof,  into an equivalent  number of shares of Class B Common Stock, $.01 par
value per share.

1998 Stock Option Plan

          On  September  17, 1998,  the  Company's  Board of Directors  adopted,
subject to shareholder  approval,  the Tremont Advisers,  Inc. 1998 Stock Option
Plan (the "1998 Plan"). The 1998 Plan provides for the issuance of up to 200,000
shares of Class B Common Stock in connection with stock options and other awards
granted under such plan. The 1998 Plan  authorizes the grant of incentive  stock
options,  non-qualified  stock options and stock rights.  The exercise price for
incentive  stock  options  shall not be less than the fair  market  value of the
underlying  shares on the date of grant.  The exercise  price for  non-statutory
stock  options  and  stock  rights  shall  not be less  than the  minimum  legal
consideration  required there fore under the laws of any  jurisdiction  in which
the Company, or its successors in interest,  may be organized.  The 1998 Plan is
administered  by a committee of the Board of  Directors.  The  committee has the
authority to determine the employees to whom awards will be made,  the amount of
awards,  and the other terms and  conditions  of the awards.  As of December 31,
1998,  23,400 options were granted at $8.00 per share under the 1998 Plan. These
options  have a five  year  term and will  vest and  become  exercisable  on the
following  schedule:  25% on the date of grant, 25% of the first  anniversary of
the  date of the  grant  and 50% on the  second  anniversary  of the date of the
grant. At December 31, 1998, 5,850 options were exercisable by employees.

New Subsidiaries

          The Company,  with a joint venture partner,  formed Tremont Investment
Management,  Inc. ("TIMI").  TIMI, 65% owned by the Company, is registered
with the Ontario  Securities  Commission in the categories of investment counsel
and portfolio  manager and as a limited  market dealer under the  Securities Act
(Ontario).

          On July 14, 1998, the Company formed Tremont  Futures,  Inc.  ("TFI").
TFI is registered with the Commodity Futures Trading Commission and the National
Futures Association as a commodity pool operator and commodity trading advisor.

Business Combination

          On March 11,  1999,  the Company  acquired all of the  outstanding
ordinary (common) shares of TASS Management Limited ("TASS"), a London,  England
- based company specializing in the sale of electronic databases. Tremont issued
190,477  shares  of its Class B Common  Stock in  exchange  for the TASS  common
shares.  TASS thus became  another of the  Company  subsidiaries,  although  its
preferred  stock  will  not be  owned  by  the  Company.  TASS  serves  a  large
institutional   client  base  whose  subscribers  include  money  center  banks,
investment  banks,  private  banks,  central  banks,  foundations,   endowments,
insurance  companies,  prime  brokers,  family  offices,  academics,  government
agencies and


                                        54
<PAGE>

     high-net worth individuals. The transaction will be accounted for using the
purchase  method of  accounting.  Accordingly,  the excess of cost over the fair
market  value  of net  assets  acquired  (approximately  $1.7  million)  will be
amortized on a straight  line basis over a ten year period.  The  operations  of
TASS will be included in the consolidated  statement of operations from the date
of closing.  In connection  with the  acquisition,  employment  agreements  were
entered into with two key  employees of TASS,  who were also granted  options to
purchase shares of the Company's  Class B Common Stock and certain  registration
rights.

Class B Common Stock Sale

     In July 1997, MRM indirectly acquired an equity interest in the Company and
MGL Investment Ltd. ("MGL"), a wholly-owned  subsidiary of MRM, acquired 615,000
shares of outstanding  Class B Common Stock, par value $0.01 at a price of $3.75
per share pursuant to a tender offer. In addition,  the Company sold MGL 202,365
shares  of  Class B  Common  Stock  at $3.75  per  share.  As a result  of these
transactions,  MRM then  indirectly  owned,  through  MGL, a number of shares of
Class B Common  Stock equal to 20% of the  aggregate  outstanding  shares of the
Company's Class A Common Stock and Class B Common Stock.

Class B Options

          During  May and June  1997,  options  to  purchase  20,000  shares and
145,000  shares,  respectively,  of Class B Common  Stock  were  granted  to the
directors and certain  executive  employees at $3.75 per share. At September 30,
1997, 13,334 options lapsed due to an employee's termination of employment.  The
remaining  options  have  vested  or will  vest and  become  exercisable  on the
following  schedule:  25% on the date of the grant, 25% on the first anniversary
of the grant and 50% on the  second  anniversary  of the  grant.  In the event a
director  or  employee  ceases to serve as such,  the  Company  has the  option,
exercisable  no later  than  seven  days  after the date of  termination  of the
relationship,  to purchase all of the director's or employee's  vested  options.
The purchase  price for each share of Class B Common Stock shall be equal to the
best bid price on the date of such termination,  and the purchase price for each
option  shall be the  greater of (i)  $3.75,  or (ii) the amount of the best bid
price for a share of Class B Common Stock on the date of such  termination  less
$3.75.

Joint Venture Investments

          Tremont  International  Insurance,  Ltd. ("TIIL"),  is a Cayman Island
corporation that offers deferred variable annuities, variable life insurance and
other  insurance  contracts  to  customers  who are not  resident  in the Cayman
Islands.  TIIL had been a joint venture between TBL and  Anglo-Dutch.  Effective
July 1, 1997, Mutual Risk Management  ("MRM"),  an international risk management
company, purchased 51% of TIIL's issued share capital. Simultaneously,  TBL sold
0.4% of  TIIL's  issued  share  capital  to  Anglo-Dutch.  As a result  of these
transactions,  TBL's  interest has been reduced to 24.5% of TIIL's  issued share
capital.  TBL, MRM and Anglo-Dutch formed Tremont MRM Services Limited ("TMRM"),
a Bermuda company to provide product  development,  marketing and administrative
services to TIIL. TBL owns a 40% interest in TMRM.

Partnership Contributions and Withdrawals

     TPI is a limited,  as well as general,  partner of The Broad  Market  Fund,
L.P. TPI, as a limited partner, made a capital contribution of $550,000 in 1997
and, in that capacity, received a distribution of $550,000 from the partnership.


                                        55
<PAGE>

          Effective  September 1, 1998,  American  Masters  Market Neutral Fund,
L.P.  ("AMF")  became the newest  addition to the Company's  line of proprietary
products.  This domestic multi-manager limited partnership was formed to achieve
long term capital appreciation  irrespective of stock market volatility.  TFI is
its general partner and, as such, is involved in its day-to-day management.  AMF
will  pay TFI a  monthly  management  fee  based on the net  asset  value of the
partnership as of the end of each month.  At December 31, 1998, TFI had invested
$614,600 in AMF, which amount represents 54.7% of AMF's net assets.

          At December  31,  1998,  TPI as general  partner of The F.W.  Thompson
Fund, L.P., closed the fund and, in connection  therewith,  made a withdrawal of
$79,200.

Selection of Investment Advisers

          As part of its services  rendered,  and in its capacity as  investment
consultant  to  various   clients,   the  Company  monitors  and  evaluates  the
performance  of investment  managers for clients based on a criteria of matching
the  objectives  of  the  clients  with  the  investment  characteristics  of an
investment  manager.  Based  on such  monitoring  and  evaluation,  the  Company
recommends the selection,  continuation or termination of an investment  manager
to the Company's  clients.  The final decision is made by the client. In certain
instances,  clients  have  requested  that  affiliates  of  the  Company  act as
investment  manager.  GAMCO,  an  affiliate  of  Mario  J.  Gabelli,  one of the
Company's  principal  shareholders,  was  selected  to be one of the  investment
managers, along with others, to one of the Company's consulting clients upon the
recommendation  of  TPI  or  TBL.  Such  recommendation  was  made  based  on an
evaluation of all relevant factors by TPI or TBL.

          In the  future,  the  Company  may enter  into  transactions  with its
directors, officers, stockholders of 5% of its Common Stock or affiliates of Mr.
Gabelli,  but  will do so only if the  terms  of such  transactions  are no less
favorable to the Company than could be obtained by the Company from unaffiliated
third parties.

Payment from Officer

          Ms. Manzke  paid  $200,000  to the  Company  in 1998.  Ms.  Manzke had
advised the Company  that she had  provided  consulting  services for a fee to a
principal  of an  investment  fund for which a  subsidiary  of the Company  then
currently  performed  services.  Ms. Manzke  believed that her services were not
within the scope either of her employment or the Company's business  activities,
but advised the Company that she will no longer render individual or independent
services to such principal.


                                        56
<PAGE>


Item 13. Exhibits, List and Reports on Form 8-K.

(a)      Documents filed as part of this report:

         1.  The following consolidated financial statements of the Company
             are included in Item 7:

         Report of Independent Auditors.......................................21
         Consolidated Balance Sheets as of December 31, 1998 and 1997.........23
         Consolidated Statements of Income for the years ended 
            December 31, 1998 and 1997........................................24
         Consolidated Statements of Shareholders' Equity for the years ended
            December 31, 1998 and 1997........................................25
         Consolidated Statements of Cash Flows for the years ended 
            December 31, 1998 and 1997........................................26
         Notes to Consolidated Financial Statements...........................27

         Exhibit No.

         3.1       Restated   Certificate  of   Incorporation   of  the  Company
                   (incorporated  herein by reference to the Company's  Form S-1
                   filed with the Commission on December 16, 1991).

         3.2       By-Laws of the Company  (incorporated  herein by reference to
                   the Company's  Form S-1 filed with the Commission on December
                   16, 1991).

         3.3       Amendment to the Certificate of Incorporation of the Company,
                   dated December 23, 1993 (incorporated  herein by reference to
                   the  Company's  Form 10-K filed with the  Commission on March
                   29, 1994).

         3.4       Amendment to the Certificate of Incorporation of the Company,
                   Dated August 6, 1998.
 
         4.1       Specimen  representing the Rights  Certificate of the Company
                   (incorporated  herein by reference to the Company's  Form S-1
                   filed with the Commission on December 16, 1991).

         4.2       Specimen  representing  the Class A Common  Stock,  $0.01 par
                   value,  of the Company  (incorporated  herein by reference to
                   the Company's  Form S-1 filed with the Commission on December
                   16, 1991).

         10.9      Consulting  Services  Agreement  dated  as of  May  1,  1991,
                   between Harold Cohen and Tremont Partners, Inc. (incorporated
                   herein by reference to the Company's  Form S-1 filed with the
                   Commission on December 16, 1991).

         10.22     Letter Agreement dated October 25, 1993,  between the Company
                   and Sandra L. Manzke (incorporated herein by reference to the
                   Company's  Form 10-K filed with the  Commission  on March 29,
                   1994).

         10.27     Lease  between  First  Properties of Bermuda Ltd. and Tremont
                   (Bermuda)  Limited,  dated  February  23, 1994  (incorporated
                   herein by reference to the Company's Form 10-K filed with the
                   Commission on March 29, 1994).


                                            57
<PAGE>


         10.29     Consulting   Services   Agreement   between  Omega   Overseas
                   Partners,  Ltd. and Tremont  (Bermuda) Limited dated April 1,
                   1994 (incorporated  herein by reference to the Company's Form
                   10-K filed with the Commission on March 29, 1994).

         10.30     Employment Agreement dated April 22, 1994 between the Company
                   and Robert I. Schulman  (incorporated  herein by reference to
                   the Company's  Form 10-Q filed with the Commission on May 12,
                   1994).

         10.31     Stock  Option  Agreement  dated  April 22,  1994  between the
                   Company  and  Robert  I.  Schulman  (incorporated  herein  by
                   reference  to  the   Company's   Form  10-Q  filed  with  the
                   Commission on May 12, 1994).

         10.33     Stock Option  Agreement  dated  December 15, 1994 between the
                   Company  and  Stephen  T.  Clayton  (incorporated  herein  by
                   reference  to  the  Company's   Registration   Statement  No.
                   33-89966 on Form S-1 and  Post-Effective  Amendment  No. 1 to
                   Registration  Statement  No.  33-81438 on Form S-1 filed with
                   the Commission on March 3, 1995).

         10.34     Employment  Agreement  dated  September  25, 1995 between the
                   Company  and  Sandra  L.  Manzke   (incorporated   herein  by
                   reference  to  the   Company's   Form  10-Q  filed  with  the
                   Commission on November 13, 1995).

         10.38     Amendment,  dated  December 13, 1996,  to Lease between First
                   Properties  of Bermuda Ltd. and Tremont  ("Bermuda")  Limited
                   dated February 23, 1994. (incorporated herein by reference to
                   the Company's  Form 10-KSB filed with the Commission on March
                   19, 1998).

         10.39     Lease  between  Gateside - Rye Company and the Company  dated
                   April 18,  1997.  (incorporated  herein by  reference  to the
                   Company's  Form 10-KSB filed with the Commission on March 19,
                   1998).

         10.40     Stock Option Agreement dated May 15, 1997 between the Company
                   and Stephen T. Clayton.  (incorporated herein by reference to
                   the Company's  Form 10-KSB filed with the Commission on March
                   19, 1998).


                                         58
<PAGE>

         10.41     Stock Option Agreement dated May 15, 1997 between the Company
                   and Bruce D. Ruehl.  (incorporated herein by reference to the
                   Company's  Form 10-KSB filed with the Commission on March 19,
                   1998).
 
         10.42     Master  Agreement dated as of June 5, 1997 among the Company,
                   Tremont  Bermuda  Limited,  Tremont  International  Insurance
                   Ltd., Mutual Risk Management (Holdings) Ltd., MGL Investments
                   Ltd.,  Hemisphere  Management  Limited  and  The  Anglo-Dutch
                   Insurance Company Limited.  (incorporated herein by reference
                   to the  Company's  Form 10-KSB filed with the  Commission  on
                   March 19, 1998).

         10.43     Stock Purchase Agreement dated as of June 5, 1997 between the
                   Company  and MGL  Investments  Ltd.  (incorporated  herein by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998).

         10.44     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and  Sandra  L.  Manzke.   (incorporated  herein  by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998).

         10.45     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and  Robert  I.  Schulman.  (incorporated  herein by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998).

         10.46     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and John L.  Keeley,  Jr.  (incorporated  herein  by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998).

         10.47     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company and Alan A. Rhein.  (incorporated herein by reference
                   to the  Company's  Form 10-KSB filed with the  Commission  on
                   March 19, 1998).

         10.48     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and  Jimmy  L.  Thomas.   (incorporated   herein  by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998).

         10.49     Stock  Purchase  Agreement  dated as of July 1, 1997  between
                   Tremont  MRM  Services  Limited  and Mutual  Risk  Management
                   (Holdings)  Ltd.  (incorporated  herein by  reference  to the
                   Company's  Form 10-KSB filed with the Commission on March 19,
                   1998).

         10.50     Shareholders'  Agreement  dated  as of  July  1,  1997  among
                   Tremont MRM  ServicesLimited,  Tremont (Bermuda) Limited, The
                   Anglo-Dutch   Insurance   Company  Limited  and  Mutual  Risk
                   Management (Holdings) Ltd.  (incorporated herein by reference
                   to the  Company's  Form 10-KSB filed with the  Commission  on
                   March 19, 1998).


                                           59
<PAGE>

  
         10.53     Tremont Advisers,  Inc. 1998 Stock Option Plan  (incorporated
                   herein by reference to the  Company's  Form  10-QSB/A1  filed
                   with the Commission on November 6, 1998)

         10.54     Shareholder's  Agreement  dated as of July 17,  1998,  by and
                   among Tremont  Advisers,  Inc., Robert J. Parnell and Tremont
                   Investment Management, Inc. (incorporated herein by reference
                   to the Company's Form 10-QSB/A1  filed with the Commission on
                   November 6, 1998).

         10.55     Employment  Agreement,  dated  as of July  17,  1998  between
                   Tremont Investment Management and Robert Parnell.

         10.56     Amendment  to  Employment  Agreement  dated as of December 9,
                   1998, between the Company and Sandra L. Manzke.

         10.57     Amendment  to  Employment  Agreement  dated as of December 9,
                   1998, between the Company and Robert I. Schulman.

         10.58     Agreement and Plan of Reorganization, dated as of March 8, 
                   1999 by and among Tremont Advisers, Inc., Tass Management
                   Limited and Nicola Meaden, Laurence Huntington Taylor, II,
                   Colin Myers, Norma Smith and Valerie Benard.

         10.59     Registration  Rights  Agreement,  dated as of March 11, 1999 
                   by and among Tremont Adviers,  Inc. and Nicola Meaden,
                   Laurence Huntington Taylor, II, Valerie Benard, Colin Myers 
                   and Norma Smith.

         10.60     Employment Agreement, dated as of March 11, 1999, by and 
                   between Tremont Advisers, Inc. and Laurence Huntington (Hunt)
                   Taylor, II.

         10.61     Employment Agreement, dated as of march 11, 1999, by and
                   among Tass Management Limited, Tremont Advisers, Inc. and
                   Nicola Meaden.

         10.62     Stock Option and Benefits Agreement, dated as of March 8, 
                   1999, by and between Tremont Advisors, Inc. and Laurence
                   Huntington Taylor, III.

         10.63     Stock Option and Benefits Agreement, dated as of March 8,
                   1999, by and between Tremont Advisers, Inc. and Nicola
                   Meaden.

         21.1      Subsidiaries of the Company (incorporated herein by reference
                   to the Company's Form 10-QSB/A1  filed with the Commission on
                   November 6, 1998).
 
         23.1      Consent of Ernst & Young LLP, independent auditors.

         23.2      Consent of Goldstein Golub Kessler LLP, independent auditors.

         27.0      Financial Data Schedule
          
      
(b)  Reports on Form 8-K.

         None.

                                     60
<PAGE>

                                      SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) 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.
                                                     (Registrant)

                                                     By /s/ Stephen T. Clayton
                                                     Stephen T. Clayton
                                                     Chief Financial Officer

Dated: March 19, 1999

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<TABLE>
<S>                                      <C>                                                 <C>   

Signature                                Title                                                    Date

/s/ Sandra L. Manzke                     Chairman of the Board and                            March 19, 1999
Sandra L. Manzke                         Chief Executive Officer



/s/ Robert I. Schulman                   President; Chief Operating                           March 19, 1999
Robert I. Schulman                       Officer and Director



/s/ John L. Keeley, Jr.                  Director                                             March 19, 1999
John L. Keeley, Jr.



/s/ Richard O'Brien                      Director                                             March 19, 1999
Richard O'Brien



/s/ Alan A. Rhein                        Director                                             March 19, 1999
Alan A. Rhein



/s/ Jimmy L. Thomas                      Director                                             March 19, 1999
Jimmy L. Thomas


/s/ Suzanne S. Hammond                   Secretary & Treasurer                                March 19, 1999
Suzanne S. Hammond


/s/ Stephen T. Clayton                   Chief Financial Officer                              March 19, 1999
Stephen T. Clayton

</TABLE>

                                        61

<PAGE> 

                                                   EXHIBIT INDEX



         3.1       Restated   Certificate  of   Incorporation   of  the  Company
                   (incorporated  herein by reference to the Company's  Form S-1
                   filed    with    the     Commission     on    December    16,
                   1991)

         3.2       By-Laws of the Company  (incorporated  herein by reference to
                   the Company's  Form S-1 filed with the Commission on December
                   16, 1991)

         3.3       Amendment to the Certificate of Incorporation of the Company,
                   dated December 23, 1993 (incorporated  herein by reference to
                   the  Company's  Form 10-K filed with the  Commission on March
                   29, 1994)

         3.4       Amendment to the Certificate of Incorporation of the Company,
                   dated August 6, 1998...................................... 66

         4.1       Specimen  representing the Rights  Certificate of the Company
                   (incorporated  herein by reference to the Company's  Form S-1
                   filed with the Commission on December 16, 1991)

         4.2       Specimen  representing  the Class A Common  Stock,  $0.01 par
                   value,  of the Company  (incorporated  herein by reference to
                   the Company's  Form S-1 filed with the Commission on December
                   16, 1991)

         10.9      Consulting  Services  Agreement  dated  as of  May  1,  1991,
                   between Harold Cohen and Tremont Partners, Inc. (incorporated
                   herein by reference to the Company's  Form S-1 filed with the
                   Commission on December 16, 1991)

         10.22     Letter Agreement dated October 25, 1993,  between the Company
                   and Sandra L. Manzke (incorporated herein by reference to the
                   Company's  Form 10-K filed with the  Commission  on March 29,
                   1994)

         10.27     Lease  between  First  Properties  of Bermuda Ltd and Tremont
                   (Bermuda)  Limited,  dated  February  23, 1994  (incorporated
                   herein by reference to the Company's Form 10-K filed with the
                   Commission on March 29, 1994)

         10.29     Consulting   Services   Agreement   between  Omega   Overseas
                   Partners,  Ltd. and Tremont  (Bermuda) Limited dated April 1,
                   1994 (incorporated  herein by reference to the Company's Form
                   10-K filed with the Commission on March 29, 1994)

         10.30     Employment Agreement dated April 22, 1994 between the Company
                   and Robert I. Schulman  (incorporated  herein by reference to
                   the Company's  Form 10-Q filed with the Commission on May 12,
                   1994)

         10.31     Stock  Option  Agreement  dated  April 22,  1994  between the
                   Company  and  Robert  I.  Schulman  (incorporated  herein  by
                   reference  to  the   Company's   Form  10-Q  filed  with  the
                   Commission on May 12, 1994)
 
                                        62

<PAGE>

         10.33     Stock Option  Agreement  dated  December 15, 1994 between the
                   Company  and  Stephen  T.  Clayton  (incorporated  herein  by
                   reference  to  the  Company's   Registration   Statement  No.
                   33-89966 on Form S-1 and  Post-Effective  Amendment  No. 1 to
                   Registration  Statement  No.  33-81438 on Form S-1 filed with
                   the Commission on March 3, 1995)

         10.34     Employment  Agreement  dated  September  25, 1995 between the
                   Company  and  Sandra  L.  Manzke   (incorporated   herein  by
                   reference  to  the   Company's   Form  10-Q  filed  with  the
                   Commission on November 13, 1995)

         10.38     Amendment,  dated  December 13, 1996,  to Lease between First
                   Properties  of Bermuda  Ltd.  and Tremont  (Bermuda)  Limited
                   dated February 23, 1994. (incorporated herein by reference to
                   the Company's  Form 10-KSB filed with the Commission on March
                   19, 1998)

         10.39     Lease  between  Gateside-Rye  Company and the  Company  dated
                   April 1,  1997.  (incorporated  herein  by  reference  to the
                   Company's  Form 10-KSB filed with the Commission on March 19,
                   1998)

         10.40     Stock Option Agreement dated May 15, 1997 between the Company
                   and Stephen T. Clayton.  (incorporated herein by reference to
                   the Company's  Form 10-KSB filed with the Commission on March
                   19, 1998)

         10.41     Stock Option Agreement dated May 15, 1997 between the Company
                   and Bruce D. Ruehl.  (incorporated herein by reference to the
                   Company's Form 10-KSB  filed with the Commission on March 19,
                   1998)

         10.42     Master  Agreement dated as of June 5, 1997 among the Company,
                   Tremont  Bermuda  Limited,  Tremont  International  Insurance
                   Ltd., Mutual Risk Management (Holdings) Ltd., MGL Investments
                   Ltd.,  Hemisphere  Management  Limited  and  The  Anglo-Dutch
                   Insurance Company Limited.  (incorporated herein by reference
                   to the  Company's  Form 10-KSB filed with the  Commission  on
                   March 19, 1998)

         10.43     Stock Purchase Agreement dated as of June 5, 1997 between the
                   Company  and MGL  Investments  Ltd.  (incorporated  herein by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998)


                                       63
<PAGE>

         10.44     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and  Sandra  L.  Manzke.   (incorporated  herein  by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998)

         10.45     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and  Robert  I.  Schulman.  (incorporated  herein by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 18, 1998)

         10.46     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and John L.  Keeley,  Jr.  (incorporated  herein  by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 18, 1998)

         10.47     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company and Alan A. Rhein.  (incorporated herein by reference
                   to the  Company's  Form 10-KSB filed with the  Commission  on
                   March 19, 1998)

         10.48     Stock  Option  Agreement  dated  June 12,  1997  between  the
                   Company  and  Jimmy  L.  Thomas.   (incorporated   herein  by
                   reference  to  the  Company's  Form  10-KSB  filed  with  the
                   Commission on March 19, 1998)

         10.49     Stock  Purchase  Agreement  dated as of July 1, 1997  between
                   Tremont  MRM  Services  Limited  and Mutual  Risk  Management
                   (Holdings)  Ltd.  (incorporated  herein by  reference  to the
                   Company's  Form 10-KSB filed with the Commission on March 19,
                   1998)

         10.50     Shareholders'  Agreement  dated  as of  July  1,  1997  among
                   Tremont MRM Services Limited,  Tremont (Bermuda) Limited, The
                   Anglo-Dutch   Insurance   Company  Limited  and  Mutual  Risk
                   Management (Holdings) Ltd.  (incorporated herein by reference
                   to the  Company's  Form 10-KSB filed with the  Commission  on
                   March 19, 1998)

         10.53     Tremont Advisers,  Inc. 1998 Stock Option Plan  (incorporated
                   herein by reference to the  Company's  Form  10-QSB/A1  filed
                   with the  Commission  on  November  6,  1998).  (incorporated
                   herein by reference to the  Company's  Form 10-KSB filed with
                   the Commission on March 19, 1998)

         10.54     Shareholder's  Agreement  dated as of July 17,  1998,  by and
                   among Tremont  Advisers,  Inc., Robert J. Parnell and Tremont
                   Investment Management, Inc. (incorporated herein by reference
                   to the Company's Form 10-QSB/A1  filed with the Commission on
                   November 6, 1998)


                                             64
<PAGE> 

         10.55     Employment  Agreement  dated  as of  July  17,  1998  between
                   Tremont Investment Management and Robert Parnell.......... 72

         10.56     Amendment  to  Employment  Agreement  dated as of December 9,
                   1998,between the Company and Sandra L. Manzke............. 84

         10.57     Amendment  to  Employment  Agreement  dated as of December 9,
                   1998, between the Company and Robert I. Schulman.......... 85
    
         10.58     Agreement and Plan of Reorganization, dated as of March 8, 
                   1999 by and among Tremont Advisers, Inc., Tass Management
                   Limited and Nicola Meaden, Laurence Huntington Taylor, II,
                   Colin Myers, Norma Smith and Valerie Benard............... 86

         10.59     Registration  Rights  Agreement,  dated as of March 11, 1999 
                   by and among Tremont Adviers,  Inc. and Nicola Meaden,
                   Laurence Huntington Taylor, II, Valerie Benard, Colin Myers 
                   and Norma Smith.......................................... 191

         10.60     Employment Agreement, dated as of March 11, 1999, by and 
                   between Tremont Advisers, Inc. and Laurence Huntington (Hunt)
                   Taylor, II............................................... 209

         10.61     Employment Agreement, dated as of march 11, 1999, by and
                   among Tass Management Limited, Tremont Advisers, Inc. and
                   Nicola Meaden............................................ 233

         10.62     Stock Optoin and Benefits Agreement, dated as of March 8, 
                   1999, by and between Tremont Advisors, Inc. and Laurence
                   Huntington Taylor, III................................... 258

         10.63     Stock Option and Benefits Agreement, dated as of March 8,
                   1999, by and between Tremont Advisers, Inc. and Nicola
                   Meaden................................................... 288
    
         21.1      Subsidiaries of the Company (incorporated herein by reference
                   to the Company's  Form 10 QSB/A1 filed with the Commission on
                   November 30, 1998)

         23.1      Consent of Ernst & Young LLP, independent auditors....... 318

         23.2      Consent of Goldstein Golub Kessler LLP, independent
                   auditors................................................. 319

         27.0      Financial Data Schedule.................................. 320

    
                                   65
<PAGE>

                              Exhibit 3.4


                       CERTIFICATE OF AMENDMENT
                                  OF
                  RESTATED CERTIFICATE OF INCORPORATION
                                  OF
                         TREMONT ADVISERS, INC.

                    Under Section 242 of the Delaware
                        General Corporation Law



     The undersigned,  Sandra L. Manzke,  the Chairman of the Board of Directors
of Tremont Advisers,  Inc., a Delaware corporation (the  "Corporation"),  hereby
certifies that:

     1. The name of the Corporation is Tremont Advisers, Inc.

     2. The Certificate of  Incorporation  of the Corporation was filed with the
Secretary of State of the State of Delaware on September 28, 1987 under the name
Lynch Asset Management  Corporation,  and thereafter amended to reflect a change
in the Corporation's name to Tremont Advisers, Inc. on October 8, 1991.

     3. Article  "FOURTH" of the Restated  Certificate of  Incorporation  of the
Corporation is hereby amended to read in its entirety as follows:

        FOURTH:  The aggregate  number of shares of all classes of capital stock
        which the  Corporation  shall have the  authority to issue is 16,000,000
        shares of capital  stock,  of which  amount  1,000,000  shares  shall be
        designated  Preferred Stock, $1.00 par value;  5,000,000 shares shall be
        designated Class A Common Stock,  $0.01 par value; and 10,000,000 shares
        shall be  designated  Class B Common Stock,  $0.01 par value.  All cross
        references in each part of this Article FOURTH refer to other paragraphs
        in such part unless otherwise indicated.

        Preferred Stock.

              The Preferred Stock may be issued from time to time in one or more
        series.  The Board of Directors of the  Corporation is hereby  expressly
        authorized to provide,  by resolution or resolutions  duly adopted by it
        prior to  issuance,  for the creation of each such series and to fix the
        designation  and  the  powers,  preferences,   rights,   qualifications,
        limitations and restrictions relating to the shares of each such series.
        The  authority of the Board of Directors  with respect to each series of
        Preferred  Stock shall include,  but not be limited to,  determining the
        following:


                                        66

<PAGE>

              (a) the  designation  of such  series,  the  number  of  shares to
        constitute  such series and the stated value if  different  from the par
        value thereof;

              (b) whether the shares of such series shall have voting rights, in
        addition to any voting rights  provided by law, and, if so, the terms of
        such voting rights, which may be general or limited;

              (c) the  dividends,  if any,  payable on such series,  whether any
        such  dividends  shall be cumulative,  and, if so, from what dates,  the
        conditions and dates upon which such dividends shall be payable, and the
        preference or relation which such dividends  shall bear to the dividends
        payable on any shares of stock of any other  class or any other class or
        any other series of Preferred Stock;

              (d)  whether  the  shares  of such  series  shall  be  subject  to
        redemption by the Corporation,  and, if so, the times,  prices and other
        conditions of such redemption;

              (e) the amount or amounts payable upon shares of such series upon,
        and the rights of the  holders  of such  series  in,  the  voluntary  or
        involuntary  liquidation,   dissolution  or  winding  up,  or  upon  any
        distribution of the assets, of the Corporation;

              (f)  whether  the  shares of such  series  shall be subject to the
        operation of a retirement  or sinking fund and, if so, the extent to and
        the manner in which any such retirement or sinking fund shall be applied
        to the  purchase  or  redemption  of  the  shares  of  such  series  for
        retirement  or other  corporate  purposes  and the terms and  provisions
        relating to the operation thereof;

              (g) whether the shares of such series shall be  convertible  into,
        or  exchangeable  for,  shares of stock of any other  class or any other
        series of Preferred Stock or any other  securities and, if so, the price
        or prices or the rate or rates of conversion or exchange and the method,
        if any, of adjusting  the same,  and any other terms and  conditions  of
        conversion or exchange;

              (h) the  limitations  and  restrictions,  if any, to be  effective
        while any shares of such  series  are  outstanding  upon the  payment of
        dividends  or the  making  of  other  distributions  on,  and  upon  the
        purchase,  redemption or other  acquisition by the  Corporation  of, the
        Common  Stock or shares of stock of any other class or any other  series
        of Preferred Stock;



                                     67

<PAGE>

              (i) the conditions or  restrictions,  if any, upon the creation of
        indebtedness  of the  Corporation  or upon the  issue of any  additional
        stock, including additional shares of such series or of any other series
        of Preferred Stock or of any other class; and

              (j) any other powers,  preferences  and  relative,  participating,
        optional and other special rights, and any  qualifications,  limitations
        and restrictions, thereof.

              The powers,  preferences and relative participating,  optional and
        other  special  rights  of  each  series  of  Preferred  Stock,  and the
        qualifications,  limitations or restrictions thereof, if any, may differ
        from  those of any and all  other  series at any time  outstanding.  All
        shares of any one series of  Preferred  Stock shall be  identical in all
        respects with all other shares of such series, except that shares of any
        one  series  issued at  different  times may  differ as to the date from
        which dividends thereof shall be cumulative.

        Class A and Class B Stock.

              The powers, preferences and rights of the shares of Class A Common
        Stock and the Class B Common Stock, and the qualifications,  limitations
        or restrictions thereof are as follows:

                  1.       Dividends

              Following the preference  distribution  of dividends to holders of
        outstanding  shares of Preferred  Stock, the record holders of shares of
        Class A Common  Stock  and Class B Common  Stock  shall be  entitled  to
        receive such dividends and distributions,  payable in cash or otherwise,
        as may be declared  thereon by the Board of Directors  from time to time
        out  of  the  assets  or  funds  of the  Corporation  legally  available
        therefor; provided, however, that no such dividend or distribution shall
        be declared or paid unless the holders of both classes  receive the same
        per  share   dividend,   payable   in  the  same   amount  and  type  of
        consideration,  as if such classes  constituted a single  class,  except
        that in the event  that any  dividend  is  declared  that is  payable in
        shares of Class A Common Stock or Class B Common  Stock,  such  dividend
        shall be  declared  and paid at the same rate per share with  respect to
        the  Class A Common  Stock and Class B Common  Stock,  and the  dividend
        payable  on  shares of Class A Common  Stock  shall be  payable  only in
        shares of Class A Common  Stock and the  dividend  payable  on shares of
        Class B Common  Stock shall be payable  only in shares of Class B Common
        Stock.


                                   68

<PAGE>
                  2.       Liquidation

              (a) In the event of a  liquidation,  dissolution  or winding up of
        the  affairs  of the  Corporation,  whether  voluntary  or  involuntary,
        following   the  payment  of  all   indebtedness   and  any   applicable
        preferential  distribution to the holders of the  outstanding  shares of
        Preferred Stock:

              (i) the  holders  of Class A Common  Stock  shall be  entitled  to
        receive an amount,  in cash  and/or  other  property,  equal to $.40 per
        share; provided,  however, that in the event the available assets of the
        Corporation are not sufficient to pay in full the holders of the Class A
        Common  Stock the amounts to which they are  entitled  pursuant  hereto,
        then each  share of Class A Common  Stock  shall  share  ratably  in the
        assets available for distribution to them; whereupon thereafter

              (ii) the holders of the Class B Common  Stock shall be entitled to
        receive an amount,  in cash  and/or  other  property,  equal to $.40 per
        share; provided,  however, that in the event the available assets of the
        Corporation are not sufficient to pay in full the holders of the Class B
        Common  Stock the amounts to which they are  entitled  pursuant  hereto,
        then each  share of Class B Common  Stock  shall  share  ratably  in the
        assets available for distribution to them; whereupon thereafter

              (iii)  all of the  remaining  assets of the  Corporation  shall be
        distributed  in equal  amounts  per share to the  record  holders of the
        Class A Common  Stock  and  Class B  Common  Stock,  as if such  classes
        constituted a single class.

              (b) The amounts  distributable with respect to each share of Class
        A Common Stock and Class B Common  Stock  pursuant to (a)(i) and (a)(ii)
        above,  respectively,  shall  be  appropriately  adjusted  to take  into
        account the effect of any stock split,  stock  dividend,  subdivision of
        shares,  or combination of shares into a smaller number of shares,  with
        respect to either or both Classes of such Common Stock.

                  3.       Conversion of Class A Common Stock

              (a) Each holder of Class A Common Stock shall be entitled,  at any
         time and from time to time on or after  August 15,  1998 to convert all
         or a portion of the  shares of Class A Common  Stock held by it into an
         equal  number of shares of Class B Common  Stock.  Each  conversion  of
         shares of Class A Common  Stock  into  shares  of Class B Common  Stock
         shall be effected by the surrender of the  certificate or  certificates
         representing  the shares of Class A Common Stock to be converted at the
         principal  office of the Corporation (or such other office or agency of
         the  Corporation as the  Corporation may designate by notice in writing
         to the  holder  or  holders  of the  Class A Common  Stock) at any time
         during its usual

                                       69

<PAGE>

        business hours, together with written notice by the holder of such Class
        A Common Stock  stating that such holder  desires to convert the shares,
        or a stated  number of shares,  of Class A Common Stock  represented  by
        such certificate or certificates into Class B Common Stock, which notice
        shall also state the name or names (with addresses) and denominations in
        which the certificate or certificates  for Class B Common Stock shall be
        issued and shall include  instructions  for delivery  thereof.  Promptly
        after  such  surrender  and the  receipt  of such  written  notice,  the
        Corporation shall issue and deliver in accordance with such instructions
        the  certificate or  certificates  for the Class B Common Stock issuable
        upon such  conversion.  Such  conversion to the extent  permitted by law
        shall be deemed to have been affected as of the close of business on the
        date  on  which  such  certificate  or  certificates   shall  have  been
        surrendered  and such notice shall have been received,  and at such time
        the  rights of the  holder of such  Class A Common  Stock (or  specified
        portion thereof) as such holder shall cease and the person or persons in
        whose name or names the certificate or certificates  for shares of Class
        B Common Stock are to be issued upon such conversion  shall be deemed to
        have  become  the  holder or  holders of record of the shares of Class B
        Common Stock represented thereby.

              (b) Shares of Class A Common Stock which are converted into shares
        of Class B Common Stock as provided herein shall not be reissued.

              (c) The  Corporation  will at all times reserve and keep available
        out of its authorized but unissued shares of Class B Common Stock or its
        treasury shares, solely for the purposes of issue upon the conversion of
        the Class A Common Stock as provided in this paragraph 3, such number of
        shares  of Class B  Common  Stock as  shall  then be  issuable  upon the
        conversion of all the then  outstanding  shares of Class A Common Stock.
        The Corporation  will take all such action as may be necessary to assure
        that all such  shares of Class B Common  Stock may be so issued  without
        violation of any applicable law or regulation or any requirements of any
        domestic stock exchange upon which shares of Class B Common Stock may be
        listed.

                  4.       Voting Rights

             The holders of shares of Class A Common  Stock shall vote  together
        with the  holders of shares of Class B Common  Stock as a single  voting
        group;  provided,  however,  that,  with respect to each matter properly
        brought  before  the  shareholders  for  their  consideration  and vote,
        including,  without limitation,  the election of directors,  each record
        holder of shares of Class A Common  Stock  shall have four (4) votes for
        each such share held of record in his name on the stock transfer records
        of the  Corporation  and each record  holder of shares of Class B Common
        Stock  shall have one (1) vote for each such share held of record in his
        name on the stock transfer records of the Corporation.

                                     70

<PAGE>

        

     5.       Pre-Emptive Rights. The holders of Class A Common Stock and Class
 B Common Stock shall have no pre-emptive rights.

     4. The  foregoing  amendment  was  authorized  by the  Board of  Directors,
followed by authorization by a statutory  majority of stockholders  who, through
their own written consent, approved and authorized this same amendment.

     IN WITNESS  WHEREOF,  the  undersigned  has signed  this  Amendment  to the
Restated  Certificate  of  Incorporation  and affirms that the  statements  made
herein are true under penalties of perjury this ____ day of August, 1998.



                                                       _________________________
                                                        Sandra L. Manzke
                                                        Chairman of The Board
ATTEST:

_________________________
Suzanne Hammond
Secretary

                                   71


<PAGE>

                         Exhibit 10.55


                              EMPLOYMENT AGREEMENT


         MEMORANDUM OF AGREEMENT (the "Agreement") made as of this 17th day of
July, 1998.


         BETWEEN:

                           Tremont Investment Management, Inc., a
                           company organized under the laws of the
                           Province of Nova Scotia and the laws of Canada
                           as applicable therein

                           hereinafter called "the Corporation"

         AND:

                           Robert J. Parnell

                           hereinafter called "Parnell"


          WHEREAS,   Tremont   Advisers,   Inc.,  a  Delaware   (United  States)
Corporation  with  offices at 555  Theodore  Fremd  Avenue,  Rye, New York 10580
U.S.A.  ("Tremont")  and Parnell,  residing at 230 Guildwood  Parkway,  Toronto,
Ontario M1E 1P7 Canada,  have entered into a Joint Venture Agreement (the "Joint
Venture") dated as of June 5, 1998;

          WHEREAS,  the Joint  Venture  stipulated  for Tremont and Parnell,  or
their  respective  affiliates,  to cause the  Corporation to be organized and in
accordance  with which  Tremont  and Parnell  are the sole  shareholders  of the
Corporation;

          WHEREAS, in accordance with the Joint Venture,  the Corporation wishes
to hire and retain the services of Parnell as an employee of the  Corporation in
the  capacities  of  President,  Chief  Operating  Officer and Chief  Investment
Officer;

          WHEREAS,  Parnell wishes to serve the Corporation in the capacities of
President, Chief Operating Officer and Chief Investment Officer; and

          WHEREAS,  Tremont,  Parnell and the Corporation  have entered into and
executed a  shareholders'  agreement of even date  herewith  (the  "Shareholders
Agreement")  for  the  purposes  of,  among  other  things,  providing  for  the
management of the Corporation and which refers to this Agreement therein.


                                  72

<PAGE>

                            Statement of Agreement

          NOW,  THEREFORE,  in  consideration  of the premises and of the mutual
covenants  contained  herein,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties agree as follows:

          1. Employment.  The Corporation  hereby employs  Parnell,  and Parnell
hereby accepts such employment,  upon the terms and conditions set forth in this
Agreement.

          2. Term of Employment. Parnell's employment under this Agreement shall
commence as of the date hereof and  continue  for an initial term ending on July
31, 2000 (the "Initial  Term"),  which may be extended in the  discretion of the
board of directors of the Corporation (the "Board of Directors"),  unless sooner
terminated pursuant to Section 8 hereof.

          3. Duties.

          (a) The  duties  of  Parnell  shall be to serve  as  President,  Chief
Operating  Officer and Chief  Investment  Officer of the Corporation and perform
such other  duties  consistent  with his  positions,  as may be  required by the
Corporation  or the Board of Directors from time to time during the Initial Term
hereof including, without limitation, the following:

               (i) manage the  day-to-day  operation and  administration  of the
Corporation, including the hiring and firing of employees;

               (ii) devote 100% of his working time,  attention  and  investment
management  efforts solely to the performance of the duties of his employment by
the Corporation and no other business endeavor whatsoever;

               (iii)  initiate  and be  available  for sales  presentations  and
client meetings;

               (iv)  coordinate 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;

               (v) supervise the year-end auditing process of the Corporation;

               (vi)  participate in the design and development of new investment
products;

               (vii) travel on behalf of the  Corporation to the extent required
by his position and responsibilities;


                                   73


<PAGE>

               (viii)  report to the President  and Chief  Operating  Officer of
Tremont,  (presently  Robert  Schulman) at such times as the President and Chief
Operating Officer shall require; and

               (ix) work in  collaboration  with  Tremont  with  respect  to the
investment management of multi-manager and single-manager hedge fund products.

               (b) Loyal and Conscientious  Performance.  Parnell agrees that he
shall  devote his entire  business  time and  energy to the  performance  of his
duties  hereunder and that to the best of his ability and  experience he will at
all times  diligently  and  faithfully  perform  all the duties and  obligations
required of him by the terms of this Agreement.

          4. Expenses.  The Corporation shall reimburse Parnell for all expenses
reasonably  incurred by Parnell in furtherance  of Parnell's  performance of his
duties  hereunder;  provided that Parnell  renders to the Corporation a complete
and accurate  accounting and  documentation of all such expenses,  and furnishes
information  adequate in the Corporation's  judgment to permit deduction of such
expenses on the income tax returns of the Corporation.

          5. Vacations.  Parnell shall be entitled to four (4) weeks of vacation
on a non-  cumulative  basis  measured on an annual  basis from the date of this
Agreement.  Parnell's  vacation  will be  scheduled  at such times as will least
interfere  with the business of the  Corporation as determined in the reasonable
judgment of the Corporation's Board of Directors (the "Board").

          6. Confidential and Proprietary Information.

          (a) Definition of Confidential  Information.  Parnell acknowledges and
agrees that  Confidential  Information of the  Corporation  has been and will be
imparted  to him,  which if  disclosed  by him 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  concerning or relating to the
business,  investment  funds,  accounts,  customers,  employees,  and affairs of
Corporation  and  contact  persons  and  other  information  maintained  by  the
Corporation,  obtained by or furnished, disclosed or disseminated to Parnell, or
obtained,  assembled or compiled by Parnell or under his supervision  during the
course of his employment by 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 written 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.


                                   74

<PAGE>

          (b)  Removal  of  Confidential  Information.  During  the term of this
Agreement and thereafter,  Parnell shall not,  without the  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 an employee of the Corporation or at any time after
the  termination  of his  employment  with the  Corporation,  without  the prior
written  consent of  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 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.

          7. Compensation.

          (a)  Salary.  During the  Initial  Term,  for all the  services  to be
rendered by Parnell in any capacity  hereunder,  Parnell shall be paid an annual
salary (the "Salary") as follows:

               (i)  U.S.$125,000.00  for the  annual  period  commencing  on the
August 1, 1998 and ending on July 31, 1999; and

               (ii)  U.S.$150,000.00  for the annual period commencing on August
1, 1999 and ending on July 31, 2000.

          Parnell's  salary  shall be paid at bi-weekly  intervals  and shall be
subject to such employment insurance, Canada Pension Plan, withholding taxes and
other payroll  deductions as are required to be made by the laws of the Province
of Ontario and the laws of Canada as applicable  therein.  Following the Initial
Term, the renewal of the terms of Parnell's employment and compensation shall be
determined by the Board of Directors of the Corporation; provided, however, that
Parnell's annual salary shall not exceed U.S.$150,000 until such time as any and
all redeemable preferred shares of the Corporation issued to Tremont in exchange
for additional capital  contributions,  as contemplated in the Joint Venture and
provided for in the Shareholders' Agreement have been redeemed in full.

          (b) Benefits.  Parnell shall be entitled to full  participation,  on a
basis  commensurate with his position as President,  Chief Operating Officer and
Chief Investment  Officer of the  Corporation,  in all comparable plans of life,
accident,  medical payment,  health and dental insurance and salary continuation
(pension)   which  are  generally  made  available  by  Tremont  to  its  senior
executives.


                                 75

<PAGE>

         8.       Termination.

          (a) Termination by Consent.  This Agreement may be terminated upon the
mutual consent of the Corporation and Parnell for any reason or no reason.

          (b)  Termination  for  Cause.   The  Corporation  may  terminate  this
Agreement for "cause", which, for the purposes of this Agreement,  shall include
(i) Parnell's  conviction for, or plea to a felony or an indictable offense or a
crime involving moral turpitude; (ii) Parnell's commission of an act of personal
dishonesty or breach of fiduciary duty involving  personal  profit in connection
with Parnell's  employment by the Corporation;  (iii) Parnell's commission of an
act involving  fraud,  willful  misconduct or gross negligence in the conduct of
his duties and  responsibilities  as an  employee of the  Corporation;  (iv) the
suspension  or  revocation  of any  licenses  or  similar  regulatory  approvals
necessary  for the  operation  of the  business  of the  Corporation  due to the
conduct  and/or  activities  of Parnell and which such  suspension or revocation
materially injures or damages the Corporation's business and reputation,  or any
other act or activities not enumerated in (i), (ii) and (iii) hereinabove, which
have the effect of materially injuring or damaging the Corporation's business or
reputation; or (v) a material breach by Parnell of any of the provisions of this
Agreement,  the  Shareholders'  Agreement or the Joint Venture  unless  remedied
within thirty (30) days after written  notice thereof is delivered to Parnell by
the Corporation, if such breach is capable of remedy.

          (c) Death or  Disability.  This  Agreement  shall be terminated by the
Corporation  upon the death or disability  of Parnell.  For the purposes of this
Agreement, "disability" shall mean the inability of Parnell during any period of
two (2)  consecutive  months or three (3)  months in any  period of twelve  (12)
consecutive months to perform those duties of employment  required hereunder due
to physical or emotional or mental  incapacity  or illness as  determined  by an
independent  physician  appointed by the Board of  Directors  for the purpose of
making this determination.

          (d)  Termination  under the  Shareholders'  Agreement.  This Agreement
shall  automatically   terminate  upon  the  termination  of  the  Shareholders'
Agreement or Parnell's otherwise ceasing to be a shareholder in the Corporation.

          (e)  Termination  Without Cause.  The  Corporation  may terminate this
Agreement at any time without cause,  including such  termination as a result of
the liquidation of the  Corporation  arising from the withdrawal of Tremont from
the  Corporation,  as referred to in the Joint  Venture,  and other than for the
reasons in Sections 8(a), (b), or (c) hereof.
 
          (f)  Payment  upon  Termination  Without  Cause.  In  the  event  this
Agreement and Parnell's  employment  hereunder is terminated by the  Corporation
without cause, as defined herein,  pursuant to Section 8(e) hereof,  in addition
to any rights of Parnell and  compensation to which he may be entitled under the
Shareholders'  Agreement,  the Corporation  shall pay to pay Parnell (i), on his
regular pay day and in accordance with the


                                    76

<PAGE>

Corporation's  payroll  practices,  installments  on the Salary in effect at the
date of termination for (A) the six (6) month period immediately  following such
termination  (the "Base  Severance  Period") or (B) the period of time remaining
until  the  expiration  of the  Initial  Term or any  subsequent  renewal  term,
whichever is longer; (ii) the value of the pro-rated vacation leave with pay for
that  portion  of the year in which  the  employment  of  Parnell  hereunder  is
terminated  during which  Parnell was actively  employed to the extent that such
vacation  entitlement  has not been used by Parnell at the time of  termination;
and (iii) the  business  expenses  reasonably  incurred  by Parnell  and payable
hereunder  through the date of  termination.  The Base  Severance  Period  shall
increase by one (1) month, up to a maximum of twelve (12) months,  for each year
that  Parnell is employed by the  Corporation.  For the purposes of this Section
8(f), the  Corporation's  failure to renew this Agreement  following the Initial
Term or any subsequent renewal term for reasons other than for cause, as defined
herein,  shall constitute  "termination  without cause" for the purposes of this
Agreement.

          (g) Payment upon  Termination  by Consent,  for Cause,  upon Parnell's
Death or  Disability or as a Result of  Successful  Claims of Newcastle  Capital
Management Inc.  Should this Agreement be terminated  pursuant to Sections 8(a),
(b) or (c) hereof or Section  8(d) hereof in respect of the  termination  of the
Shareholders'  Agreement  or  Parnell's  ceasing  to  be a  shareholder  in  the
Corporation  arising from Parnell's being  restrained from engaging  directly or
indirectly  in the  business  of  the  Corporation  as a  result  of  his  prior
affiliation with Newcastle  Capital  Management Inc., as contemplated by Section
6.4(d) of the Shareholders'  Agreement, in addition to any rights of Parnell and
compensation  to which  he is  entitled  under  the  terms of the  Shareholders'
Agreement,  Parnell  shall be entitled to payment of his Salary earned up to the
date of  termination  plus an amount  equal to the sum of:  (i) the value of the
pro-rated  vacation leave with pay for that portion of the year in which Parnell
is terminated during which Parnell was actively employed to the extent that such
vacation  entitlement  has not been used by Parnell at the time of  termination;
and (ii) the  business  expenses  reasonably  incurred  by Parnell  and  payable
hereunder through the date of termination.

          (h)  Payment  upon  Certain   other   Terminating   Events  under  the
Shareholders' Agreement.  Should this Agreement be terminated as a result of the
termination  of  the  Shareholders'   Agreement  or  Parnell  ceasing  to  be  a
shareholder in the Corporation arising from the occurrence of certain bankruptcy
or insolvency  events  relating to Parnell or the  encumbrance  of the Shares or
Preferred  Shares owned by Parnell,  as contemplated by Sections 6.4 (e) and (f)
of the  Shareholders'  Agreement,  in  addition  to any  rights of  Parnell  and
compensation  to which he is entitled  under the  Shareholders'  Agreement,  the
Corporation  shall pay to Parnell (i), on his regular pay day and in  accordance
with the Corporation's  payroll practices,  installments on his Salary in effect
at the date of termination for the three (3) month period immediately  following
such  termination;  (ii) the value of the pro-rated  vacation leave with pay for
that  portion  of the year in which  the  employment  of  Parnell  hereunder  is
terminated  during which  Parnell was actively  employed to the extent that such
vacation entitlement has not been used by Parnell at the time


                                 77

<PAGE>

of termination;  and (iii) the business expenses  reasonably incurred by Parnell
and payable hereunder through the date of termination.

          (i)  Resignation.  Following the  termination of Parnell's  employment
pursuant to the terms hereof,  Parnell  hereby  agrees to resign,  and cause his
nominee to the  Corporation's  Board of Directors  to resign,  from any offices,
positions  and  directorships  which he or such  nominee  may have held with the
Corporation.

          (j) Reasonableness.  Each of the Corporation and Parnell confirms that
the  provisions of Section 8(f) are  reasonable  and the total amount payable as
outlined  therein is an amount which has been agreed  between them to be payable
hereunder or, in the  alternative,  as a reasonable  pre-estimate of the damages
which will be suffered by Parnell in the event of termination  without cause and
shall not be construed as a penalty.

          9.  Notice.  Any notice to be given  hereunder  by either party to the
other may be  effectuated  either by  personal  delivery  in  writing,  by mail,
registered or certified,  postage prepaid, with return receipt requested,  or by
telecopier  with answerback  confirmation.  Notices shall be given in accordance
with the following:


         If to Parnell:                     Mr. Robert J. Parnell
                                            230 Guildwood Parkway
                                            Toronto, Ontario M1E 1P7 Canada
                                            Facsimile No.: 416-265-9468


         If to the Corporation:             Tremont Investment Management Inc.
                                            c/o Tremont Advisers, Inc.
                                            555 Theodore Fremd Avenue
                                            Rye, New York 10580 U.S.A.
                                            Facsimile No.: 914-921-3499

or such other  addresses as the  Corporation or Parnell may designate by written
notice to each other.  Notices  delivered  personally or by telecopier  shall be
deemed duly given on the date of actual receipt or upon answerback confirmation,
respectively,  and mailed notices shall be deemed duly given as of the third day
after the date so mailed and post-marked.

          10. Non-Solicitation and Non-Compete Covenants.

          (a)  Non-Solicitation.  Parnell  agrees  that  during the term of this
Agreement and following his ceasing to be an employee of the Corporation 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



                                 78

<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  at any time during the two (2)
years preceding the termination of this Agreement or Parnell's  ceasing to be an
employee of the Corporation;

               (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 business 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.

          (b) Agreement Not To Engage in Competing  Business.  Parnell covenants
and agrees that he will not,  during the term of this Agreement and for a period
of six (6) months following his ceasing to be an employee of the Corporation for
any reason, 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.
Notwithstanding the foregoing,  the prohibitions  against Parnell in subsections
10(a) and  10(b)  shall not  apply in the  event  (i)  Parnell's  employment  is
terminated in connection with the  liquidation of the  Corporation  arising from
the  withdrawal  of Tremont  from the  Corporation  as  referred to in the Joint
Venture, or (ii) Parnell's employment with the Corporation is terminated without
cause, as defined herein, which for the purposes of this Agreement shall include
the failure by the  Corporation  to renew this  Agreement  following the Initial
Term or any subsequent renewal term for reasons other than for cause.

          (c)  Extension  of Covenant in the Event of Breach.  In the event of a
breach of any of the covenants  set forth in Section 10(a) or 10(b) 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 Section.

          (d) Recognition.  Parnell  recognizes and expressly  acknowledges that
the  Corporation  would  be  subject  to  irreparable  harm  should  any  of the
provisions  of  Sections  6 and 10 be  infringed  or  should  any  of  Parnell's
obligations thereunder be breached by Parnell, and that damages alone will be an
inadequate  remedy for any breach or violation thereof and that the Corporation,
in  addition  to all other  remedies,  shall be entitled as a matter of right to
equitable  relief including  temporary or permanent  injunction to restrain such
breach.  Parnell further  recognizes and expressly  acknowledges that Sections 6
and 10 grant to the Corporation only such reasonable protection as is admittedly
necessary to preserve the


                                     79 

<PAGE>

legitimate interests of the Corporation and Parnell equally recognizes that such
restrictions  shall  not  impair  his  ability  to secure  alternate  employment
following the termination of his employment hereunder for any reason.

          11.  Waiver  of  Breach.  The  waiver  by any party of a breach of any
provision in this  Agreement  cannot  operate or be construed as a waiver of any
subsequent breach by a party.

          12. Compliance with Other Agreements.  Parnell represents and warrants
that the execution of this  Agreement and Parnell's  performance  hereunder will
not, with or without the giving of notice or the passage of time, conflict with,
result in the breach of or the termination of, or constitute a default under any
agreement to which Parnell is or may be bound.  Parnell  represents and warrants
that he has provided to the Corporation, prior to execution of this Agreement, a
copy or copies of the pertinent portions of any and all employment agreements or
similar  documents  executed by Parnell  with a former  employer or any business
with which Parnell has been  associated,  which on its face  prohibits  Parnell,
during a period of time which  includes  the date of  commencement  of Parnell's
employment  with  the  Corporation,  from  (i) competing  with,  or in  any  way
participating  in a business which competes with  Parnell's  former  employer or
business;  (ii) soliciting personnel of the former employer or business to leave
such former employer's employment or to leave such business; or (iii) soliciting
customers of the former employer or business or another business.

          13. Severability. The invalidity or unenforceability of any particular
provision in this Agreement shall not affect the other  provisions  hereof,  and
this  Agreement  shall  be  construed  in  all  respects  as if the  invalid  or
unenforceable provision were omitted.

          14.  Entire  Agreement.  Except as  otherwise  provided  herein,  this
Agreement covers the entire understanding of the parties as to the employment of
Parnell,   superseding  all  prior   understandings   and  agreements,   and  no
modifications  or  amendments  of the  terms  and  conditions  herein  shall  be
effective  unless in writing and signed by the parties or their  respective duly
authorized agents.

          15. Governing Law. This Agreement shall be interpreted,  construed and
governed according to the laws of the Province of Ontario and the laws of Canada
applicable therein, without reference to conflicts of law principles thereof.

          16. Capitalized Terms.  Capitalized terms not otherwise defined herein
have the meanings ascribed to them in the Shareholders' Agreement.

          17. 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:



                                     80

<PAGE>

          (a)  Mediation.  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 local arbitration association
or  similar  alternative  dispute  resolution  organization.   Any  mediator  so
designated must be acceptable to both parties.

          The  mediation  will be  conducted  as  specified  by the  mediator in
Toronto,  Ontario 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  hereto  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) Arbitration.

               (i) 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  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.

               (ii) The party desiring the arbitration shall give written notice
to the other party of such desire. Within ten (10) days of such notice,  Tremont
shall  designate  a single  arbitrator  and  Parnell  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.



                                  81

<PAGE>

               (iii) In the event the above-mentioned does not take place within
the specified  time, then the  arbitration  will be conducted  before a 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 the Province
of  Ontario  and  the  laws  of  Canada  applicable   therein  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.

               (iv) 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, even if any other portion of
these provisions is held to be invalid or  unenforceable,  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.

               (v) 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.

               (vi)  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.

               (vii)  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.

          18.  Successors and Assigns.  This Agreement shall be binding upon and
inure to the  benefit  of the  parties  hereto and their  permitted  successors,
assigns,  legal  representatives  and heirs,  but neither this Agreement nor any
rights  hereunder shall be assignable by Parnell or the Corporation  without the
other party's prior written consent.



                                      82

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                            TREMONT INVESTMENT MANAGEMENT, INC.


                                       By:______________________________________
                                       Robert I. Schulman, Chairman of the Board


                                       _________________________________________
                                       Robert J. Parnell


                                     83
<PAGE>


                                                              Exhibit 10.56

                                         AMENDMENT TO EMPLOYMENT AGREEMENT

          AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") dated this 9th of
December,  1998, by and between TREMONT ADVISERS,  INC., a Delaware  corporation
having its principal  executive offices at Corporate Center at Rye, 555 Theodore
Fremd Avenue,  Rye, New York  ("Tremont");  and SANDRA L. MANZKE,  an individual
residing in Pound Ridge, New York ("Executive"). WITNESSETH:

          WHEREAS,   Executive  is  employed  by  Tremont  pursuant  to  and  in
accordance  with the terms and conditions  contained in an employment  agreement
dated September 25, 1995 (the  "Employment  Agreement"),  by and between Tremont
and Executive; and

          WHEREAS,  Executive  and  Tremont are each  desirous  of amending  the
Employment  Agreement in accordance  with this Amendment,  effective  January 1,
1999.

          NOW, THEREFORE, in consideration of the promises and mutual covenants,
terms and conditions hereinafter set forth and in the Employment Agreement,  the
parties hereto hereby agree as follows:

1.        Section  3(a)(i)  of the  Employment  Agreement  is hereby  amended by
          deleting the following phrase: "three hundred  seventy-three  thousand
          dollars  ($373,000)" nd inserting in its place "three hundred eighty
          thousand dollars ($380,000)."

2.        Section 5 shall be  amended  by  deleting  all  references  therein to
          "December 31, 1998" and inserting in its place "December 31, 1999."

3.        Except  to the  extent  amended  by  this  Amendment,  the  terms  and
          conditions of the Employment  Agreement shall remain in full force and
          effect.  In the  event  of  any  conflict  between  the  terms  of the
          Employment Agreement and the Amendment, the Amendment shall control.

4.        Each party hereby  represents  and warrants to the other that each has
          read  the  foregoing  provisions  and that  each has had a  sufficient
          opportunity  to discuss  this  Amendment  with anyone each party might
          desire prior to signing  below.  Further,  in signing this  Amendment,
          each party has not relied on or been induced to execute this Amendment
          by any statements,  representations,  agreements or promises,  oral or
          written,  made by the other  except for those  expressly  contained in
          this Amendment.

          IN WITNESS WHEREOF,  this Amendment has been executed and delivered by
the parties hereto as of the date first above written.

WITNESS



_____________________                           By: ___________________         
Suzanne S. Hammond                                 Sandra L. Manzke
Secretary and Treasurer

ATTEST                                          TREMONT ADVISERS, INC.



_____________________                           ____________________           
Stephen T. Clayton                              Robert I. Schulman
Chief Financial Officer                         Chief Operating Officer

                                   84
<PAGE>

                                                                 Exhibit 10.57

                            AMENDMENT TO EMPLOYMENT AGREEMENT

          AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") dated this 9th of
December,  1998, by and between TREMONT ADVISERS,  INC., a Delaware  corporation
having its principal  executive offices at Corporate Center at Rye, 555 Theodore
Fremd Avenue, Rye, New York ("Tremont");  and ROBERT I. SCHULMAN,  an individual
residing at 18 Green Valley Road, Armonk, New York ("Executive"). WITNESSETH:

          WHEREAS,   Executive  is  employed  by  Tremont  pursuant  to  and  in
accordance  with the terms and conditions  contained in an employment  agreement
dated April 22, 1994 (the  "Employment  Agreement"),  by and between Tremont and
Executive; and

          WHEREAS,  Executive  and  Tremont are each  desirous  of amending  the
Employment  Agreement in accordance  with this Amendment,  effective  January 1,
1999.

          NOW, THEREFORE, in consideration of the promises and mutual covenants,
terms and conditions hereinafter set forth and in the Employment Agreement,  the
parties hereto hereby agree as follows:

1.        Section  3(a)(i)  of the  Employment  Agreement  is hereby  amended by
          deleting the following  phrase:  "three hundred  thirty-five  thousand
          seven hundred  dollars"  ($335,700)  and inserting in its place "three
          hundred forthy-two thousand dollars" ($342,000).

2.        Section 5 shall be  amended  by  deleting  all  references  therein to
          "December 31, 1998" and inserting in its place "December 31, 1999."

3.        Except  to the  extent  amended  by  this  Amendment,  the  terms  and
          conditions of the Employment  Agreement shall remain in full force and
          effect.  In the  event  of  any  conflict  between  the  terms  of the
          Employment Agreement and the Amendment, the Amendment shall control.

4.        Each party hereby  represents  and warrants to the other that each has
          read  the  foregoing  provisions  and that  each has had a  sufficient
          opportunity  to discuss  this  Amendment  with anyone each party might
          desire prior to signing  below.  Further,  in signing this  Amendment,
          each party has not relied on or been induced to execute this Amendment
          by any statements,  representations,  agreements or promises,  oral or
          written,  made by the other  except for those  expressly  contained in
          this Amendment.

          IN WITNESS WHEREOF,  this Amendment has been executed and delivered by
the parties hereto as of the date first above written.

WITNESS



_____________________                           By: ___________________         
Suzanne S. Hammond                                  Robert I. Schulman
Secretary and Treasurer

ATTEST                                          TREMONT ADVISERS, INC.



_____________________                           ____________________           
Stephen T. Clayton                              Robert I. Schulman
Chief Financial Officer                         Chief Operating Officer

                                   85


<PAGE>
                                                              Exhibit 10.58


                                                             EXECUTION COPY


                      AGREEMENT AND PLAN OF REORGANIZATION

                            Dated as of March 8, 1999


                                  by and among


                             TREMONT ADVISERS, INC.,

                             TASS MANAGEMENT LIMITED

                                       and

                   THE SHAREHOLDERS OF TASS MANAGEMENT LIMITED











                                   86
<PAGE>



                                Table of Contents


Section                                                                   Page

                                    ARTICLE I

                   CERTAIN DEFINITIONS AND TERMS OF DISCLOSURE

1.1      General...........................................................  2

1.2      Specific Terms....................................................  3

1.3      Terms of Disclosure............................................... 11


                                   ARTICLE II

                               THE REORGANIZATION

2.1      The Reorganization................................................ 12

2.2      Exchange of Shares................................................ 12

2.3      Closing........................................................... 14

2.4      Actions to be taken at the Closing................................ 14


                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES AS TO TASS

3.1      Organization and Qualification; Subsidiaries...................... 15

3.2      Organizational Documents; Officers and Directors.................. 16

3.3      Capitalization.................................................... 16

3.4      Authority Relative to this Agreement.............................. 18

3.5      No Conflict; Required Filings and Consents........................ 19

3.6      Consents.......................................................... 20


                                                  87

<PAGE>


                                Table of Contents
                                   (Continued)

Section                                                                    Page


3.7      Financial Statements.............................................. 20

3.8      Absence of Certain Changes or Events.............................. 21

3.9      Tax Matters....................................................... 23

3.10     Accounts Receivable............................................... 24

3.11     Title to Property................................................. 24

3.12     Software; Furniture, Fixtures and Equipment....................... 25

3.13     Certain Contracts................................................. 27

3.14     Real Property and Leaseholds...................................... 28

3.15     Intellectual Property............................................. 28

3.16     No Violation of Law............................................... 29

3.17     Approvals; Government Regulation.................................. 30

3.18     Litigation........................................................ 34

3.19     Insurance......................................................... 35

3.20     Labor, Benefit and Employment Agreements and Arrangements......... 36

3.21     Affiliated or Inter-Company Transactions.......................... 37

3.22     Banks; Powers of Attorney......................................... 38

3.23     Clients........................................................... 38

3.24     Year 2000 Readiness............................................... 39

3.25     Brokers........................................................... 39

3.26     Adequacy of Representations and Warranties........................ 39


                                      88

<PAGE>


                                Table of Contents
                                   (Continued)

Section                                                                   Page


                                   ARTICLE IV

              REPRESENTATIONS AND WARRANTIES AS TO THE SHAREHOLDERS

4.1      Ownership of Shares and Preference Shares.......................... 40

4.2      Outstanding Rights to Acquire Shares............................... 40

4.3      Transfer of Title.................................................. 41

4.4      Binding Commitment................................................. 41

4.5      No Conflict; Required Filings and Consents......................... 42

4.6      Securities Matters................................................. 42


                                    ARTICLE V

                  REPRESENTATIONS AND WARRANTIES AS TO TREMONT

5.1      Organization and Qualification; Subsidiaries....................... 45

5.2      Certificate of Incorporation....................................... 46

5.3      Capitalization..................................................... 46

5.4      Reports............................................................ 47

5.5      Authority Relative to this Agreement............................... 48

5.6      No Conflict; Required Filings and Consents......................... 49

5.7      Absence of Certain Changes or Events............................... 51

5.8      Tax Matters........................................................ 52

5.9      Accounts Receivable................................................ 53


                                        89                              


<PAGE>


                                Table of Contents
                                   (Continued)

Section                                                                    Page

5.10     Title to Property.................................................. 53

5.11     Intellectual Property.............................................. 54

5.12     No Violation of Law................................................ 55

5.13     Approvals; Government Regulation................................... 55

5.14     Insurance.......................................................... 59

5.15     Affiliated or Inter-Company Transactions........................... 59

5.16     Clients............................................................ 59

5.17     Litigation......................................................... 60

5.18     Year 2000 Readiness................................................ 60

5.19     Brokers............................................................ 61

5.20     Adequacy of Representations and Warranties......................... 61


                                   ARTICLE VI

                         CONDUCT OF BUSINESS PENDING THE
                  REORGANIZATION; ACCESS TO COMPANY INFORMATION

6.1      Conduct of Business by TASS Pending the Reorganization............ 62

6.2      No Shopping....................................................... 65

6.3      Investigation; Access to Information.............................. 65







                                        90

<PAGE>


                                Table of Contents
                                   (Continued)

Section                                                                    Page

                                   ARTICLE VII

                              ADDITIONAL AGREEMENTS

7.1      Additional Agreements............................................. 67

7.2      Appointments and Resignations..................................... 68

7.3      Certain TASS Obligations.......................................... 69

7.4      Barclays Credit Facility.......................................... 69

7.5      Covenants Relating to Rule 144.................................... 70

7.6      Notification of Certain Occurrences or Failures................... 70

7.7      Audited Financial Statements of TASS.............................. 71

7.8      Payment of Taxes Upon Transfer of Shares.......................... 72

7.9      Public Announcements.............................................. 72

7.10     Further Assurances................................................ 72

7.11     Accuracy of Representations....................................... 72


                                  ARTICLE VIII

                          CONDITIONS OF REORGANIZATION

8.1      Conditions to Obligations of TASS and the Shareholders............ 73

8.2      Conditions to Obligations of Tremont.............................. 76







                                    91

<PAGE>


                                Table of Contents
                                   (Continued)

Section                                                                   Page


                                   ARTICLE IX

                    CONFIDENTIAL AND PROPRIETARY INFORMATION

9.1      Definition of Confidential Information............................ 80

9.2      Removal of Confidential Information............................... 81

9.3      Disclosure of Confidential Information............................ 81

9.4      Protection of Interests........................................... 82


                                    ARTICLE X

                SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS

10.1     Survival........................................................... 82

10.2     Indemnification.................................................... 83


                                   ARTICLE XI

                             TERMINATION AND WAIVER

11.1     Termination....................................................... 89

11.2     Effect of Termination............................................. 90

11.3     Waiver............................................................ 90










                                         92

<PAGE>


                                Table of Contents
                                   (Continued)

Section                                                                   Page

                                   ARTICLE XII

                               GENERAL PROVISIONS

12.1     Notices........................................................... 91

12.2     Expenses.......................................................... 91

12.3     Headings.......................................................... 92

12.4     Severability...................................................... 92

12.5     Entire Agreement.................................................. 92

12.6     Assignment........................................................ 93

12.7     Binding Effect; Benefits.......................................... 93

12.8     Governing Law; Jurisdiction; Venue................................ 93

12.9     Counterparts...................................................... 94



                                          93
<PAGE>



Schedules


3.1            List of TASS's Subsidiaries
3.2 Names of Officers and Directors of TASS and its Subsidiaries 3.3 Schedule of
TASS Options,  Warrants,  Conversion  Rights,  Etc. 3.6 TASS's Required Consents
3.12(a)  Information  Regarding  TASS's Software 3.12(b) List of TASS's Computer
Hardware,  Furniture,  Fixtures and Equipment  3.13 Certain TASS  Contracts 3.14
Description  of  TASS's  Real  Property  and  Leaseholds  3.15  List  of  TASS's
Intellectual  Properties  3.17(a)  List  of  TASS's  Governmental  Consents  and
Licenses 3.18 Schedule of TASS's  Litigation 3.19 List and Description of TASS's
Insurance  Policies  3.20  Schedule  of TASS's  Labor,  Benefit  and  Employment
Agreements
               and Arrangements
3.21     Schedule of Affiliated or Inter-Company Transactions
3.22     List of TASS's Financial Institutions and Holders of Powers of Attorney
3.23     List of TASS's Clients and Subscribers
3.24     Description of TASS's Year 2000 Readiness
4.1      Ownership of Shares and Preference Shares
5.1      List of Tremont's Subsidiaries
5.2      Certificate of Incorporation and By-laws
5.3      Schedule of Tremont Options, Warrants, Conversion Rights, Etc.
5.6(b)   Tremont's Required Consents and Approvals
5.10     Schedule of Liens Against Tremont
5.11     List of Tremont's Intellectual Properties
5.13(a)  List of Tremont's Approvals
5.13(b)  Certain Regulatory Information
5.16     List of Tremont's Clients
5.17     Schedule of Tremont's Litigation
7.3      Schedule of Certain TASS Liabilities


                                   94

<PAGE>



Exhibits

A-1            Form of Nicola Meaden Employment Agreement

A-2            Form of Laurence Huntington Taylor, II Employment Agreement

B              Form of Registration Rights Agreement

C              Form of Special Resolution for Preference Shares

D              Form of Tremont's Counsel's Opinion

E              Form of TASS's and Meaden's and Taylor's Counsel's Opinion

F              Parties' Addresses for Notice Purposes


Attachments

1              Disclosure Letter


                                       95

<PAGE>



                      AGREEMENT AND PLAN OF REORGANIZATION


         AGREEMENT  AND PLAN OF  REORGANIZATION,  dated as of March 8, 1999 (the
"Agreement"), by and among Tremont Advisers, Inc., a corporation organized under
the laws of the State of Delaware, U.S.A. ("Tremont"),  TASS Management Limited,
a private company limited by shares (number 2527691) and incorporated in England
and Wales under the Companies Act 1985 ("TASS"),  and Nicola Meaden  ("Meaden"),
Laurence Huntington (Hunt) Taylor, II ("Taylor"), Norma Smith ("Smith"), Valerie
Benard ("Benard") and Colin Myers ("Myers"), as the holders of all of the issued
and outstanding ordinary shares of TASS (Meaden, Taylor, Smith, Benard and Myers
are hereinafter sometimes referred to collectively as the "Shareholders").

                              W I T N E S S E T H:

         WHEREAS,  the  Shareholders,  as the  owners  of  all  the  issued  and
outstanding ordinary shares of (pound)1 each of TASS (the "Shares"), pursuant to
a plan of  reorganization,  wish to  exchange  all of the  Shares  for shares of
Tremont  Class B Common Stock (as defined in Section  2.1),  in such amounts and
upon  the  terms  and  subject  to  the   conditions   set  forth   herein  (the
"Reorganization"); and

         WHEREAS,  the  board  of  directors  of  Tremont  and  TASS  have  each
determined  that it is in the best interests of their  respective  companies and
their respective shareholders for


                                    96

<PAGE>



Tremont and TASS to consummate the Reorganization  transactions described herein
upon the terms and subject to the conditions set forth herein; and

         WHEREAS, in furtherance of such Reorganization, the boards of directors
of Tremont and TASS have each approved the  transactions  described  herein upon
the terms and subject to the conditions set forth herein; and

         WHEREAS,  it is intended  that the  Reorganization  shall  qualify as a
reorganization  within the meaning of Section  368(a)(1)(B) of the U.S. Internal
Revenue Code of 1986, as amended,  and that this  Agreement  shall  constitute a
"plan of reorganization;"

         NOW  THEREFORE,  in  consideration  of the  foregoing  and  the  mutual
covenants and  agreements  herein  contained,  and intending to be legally bound
hereby, Tremont, TASS and the Shareholders hereby agree as follows:

                                    ARTICLE I
                   CERTAIN DEFINITIONS AND TERMS OF DISCLOSURE

         Section  1.1  General.  For the  purpose of this  Agreement,  except as
otherwise expressly provided or unless the context otherwise  requires,  (i) the
terms defined in this Article I include the plural as well as the singular, (ii)
the words  "herein,"  "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to


                                  97

<PAGE>



any particular Article, Section or other subdivision,  (iii) Article references,
Section  references,   Schedule  (as  defined  herein)  references  and  Exhibit
references refer to Articles, Sections, Schedules and Exhibits, respectively, of
and to this  Agreement,  and (iv) all references to this Agreement and any other
agreement  refer to this  Agreement  and Plan of  Reorganization  or such  other
agreement, as amended, modified and supplemented from time to time in accordance
with the terms  hereof or  thereof  (as  applicable).  All  references  to "this
Agreement"  shall  be  construed  to  include  references  to the  Exhibits  and
Schedules hereto.

         Section 1.2  Specific Terms.  As used herein, the following terms shall
have the following meanings:

         "Affiliate"  shall mean,  with  respect to any Person,  an  individual,
corporation,  partnership,  limited  liability  company,  firm,  joint  venture,
association, joint-stock company, trust, incorporated organization, governmental
or regulatory or other entity controlling, controlled by or under common control
with such  Person,  including  but not  limited to any  subsidiary  and  holding
company of any Person as defined in section 736 of the Companies Act.

         "Agreement"  means this  Agreement  and Plan of  Reorganization,  dated
March 8,  1999,  by and among  Tremont,  TASS and each of the  Shareholders  and
Preferred Shareholders of TASS.



                                    98

<PAGE>



         "Articles of Association" means the Articles of Association of TASS, a
amended to the date hereof.

         "Board of Directors"  shall mean the board of directors of Tremont,  as
the  same  shall be  elected  from  time to time in  accordance  with  Tremont's
by-laws.

         "Capital Securities" means, as to any Person that is a corporation, the
authorized  shares of such  Person's  capital  stock,  including  all classes of
common,  preferred,  voting and non-voting  capital stock, and, as to any Person
that is not a corporation  or an  individual,  the  ownership  interests in such
Person, including without limitation,  the right to share in profits and losses,
the  right to  receive  distributions  of cash and  property,  and the  right to
receive  allocations of items of income,  gain,  loss,  deduction and credit and
similar items from such Person,  whether or not such interests include voting or
similar  rights  entitling  the holder  thereof to  exercise  control  over such
Person.

         "Certificate of  Incorporation"  means the Certificate of Incorporation
of TASS dated August 3, 1990.

         "Certificates   of   Incorporation   on  Change  of  Name"   means  the
Certificates  of  Incorporation  on Change of Name of TASS dated October 4, 1990
and June 23, 1992, respectively.



                                   99

<PAGE>




         "Change  of  Control"  shall mean (i) an  Acquisition,  as such term is
defined in the Stock  Option  Agreements  to be  executed  by Meaden and Taylor,
respectively,   or  (ii)  during  any  period  of  two  (2)  consecutive  years,
individuals  who at the beginning of such period  constitute the entire Board of
Directors shall cease for any reason to constitute the entire Board of Directors
shall cease for any reason to  constitute  a majority of the Board of  Directors
unless the election or nomination for election by Tremont's shareholders of each
new  director  was  approved  by a vote  of at  least  two-thirds  (2/3)  of the
directors  then  still in office  who were  directors  at the  beginning  of the
period.

     "Closing" means the consummation of the  transactions  contemplated by this
Agreement in respect of the Reorganization.

         "Closing Date" has the meaning set forth in Section 2.3 hereof.

         "Companies Act" means the Companies Act 1985 under U.K. law.

         "Companies House" means the applicable U.K. office of The Registrar of 
Companies for companies incorporated in England and Wales under the Companies 
Act.

         "Disclosure  Letter"  means that certain  letter,  dated as of the date
hereof,  addressed to Tremont from TASS, Meaden and Taylor,  containing  certain
information  constituting a material and integral part of this Agreement,  which
is attached hereto as Attachment 1.


                                         100

<PAGE>




         "Employment Agreements" means, collectively,  the Employment Agreements
to be entered into by Meaden and Taylor, respectively,  with TASS and Tremont in
the forms of Exhibits A-1 and A-2 annexed hereto and made a part hereof, setting
forth the terms and  conditions of Meaden's and Taylor's  employment by TASS and
Tremont, respectively, as of the Closing Date.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
under U.S. law.

         "Financial Statements" has the meaning set forth in Section 3.7 hereof.

         "Investment Advisers Act" means the Investment Advisers Act of 1940, as
amended, under U.S. law.

         "Investment Company Act" means the Investment Company Act of 1940, as 
amended, under U.S. law.

         "IITSSA" means the International Investment and Trade in Services
Survey Act, under U.S. law.

         "Material Adverse Effect" means any change in or effect on the business
of  Tremont  or  TASS,  as the case  may be,  or any of its or their  respective
Subsidiaries, that is or will be


                                    101

<PAGE>



materially adverse to the business, operations, properties (including intangible
properties),   condition  (financial  or  otherwise),   assets,  liabilities  or
regulatory  status  of  Tremont  or TASS,  as the case may be,  and its or their
respective Subsidiaries, taken as a whole.

         "1998 Unaudited Statements" has the meaning set forth in Section 3.7
 hereof.

         "Memorandum of Association" means the Memorandum of Association of
TASS, as amended to the date hereof.

         "Organizational  Documents"  shall mean with  respect to TASS or any of
its  Subsidiaries,   TASS's   Certificate  of  Incorporation,   Certificates  of
Incorporation  on Change of Name, its Memorandum of Association and its Articles
of  Association,  and  each of such  equivalent  organizational  documents  with
respect  to  TASS's  Subsidiaries,  including  without  limitation,  any of such
Subsidiary's  certificate  of  incorporation  and  by-laws,  with  each  of such
documents as amended to the date hereof, to the extent applicable.

         "Person" means an individual,  partnership,  corporation,  association,
trust,  joint  venture,   unincorporated   organization,   and  any  government,
governmental department or agency or political subdivision thereof.

         "Preference Shares" has the meaning set forth in the preamble to this
 Agreement.



                                      102

<PAGE>



         "Preferred  Shareholders"  means all of the  holders of the  Preference
Shares (namely, Nicola Meaden and Norma Smith, in their respective capacities as
holders of certain  Preference  Shares,  and Kim  Lubbock  and Brooks  Newmark),
collectively.

         "Registration   Rights   Agreement"  means  the   Registration   Rights
Agreement,  to be executed and delivered by Tremont and the  Shareholders  on or
prior to the Closing  Date,  setting forth  certain  registration  rights of the
Shareholders  and certain  registration  obligations of Tremont,  in the form of
Exhibit B annexed hereto and made a part hereof.

         "Related Agreements" shall mean each of the Employment Agreements,  the
Registration Rights Agreement, and certain stock option agreements to be entered
into as of the Closing  Date by and  between  Tremont and each of certain of the
Shareholders  and an employee  of TASS,  providing  for the  granting of certain
options by Tremont to such Shareholders and to such other individual to purchase
shares of Tremont  Class B Common Stock,  among other things,  which shall be in
the form or forms as have been agreed to between such  Shareholders  and Tremont
as of the date hereof (collectively, the "Stock Option Agreements").

         "Reorganization" has the meaning set forth in the preamble to this 
Agreement.

         "Schedule" means a disclosure  schedule prepared by Tremont, on the one
hand, or TASS and/or the Shareholders, on the other, as the case may be, annexed
hereto and made a


                                103

<PAGE>



part hereof containing certain information  constituting a material and integral
part of this Agreement.

         "Securities Act" means the Securities Act of 1933, as amended, under
U.S. law.

         "SEC" means the U.S. Securities and Exchange Commission.

         "SFA" means The Securities and Futures Authority Limited of the U.K.

         "Shareholders"  means all of the holders of the Shares (namely,  Meaden
and Smith,  in their  respective  capacities  as holders of Shares,  and Taylor,
Benard and Myers, collectively).

         "Shares" has the meaning set forth in the preamble to this Agreement.

         "Software" has the meaning set forth in Section 3.12 hereof.

         "Special  Resolution" means the Special  Resolutions of TASS,  together
with the Extraordinary Resolution of the Preferred Shareholders, to be passed at
meetings of the Company,  the Shareholders and the Preferred  Shareholders on or
prior to the  Closing  Date in the form of  Exhibit C annexed  hereto and made a
part hereof, setting forth the terms of the Preference Shares, as amended.



                                      104

<PAGE>



         "Stock  Option  Agreements"  has the  meaning  set forth as used in the
definition of "Related Agreements" in this Section 1.2.

         "Stock  Options"  means  options to acquire  shares of Tremont  Class B
Common Stock granted by Tremont pursuant to the Stock Option Agreements.

         "Subsidiary"  shall  mean any Person of which  Tremont or TASS,  as the
case may be (either  alone or through or  together  with any other  Subsidiary),
owns,  directly or indirectly,  at least a majority of the  outstanding  Capital
Securities (or other  beneficial  interest) or a majority of the voting power of
such Person;  and, except as otherwise provided herein, the term  "Subsidiaries"
shall mean all of such Persons,  collectively, in respect of Tremont or TASS, as
the case may be.

         "Taxes" means all U.S., U.K. or other income,  gross  receipts,  sales,
use, employment,  franchise,  profits, property,  corporation,  VAT (Value Added
Tax), National Contributions Insurance, excise or other taxes, fees, stamp taxes
and  duties,  assessments  or charges of any kind  whatsoever  (whether  payable
directly or by  withholding),  together  with any  interest  and any  penalties,
additions to tax or  additional  amounts  imposed by any taxing  authority  with
respect thereto.

         "Tremont Class B Common Stock" has the meaning set forth in Section 2.1
hereof.



                                    105
<PAGE>



         "U.K." means the United Kingdom of Great Britain and Northern Ireland.

         "U.S." or "U.S.A." means the United States of America.

         Section 1.3 Terms of  Disclosure.  The  representations  and warranties
made hereunder are made subject to matters  fairly and accurately  disclosed and
presented in the  Disclosure  Letter and the Schedules and as  specifically  set
forth  in  the  Agreement,  but no  other  information  relating  to  TASS,  the
Shareholders and the Preferred Shareholders (collectively,  the "TASS Parties"),
on the one hand, or Tremont,  on the other,  of which Tremont or any of the TASS
Parties  has  knowledge  (actual  or  constructive),  as the case may be,  shall
prejudice  any  claim  made by  Tremont,  on the one  hand,  or any of the  TASS
Parties,  on the other, under such  representations and warranties or operate to
reduce any amount  recoverable.  Notwithstanding the conditions set forth in the
Disclosure  Letter,  the  parties  hereto  agree that a matter  would be "fairly
presented" in the  Disclosure  Letter if such matter were discussed or presented
under a heading set forth in the Disclosure Letter which reasonably corresponded
or bore a reasonable  relationship  to the section in the agreement  wherein the
representation  and warranty was  contained to which such matter was intended to
apply.






                                106

<PAGE>




                                   ARTICLE II
                               THE REORGANIZATION

         Section  2.1 The  Reorganization.  Subject  to and upon the  terms  and
conditions of this Agreement, TASS, the Shareholders and Tremont shall carry out
the  Reorganization  in a  manner  such  that  Tremont  shall  acquire  from the
Shareholders all of the Shares, and the Shareholders shall transfer,  assign and
convey with full title  guarantee to Tremont,  in exchange for shares of Class B
common  stock,  par value $.01 per share,  of Tremont  ("Tremont  Class B Common
Stock"),  all of the Shares. None of the Preference Shares are being redeemed or
exchanged by TASS or Tremont in connection with the Reorganization.

     Section 2.2 Exchange of Shares. (a) At the Closing, all of the Shares shall
be exchanged for 190,477 shares of Tremont Class B Common Stock, subject to
adjustment, as described hereinbelow.

         At the Closing, the amount of shares of Tremont Class B Common Stock to
be delivered to each of the Shareholders in exchange for the Shares owned by him
or  her  shall  be  as  follows,   which  amounts  are  in  proportion  to  each
Shareholders' ownership of Shares:


                                    107

<PAGE>

<TABLE>


        <S>                                      <C>                                 <C>                      
                                                                             No. of Shares of
                                           No. of                             Tremont Class B
Shareholder                            Shares of TASS                    Common Stock to be Issued


         Nicola Meaden                             789                             64,170

         Laurence Huntington                       417                             33,915
           Taylor, II

         Colin Myers                               112                              9,109

         Valerie Benard                             23                              1,871

         Norma Smith                              1001                             81,412


</TABLE>
         In the event that,  subsequent to the date of this  Agreement but prior
to the Closing  Date,  and subject to the written  consent of Meaden and Taylor,
the outstanding  shares of Tremont Class B Common Stock shall have been, without
consideration,  increased, decreased, changed into, or exchanged for a different
number or kind of shares or securities through reorganization, recapitalization,
reclassification,  stock  dividend,  stock split,  reverse stock split, or other
like changes in Tremont's capitalization,  then an appropriate and proportionate
adjustment  shall be made in the number and kind of shares of  securities  to be
thereafter   delivered   to  the   holders  of  the  Shares   pursuant   to  the
Reorganization.

                  (b) The Shareholders  shall have certain  registration  rights
with  respect to the shares of Tremont  Class B Common  Stock to be  received by
them hereunder, which shall be set forth in the Registration Rights Agreement.



                                    108

<PAGE>



         Section 2.3 Closing.  The closing of the Reorganization (the "Closing")
shall take place at 10:00 a.m., local time, on March 11, 1999, at the offices of
Newman  Tannenbaum  Helpern  Syracuse & Hirschtritt  LLP, 900 Third Avenue,  New
York, New York 10022,  or at such other time and place as Tremont and TASS shall
agree in writing (the date on which such Closing occurs is hereinafter  referred
to as the "Closing Date.")

         Section 2.4 Actions to be taken at the Closing.  (a) Upon the terms and
subject to the conditions set forth herein,  at the Closing,  against receipt of
certificates  of Tremont Class B Common Stock, as referred to in Section 2.4(b),
the Shareholders shall deliver to Tremont share certificates representing all of
the Shares accompanied by properly executed stock transfer forms, free and clear
of any and all liens, claims, charges or encumbrances of any kind.

                  (b) Upon the terms and  subject  to the  conditions  set forth
herein,  at the Closing,  against the receipt of the certificates for the Shares
from the Shareholders, as described hereinabove in Section 2.4(a), Tremont shall
deliver to each  Shareholder  stock  certificates  representing  such  number of
shares of Tremont  Class B Common  Stock to be received by such  Shareholder  in
accordance with Section 2.2.





[
                                     109

<PAGE>



                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES AS TO TASS

         TASS,  Meaden and Taylor,  severally,  hereby  represent and warrant to
Tremont as follows:

         Section 3.1 Organization and Qualification; Subsidiaries. Except as set
forth  in the  Disclosure  Letter,  each  of  TASS  and  its  Subsidiaries  is a
corporation,  duly  organized  and  validly  existing  under  the  laws  of  the
jurisdiction of its  organization  and has the requisite power and authority and
any necessary governmental and regulatory authority to own, operate or lease the
real or personal  properties  that it  purports to own,  operate or lease and to
carry on its  business as it is now being  conducted,  and is duly  qualified or
licensed as a foreign  corporation to do business,  and is in good standing,  or
holds  substantially   similar  status  to  such,  where  applicable,   in  each
jurisdiction where the character of its properties owned,  operated or leased or
the nature of its activities makes such qualification necessary under applicable
law, except for such failure to be so qualified or licensed or hold such status,
as the case may be,  which,  alone or when  taken  together  with all other such
failures,  would not have a Material Adverse Effect. A true and complete list of
all of the Subsidiaries of TASS, together with the jurisdiction of incorporation
or  organization  of each  Subsidiary  and the  percentage of each  Subsidiary's
outstanding capital stock or share capital owned by TASS or a Subsidiary, is set
forth in the Disclosure Letter.


                                   110

<PAGE>



         Section 3.2 Organizational Documents;  Officers and Directors. TASS has
heretofore  furnished  to Tremont a true,  complete  and correct  copy of TASS's
Organizational  Documents and has made available to Tremont such  Organizational
Documents with respect to all of its Subsidiaries. Such Organizational Documents
are in full force and effect.  Neither  TASS nor any of its  Subsidiaries  is in
violation of any of the  provisions of its Memorandum of Association or Articles
of Association or other equivalent Organizational  Documents.  Schedule 3.2 sets
forth the names and  positions of all of the officers and  directors of TASS and
each of its Subsidiaries.

         Section 3.3  Capitalization.  The  authorized  share capital of TASS is
(pound)200,000  divided into 52,225  ordinary  shares of (pound)1  each of which
there are (i) 2,342  ordinary  shares,  issued and fully paid,  and of which 789
shares are legally and beneficially  owned by Meaden, 417 shares are legally and
beneficially owned by Taylor,  1001 shares are legally and beneficially owned by
Smith, 112 shares are legally and beneficially owned by Myers, and 23 shares are
legally and beneficially owned by Benard; and (ii) 147,775 redeemable preference
shares  of  (pound)1,  each,  all of  which  are  issued  and  fully  paid  (the
"Preference  Shares"),  and of which 74,176 shares are legally and  beneficially
owned by Meaden,  48,999  shares are  legally and  beneficially  owned by Smith,
9,900 shares are legally and  beneficially  owned by Kim  Lubbock,  and of which
14,700 are legally owned by Brooks Newmark for the benefit of Taylor. All of the
Shares and the Preference  Shares are validly issued and are fully paid.  Except
as set forth in the Disclosure  Letter and on Schedule 3.3 hereto,  there are no
options,  warrants, puts, calls, conversion rights or other rights,  agreements,
arrangements


                                       111

<PAGE>



or commitments of any character  obligating  TASS or any of its  Subsidiaries to
acquire,  issue or sell any share  capital of TASS or other equity  interests in
TASS,  or any  obligations  or  securities  exercisable,  convertible  into,  or
exchangeable for, or exercisable into, any share capital of TASS or other equity
interests in TASS, or any voting trusts,  proxies or agreements  relating to the
voting of TASS's  share  capital.  The terms and  conditions  of the  Preference
Shares  are  as  set  forth  in  the  Special  Resolution.   Collectively,   the
Shareholders  and  the  Preferred   Shareholders  own  all  of  the  issued  and
outstanding Shares and Preference Shares, respectively.

         All the  outstanding  capital  stock or share capital of each of TASS's
Subsidiaries  is duly  authorized,  validly issued and fully paid and, except as
set forth in the  Disclosure  Letter,  is owned by TASS or a Subsidiary  of TASS
free and clear of any liens, security interests,  pledges,  agreements,  claims,
charges or encumbrances of any nature whatsoever. There are no existing options,
warrants,   puts,  calls,   conversion  rights  or  other  rights,   agreements,
arrangements or commitments of any character  relating to the issued or unissued
share capital or other equity  interests in any of TASS's  Subsidiaries,  or any
voting  trusts,  proxies  or  agreements  relating  to the voting of any of such
Subsidiaries' capital stock or share capital. Except for its Subsidiaries,  TASS
does  not  directly  or  indirectly  own  any  equity   interest  in  any  other
corporation, partnership, joint venture or other business association or entity.



                                     112

<PAGE>



         Section  3.4  Authority  Relative  to  this  Agreement.  TASS  has  the
necessary  corporate  power and  authority to enter into this  Agreement  and to
carry  out  its  obligations  hereunder.  The  execution  and  delivery  of this
Agreement by TASS,  and each other  agreement and  instrument to be executed and
delivered  by  it  pursuant  hereto,   and  the  consummation  by  TASS  of  the
transactions  contemplated hereby and thereby, have been or will be, on or prior
to the Closing  Date,  duly  authorized by all  necessary  action,  corporate or
otherwise,  on the part of  TASS.  This  Agreement  has  been  duly and  validly
executed and delivered by TASS and constitutes,  and when executed and delivered
by all parties thereto,  all such other agreements and instruments to which TASS
is a party, will be duly and validly executed by TASS, and will constitute,  the
legal,  valid  and  binding  obligations  of  TASS,  enforceable  against  it in
accordance  with  their   respective  terms  (except  to  the  extent  that  the
enforceability  thereof  may be limited by  applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other similar laws  affecting  creditors'  rights
generally  or  by  the  principles   governing  the  availability  of  equitable
remedies).  The board of directors  and the  Shareholders  of TASS have approved
this Agreement,  the  Reorganization and the transactions  contemplated  hereby,
including  the  issuance  of a share  certificate  to  Tremont in respect of the
Shares and the entry of Tremont in the register of members of TASS, and TASS, on
or prior to the  Closing  Date,  will  deliver to Tremont  complete  and correct
copies of all resolutions  (whether  adopted at a meeting or by written consent)
adopted by the board of directors and the  shareholders  of TASS  (including the
Special Resolution) with respect thereto.



                                      113

<PAGE>



         Section 3.5 No  Conflict;  Required  Filings and  Consents.  Except for
obtaining  the Required  Consents (as defined in Section  3.6),  the  execution,
delivery and performance of this Agreement by TASS and each of the  Shareholders
and the  consummation by TASS and each of the  Shareholders of the  transactions
contemplated  hereby,  do not and will not: (i) violate or conflict  with any of
the Organizational Documents of TASS or any of its Subsidiaries, including those
containing the terms of the Preference  Shares, if any; (ii) violate or conflict
with or  constitute a default (or an event which,  with notice or lapse of time,
or both, would constitute a default) under any agreement,  indenture, instrument
or understanding to which TASS or any of its Subsidiaries is a party or by which
it is bound, or violate any judgment,  decree,  law, rule or regulation to which
TASS or any of its  Subsidiaries  is a party or by which it is bound and,  where
such violation, conflict or default is likely to have a Material Adverse Effect;
(iii)  result in the creation of, or give any party the right to create any lien
or encumbrance  upon the property or assets of TASS or any of its  Subsidiaries,
which is likely to have a Material Adverse Effect;  (iv) terminate or modify, or
give to another the right to terminate or modify the  provisions or terms of any
agreement or commitment to which TASS or any of its  Subsidiaries  is a party or
by which TASS or any of its Subsidiaries is subject or bound the result of which
is likely to have a  Material  Adverse  Effect;  (v)  result in any  suspension,
revocation,  impairment,  forfeiture  or  non-renewal  of any  permit,  license,
qualification,  authorization  or  approval  applicable  to  TASS  or any of its
Subsidiaries,  or  any  of  its or  their  respective  shareholders,  directors,
officers or employees,  which is likely to have a Material  Adverse  Effect;  or
(vi) materially interfere with or adversely affect the ability of TASS or any of
its Subsidiaries to carry on the business of


                               114

<PAGE>



TASS or such Subsidiary after the Closing Date on  substantially  the same basis
as it is now conducted.

         Section 3.6  Consents.  In the  Disclosure  Letter there is set forth a
list of all material consents,  approvals or other authorizations which TASS, or
any of its  Subsidiaries,  or any  of  its  or  their  respective  shareholders,
directors,  officers or  employees,  is required to obtain from,  and any filing
which  TASS,  or any  of its  Subsidiaries,  or any of its or  their  respective
shareholders,  directors,  officers or employees,  is required to make with, any
governmental or regulatory  authority or agency or any other party in connection
with  the  execution,  delivery  and  consummation  of  this  Agreement  and the
consummation of the transactions  contemplated hereby,  including any and all of
those required by the SFA in respect of registration,  transfer of registration,
change of  controller,  qualification  or otherwise,  except for such  consents,
approvals or other  authorizations  the failure to obtain which is not likely to
have a Material  Adverse  Effect or  interfere  with the  ability of TASS or its
Shareholders  to  perform  or carry  out its or  their  obligations  under  this
Agreement (collectively, the "Required Consents").

         Section  3.7  Financial  Statements.  (a)  Except  as set  forth in the
Disclosure  Letter,  TASS has heretofore  furnished to Tremont the  consolidated
balance sheets of TASS and its Subsidiaries (the "Balance Sheets") together with
the profit and loss  accounts  ("Profit and Loss  Accounts")  as of December 31,
1997, December 31, 1996 and December 31, 1995 (December 31, 1997 being the "Last
Balance Sheet Date"), certified without qualification by


                                     115
<PAGE>



TASS's regularly employed certified  accountants and registered auditor,  Robert
A. Price F.C.C.A., whose opinions therein have been included therewith (all such
Balance  Sheets and Profit and Loss Accounts being referred to as the "Financial
Statements"),  and its unaudited  consolidated  Balance  Sheet,  Profit and Loss
Accounts  (the  "1998  Unaudited  Statements")  as of  December  31,  1998.  The
Financial  Statements  and the 1998  Unaudited  Statements are true and correct,
have been prepared under the historical  cost  convention and in accordance with
applicable U.K. accounting  standards and show a true and fair view of the state
of affairs of TASS and its  Subsidiaries as of the respective  dates thereof and
have been properly prepared in accordance with the Companies Act 1985.

                  (b) Except as reflected or reserved  against in the  Financial
Statements and the 1998 Unaudited Statements,  and as otherwise set forth in the
Disclosure Letter,  TASS and its Subsidiaries have no indebtedness,  liabilities
or  obligations  of  any  nature  (whether  accrued,  absolute,   contingent  or
otherwise) which, alone or when taken together with any such other indebtedness,
liabilities or obligations,  is likely to have a Material Adverse Effect.  Since
the Last  Balance  Sheet  Date,  neither  TASS nor any of its  Subsidiaries  has
incurred  any  material  liabilities  except  (i)  liabilities  incurred  in the
ordinary  course  of  business  and  consistent  with  past  practice,  and (ii)
liabilities incurred in connection with or as a result of the Reorganization.

         Section 3.8       Absence of Certain Changes or Events.  Since the Last
Balance Sheet Date, except as contemplated in this Agreement or any exhibit of
schedule hereto, there has


                                     116

<PAGE>



not been or  occurred  (a) any event or  condition  which,  alone or when  taken
together with any other related or similar event or condition, is likely to have
a Material Adverse Effect;  (b) any damage,  destruction or loss (whether or not
covered by  insurance)  with  respect to any of the assets of TASS or any of its
Subsidiaries  which,  alone  or when  taken  together  with  any  other  damage,
destruction  or loss,  is  likely to have a  Material  Adverse  Effect;  (c) any
redemption or other  acquisition of TASS's ordinary shares or preference  shares
by TASS or any of its Subsidiaries or any declaration or payment of any dividend
or other distribution in cash, stock or property with respect to TASS's ordinary
shares or  preference  shares;  (d) any entry into any  material  commitment  or
transaction   (including,   without   limitation,   any   borrowing  or  capital
expenditure) other than in the ordinary course of business or as contemplated by
this  Agreement;  (e) any  transfer  of, or rights  granted  under,  any leases,
licenses,  agreements,  patents,  trademarks, trade names or copyrights; (f) any
mortgage,  pledge,  security interest or imposition of lien or other encumbrance
on any asset of TASS or any of its  Subsidiaries;  or (g) any  change by TASS in
accounting  principles or methods.  Since the Last Balance Sheet Date,  TASS and
its  Subsidiaries  have conducted their business only in the ordinary course and
in a manner  consistent with past practice and have not made any material change
in the conduct of the business or operations of TASS and its Subsidiaries  taken
as a whole.  Without  limiting the  generality of the  foregoing,  except as set
forth in the Disclosure Letter, TASS has not, since the Last Balance Sheet Date,
made any  changes in  executive  compensation  or in the  manner in which  other
employees of TASS or its  Subsidiaries  are compensated or paid or agreed to pay
any  pension,  retirement  allowance or other  employee  benefit not required or
permitted by any plan, agreement or arrangement


                                     117

<PAGE>



existing on such date to any  director,  officer or  employee,  whether  past or
present, or committed itself to any collective  bargaining agreement (except for
renewals of existing  collective  bargaining  agreements)  or to any  additional
pension,   profit-sharing,   bonus,  incentive,  deferred  compensation,   stock
purchase,  stock option,  stock appreciation  right, group insurance,  severance
pay, retirement or other employee benefit plan, agreement or arrangement,  or to
any employment or consulting agreement with or for the benefit of any person, or
to amend any of such plans or any of such agreements in existence on such date.

         Section 3.9 Tax Matters.  TASS and each of its Subsidiaries  have filed
or have  caused to be filed  with all  required  governmental  agencies  all tax
returns and reports required to be filed by TASS or any of its Subsidiaries, and
each has paid in full or made adequate  provision for the payment of, all Taxes,
interest, penalties,  assessments and deficiencies shown to be due or claimed to
be due from any taxing  authorities  with  respect to the  periods  ending on or
prior to the Closing Date. The provision for income and other Taxes which is set
forth in the  Financial  Statements is adequate for all accrued and unpaid Taxes
of TASS and each of its  Subsidiaries  as of  December  31,  1997,  whether  (i)
incurred in respect of or measured by income of TASS or any of its  Subsidiaries
for any periods prior to the close of business on that date, or (ii) arising out
of  transactions  entered into, or any state of facts  existing,  on or prior to
that date.  The  provision  for income and other Taxes which is set forth in the
1998 Unaudited Statements is adequate for all income and other Taxes of TASS and
each of its  Subsidiaries  which accrued  after  December 31, 1997 and up to and
including  December 31, 1998,  whether (i) incurred in respect of or measured by
income of TASS or


                                     118

<PAGE>



any of its  Subsidiaries  for any periods prior to the close of business on that
date,  or (ii) arising out of  transactions  entered into, or any state of facts
existing, on or prior to that date. Neither TASS nor any of its Subsidiaries has
executed or filed with any taxing  authority any agreement  extending the period
for the  assessment  or  collection  of any income or other taxes,  and is not a
party to any  pending  or, to the best of the  knowledge  of Meaden and  Taylor,
threatened,   action  or  proceeding  by  any  governmental  authority  for  the
assessment  or  collection  of  income  or other  taxes.  All  Taxes  and  other
assessments and levies which TASS or any of its Subsidiaries are required by law
to withhold or to collect have been duly withheld and  collected,  and have been
paid over to the proper  governmental  authorities  or are held by TASS,  or the
Subsidiary, as the case may be, in bank accounts for such payment.

         Section 3.10 Accounts Receivable. The accounts and notes receivables of
TASS  and  each of its  Subsidiaries  on the  Last  Balance  Sheet  Date and all
accounts  and notes  receivables  acquired by TASS and each of its  Subsidiaries
subsequent  to the Last Balance Sheet Date and prior to the close of business on
December 31, 1998 have arisen in the ordinary course of business,  have not been
and are not subject to valid counterclaims or set-offs,  and, except as reserved
for in the Financial Statements and the 1998 Unaudited Statements,  or otherwise
set forth in the Disclosure Letter, TASS is not aware of any impediment to their
collection.

         Section 3.11 Title to Property.  TASS and each of its Subsidiaries have
good and marketable  title,  or, except as set forth in the  Disclosure  Letter,
valid leasehold rights in the case of leased property,  to all real property and
all personal property (other than personal


                                   119

<PAGE>



property  title to which is  specified  elsewhere  in this  Agreement)  owned or
leased by them or purported to be owned or leased by them, free and clear of all
liens,  security  interests,  claims,  encumbrances and charges,  except for (i)
liens for fees, taxes,  levies,  imposts,  duties or governmental charges of any
kind which are not yet due or are being  contested in good faith by  appropriate
proceedings  which  suspend the  collection  thereof,  (ii) liens created in the
ordinary  course of business in  connection  with the  leasing or  financing  of
office,  computer and related equipment and supplies,  (iii) liens or defects in
title or leasehold rights known, or in the exercise of reasonable  care,  should
be known,  to TASS,  which alone or when taken  together with any other liens or
defects,  do not and will not have a Material Adverse Effect,  or (iv) liens set
forth in the Disclosure  Letter.  For the purposes of this Agreement,  the term,
"marketable  title," is defined as set forth in Black's Law Dictionary  (6th ed.
1992),  which states in part,  that  marketable  title is "a title which is free
from  encumbrances  and any reasonable  doubt as to its validity,  and such as a
reasonably  intelligent person, who is well informed as to facts and their legal
bearings,  and ready and  willing to perform his  contract,  would be willing to
accept in the exercise of ordinary business prudence."

         Section  3.12  Software;  Furniture,  Fixtures and  Equipment.  (a) All
computer  software,  programs  and  management  information  systems  (including
without limitation,  all electronic data processing systems, data banks, program
specifications,  source  codes  (where  TASS is the  owner)  and  documentation)
(collectively the "Software")  owned,  leased or licensed to and used by TASS or
any of its Subsidiaries in its or their business are set forth in the Disclosure
Letter and on Schedule 3.12(a), which indicate which Software is owned by


                                    120

<PAGE>



TASS and  which is  leased or  licensed.  Except as set forth in the  Disclosure
Letter and on Schedule 3.12(a), such Software is solely legally and beneficially
owned,  leased  or  licensed  by TASS or such  Subsidiary  free and clear of all
liens, claims, encumbrances or adverse interests of any kind whatsoever. TASS or
such  Subsidiary  is in  possession  of all source codes for all of the Software
owned by it. With  respect to such  Software  owned by TASS,  such  Software was
either created by TASS or good and marketable  title thereto was  transferred to
TASS and such Software is free of any and all claims, liens, security interests,
encumbrances  and  charges  of any kind.  Except as set forth in the  Disclosure
Letter and on Schedule  3.12(a),  any Software  owned by TASS and created by any
present or past  employee of TASS is owned by TASS,  free of any and all claims,
liens,  security interests,  encumbrances and charges of any kind. Except as set
forth in the  Disclosure  Letter and on  Schedule  3.12(a),  (i) no person has a
right to receive a royalty with respect to any such Software referred to therein
or  listed  thereon,  and  (ii)  neither  TASS nor any of its  Subsidiaries  has
licenses  granted by or to it or other agreements to which it is a party (except
in the  ordinary  course  of  business),  relating  in  whole or in part to such
Software,  whether owned by TASS or any of its Subsidiaries or otherwise. To the
best of the  knowledge of TASS,  Meaden and Taylor,  neither TASS nor any of its
Subsidiaries is infringing upon, or otherwise violating, the rights of any third
party  with  respect  to any of the  Software  and the use  thereof or any other
related  intellectual  properties.   The  computer  software  described  in  the
Disclosure  Letter and on Schedule 3.12(a) are all those used in the business of
TASS and each of its Subsidiaries,  and no other computer software of a material
nature is  required  to permit  the  conduct  of  TASS's  and its  Subsidiaries'
business in the ordinary course.


                                         121

<PAGE>




                  (b)  Schedule  3.12(b)  contains a complete  and correct  list
showing all items of computer  hardware,  furniture,  fixtures and  equipment of
TASS and each of its  Subsidiaries,  with  respect  to which  only the  computer
hardware can be represented  and warranted as being  structurally  sound with no
known material defects.

         Section 3.13 Certain  Contracts.  Schedule 3.13 contains a complete and
correct list of all contracts, commitments, obligations and understandings which
are not set forth in any other schedule delivered hereunder and to which TASS or
any of its Subsidiaries is a party or otherwise bound,  except for each of those
which (i) was made in the ordinary  course of  business,  and (ii) either (A) is
terminable  by TASS or such  Subsidiary  (and  will be  terminable  by  Tremont)
without  liability,  expense or other  obligation on 30 days' notice or less, or
(B) may be  anticipated  to  involve  aggregate  payments  to or by TASS or such
Subsidiary of $5,000 (or the  equivalent) or less  calculated over the full term
thereof,  and (iii) is not  otherwise  material to the  business of TASS or such
Subsidiary, taken as a whole, or any of the properties or assets of TASS or such
Subsidiary.  Included  in such list are all  unexpired  contracts,  commitments,
obligations and  understandings of TASS's or any of its Subsidiaries with TASS's
or such Subsidiary's  customers or clients or subscribers.  Complete and correct
copies of all such contracts,  commitments,  obligations and  understandings set
forth on any of the schedules  delivered  pursuant to this  Agreement  have been
furnished  by TASS to Tremont.  Except as  expressly  stated on the  schedule on
which they are set forth,  (i) each warranty  obligation under such contracts is
in full  force  and  effect;  (ii) each  contract,  commitment,  obligation  and
understanding set forth on any of the schedules delivered


                                    122

<PAGE>



pursuant  to this  Agreement  is in full force and  effect,  no person or entity
which is a party thereto or otherwise  bound  thereby is in default  thereunder,
and no event, occurrence,  condition or act exists which does (or which with the
giving of notice or the lapse of time or both  would)  give rise to a default or
right of cancellation,  acceleration or loss of contractual benefits thereunder;
(iii)  there are no  outstanding  disputes  thereunder  and  there  have been no
threatened  cancellations  thereunder;  (iv) none of them  restricts,  limits or
prohibits any business practices of TASS or any of its Subsidiaries in any area;
and (v) none of them is materially burdensome to TASS or its Subsidiaries.

         Section 3.14 Real Property and Leaseholds.  Set forth in the Disclosure
Letter and on Schedule  3.14 is (i) a brief  description  of each parcel of real
property,  including  plants,  structures or improvements  thereon,  owned by or
leased to TASS or any of its  Subsidiaries  and (ii) a description  of all other
interests,  if any,  in real  property  owned or  claimed  by TASS or any of its
Subsidiaries. Schedule 3.14 contains a true copy of each of the deeds, leases or
other documents  evidencing such other interests listed in the Disclosure Letter
and on Schedule 3.14 and such further details as Tremont has requested.

         Section 3.15 Intellectual  Property.  Schedule 3.15 contains a complete
and correct list of all (i) U.K.,  U.S. and other  patents,  trademark and trade
name  registrations,  trademarks  and trade  names,  brandmarks  and brand  name
registrations,  servicemarks  and servicemark  registrations,  assumed names and
copyrights  and  copyright  registrations,  owned in whole or in part or used by
TASS or any of its Subsidiaries, and all applications therefor,


                                         123

<PAGE>



(ii) inventions,  discoveries,  improvements,  processes,  formulae, proprietary
rights  and  trade  secrets  relating  to the  business  of  TASS  or any of its
Subsidiaries,  and (iii)  licenses and other  agreements to which TASS or any of
its  Subsidiaries  is a party or  otherwise  bound  which  relate  to any of the
foregoing.  TASS or any such  Subsidiary  owns or has the legal  and  beneficial
right to use all of the foregoing;  no  proceedings  have been  instituted,  are
pending  or,  to the best of the  knowledge  of TASS,  Meaden  and  Taylor,  are
threatened,  which  challenge the rights of TASS or any of its  Subsidiaries  in
respect  thereto or the validity  thereof  and, to the best of the  knowledge of
TASS, Meaden and Taylor,  there is no valid basis for any such  proceedings;  to
the best of the  knowledge  of TASS,  Meaden and Taylor,  none of the  aforesaid
violates any laws, statutes,  ordinances or regulations,  or has at any time for
which the statutory  period of limitations  applicable to such  infringement has
expired  infringed  upon or violated any rights of privacy or libel or any other
rights of others including but not limited to any copyright infringement,  or is
being   infringed  by  others   including  but  not  limited  to  any  copyright
infringement;  and none of the  aforesaid is subject to any  outstanding  order,
decree, judgment, stipulation or charge.

         Section  3.16  No  Violation  of  Law.  Neither  TASS  nor  any  of its
Subsidiaries,  nor  any  of  its  or  their  respective  employee  shareholders,
executive  directors,  officers  or other  employees  within  the scope of their
respective employment is engaging in any activity or omitting to take any action
as a result  of  which  any of them is in  violation  of any  applicable  order,
injunction  or decree,  nor are any of them,  to the best of TASS's and Meaden's
and Taylor's actual knowledge,  engaging in any activity or omitting to take any
action as a result


                                             124

<PAGE>



of which (i) any of them is in violation of any law, rule, regulation, zoning or
other ordinance, statute, or any other requirement of any court or governmental,
regulatory or  administrative  body or agency,  applicable to TASS or any of its
Subsidiaries,  the business of TASS or any of its  Subsidiaries or any of its or
their properties or assets; or (ii) there is likely to be experienced a Material
Adverse Effect.

         Section  3.17  Approvals;  Government  Regulation.  (a)  Set  forth  on
Schedule  3.17(a)  is a  complete  and  correct  list  of all  governmental  and
administrative   consents,   permits,    appointments,    approvals,   licenses,
certificates  and  franchises  which  are  necessary  for the  operation  of the
business  of  TASS  and/or  its   Subsidiaries,   including   all  licenses  and
registrations required by the SFA for TASS and/or any of its Subsidiaries and/or
any of its or their respective shareholders,  directors,  officers or employees,
all of which have been  obtained by TASS and/or  such  Subsidiaries  and/or such
shareholders, directors, officers or employees and are in full force and effect.

                  (b) Except as set forth in the Disclosure Letter, neither TASS
nor any of its  Subsidiaries  nor any of its or their  respective  shareholders,
directors, officers or employees, nor any entity presently controlled by TASS or
any  of its  Subsidiaries  or any  of  its  or  their  respective  shareholders,
directors,  officers or  employees,  nor, to the best of the knowledge of Meaden
and Taylor, any former shareholder, director, officer or employee of TASS or any
of its Subsidiaries,  or any entity previously  controlled by TASS or any of its
Subsidiaries,  or  any  of  its or  their  respective  shareholders,  directors,
officers or employees,]


                                    125

<PAGE>


at any time  during the five (5) year  period  prior to the date hereof has been
(i) subject to any expulsion, bar, fine, civil penalty or censure, suspension or
revocation of membership or registration,  injunction or other sanction (each, a
"Disciplinary Action") through an adverse determination, voluntary settlement or
otherwise  in an action or  proceeding  brought  before the SFA,  the SEC or any
other U.K. or U.S. or other agency or regulatory authority,  any U.K. or U.S. or
other security or other exchange or any self-regulatory organization, nor is any
such Disciplinary  Action pending, or (ii) charged with, been convicted or found
or pled guilty to or nolo  contendere to any felony in any U.K. or U.S. or other
court,  or been found by or by agreement of settlement  with, any U.K.,  U.S. or
other court or agency or regulatory  authority,  to have violated any provision,
or rule or regulation  thereunder,  of the Securities Act, the Exchange Act, the
Investment  Advisors  Act, the  Investment  Company Act,  the  Companies  Act or
similar statute,  rule regulation of any U.K. or U.S. or other jurisdiction,  or
any rule or  regulation  of the SFA nor is any such  charge or  action  pending.
There does not exist, to the best of the knowledge of Meaden and Taylor,  nor is
there  reasonably  likely to occur,  any occurrence or state of facts  involving
TASS or any of its Subsidiaries, or any of its or their respective shareholders,
officers,  directors or employees, which would reasonably be likely to prohibit,
terminate,  suspend  or  materially  and  adversely  affect  any  registrations,
licenses or qualifications of TASS, or any of its Subsidiaries, or any of its or
their respective shareholders, directors, officers or employees with the SFA and
any  U.K.,  U.S.  or  other  agency  or any  regulatory  authority,  to which it
currently is or proposes to be subject.  Set forth on Schedule 3.17(b) is a copy
of any and all filings,  reports, notices, or other correspondence filed with or
submitted to any and all governmental agencies and


                                     126
<PAGE>



regulatory  authorities  within the past three (3) years with respect to TASS or
any of its  Subsidiaries  or its or  their  respective  shareholders,  officers,
directors and employees.

                  (c) TASS is and has been  since  1991  duly  registered  as an
adviser with the SFA or its  predecessor.  TASS is in compliance  with all laws,
rules and regulations  requiring  registration,  licensing or qualification,  or
otherwise regulating the conduct of its business as an adviser where its failure
to so comply is likely to have a Material Adverse Effect. Each such registration
is in full force and  effect.  TASS has  previously  disclosed  to  Tremont  its
communications  with  the SFA  regarding,  describing  or  referring  to  TASS's
permitted  activities  under the rules and  regulations of the SFA or such other
applicable  rules,  regulations and laws.  Except as set forth in the Disclosure
Letter, TASS has filed all forms,  reports and documents required to be filed by
it with the SFA up to and since December 31, 1998. As of their respective dates,
such forms, reports and documents (i) were prepared in accordance with the rules
and  regulations of the SFA, and (ii) did not contain any untrue  statement of a
material fact or omit to state a material fact required to be stated  therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made,  not  misleading.  Under the rules and  regulations of the
SFA,  the  following  parties  are deemed to be  "controllers"  of TASS:  Nicola
Meaden, Laurence Huntington Taylor, II and Norma Smith.

                  (d) Except as disclosed  to Tremont  prior to the date hereof,
TASS is and has been since June 7, 1996 duly registered as an investment adviser
under the Investment


                                   127

<PAGE>



Advisers  Act;  TASS  is  registered  as an  investment  adviser  in the  states
referenced in item 7, Part I of its current Form ADV, and is in compliance  with
all  state  laws  requiring  registration,  licensing  or  qualification  as  an
investment  adviser;  and each such  federal and state  registration  is in full
force and effect.  TASS has delivered to Tremont a true and complete copy of its
Form ADV,  as amended to date,  filed by TASS with the SEC;  copies of all state
registration forms,  likewise as amended to date; copies of all reports required
to be filed or kept by TASS  pursuant  to the  Investment  Advisers  Act and the
rules  promulgated  thereunder and pursuant to applicable  state  statutes,  and
copies of any and all notices,  customer complaints or other correspondence of a
regulatory  nature filed in connection  with TASS or to which TASS or any of its
shareholders,  directors, officers or employees is a party or otherwise involves
TASS or any of such other parties.  Except as disclosed to Tremont by TASS prior
to the date hereof,  TASS has filed all  amendments  required to be filed to its
Form ADV and state registration forms under federal and state law; and has filed
all  reports  required  to be filed  by it under  the  Exchange  Act  (including
Sections 13(d), (g) and (f) thereof) and the rules promulgated thereunder.

                  (e) TASS is not an "investment company," within the meaning of
the  Investment  Company  Act,  which is  required  to be  registered  under the
Investment  Company  Act in order to engage  in the  transactions  described  in
Section 7 of the  Investment  Company  Act.  TASS is not a "broker"  or "dealer"
within the meaning of the  Exchange  Act.  Copies of all  inspection  reports or
similar documents  furnished to TASS by the SEC or state regulatory  authorities
since December 31, 1997 have been provided to Tremont. TASS is


                                      128

<PAGE>



not  required to disclose any  information  to clients  under SEC Rule  206(4)-4
promulgated under the Investment Advisers Act.

                  (f) TASS has adopted a formal code of ethics, a true, complete
and  accurate  copy of which has been  provided to Tremont.  Its  policies  with
respect to avoiding  conflicts  of interest are as set forth in its Form ADV, as
amended,  which has been delivered to Tremont.  There have been no violations or
allegations of violations of such policies.

                  (g) As of their  respective  dates,  all  reports  and notices
filed by or on  behalf  of TASS,  or any of its  Subsidiaries,  or any of its or
their respective shareholders,  directors,  officers or employees with any U.K.,
U.S.  or  other  agency  or  regulatory  authority,   foreign  or  domestic,  as
contemplated  under this Section 3.17, (i) were prepared in accordance  with the
rules and  regulations of the SFA, the  Securities  Act, the Exchange Act or any
other similar statute,  rule or regulation,  and (ii) did not contain any untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances under which they were made, not misleading.

         Section 3.18  Litigation.  Except as set forth on Schedule 3.18,  there
are no  claims,  suits  or  actions,  or  administrative,  arbitration  or other
proceedings or  governmental  investigations  or complaints,  pending or, to the
best of the  knowledge of Meaden and Taylor,  threatened  against or relating to
TASS, or any of its Subsidiaries, or any of its or their


                                     129

<PAGE>



respective shareholders, directors, officers, or employees, the business of TASS
or any of its  Subsidiaries  or any of its or  their  respective  properties  or
assets before any U.K.,  U.S. or other court,  administrative,  governmental  or
regulatory  authority or body.  There are no  judgments,  orders,  stipulations,
injunctions,  decrees or awards in effect  which  relate to TASS,  or any of its
Subsidiaries  or  any  of  its  or  their  respective  shareholders,  directors,
officers,  or employees,  the business of TASS or any of its Subsidiaries or any
of its or their respective  properties or assets,  the effect of which is (i) to
limit, restrict, regulate, enjoin or prohibit any business practice in any area,
or the  acquisition of any properties,  assets or businesses,  or (ii) likely to
have  a  Material  Adverse  Effect.  Neither  Meaden  nor  Taylor  knows  of any
reasonable  basis for any  future  claim,  suit,  proceeding,  investigation  or
complaint  against  either TASS or any of its  Subsidiaries  or either Meaden or
Taylor which might have a Material Adverse Effect following the Closing Date.

         Section 3.19 Insurance.  Schedule 3.19 contains a true and correct copy
of the insurance policy maintained by TASS. Subject to the information set forth
in the Disclosure Letter, all assets and risks of TASS and its Subsidiaries of a
material  nature  are  covered  by such  policy,  which is valid  and  currently
effective and is of a type and in an amount which is consistent  with  customary
practices  and  standards  of companies  engaged in  businesses  and  operations
similar to those of TASS and its  Subsidiaries  including,  without  limitation,
data base businesses.



                                     130

<PAGE>



         Section 3.20 Labor, Benefit and Employment Agreements and Arrangements.
(a)  Schedule  3.20 to the  Disclosure  Letter  hereto  contains a complete  and
correct list and summary  description of all (i) union,  collective  bargaining,
employment,  management,  termination and consulting agreements to which TASS or
any of its Subsidiaries is a party or otherwise bound, whether under the laws of
England or Wales or otherwise,  and (ii)  compensation  plans and  arrangements;
bonus and incentive  plans and  arrangements;  deferred  compensation  plans and
arrangements;  pension and retirement plans and arrangements; profit sharing and
thrift plans and arrangements; stock or share purchase and stock or share option
plans and arrangements; hospitalization and other life, medical expenses, health
or  disability  insurance  or  reimbursement  programs;   holiday,  sick  leave,
severance,  vacation, tuition reimbursement,  personal loan and product purchase
discount  policies  and  arrangements;  and all  other  plans  or  arrangements,
authorized  by  contract  or required or  permitted  by statute,  providing  for
benefits for employees of TASS or any of its Subsidiaries.  No party to any such
agreement  set  forth  in  Schedule  3.20 is in  breach  thereof  or in  default
thereunder,  and no event  has  occurred  that with the  passage  of time or the
giving of notice, or both, would constitute such a breach or default.

                  (b) In addition,  Schedule 3.20 sets forth a true and complete
list  showing  the  names  of  all  persons  employed  by  TASS  and  any of its
Subsidiaries  as of the  date  hereof  and the  aggregate  compensation  paid or
payable  to each  such  person  for each of the 1998  and 1997  calendar  years,
together with such person's renumeration (including accrued but unpaid


                                       131

<PAGE>



renumeration,  as applicable), job title, notice period, date of commencement of
continuous employment and cost of certain benefits.

                  (c) (i) Except as set forth on Schedule 3.20, neither TASS nor
any of its  Subsidiaries  is obliged to increase the  renumeration to any of its
employees,  whether  pursuant to a statutory  or  contractual  obligation;  (ii)
except as set forth on Schedules 3.20 or 7.3, there are no amounts owing by TASS
or any of its  Subsidiaries  to any employee or former  employee  other than for
renumeration  accrued,  commissions  earned or  reimbursable  business  expenses
incurred  for the period in which the date of this  Agreement  falls;  and (iii)
neither TASS nor any of its  Subsidiaries  has incurred any liability within the
last  twelve  (12)  months  for any  breach of the terms of, or  related  to the
termination  of,  the  employment  of any  employee,  and,  to the  best  of the
knowledge  of Meaden and Taylor,  there are no  circumstances  which  reasonably
could give rise to any such liability.

         Section 3.21 Affiliated or  Inter-Company  Transactions.  Except as set
forth  on  Schedule  3.21  or  in  the  Financial  Statements,  there  exist  no
inter-company   transactions  between  TASS  and  any  of  its  Subsidiaries  or
affiliates,  and  none  of  TASS's  shareholders  and  none of the  officers  or
directors  of TASS or any of its  Subsidiaries  are  indebted to, or otherwise a
party to any transaction involving, TASS or any of its Subsidiaries, and neither
TASS nor any of its  Subsidiaries  is indebted  to, or  otherwise a party to any
transaction involving, any of such persons.


                                        132

<PAGE>



         Section  3.22  Banks;  Powers of  Attorney.  Schedule  3.22  contains a
complete and correct  list showing (i) the names and  addresses of each bank and
other  financial  institutions in which TASS or any of its  Subsidiaries  has an
account or safe  deposit  box and the names of all  persons  authorized  to draw
thereon  or who  have  access  thereto,  and (ii) the  names of all  persons  or
entities,  if  any,  holding  powers  of  attorney  from  TASS  or  any  of  its
Subsidiaries and a summary statement of the terms thereof.

         Section 3.23 Clients.  Schedule 3.23 to the Disclosure  Letter contains
(except in cases where  disclosure prior to Closing would constitute a breach of
agreed  client  confidentiality,  in which  case a side  letter  providing  such
information will be delivered at and as of Closing) the name and address of each
of TASS's and its Subsidiaries'  clients or subscribers and, in the case of each
of the ten  largest  clients or  subscribers  of TASS and its  Subsidiaries,  by
volume of sales,  an  approximation  of the  percentage  of total sales  dollars
received for the years ended  December 31, 1998,  December 31, 1997 and December
31, 1996 from each of such  clients or  subscribers.  Since  December  31, 1997,
neither TASS nor any of its Subsidiaries has received any notice from any of its
clients or subscribers that they intend to cease doing business with TASS or any
of its Subsidiaries,  other than immaterial cancellations of subscriptions,  and
neither TASS nor the  Controlling  Shareholders  have any reason to believe that
any of the clients or subscribers of TASS or any of its  Subsidiaries  intend to
cease doing business to any material extent with TASS or any of its Subsidiaries
as a result of the Reorganization or otherwise.



                                               133

<PAGE>



         Section  3.24  Year  2000  Readiness.  TASS is  aware  and has  general
knowledge of what is commonly referred to as "Year 2000" ("Y2K") problems,  and,
to the  best of the  knowledge  of  Meaden  and  Taylor,  TASS  and  each of the
Subsidiaries  are,  and as of the Closing Date will be, in  compliance  with all
applicable U.K., U.S. and other laws, rules and regulations, including the rules
and regulations of the SEC and those of the SFA relating to Y2K compliance. TASS
and each of its Subsidiaries have taken, or are currently taking, all reasonably
appropriate  steps to avoid Y2K  problems,  including  the  internal  testing of
TASS's and each  Subsidiary's  software,  "point-to-point"  testing of  software
(i.e.,  testing with subscribers and service providers),  and the implementation
of tested  software,  and neither the SEC, the SFA nor any other regulatory body
has  indicated to TASS or any of its  Subsidiaries  that the steps it is or they
are taking to address Y2K problems are inadequate,  inappropriate  or of concern
to it. Schedule 3.24 describes the details of such testing as described herein.

         Section 3.25 Brokers. No agent, broker, person or firm acting on behalf
of TASS or any of the Shareholders, or under its, his or her or their authority,
is or will be  entitled  to a  financial  advisory  fee,  brokerage  commission,
finder's fee, or other like payment in connection  with any of the  transactions
contemplated hereby.

         Section  3.26  Adequacy  of   Representations   and   Warranties.   All
representations  and warranties of the  Shareholders  and TASS contained  herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as if made on and as of such date.


                                          134

<PAGE>




                                   ARTICLE IV
              REPRESENTATIONS AND WARRANTIES AS TO THE SHAREHOLDERS

         The  Shareholders,  severally  and not jointly,  hereby  represent  and
warrant to Tremont with respect to each of themselves only as follows:

         Section 4.1 Ownership of Shares and Preference Shares. Each Shareholder
is the  legal  and  beneficial  owner of all of the  ordinary  shares  indicated
opposite  his or her  name on  Schedule  4.1.  Each  Shareholder  has  good  and
marketable  title to the Shares  owned by him or her,  free and clear of any and
all liens, claims, options, charges, encumbrances and restrictions of any nature
whatsoever and each Shareholder has the right, power,  authority and capacity to
enter into this  Agreement and to sell,  assign,  transfer and deliver with full
title  guarantee the Shares owned by him or her, and the complete  right,  title
and interest thereto, to Tremont as herein provided.

         Section  4.2  Outstanding  Rights  to  Acquire  Shares.  There  are  no
outstanding options,  warrants,  rights, calls, commitments,  conversion rights,
puts,  plans,   agreements  or  commitments  of  any  character  to  which  such
Shareholder is a party or otherwise  bound which provide for the  acquisition or
disposition  of any  share  capital  or  capital  stock  of  TASS  or any of its
Subsidiaries  owned by him or her;  and on the  Closing  Date,  there will be no
options, warrants,  rights, calls, commitments,  conversion rights, puts, plans,
agreements or commitments of any character to which such  Shareholder  will have
been a party or otherwise


                                        135

<PAGE>



bound  providing  for the  acquisition  or  disposition  of any share capital or
capital  stock of TASS or any of its  Subsidiaries  owned by him or her,  or any
obligations  or  securities  owned  by such  Shareholder  convertible  into,  or
exchangeable  for, or  exercisable  into,  any share capital or capital stock of
TASS or any of its  Subsidiaries or other equity interests in TASS or any of its
Subsidiaries.

         Section 4.3  Transfer of Title.  At the  Closing,  upon the delivery by
each  Shareholder to Tremont of the share  certificates  representing the Shares
owned by him or her, and duly executed  stock transfer forms in favor of Tremont
in respect of such Shares and the entry of Tremont in the register of members of
TASS as the holder of such Shares,  Tremont will have good and marketable  title
to such Shares, free and clear of any and all liens, claims,  options,  charges,
encumbrances and restrictions of any nature whatsoever.

         Section 4.4 Binding  Commitment.  Each  Shareholder  has the  necessary
power  and  authority  to  enter  this  Agreement  and to  carry  out his or her
obligations  hereunder.  This  Agreement has been duly and validly  executed and
delivered by each Shareholder and  constitutes,  and when executed and delivered
by all parties thereto,  all such other  agreements and instruments  referred to
herein to which such Shareholder is a party will be duly and validly executed by
such Shareholder and will constitute, the legal, valid and binding obligation of
such Shareholder  enforceable  against such Shareholder in accordance with their
respective  terms (except to the extent that the  enforceability  thereof may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
other similar laws affecting


                                      136          
<PAGE>



creditors' rights generally or by the principles governing the availability of
equitable remedies).

         Section 4.5 No  Conflict;  Required  Filings and  Consents.  Except for
obtaining the Required Consents, the execution, delivery and performance by each
Shareholder and each Preferred Shareholder of this Agreement or of any agreement
or instrument to be executed and  delivered by him or her pursuant  hereto,  and
the consummation by each Shareholder of the transactions contemplated hereby and
thereby,  do not and will not: (i) violate or conflict with, or, in the case, of
each Smith,  Benard and Myers,  to the best of each of their  actual  knowledge,
violate or conflict with, the Organizational  Documents of TASS; (ii) violate or
conflict with or  constitute a default (or an event which,  with notice or lapse
of time, or both,  would  constitute a default) under any agreement,  indenture,
instrument or understanding to or such Shareholder is a party or by which she or
he is bound or violate any  judgment,  decree,  law, rule or regulation to which
such  Shareholder  is a party or by which he or she is bound,  and,  except with
respect to any inability of such  Shareholder to transfer his or her Shares or a
breach  by  such  Shareholder  of  his  or her  representations  and  warranties
contained in Section 4.3, to which such qualification shall not apply, where any
such violation, conflict or default is likely to have a Material Adverse Effect;
or (iii)  result in the  creation  of, or give any party the right to create any
lien or encumbrance upon the Shares.

         Section 4.6       Securities Matters.  With respect to the shares of 
Tremont Class B Common Stock to be received by each Shareholder in exchange for 
his or her Shares, such


                                        137

<PAGE>



Shareholder represents and warrants as set forth below. For the purposes of this
Section 4.6,  the Shares of Tremont  Class B Common Stock to be received by each
Shareholder hereunder shall be referred to as the "Securities."

                  (a) Each Shareholder  understands that the Securities have not
been  registered  under the Securities  Act, or under the securities laws of any
U.S.  state  jurisdiction  or  other  jurisdiction,  by  reason  of a  specified
exemption from the registration provisions thereunder.

                  (b) Each Shareholder  acknowledges that the Securities must be
held indefinitely  unless they are subsequently  registered under the Securities
Act and  under  applicable  state  securities  laws or an  exemption  from  such
registration  is available.  Each  Shareholder has been advised or is aware that
Rule 144 promulgated  under the Securities Act, which permits limited resales of
securities  purchased in a private  placement,  is not  currently  available for
resale of the Securities.

                  (c) Each  Shareholder has received and carefully  reviewed all
information which such Shareholder deemed relevant in connection with his or her
investment  made  hereby,   including  without  limitation  this  Agreement.  In
addition,  each Shareholder  acknowledges that it has had the opportunity to ask
questions of, and receive  answers from,  Tremont's  representatives  concerning
Tremont's business, financial condition and results of operations.


                                          138

<PAGE>




                  (d) Each  Shareholder  is aware  that no  federal  or state or
other agency has passed upon or made any finding or determination concerning the
fairness  of the  transactions  contemplated  by  this  Agreement  or any of the
related  agreements  and  instruments  or the adequacy of the  disclosure of the
exhibits and schedules hereto or thereto.

                  (e) Each Shareholder understands that all certificates for the
Securities  issued  to him or her  shall  bear a  legend  in  substantially  the
following form:

                           "THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES  ACT OF 1933,  AS AMENDED,  OR QUALIFIED  UNDER ANY
                  STATE  SECURITIES  LAWS.  THE  SECURITIES  MAY NOT BE OFFERED,
                  SOLD,  TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  WITHOUT  SUCH
                  REGISTRATION  OR UNLESS  THE  ISSUER  RECEIVES  AN  OPINION OF
                  COUNSEL (WHICH MAY BE COUNSEL FOR THE ISSUER), SATISFACTORY TO
                  THE ISSUER  (BOTH AS TO THE ISSUER OF THE OPINION AND THE FORM
                  AND SUBSTANCE THEREOF), THAT SUCH DISPOSITION WILL NOT REQUIRE
                  REGISTRATION  OF SUCH  SECURITIES  UNDER THE SECURITIES ACT OF
                  1933,  AS  AMENDED,  OR  ANY  STATE  SECURITIES  LAWS."  THESE
                  SECURITIES ARE SUBJECT TO FURTHER RESTRICTIONS AS SET FORTH IN
                  THAT CERTAIN AGREEMENT AND PLAN OF REORGANIZATION  DATED AS OF
                  MARCH [9], 1999."







                                        139

<PAGE>




                                    ARTICLE V
                  REPRESENTATIONS AND WARRANTIES AS TO TREMONT

         Tremont hereby  represents and warrants to TASS and the Shareholders as
follows:

         Section  5.1  Organization  and  Qualification;  Subsidiaries.  Each of
Tremont and its Subsidiaries is a corporation,  duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the requisite power and authority and any necessary  governmental  authority
to own,  operate or lease the  properties  that it owns,  operates  or leases or
purports  to own,  operate  or lease and to carry on its  business  as it is now
being conducted,  and is duly qualified as a foreign corporation to do business,
and is in good  standing,  in  each  jurisdiction  where  the  character  of its
properties owned,  operated or leased or the nature of its activities makes such
qualification  necessary,  except for such  failure  which,  alone or when taken
together with all other such failures, would not have a Material Adverse Effect.
A true and complete  list of all of Tremont's  Subsidiaries,  together  with the
jurisdiction  of  incorporation  of each  Subsidiary  and the percentage of each
Subsidiary's  outstanding  capital  stock or  other  equity  interests  owned by
Tremont or a Subsidiary of Tremont, is set forth in Schedule 5.1 hereto. For the
purposes of this Article V,  reference to  "Subsidiaries"  of Tremont shall mean
its significant Subsidiaries unless the context otherwise requires.



                                        140

<PAGE>



         Section  5.2  Certificate  of  Incorporation.  Tremont  has  heretofore
furnished to TASS a true, complete and correct copy of Tremont's  certificate of
incorporation  and  by-laws,  each as  amended  to the date  hereof,  which  are
contained in Schedule  5.2. Such  certificate  of  incorporation  and by-laws of
Tremont  are  in  full  force  and  effect.  Neither  Tremont  nor  any  of  its
Subsidiaries  is in violation of any of the  provisions  of its  certificate  of
incorporation or by-laws.

         Section 5.3  Capitalization.  The  authorized  capital stock of Tremont
consists of 5,000,000  shares of Class A common stock,  par value $.01 per share
(the "Tremont Class A Common Stock"),  and 10,000,000  shares of Tremont Class B
Common  Stock.  As of December 31,  1998,  1,284,718  shares of Tremont  Class A
Common Stock and  2,939,604  shares of Tremont Class B Common Stock were validly
issued and  outstanding,  fully paid and  nonassessable.  Except as set forth on
Schedule 5.3 hereto,  since December 31, 1998, no additional shares of Tremont's
capital  stock have been issued.  All the shares of Tremont Class B Common Stock
issuable in exchange for the Shares in accordance  with this  Agreement will be,
when  so  issued,   duly   authorized  and  validly   issued,   fully  paid  and
nonassessable.  Except  as set forth on  Schedule  5.3,  there  are no  options,
warrants,   puts,  calls,   conversion  rights  or  other  rights,   agreements,
arrangements  or commitments of any character  obligating  Tremont or any of its
Subsidiaries to acquire, issue or sell any shares of capital stock of Tremont or
other equity interests in Tremont, or any obligations or securities  convertible
into or exchangeable, for, or exercisable into, any shares of capital stock of


                                      141             

<PAGE>



Tremont or other equity interests in Tremont,  or any voting trusts,  proxies or
agreements relating to the voting of Tremont's capital stock.

         Section  5.4  Reports.  (a)  Tremont  has filed all forms,  reports and
documents  required  to be filed with the SEC since  December  31,  1997 and has
previously  furnished TASS and the  Shareholders  with true and complete  copies
(without  exhibits) of its (i) Annual Reports on Form 10-KSB for the years ended
December 31, 1996 and 1997, respectively,  as filed with the SEC, (ii) Quarterly
Reports on Form 10-QSB for the three  months,  six months and nine months  ended
March 31, 1998,  June 30, 1998 and  September 30, 1998,  respectively  (all such
reports set forth in (i) and (ii) being collectively referred to as the "Tremont
Financial  Statements"),  (iii) proxy statements relating to all meetings of its
stockholders  (whether  annual or special)  since December 31, 1997 and (iv) all
other  reports or  registration  statements  filed by Tremont with the SEC since
December 31, 1997. As of their respective dates, such reports and statements (i)
were prepared in accordance  with the  requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not contain any untrue  statement
of a  material  fact or omit to state a  material  fact  required  to be  stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances under which they were made, not misleading.

                  (b) The  financial  statements  contained  in such reports and
statements have been prepared in accordance with generally  accepted  accounting
principles applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes


                                      142               

<PAGE>



thereto)  and  fairly  present  the  financial  position  of  Tremont  as at the
respective  dates thereof and the results of operations and changes in financial
position of Tremont for the periods indicated, except that the unaudited interim
financial  statements  were or are  subject  to normal  and  recurring  year-end
adjustments which were not or are not expected to be material in amount.

                  (c) Tremont has  heretofore  furnished  to TASS  complete  and
correct  copies of all  amendments  and  modifications  that have been  filed by
Tremont with the SEC to all  agreements,  documents and other  instruments  that
previously had been filed by Tremont with the SEC and are currently in effect.

         Section  5.5  Authority  Relative  to this  Agreement.  Tremont has the
necessary  corporate  power and  authority to enter into this  Agreement  and to
carry  out  its  obligations  hereunder.  The  execution  and  delivery  of this
Agreement by Tremont, and each other agreement and instrument to be executed and
delivered  by it  pursuant  hereto,  and  the  consummation  by  Tremont  of the
transactions  contemplated  hereby and thereby have been duly  authorized by all
necessary corporate action on the part of Tremont.  This Agreement has been duly
and validly executed and delivered by Tremont and constitutes, and when executed
and  delivered  by all other  parties  thereto,  all such other  agreements  and
instruments  to which  Tremont is a party will be duly and  validly  executed by
Tremont  and will  constitute,  the  legal,  valid and  binding  obligations  of
Tremont,  enforceable  against  it in  accordance  with their  respective  terms
(except to the extent that the enforceability thereof


                                   143
<PAGE>



may be limited by applicable bankruptcy, insolvency, reorganization,  moratorium
or other similar laws affecting creditors' rights generally or by the principles
governing the  availability  of equitable  remedies).  The board of directors of
Tremont has approved the  Reorganization  and the  transactions  contemplated by
this Agreement, and Tremont has delivered to TASS and Meaden and Taylor complete
and  correct  copies of all  resolutions  (whether  adopted  at a meeting  or by
written  consent)  adopted by the board of  directors  of Tremont  with  respect
thereto.

         Section  5.6 No  Conflict;  Required  Filings  and  Consents.  (a)  The
execution,  delivery  and  performance  of this  Agreement  by  Tremont  and the
consummation by Tremont of the transactions contemplated hereby, do not and will
not: (i) violate or conflict with the certificate of incorporation or by-laws of
Tremont or the  certificate of  incorporation  or the by-laws or such equivalent
organizational  documents of any of its  Subsidiaries;  (ii) violate or conflict
with or  constitute a default (or an event which,  with notice or lapse of time,
or both, would constitute a default) under any agreement,  indenture, instrument
or  understanding  to which Tremont or any of its  Subsidiaries is a party or by
which it is bound, or violate any judgment,  decree,  law, rule or regulation to
which  Tremont  or any of its  Subsidiaries  is a party or by which it is bound,
where any such  violation,  conflict  or  default  is likely to have a  Material
Adverse Effect;  (iii) result in the creation of, or give any party the right to
create any lien or encumbrance  upon the property or assets of Tremont or any of
its  Subsidiaries  which is  likely  to have a  Material  Adverse  Effect;  (iv)
terminate  or modify,  or give to another the right to  terminate  or modify the
provisions or terms of any agreement or

                                      144
                                               

<PAGE>



commitment  to which Tremont or any of its  Subsidiaries  is a party or by which
Tremont or any  Subsidiary  is subject or bound the result of which is likely to
have a  Material  Adverse  Effect;  (v)  result in any  suspension,  revocation,
impairment,  forfeiture or  non-renewal of any permit,  license,  qualification,
authorization or approval applicable to Tremont or any of its Subsidiaries which
is likely to have a Material Adverse Effect; or (vi) materially interfere with a
adversely  affect the ability of Tremont or any of its  Subsidiaries to carry on
the  business  of  Tremont  or  such  Subsidiary   after  the  Closing  Date  on
substantially the same basis as it is now conducted.

                  (b)  Except  for  applicable  requirements,  if  any,  of  the
Exchange Act, the  Securities  Act, the  Investment  Advisors Act, the Companies
Act,  IITSSA and applicable  U.S. blue sky and other U.K. laws,  neither Tremont
nor any of its  Subsidiaries  is required to submit any notice,  report or other
filing with any U.S.,  U.K. or other  governmental  authority in connection with
the execution,  delivery or performance of this Agreement or the consummation of
the transactions contemplated hereby. Except for obtaining material consents, if
any, set forth in Schedule 5.6(b), no waiver, consent, approval or authorization
of any U.S., U.K. or other  governmental or regulatory  authority is required to
be obtained or made by either Tremont or any of its  Subsidiaries  in connection
with its execution,  delivery or performance of this Agreement,  except for such
waivers,  consents,  approvals or authorizations  the failure to obtain which is
not likely to result in a Material  Adverse Effect or interfere with the ability
of Tremont to perform or carry out its obligations under this Agreement.


                                       145             

<PAGE>




         Section 5.7 Absence of Certain  Changes or Events.  Since September 30,
1998,  except as  contemplated  in this  Agreement  or any  exhibit or  schedule
hereto,  there has not been or occurred (a) any event or condition which,  alone
or when taken together with any other related or similar event or condition,  is
likely to have a Material  Adverse Effect;  (b) any damage,  destruction or loss
(whether  or not  covered  by  insurance)  with  respect to any of the assets of
Tremont or any of its Subsidiaries  which, alone or when taken together with any
other damage,  destruction or loss, is likely to have a Material Adverse Effect;
(c) except as otherwise  set forth  herein,  any  redemption  or, to the best of
Tremont's knowledge, other acquisition of Tremont's common or preferred stock or
any of its  Subsidiaries  or any declaration or payment of any dividend or other
distribution  in cash,  stock or property  with respect to  Tremont's  common or
preferred  stock;  (d) any entry into any  material  commitment  or  transaction
(including, without limitation, any borrowing or capital expenditure) other than
in the ordinary course of business or as contemplated by this Agreement; (e) any
transfer of, or rights granted under, any leases, licenses, agreements, patents,
trademarks,  trade  names or  copyrights;  (f) any  mortgage,  pledge,  security
interest or imposition of lien or other  encumbrance  on any asset of Tremont or
any of its Subsidiaries;  or (g) any change by Tremont in accounting  principles
or  methods.  Since  September  30,  1998,  Tremont  and its  Subsidiaries  have
conducted their business only in the ordinary course and in a manner  consistent
with past  practice and have not made any material  change in the conduct of the
business or operations of Tremont and its Subsidiaries taken as a whole. Without
limiting the generality of the foregoing,  Tremont has not since such date, made
any  changes in  executive  compensation  levels or in the manner in which other
employees of Tremont or its

                                         146

<PAGE>



Subsidiaries  are  compensated or paid or agreed to pay any pension,  retirement
allowance  or other  employee  benefit not  required or  permitted  by any plan,
agreement  or  arrangement  existing  on such date to any  director,  officer or
employee,  whether  past or  present,  or  committed  itself  to any  collective
bargaining  agreement  (except for  renewals of existing  collective  bargaining
agreements)  or to any additional  pension,  profit-sharing,  bonus,  incentive,
deferred compensation,  stock purchase,  stock option, stock appreciation right,
group  insurance,  severance  pay,  retirement or other  employee  benefit plan,
agreement or arrangement,  or to any employment or consulting  agreement with or
for the  benefit  of any  person,  or to amend any of such  plans or any of such
agreements in existence on such date.

         Section  5.8 Tax  Matters.  Tremont and each of its  Subsidiaries  have
filed or have caused to be filed with all required governmental agencies all tax
returns and reports required to be filed by Tremont or any of its  Subsidiaries,
and each has paid in full or made  adequate  provision  for the  payment of, all
Taxes,  interest,  penalties,  assessments and  deficiencies  shown to be due or
claimed to be due from any taxing authorities with respect to the periods ending
on or prior to the Closing Date.  The provision for income and other Taxes which
is set forth on the December 31, 1997 consolidated balance sheet of Tremont (the
"December  1997 Balance  Sheet") is adequate for all accrued and unpaid Taxes of
Tremont  and each of its  Subsidiaries  as of  December  31,  1997,  whether (i)
incurred  in  respect  of or  measured  by  income  of  Tremont  or  any  of its
Subsidiaries  for any periods  prior to the close of  business on that date,  or
(ii) arising out of  transactions  entered into, or any state of facts existing,
on or  prior to that  date.  Neither  Tremont  nor any of its  Subsidiaries  has
executed or filed with any


                                              147

<PAGE>



taxing  authority  any  agreement  extending  the period for the  assessment  or
collection  of any income or other taxes,  and is not a party to any pending or,
to the best of the knowledge of Tremont, threatened, action or proceeding by any
governmental  authority  for the  assessment  or  collection  of income or other
taxes.  All Taxes and other  assessments  and levies which Tremont or any of its
Subsidiaries  are  required  by law to  withhold  or to  collect  have been duly
withheld  and  collected,  and have been paid  over to the  proper  governmental
authorities or are held by Tremont,  or the  Subsidiary,  as the case may be, in
separate bank accounts for such payment.

         Section 5.9 Accounts Receivable.  The accounts and notes receivables of
Tremont and each of its  Subsidiaries  as of December  31, 1997 and all accounts
and  notes  receivables  acquired  by  Tremont  and  each  of  its  Subsidiaries
subsequent  to December 31, 1997 and prior to the close of business on September
30, 1998 have arisen in the ordinary  course of business,  have not been and are
not subject to valid  counterclaims or set-offs,  and, except as reserved for on
the Tremont  Financial  Statements,  Tremont is not aware of any  impediment  to
their collection.

         Section  5.10 Title to Property.  Tremont and each of its  Subsidiaries
have good and marketable  title, or valid leasehold rights in the case of leased
property,  to all real property and all personal  property  (other than personal
property  title to which is  specified  elsewhere  in this  Agreement)  owned or
leased by them,  or purported  to be owned or leased by them,  free and clear of
all liens, security interests, claims, encumbrances and charges, and is solely


                                     148
<PAGE>



legally and  beneficially  entitled to such  property,  except for (i) liens for
fees, taxes, levies,  imposts,  duties or governmental charges of any kind which
are not yet due or are being contested in good faith by appropriate  proceedings
which suspend the collection thereof,  (ii) liens created in the ordinary course
of business in connection with the leasing or financing of office,  computer and
related  equipment  and  supplies,  (iii) liens or defects in title or leasehold
rights  known,  or, in the  exercise of  reasonable  care,  should be known,  to
Tremont, which, alone or when taken together with any other liens or defects, do
not and will not have a  Material  Adverse  Effect,  or (iv)  liens set forth on
Schedule 5.10 hereto.

         Section 5.11 Intellectual  Property.  Schedule 5.11 contains a complete
and correct list of all (i) U.S. and foreign  patents,  trademark and trade name
registrations,   trademarks   and  trade  names,   brandmarks   and  brand  name
registrations,  servicemarks  and servicemark  registrations,  assumed names and
copyrights  and  copyright  registrations,  owned in whole or in part or used by
Tremont  or  any  of its  Subsidiaries,  and  all  applications  therefor,  (ii)
inventions, discoveries,  improvements,  processes, formulae, proprietary rights
and  trade  secrets   relating  to  the  business  of  Tremont  or  any  of  its
Subsidiaries, and (iii) licenses and other agreements to which Tremont or any of
its  Subsidiaries  is a party or  otherwise  bound  which  relate  to any of the
foregoing.  Tremont or any such  Subsidiary owns or has the legal and beneficial
right to use all of the foregoing;  no  proceedings  have been  instituted,  are
pending or, to the best of Tremont's knowledge, are threatened,  which challenge
the  rights of  Tremont or any of its  Subsidiaries  in  respect  thereto or the
validity thereof and, to the best of the best of Tremont's  knowledge,  there is
no valid basis for any such proceedings; to the


                                        149

<PAGE>



best of Tremont's knowledge,  none of the aforesaid violates any laws, statutes,
ordinances or  regulations,  or has at any time  infringed  upon or violated any
rights of  privacy  or libel or any other  rights  of others  including  but not
limited to any copyright infringement, or is being infringed by others including
but not limited to any  copyright  infringement;  and none of the  aforesaid  is
subject to any outstanding order, decree, judgment, stipulation or charge.

         Section  5.12 No  Violation  of  Law.  Neither  Tremont  nor any of its
Subsidiaries nor any of its or their respective executive directors, officers or
other employees within the scope of their  respective  employment is engaging in
any  activity or omitting to take any action as a result of which any of them is
in violation of any  applicable  order,  injunction or decree,  nor is it or are
they  engaging  in any  activity  or  omitting to take any action as a result of
which (i) to the best of Tremont's  knowledge,  none of them are in violation of
any law, rule,  regulation,  zoning or other  ordinance,  statute,  or any other
requirement of any court or governmental,  regulatory or administrative  body or
agency,  applicable  to  Tremont or any of its  Subsidiaries,  the  business  of
Tremont or any of its  Subsidiaries or any of its or their properties or assets;
or (ii) there is reasonably likely to be experienced a Material Adverse Effect.

         Section  5.13  Approvals;  Government  Regulation.  (a)  Set  forth  on
Schedule  5.13(a)  is a  complete  and  correct  list  of all  governmental  and
administrative   consents,   permits,    appointments,    approvals,   licenses,
certificates  and  franchises  which  are  necessary  for the  operation  of the
business of Tremont and/or its Subsidiaries, including all licenses and


                                           150

<PAGE>



registrations  required  by the SEC for Tremont  and/or any of its  Subsidiaries
and/or any of its or their respective directors,  officers or employees,  all of
which have been  obtained  by  Tremont  and/or  such  Subsidiaries  and/or  such
directors, officers or employees and are in full force and effect.

                  (b) Except as set forth on Schedule  5.13(b),  neither Tremont
nor  any of its  Subsidiaries  nor  any of its or  their  respective  directors,
officers or employees,  nor any entity presently controlled by Tremont or any of
its or their respective  directors,  officers or employees,  nor, to the best of
Tremont's knowledge, any former director,  officer or employee of Tremont or any
of its Subsidiaries,  nor any entity previously  controlled by Tremont or any of
its  Subsidiaries  or any of its or  their  respective  directors,  officers  or
employees, in the previous five (5) years has been (i) subject to any expulsion,
bar, fine,  civil penalty or censure,  suspension or revocation of membership or
registration,  injunction or other  sanction  (each,  a  "Disciplinary  Action")
through an adverse determination, voluntary settlement or otherwise in an action
or proceeding  brought before the SEC or any other domestic or foreign agency or
regulatory authority,  any domestic or foreign security or other exchange or any
self-regulatory  organization,  nor is any such Disciplinary  Action pending, or
(ii) charged with,  been convicted or found or pled guilty to or nolo contendere
to any felony in any domestic or foreign court, or been found by or by agreement
of settlement  with,  any court or agency or regulatory  authority,  domestic or
foreign, to have violated any provision,  or rule or regulation  thereunder,  of
the  Securities  Act,  the  Exchange  Act,  the  Investment  Advisors  Act,  the
Investment Company Act or similar statute, rule regulation of any

                                   151

<PAGE>



domestic  or foreign  jurisdiction,  nor is any such  charge or action  pending.
There does not exist,  to the best of the  knowledge  of  Tremont,  nor is there
reasonably  likely to occur, any occurrence or state of facts involving  Tremont
or any of its  Subsidiaries,  or  any  of  its  or  their  respective  officers,
directors or employees, which would reasonably be likely to prohibit, terminate,
suspend or  materially  and  adversely  affect any  registrations,  licenses  or
qualifications of Tremont,  or any of its  Subsidiaries,  or any of its or their
respective directors, officers or employees with the SEC and other agency or any
regulatory authority,  foreign or domestic, to which it currently is or proposes
to be subject.  Set forth on Schedule  5.13(b) is a copy of any and all filings,
reports,  notices,  customer  complaints or other  correspondence  filed with or
submitted to any and all governmental agencies and regulatory authorities within
the last three (3) years with respect to Tremont or any of its  Subsidiaries  or
its or their respective officers, directors and employees.

                  (c) Tremont's Subsidiary,  Tremont Partners,  Inc. ("TPI"), is
and has been since April 13, 1985 duly registered as an investment adviser under
the Investment  Advisers Act and is in compliance with all relevant laws,  rules
and regulations governing investment advisors,  foreign and domestic,  where the
failure to so comply is likely to result in a Material Adverse Effect.

                  (d) TPI is not an "investment  company," within the meaning of
the  Investment  Company  Act  which is  required  to be  registered  under  the
Investment  Company  Act in order to engage  in the  transactions  described  in
Section 7 of the Investment Company

                                   152
                                         
<PAGE>



Act. TPI is not a "broker" or "dealer"  within the meaning of the Exchange  Act.
Copies of all inspection  reports or similar  documents  furnished to TPI by the
SEC or state regulatory  authorities  since December 31, 1997 have been provided
to TASS.  TPI is not required to disclose any  information  to clients under SEC
Rule 206(4)-4 promulgated under the Investment Advisers Act.

                  (e) TPI has adopted a formal code of ethics, a true,  complete
and accurate copy of which has been provided to TASS.  Its policies with respect
to avoiding  conflicts of interest are as set forth in its Form ADV, as amended,
which has been  delivered to TASS.  There have been no violations or allegations
of violations of such policies which have occurred or been made.

                  (f) As of their  respective  dates,  all  reports  and notices
filed by or on behalf of TPI, or any of its  directors,  officers  or  employees
with any agency or regulatory  authority,  foreign or domestic,  as contemplated
under this Section  5.13,  (i) were  prepared in  accordance  with the rules and
regulations  of the  Securities  Act,  the  Exchange  Act or any  other  similar
statute, rule or regulation,  and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated  therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading.



                                          153

<PAGE>



         Section  5.14  Insurance.  All  assets  and  risks of  Tremont  and its
Subsidiaries of a material  nature are covered by valid and currently  effective
insurance  policies in such types and amounts as are  consistent  with customary
practices  and  standards  of companies  engaged in  businesses  and  operations
similar to those of Tremont and its Subsidiaries.

         Section 5.15 Affiliated or Inter-Company  Transactions.  There exist no
inter-company  transactions  between  Tremont  and  any of its  Subsidiaries  or
Affiliates,  and none of  Tremont's  shareholders  and none of the  officers  or
directors of Tremont or any of its  Subsidiaries are indebted to, or otherwise a
party to any  transaction  involving,  Tremont or any of its  Subsidiaries,  and
neither Tremont nor any of its Subsidiaries is indebted to, or otherwise a party
to any transaction involving, any of such persons, other than on an arm's length
basis and in accordance with generally accepted accounting principles.

         Section 5.16 Clients.  Schedule  5.16  contains  (except in cases where
disclosure  prior to the  Closing  would  constitute  a breach of agreed  client
confidentiality,  in which case a side letter providing such information will be
delivered at and as of closing)  the name and address of each of  Tremont's  and
its  Subsidiaries'  clients  or  accounts  and,  in the  case of each of the ten
largest clients or accounts of Tremont and its Subsidiaries, by volume of sales,
an approximation of the percentage of total sales dollars received for the years
ended  December 31,  1998,  December 31, 1997 and December 31, 1996 from each of
such clients or accounts.  Since December 31, 1997,  neither  Tremont nor any of
its  Subsidiaries  has  received  any notice from any of its clients or accounts
that they intend to cease doing business with


                                          154
<PAGE>



Tremont or any of its  Subsidiaries,  other  than  immaterial  cancellations  of
accounts,  and  Tremont  has no reason to  believe  that any of the  clients  or
accounts of Tremont or any of its Subsidiaries intend to cease doing business to
any material  extent with Tremont or any of its  Subsidiaries as a result of the
Reorganization or otherwise.

         Section  5.17  Litigation.  Other than as set forth on  Schedule  5.17,
there are no claims,  suits or actions, or administrative,  arbitration or other
proceedings  or  governmental  investigations,  pending  or,  to the best of the
knowledge  of Tremont,  threatened  against or relating to Tremont or any of its
Subsidiaries,  the business of Tremont or any of its  Subsidiaries or any of its
or their  respective  properties  or assets  before any  court,  administrative,
governmental or regulatory authority or body, domestic or foreign.  There are no
judgments, orders, stipulations,  injunctions, decrees or awards in effect which
relate to Tremont or any of its Subsidiaries,  the business of Tremont or any of
its  Subsidiaries or any of its or their  respective  properties or assets,  the
effect of which is (i) to limit,  restrict,  regulate,  enjoin or  prohibit  any
business  practice in any area, or the acquisition of any properties,  assets or
businesses,  or (ii) likely to have a Material Adverse Effect.  Tremont knows of
no reasonable  basis for any future claim,  suit,  proceeding,  investigation or
complaint  against either Tremont or any of its Subsidiaries  which might have a
Material Adverse Effect following the Closing Date.

         Section 5.18      Year 2000 Readiness.  Tremont is aware and has 
general knowledge of what is commonly referred to as "Year 2000" ("Y2K") 
problems, and, to the best of the


                                       155

<PAGE>



knowledge of Tremont,  Tremont and each of its  Subsidiaries  are, and as of the
Closing  Date  will be,  in  compliance  with all  applicable  laws,  rules  and
regulations,  including  the rules and  regulations  of the SEC  relating to Y2K
compliance.  Tremont and each of its  Subsidiaries  have taken, or are currently
taking,  all reasonably  appropriate steps to avoid Y2K problems,  including the
internal testing of Tremont's and each Subsidiary's  software,  "point-to-point"
testing of software (i.e., testing with subscribers and service providers),  and
the  implementation  of  tested  software,  and  neither  the SEC nor any  other
regulatory  body has  indicated to Tremont or any of its  Subsidiaries  that the
steps it is taking to address Y2K problems are inadequate,  inappropriate  or of
concern to it.

         Section 5.19 Brokers. No agent, broker, person or firm acting on behalf
of  Tremont  or under  its  authority,  is or will be  entitled  to a  financial
advisory  fee,  brokerage  commission,  finder's  fee or other  like  payment in
connection with any of the transactions contemplated hereby.

         Section  5.20  Adequacy  of   Representations   and   Warranties.   All
representations  and  warranties of Tremont  contained  herein shall be true and
correct in all  material  respects on and as of the  Closing  Date with the same
effect as if made on and as of such date.






                                        156

<PAGE>



                                   ARTICLE VI
                         CONDUCT OF BUSINESS PENDING THE
                  REORGANIZATION; ACCESS TO COMPANY INFORMATION

         Section 6.1 Conduct of  Business  by TASS  Pending the  Reorganization.
TASS and each of Meaden and Taylor covenant and agree that,  between the date of
this  Agreement and the Closing Date or the date of the earlier  termination  of
this Agreement,  unless Tremont shall  otherwise  consent in writing in advance,
the business of TASS and its  Subsidiaries  shall be conducted only in, and TASS
and its Subsidiaries shall not take any action except in, the ordinary course of
business  and in a manner  consistent  with past  practice  with a view  towards
maximizing  sales and  profits,  and TASS and Meaden  and Taylor  will use their
reasonable  best  efforts to (i)  preserve  substantially  intact  the  business
organization  of TASS and its  Subsidiaries,  (ii)  maintain  and  preserve  the
Software  and the other  assets of TASS and the  Subsidiaries  and its and their
books and records,  properties  and  business,  (iii) keep  confidential  TASS's
proprietary  and  confidential  business  information,  (iv) keep  available the
services of the  present  officers  and the  significant  employees,  agents and
consultants   of  TASS  and  its   Subsidiaries,   (v)  retain  TASS's  and  its
Subsidiaries' good will, and (vi) preserve the present relationships of TASS and
its Subsidiaries with customers, clients, suppliers and other persons with which
TASS or any of its Subsidiaries has significant  business  relations.  By way of
amplification  and not  limitation,  except as  contemplated  by this Agreement,
neither  TASS  nor  any of its  Subsidiaries  shall,  between  the  date of this
Agreement and the Closing  Date,  directly or indirectly do any of the following
without the prior written consent of Tremont:


                                   157

<PAGE>




                  (a) (i) issue, sell, pledge, dispose of, encumber,  authorize,
or propose the issuance, sale, pledge, disposition, encumbrance or authorization
of any  share  capital  of any  class,  or any  options,  warrants,  convertible
securities  or other  rights of any kind to acquire  any share  capital,  or any
other  ownership  interest,  of TASS or any of its  Subsidiaries;  (ii) amend or
propose  to  amend  the   Certificate  of   Incorporation,   the  Memorandum  of
Association,  or the Articles of Association  or the  equivalent  organizational
documents of TASS or any of its Subsidiaries; (iii) split, combine or reclassify
any outstanding share capital of TASS, or declare, set aside or pay any dividend
or distribution  payable in cash,  stock,  property or otherwise with respect to
TASS's shares;  (iv) redeem,  purchase or otherwise  acquire or offer to redeem,
purchase or otherwise acquire any share capital;  or (v) authorize or propose or
enter into any contract,  agreement,  commitment or arrangement  with respect to
any of the matters set forth in this Section 6.1(a);

                  (b) (i)  acquire (by merger,  consolidation,  amalgamation  or
acquisition of stock or assets) any  corporation,  partnership or other business
organization or division thereof; (ii) except in the ordinary course of business
and in a manner  consistent with past practices,  sell,  pledge,  dispose of, or
encumber or authorize or propose the sale, pledge, disposition or encumbrance of
any assets of TASS or any of its Subsidiaries;  (iii) incur any indebtedness for
borrowed money, or enter into any contract or agreement,  except in the ordinary
course of business; (iv) authorize any capital expenditure which is in excess of
$10,000;  or (v) enter  into or amend any  contract,  agreement,  commitment  or
arrangement with respect to any of the matters set forth in this Section 6.1(b);


                                    158

<PAGE>




                  (c) take any  action  other  than in the  ordinary  course  of
business and in a manner consistent with past practice or as otherwise  required
by law with respect to the grant of any severance or termination  pay (otherwise
than  pursuant to policies of TASS or any of its  Subsidiaries  in effect on the
date  hereof) or with  respect to any  increase  of benefits  payable  under its
severance or termination pay policies in effect on the date hereof;

                  (d)  make any  payments  (except  in the  ordinary  course  of
business and in amounts and in a manner consistent with past practice) under any
employee plan to any employee of, or  independent  contractor or consultant  to,
TASS or any Subsidiary,  enter into any new employee plan, any new employment or
consulting  agreement,  grant or  establish  any new  awards  under such plan or
agreement, or adopt or otherwise amend any of the foregoing;

                  (e) take any action except in the ordinary  course of business
and in a manner  consistent  with  past  practice  with  respect  to  accounting
policies or procedures (including without limitation its procedures with respect
to the payment of accounts payable);

                  (f) fail to  timely  file all  forms,  reports  and  documents
required to be filed with  Companies  House,  the SFA or the SEC pursuant to the
Companies Act 1985, the Financial  Services Act 1986,  the  Investment  Advisors
Act, the Exchange Act or the rules of the SFA; or


                                   159

<PAGE>



                  (g) take, or agree in writing or otherwise to take, any of the
foregoing actions or any action which would make any  representation or warranty
of TASS contained in this Agreement  untrue or incorrect in any material respect
as of the date when made or as of a future date.

         Section 6.2 No Shopping.  TASS and its Subsidiaries  will not, directly
or  indirectly,  through any  officer,  director,  agent,  financial  adviser or
otherwise, solicit, initiate or encourage submission of proposals or offers from
any person  relating to any  acquisition  or  purchase  of all or a  substantial
portion of the assets of, or any material equity interest in, TASS or any of its
Subsidiaries or any business  combination with TASS or any of its  Subsidiaries,
or participate in any negotiations regarding, or furnish to any other person any
information  with respect to, or otherwise  cooperate in any way with, or assist
or participate in,  facilitate or encourage,  any effort or attempt by any other
person to do or seek any of the foregoing.  TASS shall use its  reasonable  best
efforts to cause all materials  previously  furnished to any third  parties,  if
any, to be promptly returned to TASS and shall cease any negotiations  conducted
in connection therewith or otherwise conducted with any such parties. TASS shall
promptly notify Tremont if any such proposal or offer, or any inquiry or contact
with any person with respect thereto,  is made, and shall furnish Tremont with a
copy of any written proposal or offer.

     Section 6.3 Investigation;  Access to Information. (a) From the date hereof
to the Closing Date,  Tremont may make such  investigation of the properties and
business of TASS


                                       160

<PAGE>



and its Subsidiaries,  as Tremont deems necessary or advisable, and TASS and the
Shareholders,  shall and shall cause TASS's Subsidiaries,  officers,  directors,
employees,  auditors and agents to, afford the officers, employees and agents of
Tremont  reasonable  access at all reasonable  times to its and their  officers,
employees, agents, properties, offices and other facilities and to all books and
records, and shall furnish Tremont with all financial,  operating and other data
and  information  as Tremont,  through its  officers,  employees or agents,  may
reasonably  request.  No such investigation nor any investigations made prior to
the date hereof shall affect any of the  representations  and warranties of TASS
or the Shareholders contained herein or in any agreement or instrument delivered
pursuant hereto.

                  (b)  Tremont  and TASS each  agrees  that it shall,  and shall
cause its respective  affiliates and, in the case of TASS, the  Shareholders and
each of their respective  officers,  directors,  employees,  financial advisors,
attorneys, accountants,  consultants and agents ("Representatives"),  to use its
and their  reasonable  best  efforts to hold in strict  confidence  all data and
information  which  may be  obtained  by  either  of them,  or their  respective
Representatives,  with respect to the other or any Subsidiaries of the other, or
any division, associate, representative, agent or affiliate of the other (unless
such information is or becomes publicly  available  without the fault of Tremont
or TASS or any  Representative  thereof,  as the case may be,  or to the  extent
Tremont or TASS, as the case may be, deems public  disclosure to be necessary in
order to evaluate the properties and business of TASS and its  Subsidiaries,  on
the one hand, or Tremont and its  Subsidiaries,  on the other,  or to the extent
public  disclosure of such  information is required by law or legal process) and
each of


                                    161

<PAGE>



Tremont  and TASS shall  insure  that their  respective  Representatives  do not
disclose such  information  except as provided  herein without the prior written
consent of the other.

                  (c) In the event of the termination of this Agreement, Tremont
shall, and shall cause its affiliates and  Subsidiaries and each  Representative
thereof to, return promptly every document furnished to it by TASS or any of its
Subsidiaries, or any division, associate,  Representative, agent or affiliate of
TASS or its Subsidiaries in connection with the transactions contemplated hereby
and  any  copies  thereof  which  may  have  been  made,  and  shall  cause  the
Representatives  of Tremont to whom such documents  were  furnished  promptly to
return such  documents and any copies  thereof any of them may have made,  other
than  documents  filed with  Companies  House,  the SFA or the SEC or  otherwise
publicly  available  other than as a result of the  actions of Tremont or any of
its Representatives.

                                   ARTICLE VII
                              ADDITIONAL AGREEMENTS

         Section 7.1 Additional Agreements. TASS and Tremont will each comply in
all  respects  with  all  applicable  laws and with  all  applicable  rules  and
regulations of any  governmental  authority in connection with their  execution,
delivery and  performance  of this Agreement and the  transactions  contemplated
hereby.  Each of the parties hereto agrees to use reasonable best efforts and to
cooperate  with each other to obtain in a timely manner all  necessary  waivers,
consents and approvals and to effect all necessary registrations and


                                        162

<PAGE>



filings,  including  any and all filings which may be necessary by Tremont under
IITSSA,  and to use all  reasonable  best efforts to take, or cause to be taken,
all other  actions and to do, or cause to be done,  all other things  necessary,
proper or advisable to consummate  and make effective as promptly as practicable
the transactions contemplated by this Agreement.

         Section 7.2 Appointments and  Resignations.  (a) Immediately  following
the Closing, the following persons shall be elected as directors and/or officers
of TASS and each of its  Subsidiaries and hold such  directorships  and serve in
the offices  set forth  opposite  their  respective  names  until their  earlier
resignation or removal:
<TABLE>

   <S>                                            <C>                                     <C>                 

Name of Company                                   Name                                  Title


TASS Management Limited                           Nicola Meaden                         Managing Director and
                                                                                        Chief Executive Officer;
                                                                                        Director

                                                  Colin Myers                           Chief Financial Officer

TASS Management Inc.                              Nicola Meaden                         President

TASS Investment Managers                          Nicola Meaden                         President
  Limited



</TABLE>

TASS will take all  corporate  action  necessary  to  accomplish  the  foregoing
including  obtaining  any  necessary  resignations  of  existing  directors  and
officers which may be required by Tremont on or prior to the Closing Date. As of
the  Closing  Date,  Meaden  and  Taylor,  respectively,  shall  enter  into the
Employment Agreements with TASS and Tremont.


                                          163

<PAGE>




                  (b)  Tremont  shall take all  corporate  action  necessary  to
nominate,  and effective as of the Closing Date,  shall  appoint,  Meaden to the
Tremont Board of Directors,  where she shall serve,  pending her election by the
stockholders  of Tremont  entitled to vote thereon at their next annual meeting.
Thereafter,  subject to the terms of her Employment  Agreement with TASS, for so
long as  Meaden  shall be  employed  by TASS,  Meaden  shall  be  nominated  and
appointed  to the Tremont  Board of  Directors  at each annual  meeting at which
directors  shall be so  nominated,  to serve  for  such  term as all such  other
directors  standing for election  shall be so nominated,  subject to election at
the annual meeting of the Tremont shareholders.

         Section 7.3 Certain TASS Obligations. Within thirty (30) days following
the  Closing  Date,   Tremont  shall  cause  TASS  to  satisfy  certain  accrued
liabilities  of TASS as set forth on  Schedule  7.3. In the event TASS shall not
have sufficient funds for the payment of such liabilities, Tremont shall loan to
TASS or  contribute to it as additional  capital  sufficient  funds to make such
payments.

         Section 7.4 Barclays Credit Facility.  On or prior to the Closing Date,
Tremont  and TASS,  using  their best  efforts,  shall  endeavor  to cause to be
discharged  that certain  Debenture,  dated October 22, 1992 (the  "Debenture"),
made by TASS in favor of Barclays  Bank PLC  ("Barclays")  securing the borrowed
amounts set forth on Schedule 7.4 hereto,  and the related guaranty of Kleinwort
Benson (the "Guaranty").



                                       164

<PAGE>



         Section  7.5  Covenants  Relating  to Rule  144.  With a view to making
available the benefits of certain rules and  regulations of the SEC which may at
any time  permit  the sale of the  Shares to the  public  without  registration,
Tremont agrees:

                  (a) To make and keep public information available with respect
to  Tremont  as those  terms are  understood  and  defined in Rule 144 under the
Securities Act, at all times after the Closing Date; and

                  (b) To use its best  efforts  to then  file  with the SEC in a
timely  manner all reports and other  documents  required to be filed by Tremont
under the Securities Act and the Exchange Act.

         Section 7.6 Notification of Certain Occurrences or Failures. TASS shall
give prompt notice to Tremont,  and Tremont shall give prompt notice to TASS, of
(i)  the   occurrence  or   non-occurrence   of  any  event  the  occurrence  or
non-occurrence of which would be likely to cause any  representation or warranty
contained in this  Agreement to be untrue or inaccurate in any material  respect
at any time from the date  hereof to the  Closing  Date,  and (ii) any  material
failure of TASS or the Shareholders,  on the one hand, or Tremont, on the other,
or any officer, director,  employee or agent of TASS or Tremont, as the case may
be, to comply  with or  satisfy  any  covenant,  condition  or  agreement  to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this


                                        165

<PAGE>



Section 7.7 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.

         Section 7.7 Audited  Financial  Statements of TASS.  Within thirty (30)
days after the Closing  Date,  TASS shall  furnish to Tremont  the  consolidated
Financial  Statements  of  TASS  as of  December  31,  1998,  certified  without
qualification by TASS's regularly employed certified  accountants and registered
auditor whose  opinions  therein shall be included  therewith (the "1998 Audited
Statements").  If the 1998 Audited Statements are materially  different from the
1998 Unaudited  Statements,  the Shareholders and Tremont hereby agree that they
shall endeavor in good faith to make such adjustments as may be necessary in the
Reorganization  transactions  contemplated hereunder to proportionately  reflect
such  material  difference.  Notwithstanding  the  foregoing,  Tremont  and  the
Shareholders  expressly agree and acknowledge  that no such material  difference
shall be  deemed  to exist in the  event  such  difference  arises  from (i) the
provision  in the 1998 Audited  Statements  of the accrued  liabilities  of TASS
referred  to in  Section  7.3,  the fees  and  expenses  of  TASS's  counsel  in
connection  with the litigation  styled,  TASS Management  Limit v.  Cherryscope
Ltd.,  in the  approximate  amount of  (pound)18,000,  or the costs and expenses
incurred by TASS in  connection  with the  preparation  and  negotiation  of the
Agreement  and  each  of  the  Related   Agreements,   or  (ii)  any  accounting
recharacterization  with  respect to the 1998  Audited  Statements  proposed  or
endorsed by Tremont.  In connection  with the  foregoing,  Tremont  acknowledges
specifically that all legal bills of Landau & Cohen and Kleinberg, Kaplan, Wolff
& Cohen, P.C. incurred in connection with the transactions


                                              166

<PAGE>



contemplated  by this Agreement are for the account of, and payable by, TASS and
likewise shall not be deemed to require an adjustment as contemplated herein.

         Section  7.8  Payment of Taxes Upon  Transfer  of Shares.  TASS and the
Shareholders  shall be responsible for, and shall pay all Taxes (other than U.K.
stamp  taxes),  if any,  and any and all  filing,  recording,  registration  and
similar fees, arising out of the transactions contemplated by this Agreement.

         Section 7.9 Public  Announcements.  Tremont and TASS shall consult with
each other  before  issuing  any press  release or  otherwise  making any public
statements with respect to the Reorganization and shall not issue any such press
release or make any such public statement  without the prior written approval of
the other, except as may be required by law.

         Section 7.10 Further Assurances. TASS and each of the Shareholders,  on
the one hand, and Tremont, on the other, hereby agree that they shall, form time
to  time  after  the  Closing  Date,  take  any and all  actions,  and  execute,
acknowledge,  deliver,  file and/or record any and all documents and instruments
as the other party may reasonably request in order to insure consummation of the
transactions contemplated by this Agreement.

         Section 7.11 Accuracy of Representations. Each party hereto agrees that
prior to the Closing Date he or she or it will (and the Shareholders shall cause
TASS and each of its  Subsidiaries  to) enter  into no  transaction  and take no
action, and will use his or her or its


                                   167

<PAGE>



best efforts to prevent the  occurrence of any event,  which would result in any
of his or her or its representations,  warranties or covenants contained in this
Agreement or in any agreement,  document or instrument delivered pursuant hereto
not to be true and correct, or not to be performed as contemplated, at and as of
the time immediately after the occurrence of such transaction or event.

                                  ARTICLE VIII
                          CONDITIONS OF REORGANIZATION

         Section 8.1 Conditions to Obligations of TASS and the Shareholders. The
obligation of TASS and the Shareholders to effect the transactions  contemplated
by this Agreement is subject to the fulfillment of the following conditions:

                  (a)  Representations  and Warranties.  The representations and
warranties  of  Tremont   contained  in  this  Agreement,   including,   without
limitation,  the  Schedules  thereto,  shall be true and correct in all material
respects on the date  hereof and shall also be true and correct in all  material
respects on and as of the Closing Date, except for changes  contemplated by this
Agreement,  with the same force and  effect as if made on and as of the  Closing
Date.



                                      168
<PAGE>



                  (b) Agreements,  Conditions and Covenants.  Tremont shall have
performed or complied in all material  respects with all agreements,  conditions
and covenants  required by this Agreement to be performed or complied with by it
on or before the Closing Date.

                  (c)  Related  Agreements.  Each  of  the  Related  Agreements,
including each of the Employment  Agreements,  the Registration Rights Agreement
and the Stock  Option  Agreements,  shall have been  executed  and  delivered in
substantially  the form annexed hereto,  or as described  herein, in the case of
the Stock Option Agreements, and each of the Related Agreements shall be in full
force and effect in accordance  with their  respective  terms.  All  agreements,
conditions  and  covenants  contained  in  the  Related  Agreement  that  are to
performed  or complied  with by Tremont on or before the Closing Date shall have
been performed or complied with.

                  (d)  Barclays  Debenture.   The  Barclays  Debenture  and  the
Guaranty shall be discharged to the reasonable satisfaction of TASS.

                  (e)  Certificate.  Tremont  shall have  furnished  TASS with a
certificate  dated the Closing  Date,  to the effect that it has  fulfilled  the
conditions specified in Section 8.1(a) and 8.1(b).

     (f) Statutory Requirements. All domestic and foreign statutory
     requirements  for the valid  consummation  by Tremont  of the  transactions
contemplated by this


                                          169

<PAGE>



Agreement shall have been fulfilled; and all filings,  authorizations,  consents
and approvals of all domestic and foreign governmental authorities and agencies,
including  the SFA  pursuant to that  certain  notice,  dated  February 4, 1999,
submitted by TASS in respect of the proposed  change in  controllers  of TASS in
accordance  with SFA Rule  2-23A(1),  required to be obtained in order to permit
consummation by Tremont of the transactions contemplated by this Agreement shall
have been obtained.

                  (g) Consents under Agreements. Tremont shall have obtained the
consent,  approval or  authorization  of each party whose  consent,  approval or
authorization shall be required in connection with the transactions contemplated
hereby   including   those  under  any  agreement,   indenture,   instrument  or
understanding to which Tremont is a party, except those for which the failure to
obtain such  consents,  approvals or  authorizations  would not  materially  and
adversely affect the consummation of the transactions contemplated hereby.

                  (h)   Litigation   or   Proceedings.   No   order,   judgment,
stipulation,  injunction  or  decree  of any  court  or  other  governmental  or
regulatory   agency  shall  be  in  effect  which  restrains  or  prohibits  the
transactions  contemplated  hereby,  and  no  suit,  action  or  administrative,
arbitration  or other  proceeding or  governmental  or regulatory  investigation
shall be pending before any court or other  governmental or regulatory agency in
which it is sought to restrain or prohibit  the  execution  and delivery of this
Agreement,  or  any  of  the  related  documents  and  instruments  executed  in
connection herewith, or the consummation of the transactions contemplated hereby
and thereby, to subject the Shareholders, TASS or any


                                       170

<PAGE>



of its  Subsidiaries to liability on the basis that it or they have breached any
law or duty or otherwise acted  improperly,  nor shall any such suit,  action or
administrative, arbitration or other proceeding or governmental investigation be
threatened.

                  (i) Opinion of Counsel for Tremont. TASS shall have received a
favorable opinion of counsel to Tremont, dated the Closing Date, in such form as
shall be reasonable and customary in transactions  of the type described  herein
and as shall be reasonably  agreed upon between  counsel for Tremont and counsel
for TASS,  the form of which the  parties  agree they shall  cause to be annexed
hereto as Exhibit D on or prior to the Closing  Date.  In rendering  its opinion
such counsel may rely as to factual matters upon certificates or other documents
furnished  by officials of Tremont and by  government  officials,  and upon such
other documents and data as such counsel deems  appropriate as a basis for their
opinions.

     Section 8.2  Conditions  to  Obligations  of Tremont.  The  obligations  of
Tremont to effect the transactions  contemplated by this Agreement is subject to
the following conditions:

                  (a)  Representations  and Warranties.  The representations and
warranties  of TASS and each of the  Shareholders  contained in this  Agreement,
including,  without limitation, the Schedules thereto and the Disclosure Letter,
shall be true and correct in all material  respects on the date hereof and shall
also be true and correct in all material respects


                                    171

<PAGE>



on  and as of  the  Closing  Date,  except  for  changes  contemplated  by  this
Agreement,  with the same force and  effect as if made on and as of the  Closing
Date.

                  (b) Agreements, Conditions and Covenants. TASS and each of the
Shareholders  shall have performed or complied in all material respects with all
agreements,  conditions and covenants required by this Agreement to be performed
or complied with by it or them on or before the Closing Date.

                  (c) Employment Agreements and Special Resolution.  (i) Each of
the  Employment  Agreements  shall have been  executed and delivered in the form
provided  herein,  and each of the Employment  Agreements shall be in full force
and effect in accordance with their respective terms. All agreements, conditions
and covenants contained in the Employment Agreements that are to be performed or
complied with by Meaden and Taylor, respectively,  on or before the Closing Date
shall have been performed or complied with.

     (ii) Tremont shall have received satisfactory evidence from TASS of the due
filing of the Special Resolution with the appropriate  governmental  authorities
in accordance with the Companies Act.

                  (d)  Barclays  Debenture.   The  Barclays  Debenture  and  the
Guaranty shall be discharged to the reasonable satisfaction of Tremont.



                                      172

<PAGE>



                  (e)  Certificate.   TASS  and  the  Shareholders   shall  have
furnished  Tremont with a certificate dated the Closing Date, to the effect that
it and they have  fulfilled  the  conditions  specified  in  Section  8.2(a) and
8.2(b).

                  (f) Statutory Requirements. All domestic and foreign statutory
requirements  for the valid  consummation  by TASS and the  Shareholders  of the
transactions  contemplated by this Agreement shall have been fulfilled;  and all
authorizations,  consents and approvals of all domestic and foreign governmental
authorities and agencies, including the SFA, required to be obtained in order to
permit   consummation  by  TASS  and  the   Shareholders  of  the   transactions
contemplated by this Agreement shall have been obtained.

                  (g) Consents under Agreements. TASS and the Shareholders shall
have  obtained  the  consent,  approval  or  authorization  of each party  whose
consent,  approval or  authorization  shall be required in  connection  with the
transactions contemplated hereby under any agreement,  indenture,  instrument or
understanding to which TASS or any of the Shareholders is a party, including the
Required  Consents,  except those for which the failure to obtain such consents,
approvals  or  authorizations  would not  materially  and  adversely  affect the
consummation of the transactions contemplated hereby.

                  (h)   Litigation   or   Proceedings.   No   order,   judgment,
stipulation,  injunction  or  decree  of any  court  or  other  governmental  or
regulatory   agency  shall  be  in  effect  which  restrains  or  prohibits  the
transactions contemplated hereby, and no suit, action or


                                       173

<PAGE>



administrative,  arbitration or other  proceeding or  governmental or regulatory
investigation  shall be pending before any court or other governmental agency or
regulatory  in which it is sought to  restrain  or prohibit  the  execution  and
delivery of this  Agreement,  or any of the related  documents  and  instruments
executed  in  connection  herewith,  or the  consummation  of  the  transactions
contemplated  hereby and thereby,  to subject Tremont or any of its Subsidiaries
to  liability  on the  basis  that it or they have  breached  any law or duty or
otherwise acted improperly,  nor shall any such suit, action or  administrative,
arbitration or other proceeding or governmental investigation be threatened.

                  (i) Opinion of Counsel for TASS and the Shareholders.  Tremont
shall have received  favorable opinions of counsel to TASS and the Shareholders,
dated the  Closing  Date,  in a form  reasonable  and  customary  in the type of
transactions  described  herein and as shall be  reasonably  agreed upon between
counsel for TASS and counsel for Tremont,  the forms of which the parties  agree
they shall  cause to be annexed  hereto as Exhibit E on or prior to the  Closing
Date. In rendering its opinion such counsel may rely as to factual  matters upon
certificates  or  other  documents  furnished  by  officials  of TASS and by the
Shareholders and by government officials, and upon such other documents and data
as such counsel deems appropriate as a basis for their opinions.





                                     174

<PAGE>




                                   ARTICLE IX
                    CONFIDENTIAL AND PROPRIETARY INFORMATION

         Section 9.1 Definition of Confidential Information.  Each of Meaden and
Taylor acknowledges and agrees that Confidential Information of TASS and Tremont
and their  respective  Subsidiaries has been and will be imparted to them, which
if disclosed by either of them or improperly  used by either of them will result
in harm  to  Tremont's  operation  of  TASS  or any of its or  their  respective
Subsidiaries.  For the purposes of this  Agreement,  "Confidential  Information"
shall mean all research, information,  software, databases, trade secrets, sales
and  marketing  information,  subscriber  information,  operations  material and
memoranda,  personnel records, client lists,  information relating to investment
funds,  accounts and customers,  pricing information,  and financial information
concerning or relating to the business,  clients,  subscribers,  employees,  and
affairs of TASS or Tremont,  or any of its or their respective  Subsidiaries and
contact  persons and other  information  maintained by TASS or Tremont or any of
its or their  respective  Subsidiaries,  obtained by or furnished,  disclosed or
disseminated to either Meaden or Taylor,  or obtained,  assembled or compiled by
either Meaden or Taylor or under his or her supervision during the course of his
or her employment by Tremont or TASS, as the case may be, or any of its or their
respective  Subsidiaries,  and all physical embodiments of the foregoing, all of
which are  hereby  agreed to be the  property  of and  confidential  to TASS and
Tremont and its or their  respective  Subsidiaries.  "Confidential  Information"
shall not include any of the foregoing to the extent


                                     175
<PAGE>



the same can be shown by written  documentation by Meaden or Taylor, as the case
may be,  to be  available  to the  public  through  no fault or  breach  of this
Agreement by them.

         Section 9.2  Removal of  Confidential  Information.  Each of Meaden and
Taylor hereby agrees that he or she shall not,  without  Tremont's prior written
consent,  remove or cause to be removed from Tremont's or TASS's,  or any of its
or their  respective  Subsidiaries'  premises any Confidential  Information,  or
other material whatsoever,  belonging to TASS or Tremont or any such Subsidiary,
for purposes  other than for use in connection  with  authorized  work Meaden or
Taylor  may  perform  for  TASS or  Tremont  or any of its or  their  respective
Subsidiaries or Affiliates.

         Section 9.3 Disclosure of Confidential Information.  Each of Meaden and
Taylor hereby agrees that without the prior  written  consent of Tremont,  he or
she will not,  disclose,  except as required by law,  or make  available  to any
person or entity any Confidential  Information,  nor shall Meaden or Taylor make
or cause to be made,  or permit or allow,  either on Meaden's  or  Taylor's  own
behalf or on behalf of others,  any use of such  Confidential  Information other
than in the proper  performance  of Meaden's or Taylor's  duties as an employee.
All Confidential  Information shall be returned to Tremont promptly upon request
or promptly  following the  termination of Meaden's or Taylor's  employment with
TASS or Tremont or any of their respective Subsidiaries.



                                         176

<PAGE>



         Section 9.4 Protection of Interests. In the event of the termination of
either Meaden's or Taylor's employment by TASS or Tremont, respectively,  Meaden
and Taylor each hereby  undertake to comply with the terms of Section  10(b)-(f)
of their respective Employment Agreements.

                                    ARTICLE X
                SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATIONS

         Section 10.1  Survival.  Each of the parties  hereto hereby agrees that
all representations and warranties made by such party or on behalf of such party
in  this  Agreement  or in any  exhibit,  certificate,  document  or  instrument
delivered  pursuant to this  Agreement,  shall  survive the Closing Date and the
consummation of the transactions  contemplated hereby for a period lasting until
and including the earlier to occur of March 31, 2000 or the effective  date of a
Change in Control (as such term is defined in the Stock  Option  Agreements)  of
Tremont (the "Survival Period"); provided, that the Survival Period shall not so
limit the survival of (i) claims  arising out of or relating to  representations
or warranties made in Sections 3.3, 4.1, 4.2 and 4.3 which  representations  and
warranties  shall be deemed to be continuing  and shall survive as aforesaid for
the applicable  statutory  period of  limitations,  (ii) claims arising out of a
misrepresentation  of fact or breach of any warranty as to which written  notice
thereof shall have been given to the Indemnitor (as defined in Section  10.2(e))
not later  than the  expiration  of the  Survival  Period,  or (iii)  claims for
misrepresentation  of fact or breach of any warranty  pertaining  to Tax matters
set forth in

                                              177

<PAGE>



Section 3.9, as to which  written  notice  thereof  shall have been given to the
Indemnitor  not later than 60 days  following  the  expiration  of the statutory
period  of   limitations   applicable   to  the  tax  claim   involved   in  the
misrepresentation or breach of warranty.

         Section 10.2 Indemnification.  (a) Tremont agrees to indemnify and hold
TASS and its Subsidiaries and their respective  directors,  officers,  employees
and agents,  and each of the Shareholders  harmless from, against and in respect
of,  and  shall  on  demand  reimburse  TASS,  such  Subsidiary  or any of  such
Shareholders  for:  (i) any and all loss,  cost,  expense,  liability  or damage
resulting from any untrue  representation,  breach of warranty or nonfulfillment
of any  covenant or  agreement  by Tremont  contained  herein or in any exhibit,
certificate, document or instrument delivered to TASS or any of the Shareholders
hereunder; (ii) any and all loss, cost, expense, liability or damage arising out
of or  attributable  to  the  ownership  or  operation  of  TASS  or  any of its
Subsidiaries  by Tremont or any of its  Subsidiaries  from and after the Closing
Date; (iii) any claim for finder's fees or brokerage or other commissions by any
person,  firm or corporation,  arising by reason of any services alleged to have
been rendered to or at the instance of Tremont with respect to this Agreement or
any of the  transactions  contemplated  hereby;  and (iv)  any and all  actions,
suits, proceedings,  claims, demands, assessments,  judgments,  reasonable costs
and expenses, including without limitation, legal fees and expenses, incident to
any of the  foregoing or incurred in  investigating  or  attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.



                                            178

<PAGE>



                  (b) Meaden and Taylor,  as provided  in Section  10.2(d)  with
respect to the representations  and warranties  contained in Article III and the
nonfulfillment  of any covenant or agreement by TASS or any of the  Shareholders
contained herein or in any schedule exhibit, certificate, agreement, document or
instrument  delivered  to Tremont  hereunder,  and  severally,  with  respect to
Meaden's and Taylor's  representations  and warranties  contained in Article IV,
agree to indemnify and hold Tremont and its  Subsidiaries  and their  respective
directors,  officers, employees and agents harmless from, against and in respect
of, and shall on demand  reimburse  Tremont or such  Subsidiary for: (i) any and
all loss,  cost,  expense,  liability  or damage  resulting  from (A) any untrue
representation  or breach of warranty  contained  in Article III, (B) any untrue
representation  or breach of warranty with respect to themselves,  individually,
contained in Article IV, or (C) the  nonfulfillment of any covenant or agreement
by TASS or any of the Shareholders contained herein or in any schedule, exhibit,
certificate,  agreement,  document or instrument delivered to Tremont hereunder;
(ii) any and all loss,  cost,  expense,  liability  or damage  arising out of or
attributable  to the  ownership or operation of TASS or any of its  Subsidiaries
prior to the Closing  Date;  (iii) any claim for  finder's  fees or brokerage or
other commissions by any person,  firm or corporation,  arising by reason of any
services  alleged to have been  rendered to or at the instance of TASS or any of
the Shareholders or Preferred Shareholders with respect to this Agreement or any
of the transactions  contemplated  hereby; and (iv) any and all actions,  suits,
proceedings,  claims,  demands,  assessments,  judgments,  reasonable  costs and
expenses, including without limitation, legal fees and expenses, incident to any
of the foregoing or

                                      179

<PAGE>



incurred  in  investigating  or  attempting  to avoid the same or to oppose  the
imposition thereof, or in enforcing this indemnity.

                  (c)   Notwithstanding   anything  in  this  Agreement  to  the
contrary,  no party  hereto shall be entitled to any  indemnification  hereunder
until the aggregate of all indemnification  claims hereunder exceeds U.S. Twenty
Five Thousand Dollars (US $25,000) in which case the indemnifying party shall be
liable  for any and all  indemnification  claims in excess of such  amount.  The
parties  hereto do not intend that this amount be deemed to be a  definition  of
materiality for any purpose under this Agreement.

                  (d)   Notwithstanding   anything  in  this  Agreement  to  the
contrary,  Meaden's and Taylor's  cumulative  liability  under this Article X or
otherwise under this Agreement and the documents executed in connection herewith
shall in no event exceed, and the total amount of indemnification  payments that
Meaden and  Taylor can be  required  to make  hereunder  shall be limited in the
aggregate  to,  a  maximum  of  the  lesser  of,  calculated  at  the  time  the
indemnification  obligation is due (the "Indemnification Date"), (i) such number
of shares of Tremont  Class B Common  Stock and Stock  Options  received  (or so
exercised) pursuant to the terms hereof, subject to Section 2.2(a) in respect of
any   conversion   or   exchange   of   such   securities   (collectively,   the
"Indemnification  Securities"),  by Meaden  and Taylor  having a Current  Market
Price, as such term is defined in the Stock Option Agreements  entered into with
Meaden and Taylor, respectively, equal to U.S. Two Million Five Hundred Thousand
Dollars (US $2,500,000),  and (ii) all of Meaden's and Taylor's  Indemnification
Securities if

                                    180

<PAGE>



they have a Current  Market  Price of less than U.S.  $2,500,000  (the  "Maximum
Indemnity Amount"). In the event Tremont shall seek indemnification  pursuant to
the  terms  of  this  Agreement  other  than  in  respect  of  the  breach  of a
representation  or  warranty  contained  in Article IV hereto,  Meaden  shall be
responsible for two-thirds (2/3) of the indemnification obligation, in an amount
up to two-thirds (2/3) of the Maximum  Indemnity Amount (the "Meaden  Maximum"),
and  Taylor  shall  be  responsible   for  one-third  of  such   indemnification
obligation,  in an amount up to one-third (1/3) of the Maximum  Indemnity Amount
(the "Taylor Maximum"); provided, further, that Tremont must simultaneously seek
indemnification from Meaden and Taylor, pro rata on a two-thirds (2/3)/one-third
(1/3) basis or not seek indemnification from either; provided that, in the event
of a breach by either Meaden or Taylor of any of his or her  representations  or
warranties  contained in Article IV hereof,  Tremont shall seek  indemnification
solely from the breaching  party up to the Meaden Maximum or the Taylor Maximum,
as the  case  may  be.  Meaden  and  Taylor  shall  have  no  obligation  to pay
indemnification  to Tremont  except in  Indemnification  Securities  as provided
herein,  with the amount of  Indemnification  Securities to be determined  based
upon Current Market Price. The indemnification  under this Section 10.2(d) shall
be the sole remedy of Tremont  against Meaden and Taylor.  Tremont shall have no
remedies against any of the other individual parties hereto who are Shareholders
except for a breach of any such  party's  representations  and  warranties  made
pursuant to Article IV,  which shall be limited  with respect to each such party
in an amount equal to the lesser of, calculated as of the Indemnification  Date,
(i) such number of such  party's  Indemnification  Securities,  having a Current
Market Price in the amount set forth opposite such party's name below,  and (ii)
all


                                            181

<PAGE>



of such party's  Indemnification  Securities if they have a Current Market Price
of less than the amount set forth opposite such party's name below.

                  Name                                Limit on Indemnification

                  Smith                                       US $200,000

                  Myers                                       US  $75,000

                  Benard                                      US  $20,000



                  (e) If any  action,  suit or  proceeding  shall  be  commenced
against,  or any  claim  or  demand  be  asserted  against,  TASS  or any of its
Subsidiaries,  or any of their  respective  officers,  directors,  employees  or
agents,  or  the  Shareholders,  on  the  one  hand,  or  Tremont  or any of its
Subsidiaries,  or any of their  respective  officers,  directors,  employees  or
agents,  on the other,  as the case may be  (hereinafter in this Section 10.2(e)
called the "Indemnitee"), in respect of which such Indemnitee proposes to demand
indemnification under this Section 10.2, the person from whom indemnification is
sought  (hereinafter  in this  Section 10.2 called the  "Indemnitor"),  shall be
notified to that effect with  reasonable  promptness and shall have the right to
assume the entire defense of such action, suit,  proceeding,  or claim or demand
control of (including the selection of counsel)  provided it shall post security
for the payment of any  judgment  or  settlement  in form and amount  reasonably
satisfactory  to the  Indemnitee  subject  to the  right  of the  Indemnitee  to
participate  at its expense and with counsel of its choice (except to the extent
that the named  parties  to any  suit,  action or  proceeding  include  both the
Indemnitor and the Indemnitee, and the


                                        182

<PAGE>



Indemnitee  shall have been  advised  by  counsel  that there may be one or more
legal  defenses  available  to the  Indemnitee  which are  different  from or in
addition to those  available  to the  Indemnitor,  in which case the  Indemnitor
shall  pay the  fees  and  expenses  of  counsel)  the  defense,  compromise  or
settlement thereof,  and in connection  therewith the Indemnitee shall cooperate
fully in all aspects with the  Indemnitor  in any such  defense,  compromise  or
settlement, including, without limitation, by making available to the Indemnitor
all pertinent  information  under the control of the Indemnitee.  The Indemnitor
will not compromise or settle any such action, suit, proceeding, claim or demand
without the prior written  consent of the Indemnitee  which consent shall not be
unreasonably  withheld,  except in the event such  settlement or compromise  may
involve,  potential  criminal,  administrative or similar sanctions to which the
Indemnitee  may become  subject in which case such  consent  may be  arbitrarily
withheld.   In  the  event   approval   the  consent  to  which  is  subject  to
reasonableness  as provided  hereinabove is withheld,  following written request
therefor,  then the  liability  of the  Indemnitor  with respect to such action,
suit,  proceeding  claim or demand  shall be limited to the total  amount  which
would have been paid by the  Indemnitor  with  respect  thereto if the  proposed
compromise or settlement had been approved, including the amount of counsel fees
and other  legal  expenses  attributable  thereto  accumulated  at the time such
approval is withheld.

                  (f) The respective  indemnification  rights of any party shall
not be  limited  or  affected  by the  existence,  non-existence  or  extent  of
insurance coverage.



                                        183

<PAGE>



                                   ARTICLE XI
                             TERMINATION AND WAIVER

     Section 11.1  Termination.  This  Agreement  may be  terminated at any time
prior to the Closing Date:

     (a) By mutual  written  consent of the boards of  directors  of Tremont and
TASS;

                  (b) By either Tremont or TASS if the Reorganization  shall not
have been  consummated  by March 31, 1999,  provided  that no party in breach of
this Agreement may terminate this Agreement pursuant to this Section 11.1(b);

                  (c) By  TASS  or  the  Shareholders  if any of the  conditions
specified in Section 8.1 has not been met as of the Closing  Date, or shall have
become  incapable of fulfillment,  and shall not have been waived by TASS or the
Shareholders; or

                  (d) By Tremont if any of the  conditions  specified in Section
8.2 has not been met as of the Closing Date,  or shall have become  incapable of
fulfillment, and shall not have been waived by Tremont; or.



                                          184

<PAGE>



                  (e) If an order, judgment,  stipulation,  injunction or decree
shall have been issued by any court or other  governmental or regulatory  agency
permanently  restraining,  enjoining or otherwise  prohibiting the  transactions
contemplated by this Agreement and such order, judgment, stipulation, injunction
or decree shall have become final and non-appealable;  provided,  that the party
seeking to terminate this Agreement  pursuant to this Section 11.1(e) shall have
used  all  reasonable  best  efforts  to  remove  such  judgment,   stipulation,
injunction or decree.

         Section 11.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 11.1,  this Agreement  shall  forthwith  become
void and there shall be no liability on the part of Tremont,  on the one hand or
TASS, the Shareholders or the Preferred  Shareholders,  on the other, except (i)
with respect to the parties'  obligations  under Section 6.2 and with respect to
Section 12.2, and (ii) nothing herein shall relieve any party from liability for
any willful breach hereof.

         Section 11.3 Waiver. At any time prior to the Closing Date, Tremont, on
the one hand, and TASS, the Shareholders and the Preferred Shareholders,  on the
other,  may (i) extend the time for the performance of any of the obligations or
other  acts of the  other  party  hereto,  (ii)  waive any  inaccuracies  in the
representations  and warranties of the other party hereto contained herein or in
any document  delivered  pursuant hereto and (iii) waive  compliance with any of
the  agreements or conditions of the other party hereto  contained  herein.  Any
agreement on the part of a party hereto to any such extension or waiver shall be


                                               185

<PAGE>



valid  only as  against  such  party and only if set forth in an  instrument  in
writing signed by such party.

                                   ARTICLE XII
                               GENERAL PROVISIONS

         Section 12.1  Notices.  All notices and other  communications  given or
made  pursuant  hereto shall be in writing and shall be deemed to have been duly
given or made when received by the party to which it is addressed.  Such notices
shall be sent by personal delivery,  electronically,  facsimile  transmission or
recognized  overnight  courier,  receipt  acknowledged,  to the parties at their
addresses  set forth on Exhibit F annexed  hereto and made a part  hereof (or at
such other address as any party may have  previously  specified by notice to the
other  parties as to the address to which  notice shall be given to such party).
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.

         Section 12.2  Expenses.  All costs and expenses  incurred in connection
with this Agreement and the  transactions  contemplated  hereby shall be paid by
the party  incurring such costs and expenses,  except to the extent that if TASS
or any of the  Shareholders or the Preferred  Shareholders,  on the one hand, or
Tremont,  on the other, shall willfully terminate this Agreement in violation of
Section 11 hereof, such party shall pay all costs and expenses


                                        186

<PAGE>



(including  attorneys'  fees and expenses of the other party in connection  with
the preparation, negotiation and execution of this Agreement and its enforcement
of the provisions of this Section 12.2.

     Section 12.3  Headings.  The headings  contained in this  Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.

         Section  12.4  Severability.  If any  term or other  provision  of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal or
incapable  of being  enforced  by any rule of law, or public  policy,  all other
conditions and provisions of this Agreement  shall  nevertheless  remain in full
force and effect to the fullest  extent  possible  so as to effect the  original
intent of the  parties  and the  fulfillment  of the  transactions  contemplated
hereby.

         Section 12.5 Entire Agreement.  This Agreement (together with the other
documents  being  delivered  pursuant to or in connection  with this  Agreement)
constitutes  the entire  agreement and  understanding  of the parties  hereto in
respect of the subject matter contained herein, and supercedes any and all other
prior  agreements and  understandings,  both written and oral, among the parties
hereto, or any of them, with respect to the subject matter contained herein.



                                   187
<PAGE>



         Section 12.6  Assignment.  Without the prior written  consent of all of
the parties hereto,  this Agreement shall not be assigned by operation of law or
otherwise,  except that Tremont may assign all or any of its rights hereunder to
any  affiliate of Tremont  provided  that no such  assignment  shall relieve the
signing party of its obligations hereunder.

         Section 12.7 Binding  Effect;  Benefits.  This Agreement shall inure to
the  benefit  of,  and shall be  binding  upon,  the  parties  hereto  and their
respective  heirs,  legal  representatives,  successors  and permitted  assigns.
Nothing  herein  contained,  express or implied,  is intended to confer upon any
person  other  than  the  parties  hereto  and  their  respective  hears,  legal
representatives,  successors and permitted assigns, any rights or remedies under
or by reason of this Agreement.

         Section 12.8 Governing Law;  Jurisdiction;  Venue. This Agreement shall
be governed by, and construed in accordance  with,  the laws of the State of New
York  applicable to contracts  executed in and to be performed  entirely  within
that State,  without regard to New York's conflicts of law principles.  TASS and
each of the Shareholders  expressly submit to the exclusive  jurisdiction of the
courts of the State of New York and of any federal  court  located  therein over
any  dispute  arising  out  of or  relating  to  this  Agreement  or  any of the
transactions  contemplated  hereby, and each party hereby agrees that all claims
in respect of such dispute shall be heard and determined in such court.

                                         188

<PAGE>



         Section 12.9  Counterparts.  This  Agreement  may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when  executed  shall be deemed to be an original but all of which
shall constitute one and the same Agreement.


                                      189

<PAGE>


         IN WITNESS WHEREOF,  Tremont,  TASS and each of the  Shareholders  have
executed,  or have  caused to be  executed  through  there  respective  officers
thereunto duly authorized, this Agreement as of the date first written above.

                                               TREMONT ADVISERS, INC.

                                               By:
                                                   Name:
                                                   Title:



                                                TASS MANAGEMENT LIMITED

                                                By:
                                                    Name:
                                                    Title:


                                                  Nicola Meaden


                                                 Laurence Huntington Taylor, II



                                                              The          other
                                                              Shareholders as to
                                                              Articles  II,  IV,
                                                              VII,  VIII, X, XI,
                                                              and XII only:


                                                              Colin Myers


                                                              Norma Smith


                                                              Valerie Benard


                                  190

<PAGE>


                                                                Exhibit 10.59


                          REGISTRATION RIGHTS AGREEMENT


         This  Registration  Rights  Agreement  (the  "Agreement")  is made  and
entered  into as of March  11,  1999 by and  among  TREMONT  ADVISERS,  INC.,  a
Delaware  corporation  (the  "Company"),  and each of those  Persons whose names
appear on the signature page hereof (the "TASS Parties").

         This  Agreement is made in connection  with that certain  Agreement and
Plan of  Reorganization,  dated as of March 8, 1999,  by and among the  Company,
TASS  Management  Limited,  a  company  incorporated  in  England  and in  Wales
("TASS"),  and  each  of the  TASS  Parties  (the  "Reorganization  Agreement"),
pursuant to which the TASS Parties are receiving Common Stock of the Company. In
addition, in connection with the Reorganization  Agreement,  certain of the TASS
Parties are receiving  Options to acquire Common Stock of the Company (such TASS
Parties  being  referred to as the "Option  Holders")  pursuant to the terms and
conditions  of certain  stock  option  agreements,  dated as of the date hereof,
executed   by  and  between   each  of  the  Option   Holders  and  the  Company
(collectively,  the "Stock Option Agreements"). The execution of and delivery of
this Agreement is a condition  precedent to the  obligations of TASS and each of
the TASS Parties under the Reorganization Agreement.

         Unless otherwise  defined herein,  capitalized terms so used herein and
not  defined  shall have the same  meaning  as  provided  in the  Reorganization
Agreement.

         The parties hereby agree as follows:

         1.       Certain Definitions.

                  Unless the context  otherwise  requires,  the terms defined in
this Section 1 shall have the  meanings  specified  for all purposes  under this
Agreement  applicable  to both the singular and plural forms of any of the terms
herein  defined.  Terms  defined in the preamble  hereof shall have the meanings
assigned to such terms therein.  As used in this Agreement,  the following terms
shall have the following respective meanings:

                  (a)      "Board" means the Board of Directors of the Company.

                  (b)  "Business  Day"  means any day,  other  than a  Saturday,
Sunday or legal  holiday,  on which  banks in the State of New York are open for
business.

     (c)   "Commission"   means  the  United  States   Securities  and  Exchange
Commission.


                                        191
<PAGE>



                  (d) "Common  Stock" means the Class B Common Stock,  par value
$.01 per share,  of the  Company,  any shares into which such Common Stock shall
have been changed,  or any shares  resulting from any  reclassification  of such
Common Stock.

                  (e) "Exchange Act" means the U.S.  Securities  Exchange Act of
1934,  as  amended,  or  any  successor  statute  thereto,  and  the  rules  and
regulations of the Commission promulgated  thereunder,  all as the same shall be
in effect at the time.

                  (f) "Holders" means the Persons (other than the Company) whose
names  appear  on the  signature  page  hereof,  and any  other  Person  holding
Registrable  Securities  to whom these  registration  rights have been  assigned
pursuant to Section  9(f) of this  Agreement;  provided  however,  that a Person
shall  cease  to be a  Holder  when  such  Person  ceases  to  hold  Registrable
Securities.

                  (g)  "Holders  of a Majority  of the  Registrable  Securities"
means the Person or  Persons  who are the  Holders  of  greater  than 50% of the
Registrable Securities then outstanding.

                  (h) "Options"  means any and all options issued by the Company
to the  Option  Holders  pursuant  to the  Stock  Option  Agreements,  which are
exercisable for the purchase of Common Stock.

                  (i)   "Person"   shall   mean  an   individual,   partnership,
corporation,  association, trust, joint venture, unincorporated organization and
any  government,  governmental  department  or agency or  political  subdivision
thereof.

                  (j)  "Registrable  Securities"  means  (i)  any  Common  Stock
acquired by the TASS  Parties  pursuant to the  Reorganization  Agreement as set
forth as Schedule A hereto to the extent the same is not,  at the time,  subject
to any vesting or similar restrictions; (ii) any Common Stock issued or issuable
to any Holder  upon  exercise  of any  Options  outstanding  on the date of this
Agreement,  as listed on  Schedule A hereto,  or issued in  replacement  of such
Options;  and (iii) any securities issued or issuable with respect to the Common
Stock referred to in clauses (i) and (ii) by way of stock split,  stock dividend
or   in   connection   with   a   combination   of   shares,   reclassification,
recapitalization, merger or consolidation or reorganization.

                  (k) "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with this Agreement,  including,  without
limitation,  all  registration,  filing,  listing and  National  Association  of
Securities Dealers,  Inc. ("NASD") fees, all fees and expenses of complying with
securities  or blue sky laws,  all word  processing,  duplicating  and  printing
expenses,   all  messenger  and  delivery  expenses,  any  transfer  taxes,  the
reasonable  fees and expenses of the  Company's  legal  counsel and  independent
public  accountants,  including  the  expenses  of any  special  audits or "cold
comfort" letters required by or incident to such performance and compliance, and
any fees and  disbursements  of  underwriters  customarily  paid by  issuers  or
sellers of securities; provided, however, that Registration


                                        192

<PAGE>



Expenses shall not include underwriting discounts and commissions.

                  (l) "Rule 144" means Rule 144  promulgated  by the  Commission
pursuant to the Securities Act, as shall be in effect at the time.

                  (m) "Securities Act" means the U.S. Securities Act of 1933, as
amended, or any successor statute thereto,  and the rules and regulations of the
Commission  promulgated  thereunder,  all as the same  shall be in effect at the
time.

         2.       Registration.

                  (a)  Requested  Registration.  (i) If at any time after ninety
(90) days  from the date  hereof,  upon  written  request  by the  Holders  of a
Majority of the Registrable  Securities that the Company effect the registration
under  the  Securities  Act of all or  part  of the  Registrable  Securities  (a
"Requested  Registration"),  the Company will use its best efforts to effect the
registration  under the Securities Act of the Registrable  Securities  which the
Company  has been so  requested  to register by the Holders of a Majority of the
Registrable Securities as promptly as practicable after receipt of such request;
provided, however, that the Company shall not be obligated to effect a Requested
Registration  pursuant  to this  paragraph  (a):  (A)  during  the  twelve  (12)
consecutive  months following the effective date of the  registration  statement
filed in  connection  with any  previous  registration  in which the  Holders of
Registrable Securities had incidental  registration rights to register all their
Registrable  Securities  pursuant  to this  Agreement;  or (B) at any time  when
another registration  statement (other than on Form S-8) of the Company, (1) has
been filed and not yet become  effective,  or (2) has become effective less than
six (6) months  prior to the date of  request  for the  Requested  Registration.
Whenever the Company  shall,  pursuant to this Section 2(a), be requested by the
Holders of a Majority of the Registrable  Securities to effect the  registration
of any  Registrable  Securities  under the  Securities  Act,  the Company  shall
promptly  give written  notice of such proposed  registration  to all Holders of
Registrable  Securities.  Upon the written  request of any Holder  within twenty
(20) days after the giving of such notice, the Company will use its best efforts
to cause any of the  Registrable  Securities  specified by any such Holder to be
included  in such  registration  statement  under  and in  accordance  with  the
Securities  Act.  The  Company  shall be  obligated  to  effect at least one (1)
Requested  Registration,  and up to two (2) Requested Registrations in the event
that if during the forty  eight (48) month  period  commencing  ninety (90) days
from the  date  hereof  the  Company  shall  not have  effected  a  registration
statement  in  which  the  Holders  of  Registrable  Securities  had  incidental
registration  rights to register all their  Registrable  Securities  pursuant to
this  Agreement,  under  this  Section  2(a);  provided,  however,  that if upon
expiration  of such forty eight (48) month  period,  the Company  shall not have
been requested to effect a Requested Registration,  the Company shall thereafter
be obligated to effect only one (1)  Requested  Registration  under this Section
2(a).

     (ii) Subject to the  requirements  of paragraph (f) below,  the Company may
include in such Requested Registration other securities of the Company for sale,
for the Company's  account or for the account of any other Person, if and to the
extent that the

                                        193

<PAGE>



managing  underwriter  determines that the inclusion of such  additional  shares
will not  interfere  with the orderly sale of the  underwritten  securities at a
price  range  acceptable  to  the  Holders  of a  Majority  of  the  Registrable
Securities.

                  (b) Incidental Registration.  If the Company for itself or any
of its  security  Holders  shall  at any  time or times  after  the date  hereof
determines to register  under the Securities Act any shares of its capital stock
or other securities (other than: (i) the registration of an offer, sale or other
disposition  of securities  solely to employees  of, or other persons  providing
services to, the Company,  or any subsidiary  pursuant to an employee or similar
benefit plan; or (ii) relating to a merger,  acquisition or other transaction of
the type  described  in Rule 145 under the  Securities  Act or a  comparable  or
successor rule,  registered on Form S-4 or similar or successor  forms), on each
such occasion the Company will notify each Holder of such determination at least
twenty (20) days prior to the filing of such  registration  statement,  and upon
the request of any Holder  given in writing  within  fifteen (15) days after the
receipt  of such  notice,  the  Company  will  use its best  efforts  as soon as
practicable  thereafter to cause any of the Registrable  Securities specified by
any such Holder to be included in such registration statement to the extent such
registration  is  permissible  under  the  Securities  Act  and  subject  to the
conditions of the Securities Act (an "Incidental Registration").

                  (c)  Registration   Statement  Form.  The  Company  shall,  if
permitted  by law,  effect any  registration  requested  under  Section 2 by the
filing of a registration  statement on Commission  Form S-3, or any successor or
similar short-form  registration statement ("Commission Form S-3") and shall use
its best efforts to take any action  necessary to maintain  its  eligibility  to
utilize  Commission  Form S-3 to permit resales as requested by the Holders with
respect to Transactions  Involving  Secondary  Offerings as described in General
Instruction I.B.3 of Commission Form S-3.

                  (d) Expenses.  The Company shall pay all Registration Expenses
incurred in  connection  with any  Incidental  Registration.  The Holders of the
Registrable  Securities included in the registration statement with respect to a
Requested   Registration  shall  pay  all  Registration   Expenses  incurred  in
connection  therewith  except  (i) to the  extent  the  Company  includes  other
securities  of the  Company  in a  Requested  Registration  pursuant  to Section
2(a)(ii),  in  which  case it  shall  pay its pro  rata  share  of  Registration
Expenses, and (ii) with respect to any Requested Registration effected following
the  expiration  of the forty  eight (48) month  period  referred  to in Section
2(a)(i),  if  during  such  period,  the  Company  shall  not  have  effected  a
registration  statement  in which the  Holders  of  Registrable  Securities  had
incidental  registration  rights to register  all their  Registrable  Securities
pursuant to this Agreement, in which case the Company shall pay all Registration
Expenses incurred in connection therewith.

                  (e) Effective Registration Statement. A Requested Registration
or an  Incidental  Registration  requested  pursuant to Section  2(a) or Section
2(b),  respectively,  shall not be deemed  to have been  effected  unless it has
become  effective  with  the  Commission.   Notwithstanding  the  foregoing,   a
registration statement will not be deemed to have been effected if: after it has
become  effective with the Commission,  such  registration is interfered with by
any


                                        194

<PAGE>



stop order, injunction, or other order or requirement of the Commission or other
governmental  agency  or any  court  proceeding  for  any  reason  other  than a
misrepresentation or omission by any Holder.

                  (f) Priority in Requested or Incidental  Registration.  (i) In
cases of underwritten  offerings,  if the managing underwriters in any Requested
Registration or Incidental Registration shall give written advice to the Company
that, in their opinion,  market conditions dictate that no more than a specified
maximum  number  of  securities  (the  "Underwriter's   Maximum  Number")  could
successfully   be  included  in  such  Requested   Registration   or  Incidental
Registration,  then, subject to any conflicting rights of any Person (other than
a Holder) of  registration  rights granted prior to the date hereof as set forth
on Schedule B hereto

     (A) if such registration is not a Requested Registration, the
         Company  (A) shall be  entitled  to include in such  registration  that
         number of securities  which the Company  proposes to offer and sell for
         its own  account  in such  registration  and which  does not exceed the
         Underwriter's Maximum Number; and (B) will be obligated and required to
         include  in such  registration  that  number of  shares of  Registrable
         Securities  which shall have been  requested by the Holders to the full
         extent of the remaining portion of the Underwriter's Maximum Number;

     (B) if such registration is a Requested Registration, then the Compan shall
         be  entitled  to include in such  registration,  but only to the extent
         that the amount of shares of Registrable  Securities for which the 
         Holders have requested registration  is not  reduced,  that  number of
         securities  which  the  Company proposes to offer and sell for its own
         account in such registration to the full extent of the remaining
         portion of the Underwriter's Maximum Number;

                                    (C)     if less than all of the Registrable
         Securities requested to be included in any such registration by the 
         Holders can be so included due to the  above  priority  requirements,
         then each requesting Holder's request, as the case may be,  shall be  
         granted (subject to the next paragraph) on a pro rata basis with the 
         other requesting Holders, based upon the relative amounts of 
         Registrable  Securities so requested to be included.

     (ii)  Notwithstanding  any other provision of this Agreement,  as among the
TASS parties,  in the event and to the extent the TASS Parties have registration
rights  hereunder  that do not allow in a  particular  instance for the pro-rata
registration  of all Registrable  Securities  held by the TASS Parties,  then in
such case,  Colin Myers ("Myers") and Valerie Benard  ("Benard")  shall be given
the opportunity,  upon written request to Nicola Meaden  ("Meaden") and Laurence
Huntington  Taylor,  II  ("Taylor"),   to  register  all  of  their  Registrable
Securities in preference to and before any of the Registrable Securities held by
Meaden and Taylor are  registered.  If such written request is made by Myers and
Benard, then only to the extent that all of the Registrable Securities for which
Myers and Benard request registration are duly registered hereunder shall Meaden
and Taylor have their Registrable Securities registered,


                                   195

<PAGE>



whereupon such  Registrable  Securities of Meaden and Taylor shall be registered
pro-rata to their  holdings as of the date of this  Agreement.  As between Myers
and Benard,  if less than all their  Registrable  Securities  can be registered,
their Registrable Securities will be registered pro-rata to their holdings as of
the date of this  Agreement.  Nothing in this provision will alter the aggregate
number of Registrable  Securities which the Company may at one time be obligated
to  register,  and  nothing  shall  reduce  Norma  Smith's  right  to  have  her
Registrable Securities registered on a pro-rata basis.

                  (g)  Notwithstanding  anything set forth in paragraphs (a) and
(b) of  this  Section  2,  the  Company  shall  have  the  right  to  delay  any
registration of Registrable  Securities  requested  pursuant to paragraph (a) or
(b) of this  Section  2 for up to the  minimum  period  necessary  not to exceed
ninety  (90) days if such  registration  would,  in the  judgment  of the Board,
substantially  interfere with any material  transaction  being negotiated at the
time of receipt of the request from the  Holders;  provided,  however,  that the
Company may not  exercise  its rights  under this Section 2(g) more than once in
any twelve (12) month period.

         3. Registration Procedures.

                  (a) If and  whenever  the  Company is required to use its best
efforts to effect  the  registration  of any  Registrable  Securities  under the
Securities  Act as  provided  in Section 2, the  Company,  as  expeditiously  as
possible and subject to the terms and conditions of Section 2, will:

     (i)  prepare  and  file  with the  Commission  the  requisite  registration
statement  to effect such  registration  and use its best  efforts to cause such
registration to become and remain effective as provided herein;

     (ii) permit any Holder which, in the reasonable judgment of the Holder
and the Company, might be deemed to be an underwriter or a controlling person of
the Company,  to participate in the preparation of such  registration  statement
and to require the  insertion  therein of material,  furnished to the Company in
writing,  which in the reasonable judgment of such Holder and its counsel should
be included;

     (iii) prepare and file with the Commission  such amendments and supplements
to such registration  statement and the prospectus used in connection  therewith
as may be necessary to keep such registration  statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until the earlier of such time
as all of such  securities have been disposed of in accordance with the intended
methods  of  disposition  by the  seller or  sellers  thereof  set forth in such
registration  statement or the  expiration of one hundred twenty (120) days (or,
if such  registration  statement has been filed on Form S-3, for a period of one
year) (in each case  excluding  days the Holders  are unable to sell  thereunder
because of acts or omissions  of the Company or because of Blackout  Periods (as
defined in Section 3(d))) after such registration statement becomes effective;
 
                                        196

<PAGE>




     (iv)  furnish  to the  Holders  such  number  of  conformed  copies of such
registration  statement and of each such  amendment and  supplement  thereto (in
each case  including  all  exhibits),  such  number of copies of the  prospectus
contained in such registration  statement (including each preliminary prospectus
and any summary  prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity  with the  requirements of the Securities Act,
and such other  documents,  as any Holder of  Registrable  Securities to be sold
under such registration statement may reasonably request;

     (v) use its best efforts to register or qualify all Registrable Securities
covered by such  registration  statement  under such other  United  States state
securities or blue sky laws of such  jurisdictions  as any Holder of Registrable
Securities  to be  sold  under  such  registration  statement  shall  reasonably
request,  to keep such  registration or  qualification  in effect for so long as
such  registration  remains in effect,  and take any other  action  which may be
reasonably necessary or advisable to enable the Holder of Registrable Securities
to be sold under such  registration  statement to consummate the  disposition in
such  jurisdictions  of the  securities  owned by such  Holder,  except that the
Company  shall not for any such purpose be required to (a) qualify  generally to
do business as a foreign  corporation in any  jurisdiction  wherein it would not
but for the  requirements of this paragraph (v) be obligated to be so qualified,
or (b) subject itself to taxation in any such jurisdiction.

     (vi) use its best efforts to cause all Registrable Securities covered by
such  registration  statement  to be  registered  with or approved by such other
United States state governmental  agencies or authorities as may be necessary to
enable the Holder of Registrable  Securities to be sold under such  registration
statement to consummate the intended disposition of such Registrable Securities;

     (vii)  in the  event  of the  issuance  of any stop  order  suspending  the
effectiveness  of the  registration  statement,  or of any order  suspending  or
preventing the use of any related  prospectus or suspending the qualification of
any Registrable  Securities included in such registration  statement for sale in
any jurisdiction,  the Company shall use its best efforts promptly to obtain the
withdrawal of such order;

     (viii) immediately notify the Holders of Registrable Securities included in
such  registration  statement at any time when a prospectus  relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration  statement, as
then in effect,  includes an untrue statement of material fact or omits to state
any  material  fact  required  to be stated  therein  or  necessary  to make the
statements therein not misleading in the light of the circumstances  under which
they were made, and at the request of the Holders  promptly  prepare and furnish
to the Holders a reasonable  number of copies of a supplement to or an amendment
of such  prospectus as may be necessary so that, as thereafter  delivered to the
purchasers  of such  securities,  such  prospectus  shall not  include an untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;


                                        197

<PAGE>




     (ix) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission;

     (x) provide a transfer agent for all Registrable Securities covered by such
registration  statement not later than the effective  date of such  registration
statement; and


     (xi) use its best  efforts to list and maintain the listing and trading of
all Registrable  Securities  covered by such registration  statement on any
securities  exchange or market on which any of the  Registrable  Securities are 
then listed.

                  (b)  The  Company  may  require  each  Holder  of  Registrable
Securities to be sold under such  registration  statement to furnish the Company
with such  information and undertakings as it may reasonably  request  regarding
such Holder and the distribution of such securities as the Company may from time
to time  reasonably  request in  writing.  Information  provided  by the Holders
regarding the Holders and their plan of  distribution  shall be included in such
registration  statement  without  unreasonable  alteration or, in the case of an
Incidental  Registration,  to the extent  reasonably  determined by the managing
underwriters.

                  (c) Each Holder,  by execution of this  Agreement,  agrees (i)
that upon receipt of any notice of the Company of the  happening of any event of
the kind  described in  paragraph  (a)(viii) of this Section 3, such Holder will
forthwith discontinue its disposition of Registrable  Securities pursuant to the
registration statement relating to such Registrable Securities until the receipt
by  such  Holder  of  the  copies  of the  supplemented  or  amended  prospectus
contemplated by paragraph (a)(viii) of this Section 3 and, if so directed by the
Company,  will deliver to the Company or destroy all copies other than permanent
file copies,  then in  possession of the Holders of the  prospectus  relating to
such Registrable  Securities  current at the time of receipt of such notice, and
(ii) that it will immediately notify the Company in writing,  at any time when a
prospectus  relating  to the  registration  of such  Registrable  Securities  is
required to be delivered under the Securities Act, of the happening of any event
as a result of which  information  previously  furnished  by such  Holder to the
Company for  inclusion  in such  prospectus  contains an untrue  statement  of a
material fact or omits to state any material fact required to be stated  therein
or necessary to make the  statements  therein not misleading in the light of the
circumstances  under which they were made.  In the event the Company or any such
Holder shall give any such notice,  the period referred to in paragraph (a)(iii)
of this  Section 3 shall be  extended by a number of days equal to the number of
days  during the period  from and  including  the giving of notice  pursuant  to
paragraph (a)(viii) of this Section 3 to and including the date when such Holder
shall  have  received  the  copies of the  supplemented  or  amended  prospectus
contemplated by paragraph (a)(viii) of this Section 3.

                  (d) Nothing herein,  including the Company's obligations under
Sections  2(a) and 2(b),  shall  restrict the  Company's  ability to suspend the
effectiveness  of the registration  statement,  at any time, for such reasonable
period of time (not,  in any  instance,  to exceed  sixty (60) days (a "Blackout
Period")) which the Board determines is necessary to prevent the


                                        198

<PAGE>



premature  disclosure of any events or information  having a material  effect on
the  Company.  In  addition,  the  Company  shall  not be  required  to keep the
registration statement effective, or may, without suspending such effectiveness,
instruct  the Holders of  Registrable  Securities  included in the  registration
statement,  not to sell such shares,  during any period during which the Company
is  instructed,  directed,  ordered or otherwise  requested by any  governmental
agency or self-regulatory organization to stop or suspend such trading or sales.

         4. Underwritten Offerings.

                  (a)  Selection of  Underwriters.  If a Requested  Registration
pursuant to Section 2(a)  involves an  underwritten  offering,  then the Company
shall select the underwriter, which must be reasonably acceptable to the Holders
of a Majority of the Registrable Securities.

                  (b) Underwritten Offering. In connection with any underwritten
offering  pursuant to a registration  requested  under Section 2(a), the Company
will  enter  into an  underwriting  agreement  with  the  underwriters  for such
offering,  such agreement to be in form and substance reasonably satisfactory to
the Holders of a Majority of the Registrable Securities and such underwriters in
their reasonable judgment and to contain such  representations and warranties by
the Company and such other terms as are  customarily  contained in agreements of
that type, including,  without limitation,  indemnities to the effect and to the
extent  provided in Section 6. Each Holder  participating  in such  registration
shall be a party to such underwriting agreement.

                  (c) Holdback Agreements.  Each Holder agrees, if so reasonably
required by the managing  underwriter or the Company in a registration  pursuant
to Section 2, not to effect any sale or distribution  of Registrable  Securities
(including  sales  pursuant  to Rule 144) during the seven (7) days prior to and
the one hundred eighty (180) days after any  registration  pursuant to Section 2
or any other registration by the Company has become effective (except as part of
such  underwritten  registration)  or, if the managing  underwriter  advises the
Company  that,  in its opinion,  no such public sale or  distribution  should be
effected for a period of not more than one hundred  eighty (180) days after such
underwritten  registration  in order to complete  the sale and  distribution  of
securities  included in such  registration  and the Company gives notice to such
effect to such Holders of such advice,  each Holder shall not effect any sale or
distribution   of   Registrable   Securities   during  such  period  after  such
underwritten  registration,  except as part of such  underwritten  registration,
whether or not such Holder participates in such registration.

         5. Preparation, Reasonable Investigation.

                  In  connection   with  the  preparation  and  filing  of  each
registration  statement under the Securities Act, the Company will give Holders'
counsel, the underwriters, if any, and their respective counsel and accountants,
one set each of drafts and final  copies of such  registration  statement,  each
prospectus  included  therein or filed with the  Commission  and each  amendment
thereof or supplement thereto, as promptly as reasonably practicable,  but in no
event less than five (5)  business  days prior to the  filing  thereof  with the
Commission, and will give each of


                                        199
<PAGE>



them such access to its books and records and such  opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be reasonably necessary, in
the opinion of Holders' Counsel and such underwriters'  respective  counsel,  to
conduct a reasonable investigation within the meaning of the Securities Act.

         6.       Indemnification and Contribution.

                  (a)  Indemnification  by  the  Company.  In the  event  of any
registration  under the Securities Act pursuant to Section 2 of any  Registrable
Securities  covered by such  registration,  the Company  will,  and hereby does,
indemnify  and hold harmless  each Holder of  Registrable  Securities to be sold
under such registration statement,  each such Holder's legal counsel, each other
person  who  participates  as an  underwriter  in the  offering  or sale of such
securities  (if so required by such  underwriter as a condition to including the
Registrable  Securities  of the  Holders  in such  registration)  and each other
person, if any, who controls any such Holder or any such underwriter  within the
meaning  of  the  Securities  Act  against  any  losses,   claims,   damages  or
liabilities,   joint  or  several,  to  which  the  Holders  or  underwriter  or
controlling  person may become  subject under the  Securities  Act or otherwise,
insofar  as  such  losses,   claims,  damages  or  liabilities  (or  actions  or
proceedings,  whether commenced or threatened,  in respect thereof) arise out of
or are based  upon any  untrue  statement  or alleged  untrue  statement  of any
material  fact  contained  in  any  registration   statement  under  which  such
securities were registered under the Securities Act, any preliminary prospectus,
final  prospectus  or  summary  prospectus  contained  therein  or any  document
incorporated  therein by reference,  or any amendment or supplement  thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements  therein not  misleading,  or
arise out of any violation by the Company of any rule or regulation  promulgated
under the Securities  Act or state  securities law applicable to the Company and
relating to action or inaction  required of the Company in  connection  with any
such registration,  and the Company will reimburse such parties for any legal or
any other expenses  reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability,  action or proceeding or enforcing
their rights under this Section 6(a); provided,  however, that the Company shall
not be liable to any such  party in any such  case to the  extent  that any such
loss, claim,  damage,  liability (or action or proceeding in respect thereof) or
expense  arises out of or is based upon any untrue  statement or alleged  untrue
statement or omission or alleged omission made in such  registration  statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or  supplement  in reliance  upon and in  conformity  with  written  information
furnished  to the  Company  by such party or arises out of or is based upon such
party's  failure to deliver a prospectus  in  accordance  with  applicable  law;
provided,  further however, that the indemnification contained in this paragraph
(a) with respect to any Preliminary Prospectus shall not inure to the benefit of
any such party on account of any such loss, claim, damage,  liability or expense
arising from the sale of the Registrable  Securities by such party to any person
if a copy of the Prospectus shall not have been delivered or sent to such person
within the time required by the Securities Act and the  regulations  thereunder,
and the untrue  statement  or alleged  untrue  statement  or omission or alleged
omission of a material fact contained in such Preliminary


                                   200
<PAGE>



Prospectus  was  corrected  in the  Prospectus,  provided  that the  Company has
delivered the  Prospectus to such party in requisite  quantity on a timely basis
to permit such delivery or sending.

                  (b) Indemnification by the Holders. To the extent permitted by
law,  each  Holder  will,  if  Registrable  Securities  held by such  Holder are
included  in the  securities  as to which such  registration,  qualification  or
compliance  is being  effected,  indemnify the Company,  each of its  directors,
officers and controlling persons, and each underwriter, if any, of the Company's
securities  covered by such a registration  statement,  each person who controls
the Company or such underwriter  within the meaning of the Securities Act or the
Exchange  Act or the rules and  regulations  thereunder,  each other such Holder
including  Registrable  Securities and other  securities in the securities as to
which such registration, qualification or compliance is being effected, and each
of their officers,  directors, members and partners, and each person controlling
such Holder,  against all claims,  losses,  damages and liabilities (or actions,
proceedings or settlements  in respect  thereof)  arising out of or based on any
untrue  statement (or alleged untrue  statement) of a material fact contained in
any  such  registration  statement,   prospectus,  offering  circular  or  other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  and  will  reimburse  the  Company  and  such  Holders,  directors,
officers,  members, partners,  persons,  underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
and defending or settling any such claim,  loss,  damage,  liability,  action or
proceeding  or enforcing  their rights under this Section  6(b), in each case to
the extent,  but only to the  extent,  that such  untrue  statement  (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement,  prospectus, offering circular or other document in reliance upon and
in conformity with written  information  furnished to the Company by such Holder
and stated to be  specifically  for use  therein;  provided,  however,  that the
obligations of such Holder  hereunder shall be limited to an amount equal to the
net proceeds to each such Holder of securities sold as contemplated herein.

                  (c) Notices of Claims,  etc. Promptly after receipt by a party
(an  "Indemnified  Party")  of  notice  of the  commencement  of any  action  or
proceeding  involving a claim  referred to in the  preceding  paragraphs of this
Section 6, such  Indemnified  Party will, if a claim in respect thereof is to be
made  against a party  required  to provide  indemnification  (an  "Indemnifying
Party"),  give written notice to the latter of the  commencement of such action,
provided,  however,  that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligation under
the  preceding  paragraphs  of this  Section 6,  except to the  extent  that the
Indemnifying  Party is actually  prejudiced  by such failure to give notice.  In
case any such action is brought  against an  Indemnified  Party,  unless in such
Indemnified  Party's  reasonable  judgment a conflict of interest  between  such
Indemnified  and  Indemnifying  Parties may exist in respect of such claim,  the
Indemnifying Party shall be entitled to participate in and to assume the defense
thereof,  jointly with any other  Indemnifying  Party similarly  notified to the
extent  that  it  may  wish,  with  counsel  reasonably   satisfactory  to  such
Indemnified  Party,  and  after  notice  from  the  Indemnifying  Party  to such
Indemnified  Party  of its  election  so to  assume  the  defense  thereof,  the
Indemnifying Party shall not be liable to such



                                           201
<PAGE>



Indemnified Party for any legal or other expenses  subsequently  incurred by the
latter in  connection  with the defense  thereof.  No  Indemnifying  Party shall
consent  to entry of any  judgment  or enter  into any  settlement  without  the
consent of the Indemnified Party which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such  Indemnified  Party of a
release from all liability in respect to such claim or litigation.

                  (d) Other  Indemnification.  Indemnification  similar  to that
specified  in the  preceding  paragraphs  of this  Section  6 (with  appropriate
modifications)  shall be given by the  Company  and each  Holder of  Registrable
Securities  included in any registration  statement with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority, other than the Securities Act.

                  (e) Indemnification  Payment. The indemnification  required by
this Section 6 shall be made by periodic  payments of the amount  thereof during
the course of the  investigation  or defense,  as and when bills are received or
expense, loss, damage or liability is incurred.

                  (f) Survival of  Obligations.  The  obligations of the Company
and of the Holders  under this  Section 6 shall  survive the  completion  of any
offering of Registrable Securities under this Agreement.

                  (g) Contribution.  If the indemnification provided for in this
Section 6 is unavailable or insufficient to hold harmless an Indemnified  Party,
then each  Indemnifying  Party shall contribute to the amount paid or payable to
such Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 6 an amount or  additional  amount,  as the case may
be, in such  proportion as is  appropriate  to reflect the relative fault of the
Indemnifying  Party or parties on the one hand and the Indemnified  Party on the
other in  connection  with the  statements or omissions  which  resulted in such
losses,  claims,  demands or liabilities as well as any other relevant equitable
considerations.  The relative  fault shall be  determined by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or the  omission  or  alleged  omission  to state a  material  fact  relates  to
information supplied by the Indemnifying Party or parties on the one hand or the
Indemnified  Party on the other and the parties'  relative,  intent,  knowledge,
access to  information  and  opportunity  to  correct  or  prevent  such  untrue
statement or omission.  The amount paid to an  Indemnified  Party as a result of
the losses,  claims, damages or liabilities referred to in the first sentence of
this  Section  6(g)  shall be deemed  to  include  any  legal or other  expenses
reasonably  incurred by such Indemnified Party in connection with  investigating
or  defending  any action or claim  which is the  subject of this  Section 6. No
person  guilty of  fraudulent  misrepresentation  within the  meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any Person
who was not guilty of such fraudulent misrepresentation.


                                   202


<PAGE>



         7. Covenants Relating to Rule 144.

                  With a view to making  available the benefits of certain rules
and  regulations  of the  Commission  which may at any time  permit  the sale of
securities  of the  Company  to the public  without  registration,  the  Company
agrees:

                  (a) to keep effective its registration  under the Exchange Act
and to make and keep public information available with respect to the Company as
those terms are understood and defined in, and to the extent necessary to permit
sales under, Rule 144 under the Securities Act;

                  (b) to use its best efforts to file with the  Commission  in a
timely  manner  all  reports  and other  documents  required  to be filed by the
Company under the Securities Act and the Exchange Act; and

                  (c) so long as a Holder owns any  Registrable  Securities,  to
furnish to the Holder forthwith upon request a written  statement by the Company
as to its  compliance  with the  foregoing  requirements  of Section 7(a) and of
Section  7(b),  a copy of the most  recent  annual  or  quarterly  report of the
Company,  and such other  reports and  documents  of the Company as a Holder may
reasonably  request  in  availing  itself  of  any  rule  or  regulation  of the
Commission allowing a Holder to sell any such securities without registration.

         8.       Certain Representations and Agreements.

                  The Company hereby  represents  and warrants that,  except for
the rights  granted under this Agreement and rights granted under the agreements
and provisions  described on Schedule B hereto, no Person holds any registration
rights with respect to securities of the Company and neither the Company nor any
holder of the  Company's  securities  is bound by, or subject to, any  agreement
with any  holder of the  Company's  securities  with  respect  to the  voting or
transfer  of the  Company's  securities  or  obligating  the  Company to take or
refrain from taking any actions of any type. The Company, at its discretion, may
grant  registration  rights,  pari passu with the rights granted in Section 2 of
this Agreement, to persons who become holders of other securities of the Company
subsequent to the date of this Agreement,  and shall not be obligated to seek or
obtain the consent of the Holders in order to do so;  provided  such persons are
officers or directors of the Company or investors acquiring at least ten percent
(10%) of the outstanding Common Stock when such rights are granted.

         9.       Miscellaneous.

                  (a)  Termination.  The  rights  of each  Holder  set  forth in
Sections 2, 3, 4, 5 and 7 shall terminate on the date which is six (6) years and
ninety (90) days from the date of this Agreement.


                                        203

<PAGE>



                  (b) Specific Performance.  The parties hereto acknowledge that
there may be no adequate  remedy at law if any party fails to perform any of its
obligations  hereunder and that each party may be irreparably harmed by any such
failure,  and accordingly agree that each party, in addition to any other remedy
to which it may be  entitled  at law or in equity,  shall be  entitled to compel
specific  performance of the obligations of any other party under this Agreement
in accordance with the terms and conditions of this Agreement.

                  (c) Notices.  All  demands,  notices,  requests,  consents and
other  communications  required or permitted  under this  Agreement  shall be in
writing and shall be personally  delivered or sent by facsimile  machine (with a
confirmation copy sent by one of the other methods  authorized in this Section),
commercial  (including FedEx) or U.S. Postal Service overnight delivery service,
or,  deposited with the U.S.  Postal  Service mailed first class,  registered or
certified mail, postage prepaid, as set forth below:

                           (i)      if to the Company, addressed to:

                                    Tremont Advisers, Inc.
                                    Corporate Center at Rye
                                    555 Theodore Fremd Avenue
                                    Rye, New York  10580
                                    Facsimile: 914-925-9337
                                    Attention:   Stephen T. Clayton
                                                 Chief Financial Officer

                           (ii)     if to the Holders,  to their  addresses  set
                                    forth on the signature pages hereof.

Notices  shall be deemed  given upon the  earlier to occur of (i) receipt by the
party to whom such notice is directed; (ii) if sent by facsimile machine, on the
day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such  notice  is  directed)  such  notice is sent if sent (as  evidenced  by the
facsimile  confirmed receipt) prior to 5:00 p.m. Eastern Time and, if sent after
5:00 p.m.  Eastern  Time,  on the day (other  than a  Saturday,  Sunday or legal
holiday in the  jurisdiction  to which such notice is directed) after which such
notice is sent; (iii) on the first (second in the case of non-U.S. destinations)
business day (other than a Saturday, Sunday or legal holiday in the jurisdiction
to which such notice is directed)  following the day the same is deposited  with
the commercial carrier if sent by commercial overnight delivery service; or (iv)
the  fifth  day  (other  than  a  Saturday,  Sunday  or  legal  holiday  in  the
jurisdiction  to which such notice is directed)  following  deposit thereof with
the U.S.  Postal  Service as  aforesaid.  Each  party,  by notice  duly given in
accordance  therewith  may  specify a  different  address  for the giving of any
notice hereunder.

                  (d) Governing Law;  Jurisdiction;  Venue. This Agreement shall
be governed by and construed in  accordance  with the internal laws of the State
of New  York,  without  regard  to  conflicts  of law  principles  thereof.  Any
litigation or arbitration between or among the parties


                                        204
<PAGE>



which arises out of this Agreement  shall be instituted  and prosecuted  only in
the  appropriate  New York or federal court or other  tribunal,  situated in New
York.  Each  party  specifically  submits  him,  her or itself to the  exclusive
jurisdiction  of such courts for purposes of any such action and the enforcement
of any judgment or order arising  therefrom.  To the fullest  extent they may do
so,  the  parties  hereto  waive  any right to a change of venue and any and all
objections  to  the  jurisdiction  of  New  York  courts.   Notwithstanding  the
foregoing, each party may take such actions in a foreign jurisdiction which such
party deems  necessary and  appropriate to enforce or collect any court judgment
in any dispute  arising out of this Agreement or to seek and obtain other relief
as is necessary to enforce the terms hereof.

                  (e) Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for  convenience  only, and do not
constitute a part of this  Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.

                  (f) Entire Agreement; Amendments. This Agreement and the other
writings  referred  to herein or  delivered  pursuant  hereto  which form a part
hereof  contain  the entire  understanding  of the parties  with  respect to its
subject   matter.   This   Agreement   supersedes   all  prior   agreements  and
understandings  between  or among any of the  parties  hereto  with  respect  to
registration rights involving  securities of the Company.  This Agreement may be
amended and the  observance of any term of this  Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only by a written  instrument  duly executed by the Company and the Holders of a
Majority of the Registrable Securities; provided however, that to the extent any
amendment  would  adversely  affect the rights of  certain  Holders  ("Adversely
Affected Holders") in a way that is substantially  dissimilar from its effect on
other Holders,  then such  amendment  shall not be effective as to the Adversely
Affected Holders unless it shall have been approved by the Holders of a majority
of the Registrable Securities held by such Adversely Affected Holders.

                  (g)  Assignability.  Without the consent of any other Holders,
the rights and obligations of any Holder under this Agreement may be transferred
to any transferee to whom Registrable  Securities may be transferred pursuant to
all  documents  and  agreements  between the Company and the Holder  making such
transfer; provided, however, that: (i) such transfers are in compliance with all
such other  documents and  agreements  between the Company and the Holder making
such transfer including without limitation the Reorganization Agreement and such
Holder's Stock Option  Agreement;  (ii) the Holder making such transfer provides
the Company with written notice of the transfer of such  Registrable  Securities
at or prior to such  transfer,  advising  the Company of the name and address of
the proposed  transferee and identifying  the securities to be transferred;  and
(iii)  such  proposed  transferee  agrees in  writing  to be bound by all of the
provisions of this Agreement.  In such event,  such transferee shall be added to
the signature page hereof and become a Holder under this Agreement.



                  (h)       Counterparts.  This Agreement may be executed in two
or more


                                    205

<PAGE>



counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

                  (i) Notwithstanding any other provision of this Agreement, the
Company  will not (i) in any 365 day period  restrict  the ability of Holders to
sell  Registrable  Securities for more than (A) 187 days in any  circumstance or
series of  circumstances  involving  Section 4(c) hereof,  or (B) 60 days in any
other  circumstance of series of  circumstances,  and (ii) in any 545 day period
restrict the exercise of registration rights under this Agreement by the Holders
for more than 12 months.

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


                                                      TREMONT ADVISERS, INC.

                                       By:
                                      Name:
                                     Title:



                                    HOLDERS:


                                                      Nicola Meaden



                                                 Laurence Huntington Taylor, II



                                                 Valerie Benard



                                                 Colin Myers


                                                 Norma Smith



                                    206

<PAGE>



                                   SCHEDULE A

           Schedule of Common Stock and Options owned by the TASS Parties

<TABLE>

               <S>                                          <C>                                          <C>                     
                                                  No. of Shares of Tremont                      No. of Shares
             TASS Party                             Class B Common Stock                       of Stock Options

             Meaden                                        64,170                                   24,844

             Taylor                                        33,915                                   78,007

             Myers                                         9,109                                     2,500

             Benard                                        1,871                                     7,500

             Smith                                         81,412                                      -

             Holzhausen                                      -                                       2,000



</TABLE>
                                                    207

<PAGE>


                                   SCHEDULE B

                            Prior Registration Rights



         Pursuant  to a Stock  Purchase  Agreement,  dated June 5, 1997,  by and
between Tremont Advisers, Inc. ("Tremont") and MGL Investments Ltd. ("MGL"), MGL
has certain  "piggyback" and demand  registration rights with respect to 202,365
shares of Tremont's Class B common stock (the "Shares").  Those rights allow MGL
to (i)  require  Tremont to register  the Shares  owned by them,  under  certain
circumstances and subject to certain limitations,  in the event Tremont proposes
to file a registration statement,  and (ii) demand, under certain circumstances,
that  Tremont  register  the  Shares,  and  Tremont is  required to use its best
efforts to cause such registration to become effective.


                                      208

<PAGE>

                                                            Exhibit 10.60

                                                            EXECUTION COPY


                           EMPLOYMENT AGREEMENT


     AGREEMENT,  made as of March 11,  1999,  by and between  TREMONT  ADVISERS,
INC., a Delaware  (U.S.A.) company with its principal  executive  offices at 555
Theodore  Fremd  Avenue,  Rye,  New York 10580,  U.S.A.  (the  "Employer"),  and
LAURENCE  HUNTINGTON (HUNT) TAYLOR, II, an individual residing in Basking Ridge,
New Jersey, U.S.A. ("Taylor").


                         W I T N E S S E T H:



         WHEREAS,  in connection with the agreement and plan of  reorganization,
dated as of the date hereof (the "Plan of Reorganization"), among Employer, TASS
Management  Limited, a company  incorporated in England and Wales ("TASS"),  and
the holders of all of the ordinary shares of Employer and TASS, Employer desires
to employ  Taylor  desires to be so  employed  by  Employer,  as the Senior Vice
President of Global  Marketing and Sales of Employer,  pursuant to the terms and
conditions set forth in this Agreement;

     WHEREAS,  this Agreement is referred to in, and is subject to the terms and
conditions
of, the Plan of Reorganization;

         NOW,  THEREFORE,  in consideration of the mutual  covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
agree as follows:


                                       209

<PAGE>




         Section 1.  Definitions.  The terms defined in this Section 1, whenever
used in this Agreement,  shall, unless the context otherwise requires,  have the
respective meanings specified in this Section 1.

         (a) "Affiliate"  shall mean, with respect to any Person, an individual,
corporation,  partnership,  limited  liability  company,  firm,  joint  venture,
association, joint-stock company, trust, incorporated organization, governmental
or regulatory or other entity controlling, controlled by or under common control
with such  Person,  including  but not  limited to any  subsidiary  and  holding
company of any Person as defined in section 736 of the U.K. Companies Act 1985.

         (b) "Agreement" means this Employment Agreement,  dated as of March 11,
1999, by and between the Employer and Taylor.

         (c) "Annual  Bonus"  means the  Guaranteed  Bonus  (which is not in the
Board of Directors' discretion), together with any additional bonus which may be
granted to Taylor by the  Company  in the sole and  absolute  discretion  of the
Board of Directors or any authorized committee thereof.

         (d) "Base  Compensation" means the annual base salary payable to Taylor
pursuant to Section 5 of this Agreement.



                                    210

<PAGE>



         (e) "Board of  Directors"  means the board of directors of Tremont,  as
elected from time to time in accordance with the by-laws of Tremont.

         (f) "Cause"  shall have the  meaning  set forth in Section  6(a)(ii) of
this Agreement.

         (g) "Client" shall mean any Person which, at the date of termination of
this Agreement or within a period of six (6) months  immediately  preceding such
termination, is a client of or subscriber to Employer, or any of its Affiliates,
or its or their services, and being a Person (i) with which Taylor or any person
reporting  directly to Taylor has had personal  dealings in the course of her or
his duties; or (ii) of which Taylor has personal knowledge.

         (h)  "Company"  means TASS and  Tremont,  in its capacity as the parent
corporation of TASS, collectively.

         (i) "Competing  Business" shall mean any Person which is engaged in (i)
electronic database subscription services or personalized alternative investment
counseling  services for investment funds,  including hedge funds,  derivatives,
managed future funds, foreign exchange,  venture capital, emerging market funds,
leveraged  buyouts  or  arbitrage  funds,  or (ii) any other  business  which is
substantially  the same as any other  business  in which  Employer or any of its
Affiliates is engaged as at the date of  termination of this Agreement and being
a business  in which  Taylor is  directly  engaged at any time during the twelve
(12) month period immediately preceding such termination.


                                   211

<PAGE>




         (j) "Guaranteed Bonus" means the minimum guaranteed bonus of U.S. Fifty
Thousand  Dollars  (US$50,000)  payable  annually,  or  in  such  more  frequent
installments as permitted  hereunder,  to Taylor in accordance with Section 5(a)
hereof, which is not in the Board of Directors' discretion.

         (k)  "Person"  shall  mean any  individual,  corporation,  partnership,
limited  liability  company,  firm,  joint  venture,  association,   joint-stock
company, trust, incorporated  organization,  governmental or regulatory or other
entity.

         (l) "Potential Client" shall mean any Person with which there are as at
the date of termination of this  Agreement  negotiations  ongoing with a view to
such  Person  becoming  a client  of or  subscriber  to  Employer  or any of its
Affiliates,  and being a Person  (i) with which  Taylor or any person  reporting
directly to Taylor has had personal dealings in the course of her or his duties,
or (ii) of which Taylor has personal knowledge.

         (m) "President" shall mean the duly elected President of Tremont.

         (n) "TASS" means TASS  Management  Limited,  a company  incorporated in
England and Wales.

         (o) "Term" shall mean the stated  period of Taylor's  employment as set
forth herein, unless sooner terminated pursuant to the terms hereof.


                                        212

<PAGE>




         (p) "Termination Date" shall mean the date this Agreement is terminated
pursuant to the terms hereof.

         (q) "Tremont" means Tremont Advisers,  Inc., a Delaware corporation and
the sole ordinary shareholder of TASS.

         (r) "U.K."  means the  United  Kingdom of Great  Britain  and  Northern
Ireland.

         (s) "U.S." means the United States of America.

         Section 2.  Employment.  Employer hereby hires and employs Taylor,  and
Taylor hereby  accepts  employment  with  Employer,  as Senior Vice President of
Global  Marketing  and Sales of  Employer,  upon the terms  and  subject  to the
conditions set forth in this Agreement.

         Section  3. Term of  Employment.  The Term shall be for a period of two
years,  commencing on March 11, 1999 and continuing  until March 11, 2001 unless
sooner terminated  pursuant to the terms and conditions of this Agreement.  Upon
completion of the Term this Agreement shall terminate  automatically without the
need for prior notice.

     Section 4. Duties.  Taylor shall serve Employer faithfully and honestly and
use his best  efforts and  abilities  on behalf of  Employer in the  position of
Senior Vice President of Global Sales and Marketing of Employer and shall devote
all of his business time, attention,


                                     213

<PAGE>



skills and efforts solely to the performance of his duties on behalf of Employer
and each of its Affiliates, as may be required by the Employer,  consistent with
the terms of this Agreement, and, subject to the terms of this Agreement,  shall
not  engage or be  involved,  directly  or  indirectly,  in any  other  business
endeavor  whatsoever  without the express  written  consent of Employer.  Taylor
shall  perform  such duties  consistent  with his position or such duties as may
reasonably be assigned by Employer,  acting through the President,  from time to
time during the Term hereof, including without limitation, the following:

                  (a) Taylor  shall  serve as Senior  Vice  President  of Global
Marketing  and  Sales  of  Employer,   responsible   for  the   development  and
coordination of worldwide marketing and sales activities for the Employer;

                  (b)  Taylor  shall  diligently   represent  the  interests  of
Employer and each of its  Affiliates in the United States and in each such other
countries as Taylor and the Employer shall determine;

                  (c)  Taylor  shall  promote,  endorse,  publicize,  and market
proprietary   investment  vehicles,   and  database  management,   research  and
consulting  services  offered by Employer and each of its  Affiliates  and shall
advise Employer's quantitative research analysts as may be appropriate;



                                 214

<PAGE>



                  (d) Taylor shall work  initially at Employer's  offices at 555
Theodore Fremd Avenue,  Rye, New York 10580,  U.S.A.  and, as may be required by
the Employer,  to work on a temporary or permanent  basis at such other location
within the United States, and to travel to such places,  both within and outside
the United States, as may be required for the proper  performance of his duties,
except that during the Term,  without Taylor's consent,  (i) Taylor shall not be
required to  relocate  his place of  employment  to any area beyond a fifty (50)
mile radius of the boundaries of the City of New York, New York; and (ii) Taylor
shall not be required to travel to  destinations on behalf of Employer or any of
its  Affiliates  (A) such that  during the course of any year during the Term he
shall  have  spent  more  than  fifty  percent  (50%)  of his  business  time in
connection with the performance of his duties hereunder  engaged in such travel,
(B) for any period  extending  longer than three (3)  consecutive  weeks  within
which he is not reasonably within commuting distance of Employer's offices,  and
(C) otherwise  inconsistent  with his past practices as Senior Vice President of
Global Marketing and Sales, or comparable position, with TASS; and

                  (e)  Taylor  shall  report to the  Employer  at such  times as
Employer, acting through the President, may reasonably require.

     Section 5.  Compensation.  (a) In consideration  for all the services to be
rendered by Taylor to Employer and its Affiliates as may be required pursuant to
the  terms of this  Agreement,  and any  rights  granted  by Taylor  under  this
Agreement, Employer shall pay compensation to Taylor as follows:


                                         215

<PAGE>




     (i) Base  Compensation.  During the Term of this Agreement,  Employer shall
pay Taylor Base Compensation,  payable in monthly  installments,  and subject to
normal  withholding taxes and deductions,  at the rate of U.S. One Hundred Fifty
Thousand  Dollars  (US$150,000)  per annum.  In the event that  Taylor  shall be
employed by Employer  after the  expiration of the Term, but Employer and Taylor
have not mutually  agreed to extend the terms of this  Agreement,  the period of
employment,  the Base  Compensation  payable to Taylor  and the other  terms and
conditions of his employment shall be as agreed by Taylor and the Company;

                           (ii)     Annual Bonus.

     (A) Guaranteed  Bonus.  In addition to the Base  Compensation  set forth in
Section 5(a)(i) above,  subject to the terms and conditions of Section 9, Taylor
shall receive a Guaranteed  Bonus for each year of the Term, which shall be paid
upon the later of five (5) days  following  the  conclusion  of each year of the
Term or the date on which Tremont  customarily  pays its senior  officers  their
annual  bonuses for Tremont's  preceding  fiscal year ending  December 31, or at
such earlier time or times as the Company  acting  through the  President  shall
determine.

     (B)  Discretionary   Bonus.  In  addition  to  the  Base  Compensation  and
Guaranteed  Bonus set forth in Sections  5(a)(i) and  5(a)(ii)(A),  Taylor shall
also be eligible to receive an  additional  annual bonus from the Company at the
determination of the Board of


                                      216

<PAGE>



Directors,  or any committee thereof,  which  determination shall be at the sole
and absolute discretion of the Board of Directors or such committee.

                  (b)   Notwithstanding   the   provisions   of   this   Section
5(a)(ii)(B), Tremont shall not be required to pay any additional compensation to
Taylor beyond that specified in Section 5(a)(i) and 5(a)(ii)(A) hereof.

         Section 6.  Benefits.  In addition  to the  compensation  described  in
Section 5, Taylor shall be entitled to participate  in any  comparable  employee
health,  medical or other benefits that Employer may now or hereafter  establish
which are generally available to the senior officers of Employer,  to the extent
such  benefits  are  available  to  Taylor  under  applicable  law,  on a  basis
commensurate  with his  position as Senior Vice  President  of Global  Sales and
Marketing of Employer.

         Section 7. Expenses.  Employer shall reimburse  Taylor for all expenses
reasonably  incurred by Taylor in  furtherance  of Taylor's  performance  of his
duties to Employer  and its  Affiliates  hereunder  and in  accordance  with any
policy on expenses  issued by the  Employer,  provided  that  Taylor  renders to
Employer,  or to  Tremont,  as may be required by the  Company,  a complete  and
accurate  accounting  and  documentation  of all such  expenses,  and  furnishes
information adequate in Employer's  reasonable judgment,  to permit deduction of
such expenses on the income tax returns of Employer.



                                   217

<PAGE>



         Section 8.  Vacations.  (a) Taylor shall be entitled to twenty-one (21)
working  days' paid vacation per vacation year (in addition to New York bank and
other  public  holidays) to be taken upon  advance  notice to  Employer,  acting
through the  President,  subject to the  reasonable  objection of the President.
Vacation entitlement shall be deemed to accrue from day to day. For the purposes
of this  Agreement,  Employer's  vacation  year with respect to Taylor shall run
from March 11 to March 11.

                  (b)  Taylor  shall not be  entitled  to carry  over any unused
vacation  entitlement  from one vacation year to another and will not be paid in
lieu thereof for any untaken  vacation except upon  termination of employment as
provided  herein.  Employer  will pay to Taylor one day's  vacation pay for each
complete day of vacation  entitlement  for that  vacation year which has accrued
but remains  untaken at the date of  termination.  A day's vacation pay for this
purpose shall be one-three hundred sixty fifth (1/365) of Base Compensation.

     Section 9. Termination. (a) This Agreement may be terminated as follows:

     (i)  Termination  by Consent.  This  Agreement may be  terminated  upon the
mutual written consent of Employer and Taylor for any reason or no reason.

     (ii)  Termination  for Cause.  Employer  may  terminate  this  Agreement by
summary notice for "Cause,"  which,  for the purposes of this  Agreement,  shall
mean:


                                   218

<PAGE>



     (A)  Taylor's  conviction  for any criminal  offense  other than an offense
under road traffic legislation for which Taylor is not sentenced to imprisonment
(whether immediate or suspended);

     (B)  Taylor's  commission  of an act of  personal  dishonesty  or breach of
fiduciary duty involving personal profit in connection with Taylor's  employment
by Employer;

     (C) Taylor's  commission of an act involving fraud,  willful  misconduct or
serious  negligence  in the  conduct of his duties  and  responsibilities  as an
employee of Employer; or

     (D) a material breach by Taylor of any of the provisions of this
Agreement  unless  remedied within thirty (30) days after written notice thereof
is  delivered  to Taylor by Employer,  if such breach is  reasonably  capable of
remedy.

                           (iii) Death or Disability.

     (A) Death. This Agreement will automatically terminate upon Taylor's death.


                                     219

<PAGE>



     (B) Disability. Employer may terminate Taylor's employment upon twelve (12)
weeks'  prior  written  notice if Taylor  shall have been  prevented by illness,
injury or accident from fully  discharging  his duties under this  Agreement for
three (3)  consecutive  months or for a total  aggregate  period of eighty  (80)
working days (i.e.,  Monday  through Friday  inclusive) in the preceding  twelve
(12) calendar  months,  provided that Taylor is not performing his duties on the
day on which such notice is issued.

     (iv)  Termination  Without Cause.  Employer may terminate this Agreement at
any time without Cause.

     (v) Resignation. Upon termination of Taylor's employment pursuant
to the terms hereof, Taylor shall immediately resign as a member of the board of
directors  of Employer to the extent he is serving in such  capacity at the time
of  termination  and shall  immediately  resign from any offices,  positions and
other  directorships  which  he  may  then  hold  with  Employer  or  any of its
Affiliates.

                  (b) (i) Payment Upon  Termination  Without Cause. In the event
this  Agreement and Taylor's  employment  hereunder  are  terminated by Employer
without Cause (for reasons other than those set forth in Sections 9(a)(i),  (ii)
and (iii)) prior to March 11, 2001,  Employer shall pay or shall be obligated to
pay,  as the case may be, to Taylor in full and  final  settlement  (subject  to
statutory  rights) of all (if any) claims which Taylor may have against Employer
or any of its  Affiliates  arising out of his  employment or its  termination by
Employer,


                                     220

<PAGE>



amounts  equal to (A)  installments  on the Base  Compensation  in effect at the
Termination Date, in accordance with Employer's payroll  practices,  until March
11, 2001 (such  period being  referred to as the  "Severance  Period");  (B) the
Guaranteed  Bonus (or any unpaid portion thereof) for each year ending March 11,
2000 and  March 11,  2001,  respectively,  under  the  terms of this  Agreement,
payable  to Taylor in  accordance  with  Section  5(a)(ii)(A)  hereof,  plus any
discretionary  bonus  awarded  pursuant  to  Section  5(a)(ii)(B)  prior  to the
Termination Date and not yet paid; (C) the value of Taylor's  pro-rated vacation
entitlement  with pay accrued for that portion of the vacation year in which the
employment of Taylor  hereunder is  terminated,  calculated  in accordance  with
Section 8 hereof, to the extent that such vacation entitlement has not been used
by Taylor as of the Termination Date; and (D) the business  expenses  reasonably
incurred  by Taylor up to and  including  the  Termination  Date and  payable in
accordance  with Section 7 hereof.  In addition,  Employer  agrees that,  in the
event Taylor is terminated  without Cause,  for a period ending upon the earlier
of the date which is twelve (12) months from the  Termination  Date, or the date
upon  which  Taylor  secures  employment  which  offers him the  opportunity  to
participate  in a benefit plan  comparable  to  Employer's on the same terms and
conditions as Employer,  Taylor shall be entitled to continue to  participate in
Employer's health,  medical or other benefits,  to the extent of his entitlement
while he was an employee of Employer in accordance with Section 6 hereof.

     (ii)  Offset  for  Employment  by  Competing  Business.  In the event  this
Agreement and Taylor's employment are terminated by Employer without Cause prior
to the  end  of  the  Term,  and  commencing  on a  date  thereafter  (the  "New
Affiliation Date"), Taylor shall


                                     221

<PAGE>



commence  rendering  services  (whether  directly or  indirectly  and whether as
partner, principal, agent, consultant or otherwise) to, or become employed by, a
Competing Business, Taylor promptly shall notify Employer in writing of such new
employment and certify the amount by which his guaranteed  compensation  in such
new employment during any period within the Severance Period exceeds or fails to
equal his Base  Compensation and Guaranteed Bonus hereunder for such period.  If
such  guaranteed  compensation  shall fail to equal his Base  Compensation  plus
Guaranteed Bonus for such period,  the payments by Employer of Base Compensation
plus  Guaranteed  Bonus for such period shall continue in an amount equal to the
difference between the Base Compensation plus Guaranteed Bonus, on the one hand,
and such guaranteed compensation from such new employment on the other. Payments
of any Base  Compensation  plus Guaranteed Bonus shall  immediately cease during
any such  period  if (A)  Taylor  fails  to  provide  such  written  notice  and
certification within thirty (30) days of commencing such new employment,  or (B)
upon Employer's receipt of such notice and certification stating that the amount
of Taylor's  guaranteed  compensation in such new employment  during such period
exceeds his Base  Compensation  plus his Guaranteed Bonus during such period. By
way of example  only,  if during a twelve  (12) month  Severance  Period  Taylor
accepts a consulting  assignment for a Competing Business for six (6) months for
guaranteed compensation in excess of the Base Compensation plus Guaranteed Bonus
payable  during such six (6) month period,  then Employer shall not be obligated
to pay Taylor Base  Compensation plus Guaranteed Bonus during such six (6) month
period,  but shall again be obligated to renew such  payments at the end of such
six (6) month period and for the remainder of the Severance  Period as described
herein.


                                        222

<PAGE>




     (iii) Payment Upon Termination Other Than Without Cause. Should
this  Agreement  and  Taylor's  employment  be  terminated  pursuant to Sections
9(a)(i),  (ii) or (iii) hereof,  Taylor shall be entitled to payment of his Base
Compensation  earned up to the Termination  Date plus an amount equal to the sum
of: (A) any discretionary bonus awarded pursuant to Section 5(a)(ii)(B) prior to
the  Termination  Date and not yet  paid;  (B) the value of  Taylor's  pro-rated
vacation entitlement with pay for that portion of the vacation year in which the
employment of Taylor  hereunder is  terminated,  calculated  in accordance  with
Section 8 hereof, to the extent that such vacation entitlement has not been used
by Taylor as of the Termination Date; and (C) the business  expenses  reasonably
incurred  by Taylor up to and  including  the  Termination  Date and  payable to
Taylor pursuant to Section 7 hereof through the  Termination  Date. In addition,
if Taylor's  employment is terminated prior to the end of the Term under Section
9(a)(i), (ii) or (iii), he shall also be entitled to receive with respect to the
year during the Term in which his  employment  was  terminated  a portion of the
Guaranteed  Bonus in an  amount  equal to the  Guaranteed  Bonus  for such  year
multiplied by a percentage  representing that portion of such year which elapsed
up to the  Termination  Date less any payments of the  Guaranteed  Bonus already
received by Taylor with respect to such year.  All amounts for which Employer is
liable  to  Taylor  (or his  estate,  as the case  may be)  under  this  Section
9(b)(iii)  for  Guaranteed  Bonus  shall be  payable  within  thirty  (30)  days
following  the  Termination  Date or the date  upon  which  annual  bonuses  for
Employer's  fiscal  year  ending the  December  31 prior to the year of Taylor's
termination,  would be paid to Employer's  senior  officers in  accordance  with
Employer's  customary  practices,  whichever is later. All other amounts owed to
Taylor under this Section 9(b)(iii) shall be payable within thirty (30) days of


                                         223

<PAGE>



the  Termination  Date.  By way of example  only,  if for the  purposes  of this
Section 9(b)(iii),  the Termination Date is April 1, 2000, and the date on which
Employer would  customarily pay its senior officers their annual bonuses for the
year ending December 31, 1999 is April 15, 2000, the amounts owing to Taylor for
Guaranteed Bonus pursuant to this Section 9(b)(iii) shall be payable by Employer
no later than May 1, 2000.

     (iv) Reasonableness.  Employer,  on the one hand, and Taylor, on the other,
hereby  confirm that the provisions of Section 9(b) are reasonable and the total
amount  payable as outlined  therein is an amount which has been agreed  between
them to be payable hereunder or, in the alternative, as a reasonable preestimate
of the  damages  which will be  suffered  by Taylor in the event of  termination
without Cause and shall not be construed as a penalty.

         Section 10.       Confidential and Proprietary Information.

                  (a)   Definition   of   Confidential    Information.    Taylor
acknowledges  and agrees  that  Confidential  Information  of  Employer  and its
Affiliates  has been and will be imparted to him,  which if  disclosed by him or
improperly used by him will result in harm to Employer or any of its Affiliates.
For the purposes of this Agreement,  "Confidential  Information"  shall mean all
research,  information,  software, databases, trade secrets, sales and marketing
information,   subscriber   information,   operations  material  and  memoranda,
personnel  records,  client lists,  information  relating to  investment  funds,
accounts and customers, pricing information, and


                                      224

<PAGE>



financial  information   concerning  or  relating  to  the  business,   clients,
subscribers,  employees,  and affairs of Employer,  or any of its Affiliates and
contact  persons  and other  information  maintained  by  Employer or any of its
Affiliates,  obtained by or furnished,  disclosed or disseminated to Taylor,  or
obtained,  assembled or compiled by Taylor or under his  supervision  during the
course of his employment by Employer, or any of its Affiliates, and all physical
embodiments of the foregoing,  all of which are hereby agreed to be the property
of and confidential to Employer and its Affiliates.  "Confidential  Information"
shall not  include any of the  foregoing  to the extent the same can be shown by
written  documentation by Taylor, to be available to the public through no fault
or breach of this Agreement.

                  (b) Removal of Confidential Information.  Taylor hereby agrees
that,  during the Term of this Agreement and thereafter,  he shall not,  without
Employer's prior written consent, remove or cause to be removed from Employer's,
or any of its  Affiliates'  premises  any  Confidential  Information,  or  other
material  whatsoever,  belonging  to  Employer  or any of  its  Affiliates,  for
purposes  other  than for use in  connection  with  authorized  work  Taylor may
perform for Employer or any of its Affiliates.

                  (c)  Disclosure  of  Confidential  Information.  Taylor hereby
agrees that, during the Term of this Agreement and thereafter, without the prior
written consent of Employer, he will not, disclose, except as required by law or
in the normal course of Employer's business,  or make available to any person or
entity any Confidential Information,  nor shall Taylor make or cause to be made,
or permit or allow, either on Taylor's own behalf or on behalf of others,

                                225

<PAGE>



any use of such Confidential Information other than in the proper performance of
Taylor's duties as an employee.  All Confidential  Information shall be returned
to Employer  promptly  upon request or promptly  following  the  termination  of
Taylor's  employment  with Employer.  Notwithstanding  the foregoing,  except as
otherwise  required by law,  Taylor shall at all times maintain as  confidential
such  Confidential  Information  which  is also  confidential  to,  or  contains
confidential information concerning any officer, director,  shareholder,  client
or account of Employer  without the prior  written  consent of the party to whom
such confidential information applies.

                  (d) The  obligations  of this  Section  10 shall  survive  the
expiration  or  termination  of the Agreement to the extent set forth in Section
10(c) above.

         Section 11.  Protection of  Interests.  (a) Taylor shall not during the
Term of this Agreement,  without the prior written  consent of Employer,  acting
through the President,  be concerned or interested in any capacity in any trade,
business  or  occupation  (other  than the  business  of  Employer or any of its
Affiliates),  whether or not of a similar nature to or competing in any material
respect  with any of the  businesses  of Employer  any of its  Affiliates.  Such
restriction  shall not prevent  Taylor from holding or being  interested  in not
more than one percent (1%) of the total issued share capital or capital stock in
any publicly  traded or private company the shares of which are listed or quoted
on a recognized stock exchange or in the  over-the-counter  market. In addition,
with the prior consent of Employer,  acting  through the  President,  Taylor may
hold, directly or indirectly, interests as a passive investor in publicly traded
or


                                226
<PAGE>



private hedge funds or managed funds representing  investments  therein,  in the
aggregate,  of not more than U.S. Five Million Dollars (US  $5,000,000),  and in
such case, the terms of this Section 11 shall not prevent any such investment by
Taylor, within the foregoing  limitations,  representing up to five percent (5%)
of the total issued share capital or equity  interests in any such hedge fund or
managed fund.

                  (b) Taylor  shall not at any time after the  Termination  Date
represent  himself  as  being in any way  connected  with or  interested  in the
business of Employer or any of its  Affiliates  or knowingly  make any untrue or
misleading statement in relation to Employer or any of its Affiliates.

                  (c) In the event Taylor shall be terminated for Cause,  Taylor
shall not directly or indirectly and whether as employee, director,  consultant,
owner or  otherwise  during  the  period of twelve  (12)  months  following  the
termination of his  employment by Employer  engage or be interested or concerned
in any Competing  Business,  except by holding or being  interested as a passive
investor in the investments referred to in Section 11(a).

                  (d) Taylor shall not,  directly or  indirectly  and whether as
employee, director,  consultant, owner or otherwise during the twelve (12) month
period  following  the  termination  of  his  employment  with  Employer  and in
competition with Employer or any of its Affiliates  canvas or solicit the custom
of or seek to entice away from Employer or any of its Affiliates (i) any Client;
or (ii) any Potential Client.


                                  227

<PAGE>




                  (e) Taylor shall not,  directly or  indirectly  and whether as
employee, director,  consultant, owner or otherwise during the twelve (12) month
period  following  the  termination  of  his  employment  with  Employer  and in
competition  with  Employer or any of its  Affiliates  do business  with (i) any
Client or (ii) any Potential Client.

                  (f) Taylor  shall not  directly or  indirectly  and whether as
employee, director,  consultant, owner or otherwise during the twelve (12) month
period  following the  termination  of his  employment  with Employer  entice or
endeavor to entice away from Employer or any of its  Affiliates or any of its or
their employees  (whether or not the departure of such employee would constitute
a breach of contract on his or her part).  For the  purposes of this  paragraph,
"employee"  means any person  employed  or  retained  by  Employer or any of its
Affiliates with management or senior level sales responsibilities,  whether on a
permanent  or  consultancy  basis,  with whom  Taylor  shall  have had  personal
dealings in the course of performing his duties under this Agreement. Nothing in
this  provision  will  prevent  Taylor from hiring an employee  responding  to a
general  solicitation  appearing in a newspaper,  trade  publication  or similar
medium.

         Section  12.  Notices.  Any  notice or other  communication  under this
Agreement shall be in writing and shall be considered given when received by the
party to whom or 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 set
forth below (or at such other address as any party may have previously specified


                                      228

<PAGE>



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.

         If to Employer:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580
                  U.S.A.
                  Attention: Mr. Stephen T. Clayton, Chief Financial Officer
                  Facsimile No.: 914-925-9337

         with a copy to:

                  Newman Tannenbaum Helpern
                    Syracuse & Hirschtritt LLP
                  900 Third Avenue
                  New York, New York  10022
                  U.S.A.
                  Attention: Michael G. Tannenbaum, Esq.
                  Facsimile No.: 212-371-1084

         If to Taylor:

                  Laurence Huntington Taylor, II
                  83 Tuxford Terrace
                  Basking Ridge, New Jersey 07920
                  U.S.A.
                  Facsimile No.: 908-630-0461

         with a copy to:

                  Kleinberg, Kaplan, Wolff & Cohen, P.C.
                  551 Fifth Avenue
                  New York, NY  10176
                  Attention: Frederic A. Kleinberg, Esq.
                  Facsimile No.: 212-986-8866


                                      229

<PAGE>




         Section 13.       General.

         (a) As from  the  date of  this  Agreement,  all  other  agreements  or
arrangements (whether written or oral and express or implied) between Taylor and
Employer or any of its  Affiliates  relating to the  services or  employment  of
Taylor shall be deemed to have been terminated by mutual consent.

         (b) The  parties  agree and  acknowledge  that there are no  collective
agreements applicable to Taylor's employment with Employer.

         (c) This  Agreement  shall be  governed by the laws of the State of New
York and the laws of the United States of America applicable  therein,  and each
party  submits to the  jurisdiction  of the New York courts with  respect to any
claim or matter  arising  under this  Agreement,  and each party agrees that all
such claims or matters  shall be heard and  determined  in such courts,  without
reference to conflict of law principles thereof.

         Section 14.  Taylor's  Representations  and  Warranties.  Taylor hereby
represents and warrants to Employer and any of its Affiliates that the execution
of this Agreement and Taylor's performance  hereunder will not, with, or without
the giving of notice or the passage of time, conflict with, result in the breach
of or the  termination  of, or constitute a default under any agreement to which
Taylor is or may be bound.



                                     230

<PAGE>



     Section 15. Headings. The headings used in this Agreement are solely for
convenience of reference and shall not effect its interpretation.

     Section  16.  Waiver of Breach.  The waiver by any party of a breach of any
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by a party.

         Section 17. Severability.  If any paragraph,  term or provision of this
Agreement shall be held or determined to be  unenforceable,  the balance of this
Agreement  shall  nevertheless  continue in full force and effect  unaffected by
such holding or determination. In addition, in any such event, the parties agree
that it is their  intention  and  agreement  than any  such  paragraph,  term or
provision  which is held or determined  to be  unenforceable  as written,  shall
nonetheless  be enforced and binding to the fullest  extent  permitted by law as
though such  paragraph,  term or provision had been written in such a manner and
to such extent as to be enforceable under the circumstances.

     Section  18.  Amendments.  No  amendment,  modification  or  waiver  of any
provisions  of this  Agreement  shall be made except by an instrument in writing
signed by the parties charged.



                                    231

<PAGE>


         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.

                                                     Employer:

                                                     TREMONT ADVISERS, INC.


                                       By:
                                      Name:
                                     Title:




                                                Laurence Huntington Taylor, II




                                         232

<PAGE>
                                                                 Exhibit 10.61

                                                                 EXECUTION COPY


                               EMPLOYMENT AGREEMENT


         AGREEMENT,  made as of March 11, 1999,  by and between TASS  MANAGEMENT
LIMITED,  a company  incorporated  in England and Wales,  having its  registered
office at 27 Palace Street, London 5W1E 5HN ("TASS"),  TREMONT ADVISERS, INC., a
corporation  incorporated  under  the laws of the  State of  Delaware  (U.S.A.),
having its  principal  office at Corporate  Center at Rye,  555  Theodore  Fremd
Avenue,  Rye,  New York 10580  ("Tremont"),  and NICOLA  MEADEN,  an  individual
residing in London, England ("Meaden").


                                               W I T N E S S E T H:



         WHEREAS,  in connection with the agreement and plan of  reorganization,
dated as of the date hereof (the "Plan of Reorganization"),  among Tremont, TASS
and the holders of all of the ordinary  shares of TASS, TASS desires to continue
to employ Meaden,  and Meaden desires to be so employed by TASS, as the Managing
Director  and  Chief  Executive  Officer  of TASS,  pursuant  to the  terms  and
conditions set forth in this Agreement;

     WHEREAS,  this Agreement is referred to in, and is subject to the terms and
conditions of, the Plan of Reorganization;



                                     233

<PAGE>



         NOW,  THEREFORE,  in consideration of the mutual  covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
agree as follows:

         Section 1.  Definitions.  The terms defined in this Section 1, whenever
used in this Agreement,  shall, unless the context otherwise requires,  have the
respective meanings specified in this Section 1.

         (a) "Affiliate"  shall mean, with respect to any Person, an individual,
corporation,  partnership,  limited  liability  company,  firm,  joint  venture,
association, joint-stock company, trust, incorporated organization, governmental
or regulatory or other entity controlling, controlled by or under common control
with such  Person,  including  but not  limited to any  subsidiary  and  holding
company of any Person as defined in section 736 of the U.K. Companies Act 1985.

         (b) "Agreement" means this Employment Agreement,  dated as of March 11,
1999, by and between the Company and Meaden.

         (c) "Annual  Bonus"  means the  Guaranteed  Bonus  (which is not in the
Board of Directors' discretion), together with any additional bonus which may be
granted to Meaden by the  Company  in the sole and  absolute  discretion  of the
Board of Directors or any authorized committee thereof.


                                         234

<PAGE>




         (d) "Base  Compensation" means the annual base salary payable to Meaden
pursuant to Section 5 of this Agreement.

         (e) "Board of  Directors"  means the board of directors of Tremont,  as
elected from time to time in accordance with the by-laws of Tremont.

         (f) "Cause"  shall have the  meaning  set forth in Section  6(a)(ii) of
this Agreement.

         (g) "Client" shall mean any Person which, at the date of termination of
this Agreement or within a period of six (6) months  immediately  preceding such
termination,  is a client of or subscriber to TASS, or any of its Affiliates, or
its or their  services,  and being a Person (i) with which  Meaden or any person
reporting  directly to Meaden has had personal  dealings in the course of her or
his duties; or (ii) of which Meaden has personal knowledge.

         (h)  "Company"  means TASS and  Tremont,  in its capacity as the parent
corporation of TASS, collectively.

         (i) "Competing  Business" shall mean any Person which is engaged in (i)
electronic database subscription services or personalized alternative investment
counseling  services for investment funds,  including hedge funds,  derivatives,
managed future funds, foreign exchange,  venture capital, emerging market funds,
leveraged  buyouts  or  arbitrage  funds,  or (ii) any other  business  which is
substantially the same as any other business in which TASS or any of its


                                      235

<PAGE>



Affiliates is engaged as at the date of  termination of this Agreement and being
a business  in which  Meaden is  directly  engaged at any time during the twelve
(12) month period immediately preceding such termination.

         (j) "Guaranteed Bonus" means the minimum guaranteed bonus of U.S. Fifty
Thousand  Dollars  (US$50,000)  payable  annually,  or  in  such  more  frequent
installments as permitted  hereunder,  to Meaden in accordance with Section 5(a)
hereof, which is not in the Board of Directors' discretion.

         (k)  "Person"  shall  mean any  individual,  corporation,  partnership,
limited  liability  company,  firm,  joint  venture,  association,   joint-stock
company, trust, incorporated  organization,  governmental or regulatory or other
entity.

         (l) "Potential Client" shall mean any Person with which there are as at
the date of termination of this  Agreement  negotiations  ongoing with a view to
such Person becoming a client of or subscriber to TASS or any of its Affiliates,
and being a Person (i) with which  Meaden or any person  reporting  directly  to
Meaden has had personal  dealings in the course of her or his duties, or (ii) of
which Meaden has personal knowledge.

         (m) "President" shall mean the duly elected President of Tremont.




                                      236

<PAGE>



         (n) "SFA" means The  Securities  and Futures  Authority  Limited of the
U.K.

         (o) "TASS" means TASS  Management  Limited,  a company  incorporated in
England and Wales.

         (p) "Term" shall mean the stated  period of Meaden's  employment as set
forth herein, unless sooner terminated pursuant to the terms hereof.

         (q) "Termination Date" shall mean the date this Agreement is terminated
pursuant to the terms hereof.

         (r) "Tremont" means Tremont Advisers,  Inc., a Delaware corporation and
the sole ordinary shareholder of TASS.

         (s) "U.K."  means the  United  Kingdom of Great  Britain  and  Northern
Ireland.

         (t) "U.S." means the United States of America.

     Section 2.  Employment.  TASS hereby hires and employs  Meaden,  and Meaden
hereby accepts  employment  with TASS, as President of TASS,  upon the terms and
subject to the conditions set forth in this Agreement. For so long as TASS shall
be obligated to Meaden


                                        237

<PAGE>



hereunder,  Tremont hereby guarantees the performance by TASS and the payment of
its  obligations  hereunder  to  Meaden,  upon  the  terms  and  subject  to the
conditions set forth herein.

         Section  3. Term of  Employment.  The Term shall be for a period of two
years,  commencing on March 11, 1999 and continuing  until March 11, 2001 unless
sooner terminated  pursuant to the terms and conditions of this Agreement.  Upon
completion of the Term this Agreement shall terminate  automatically without the
need for prior notice.

         Section 4. Duties.  Meaden shall serve TASS faithfully and honestly and
use her best efforts and abilities on behalf of TASS in the position of Managing
Director  and  Executive  Officer of TASS and shall  devote all of her  business
time,  attention,  skills and efforts solely to the performance of her duties on
behalf of TASS and each of its  Affiliates,  as may be required by the  Company,
consistent with the terms of this Agreement,  and,  subject to the terms of this
Agreement, shall not engage or be involved, directly or indirectly, in any other
business endeavor whatsoever without the express written consent of the Company.
Meaden shall perform such duties  consistent with her position or such duties as
may reasonably be assigned by the Company,  acting  through the President,  from
time  to  time  during  the  Term  hereof,  including  without  limitation,  the
following:

                  (a) Meaden shall serve as chief executive officer of TASS with
the designation of Managing  Director and Chief Executive  Officer,  responsible
for the daily supervision of the


                                       238

<PAGE>



business of TASS and the  administration  of its  operations and shall be deemed
Senior Executive Officer,  Compliance Officer, and Finance Officer in accordance
with the rules of the SFA;

                  (b) Meaden shall serve as a director on the board of directors
of TASS for so long as the Company shall require the same;

                  (c) Meaden shall  diligently  represent  the interests of TASS
and each of its Affiliates in the United Kingdom and on the continent of Europe;

                  (d)  Meaden  shall  promote,  endorse,  publicize,  and market
proprietary   investment  vehicles,   and  database  management,   research  and
consulting  services offered by TASS and each of its Affiliates and shall advise
Tremont's quantitative research analysts as may be appropriate;

                  (e) Meaden shall work initially at TASS's offices at 27 Palace
Street, London 5W1E 5HN, England and, as may be required by the Company, to work
on a temporary or permanent basis at such other location within the U.K., and to
travel to such places,  both within and outside the U.K., as may be required for
the proper  performance  of her duties,  except  that  during the Term,  without
Meaden's  consent,  (i) Meaden  shall not be required  to relocate  her place of
employment  to any area beyond a ten (10) mile radius of the  boundaries  of the
City of London,  England;  and (ii)  Meaden  shall not be  required to travel to
destinations on behalf of TASS or any of its Affiliates (A) such that during the
course of any year during the Term she

                                    239

<PAGE>



shall  have  spent  more  than  fifty  percent  (50%)  of her  business  time in
connection with the performance of her duties hereunder  engaged in such travel,
(B) for any period  extending  longer than three (3)  consecutive  weeks  within
which she is not reasonably within commuting distance of TASS's offices, and (C)
otherwise  inconsistent  with her past practices as Managing  Director and Chief
Executive Officer of TASS; and

                  (f) Meaden  shall  report to the  Company at such times as the
Company, acting through the President, may reasonably require.

     Section 5.  Compensation.  (a) In consideration  for all the services to be
rendered by Meaden to TASS and its Affiliates as may be required pursuant to the
terms of this Agreement,  and any rights granted by Meaden under this Agreement,
TASS shall pay compensation to Meaden as follows:

     (i) Base  Compensation.  During the Term of this Agreement,  TASS shall pay
Meaden Base Compensation, payable in monthly installments, and subject to normal
withholding taxes and deductions, at the rate of U.S. One Hundred Fifty Thousand
Dollars  (US$150,000)  per annum.  In the event that Meaden shall be employed by
TASS after the  expiration  of the Term,  but the  Company  and Meaden  have not
mutually agreed to extend the terms of this Agreement, the period of employment,
the Base  Compensation  payable to Meaden and the other terms and  conditions of
her employment shall be as agreed by Meaden and the Company;


                                    240

<PAGE>




                           (ii)     Annual Bonus.

     (A) Guaranteed  Bonus.  In addition to the Base  Compensation  set forth in
Section 5(a)(i) above,  subject to the terms and conditions of Section 9, Meaden
shall receive a Guaranteed  Bonus for each year of the Term, which shall be paid
upon the later of five (5) days  following  the  conclusion  of each year of the
Term or the date on which Tremont  customarily  pays its senior  officers  their
annual  bonuses for Tremont's  preceding  fiscal year ending  December 31, or at
such earlier time or times as the Company,  acting through the President,  shall
determine.

     (B)  Discretionary   Bonus.  In  addition  to  the  Base  Compensation  and
Guaranteed  Bonus set forth in Sections  5(a)(i) and  5(a)(ii)(A),  Meaden shall
also be eligible to receive an  additional  annual bonus from the Company at the
determination  of the  Board  of  Directors,  or any  committee  thereof,  which
determination  shall be at the  sole and  absolute  discretion  of the  Board of
Directors or such committee.

                  (b)   Notwithstanding   the   provisions   of   this   Section
5(a)(ii)(B),  neither TASS nor Tremont  shall be required to pay any  additional
compensation  to Meaden beyond that specified in Section 5(a)(i) and 5(a)(ii)(A)
hereof.

     Section 6. Benefits.  In addition to the compensation  described in Section
5, Meaden shall be entitled to participate in any  comparable  employee  health,
medical or other benefits that


                                    241

<PAGE>



TASS may now or hereafter  establish which are generally available to the senior
officers of Tremont,  to the extent such  benefits are available to Meaden under
applicable law, on a basis commensurate with her position as President of TASS.

         Section 7.  Expenses.  TASS  shall  reimburse  Meaden for all  expenses
reasonably  incurred by Meaden in  furtherance  of Meaden's  performance  of her
duties to TASS and its Affiliates hereunder and in accordance with any policy on
expenses  issued by the Company,  provided  that Meaden  renders to TASS,  or to
Tremont,  as may be required by the Company, a complete and accurate  accounting
and documentation of all such expenses,  and furnishes  information  adequate in
the Company's reasonable  judgment,  to permit deduction of such expenses on the
income tax returns of TASS.

         Section 8.  Holidays.  (a) Meaden shall be entitled to twenty-one  (21)
working  days' paid  holiday per holiday  year (in  addition to English bank and
other public  holidays) to be taken upon advance  notice to the Company,  acting
through the  President,  subject to the  reasonable  objection of the President.
Holiday  entitlement shall be deemed to accrue from day to day. For the purposes
of this  Agreement,  TASS's  holiday  year with respect to Meaden shall run from
March 11 to March 11.

                  (b)  Meaden  shall not be  entitled  to carry  over any unused
holiday  entitlement  from one  holiday  year to another and will not be paid in
lieu thereof for any untaken  holiday  except upon  termination of employment as
provided herein. TASS will pay to Meaden one day's


                                      242

<PAGE>



holiday pay for each complete day of holiday  entitlement  for that holiday year
which has  accrued  but  remains  untaken  at the date of  termination.  A day's
holiday pay for this purpose  shall be one-three  hundred sixty fifth (1/365) of
Base Compensation.

     Section 9. Termination. (a) This Agreement may be terminated as follows:

     (i)  Termination  by Consent.  This  Agreement may be  terminated  upon the
mutual written consent of the Company and Meaden for any reason or no reason.

     (ii) Termination for Cause. Company may terminate this Agreement by summary
notice for "Cause," which, for the purposes of this Agreement, shall mean:

     (A) Meaden's conviction for any criminal offense other than an
     offense under road traffic legislation for which Meaden is not sentenced to
imprisonment
(whether immediate or suspended);

     (B)  Meaden's  commission  of an act of  personal  dishonesty  or breach of
fiduciary duty involving personal profit in connection with Meaden's  employment
by TASS;



                                         243

<PAGE>



     (C) Meaden's  commission of an act involving fraud,  willful  misconduct or
serious  negligence  in the  conduct of her duties  and  responsibilities  as an
employee of TASS;

     (D) Except as otherwise permitted or instructed by the Company,
Meaden's ceasing to be a registered Person of Employer with the SFA;

     (E) the  suspension  or  revocation  of any licenses or similar  regulatory
approvals  necessary for the operation of the business of TASS due, in whole, or
substantially  in whole,  to the conduct  and/or  activities of Meaden and which
such suspension or revocation materially injures or damages TASS's or any of its
Affiliates' business and reputation; or

     (F) a material  breach by Meaden of any of the provisions of this Agreement
unless  remedied  within  thirty  (30) days  after  written  notice  thereof  is
delivered  to Meaden by the  Company,  if such breach is  reasonably  capable of
remedy.

                           (iii) Death or Disability.

     (A) Death. This Agreement will automatically terminate upon
Meaden's death.



                                         244

<PAGE>



     (B) Disability.  Company may terminate Meaden's employment upon twelve (12)
weeks'  prior  written  notice if Meaden  shall have been  prevented by illness,
injury or accident from fully  discharging  her duties under this  Agreement for
three (3)  consecutive  months or for a total  aggregate  period of eighty  (80)
working days (i.e.,  Monday  through Friday  inclusive) in the preceding  twelve
(12) calendar  months,  provided that Meaden is not performing her duties on the
day on which such notice is issued.

     (iv) Termination Without Cause. Company may terminate this Agreement at any
time without Cause.

     (v) Resignation. Upon termination of Meaden's employment pursuant
to the terms hereof, Meaden shall immediately resign as a member of the board of
directors  of TASS to the extent she is serving in such  capacity at the time of
termination and shall immediately  resign from any offices,  positions and other
directorships which she may then hold with TASS or any of its Affiliates.

                  (b) (i) Payment Upon  Termination  Without Cause. In the event
this Agreement and Meaden's  employment  hereunder are terminated by the Company
without Cause (for reasons other than those set forth in Sections 9(a)(i),  (ii)
and (iii)) prior to March 11, 2001, TASS shall pay or shall be obligated to pay,
as the case may be, to Meaden in full and final settlement (subject to statutory
rights) of all (if any) claims  which Meaden may have against TASS or any of its
Affiliates arising out of her employment or its termination by the Company,


                                         245

<PAGE>



amounts  equal to (A)  installments  on the Base  Compensation  in effect at the
Termination Date, in accordance with TASS's payroll  practices,  until March 11,
2001  (such  period  being  referred  to as the  "Severance  Period");  (B)  the
Guaranteed  Bonus (or any unpaid portion thereof) for each year ending March 11,
2000 and  March 11,  2001,  respectively,  under  the  terms of this  Agreement,
payable  to Meaden in  accordance  with  Section  5(a)(ii)(A)  hereof,  plus any
discretionary  bonus  awarded  pursuant  to  Section  5(a)(ii)(B)  prior  to the
Termination Date and not yet paid; (C) the value of Meaden's  pro-rated  holiday
entitlement  with pay accrued for that  portion of the holiday year in which the
employment of Meaden  hereunder is  terminated,  calculated  in accordance  with
Section 8 hereof, to the extent that such holiday  entitlement has not been used
by Meaden as of the Termination Date; and (D) the business  expenses  reasonably
incurred  by Meaden up to and  including  the  Termination  Date and  payable in
accordance with Section 7 hereof.  In addition,  the Company agrees that, in the
event Meaden is terminated  without Cause,  for a period ending upon the earlier
of the date which is twelve (12) months from the  Termination  Date, or the date
upon  which  Meaden  secures  employment  which  offers her the  opportunity  to
participate in a benefit plan  comparable to the Company's on the same terms and
conditions as the Company,  Meaden shall be entitled to continue to  participate
in TASS's health,  medical or other  benefits,  to the extent of her entitlement
while she was an employee of TASS in accordance with Section 6 hereof.

     (ii)  Offset  for  Employment  by  Competing  Business.  In the event  this
Agreement and Meaden's  employment are  terminated by the Company  without Cause
prior to the end of the Term,  and  commencing  on a date  thereafter  (the "New
Affiliation Date"), Meaden


                                    246
<PAGE>



shall commence rendering services (whether directly or indirectly and whether as
partner, principal, agent, consultant or otherwise) to, or become employed by, a
Competing Business,  Meaden promptly shall notify the Company in writing of such
new employment and certify the amount by which her  guaranteed  compensation  in
such new  employment  during any period within the Severance  Period  exceeds or
fails to equal her Base  Compensation  and Guaranteed  Bonus  hereunder for such
period.  If  such  guaranteed   compensation   shall  fail  to  equal  her  Base
Compensation plus Guaranteed Bonus for such period,  the payments by the Company
of Base  Compensation plus Guaranteed Bonus for such period shall continue in an
amount equal to the difference  between the Base  Compensation  plus  Guaranteed
Bonus,  on the  one  hand,  and  such  guaranteed  compensation  from  such  new
employment on the other. Payments of any Base Compensation plus Guaranteed Bonus
shall  immediately  cease  during any such period if (A) Meaden fails to provide
such written notice and certification within thirty (30) days of commencing such
new  employment,   or  (B)  upon  the  Company's  receipt  of  such  notice  and
certification  stating that the amount of Meaden's  guaranteed  compensation  in
such new employment  during such period exceeds her Base  Compensation  plus her
Guaranteed Bonus during such period.  By way of example only, if during a twelve
(12)  month  Severance  Period  Meaden  accepts a  consulting  assignment  for a
Competing  Business for six (6) months for guaranteed  compensation in excess of
the Base  Compensation  plus Guaranteed  Bonus payable during such six (6) month
period,  then TASS shall not be obligated to pay Meaden Base  Compensation  plus
Guaranteed Bonus during such six (6) month period,  but shall again be obligated
to renew  such  payments  at the end of such six (6)  month  period  and for the
remainder of the Severance Period as described herein.


                                        247

<PAGE>




     (iii) Payment Upon Termination Other Than Without Cause. Should
this  Agreement  and  Meaden's  employment  be  terminated  pursuant to Sections
9(a)(i),  (ii) or (iii) hereof,  Meaden shall be entitled to payment of her Base
Compensation  earned up to the Termination  Date plus an amount equal to the sum
of: (A) any discretionary bonus awarded pursuant to Section 5(a)(ii)(B) prior to
the  Termination  Date and not yet  paid;  (B) the value of  Meaden's  pro-rated
holiday  entitlement  with pay for that portion of the holiday year in which the
employment of Meaden  hereunder is  terminated,  calculated  in accordance  with
Section 8 hereof, to the extent that such holiday  entitlement has not been used
by Meaden as of the Termination Date; and (C) the business  expenses  reasonably
incurred  by Meaden up to and  including  the  Termination  Date and  payable to
Meaden pursuant to Section 7 hereof through the  Termination  Date. In addition,
if Meaden's  employment is terminated prior to the end of the Term under Section
9(a)(i),  (ii) or (iii),  she shall also be entitled to receive  with respect to
the year during the Term in which her employment was terminated a portion of the
Guaranteed  Bonus in an  amount  equal to the  Guaranteed  Bonus  for such  year
multiplied by a percentage  representing that portion of such year which elapsed
up to the  Termination  Date less any payments of the  Guaranteed  Bonus already
received by Meaden with respect to such year.  All amounts for which the Company
is liable to  Meaden  (or her  estate,  as the case may be) under  this  Section
9(b)(iii)  for  Guaranteed  Bonus  shall be  payable  within  thirty  (30)  days
following  the  Termination  Date or the date  upon  which  annual  bonuses  for
Tremont's  fiscal  year  ending the  December  31 prior to the year of  Meaden's
termination,  would be paid to  Tremont's  senior  officers in  accordance  with
Tremont's  customary  practices,  whichever is later.  All other amounts owed to
Meaden under this Section 9(b)(iii) shall be payable within thirty (30) days of

                                     248

<PAGE>



the  Termination  Date.  By way of example  only,  if for the  purposes  of this
Section 9(b)(iii),  the Termination Date is April 1, 2000, and the date on which
Tremont would  customarily  pay its senior officers their annual bonuses for the
year ending December 31, 1999 is April 15, 2000, the amounts owing to Meaden for
Guaranteed  Bonus  pursuant to this  Section  9(b)(iii)  shall be payable by the
Company no later than May 1, 2000.

     (iv) Reasonableness.  TASS and Tremont, on the one hand, and Meaden, on the
other, hereby confirm that the provisions of Section 9(b) are reasonable and the
total  amount  payable as  outlined  therein is an amount  which has been agreed
between them to be payable  hereunder  or, in the  alternative,  as a reasonable
preestimate  of the  damages  which will be  suffered  by Meaden in the event of
termination without Cause and shall not be construed as a penalty.

                  (c) Meaden hereby agrees to waive any right to make a claim of
unfair  dismissal if this Agreement  terminates  upon the expiration of the Term
without it being extended or renewed.

         Section 10.       Confidential and Proprietary Information.

                  (a)   Definition   of   Confidential    Information.    Meaden
acknowledges  and agrees that  Confidential  Information  of the Company and its
Affiliates  has been and will be imparted to her,  which if  disclosed by her or
improperly used by her will result in harm to the Company

                                      249

<PAGE>



or any of its  Affiliates.  For the  purposes of this  Agreement,  "Confidential
Information" shall mean all research,  information,  software,  databases, trade
secrets, sales and marketing  information,  subscriber  information,  operations
material and memoranda, personnel records, client lists, information relating to
investment funds,  accounts and customers,  pricing  information,  and financial
information  concerning  or  relating  to the  business,  clients,  subscribers,
employees,  and affairs of the  Company,  or any of its  Affiliates  and contact
persons  and  other  information  maintained  by  the  Company  or  any  of  its
Affiliates,  obtained by or furnished,  disclosed or disseminated to Meaden,  or
obtained,  assembled or compiled by Meaden or under her  supervision  during the
course of her  employment  by TASS, or any of its  Affiliates,  and all physical
embodiments of the foregoing,  all of which are hereby agreed to be the property
of  and   confidential  to  the  Company  and  its   Affiliates.   "Confidential
Information"  shall not include any of the  foregoing to the extent the same can
be shown by written  documentation  by  Meaden,  to be  available  to the public
through no fault or breach of this Agreement.

                  (b) Removal of Confidential Information.  Meaden hereby agrees
that,  during the Term of this Agreement and thereafter,  she shall not, without
the Company's prior written consent,  remove or cause to be removed from TASS's,
or any of its  Affiliates'  premises  any  Confidential  Information,  or  other
material  whatsoever,  belonging  to the Company or any of its  Affiliates,  for
purposes  other  than for use in  connection  with  authorized  work  Meaden may
perform for TASS or any of its Affiliates.



                                          250

<PAGE>



                  (c)  Disclosure  of  Confidential  Information.  Meaden hereby
agrees that, during the Term of this Agreement and thereafter, without the prior
written consent of the Company,  she will not,  disclose,  except as required by
law or in the normal course of TASS's business,  or make available to any person
or entity any  Confidential  Information,  nor shall  Meaden make or cause to be
made, or permit or allow,  either on Meaden's own behalf or on behalf of others,
any use of such Confidential Information other than in the proper performance of
Meaden's duties as an employee.  All Confidential  Information shall be returned
to Tremont  promptly  upon  request or promptly  following  the  termination  of
Meaden's  employment  with  TASS.  Notwithstanding  the  foregoing,   except  as
otherwise  required by law,  Meaden shall at all times maintain as  confidential
such  Confidential  Information  which  is also  confidential  to,  or  contains
confidential information concerning any officer, director,  shareholder,  client
or account of TASS or Tremont  without the prior written consent of the party to
whom such confidential information applies.

                  (d) The  obligations  of this  Section  10 shall  survive  the
expiration  or  termination  of the Agreement to the extent set forth in Section
10(c) above.

     Section 11.  Protection of Interests.  (a) Meaden shall not during the Term
of this  Agreement,  without the prior  written  consent of the Company,  acting
through the President,  be concerned or interested in any capacity in any trade,
business  or  occupation  (other  than  the  business  of  TASS  or  any  of its
Affiliates),  whether or not of a similar nature to or competing in any material
respect with any of the businesses of TASS or any of its Affiliates. Such


                                    251

<PAGE>



restriction  shall not prevent  Meaden from holding or being  interested  in not
more than one percent (1%) of the total issued share capital or capital stock in
any publicly  traded or private company the shares of which are listed or quoted
on a recognized stock exchange or in the  over-the-counter  market. In addition,
with the prior consent of the Company, acting through the President,  Meaden may
hold, directly or indirectly, interests as a passive investor in publicly traded
or private hedge funds or managed funds representing investments therein, in the
aggregate,  of not more than U.S. Five Million Dollars (US  $5,000,000),  and in
such case, the terms of this Section 11 shall not prevent any such investment by
Meaden, within the foregoing  limitations,  representing up to five percent (5%)
of the total issued share capital or equity  interests in any such hedge fund or
managed fund.

                  (b) Meaden  shall not at any time after the  Termination  Date
represent  herself  as  being in any way  connected  with or  interested  in the
business  of TASS or any of its  Affiliates  or  knowingly  make any  untrue  or
misleading statement in relation to TASS or any of its Affiliates.

                  (c) In the event Meaden shall be terminated for Cause,  Meaden
shall not directly or indirectly and whether as employee, director,  consultant,
owner or  otherwise  during  the  period of twelve  (12)  months  following  the
termination  of her  employment  by TASS engage or be interested or concerned in
any  Competing  Business,  except by  holding or being  interested  as a passive
investor in the investments referred to in Section 10(b).



                                        252

<PAGE>



                  (d) Meaden shall not,  directly or  indirectly  and whether as
employee, director,  consultant, owner or otherwise during the twelve (12) month
period  following the termination of her employment with TASS and in competition
with TASS or any of its  Affiliates  canvas or solicit  the custom of or seek to
entice away from the Company or any of its  Affiliates  (i) any Client;  or (ii)
any Potential Client.

                  (e) Meaden shall not,  directly or  indirectly  and whether as
employee, director,  consultant, owner or otherwise during the twelve (12) month
period  following the termination of her employment with TASS and in competition
with the Company or any of its  Affiliates  do  business  with (i) any Client or
(ii) any Potential Client.

                  (f) Meaden  shall not  directly or  indirectly  and whether as
employee, director,  consultant, owner or otherwise during the twelve (12) month
period  following the termination of her employment with TASS entice or endeavor
to entice away from the Company or any of its  Affiliates or any of its or their
employees  (whether or not the  departure of such  employee  would  constitute a
breach of contract  on his or her part).  For the  purposes  of this  paragraph,
"employee"  means any person  employed  or retained by the Company or any of its
Affiliates with management or senior level sales responsibilities,  whether on a
permanent  or  consultancy  basis,  with whom  Meaden  shall  have had  personal
dealings in the course of performing her duties under this Agreement. Nothing in
this  provision  will  prevent  Meaden from hiring an employee  responding  to a
general  solicitation  appearing in a newspaper,  trade  publication  or similar
medium.

                                          253

<PAGE>




         Section  12.  Notices.  Any  notice or other  communication  under this
Agreement shall be in writing and shall be considered given when received by the
party to whom or 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 set
forth below (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.

         If to TASS or Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580
                  U.S.A.
                  Attention: Mr. Stephen T. Clayton, Chief Financial Officer
                  Facsimile No.: 914-925-9337

         with a copy to:

                  Newman Tannenbaum Helpern
                    Syracuse & Hirschtritt LLP
                  900 Third Avenue
                  New York, New York  10022
                  U.S.A.
                  Attention: Michael G. Tannenbaum, Esq.
                  Facsimile No.: 212-371-1084



                                       254

<PAGE>



         If to Meaden:

                  Ms. Nicola Meaden
                  12 Wynnstay Gardens
                  Allen Street
                  London W8 6UP
                  ENGLAND
                  Facsimile No.: _________________

         with a copy to:

                  Landau & Cohen, Solicitors
                  130-132 Burnt Oak Broadway
                  Edgeware, Middlesex HA8 0BB
                  ENGLAND
                  Attention: Richard Cohen, Esq.
                  Facsimile No.: 011-44-181-951-1317



         Section 13.       General.

         (a) As from  the  date of  this  Agreement,  all  other  agreements  or
arrangements (whether written or oral and express or implied) between Meaden and
TASS or any of its  Affiliates  relating to the services or employment of Meaden
shall be deemed to have been terminated by mutual consent.

         (b) The  parties  agree and  acknowledge  that there are no  collective
agreements applicable to Meaden's employment with TASS.

         (c) This Agreement  shall be governed by the laws of England and Wales,
and each party submits to the jurisdiction of the English courts with respect to
any claim or matter arising


                                        255

<PAGE>



under this  Agreement,  and each party  agrees  that all such  claims or matters
shall be heard and determined in such courts.

         Section 14.  Meaden's  Representations  and  Warranties.  Meaden hereby
represents and warrants to TASS and any of its Affiliates  that the execution of
this Agreement and Meaden's performance hereunder will not, with, or without the
giving of notice or the passage of time,  conflict with, result in the breach of
or the  termination  of, or  constitute a default  under any  agreement to which
Meaden is or may be bound.

     Section 15.  Headings.  The headings used in this  Agreement are solely for
convenience of reference and shall not effect its interpretation.

     Section  16.  Waiver of Breach.  The waiver by any party of a breach of any
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by a party.

         Section 17. Severability.  If any paragraph,  term or provision of this
Agreement shall be held or determined to be  unenforceable,  the balance of this
Agreement  shall  nevertheless  continue in full force and effect  unaffected by
such holding or determination. In addition, in any such event, the parties agree
that it is their  intention  and  agreement  than any  such  paragraph,  term or
provision  which is held or determined  to be  unenforceable  as written,  shall
nonetheless  be enforced and binding to the fullest  extent  permitted by law as
though such paragraph, term


                                        256

<PAGE>


or  provision  had been  written  in such a manner  and to such  extent as to be
enforceable under the circumstances.

     Section  18.  Amendments.  No  amendment,  modification  or  waiver  of any
provisions  of this  Agreement  shall be made except by an instrument in writing
signed by the parties charged.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.


                                                     TASS MANAGEMENT LIMITED


                                       By:
                                      Name:
                                     Title:



                                                     Nicola Meaden



                                                     TREMONT ADVISERS, INC.


                                       By:
                                      Name:
                                     Title:

                                   257

<PAGE>
                                                                 Exhibit 10.62

                                                                 EXECUTION COPY

                         STOCK OPTION AND BENEFITS AGREEMENT

         THIS STOCK OPTION AND BENEFITS AGREEMENT (the "Agreement"),  made as of
March 8, 1999,  by and  between  TREMONT  ADVISERS,  INC.,  a Delaware  (U.S.A.)
corporation with its principal  executive  offices at 555 Theodore Fremd Avenue,
Rye, New York 10580, U.S.A. ("Tremont"),  and LAURENCE HUNTINGTON TAYLOR, II, an
individual residing in Basking Ridge, New Jersey, U.S.A. ("Taylor").

                                               W I T N E S S E T H:

         WHEREAS,  in  connection  with the plan of  reorganization  among TASS,
Tremont and the holders of all of the ordinary  shares of TASS,  Tremont employs
Taylor as the Senior Vice President of Global Sales and Marketing of Tremont;

         WHEREAS, in connection with Taylor's employment by Tremont, Tremont has
agreed to grant and Taylor  wishes to accept the option to purchase from Tremont
Shares in accordance  with and subject to the terms and conditions  contained in
this Agreement;


                                   258

<PAGE>



         WHEREAS,  the  Exercise  Price set forth herein for the Group I Options
granted to Taylor hereunder reflects the approximate Fair Market Value per Share
determined as of December 9, 1998 by the Board of Directors; and

         WHEREAS,  in addition to granting  Taylor  options to purchase  Shares,
Tremont  wishes to provide to Taylor  certain other benefits as set forth herein
in the event  there  shall  occur  one or more  transactions  involving  Tremont
constituting a Covered Acquisition as described herein;

         NOW,  THEREFORE,  in consideration of the mutual  covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
agree as follows:

         Section 1. Certain  Definitions.  The terms  defined in this Section 1,
whenever used in this Agreement,  shall,  unless the context otherwise requires,
have the respective meanings hereinafter specified in Section 1.

                  (a)  "Acquisition"  shall mean the  acquisition  of Tremont by
another  unaffiliated  entity  in a  merger,  consolidation,  a  sale  of all or
substantially   all  of  Tremont's   assets  or  securities,   a  reorganization
transaction  (other  than a mere  reincorporation  or the  creation of a holding
company), a liquidation of Tremont or similar transaction.



                                        259

<PAGE>



                  (b)  "Acquisition  Consideration"  shall mean the amount to be
allocated to one Share out of the Acquisition Proceeds in a Covered Acquisition.

                  (c)  "Acquisition  Proceeds"  shall  mean all  cash,  deferred
payments,  securities and other articles of value received by Tremont and/or the
holders of any of Tremont's  securities in consideration for the sale by Tremont
of its assets or the transfer by such holders of their securities in any Covered
Acquisition.

                  (d) "Actual  Distribution"  shall mean the actual distribution
on a date or dates specified of Acquisition  Consideration to the holders of the
Shares in connection with a Covered Acquisition.

                  (e)  "Affiliate"  shall mean,  with respect to any Person,  an
individual,  corporation,  partnership,  limited liability company,  firm, joint
venture,  association,  joint-stock company, trust,  incorporated  organization,
governmental or regulatory or other entity  controlling,  controlled by or under
common control with such Person.

                  (f)   "Agreement"   means  this  Stock   Option  and  Benefits
Agreement, dated March 11, 1999, by and between Tremont and Taylor.

                  (g) "Anti-Dilution Premium" shall mean the benefit or benefits
calculated pursuant to Section 4.


                                 260

<PAGE>




                  (h)  "Board of  Directors"  means the  board of  directors  of
Tremont, as elected from time to time in accordance with the by-laws of Tremont.

                  (i)  "Business  Day"  shall  mean a day on which  the New York
Stock Exchange is open for trading.

                  (j) "Change in Control" shall mean (i) an Acquisition, as such
term is defined in the Stock  Option  Agreements  to be  executed  by Meaden and
Taylor, respectively, or (ii) during any one (1) year period, individuals who at
the  beginning of such period  constitute  the entire  Board of Directors  shall
cease for any reason to  constitute a majority of the Board of Directors  unless
the election or nomination  for election by Tremont's  shareholders  of each new
director was approved by a vote of at least  two-thirds  (2/3) of the  directors
then still in office who were directors at the beginning of the period.

                  (k) "Common Stock" means Tremont's  authorized  Class B Common
Stock, par value $.01 per share.

                  (l)  "Computation  Date"  shall  mean the date upon  which the
transactions  contemplated in a Covered Acquisition are actually consummated and
closed.

                  (m) "Computation Statement" shall mean the statement which may
be issued by the Board of Directors pursuant to Section 4(f).


                                        261

<PAGE>




                  (n)  "Covered  Acquisition"  shall  mean  an  Acquisition  the
Computation  Date for which  shall  occur  before the third  anniversary  of the
Effective Date.

                  (o) "Current Market Price" per Share or for any other security
for purposes of any provision of this Agreement as of a Determination Date shall
mean:

     (i) If any of the Shares or any of such securities is then Publicly Traded,
the average of the daily market prices of the Shares or such  securities  over a
period of five (5)  consecutive  days  prior to such date on which the Shares or
such securities have traded.

     As used in this clause (i),  "market  price"  shall mean the average of the
closing price of Shares or such securities on any Business Day, as reported with
respect to the market (or the  composite  of  markets,  if more than one) on all
primary national  securities  exchanges in the United States on which any of the
Shares or such securities are then listed, or, if there shall have been no sales
on any such  exchange  on such day,  the  average of the  closing  bid and asked
prices on all such  exchanges  at the close of trading  on such day,  or, if the
Shares or such securities shall not be so listed,  if applicable,  the last sale
price,  or, if there  shall have been no sales on such day,  the  average of the
representative  bid and  asked  prices at the  close of  trading  on such day as
quoted by Nasdaq or as listed  on the OTC  Bulletin  Board  (Nasdaq  and the OTC
Bulletin Board being collectively referred to as the "OTC Market"), or, if there
shall have been no sales in the OTC Market on such day or if

                                         262

<PAGE>



the Shares or such  securities  are not quoted or listed in the OTC Market,  the
average of the closing bid and asked  prices as  furnished by two members of the
NASD selected from time to time by the Company for that purpose.

     (ii) If the  Shares  or such  other  securities  shall not be listed on any
domestic  exchange or quoted on Nasdaq or on the OTC  Bulletin  Board or the bid
and asked prices for which cannot be obtained  from two members of the NASD,  as
described  above,  then the Current  Market Price shall be the Fair Market Value
per  Share  or per  share  or unit of any of such  other  securities  as of such
Determination Date.

                  (p)  "Deemed   Distribution"  shall  mean  a  distribution  of
Acquisition  Consideration  to the holders of the Shares deemed to have occurred
for the purposes of this Agreement  immediately  following a Covered Acquisition
involving a sale of assets by Tremont.

                  (q)  "Determination  Date"  shall  mean any date as of  which,
pursuant to any provision of this Agreement,  a determination  of Current Market
Price shall be required or permitted.

                  (r)  "Effective  Date"  shall  mean the date  upon  which  the
Employment  Agreement shall have become  effective and Taylor's  employment with
Employer shall have commenced.

                                        263

<PAGE>




                  (s)      "Employer" means Tremont.

                  (t)  "Employment  Agreement"  means the  Employment  Agreement
among Tremont and Taylor made as of March 11, 1999.

                  (u) "Exercise  Price" shall mean the per Share option exercise
price  for each of the Group I Options  and the  Group II  Options  set forth in
Section 2 hereof.

                  (v)  "Expiration  Date"  means  the  date on which  the  Stock
Options  and their  right of  exercise  shall  expire,  as provided in Section 2
hereof.

                  (w)  "Fair  Market  Value"  as of any  Determination  Date  or
Computation  Date  shall  mean,  as  determined  in good  faith by the  Board of
Directors  (subject to Section 10), (i) as to Common Stock, as of such date, the
price of Common Stock in a sale of Tremont as a going concern in an arm's length
transaction  to an  independent  Third  Party,  without  regard  to the  lack of
liquidity  of the  Common  Stock due to any  restrictions  or other  limitations
contained in this  Agreement,  and (ii) as to any other  property or  securities
referred to herein,  the price of such property or securities as of such date in
an arm's length  transaction to an independent Third Party. Such valuation shall
assume a sale to a  hypothetical  "ready,  willing and able" Third Party without
consideration  given to any  potential  forced sale  occurring  by virtue of the
absence  of  actual  Third  Party  purchasers  on  any  Determination   Date  or
Computation Date.

                                         264

<PAGE>




                  (x) "Floor  Price" shall mean a price per share for the Common
Stock of U.S. Seven Dollars and 50/100 (US $7.50).

                  (y) "Group I Options"  shall  mean  options to acquire  Shares
granted by Tremont as of the  Effective  Date  pursuant to Section  2(a) of this
Agreement, having an Exercise Price of U.S. Eight Dollars (US $8.00) per Share.

                  (z) "Group II Options"  shall mean  options to acquire  Shares
granted by Tremont as of the  Effective  Date  pursuant to Section  2(b) of this
Agreement,  having an  exercise  price of U.S.  Fifteen  Dollars (US $15.00) per
Share.

                  (aa)  "Taylor  Affiliate"  shall mean any of Taylor's  spouse,
parents, siblings, lineal descendants, spouses of any lineal descendants, lineal
descendants  of  siblings  and  trusts  for  the  benefit  of  all or any of the
foregoing.

     (ab) "NASD" means The National Association of Securities Dealers, Inc.

                  (ac)     "Nasdaq" means the NASD Automated Quotation System.

                  (ad)  "Offered  Shares" shall mean the number of Shares Taylor
wishes to sell  pursuant to any Third Party  Offer and for which  Tremont  shall
have a right of first refusal in accordance with Section 7(c) hereof.


                                         265

<PAGE>




     (ae) "OTC Bulletin Board" means the quotation system for the non-Nasdaq
over-the-counter market.

                  (af)  "Person"   shall  mean  any   individual,   corporation,
partnership,  limited  liability  company,  firm,  joint  venture,  association,
joint-stock  company,   trust,   incorporated   organization,   governmental  or
regulatory or other entity.

                  (ag) "Potential  Realizable Value" shall mean, with respect to
any Stock Option, its potential realizable value, as determined in good faith by
the Board of Directors,  using models and methods as  reasonably,  determined by
the Board of Directors to be customary in the securities and financial  services
industries,  which take into account,  among other things,  the period remaining
until the  expiration of the option,  the volatility of the security and current
interest rates.

                  (ah) "Publicly Traded" shall mean, as to any security referred
to herein,  if listed or admitted to unlisted  trading  privileges on a national
securities  exchange or  designated as a National  Market System  security on an
interdealer quotation system by the NASD or if sales or bid and offer quotations
are  reported  for that  class of such  security  by Nasdaq or the OTC  Bulletin
Board.

                  (ai) "Reference  Price" per Share shall mean with respect to a
Covered  Transaction the greater of the Acquisition  Consideration and the Floor
Price.

                                        266

<PAGE>




                  (aj) "Right of First Refusal"  shall mean Tremont's  option to
purchase  Shares  pursuant to Section 7(c) hereof in the event that Taylor shall
have received,  and wishes to accept, a Third Party Offer with respect to all or
any of the Shares owned by him.

                  (ak) "Securities" shall mean any exercisable Stock Options and
Shares issued upon the exercise of Stock Options.

     (al)  "Securities  Act"  shall  mean the U.S.  Securities  Act of 1933,  as
amended.

     (am) "Share" or "Shares" shall mean one or more shares of Common Stock.

                  (an) "Stock Option" or "Stock Options" shall mean,  singularly
or  collectively,  as the case may be,  the  Group I  Options  and the  Group II
Options.

                  (ao)     "TASS" shall mean TASS Management Limited, a company
incorporated in England and Wales.

     (ap)  "Third  Party" or "Third  Parties"  shall mean a Person who is not an
Affiliate  of  Taylor  or  Tremont,  or any of  Tremont's  officers,  directors,
employees or agents

                                        267

<PAGE>



     or any of their respective relatives, or an individual otherwise related in
any capacity to
Taylor.

                  (aq) "Third Party Offer" shall mean a bona fide written  offer
from a Third Party to purchase Shares from Taylor.

                  (ar)  "Tremont"  means Tremont  Advisers,  Inc., a corporation
organized and existing under the laws of the State of Delaware.

                  (as)     "U.S." means the United States of America

         Section 2. Options.  As of the Effective Date, Tremont hereby grants to
Taylor, and Taylor hereby accepts options described below to purchase the number
of Shares  specified below on the terms and subject to the conditions  described
herein,  during a term (the "Term") which  commences on the  Effective  Date and
ends at 12:00 midnight (prevailing local time at Tremont's principal offices) on
the Expiration Date, which is the day that is the date of the sixth  anniversary
of the Effective Date,  subject to the provisions for vesting  described herein,
at the Exercise Price specified below.






                                          268

<PAGE>



         (a)      Group I Options.  Subject to Section 4:

                  (i)  Number of  Shares;  Exercise  Price.  The Group I Options
hereby granted to Taylor  entitle  Taylor to subscribe for and purchase,  at any
time or from time to time  subject  to  vesting  as  provided  below,  until the
Expiration  Date, up to 78,007 Shares at an Exercise  Price equal to U.S.  Eight
Dollars (US $8.00) per Share.

                  (ii)  Vesting.  The  Group I  Options  shall  vest and  become
exercisable in installments as follows:

     (A) Up to sixty  percent  (60%) of the  total  number  of  Shares  optioned
pursuant to this Section 2(a) may be exercised on and after the Effective  Date,
for up to an aggregate of 46,846 Shares; and

     (B) At any time on or after  March 11,  2000,  the  Group I Options  may be
exercised  as to all Shares  optioned  for which  they have not been  previously
exercised until the Expiration Date,  whereupon the Group I Options shall expire
and may no longer be exercised.






                                        269

<PAGE>




         (b) Group II Options. Subject to Section 4:

                  (i) Number of  Shares;  Exercise  Price.  The Group II Options
hereby granted to Taylor entitle Taylor to subscribe for and purchase subject to
vesting  as  provided  below,  at any  time or  from  time to  time,  until  the
Expiration  Date,  up to 13,154  Shares at an  Exercise  Price  equal to Fifteen
Dollars (US $15.00) per Share.

                  (ii)  Vesting.  The Group II  Options  shall  vest and  become
exercisable in installments as follows:

     (A) Up to an aggregate of 4,384 Shares optioned pursuant to this
Section 2(b) may be exercised on or after the Effective Date;

                           (B)  Up to an  aggregate  of  8,768  Shares  optioned
pursuant to this
Section 2(b) may be exercised at any time on or after March 11, 2000; and

                           (C) At any time on or after March 11, 2001, the Group
II Options
may be  exercised  as to all  Shares  optioned  for  which  they  have  not been
previously  exercised until the Expiration Date,  whereupon the Group II Options
shall expire and may no longer be exercised.



                                        270

<PAGE>



         (c)  Acceleration.  Notwithstanding  Section 2(a) and (b) but otherwise
subject to the terms and conditions  hereof, the Stock Options shall immediately
become  exercisable for all of the Shares upon the effective date of a Change in
Control,  including the portion thereof which would,  but for this Section 2(c),
not yet be exercisable,  unless,  in the event of an Acquisition,  the agreement
with respect to which includes a provision  reasonably  acceptable to Taylor for
the assumption of the Stock Options or the substitution for the Stock Options of
an  option  or  options  covering  the  stock  of a  Publicly  Traded  successor
corporation,  or a parent or subsidiary  thereof,  with appropriate  adjustments
made in  accordance  with Section 4 hereof as to the number and/or nature of the
Shares purchasable upon the exercise of the Stock Options, then in such case the
Stock Options shall continue in the manner and under the terms so provided.

         Section 3. Anti-Dilution In The Event Of A Covered Acquisition.  (a) In
the event of the occurrence of a Covered  Acquisition  in which the  Acquisition
Consideration shall be less than U.S. Eight Dollars (US $8.00) per share, Taylor
shall be entitled to receive,  as an Anti-Dilution  Premium,  an amount equal to
the  consequent  reduction  in the  Potential  Realizable  Value of the  Group I
Options and a result of the Reference Price being less than the Group I Options'
Exercise Price.

                  (b) The Anti-Dilution  Premium shall be calculated by Tremont,
and  delivered,  at  Tremont's  option,  in any  combination  of the  following,
together with a


                                    271

<PAGE>



Computation Statement, as soon as practicable after the Computation Date, but in
no event later than ten (10) days following the Computation Date:

     (i) A payment by certified or cashier's check for an amount in
United States Dollars;

     (ii) A reduction in the Group II Options Exercise Price thereby  increasing
the Potential Realizable Value of the Group II Options,  provided that the Group
II Options shall be assumed by the acquiring Person in the Covered  Acquisition;
and/or

                           (iii) The issuance of Shares,  Stock Options or other
securities valued
as provided in Section 3(e) hereof.

                  (c) Taylor's right to receive an  Anti-Dilution  Premium shall
terminate  on the date which is the third  anniversary  of the  Effective  Date,
unless a  Computation  Date occurs  before such  anniversary  in which case such
right shall survive  until such time as Taylor shall  receive the  Anti-Dilution
Premium  in  accordance  with  this  Section  3(a)  in  respect  of the  Covered
Acquisition to which such Computation Date relates.

                  (d) The Anti-Dilution Premium shall apply in respect of Shares
issuable  upon the exercise of the Group I Options  owned only by Taylor and not
to any  transferee  or  assignee  of  Taylor's  Shares  other  than to a  Taylor
Affiliate.


                                       272

<PAGE>




                  (e) In determining the amount of any Acquisition Consideration
for the purposes of this Agreement, the following considerations shall apply:

     (i) in the case of any Covered Acquisition, the computation of
Acquisition  Consideration shall be effected on a fully diluted basis, i.e., all
options,  warrants and other  securities  convertible into Common Stock shall be
deemed  to have  been  exercised  or  converted,  as the case  may be,  with the
consideration  therefor  having  been paid at the  instant  prior to any  Actual
Distribution or Deemed Distribution to the holders of the Shares;

     (ii) United States  currency or other  currencies to be received as part of
Acquisition Proceeds shall be valued at face value;

                           (iii) each fixed  non-contingent  deferred payment to
be received as
part of Acquisition Proceeds shall be valued at present value at the Computation
Date,  using a discount  factor equal to the prime rate of Citibank,  NA, or any
successor thereto, as in effect at the Computation Date, plus;

     (iv) marketable securities to be received as part of such proceeds shall be
valued at the Current Market Price at the Computation Date;

     (v) all  other  property  shall  be  valued  at Fair  Market  Value  at the
Computation Date;


                                     273

<PAGE>




     (vi) in the case of a sale of  substantially  all of its assets by Tremont,
or any other transaction in which Acquisition Consideration is not paid directly
to the holders of the Shares,  in order to determine  the amount of  Acquisition
Proceeds  to be  allocated  to all of the Shares,  it shall be assumed  that the
Acquisition  Proceeds to be received by Tremont,  valued in accordance with this
Section 3(d), after payment of all outstanding liabilities, shall be immediately
distributed  to all of the  security  holders of  Tremont in a manner  such that
there  shall first be  allocated  to any  holders of  preferred  shares or other
senior securities of Tremont such amounts owing to such holders as determined by
the  Board  of  Directors  in  accordance  with  the  terms  of such  shares  or
securities, including any accrued and unpaid dividends, with the balance of such
consideration  being allocated to the holders of all of the Shares and any other
shares of common stock of Tremont in accordance with their terms;

     (vii) in the case of a transaction in which the  Acquisition  Consideration
shall be  payable  directly  to  Tremont's  security  holders,  the amount to be
allocated  to the  Shares  shall be the  actual  amount  so  payable,  valued in
accordance with this Section 3(d);

                           (viii) any determination of value to be made pursuant
to this Section
3(d) shall be initially  made by the Board of Directors,  utilizing the services
of such  appraiser(s)  or other  expert(s) as the Board of Directors  shall deem
appropriate,  and the Board of  Directors  shall cause there to be  delivered to
Taylor a Computation Statement showing such valuations and computations; and


                                          274

<PAGE>




     (ix) any Anti-Dilution  Premium payable to Taylor or any other person shall
be deducted as a liability of Tremont in calculating Acquisition Consideration.

                  (f)  In the  event  that  Taylor  shall  not  agree  with  the
computations  and valuations set forth in the  Computation  Statement,  then the
parties shall submit such matter for resolution to an "independent" committee of
the Board of Directors, consisting of all directors then sitting and who are not
then and were not previously executive officers of Tremont (the "Committee"). If
such  matter  has not been  resolved  within  thirty  (30)  days  following  its
submission  to the  Committee the parties shall submit such matter to any one of
the five largest  nationally  known  accounting  firms in the United States,  or
their  successors,  as may be  jointly  selected  by  Taylor  and  Tremont  (the
"Accountants");  provided,  however,  that Tremont  specifically agrees that its
auditors  shall not be  considered  for  selection.  The parties  agree that the
decision of the Accountants  with respect to the computations and valuations set
forth in the Computation  Statement will be binding on the parties and shall not
be subject to arbitration in accordance  with Section 10 hereof.  Each of Taylor
and  Tremont  shall  bear  him or its own  costs  with  respect  to the  dispute
resolution  process  described in this Section 9(f), and shall share equally the
fees and disbursements of the Accountants.

     Section 4. Adjustments.  Upon the occurrence of any of the following events
described  below,  Taylor's  rights  with  respect to the Stock  Options and the
optioned Shares shall be adjusted as follows:

                                       275

<PAGE>



         In the event the  Company  shall after the date of this  Agreement  (i)
declare a dividend or make a  distribution  on its Common Stock in shares of its
capital  stock,  (ii) subdivide its  outstanding  shares of Common Stock through
stock split or otherwise,  (iii) combine its outstanding  shares of Common Stock
into  a  smaller   number  of  shares  of  Common   Stock,   or  (iv)  issue  by
reclassification  of  its  Common  Stock  (including  any   reclassification  in
connection with a consolidation or merger in which the Company is the continuing
corporation)  other  securities of the Company,  the number and/or nature of the
Shares  purchasable upon exercise of each Stock Option and/or the Exercise Price
shall be  adjusted  so that  Taylor  shall be  entitled  to receive the kind and
number of Shares or other securities of the Company which he would have owned or
been  entitled to receive  after the  happening  of any of the events  described
above, had such Stock Option been exercised  immediately  prior to the happening
of such event or any record  date with  respect  thereto.  Any  adjustment  made
pursuant to this Section 4 shall become effective retroactively as of the record
date of such event. In the event of any such  adjustment,  Tremont shall send to
Taylor a notice of such  adjustment  prepared and signed by the Chief  Financial
Officer of Tremont,  which shall set forth the number of Shares purchasable upon
the  exercise of each Stock  Option and the  Exercise  Price of the Shares after
such  adjustment,  a brief  statement of the facts requiring such adjustment and
computation by which such adjustment was made.

     Section 5. Method of  Exercise.  (a) The Stock  Options may be exercised by
Taylor hereunder by giving ten (10) Business Days' notice of exercise to Tremont
specifying  the number of Shares to be purchased  and the total  purchase  price
therefor accompanied by


                                      276

<PAGE>



cash,  certified check for the amount in United States Dollars,  Shares,  or any
combination  thereof,  as may be elected by Taylor, in payment of such price. If
payment is made in Shares, the Common Stock must then be Publicly Traded and the
value of the Shares  received by Tremont for purposes of determining  the amount
of payment shall be their Current Market Price as of the date of exercise.

                  (b) In lieu of exercise  of any  portion of the Stock  Options
for cash  provided in Section  5(a)  hereof,  the Stock  Options (or any portion
thereof)  may, at the election of Taylor,  be  converted in a cashless  exercise
into the nearest whole number of shares of Common Stock equal to (i) the product
of (A) the number of Stock Options to be so converted,  (B) the number of Shares
of Common Stock then issuable  upon the exercise of each Stock  Option,  and (C)
the excess,  if any, of the Current  Market  Price per share with respect to the
date of  conversion  over the Exercise  Price in effect on the Business Day next
preceding the date of  conversion,  divided by (ii) the Current Market Price per
share with respect to the date of conversion.

     Section  6.  Requirements  Of Law;  Delivery.  (a) In  accepting  the Stock
Options,
Taylor understands and specifically acknowledges that:

     (i) the  Securities  have not been  registered  under the Securities Act or
under the securities laws of any U.S. state  jurisdiction,  or under the laws of
any other jurisdiction, by reason of a specified exemption from the registration
provisions thereunder;


                                        277

<PAGE>




     (ii) the Securities must be held indefinitely  unless they are subsequently
registered under the Securities Act and under other  applicable  securities laws
or an exemption from such registration is available; and

     (iii) all certificates  for the Securities  issued to him may bear a legend
in substantially the following form:

                           "THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES  ACT OF 1933,  AS AMENDED,  OR QUALIFIED  UNDER ANY
                  STATE  SECURITIES  LAWS.  THE  SECURITIES  MAY NOT BE OFFERED,
                  SOLD,  TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  WITHOUT  SUCH
                  REGISTRATION  OR UNLESS  THE  ISSUER  RECEIVES  AN  OPINION OF
                  COUNSEL (WHICH MAY BE COUNSEL FOR THE ISSUER), SATISFACTORY TO
                  THE ISSUER  (BOTH AS TO THE ISSUER OF THE OPINION AND THE FORM
                  AND SUBSTANCE THEREOF), THAT SUCH DISPOSITION WILL NOT REQUIRE
                  REGISTRATION  OF SUCH  SECURITIES  UNDER THE SECURITIES ACT OF
                  1933,  AS  AMENDED,   OR  ANY  STATE  SECURITIES  LAWS.  THESE
                  SECURITIES ARE SUBJECT TO FURTHER RESTRICTIONS AS SET FORTH IN
                  THAT CERTAIN AGREEMENT AND PLAN OF REORGANIZATION  DATED AS OF
                  MARCH 8, 1999."

                  (b) No Shares shall be delivered  upon the exercise of a Stock
Option until the Exercise Price shall have been paid in full and, if required by
Tremont  in its sole  discretion,  until  Taylor  has  given  Tremont  a written
statement  reasonably  satisfactory to it that he is purchasing the Shares as an
investment and not with a view to sale or distribution of any of such Shares.


                                      278

<PAGE>




     Section 7. Transfer Restrictions.  (a) Stock Options may not be transferred
at any time  without the prior  written  consent of Tremont and may be exercised
pursuant to the terms hereof only by Taylor.

                  (b) Taylor shall at no time sell, assign, encumber,  transfer,
pledge or hypothecate or otherwise  dispose of all or any part of the Shares now
owned  or  hereafter   acquired  by  him  or  any  interest  therein  except  as
specifically  permitted  in this  Agreement.  Any  such  purported  encumbrance,
transfer or  disposition  in  violation of this  Agreement  shall be invalid and
shall be of no force  and  effect  and  shall not be  registered,  or  otherwise
recognized, or caused to be registered by Tremont.

                  (c) Notwithstanding anything to the contrary contained in this
Agreement,  Taylor is under no  restrictions as to the transfer by him of any or
all of the Shares owned by him to one or more Taylor  Affiliates  provided  that
each such  Taylor  Affiliate  shall  execute  and  deliver  to Tremont a written
consent, in a form to be acceptable to Tremont and Taylor, to be bound by all of
the  provisions of this  Agreement.  In the event of any transfer by Taylor to a
Taylor  Affiliate of all or any part of the Shares owned by him (or in the event
of any  subsequent  transfer  by any such  Taylor  Affiliate  to another  Taylor
Affiliate),  such Taylor Affiliate shall receive and hold such Shares subject to
the terms of this Agreement and the rights and  obligations  hereunder of Taylor
as though such Shares were still owned by Taylor,  and Taylor (together with all
of him Taylor Affiliates) shall continue to be deemed a single


                                       279

<PAGE>



shareholder.  There  shall be no  further  transfer  of such  Shares by a Taylor
Affiliate except between and among such Taylor  Affiliate,  Taylor and the other
Taylor Affiliates.

                  (d) (i) In the event that  Taylor  shall at any time desire to
sell Offered  Shares  pursuant to a Third Party Offer,  Taylor shall first offer
such  Offered  Shares to  Tremont  pursuant  to a  written  notice  (the  "Offer
Notice"), advising Tremont of him intention to make such disposition.  The Offer
Notice shall set forth and specify, (x) the name(s) and address(es) of the Third
Parties,  and (y) the number of Shares  subject to the Third  Party  Offer,  the
intended  purchase price thereof,  the method of payment  therefor and any other
material terms of such Third Party Offer.

     (ii) Tremont shall have the option (the "Tremont  Option"),  exercisable no
later than ten (10) Business Days (the "First Refusal  Period") after receipt of
the  Offer  Notice  from  Taylor,   and  subject  to  all  applicable  laws  and
regulations, to agree to purchase any or all of the Offered Shares, at the price
and on the terms contained in the Third Party Offer.

     (iii) If Tremont shall elect to exercise the Tremont Option,  it shall give
a written  notice to Taylor prior to the end of the First Refusal  Period of its
intention  to exercise  (the  "Tremont  Notice")  and  specifying  the number of
Offered Shares Tremont is electing to purchase.  In the event that Tremont shall
elect to purchase all or any part of the Offered Shares, then the closing of the
purchase and sale of such Offered Shares shall take


                                     280

<PAGE>



place on a date as agreed to between Taylor and Tremont, which shall be no later
than thirty  (30)  Business  Days  following  Tremont's  delivery of the Tremont
Notice at the  principal  executive  offices of Tremont,  or such other place as
Tremont may reasonably designate.

                           (iv) If  Tremont  shall  not  elect to  exercise  the
Tremont Option prior
to the end of the First  Refusal  Period,  Taylor  shall have the  right,  for a
period of thirty (30) days after the expiration of the First Refusal Period,  to
sell to the Third  Party all or any  portion of the  Offered  Shares as to which
Tremont  shall not have  exercised  the Tremont  Option but only pursuant to the
Third Party Offer.  In addition to the foregoing,  any offer and sale of Offered
Shares pursuant to a Third Party Offer shall,  in all respects,  comply with the
registration   provisions  of  any  applicable  securities  law  (or  be  exempt
therefrom)  and the  conclusive  written  opinion of Taylor's  counsel that such
offer and sale comply with said registration  provisions or are exempt therefrom
shall be received by Tremont as a condition to Tremont's  registering or causing
to be  registered  the transfer of any Offered  Shares.  Copies of all documents
relating to such sale shall be  forwarded  to the  Secretary of Tremont no later
than five (5) days  prior to the  proposed  date of such  sale.  If such sale by
Taylor pursuant to the terms of the Third Party Offer is not consummated  within
thirty (30) days after the  expiration  of the First  Refusal  Period,  Taylor's
Shares  shall  again be  subject  to all of the  terms  and  provisions  of this
Agreement.



                                        281

<PAGE>



                  (e) For so long as Taylor  shall be employed by  Employer,  or
any of its  Affiliates,  Tremont's  Right of First  Refusal  shall  apply to all
Shares now or  hereafter  acquired by him  whether  pursuant to an exercise of a
Stock Option or otherwise.

         Section 8. Termination  Under Employment  Agreement.  In the event that
the Employment Agreement is terminated by the Employer with or without Cause, as
such term is defined in the Employment Agreement, or the Employer does not elect
to renew the Employment  Agreement beyond the "Term" (as such term is defined in
the  Employment  Agreement and not in this  Agreement),  and Taylor ceases to be
employed by Employer,  or the Employment  Agreement is terminated as a result of
Taylor's death or disability, Taylor (or him estate, as the case may be), in all
cases,  shall retain the right to exercise the unexercised  portion of the Stock
Options,  at any  time  or  from  time  to time  until  the  Expiration  Date in
accordance with Section 2.

         Section 9. Rights In Stock Before  Issuance And Delivery.  Taylor shall
not be entitled to the  privileges  of stock  ownership in respect of any Shares
issuable upon exercise of the Stock  Options,  unless and until such Shares have
been issued to Taylor as fully paid shares.

     Section 10. Stock Option Administration. Other than as set forth in Section
3(e) hereof,  in the event of a disagreement  as to the  interpretation  of this
Agreement  or the terms of the Stock  Options,  or any  amendment  hereto or any
procedure hereunder, or as to any

                                   282

<PAGE>



right or obligation arising from or related to this Agreement,  the matter shall
be  submitted  for  resolution  by  the  parties  to  the  Committee.   If  such
disagreement  has not been  resolved  within  thirty  (30)  days  following  its
submission to the Committee,  the  disagreement  will be settled by arbitration.
Such arbitration shall be held in accordance with the United Nations  Commission
on  International  Trade Law Arbitration  Rules,  with the American  Arbitration
Association acting as the appointing  authority.  Any arbitration  proceeding as
described herein shall be held in the City of New York. The parties hereto agree
that any  arbitration  shall be a final  and  binding  determination  as to such
matters as described therein and a judgment of any federal, state or other court
having  jurisdiction  thereof may be entered upon the award made pursuant to the
arbitration.

         Section 11. No Employment  Contract.  This  Agreement  shall not confer
upon  Taylor  any  right  to  continued  employment  by  Tremont  or  any of its
Affiliates,  nor shall this  Agreement  interfere  in any way with the rights of
TASS and Tremont under the terms of the Employment Agreement.

         Section  12.  Notices.  Any  notice or other  communication  under this
Agreement shall be in writing and shall be considered given when received by the
party to whom or 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 set
forth below (or at such other address as any party may have previously specified
by notice to the other parties as the address to which notice


                                 283

<PAGE>



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.

         If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580
                  U.S.A.
                  Attention: Stephen T. Clayton, Chief Financial Officer
                  Facsimile No.: 914-925-9337

         with a copy to:

                  Newman Tannenbaum Helpern
                    Syracuse & Hirschtritt LLP
                  900 Third Avenue
                  New York, New York  10022
                  U.S.A.
                  Attention: Michael G. Tannenbaum, Esq.
                  Facsimile No.: 212-371-1084

         If to Taylor:

                  Laurence Huntington Taylor, II
                  83 Tuxford Terrace
                  Basking Ridge, New Jersey 07920
                  U.S.A.
                  Facsimile No.: 908-630-0461

         with a copy to:

                  Kleinberg, Kaplan, Wolff & Cohen, P.C.
                  551 Fifth Avenue
                  New York, New York  10176
                  Attention: Frederic A. Kleinberg, Esq.
                  Facsimile No.: 212-986-8866




                                        284

<PAGE>



     Section 13. Tax Consequences. Taylor has reviewed with him own tax advisors
the foreign and local tax consequences of the transactions  contemplated by this
Agreement.  Taylor is relying  solely on such advisors and not on any statements
or representations of the Company or any of its agents.

     Section 14. Headings. The headings used in this Agreement are solely for
convenience of reference and shall not affect its interpretation.

     Section  15.  Waiver Of Breach.  The waiver by any party of a breach of any
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent
breach by a party.

         Section  16.  Governing  Law.  This  Agreement  shall  be  interpreted,
construed  and  governed  according  to the laws of the State of New  York,  the
United  States of America,  without  reference to  conflicts  of law  principles
thereof.  Except with  respect to disputes  wherein the parties  have  expressly
agreed herein to submit such dispute to  arbitration,  the parties hereto submit
to the  jurisdiction  of the courts of the State of New York and of any  federal
court  located  therein  over any  dispute  arising  out of or  relating to this
Agreement or any of the transactions  contemplated hereby, and each party hereby
agrees that all claims in respect of such dispute shall be heard and  determined
in such court.



                                                285

<PAGE>



         Section 17.  Severability.  If any  section,  term or provision of this
Agreement shall be held or determined to be  unenforceable,  the balance of this
Agreement  shall  nevertheless  continue in full force and effect  unaffected by
such holding or determination. In addition, in any such event, the parties agree
that it is  their  intention  and  agreement  that  any  such  section,  term or
provision  which is held or determined  to be  unenforceable  as written,  shall
nonetheless  be enforced and binding to the fullest  extent  permitted by law as
though such section,  term or provision had been written in such a manner and to
such extent as to be enforceable under the circumstances.

     Section  18.  Amendments.  No  amendment,  modification  or  waiver  of any
provisions  of this  Agreement  shall be made except by an instrument in writing
signed by the parties charged.

         Section 19. Entire  Agreement.  This Agreement  constitutes  the entire
agreement of the parties hereto with respect to the matters set forth herein and
supersedes any prior understanding or agreement,  oral or written,  with respect
thereto.

                                 286

<PAGE>


         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.

                                                 TREMONT ADVISERS, INC.


                                       By:
                                      Name:
                                     Title:





                                                 LAURENCE HUNTINGTON TAYLOR, II


                                    287        
<PAGE>

                                                                 Exhibit 10.63
                                                                 EXECUTION COPY

                         STOCK OPTION AND BENEFITS AGREEMENT

         THIS STOCK OPTION AND BENEFITS AGREEMENT (the "Agreement"),  made as of
March 8, 1999,  by and  between  TREMONT  ADVISERS,  INC.,  a Delaware  (U.S.A.)
corporation with its principal  executive  offices at 555 Theodore Fremd Avenue,
Rye,  New York 10580,  U.S.A.  ("Tremont"),  and NICOLA  MEADEN,  an  individual
residing in London, England ("Meaden").

                              W I T N E S S E T H:

         WHEREAS,  in  connection  with the plan of  reorganization  among TASS,
Tremont  and the  holders of all of the  ordinary  shares of TASS,  Tremont  has
caused TASS to employ Meaden as the President of TASS;

         WHEREAS,  in connection with Meaden's  employment by TASS,  Tremont has
agreed to grant and Meaden  wishes to accept the option to purchase from Tremont
Shares in accordance  with and subject to the terms and conditions  contained in
this Agreement;


                                      288

<PAGE>



         WHEREAS,  the  Exercise  Price set forth herein for the Group I Options
granted to Meaden hereunder reflects the approximate Fair Market Value per Share
determined as of December 9, 1998 by the Board of Directors; and

         WHEREAS,  in addition to granting  Meaden  options to purchase  Shares,
Tremont  wishes to provide to Meaden  certain other benefits as set forth herein
in the event  there  shall  occur  one or more  transactions  involving  Tremont
constituting a Covered Acquisition as described herein;

         NOW,  THEREFORE,  in consideration of the mutual  covenants,  terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are specifically acknowledged,  the parties
agree as follows:

         Section 1. Certain  Definitions.  The terms  defined in this Section 1,
whenever used in this Agreement,  shall,  unless the context otherwise requires,
have the respective meanings hereinafter specified in Section 1.

                  (a)  "Acquisition"  shall mean the  acquisition  of Tremont by
another  unaffiliated  entity  in a  merger,  consolidation,  a  sale  of all or
substantially   all  of  Tremont's   assets  or  securities,   a  reorganization
transaction  (other  than a mere  reincorporation  or the  creation of a holding
company), a liquidation of Tremont or similar transaction.



                                      289

<PAGE>



                  (b)  "Acquisition  Consideration"  shall mean the amount to be
allocated to one Share out of the Acquisition Proceeds in a Covered Acquisition.

                  (c)  "Acquisition  Proceeds"  shall  mean all  cash,  deferred
payments,  securities and other articles of value received by Tremont and/or the
holders of any of Tremont's  securities in consideration for the sale by Tremont
of its assets or the transfer by such holders of their securities in any Covered
Acquisition.

                  (d) "Actual  Distribution"  shall mean the actual distribution
on a date or dates specified of Acquisition  Consideration to the holders of the
Shares in connection with a Covered Acquisition.

                  (e)  "Affiliate"  shall mean,  with respect to any Person,  an
individual,  corporation,  partnership,  limited liability company,  firm, joint
venture,  association,  joint-stock company, trust,  incorporated  organization,
governmental or regulatory or other entity  controlling,  controlled by or under
common control with such Person.

                  (f)   "Agreement"   means  this  Stock   Option  and  Benefits
Agreement, dated March 11, 1999, by and between Tremont and Meaden.

                  (g) "Anti-Dilution Premium" shall mean the benefit or benefits
calculated pursuant to Section 4.
                                      290

<PAGE>




                  (h)  "Board of  Directors"  means the  board of  directors  of
Tremont, as elected from time to time in accordance with the by-laws of Tremont.

                  (i)  "Business  Day"  shall  mean a day on which  the New York
Stock Exchange is open for trading.

                  (j) "Change in Control" shall mean (i) an Acquisition, as such
term is defined in the Stock  Option  Agreements  to be  executed  by Meaden and
Taylor, respectively, or (ii) during any one (1) year period, individuals who at
the  beginning of such period  constitute  the entire  Board of Directors  shall
cease for any reason to  constitute a majority of the Board of Directors  unless
the election or nomination  for election by Tremont's  shareholders  of each new
director was approved by a vote of at least  two-thirds  (2/3) of the  directors
then still in office who were directors at the beginning of the period.

                  (k) "Common Stock" means Tremont's  authorized  Class B Common
Stock, par value $.01 per share.

                  (l)  "Computation  Date"  shall  mean the date upon  which the
transactions  contemplated in a Covered Acquisition are actually consummated and
closed.

                  (m) "Computation Statement" shall mean the statement which may
be issued by the Board of Directors pursuant to Section 4(f).

                                          291

<PAGE>




                  (n)  "Covered  Acquisition"  shall  mean  an  Acquisition  the
Computation  Date for which  shall  occur  before the third  anniversary  of the
Effective Date.

                  (o) "Current Market Price" per Share or for any other security
for purposes of any provision of this Agreement as of a Determination Date shall
mean:

     (i) If any of the Shares or any of such securities is then Publicly
Traded,  the average of the daily market prices of the Shares or such securities
over a period  of five (5)  consecutive  days  prior to such  date on which  the
Shares or such securities have traded.

     As used in this clause (i),  "market  price"  shall mean the average of the
closing price of Shares or such securities on any Business Day, as reported with
respect to the market (or the  composite  of  markets,  if more than one) on all
primary national  securities  exchanges in the United States on which any of the
Shares or such securities are then listed, or, if there shall have been no sales
on any such  exchange  on such day,  the  average of the  closing  bid and asked
prices on all such  exchanges  at the close of trading  on such day,  or, if the
Shares or such securities shall not be so listed,  if applicable,  the last sale
price,  or, if there  shall have been no sales on such day,  the  average of the
representative  bid and  asked  prices at the  close of  trading  on such day as
quoted by Nasdaq or as listed  on the OTC  Bulletin  Board  (Nasdaq  and the OTC
Bulletin Board being collectively referred to as the "OTC Market"), or, if there
shall have been no sales in the OTC Market on such day or if


                                        292

<PAGE>



the Shares or such  securities  are not quoted or listed in the OTC Market,  the
average of the closing bid and asked  prices as  furnished by two members of the
NASD selected from time to time by the Company for that purpose.

                           (ii) If the Shares or such other securities shall not
     be  listed  on any  domestic  exchange  or  quoted  on Nasdaq or on the OTC
Bulletin Board or the bid
and asked prices for which cannot be obtained  from two members of the NASD,  as
described  above,  then the Current  Market Price shall be the Fair Market Value
per  Share  or per  share  or unit of any of such  other  securities  as of such
Determination Date.

                  (p)  "Deemed   Distribution"  shall  mean  a  distribution  of
Acquisition  Consideration  to the holders of the Shares deemed to have occurred
for the purposes of this Agreement  immediately  following a Covered Acquisition
involving a sale of assets by Tremont.

                  (q)  "Determination  Date"  shall  mean any date as of  which,
pursuant to any provision of this Agreement,  a determination  of Current Market
Price shall be required or permitted.

                  (r)  "Effective  Date"  shall  mean the date  upon  which  the
Employment  Agreement shall have become  effective and Meaden's  employment with
Employer shall have commenced.


                                        293
<PAGE>




                  (s)      "Employer" means TASS.

                  (t)  "Employment  Agreement"  means the  Employment  Agreement
among Employer, Tremont and Meaden made as of March 11, 1999.

                  (u) "Exercise  Price" shall mean the per Share option exercise
price  for each of the Group I Options  and the  Group II  Options  set forth in
Section 2 hereof.

                  (v)  "Expiration  Date"  means  the  date on which  the  Stock
Options  and their  right of  exercise  shall  expire,  as provided in Section 2
hereof.

                  (w)  "Fair  Market  Value"  as of any  Determination  Date  or
Computation  Date  shall  mean,  as  determined  in good  faith by the  Board of
Directors  (subject to Section 10), (i) as to Common Stock, as of such date, the
price of Common Stock in a sale of Tremont as a going concern in an arm's length
transaction  to an  independent  Third  Party,  without  regard  to the  lack of
liquidity  of the  Common  Stock due to any  restrictions  or other  limitations
contained in this  Agreement,  and (ii) as to any other  property or  securities
referred to herein,  the price of such property or securities as of such date in
an arm's length  transaction to an independent Third Party. Such valuation shall
assume a sale to a  hypothetical  "ready,  willing and able" Third Party without
consideration  given to any  potential  forced sale  occurring  by virtue of the
absence  of  actual  Third  Party  purchasers  on  any  Determination   Date  or
Computation Date.

                                      294

<PAGE>




                  (x) "Floor  Price" shall mean a price per Share for the Common
Stock of U.S. Seven Dollars and 50/100 (US $7.50).

                  (y) "Group I Options"  shall  mean  options to acquire  Shares
granted by Tremont as of the  Effective  Date  pursuant to Section  2(a) of this
Agreement, having an Exercise Price of U.S. Eight Dollars (US $8.00) per Share.

                  (z) "Group II Options"  shall mean  options to acquire  Shares
granted by Tremont as of the  Effective  Date  pursuant to Section  2(b) of this
Agreement,  having an  exercise  price of U.S.  Fifteen  Dollars (US $15.00) per
Share.

                  (aa)  "Meaden  Affiliate"  shall mean any of Meaden's  spouse,
parents, siblings, lineal descendants, spouses of any lineal descendants, lineal
descendants  of  siblings  and  trusts  for  the  benefit  of  all or any of the
foregoing.

     (ab) "NASD" means The National Association of Securities Dealers, Inc.

                  (ac)     "Nasdaq" means the NASD Automated Quotation System.

                  (ad)  "Offered  Shares" shall mean the number of Shares Meaden
wishes to sell  pursuant to any Third Party  Offer and for which  Tremont  shall
have a right of first refusal in accordance with Section 7(c) hereof.


                                       295

<PAGE>




     (ae) "OTC Bulletin Board" means the quotation system for the non-Nasdaq
over-the-counter market.

                  (af)  "Person"   shall  mean  any   individual,   corporation,
partnership,  limited  liability  company,  firm,  joint  venture,  association,
joint-stock  company,   trust,   incorporated   organization,   governmental  or
regulatory or other entity.

                  (ag) "Potential  Realizable Value" shall mean, with respect to
any Stock Option, its potential realizable value, as determined in good faith by
the Board of Directors,  using models and methods as  reasonably,  determined by
the Board of Directors to be customary in the securities and financial  services
industries,  which take into account,  among other things,  the period remaining
until the  expiration of the option,  the volatility of the security and current
interest rates.

                  (ah) "Publicly Traded" shall mean, as to any security referred
to herein,  if listed or admitted to unlisted  trading  privileges on a national
securities  exchange or  designated as a National  Market System  security on an
interdealer quotation system by the NASD or if sales or bid and offer quotations
are  reported  for that  class of such  security  by Nasdaq or the OTC  Bulletin
Board.

                  (ai) "Reference  Price" per Share shall mean with respect to a
Covered  Transaction the greater of the Acquisition  Consideration and the Floor
Price.


                                        296

<PAGE>




                  (aj) "Right of First Refusal"  shall mean Tremont's  option to
purchase  Shares  pursuant to Section 7(c) hereof in the event that Meaden shall
have received,  and wishes to accept, a Third Party Offer with respect to all or
any of the Shares owned by her.

                  (ak) "Securities" shall mean any exercisable Stock Options and
Shares issued upon the exercise of Stock Options.

     (al)  "Securities  Act"  shall  mean the U.S.  Securities  Act of 1933,  as
amended.

     (am) "Share" or "Shares" shall mean one or more shares of Common Stock.

                  (an) "Stock Option" or "Stock Options" shall mean,  singularly
or  collectively,  as the case may be,  the  Group I  Options  and the  Group II
Options.

                  (ao)     "TASS" shall mean TASS Management Limited, a company
incorporated in England and Wales.

                  (ap) "Third Party" or "Third  Parties" shall mean a Person who
is not an Affiliate  of Meaden or Tass,  or any of Tass's  officers,  directors,
employees  or  agents or any of their  respective  relatives,  or an  individual
otherwise related in any capacity to Meaden.


                                      297

<PAGE>




                  (aq) "Third Party Offer" shall mean a bona fide written  offer
from a Third Party to purchase Shares from Meaden.

                  (ar)  "Tremont"  means Tremont  Advisers,  Inc., a corporation
organized and existing under the laws of the State of Delaware.

     (as) "U.K." means the United Kingdom of Great Britain and Northern Ireland.

                  (at)     "U.S." means the United States of America

         Section 2. Options.  As of the Effective Date, Tremont hereby grants to
Meaden, and Meaden hereby accepts options described below to purchase the number
of Shares  specified below on the terms and subject to the conditions  described
herein,  during a term (the "Term") which  commences on the  Effective  Date and
ends at 12:00 midnight (prevailing local time at Tremont's principal offices) on
the Expiration Date, which is the day that is the date of the sixth  anniversary
of the Effective Date,  subject to the provisions for vesting  described herein,
at the Exercise Price specified below.






                                        298

<PAGE>



         (a)      Group I Options.  Subject to Section 4:

                  (i)  Number of  Shares;  Exercise  Price.  The Group I Options
hereby granted to Meaden  entitle  Meaden to subscribe for and purchase,  at any
time or from time to time  subject  to  vesting  as  provided  below,  until the
Expiration  Date, up to 147,447  Shares at an Exercise Price equal to U.S. Eight
Dollars (US $8.00) per Share.

                  (ii)  Vesting.  The  Group I  Options  shall  vest and  become
exercisable in installments as follows:

     (A) Up to sixty  percent  (60%) of the  total  number  of  Shares  optioned
pursuant to this Section 2(a) may be exercised on and after the Effective  Date,
for up to an aggregate of 88,468 Shares; and

                           (B) At any time on or after March 11, 2000, the Group
I Options
may be  exercised  as to all  Shares  optioned  for  which  they  have  not been
previously  exercised until the Expiration  Date,  whereupon the Group I Options
shall expire and may no longer be exercised.






                                   299

<PAGE>



         (b) Group II Options. Subject to Section 4:

                  (i) Number of  Shares;  Exercise  Price.  The Group II Options
hereby granted to Meaden entitle Meaden to subscribe for and purchase subject to
vesting  as  provided  below,  at any  time or  from  time to  time,  until  the
Expiration  Date,  up to 24,844  Shares at an  Exercise  Price  equal to Fifteen
Dollars (US $15.00) per Share.

                  (ii)  Vesting.  The Group II  Options  shall  vest and  become
exercisable in installments as follows:

     (A) Up to an aggregate of 8,281  Shares  optioned  pursuant to this Section
2(b) may be exercised on or after the Effective Date;

                           (B) Up to an  aggregate  of  16,563  Shares  optioned
     pursuant to this  Section  2(b) may be  exercised  at any time on and after
March 11, 2000; and

     (C) At any time on or after  March 11,  2001,  the Group II Options  may be
exercised  as to all Shares  optioned  for which  they have not been  previously
exercised until the Expiration Date, whereupon the Group II Options shall expire
and may no longer be exercised.



                                      300

<PAGE>



         (c)  Acceleration.  Notwithstanding  Section 2(a) and (b) but otherwise
subject to the terms and conditions  hereof, the Stock Options shall immediately
become  exercisable for all of the Shares upon the effective date of a Change in
Control,  including the portion thereof which would,  but for this Section 2(c),
not yet be exercisable,  unless,  in the event of an Acquisition,  the agreement
with respect to which includes a provision  reasonably  acceptable to Meaden for
the assumption of the Stock Options or the substitution for the Stock Options of
an  option  or  options  covering  the  stock  of a  Publicly  Traded  successor
corporation,  or a parent or subsidiary  thereof,  with appropriate  adjustments
made in  accordance  with Section 4 hereof as to the number and/or nature of the
Shares purchasable upon the exercise of the Stock Options, then in such case the
Stock Options shall continue in the manner and under the terms so provided.

         Section 3. Anti-Dilution In The Event Of A Covered Acquisition.  (a) In
the event of the occurrence of a Covered  Acquisition  in which the  Acquisition
Consideration shall be less than U.S. Eight Dollars (US $8.00) per share, Meaden
shall be entitled to receive,  as an Anti-Dilution  Premium,  an amount equal to
the  consequent  reduction  in the  Potential  Realizable  Value of the  Group I
Options and a result of the Reference Price being less than the Group I Options'
Exercise Price.

                  (b) The Anti-Dilution  Premium shall be calculated by Tremont,
and  delivered,  at  Tremont's  option,  in any  combination  of the  following,
together with a


                                       301

<PAGE>



Computation Statement, as soon as practicable after the Computation Date, but in
no event later than ten (10) days following the Computation Date:

     (i) A  payment  by  certified  or  cashier's  check for an amount in United
States Dollars;

                           (ii) A  reduction  in the Group II  Options  Exercise
Price thereby
increasing the Potential Realizable Value of the Group II Options, provided that
the Group II Options  shall be assumed by the  acquiring  Person in the  Covered
Acquisition; and/or

                           (iii) The issuance of Shares,  Stock Options or other
securities valued
as provided in Section 3(e) hereof.

                  (c) Meaden's right to receive an  Anti-Dilution  Premium shall
terminate  on the date which is the third  anniversary  of the  Effective  Date,
unless a  Computation  Date occurs  before such  anniversary  in which case such
right shall survive  until such time as Meaden shall  receive the  Anti-Dilution
Premium  in  accordance  with  this  Section  3(a)  in  respect  of the  Covered
Acquisition to which such Computation Date relates.

                  (d) The Anti-Dilution Premium shall apply in respect of Shares
issuable  upon the exercise of the Group I Options  owned only by Meaden and not
to any  transferee  or  assignee  of  Meaden's  Shares  other  than to a  Meaden
Affiliate.


                                        302

<PAGE>




                  (e) In determining the amount of any Acquisition Consideration
for the purposes of this Agreement, the following considerations shall apply:

     (i) in the case of any Covered Acquisition,  the computation of Acquisition
Consideration  shall be effected on a fully diluted  basis,  i.e.,  all options,
warrants and other  securities  convertible into Common Stock shall be deemed to
have been  exercised or  converted,  as the case may be, with the  consideration
therefor  having been paid at the instant  prior to any Actual  Distribution  or
Deemed Distribution to the holders of the Shares;

     (ii) United States  currency or other  currencies to be received as part of
Acquisition Proceeds shall be valued at face value;

     (iii) each fixed non-contingent  deferred payment to be received as part of
Acquisition  Proceeds shall be valued at present value at the Computation  Date,
using a  discount  factor  equal  to the  prime  rate of  Citibank,  NA,  or any
successor thereto, as in effect at the Computation Date, plus __%;

     (iv) marketable securities to be received as part of such proceeds shall be
valued at the Current Market Price at the Computation Date;

     (v) all other property shall be valued at Fair Market Value at the
Computation Date;

[
                                         303

<PAGE>




     (vi) in the case of a sale of substantially all of its assets by Tremont,
or any other transaction in which Acquisition Consideration is not paid directly
to the holders of the Shares,  in order to determine  the amount of  Acquisition
Proceeds  to be  allocated  to all of the Shares,  it shall be assumed  that the
Acquisition  Proceeds to be received by Tremont,  valued in accordance with this
Section 3(d), after payment of all outstanding liabilities, shall be immediately
distributed  to all of the  security  holders of  Tremont in a manner  such that
there  shall first be  allocated  to any  holders of  preferred  shares or other
senior securities of Tremont such amounts owing to such holders as determined by
the  Board  of  Directors  in  accordance  with  the  terms  of such  shares  or
securities, including any accrued and unpaid dividends, with the balance of such
consideration  being allocated to the holders of all of the Shares and any other
shares of common stock of Tremont in accordance with their terms;

     (vii) in the case of a transaction in which the Acquisition
Consideration  shall be payable  directly to  Tremont's  security  holders,  the
amount to be  allocated  to the Shares  shall be the actual  amount so  payable,
valued in accordance with this Section 3(d);

     (viii) any  determination of value to be made pursuant to this Section 3(d)
shall be initially  made by the Board of  Directors,  utilizing  the services of
such  appraiser(s)  or other  expert(s)  as the Board of  Directors  shall  deem
appropriate,  and the Board of  Directors  shall cause there to be  delivered to
Meaden a Computation Statement showing such valuations and computations; and


                                              304

<PAGE>




     (ix) any Anti-Dilution Premium payable to Meaden or any other
     person  shall  be  deducted  as  a  liability  of  Tremont  in  calculating
Acquisition Consideration.

                  (f)  In the  event  that  Meaden  shall  not  agree  with  the
computations  and valuations set forth in the  Computation  Statement,  then the
parties shall submit such matter for resolution to an "independent" committee of
the Board of Directors, consisting of all directors then sitting and who are not
then and were not previously executive officers of Tremont (the "Committee"). If
such  matter  has not been  resolved  within  thirty  (30)  days  following  its
submission  to the  Committee the parties shall submit such matter to any one of
the five largest  nationally  known  accounting  firms in the United States,  or
their  successors,  as may be  jointly  selected  by  Meaden  and  Tremont  (the
"Accountants");  provided,  however,  that Tremont  specifically agrees that its
auditors  shall not be  considered  for  selection.  The parties  agree that the
decision of the Accountants  with respect to the computations and valuations set
forth in the Computation  Statement will be binding on the parties and shall not
be subject to arbitration in accordance  with Section 10 hereof.  Each of Meaden
and  Tremont  shall  bear  her or its own  costs  with  respect  to the  dispute
resolution  process  described in this Section 9(f), and shall share equally the
fees and disbursements of the Accountants.

     Section 4. Adjustments.  Upon the occurrence of any of the following events
described  below,  Meaden's  rights  with  respect to the Stock  Options and the
optioned Shares shall be adjusted as follows:



                                  305

<PAGE>



         In the event the  Company  shall after the date of this  Agreement  (i)
declare a dividend or make a  distribution  on its Common Stock in shares of its
capital  stock,  (ii) subdivide its  outstanding  shares of Common Stock through
stock split or otherwise,  (iii) combine its outstanding  shares of Common Stock
into  a  smaller   number  of  shares  of  Common   Stock,   or  (iv)  issue  by
reclassification  of  its  Common  Stock  (including  any   reclassification  in
connection with a consolidation or merger in which the Company is the continuing
corporation)  other  securities of the Company,  the number and/or nature of the
Shares  purchasable upon exercise of each Stock Option and/or the Exercise Price
shall be  adjusted  so that  Meaden  shall be  entitled  to receive the kind and
number of Shares or other  securities  of the Company which she would have owned
or been entitled to receive  after the happening of any of the events  described
above, had such Stock Option been exercised  immediately  prior to the happening
of such event or any record  date with  respect  thereto.  Any  adjustment  made
pursuant to this Section 4 shall become effective retroactively as of the record
date of such event. In the event of any such  adjustment,  Tremont shall send to
Meaden a notice of such  adjustment  prepared and signed by the Chief  Financial
Officer of Tremont,  which shall set forth the number of Shares purchasable upon
the  exercise of each Stock  Option and the  Exercise  Price of the Shares after
such  adjustment,  a brief  statement of the facts requiring such adjustment and
computation by which such adjustment was made.

     Section 5. Method of  Exercise.  (a) The Stock  Options may be exercised by
Meaden hereunder by giving ten (10) Business Days' notice of exercise to Tremont
specifying  the number of Shares to be purchased  and the total  purchase  price
therefor

                                     306

<PAGE>



accompanied by cash,  certified  check for the amount in United States  Dollars,
Shares, or any combination  thereof,  as may be elected by Meaden, in payment of
such price. If payment is made in Shares, the Common Stock must then be Publicly
Traded  and the  value  of the  Shares  received  by  Tremont  for  purposes  of
determining  the amount of payment shall be their Current Market Price as of the
date of exercise.

                  (b) In lieu of exercise  of any  portion of the Stock  Options
for cash  provided in Section  5(a)  hereof,  the Stock  Options (or any portion
thereof)  may, at the election of Meaden,  be  converted in a cashless  exercise
into the nearest whole number of shares of Common Stock equal to (i) the product
of (A) the number of Stock Options to be so converted,  (B) the number of Shares
of Common Stock then issuable  upon the exercise of each Stock  Option,  and (C)
the excess,  if any, of the Current  Market  Price per share with respect to the
date of  conversion  over the Exercise  Price in effect on the Business Day next
preceding the date of  conversion,  divided by (ii) the Current Market Price per
share with respect to the date of conversion.

     Section  6.  Requirements  Of Law;  Delivery.  (a) In  accepting  the Stock
Options, Meaden understands and specifically acknowledges that:

     (i) the  Securities  have not been  registered  under the Securities Act or
under the securities laws of any U.S. state  jurisdiction,  or under the laws of
any other jurisdiction, by reason of a specified exemption from the registration
provisions thereunder;

                                    307

<PAGE>




     (ii) the Securities must be held indefinitely unless they are
subsequently  registered  under the  Securities  Act and under other  applicable
securities laws or an exemption from such registration is available; and

                           (iii) all certificates  for the Securities  issued to
her may bear a legend in substantially the following form:

                           "THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES  ACT OF 1933,  AS AMENDED,  OR QUALIFIED  UNDER ANY
                  STATE  SECURITIES  LAWS.  THE  SECURITIES  MAY NOT BE OFFERED,
                  SOLD,  TRANSFERRED  OR  OTHERWISE  DISPOSED  OF  WITHOUT  SUCH
                  REGISTRATION  OR UNLESS  THE  ISSUER  RECEIVES  AN  OPINION OF
                  COUNSEL (WHICH MAY BE COUNSEL FOR THE ISSUER), SATISFACTORY TO
                  THE ISSUER  (BOTH AS TO THE ISSUER OF THE OPINION AND THE FORM
                  AND SUBSTANCE THEREOF), THAT SUCH DISPOSITION WILL NOT REQUIRE
                  REGISTRATION  OF SUCH  SECURITIES  UNDER THE SECURITIES ACT OF
                  1933,  AS  AMENDED,   OR  ANY  STATE  SECURITIES  LAWS.  THESE
                  SECURITIES ARE SUBJECT TO FURTHER RESTRICTIONS AS SET FORTH IN
                  THAT CERTAIN AGREEMENT AND PLAN OF REORGANIZATION  DATED AS OF
                  MARCH 8, 1999."

                  (b) No Shares shall be delivered  upon the exercise of a Stock
Option until the Exercise Price shall have been paid in full and, if required by
Tremont  in its sole  discretion,  until  Meaden  has  given  Tremont  a written
statement reasonably  satisfactory to it that she is purchasing the Shares as an
investment and not with a view to sale or distribution of any of such Shares.


                                           308

<PAGE>




     Section 7. Transfer Restrictions.  (a) Stock Options may not be transferred
at any time  without the prior  written  consent of Tremont and may be exercised
pursuant to the terms hereof only by Meaden.

                  (b) Meaden shall at no time sell, assign, encumber,  transfer,
pledge or hypothecate or otherwise  dispose of all or any part of the Shares now
owned  or  hereafter   acquired  by  her  or  any  interest  therein  except  as
specifically  permitted  in this  Agreement.  Any  such  purported  encumbrance,
transfer or  disposition  in  violation of this  Agreement  shall be invalid and
shall be of no force  and  effect  and  shall not be  registered,  or  otherwise
recognized, or caused to be registered by Tremont.

                  (c) Notwithstanding anything to the contrary contained in this
Agreement,  Meaden is under no  restrictions as to the transfer by her of any or
all of the Shares owned by her to one or more Meaden  Affiliates  provided  that
each such  Meaden  Affiliate  shall  execute  and  deliver  to Tremont a written
consent, in a form to be acceptable to Tremont and Meaden, to be bound by all of
the  provisions of this  Agreement.  In the event of any transfer by Meaden to a
Meaden  Affiliate of all or any part of the Shares owned by her (or in the event
of any  subsequent  transfer  by any such  Meaden  Affiliate  to another  Meaden
Affiliate),  such Meaden Affiliate shall receive and hold such Shares subject to
the terms of this Agreement and the rights and  obligations  hereunder of Meaden
as though such Shares were still owned by Meaden,  and Meaden (together with all
of her Meaden  Affiliates)  shall  continue  to be deemed a single  shareholder.
There shall be no further transfer of such

                                     309

<PAGE>



Shares by a Meaden  Affiliate  except  between and among such Meaden  Affiliate,
Meaden and the other Meaden Affiliates.

                  (d) (i) In the event that  Meaden  shall at any time desire to
sell Offered  Shares  pursuant to a Third Party Offer,  Meaden shall first offer
such  Offered  Shares to  Tremont  pursuant  to a  written  notice  (the  "Offer
Notice"), advising Tremont of her intention to make such disposition.  The Offer
Notice shall set forth and specify, (x) the name(s) and address(es) of the Third
Parties,  and (y) the number of Shares  subject to the Third  Party  Offer,  the
intended  purchase price thereof,  the method of payment  therefor and any other
material terms of such Third Party Offer.

     (ii) Tremont shall have the option (the "Tremont Option"),
exercisable  no later than ten (10) Business Days (the "First  Refusal  Period")
after  receipt of the Offer  Notice from Meaden,  and subject to all  applicable
laws and regulations,  to agree to purchase any or all of the Offered Shares, at
the price and on the terms contained in the Third Party Offer.

     (iii) If Tremont shall elect to exercise the Tremont Option,  it shall give
a written  notice to Meaden prior to the end of the First Refusal  Period of its
intention  to exercise  (the  "Tremont  Notice")  and  specifying  the number of
Offered Shares Tremont is electing to purchase.  In the event that Tremont shall
elect to purchase all or any part of the Offered Shares, then the closing of the
purchase and sale of such Offered Shares shall take 23


                                      310
<PAGE>



place on a date as agreed to between Meaden and Tremont, which shall be no later
than thirty  (30)  Business  Days  following  Tremont's  delivery of the Tremont
Notice at the  principal  executive  offices of Tremont,  or such other place as
Tremont may reasonably designate.

     (iv) If Tremont shall not elect to exercise the Tremont Option prior to the
end of the First Refusal  Period,  Meaden shall have the right,  for a period of
thirty (30) days after the  expiration of the First Refusal  Period,  to sell to
the Third  Party all or any portion of the  Offered  Shares as to which  Tremont
shall not have exercised the Tremont Option but only pursuant to the Third Party
Offer.  In  addition  to the  foregoing,  any offer and sale of  Offered  Shares
pursuant  to a Third  Party  Offer  shall,  in all  respects,  comply  with  the
registration   provisions  of  any  applicable  securities  law  (or  be  exempt
therefrom)  and the  conclusive  written  opinion of Meaden's  counsel that such
offer and sale comply with said registration  provisions or are exempt therefrom
shall be received by Tremont as a condition to Tremont's  registering or causing
to be  registered  the transfer of any Offered  Shares.  Copies of all documents
relating to such sale shall be  forwarded  to the  Secretary of Tremont no later
than five (5) days  prior to the  proposed  date of such  sale.  If such sale by
Meaden pursuant to the terms of the Third Party Offer is not consummated  within
thirty (30) days after the  expiration  of the First  Refusal  Period,  Meaden's
Shares  shall  again be  subject  to all of the  terms  and  provisions  of this
Agreement.



                                      311

<PAGE>



                  (e) For so long as Meaden  shall be employed by  Employer,  or
any of its  Affiliates,  Tremont's  Right of First  Refusal  shall  apply to all
Shares now or  hereafter  acquired by her  whether  pursuant to an exercise of a
Stock Option or otherwise.

         Section 8. Termination  Under Employment  Agreement.  In the event that
the Employment Agreement is terminated by the Employer with or without Cause, as
such term is defined in the Employment Agreement, or the Employer does not elect
to renew the Employment  Agreement beyond the "Term" (as such term is defined in
the  Employment  Agreement and not in this  Agreement),  and Meaden ceases to be
employed by Employer,  or the Employment  Agreement is terminated as a result of
Meaden's death or disability, Meaden (or her estate, as the case may be), in all
cases,  shall retain the right to exercise the unexercised  portion of the Stock
Options,  at any  time  or  from  time  to time  until  the  Expiration  Date in
accordance with Section 2.

         Section 9. Rights In Stock Before  Issuance And Delivery.  Meaden shall
not be entitled to the  privileges  of stock  ownership in respect of any Shares
issuable upon exercise of the Stock  Options,  unless and until such Shares have
been issued to Meaden as fully paid shares.

     Section 10. Stock Option Administration. Other than as set forth in Section
3(e) hereof,  in the event of a disagreement  as to the  interpretation  of this
Agreement  or the terms of the Stock  Options,  or any  amendment  hereto or any
procedure hereunder, or as to any


                                     312

<PAGE>



right or obligation arising from or related to this Agreement,  the matter shall
be  submitted  for  resolution  by  the  parties  to  the  Committee.   If  such
disagreement  has not been  resolved  within  thirty  (30)  days  following  its
submission to the Committee,  the  disagreement  will be settled by arbitration.
Such arbitration shall be held in accordance with the United Nations  Commission
on  International  Trade Law Arbitration  Rules,  with the American  Arbitration
Association acting as the appointing  authority.  Any arbitration  proceeding as
described herein shall be held in the City of New York. The parties hereto agree
that any  arbitration  shall be a final  and  binding  determination  as to such
matters as described therein and a judgment of any federal, state or other court
having  jurisdiction  thereof may be entered upon the award made pursuant to the
arbitration.

         Section 11. No Employment  Contract.  This  Agreement  shall not confer
upon  Meaden  any  right  to  continued  employment  by  Tremont  or  any of its
Affiliates,  nor shall this  Agreement  interfere  in any way with the rights of
TASS and Tremont under the terms of the Employment Agreement.

         Section  12.  Notices.  Any  notice or other  communication  under this
Agreement shall be in writing and shall be considered given when received by the
party to whom or 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 set
forth below (or at such other address as any party may have previously specified
by notice to the other parties as the address to which notice


                                   313

<PAGE>



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.

         If to Tremont:

                  Tremont Advisers, Inc.
                  Corporate Center at Rye
                  555 Theodore Fremd Avenue
                  Rye, New York  10580
                  U.S.A.
                  Attention: Stephen T. Clayton, Chief Financial Officer
                  Facsimile No.: 914-925-9337

         with a copy to:

                  Newman Tannenbaum Helpern
                    Syracuse & Hirschtritt LLP
                  900 Third Avenue
                  New York, New York  10022
                  U.S.A.
                  Attention: Michael G. Tannenbaum, Esq.
                  Facsimile No.: 212-371-1084

         If to Meaden:

                  Nicola Meaden
                  12 Wynnstay Gardens
                  Allen Street
                  London W8 6UP
                  ENGLAND
                  Facsimile No.: _________________

         with a copy to:

                  Landau & Cohen, Solicitors
                  130-132 Burnt Oak Broadway
                  Edgeware, Middlesex HA8 0BB
                  ENGLAND
                  Attention: Richard Cohen
                  Facsimile No.: 011-44-181-951-1317


                                      314

<PAGE>




     Section 13. Tax Consequences. Meaden has reviewed with her own tax advisors
the foreign and local tax consequences of the transactions  contemplated by this
Agreement.  Meaden is relying  solely on such advisors and not on any statements
or representations of the Company or any of its agents.

     Section 14.  Headings.  The headings used in this  Agreement are solely for
convenience of reference and shall not affect its interpretation.

     Section  15.  Waiver Of Breach.  The waiver by any party of a breach of any
provision in this Agreement shall not operate or be construed as a waiver of any
subsequent breach by a party.

         Section  16.  Governing  Law.  This  Agreement  shall  be  interpreted,
construed  and  governed  according  to the laws of the State of New  York,  the
United  States of America,  without  reference to  conflicts  of law  principles
thereof.  Except with  respect to disputes  wherein the parties  have  expressly
agreed herein to submit such dispute to  arbitration,  the parties hereto submit
to the  jurisdiction  of the courts of the State of New York and of any  federal
court  located  therein  over any  dispute  arising  out of or  relating to this
Agreement or any of the transactions  contemplated hereby, and each party hereby
agrees that all claims in respect of such dispute shall be heard and  determined
in such court.



                                      315

<PAGE>



         Section 17.  Severability.  If any  section,  term or provision of this
Agreement shall be held or determined to be  unenforceable,  the balance of this
Agreement  shall  nevertheless  continue in full force and effect  unaffected by
such holding or determination. In addition, in any such event, the parties agree
that it is  their  intention  and  agreement  that  any  such  section,  term or
provision  which is held or determined  to be  unenforceable  as written,  shall
nonetheless  be enforced and binding to the fullest  extent  permitted by law as
though such section,  term or provision had been written in such a manner and to
such extent as to be enforceable under the circumstances.

     Section  18.  Amendments.  No  amendment,  modification  or  waiver  of any
provisions  of this  Agreement  shall be made except by an instrument in writing
signed by the parties charged.

         Section 19. Entire  Agreement.  This Agreement  constitutes  the entire
agreement of the parties hereto with respect to the matters set forth herein and
supersedes any prior understanding or agreement,  oral or written,  with respect
thereto.



                                     316

<PAGE>


         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.

                                                 TREMONT ADVISERS, INC.


                                       By:
                                      Name:
                                     Title:



                                                 Nicola Meaden


                                    317

<PAGE>
                                                                 Exhibit 23.1

                              CONSENT OF INDEPENDENT AUDITORS




We consent to the incorporation by reference in the Registration Statement
(Form S-8 N. 33-78346) pertaining to the Tremont Advisers, Inc. 401(k) Savings
Plan of our report dated March 5, 1999, with respect to the consolidated 
financial statements of Tremont Advisers, Inc. included in the Annual Report
(Form 10-KSB) for the year ended December 31, 1998.






                                             ERNST & YOUNG LLP




White Plains, New York
March 15, 1999
                                   318

<PAGE>
                                                            Exhibit 23.2
To the Board of Directors of
Tremont Advisers, Inc.



We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (no. 33-78346) pertaining to the Tremont Advisers, Inc.
401(k) Savings Plan of our report dated February 13, 1999 on the financial 
statements of The Broad Market Fund, L.P. as of December 31, 1998 and for the
year then ended which report is included in the Annual Report on Form 10-KSB of
Tremont Advisers, Inc. for the year ended December 31, 1998.




GOLDSTEIN GOLUB KESSLER LLP
New York, New York


March 17. 1999


                                        319