Document:

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                                                                   EXHIBIT 10.52

                                RELEASE AGREEMENT

         This RELEASE AGREEMENT (the "Agreement") is made and entered into by
and between MESSAGEMEDIA, INC. ("MessageMedia") and DENNIS CAGAN ("Mr. Cagan")
and CAGANCO, INC. ("CaganCo") (together "Cagan Parties") as of the Execution
Date of this Agreement defined in paragraph 26 below.

                                   I. RECITALS

         WHEREAS, effective as of October 31, 1999 ("Resignation Date"), Mr.
Cagan tendered his resignation from any and all prior positions as an employee,
consultant, and officer he may have held with MessageMedia or any of its
affiliates or subsidiaries; and

         WHEREAS, Mr. Cagan tendered his resignation voluntarily and at his sole
election and discretion; and

         WHEREAS, MessageMedia has accepted the resignation tendered by Mr.
Cagan;

         WHEREAS, the parties wish to make the resignation from full-time
employment amicable but conclusive on the terms and conditions set forth herein;

         WHEREAS, MessageMedia has offered and Mr. Cagan has accepted a
temporary, part-time position with MessageMedia;

         WHEREAS, this Agreement does not alter or in any way affect Mr. Cagan's
status as a member of MessageMedia's Board of Directors;

         WHEREAS, the parties intend that this Agreement, including the attached
exhibit hereto, constitute the full, final, and entire agreement with regard to
MessageMedia's obligations to Mr. Cagan from the Resignation Date forward;

         WHEREAS, Mr. Cagan accepts the benefits of this Agreement with the
acknowledgment that by its terms he has been fully and satisfactorily
compensated;

         WHEREAS, CaganCo and MessageMedia entered into an agreement whereby
CaganCo was to provide certain services to MessageMedia;

         WHEREAS, CaganCo and MessageMedia desire to terminate any and all
agreements, whether written or oral, that CaganCo and MessageMedia may have
entered into from time to time;

         WHEREAS, CaganCo acknowledges that it has received valuable
consideration in exchange for termination of its obligations to MessageMedia.

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                                  II. COVENANTS

         NOW THEREFORE, in consideration of the above set forth recitals which
are incorporated herein by reference and the mutual promises and covenants
contained in this Agreement, it is hereby agreed by and between the parties
hereto as follows:

         1. RESIGNATION. Mr. Cagan has tendered, and MessageMedia has accepted,
Mr. Cagan's resignation from any and all prior positions Mr. Cagan may have held
with MessageMedia, effective as of October 31, 1999 ("Resignation Date"). This
Agreement does not alter or in any way affect Mr. Cagan's status as a member of
MessageMedia's Board of Directors.

         2. CONSIDERATION. Although MessageMedia has no policy or procedure
requiring payment of any severance benefits, MessageMedia agrees to the
following as consideration for this Agreement:

                  (a) AGREEMENT FOR TEMPORARY PART-TIME EMPLOYMENT. As
consideration for executing this Agreement, MessageMedia agrees to enter into
the Agreement for Temporary Part-time Employment, attached hereto as Exhibit A.
Mr. Cagan's status as a temporary, part-time employee shall commence immediately
upon Mr. Cagan executing this Agreement and the attached Exhibit A and shall be
effective as of the Resignation Date, as defined above. MessageMedia's
obligations under this paragraph or the Agreement for Temporary Part-time
Employment, if any, shall terminate immediately if Mr. Cagan, at any time,
violates any obligation to MessageMedia under said agreements.

                  (b) INSURANCE. MessageMedia agrees to provide Mr. Cagan with a
COBRA notification form setting forth his rights and responsibilities with
regard to COBRA coverage within ten days after the Execution Date. Should Mr.
Cagan timely elect to continue coverage pursuant to COBRA, MessageMedia agrees
to reimburse Mr. Cagan on a monthly basis for a period beginning November 1,
1999 and concluding January 31, 2000 ("COBRA Reimbursement Period"), unless this
obligation is terminated earlier as set forth in this Agreement, for the COBRA
premiums Mr. Cagan pays in order to maintain health insurance coverage during
the COBRA Reimbursement Period that is substantially equivalent to that which
Mr. Cagan received immediately prior to the Resignation Date. Any reimbursement
by MessageMedia during the COBRA Reimbursement Period is contingent upon Mr.
Cagan providing MessageMedia documentation establishing that Mr. Cagan paid the
COBRA premium and reflecting the extent of the coverage. Failure by Mr. Cagan to
present sufficient documentation relieves MessageMedia of any obligation under
this paragraph 2(b). Any reimbursements due under this paragraph 2(b) shall be
made by MessageMedia within 30 days after presentation by Mr. Cagan of such
sufficient documentation. Should Mr. Cagan obtain employment with an another
employer who provides medical benefits during the COBRA Reimbursement Period,
MessageMedia's obligation under this paragraph shall forever cease upon the
expiration of the waiting period (if any) for entitlement to insurance coverage
through Mr. Cagan's new employer. Mr. Cagan agrees to notify MessageMedia in
writing in the event that Mr. Cagan obtains employment before the end of the
COBRA Reimbursement Period. In any event, and notwithstanding any provision to
the contrary in this paragraph, MessageMedia's obligations

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under this paragraph shall forever cease no later than by the end of the COBRA
Reimbursement Period. The parties agree that any payments made under this
paragraph 2(b) is provided solely in consideration for Mr. Cagan's executing and
not revoking the ADEA waiver and release set forth in paragraph 14.

         3. OTHER CONSIDERATION. Except as expressly provided herein or in the
Agreement for Temporary Part-time Employment attached hereto as Exhibit A, the
Cagan Parties acknowledge and agree that the Cagan Parties will not receive (nor
are the Cagan Parties entitled to receive) any additional consideration,
payments, reimbursements, incentive payments, stock, equity interests or
benefits of any kind. Mr. Cagan further acknowledges and agrees that on or
before the Resignation Date MessageMedia paid to Mr. Cagan in full any and all
wages, salary, accrued but unused vacation, floating holiday accrued but not
taken, personal time off, commissions, bonuses, stock options, incentive
payments and compensation due and owing, if any, as of the Resignation Date.

         4. DENIAL OF LIABILITY. The parties acknowledge that any payment by
MessageMedia and any release by Mr. Cagan and CaganCo pursuant to this Agreement
are made to ensure that Mr. Cagan's resignation from full-time employment and
the termination of all agreements with CaganCo is amicable, that in making any
such payment or release, MessageMedia and the Cagan Parties in no way admit any
liability to each other and that they expressly deny any such liability.

         5. NONDISPARAGEMENT. The Cagan Parties and MessageMedia agree that
neither party will at any time disparage the other to third parties in any
manner likely to be harmful to the other party, their business reputation, or
the personal or business reputation of its directors, shareholders and/or
employees. Notwithstanding the prohibition in the preceding sentence, each party
shall respond accurately and fully to any question, inquiry, or request for
information when required by legal process.

         6. MESSAGEMEDIA PROPERTY. Prior to the Resignation Date, Mr. Cagan
agrees to return to MessageMedia all MessageMedia documents (and all copies
thereof) and any and all other MessageMedia property in Mr. Cagan's possession,
custody or control, including, but not limited to, financial information,
customer information, customer lists, employee lists, MessageMedia files, notes,
cellular telephones, contracts, drawings, records, business plans and forecasts,
financial information, specifications, computer-recorded information, software,
tangible property, credit cards, entry cards, identification badges and keys,
and any materials of any kind which contain or embody any proprietary or
confidential material of MessageMedia (and all reproductions thereof), except as
necessary to fulfill Mr. Cagan's duties as a member of MessageMedia's Board of
Directors or as an employee under the Agreement for Temporary Part-time
Employment.

         7. CONFIDENTIALITY. The provisions of this Agreement shall be held in
strictest confidence by the Cagan Parties and MessageMedia and shall not be
publicized or disclosed in any manner whatsoever. Notwithstanding the
representations and prohibitions in this paragraph: (a) the parties may disclose
this Agreement in confidence to their respective attorneys, accountants,
auditors, tax preparers, and financial advisors; (b) MessageMedia may disclose
this

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Agreement as necessary to fulfill standard or legally required corporate
reporting or disclosure requirements; (c) MessageMedia may disclose this
Agreement upon request from any government entity; and (d) the parties may
disclose this Agreement insofar as such disclosure may be necessary to enforce
its terms or as otherwise required by law.

         8. BUSINESS EXPENSE REIMBURSEMENT. MessageMedia agrees to reimburse Mr.
Cagan for those reasonable business expenses he necessarily incurred in his
capacity as a MessageMedia employee or consultant up to and including the
Resignation Date, to the extent that such reimbursement is consistent with
MessageMedia's policies in this regard. Mr. Cagan must submit the necessary
documentation establishing the amount, date and reason for expenses he incurred
and for which he seeks reimbursement no later than 15 days after the Execution
Date.

         9. REFERENCES. To coordinate MessageMedia's response to any inquiries
from prospective employers seeking employment references concerning Mr. Cagan,
Mr. Cagan agrees to direct such prospective employers exclusively to the
MessageMedia Vice President of Human Resources. Should the Vice President of
Human Resources receive an inquiry, the Vice President (or an authorized agent
acting on behalf of the Vice President) shall confirm Mr. Cagan's period of
employment with MessageMedia, the position he held, and the latest salary that
he received as an employee.

         10. NON-DISCLOSURE OF PROPRIETARY INFORMATION. Mr. Cagan acknowledges
and agrees that he is obligated to keep in the strictest of confidence, and not
to use or to disclose to any person, firm or corporation any trade secrets,
confidential knowledge, data or other proprietary information of MessageMedia.
By way of illustration only, this shall include information relating to
products, processes, know-how, designs, formulas, methods, samples,
developmental or experimental work, improvements, discoveries, plans for
research and new products, plans for marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers, and information regarding the skills, knowledge,
background, performance, salary, compensation or benefits of any MessageMedia
employee other than Mr. Cagan himself ("Confidential Information"). Mr. Cagan
further acknowledges that MessageMedia received confidential or proprietary
information from third parties subject to a duty on MessageMedia to maintain the
confidentiality of such information and/or to use the information only for
certain limited purposes. Mr. Cagan agrees to keep in the strictest of
confidence, and not to use or to disclose to any person, firm or corporation any
trade secrets, confidential knowledge, data or other proprietary information of
such third parties. Nothing in this paragraph does, is intended to, nor should
be construed to, narrow the obligations of Mr. Cagan imposed by any other
provision herein, any other agreement, law or other source.

         11. ENFORCEMENT OF PROPRIETARY RIGHTS. Mr. Cagan agrees to assist
MessageMedia in every proper way to obtain, and from time to time enforce,
United States and foreign Proprietary Rights. The term "Proprietary Rights"
shall mean all trade secret, patent, copyright, mask work and other intellectual
property rights throughout the world, relating to MessageMedia Inventions,
defined below, in any and all countries. Mr. Cagan further agrees to execute,
verify and deliver such documents and perform such other acts (including
appearances as a witness) as MessageMedia may reasonably request for use in
applying for, obtaining,

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perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the
assignment thereof. In addition, Mr. Cagan agrees to execute, verify and deliver
assignments of such Proprietary Rights to MessageMedia or its designee. Mr.
Cagan's obligation to assist MessageMedia with respect to Proprietary Rights
relating to such MessageMedia Inventions in any and all countries shall continue
beyond the Resignation Date, but, if MessageMedia's CEO requests Mr. Cagan's
services in writing, MessageMedia will compensate Mr. Cagan at a reasonable rate
after the Resignation Date for the time actually spent by Mr. Cagan rendering
such assistance. In the event MessageMedia is unable for any reason, after
reasonable effort, to secure Mr. Cagan's signature on any document needed to
execute, verify, or deliver any document assigning any trade secret, patent,
copyright, mask work or intellectual property right throughout the world
relating to MessageMedia Inventions, Mr. Cagan hereby irrevocably designates and
appoints MessageMedia and its duly authorized officers and agents as his agent
and attorney in fact, which appointment is coupled with an interest, to act for
and in Mr. Cagan's behalf to execute, verify and file any such documents and to
do all of his lawfully permitted acts to further the purposes of the preceding
paragraph with the same legal force and effect as if executed by Mr. Cagan. By
way of illustration but not limitation, "MessageMedia Inventions" includes trade
secrets, inventions, mask works, ideas, processes, formulas, source and object
codes, data, programs, other works of authorship, know-how, improvements,
discoveries, developments, designs and techniques, any patents, patent
applications, copyrights, trademarks, and pending copyrights or trademarks.
Nothing in this paragraph does, is intended to, nor should be construed to
narrow the obligations of Mr. Cagan imposed by any other provision herein, any
other agreement, law or other source.

         12. NONCOMPETITION AND NONSOLICITATION. Mr. Cagan acknowledges that
while he was employed with MessageMedia, he acted as Interim Chief Executive
Officer, was a member of executive and management personnel at MessageMedia, and
was privy to extremely sensitive, confidential and valuable commercial
information, and trade secrets belonging to MessageMedia, the disclosure of
which information and secrets would greatly harm MessageMedia. In addition, Mr.
Cagan acknowledges that the consideration received as an employee of
MessageMedia, as well as a portion of the consideration received in the mutual
provisions and covenants as part of this Agreement, are in return for his
covenants to preserve the good will of MessageMedia. As a reasonable measure to
protect MessageMedia from the harm of such disclosure and use of its information
and trade secrets against it, and as a reasonable measure to preserve the trade
secrets of MessageMedia, the parties agree to the following as part of this
Agreement:

                  (a) NON-COMPETITION COVENANT. Mr. Cagan agrees and
acknowledges that for a period of six (6) months following after the Termination
Date as defined in paragraph 10 of the Agreement for Temporary Part-time
Employment, attached as Exhibit A, he will not directly or indirectly engage in
(whether as an employee, consultant, proprietor, partner, director, officer or
otherwise), or have any ownership interest in, or participate in the financing,
operation, management or control of, any person, firm, corporation, partnership,
joint venture or other business entity that engages in the marketing or sale of
e-mail based customer relationship management and direct marketing services or
any computer program, product, process, system, or service marketed, sold or
under development by MessageMedia. The parties agree that no more than 1% of the
outstanding voting stock of a publicly traded company or any stock owned

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by Mr. Cagan as of the Resignation Date shall not constitute a violation of this
paragraph. Mr. Cagan further agrees and acknowledges that because of the nature
and type of business that MessageMedia engages in, the geographic scope of the
non-compete shall include all counties, cities, and states of the United States
and that such a geographic scope is reasonable. Nothing in this paragraph should
be construed to narrow the obligations of Mr. Cagan imposed by any other
provision herein, any other agreement, law or other source.

                  (b) NON-SOLICITATION COVENANT. Mr. Cagan acknowledges that he
was privy to highly sensitive personnel information, including (without
limitation) information concerning the skills, knowledge, and background of
MessageMedia employees, performance evaluations of employees by MessageMedia,
salary, compensation and benefits paid by MessageMedia to its employees and
other confidential, private and commercially valuable information. Mr. Cagan
acknowledges that disclosure of such information to others would be detrimental
to MessageMedia, and could lead to the loss of employees and knowledge critical
to the business of MessageMedia. Mr. Cagan also acknowledges that he was privy
to valuable and confidential information and trade secrets concerning
relationships between MessageMedia and customers, vendors, investors,
consultants, independent contractors and other business entities, and that
severance or alteration of such relationships would be highly detrimental to
MessageMedia. Accordingly, as a part of this Agreement and for the period during
the Employment Agreement, and six months after the Termination Date under the
Agreement for Temporary Part-time Employment, Mr. Cagan agrees not to solicit,
either directly or indirectly, any employee or director of MessageMedia to
terminate or alter his or her relationship with MessageMedia. Mr. Cagan further
agrees that for the period during the Employment Agreement, and six months after
the Termination Date, he will not, either directly or indirectly, solicit or
attempt to solicit any customer, client, supplier, investor, vendor, consultant
or independent contractor of MessageMedia to terminate, reduce or negatively
alter his, her or its relationship with MessageMedia. Mr. Cagan further agrees
and acknowledges that because of the nature and type of business that
MessageMedia engages in, the geographic scope of the non-compete shall include
all counties, cities, and states of the United States and that such a geographic
scope is reasonable. Nothing in this paragraph 12 or its subparagraphs should be
construed to narrow the obligations of Mr. Cagan imposed by any other provision
herein, any other agreement, law or other source.

                  (c) REASONABLE. Mr. Cagan agrees and acknowledges that the
time limitation on the restrictions in this paragraph 12 and its subparagraphs
are reasonable. Mr. Cagan also acknowledges and agrees that the limitation in
this paragraph 12 and its subparagraphs is reasonably necessary for the
protection of MessageMedia, that through this Agreement he shall receive
adequate consideration for any loss of opportunity associated with the
provisions herein, and that these provisions provide a reasonable way of
protecting MessageMedia's business value which was imparted to him. Mr. Cagan
further agrees that these restrictions are necessary because it is inevitable
that he will disclose Confidential Information without such restrictions. If any
restriction set forth in this paragraph 12 and its subparagraphs is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time, it shall be interpreted to extend only over the maximum
period of time as to which it may be enforceable. Mr. Cagan acknowledges and
agrees that the provisions in this paragraph 12 and its subparagraphs are
essential and material to this Agreement, and that upon breach of this

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paragraph 12 and its subparagraphs by Mr. Cagan, MessageMedia is entitled to
recover any payments or other consideration made pursuant to this Agreement, to
withhold providing additional payments or consideration, to equitable relief to
prevent continued breach, to recover damages and to seek any other remedies
available to MessageMedia.

         13. RELEASE OF CLAIMS BY MR. CAGAN AND CAGANCO. In exchange for the
consideration set forth in this Agreement and the mutual covenants of
MessageMedia and the Cagan Parties, the Cagan Parties hereby release, acquit and
forever discharge MessageMedia, its affiliated corporations and entities, its
and their officers, directors, agents, representatives, servants, attorneys,
employees, shareholders, successors and assigns of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys' fees,
damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known or unknown, suspected and unsuspected, disclosed and
undisclosed, liquidated or contingent, arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the
Execution Date, including but not limited to: any and all such claims and
demands directly or indirectly arising out of or in any way connected with Mr.
Cagan's employment with MessageMedia or any prior consulting relationship
between Mr. Cagan or CaganCo and MessageMedia, change of status in employment,
or the conclusion of that employment; claims or demands related to salary,
bonuses, commissions, stock, stock options, or any ownership interests in
MessageMedia, vacation pay, personal time off, fringe benefits, expense
reimbursements, sabbatical benefits, severance benefits, or any other form of
compensation; claims pursuant to any federal, any state or any local law,
statute, common law, regulation or cause of action including, but not limited
to, the federal Age Discrimination in Employment Act of 1967, as amended
("ADEA") under the terms set forth in paragraph 14 below, the federal Civil
Rights Act of 1964, as amended; claims for attorney's fees, costs and other
expenses under Title VII of the federal Civil Rights Act of 1964, as amended, or
any other statute, agreement or source of law; the federal Americans with
Disabilities Act of 1990; the Family and Medical Leave Act; the Employee
Retirement Income Security Act; the Colorado Fair Employment and Housing Act;
Colorado Labor Code; tort law; contract law; wrongful discharge; discrimination;
harassment; fraud; defamation; libel; emotional distress; breach of contract and
breach of the implied covenant of good faith and fair dealing. The Cagan Parties
agree that in the event either brings a claim covered by this release in which
he seeks damages against MessageMedia or in the event he seeks to recover
against MessageMedia in any claim brought by a governmental agency on his
behalf, this Agreement shall serve as a complete defense to such claims.

         14. ADEA WAIVER AND RELEASE BY MR. CAGAN. Mr. Cagan acknowledges that
Mr. Cagan is knowingly and voluntarily waiving and releasing any rights Mr.
Cagan may have under the federal Age Discrimination in Employment Act of 1967,
as amended ("ADEA Waiver and Release"). Mr. Cagan acknowledges that the
consideration given for this ADEA Waiver and Release, provided for in paragraph
2(a), is in addition to anything of value to which Mr. Cagan was already
entitled. The parties agree and acknowledge that Mr. Cagan has been advised by
this writing, as required by the ADEA that: (a) this ADEA Waiver and Release
does not apply to any claims under ADEA that may arise after the date that Mr.
Cagan signs this Agreement; (b) Mr. Cagan has the right to and is advised to
consult with an attorney prior to executing this Agreement; (c) Mr. Cagan has
twenty-one days within which to consider this ADEA Waiver and Release (although
Mr. Cagan may choose to voluntarily execute this ADEA Waiver and Release

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earlier); and (d) Mr. Cagan has seven days following the execution of this
Agreement to revoke Mr. Cagan's ADEA Waiver and Release by sending, via
certified United States mail, written notice of revocation to the attention of
MessageMedia, Inc., Attention: Sue Morse, 6060 Spine Road Boulder, CO 80301.
This ADEA waiver shall not be effective until the date upon which the Revocation
Period has expired, which shall be deemed by the parties to be the eighth (8th)
day after this Agreement is signed by Mr. Cagan (this date is hereinafter
referred to as the "ADEA Effective Date"). The parties acknowledge and agree
that revocation by Mr. Cagan of the ADEA Waiver and Release is not effective to
revoke Mr. Cagan's waiver or release of any other claims pursuant to this
Agreement. The parties further agree that revocation by Mr. Cagan of the ADEA
Waiver and Release shall entitle MessageMedia to recover any and all
consideration of any form given by MessageMedia in consideration for Mr. Cagan
executing and not revoking the ADEA Waiver and Release, and to recover the
costs, expenses and attorney's fees incurred in attempting to recover such
payments.

         15. TAX CONSEQUENCES. The Cagan Parties expressly acknowledges that
MessageMedia has not made, nor herein makes, any representation about the tax
consequences of any consideration provided by MessageMedia to Mr. Cagan pursuant
to this Agreement. Mr. Cagan agrees to identify and hold MessageMedia harmless
for any and all claims or penalties asserted against MessageMedia for failure to
pay taxes due on any consideration provided by MessageMedia pursuant to this
Agreement.

         16. COOPERATION. Mr. Cagan agrees to fully cooperate with MessageMedia
in connection with any MessageMedia defense, prosecution, or investigation by
MessageMedia regarding any actual or potential litigation, administrative
proceeding, or other such procedures, in which MessageMedia may be involved as a
party or non-party from time to time.

         17. NO THIRD PARTY RIGHTS. The parties agree that by making this
Agreement they do not intend to confer any benefits privileges or rights to
others. The Agreement is strictly between the parties hereto, subject to the
terms of paragraph 21 below, and that it shall not be construed to vest in any
other the status of third-party beneficiary.

         18. VOLUNTARY AND KNOWINGLY. Mr. Cagan and CaganCo acknowledge that,
before executing this Agreement, they have been advised and given the
opportunity to consult with counsel and has in fact sought and received advice
from counsel of her own choosing, and was fully advised of his rights under law.
Mr. Cagan and CaganCo further acknowledges that they have reviewed this
Agreement in its entirety, understands it, and voluntarily executes it.

         19. DUTY TO EFFECTUATE. The parties agree to perform any lawful
additional acts, including the execution of additional agreements, as are
reasonably necessary to effectuate the purpose of this Agreement.

         20. ENTIRE AGREEMENT. Except for those agreements expressly referenced
herein, this Agreement, including Exhibit A hereto, constitutes the complete,
final and exclusive embodiment of the entire agreement between Mr. Cagan,
CaganCo, and MessageMedia with regard to the subject matter hereof. The parties
intend that any prior agreement, whether written or oral, with regard to any
employment or consulting relationship between Mr. Cagan and

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MessageMedia and CaganCo and MessageMedia shall forever terminate, and this
Agreement shall define any further obligations that MessageMedia has to Mr.
Cagan and CaganCo. This Agreement is entered into without reliance on any
promise or representation, written or oral, other than those expressly contained
herein. It may not be modified except in a writing signed by Mr. Cagan and
CaganCo and a duly authorized officer of MessageMedia.

         21. SUCCESSORS AND ASSIGNS. This Agreement, including Exhibit A hereto,
shall bind the heirs, personal representatives, successors, assigns, executors
and administrators of each party, and insure to the benefit of each party, its
heirs, successors and assigns.

         22. APPLICABLE LAW. The parties agree and intend that this Agreement be
construed and enforced in accordance with the laws of the State of Colorado.

         23. FORUM. This Agreement will be governed by and construed according
to the laws of the State of Colorado as such laws are applied to agreements
entered into and to be performed entirely within Colorado between Colorado
residents. The Cagan Parties hereby expressly understands and consents that this
Agreement is a transaction of business in the State of Colorado and in the City
and County of Boulder, Colorado, and constitutes the minimum contacts necessary
to make Mr. Cagan subject to the personal jurisdiction and venue of the federal
courts located in the State of Colorado, and the state courts located in the
County of Boulder, Colorado. Mr. Cagan agrees and acknowledges that any
controversy arising out of or relating to this Agreement or the breach thereof,
or any claim or action to enforce this Agreement or portion thereof, or any
controversy or claim requiring interpretation of this Agreement must be brought
in federal court within the State of Colorado or a state court located in the
City and County of Boulder, Colorado. No such action may be brought in any forum
outside the State of Colorado. Any action brought in contravention of this
paragraph by one party is subject to dismissal at any time and at any stage of
the proceedings by the other, and no action taken by the other in defending,
counter claiming or appealing shall be construed as a waiver of this right to
immediate dismissal. A party bringing an action in contravention of this
paragraph shall be liable to the other party for the costs, expenses and
attorney's fees incurred in successfully dismissing the action or successfully
transferring the action to the federal courts located in the State of Colorado,
or the state courts located in the County of Boulder, Colorado.

         24. SEVERABLE. If any provision of this Agreement is determined to be
invalid, void or unenforceable, in whole or in part, this determination will not
affect any other provision of this Agreement, and the provision in question
shall be modified so as to be rendered enforceable.

         25. ENFORCE ACCORDING TO TERMS. The parties intend this Agreement to be
enforced according to their terms.

         26. EXECUTION DATE. This Agreement is effective on the later of the
dates that each party signed this Agreement ("Execution Date").

         27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, any of which need not contain the signatures of more than one
party but all signed counterparts taken together will constitute one and the
same argument.

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

         29. EXPIRATION. Unless otherwise agreed to by MessageMedia in writing
signed by an authorized MessageMedia representative, this agreement must be
executed by Mr. Cagan and delivered to MessageMedia no later than January 4,
2000 to be effective or binding on MessageMedia.

         IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as follows:

DENNIS CAGAN                           MESSAGEMEDIA, INC.,
An individual                          A Delaware corporation

                                       By:
-----------------------------             --------------------------------
Dennis Cagan
                                       Its:
                                           -------------------------------

Date:                        , 1999    Date:                        , 1999
     ------------------------               ------------------------

CAGANCO, INC.,
A corporation

By:
   --------------------------
   Dennis Cagan, President

Date:                        , 1999
     ------------------------

EXHIBIT A:  AGREEMENT FOR TEMPORARY PART-TIME EMPLOYMENT

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                                    EXHIBIT A
                  AGREEMENT FOR TEMPORARY, PART-TIME EMPLOYMENT
                   BETWEEN MESSAGEMEDIA, INC AND DENNIS CAGAN

         This Agreement for Temporary, Part-time Employment ("Employment
Agreement") is entered into by and between MESSAGEMEDIA, INC. ("MessageMedia" or
the "Company") and DENNIS CAGAN ("Mr. Cagan") (collectively, "Parties"), as
consideration for the terms, provisions and covenants in the Release Agreement
between MessageMedia and Mr. Cagan, attached hereto and incorporated herein by
reference ("Release Agreement"), effective as of the same day as the Resignation
Date, as defined in the Release Agreement.

                                   I. RECITALS

         WHEREAS, as of the Execution Date of this Employment Agreement, Mr.
Cagan currently is an employee of MessageMedia;

         WHEREAS, the Parties have entered into the Release Agreement, by which
all past and future duties, rights, and obligations of the Parties are released;

         WHEREAS, in consideration for the provisions and covenants in the
Release Agreement, MessageMedia and Mr. Cagan desire that Mr. Cagan's employment
with MessageMedia continue without interruption in accordance with the terms and
conditions set forth herein;

         WHEREAS, in accordance with the terms and conditions of the provisions
of this Employment Agreement, MessageMedia wishes to compensate Mr. Cagan for
part-time work for MessageMedia;

         WHEREAS, MessageMedia desires to employ Mr. Cagan and to assure itself
of the availability of the services of Mr. Cagan beginning the day after the
Resignation Date, as defined in paragraph 1 of the Release Agreement
("Resignation Date");

         WHEREAS, Mr. Cagan desires to be employed by MessageMedia under the
terms and conditions contained herein.

                                  II. COVENANTS

         NOW, THEREFORE, in consideration of the above set forth recitals which
are incorporated herein by reference, the terms, provisions, and covenants of
the Release Agreement, and the mutual promises and covenants set forth in this
Employment Agreement and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties agree as follows:

         1. EMPLOYMENT. MessageMedia hereby agrees to employ Mr. Cagan, and Mr.
Cagan hereby accepts such employment under the terms set forth herein. The
Parties acknowledge that Mr. Cagan's employment with MessageMedia continues
uninterrupted in accordance with the terms and conditions contained herein.

         2. TERM OF EMPLOYMENT. MessageMedia agrees to employ Mr. Cagan on a
part-time and temporary basis and for a period beginning on the same day as the
Resignation Date, as defined in the Release Agreement and ending on the
Termination Date, as defined in paragraph 10 below.

         3. DUTIES. Mr. Cagan shall render part-time services to MessageMedia at
MessageMedia's Boulder, Colorado, office. Mr. Cagan's services shall consist of
his providing advice and assistance relating to strategic leadership and
consulting. Mr. Cagan also shall provide assistance on other related projects.
Mr. Cagan shall report directly to MessageMedia's Chief Executive Officer, who
is, at the present time, Larry Jones. Mr. Cagan's responsibilities, title,
working conditions, duties, and/or any other aspect of Mr. Cagan's employment
may be changed, added to or eliminated during his employment at the sole
discretion of MessageMedia.

         4. PART-TIME. The Parties agree and acknowledge that Mr. Cagan's
employment is temporary and part-time. The Parties anticipate that Mr. Cagan
shall perform his duties within a time commitment of ten to twenty hours per
month. Because Mr. Cagan's position is classified as exempt, Mr. Cagan will not
be eligible for overtime premiums.

<PAGE>   12

         5. SALARY. Mr. Cagan acknowledges and agrees that he will be
compensated for work requested and performed at a rate of $1,000 per eight hour
day, less payroll deductions and all required withholdings, to be paid in
periodic installments in accordance with MessageMedia's customary practices (as
they may be changed by MessageMedia from time to time in its sole discretion).
Mr. Cagan shall not be compensated any amounts for days on which he does not
perform services at the request of MessageMedia for at least eight hours.

         6. STOCK OPTIONS. MessageMedia has previously granted to Mr. Cagan
three stock options, consisting of the "Nonstatutory Option" (as defined in the
Employment Agreement between MessageMedia and Mr. Cagan effective as of January
11, 1999 (the "January Agreement")) to purchase 125,000 shares of MessageMedia
common stock ("Stock"), the "Option" (as defined in the January Agreement) to
purchase 15,000 shares of Stock and the "Supplemental Option" (as defined in the
January Agreement) to purchase 135,000 shares of Stock (collectively, the "Cagan
Options").

                  a. THE NONSTATUTORY OPTION. MessageMedia and Mr. Cagan
acknowledge and agree that the vesting of all otherwise unvested shares of Stock
subject to the Nonstatutory Option has previously been accelerated and that the
Nonstatutory Option has been exercised in full by Mr. Cagan. Accordingly, no
shares of Stock remain available for purchase under the Nonstatutory Option.

                  b. THE OPTION AND THE SUPPLEMENTAL OPTION (THE "REMAINING
OPTION"). Inasmuch as Mr. Cagan is continuing his employment with MessageMedia
and has not terminated his Continuous Status as an Employee or Consultant
(within the meaning applicable under the Option and the Supplemental Option),
such Remaining Options shall continue in effect, in accordance with and subject
to their respective terms and conditions, during the period of Mr. Cagan's
employment under this Employment Agreement. MessageMedia and Mr. Cagan
acknowledge that, as of October 1, 1999, the Remaining Options are fully vested
and exercisable as to all shares of Stock subject to the Remaining Options,
according to the applicable provisions thereof.

                  c. NO OTHER STOCK RIGHTS. Mr. Cagan hereby acknowledges and
agrees that (i) neither he nor any party related to or affiliated with him (each
a "Cagan Party," as defined in the Release Agreement) has been granted stock
options, stock purchase rights or any other rights or awards with respect to the
acquisition or receipt of Stock ("Stock Rights"), except for the Cagan Options
as described in this paragraph 6, and (ii) the Remaining Options constitute the
only outstanding Stock Rights held by any Cagan Party as of the date of
execution of this Employment Agreement.

         7. MESSAGEMEDIA BENEFITS, SICK LEAVE, HOLIDAYS AND REIMBURSEMENT. Mr.
Cagan and MessageMedia agree that Mr. Cagan shall not be eligible to receive
MessageMedia benefits, health insurance coverage, life insurance coverage, any
other insurance coverage, vacations, sick leave, holidays, or fringe benefits.
MessageMedia will reimburse Mr. Cagan in accordance with MessageMedia
reimbursement policies in effect from time to time for all reasonable and
customary business expenses incurred during Mr. Cagan's employment, provided
that Mr. Cagan promptly furnish to MessageMedia adequate records and documentary
evidence of such expense.

         8. POLICIES AND PROCEDURES. As an employee of MessageMedia, Mr. Cagan
agrees that he is subject to and will comply with the policies and procedures of
MessageMedia, as such policies and procedures may be modified, added to or
eliminated from time to time at the sole discretion of MessageMedia, except to
the extent any such policy or procedure specifically conflicts with the express
terms of this Employment Agreement or the Release Agreement. Mr. Cagan further
agrees and acknowledges that any written or oral policies and procedures of
MessageMedia do not constitute contracts between MessageMedia and Mr. Cagan.

         9. PROPRIETARY INFORMATION AND INVENTIONS AND OTHER OBLIGATIONS. Mr.
Cagan agrees that his employment under this Agreement is contingent upon his
execution of MessageMedia's Employee Proprietary Information and Inventions
Agreement, attached hereto as Exhibit 1, which is incorporated herein by
reference. Mr. Cagan agrees that he will sign and return the MessageMedia's
Employee Proprietary Information and Inventions Agreement.

         10. TERMINATION OF EMPLOYMENT. It is understood and agreed by
MessageMedia and Mr. Cagan that this Employment Agreement does not contain any
promise or representation concerning the duration of Mr. Cagan's employment with
MessageMedia. Mr. Cagan specifically acknowledges that his part-time employment
with MessageMedia is at-will and may be altered or terminated by either Mr.
Cagan or MessageMedia at any time, with or without cause. The nature, terms or
conditions of Mr. Cagan's employment with MessageMedia cannot be changed by any
oral representation, custom, habit or practice, or any other writing. In the
event of conflict between this disclaimer and any other statement, oral

                                       2
<PAGE>   13

or written, present or future, concerning terms and conditions of employment,
the at-will relationship confirmed by this disclaimer shall control. Under the
terms below, the last date of Mr. Cagan's employment is the Termination Date.

                  a. TERMINATION BY COMPANY. The Company may terminate this
Employment Agreement immediately in its sole discretion upon Mr. Cagan's breach
of this Employment Agreement, including Exhibit 1, or breach of the provisions
or covenants under the Release Agreement. The Company may terminate this
Employment Agreement at any time, with or without cause, upon providing Mr.
Cagan 15 days written notice to his last known address. Mr. Cagan is responsible
for notifying and updating MessageMedia of his current address.

                  b. TERMINATION BY MR. CAGAN. Mr. Cagan may terminate this
Employment Agreement at any time upon fifteen days notice to the Vice President
of Human Resources of MessageMedia, 6060 Spine Road, Boulder, CO 80301.

                  c. TERMINATION BY DEATH. If Mr. Cagan shall die during the
terms of this Agreement, this Agreement shall terminate immediately upon Mr.
Cagan's death.

         11. NONCOMPETITION AND NONSOLICITATION. Mr. Cagan acknowledges that
during his prior employment with MessageMedia, he acted as Interim Chief
Executive Officer, was a member of executive and management personnel at
MessageMedia, and was privy to extremely sensitive, confidential, and valuable
commercial information, and trade secrets belonging to MessageMedia, the
disclosure of which information and secrets would greatly harm MessageMedia. In
addition, Mr. Cagan acknowledges that the consideration received as both a
full-time and a part-time employee of MessageMedia, as well as a portion of the
consideration received in the mutual provisions and covenants as part of this
Employment Agreement, are in return for his covenants to preserve the good will
of MessageMedia. As a reasonable measure to protect MessageMedia from the harm
of such disclosure and use of its information and trade secrets against it, and
as a reasonable measure to preserve the trade secrets of MessageMedia, the
parties agree to the following as part of this Agreement:

                  a. NON-COMPETITION COVENANT. Mr. Cagan agrees and acknowledges
that during his part-time employment and for a period of six (6) months
following the termination of this Employment Agreement under Section 10, he will
not directly or indirectly engage in (whether as an employee, consultant,
proprietor, partner, director, officer or otherwise), or have any ownership
interest in, or participate in the financing, operation, management or control
of, any person, firm, corporation, partnership, joint venture or other business
entity that engages in the marketing or sale of e-mail based customer
relationship management and direct marketing services or any computer program,
product, process, system, or service marketed, sold or under development by
MessageMedia. The parties agree that no more than 1% of the outstanding voting
stock of a publicly traded company or any stock owned by Mr. Cagan as of the
Resignation Date shall not constitute a violation of this paragraph. Nothing in
this paragraph should be construed to narrow the obligations of Mr. Cagan
imposed by any other provision herein, any other agreement, law or other source.

                  b. NON-SOLICITATION COVENANT. Mr. Cagan acknowledges that he
has been and will be privy to highly sensitive personnel information, including
(without limitation) information concerning the skills, knowledge, and
background of MessageMedia employees, performance evaluations of employees by
MessageMedia, salary, compensation and benefits paid by MessageMedia to its
employees and other confidential, private and commercially valuable information.
Mr. Cagan acknowledges that disclosure of such information to others would be
detrimental to MessageMedia and could lead to the loss of employees and
knowledge critical to the business of MessageMedia. Mr. Cagan also acknowledges
that he was and will be privy to valuable and confidential information and trade
secrets concerning relationships between MessageMedia and customers, vendors,
investors, consultants, independent contractors and other business entities, and
that severance or alteration of such relationships would be highly detrimental
to MessageMedia. Accordingly, as a part of this Employment Agreement, Mr. Cagan
agrees not to solicit, either directly or indirectly, any employee or director
of MessageMedia to terminate or alter his or her relationship with MessageMedia
during this Employment Agreement or for six months after the termination of this
Employment Agreement under Section 10. Mr. Cagan further agrees that for the
period of this Employment Agreement and for six months after the termination of
this Employment Agreement under Section 10, he will not, either directly or
indirectly, solicit or attempt to solicit any customer, client, supplier,
investor, vendor, consultant or independent contractor of MessageMedia to
terminate, reduce or negatively alter his, her or its relationship with
MessageMedia. Mr. Cagan further agrees and acknowledges that because of the
nature and type of business that MessageMedia engages in, the geographic scope
of the covenant not to compete shall include all counties, cities, and states of
the United States and that such a geographic scope is reasonable. Nothing in
this paragraph 11 or its

                                       3
<PAGE>   14

subparagraphs should be construed to narrow the obligations of Mr. Cagan imposed
by any other provision herein, any other agreement, law or other source.

                  c. REASONABLE. Mr. Cagan agrees and acknowledges that the time
limitation on the restrictions in this paragraph 11 and its subparagraphs are
reasonable. Mr. Cagan also acknowledges and agrees that the limitation in this
paragraph 11 and its subparagraphs is reasonably necessary for the protection of
MessageMedia, that through this Agreement he shall receive adequate
consideration for any loss of opportunity associated with the provisions herein,
and that these provisions provide a reasonable way of protecting MessageMedia's
business value which was imparted to him. Further, Mr. Cagan agrees that the
restrictions contained herein are necessary because it is inevitable that Mr.
Cagan will disclose Confidential Information, as defined in Exhibit 1, without
such restriction. If any restriction set forth in this paragraph 11 and its
subparagraphs is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time, it shall be
interpreted to extend only over the maximum period of time as to which it may be
enforceable. Mr. Cagan acknowledges and agrees that the provisions in this
paragraph 11 and its subparagraphs are essential and material to this Agreement,
and that upon breach of this paragraph 12 and its subparagraphs by Mr. Cagan,
MessageMedia is entitled to recover any payments or other consideration made
pursuant to this Agreement, to withhold providing additional payments or
consideration, to equitable relief to prevent continued breach, to recover
damages and to seek any other remedies available to MessageMedia.

         12. NO CONFLICT OF INTEREST. Mr. Cagan agrees during the term of this
Employment Agreement not to accept work or enter into a contract or accept an
obligation, inconsistent or incompatible with Mr. Cagan's obligations under this
Employment Agreement or the scope of services rendered for MessageMedia. Mr.
Cagan warrants that to the best of his knowledge, there is no other existing
contract or duty on Mr. Cagan's part inconsistent with this Employment
Agreement, unless a copy of such contract or a description of such duty is
attached to the Company's Employee Proprietary Information, and Inventions
Agreement as Exhibit 1 thereto. Mr. Cagan further agrees not to disclose to the
MessageMedia, or bring onto MessageMedia premises, or induce MessageMedia to use
any confidential information that belongs to anyone other than MessageMedia or
Mr. Cagan.

         13. SURVIVAL. Mr. Cagan acknowledges and agrees that he remains bound
by the provisions and covenants contained in paragraphs 8, 9, and 11, and the
Employee Proprietary Information and Inventions Agreement, the Release Agreement
after the termination of his employment, without regard for what reason this
Employment Agreement is terminated.

         14. TAX CONSEQUENCES. Mr. Cagan agrees to be responsible for the
payment of any taxes due on any and all compensation provided to him by
MessageMedia pursuant to paragraphs 5 and 6 of this Employment Agreement. Mr.
Cagan agrees to indemnify MessageMedia and hold MessageMedia harmless from any
and all claims or penalties asserted against MessageMedia for any failure to pay
taxes due on any compensation provided by MessageMedia pursuant to paragraphs 5
and 6 of this Employment Agreement. Mr. Cagan expressly acknowledges that
MessageMedia has not made, nor herein makes, any representation about the tax
consequences of any consideration provided by MessageMedia to Mr. Cagan pursuant
to this Employment Agreement.

         15. SUCCESSORS AND ASSIGNS. Mr. Cagan may not assign any right or
obligation arising under this Employment Agreement. MessageMedia may assign any
right or obligation arising under this Employment Agreement. This Employment
Agreement shall bind the heirs, personal representatives, successors, executors
and administrators of each party, and insure to the benefit of each party, its
heirs, and successors.

         16. GOVERNING LAW. The parties agree that this Employment Agreement and
all disputes relating to or requiring interpretation of this Agreement or
relating to Mr. Cagan's employment with MessageMedia shall be governed by and
construed according to the laws of the State of Colorado as such laws are
applied to agreements entered into and to be performed entirely within Colorado
between Colorado residents.

         17. CONSENT TO PERSONAL JURISDICTION AND EXCLUSIVE FORUM. This
Employment Agreement will be governed by and construed according to the laws of
the State of Colorado as such laws are applied to agreements entered into and to
be performed entirely within Colorado between Colorado residents. Mr. Cagan
hereby expressly understands and consents that this Employment Agreement is a
transaction of business in the State of Colorado and in the City and County of
Boulder, Colorado, and constitutes the minimum contacts necessary to make Mr.
Cagan subject to the personal jurisdiction and venue of the federal courts
located in the State of Colorado and the state courts located in the County of
Boulder, Colorado. Mr. Cagan agrees and acknowledges that any controversy
arising out of or relating to this Employment

                                       4
<PAGE>   15

Agreement or the breach thereof, or any claim or action to enforce this
Employment Agreement or portion thereof, or any controversy or claim requiring
interpretation of this Employment Agreement must be brought in federal court
within the State of Colorado or a state court located in the City and County of
Boulder, Colorado. No such action may be brought in any forum outside the State
of Colorado. Any action brought in contravention of this paragraph by one party
is subject to dismissal at any time and at any stage of the proceedings by the
other, and no action taken by the other in defending, counter claiming or
appealing shall be construed as a waiver of this right to immediate dismissal. A
party bringing an action in contravention of this paragraph shall be liable to
the other party for the costs, expenses and attorney's fees incurred in
successfully dismissing the action or successfully transferring the action to
the federal courts located in the State of Colorado, or the state courts located
in the City and County of Boulder, Colorado.

         18. SEVERABLE. If any provision of this Employment Agreement is
determined to be invalid, void or unenforceable, in whole or in part, this
determination will not affect any other provision of this Employment Agreement,
and the provision in question shall be modified so as to be rendered
enforceable.

         19. ENFORCE ACCORDING TO TERMS. The parties intend this Employment
Agreement to be enforced according to their terms.

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

         21. COUNTERPARTS. This Employment Agreement may be executed in one or
more counterparts, any of which need not contain the signatures of more than one
party but all signed counterparts taken together will constitute one and the
same argument.

         22. ENTIRE AGREEMENT. This Employment Agreement, including Exhibit 1,
together with the Release Agreement, supersede all prior agreements, written or
oral, between Mr. Cagan and MessageMedia as of the Effective Date regarding Mr.
Cagan's employment with MessageMedia except as such agreements are otherwise
expressly identified and noted in this Employment Agreement or Release
Agreement. No provisions of this Employment Agreement shall be changed or
modified in whole or in part except by an agreement in writing by Mr. Cagan and
the MessageMedia Chief Executive Officer. Mr. Cagan agrees that waiver by either
party of any breach by the other party of any provision of this Employment
Agreement shall not be deemed or construed to be a waiver or permission for
continued waiver of a later breach of such provision.

         I have read this Employment Agreement and understand its terms. I have
been advised to seek legal counsel before signing this Employment Agreement.

         Dated this _____ day of December, 1999.

MESSAGEMEDIA, INC.                     DENNIS CAGAN

By:                                    By:
   -------------------------------        -------------------------------
Name:                                     Dennis Cagan
     -----------------------------
Title:
      ----------------------------

                                       5<PAGE>   1
                                                                   EXHIBIT 10.4

                             SPLIT-DOLLAR AGREEMENT

     This Agreement by and between Paul M. Peduto (the "Employee") and WARREN
FIVE CENTS SAVINGS BANK (the "Bank") shall be effective as of January 1, 1999.

     WHEREAS, the Employee is employed by the Bank; and

     WHEREAS, the Employee wishes to provide life insurance protection for his
family in the event of his death, under a policy of life insurance insuring his
life (the "Policy"), which is described in Exhibit A attached hereto and by this
reference made a part hereof, and which is being issued by the issuer listed in
Exhibit A (the "Insurer"); and

     WHEREAS, the Bank is willing to pay the premiums due on the Policy as an
additional employment benefit for the Employee, on the terms and conditions
hereinafter set forth;

     WHEREAS, the Employee is the owner of the Policy and, as such, possesses
all incidents of ownership in and to the Policy; and

     WHEREAS, the Bank wishes to have the Policy collaterally assigned to it by
the Employee, in order to secure the repayment of the amounts which it will pay
toward the premiums on the Policy;

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

     1.   PURCHASE OF POLICY.

     The Employee will contemporaneously purchase the Policy from the Insurer;
such policy to provide a death benefit to the Employee equal to three times the
Employee's base salary (as in effect on the Effective Date and as subsequently
adjusted). Both parties hereto agree that they will take all necessary action to
cause the Insurer to issue the Policy and shall take any further action which
may be necessary to cause the Policy to conform to the provisions of this
Agreement. Both parties hereto agree that the Policy shall be subject to the
terms and conditions of this Agreement and of the collateral assignment filed
with the Insurer relating to the Policy.

     2.   OWNERSHIP OF POLICY.

     The Employee (or Employee's donee, if applicable) shall be the sole and
absolute owner of the Policy; the Employee may exercise all ownership rights
granted to the owner thereof by the terms of the Policy, except as may be
otherwise provided herein.

                                       1
<PAGE>   2

     3.   PAYMENT OF PREMIUMS.

     So long as the Employee is an employee of the Bank, before the end of any
grace period provided in the Policy for each premium payment, the Bank shall pay
or cause to be paid the full amount of the premium to the Insurer, and shall,
upon request, promptly furnish the Employee evidence of timely payment of such
premium. The Bank shall annually furnish to the Employee a statement of the
amount of income reportable by the Employee for federal and state income tax
purposes, as a result of its payment of such premium.

     4.   APPLICATION OF DIVIDENDS.

     Any dividend declared on the Policy, if any, shall be applied to purchase
paid-up additional insurance on the life of the Employee. The parties hereto
agree that the dividend election provisions of the Policy shall conform to the
provisions hereof.

     5.   COLLATERAL ASSIGNMENT.

     To secure the repayment to the Bank of an amount equal to the aggregate
amount of its premium payments under the Policy, the Employee has
contemporaneously with the execution of this Agreement assigned the Policy to
the Bank as collateral, by means of the form used by the Insurer for such
assignments. The collateral assignment of the Policy to the Bank hereunder shall
not be terminated, altered or amended by the Employee without the express
written consent of the Bank. Both parties hereby agree to take all action
necessary to cause such collateral assignment to conform to the provisions of
this Agreement.

     6.   TRANSFER OF POLICY.

          (a)  Except as provided in subsection (b) below and as otherwise
provided herein, neither the Employee nor any donee of the Employee's, without
the express written consent of the Bank, shall sell, assign, transfer, borrow
against, surrender or cancel the Policy, change the beneficiary designation
provision thereof, or terminate the dividend election thereof.

          (b)  The Employee shall have the right to absolutely and irrevocably
give to a donee, all of his right, title and interest in and to the Policy,
subject to the collateral assignment of the Policy to the Bank pursuant hereto.
The Employee may exercise this right by executing a written transfer of
ownership in the form used by the Insurer for irrevocable gifts of insurance
policies, and delivering this form to the Bank. Upon receipt of such form,
executed by the Employee and duly accepted by the donee thereof, the Bank shall
consent thereto in writing, and shall thereafter treat the Employee's donee as
the sole owner of all of the Employee's right, title and interest in and to the
Policy, subject to the Bank pursuant hereto. Thereafter, the Employee shall have
no right, title or interest in and to the Policy, all such rights being vested
in and exercisable only by such donee.

                                       2
<PAGE>   3

     7.   PAYMENT OF BENEFIT.

     Upon the death of the Employee while the Policy is in effect, the
beneficiary or beneficiaries shall receive an amount of the death benefit equal
to three (3) times the Employee's base salary in effect at the time of his death
and the Bank shall have the unqualified right to receive the remaining portion
of the death benefit. No amount shall be paid from such death benefit to the
designated beneficiary or beneficiaries until the full amount due the Bank
hereunder has been paid. Both parties hereto agree that the beneficiary
designation provision of the Policy shall conform to the provisions hereof.

     8.   PAYMENT OF CASH SURRENDER VALUE.

     Upon the expiration or termination of the Policy prior to the death of the
Employee, the Bank shall have the unqualified right to receive a portion of the
cash surrender value of the Policy equal to the aggregate amount of its premium
payments under the Policy, reduced by any outstanding indebtedness to the
Insurer which was incurred by the Bank and secured by the Policy, including any
interest due on such indebtedness. The balance of the Policy's cash surrender
value, if any, shall be distributed to the Employee or the Employee's donee, if
applicable. In no event shall the amount payable to the Bank hereunder exceed
the Policy's cash surrender value. No amount shall be paid to the Employee or
the Employee's donee, if applicable, until the full amount due the Bank
hereunder has been paid. Both parties hereto agree that the Policy shall conform
to the provisions hereof.

     9.   TERMINATION OF AGREEMENT.

          (a)  This Agreement shall terminate without notice upon the occurrence
of any of the following events: (i) the total cessation of the business of the
Bank, (ii) the bankruptcy, receivership or dissolution of the Bank, or (iii)
failure of the Employee (or the Employee's donee, if applicable) to repay the
Bank pursuant to the provisions of Section 10.

          (b)  In addition, the Employee (or the Employee's donee, if
applicable) may terminate this Agreement, while no premium under this Policy is
overdue, by written notice to the other parties hereto. Such termination shall
be effective as of the date of such notice.

          (c)  Upon the termination of the Agreement, the Bank shall have the
unqualified right to receive a portion of the cash surrender value of the Policy
equal to the aggregate amount of its premium payments under the Policy, reduced
by any outstanding indebtedness to the Insurer which was incurred by the Bank
and secured by the Policy, including any interest due on such indebtedness.

                                       3
<PAGE>   4

     10.  RELEASE OF COLLATERAL ASSIGNMENT AT TERMINATION.

     Within thirty (30) days after the date of the termination of his employment
with the Bank, the Employee (or the Employee's donee, if applicable) shall pay
to the Bank an amount in cash equal to the aggregate amount of premiums paid
under the Policy by the Bank to date reduced by any outstanding indebtedness to
the Insurer secured by the Policy which was incurred by the Bank and remains
outstanding as of the date of such termination (including any interest then due
with respect to such indebtedness). Upon receipt of such amount, the Bank shall
release the collateral assignment of the Policy by the execution and delivery of
any appropriate instrument of release.

     11.  INSURER NOT A PARTY.

     Subject to the terms and conditions of the Policy, the Insurer shall be
fully discharged from its obligations under the Policy by payment of the Policy
death benefit to the beneficiary or beneficiaries named in the Policy, subject
to the terms and conditions of the Policy. In no event shall the insurer be
considered a party to this Agreement, or any modification or amendment hereof.
No provisions of this Agreement nor or any modification or amendment hereof
shall in any way be construed as enlarging, changing, varying or in any other
way affecting the obligations of the Insurer as expressly provided in the
Policy, except insofar as the provisions hereof are made a part of the Policy by
the collateral assignment executed by the Employee and filed with the Insurer in
connection herewith.

     12.  ADMINISTRATION.

     The Bank shall make all determinations concerning rights to benefits under
this Agreement. Any decision by the Bank denying a claim by the Employee, his
donee or his beneficiary, for benefits under this Agreement shall be stated in
writing and delivered or mailed to the Employee or such donee or beneficiary.
Such decision shall set forth the specific reasons for the denial, written to
the best of the Bank's ability in a manner that may be understood without legal
or actuarial counsel.

     13.  NOTICES.

     Any notice required or permitted to be given hereunder shall be effective
when received and shall be sufficient if in writing and if personally delivered
or sent by prepaid cable, telex or registered air mail, return receipt
requested, to the party to receive such notice at this address set forth at the
end of this Agreement or at such other address as a party may be notice specify
to the other.

                                       4
<PAGE>   5

     14.  MISCELLANEOUS.

     To be effective, each modification or amendment to this Agreement must be
in writing and signed by both parties hereto. No waiver shall be valid unless in
writing and signed by the waiving party. No inaction shall constitute a waiver.
Any waiver shall be effective only with respect to past events and shall not
constitute a continuing or prospective waiver unless expressly so stated in
writing. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts as the forum for any litigation between the parties with respect
to this Agreement. If any provision or provisions of this Agreement is, or
hereafter is adjudged to be, for any reason unenforceable or invalid, it is the
specific intent of the parties that the remainder hereof shall subsist and be
binding upon each of the parties hereto. This Agreement shall bind and inure to
the benefit of the respective assigns, heirs, successors and legal
representatives of each of the parties hereto. The headings and captions of this
Agreement are for the purpose of reference only and shall not limit or defined
any meaning thereof.

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

WARREN FIVE CENTS SAVINGS BANK              EMPLOYEE

By: __________________________          _________________________________
  Title:________________________

_____________________________           _________________________________
Attest                                  Witness

(SEAL)

                                       5
<PAGE>   6

                                    EXHIBIT A
                                    ---------

     The following life insurance policy is subject to the foregoing
Split-Dollar Agreement:

Insurer:          Security Life of Denver Insurance Company

Insured:          Paul M. Peduto

Policy Number:    1556037

Face Amount:      $429,208

Date of Issue:    January 1, 1999

                                       6

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