Document:

DATED:  JANUARY 21, 2000

                          BROCKER TECHNOLOGY GROUP LTD.

                                     - and -

                        MONTREAL TRUST COMPANY OF CANADA

                        --------------------------------

                            SPECIAL WARRANT INDENTURE

                        --------------------------------

                           PROVIDING FOR THE ISSUE OF
                                  COMMON SHARES

<PAGE>

THIS SPECIAL WARRANT INDENTURE made as of the 21st day of January, 2000

BETWEEN:

               BROCKER  TECHNOLOGY GROUP LTD., a corporation  incorporated under
               the laws of the Province of Alberta,

               (hereinafter called the "Corporation"),

                                                               OF THE FIRST PART

                                     - and -

               THE  MONTREAL  TRUST  COMPANY OF  CANADA,  a trust  company  duly
               authorized  to carry on business  in the  Province of Alberta and
               all Provinces of Canada,

               (hereinafter called the "Trustee"),

                                                              OF THE SECOND PART

          WHEREAS  the  Corporation  proposes  to issue  and sell on the date of
Closing  hereof  1,800,000  Special  Warrants,  and  proposes  that each Special
Warrant shall be exchangeable for one Common Share, subject to adjustment as set
out below;

          AND WHEREAS for such  purpose the  Corporation  deems it  necessary to
create  and  issue  Special  Warrants  constituted  and  issued  in  the  manner
hereinafter appearing;

          AND WHEREAS the  Corporation  is duly  authorized  to create and issue
Special  Warrants  to be issued as herein  provided,  and to allot and issue the
Common Shares into which the Special Warrants are exchangeable;

          AND WHEREAS all things  necessary have been done and performed to make
the  Special  Warrants,  when  certified  by the  Trustee  and issued as in this
Indenture  provided,  legal,  valid and binding  upon the  Corporation  with the
benefits and subject to the terms of this Indenture;

          NOW THEREFORE  THIS  INDENTURE  WITNESSETH  that for good and valuable
consideration  mutually given and received, the receipt and sufficiency of which
is hereby acknowledged, it is hereby agreed and declared as follows:

<PAGE>
                                        3

ARTICLE I.
INTERPRETATION

1.01      Definitions

          In this Indenture,  unless there is something in the subject matter or
context inconsistent therewith:

          (a)  "Agency   Agreement"  means  the  Agency  Agreement  between  the
               Corporation  and Thomson  Kernaghan & Co.  Limited dated the date
               hereof; and may be amended from time to time;

          (b)  "Business Day" means,  in respect of any city, a day which is not
               a Saturday or Sunday or legal holiday in such city;

          (c)  "Closing"   shall  mean  the  time  on  which  all   transactions
               contemplated herein and in the Agency Agreement are consummated;

          (d)  "Common  Shares"  means  Common  Shares  in  the  capital  of the
               Corporation  as such shares exist at the close of business on the
               date of execution and delivery of this  Indenture;  provided that
               in the event of any adjustment of subscription rights pursuant to
               Section 4.06, "Common Shares" shall thereafter mean the shares or
               other securities or property resulting from such adjustment;

          (e)  "Corporation's  Auditors"  means a firm of chartered  accountants
               duly appointed as auditors of the Corporation;

          (f)  "Counsel" means a barrister and solicitor (who may be counsel for
               the Corporation) acceptable to the Trustee;

          (g)  "Director"  means a  director  of the  Corporation  for the  time
               being,  and  reference  without  more to action by the  directors
               means action by the directors of the  Corporation  as a board or,
               whenever duly empowered,  action by an executive committee of the
               board;

          (h)  "Dividends paid in the ordinary course" means dividends,  whether
               in cash or in shares  of the  capital  stock of the  Corporation,
               paid in any fiscal year of the Corporation to the extent that the
               aggregate  of such cash and the  paid-up  capital of such  shares
               does not in such fiscal year exceed the greatest of:

               (i)       150% of the aggregate  amount of dividends  paid by the
                         Corporation  on the  Common  Shares in the period of 12
                         consecutive months ended immediately prior to the first
                         day of such fiscal year;

               (ii)      80% of the  aggregate  amount of dividends  paid by the
                         Corporation  on the  Common  Shares in the period of 36
                         consecutive months ended immediately prior to the first
                         day of such fiscal year; and

<PAGE>
                                        4

               (iii)     100%  of  the   consolidated   net   earnings   of  the
                         Corporation, before extraordinary items, for the period
                         of 12 consecutive months ended immediately prior to the
                         first day of such  fiscal year (such  consolidated  net
                         earnings  to be  as  shown  in  the  audited  financial
                         statements  of the  Corporation  for such  period of 12
                         consecutive   months   or,  if  there  are  no  audited
                         financial   statements   in  respect  of  such  period,
                         computed  in   accordance   with   generally   accepted
                         accounting  principles consistent with those applied in
                         the preparation of the most recent audited consolidated
                         financial statements of the Corporation);

               and for such  purpose the amount of any  dividend  paid in shares
               shall be the aggregate paid-up capital of such shares;

          (i)  "Exercise  Date" with  respect to any Special  Warrant  means the
               date on which such Warrant is surrendered in accordance  with the
               provisions of Article IV;

          (j)  "Issue Date" has the meaning ascribed thereto in Section 2.02;

          (k)  "Person" means an individual,  a  corporation,  a partnership,  a
               trustee or any unincorporated organization;

          (l)  "Qualification  Date"  means the date a receipt is issued for the
               filing of a prospectus  that  qualifies the  distribution  of the
               Common Shares issuable upon the exercise of the Special Warrants;

          (m)  "Qualifying  Jurisdiction"  means all  jurisdictions in which the
               Special Warrants may be lawfully  effected and sold in compliance
               with all  applicable  securities  laws and in such a manner so as
               not to require  registration thereof or filing of a prospectus or
               offering memorandum with respect thereto under such laws;

          (n)  "Shareholder"  means a holder  of  record  of one or more  Common
               Shares;

          (o)  "Special  Warrant  Indenture",   "this  Trust  Indenture",  "this
               Indenture",  "herein",  "hereby" and similar  expressions mean or
               refer to this  Indenture  and any  Indenture,  deed or instrument
               supplemental or ancillary hereto; and the expressions  "Article",
               "Section" and "Subsection" followed by a number mean and refer to
               the specified article, section or subsection of this Indenture;

          (p)  "Special  Warrants" means the Special Warrants  exchangeable into
               Common Shares evidenced by a certificate or certificates,  issued
               and certified hereunder and for the time being outstanding;

          (q)  "Time of Expiry" means 4:00 p.m. (Edmonton time) on the day which
               is the  earlier  of:  (i) five (5) days  after the  Qualification
               Date, or (ii) one year from the date hereof;

          (r)  "Warrantholders" or "Holders" means the registered holders of the
               Special Warrants for the time being;

<PAGE>
                                      -5-

          (s)  "Warrantholders'  Request"  means an instrument  signed in one or
               more  counterparts  by  Warrantholders   entitled,   at  any  one
               particular  time to acquire in the aggregate not less than 25% of
               the  aggregate  number of Common  Shares which could be purchased
               pursuant to all Special Warrants,  requesting the Trustee to take
               some action or proceeding acquired therein;

          (t)  "Written  order  of the  Corporation",  "written  request  of the
               Corporation",   "written   consent   of  the   Corporation"   and
               "Certificate of the Corporation"  mean,  respectively,  a written
               order, request, consent and certificate signed in the name of the
               Corporation  by  its  chairman,  vice-chairman  of the  board  or
               president or an executive  vice-president  or a director  and, in
               addition, by its secretary or treasurer or assistant secretary or
               a  director  and  may  consist  of one  or  more  instruments  so
               executed;

words  importing the singular number include the plural and vice versa and words
importing the masculine gender include the feminine and neuter genders.

1.02      Interpretation not Affected by Headings, etc.

          The  division  in this  Indenture  into  Articles  and  Sections,  the
provision  of a  table  of  contents  and  the  insertion  of  headings  are for
convenience  of  reference  only  and  shall  not  affect  the  construction  or
interpretation of this Indenture.

1.03      Currency

          Except as otherwise  noted, all dollar amounts herein are expressed in
Canadian dollars.

1.04      Applicable Law

          This Indenture and the Warrants shall be construed in accordance  with
the laws of the  Province  of Alberta  and shall be treated in all  respects  as
Alberta contracts.

1.05      Non-Business Days

          In the event that any action  hereunder  is required to  permitted  to
occur on any day that is not a  Business  Day,  it shall  occur or  caused to be
occurred on the next Business Day thereafter.

1.06      Conflicts

          In the event there is any conflict between this Indenture and the form
of Special Warrant certificate, the provisions herein shall govern and prevail.

ARTICLE II
ISSUE OF SPECIAL WARRANTS

2.01      Issue of Special Warrants

          Special Warrants, in definitive form, entitling the registered holders
thereof  to  acquire  an  aggregate  of  1,800,000  Common  Shares  (subject  to
adjustment, as herein provided) are hereby authorized.

<PAGE>
                                      -6-

2.02      Issue Date

          (a)  The  Issue  Date  shall  be  a  date  to  be  determined  by  the
               Corporation, which date shall not be later than January 21, 2000.
               The Corporation shall determine, and shall execute and deliver to
               the Trustee a written notice of, the Issue Date prior to the date
               which has been determined to be the Issue Date.

          (b)  Upon the Issue Date, the Special  Warrants  authorized in Section
               2.01 shall be created and shall be  executed by the  Corporation,
               certified by or on behalf of the Trustee,  and shall be delivered
               by the  Corporation  to the  Trustee  to be held  by the  Trustee
               pending compliance by it with the provisions of Section 5.05.

2.03      Form and Terms of Warrants

          (a)  Each Special  Warrant  authorized  to be issued  hereunder  shall
               entitle  the holder  thereof to acquire  one Common  Share at any
               time from the issue thereof until the Time of Expiry.

          (b)  The number of Common Shares which may be acquired pursuant to the
               Special  Warrants may be adjusted in the events and in the manner
               specified in Article IV.

          (c)  The Special  Warrants  Certificate  (including the exercise form)
               shall be substantially  in the form set out in Schedule  2.03(c),
               shall  be  dated  as  of  the  Issue   Date,   shall   bear  such
               distinguishing  letters and numbers as the Corporation shall with
               the approval of the Trustee  prescribe,  and shall be issuable in
               any denomination, excluding fractions.

2.04      Issue in Substitution for Lost Warrants

          (a)  In case any of the Special  Warrants shall become mutilated or be
               lost, destroyed or stolen, the Corporation, subject to applicable
               law,  shall issue and  thereupon  the Trustee  shall  certify and
               deliver a new  Special  Warrant of like date and tenor as the one
               mutilated, lost, destroyed or stolen in exchange for and in place
               of and upon  cancellation of such mutilated Special Warrant or in
               lieu of and in  substitution  for such lost,  destroyed or stolen
               Special Warrant and the substituted Special Warrant shall be in a
               form approved by the Trustee and shall be entitled to the benefit
               hereof  and rank  equally in  accordance  with its terms with all
               other Special Warrants issued or to be issued hereunder.

          (b)  The applicant for the issue of a new Special Warrant  pursuant to
               this Section shall bear the cost of the issue thereof and in case
               of loss,  destruction or theft shall, as a condition precedent to
               the issue thereof,  furnish to the Corporation and to the Trustee
               such evidence of ownership and of the loss,  destruction or theft
               of the Special  Warrant so lost,  destroyed or stolen as shall be
               satisfactory  to the  Corporation  and to the  Trustee  in  their
               discretion  and such applicant may also be required to furnish an
               indemnity  in  amount  and  form  satisfactory  to them in  their
               discretion,   and  shall  pay  the  reasonable   charges  of  the
               Corporation and the Trustee in connection therewith.

<PAGE>
                                      -7-

2.05      Warrantholder not a Shareholder

          The  holding  of a Special  Warrant  shall not  constitute  the holder
thereof a holder of Common  Shares nor  entitle  him to any right or interest in
respect thereof except as herein and in the Special Warrant expressly provided.

2.06      Special Warrants to Rank Pari Passu

          All Special Warrants shall rank pari passu, whatever may be the actual
date of issue of the same.

2.07      Signing of Special Warrants

          The  Special  Warrants  shall  be  signed  by one of the  chairman  or
vice-chairman of the board or the president or an executive  vice-president or a
vice-president  or the secretary,  treasurer,  assistant  secretary or assistant
treasurer of the Corporation.  The signature of such officer may be mechanically
reproduced in facsimile and Special  Warrants  bearing such facsimile  signature
shall be binding upon the  Corporation  as if they had been  manually  signed by
such officer.  Notwithstanding that any of the persons whose manual or facsimile
signature  appears on any Special  Warrant as one of such officers may no longer
hold office at the date of such Special Warrant or at the date of  certification
or at the delivery  thereof,  any Special  Warrant signed as aforesaid  shall be
valid and binding upon the Corporation.

2.08      Certification by the Trustee

          (a)  No Special Warrant shall be issued or, if issued,  shall be valid
               or entitle  the holder to the benefit  thereof  until it has been
               certified  by or on behalf of the  Trustee  substantially  in the
               form of the  certificate  set out in Schedule  2.03(c) or in some
               other form approved by the Trustee and such  certification by the
               Trustee upon any Special Warrant shall be conclusive  evidence as
               against the Corporation that the Special Warrant so certified has
               been duly issued hereunder and that the holder is entitled to the
               benefit thereof.

          (b)  The  certification  of the  Trustee  on Special  Warrants  issued
               hereunder shall not be construed as a representation  or warranty
               by the  Trustee as to the  validity of this  Indenture  or of the
               Special Warrants (except the due  certification  thereof) and the
               Trustee shall in no respect be liable or  answerable  for the use
               made  of  the  Special   Warrants  or  any  of  them  or  of  the
               consideration therefor.

ARTICLE III
EXCHANGE AND OWNERSHIP OF SPECIAL WARRANTS; NOTICE TO WARRANTHOLDERS

3.01      Exchange of Special Warrants

          (a)  Special  Warrants  to  purchase  any  specified  number of Common
               Shares may, upon compliance  with the reasonable  requirements of
               the  Trustee,   be  exchanged  for  Special   Warrants  in  other
               denominations  entitling the holder  thereof to purchase an equal
               aggregate number of Common Shares.

<PAGE>
                                      -8-

          (b)  Special  Warrants may be exchanged only at the principal  offices
               of the Trustee in the City of Calgary, or at any other place that
               is  designated  by  the  Corporation  with  the  approval  of the
               Trustee.  Any Special  Warrants  tendered for  exchange  shall be
               surrendered to the Trustee and cancelled.

3.02      Charges for Exchange

          Except as otherwise herein provided, the Trustee shall, if required by
the Corporation,  charge a reasonable sum for each new Special Warrant issued in
exchange for any Special Warrant,  and payment of such charges and reimbursement
of the Trustee or the  Corporation  for any stamp taxes or governmental or other
charges required to be paid shall be made by the party requesting such exchange,
as a condition precedent thereto.

3.03      Non-Transferability of Special Warrants

          (a)  Except as provided for in subsection  3.03(b) of this  indenture,
               the  Special  Warrants  shall be  non-transferrable  without  the
               written  approval of the  Corporation,  which may be  arbitrarily
               withheld.

          (b)  In the event of the bankruptcy or death of a  Warrantholder,  the
               Trustee,  upon receipt of written proof thereof, may transmit the
               Warrantholder's  Special  Warrants  by  operation  of  law to the
               Trustee in bankruptcy, personal representative or surviving joint
               tenant as the case may be.

3.04      Ownership and Transfer of Special Warrants

          The  Corporation  and the  Trustee  may deem and treat the  registered
owner of any Special  Warrant as the  absolute  holder and owner of such Warrant
for all purposes,  and the  Corporation and the Trustee shall not be affected by
any notice or knowledge to the  contrary.  The  registered  owner of any Special
Warrant shall be entitled to the rights  evidenced by such Special Warrants free
from all equities or rights of set-off or  counterclaim  between the Corporation
and the  original  or any  intermediate  holder  thereof and all persons may act
accordingly and the receipt of any such registered owner of such Special Warrant
for the Common Shares purchasable  pursuant thereto shall be a good discharge to
the Corporation and the Trustee for the same and neither the Corporation nor the
Trustee shall be bound to inquire into the title of any such registered owner.

3.05      Notice to Warrantholders

          Unless herein  otherwise  expressly  provided,  any notice to be given
hereunder to  Warrantholders  shall be deemed to be validly given if such notice
is  delivered  personally  or  sent  by  prepaid  ordinary  or  airmail  to each
Warrantholder  at their recorded  address,  or if sent to each  Warrantholder at
their  recorded  address  by any  means  of  prepaid,  transmitted  or  recorded
communication.  A Notice so delivered shall be deemed to have been given when it
is delivered  personally or to the recorded  address as  aforesaid;  a notice so
mailed  shall be deemed to have been given when  deposited  in a Post  Office or
public letter box; and a notice so sent by any means of  transmitted or recorded
communication shall be deemed to have been given when dispatched or delivered to
the  appropriate  communication  company  or  agency or its  representative  for
dispatch.

<PAGE>
                                      -9-

ARTICLE IV
EXERCISE OF SPECIAL WARRANTS

4.01      Method of Exercise of Warrants

          (a)  The holder of any Special  Warrant may exercise the right thereby
               conferred on him to acquire Common Shares by  surrendering to the
               Trustee at its principal offices in the City of Calgary or at any
               other place or places that may be designated  by the  Corporation
               with the approval of the  Trustee:  such  Special  Warrant,  duly
               completed and executed in the form set out in Schedule 2.03(c).

               Subject to Section to 4.04, a Special Warrant exercised  pursuant
               to the foregoing  paragraph of this  Subsection  4.01(a) shall be
               deemed to be surrendered upon personal delivery thereof to or, if
               sent by mail or other means of transmission, upon receipt thereof
               by, the Trustee.

          (b)  Any exercise referred to in Subsection 4.01(a) shall be signed by
               the  Warrantholder  and shall specify the number of Common Shares
               which the  holder  desires  be issued  (being not more than those
               which he is entitled to acquire  pursuant to the Special  Warrant
               surrendered),  the  person or persons in whose name or names such
               Common Shares are to be issued, his or their address or addresses
               and the number of Common  Shares to be issued to each such person
               if more than one is so  specified.  If any of the  Common  Shares
               subscribed for are to be issued to a person or persons other than
               the Warrantholder, the Warrantholder shall pay to the Trustee all
               requisite  transfer  taxes  and the  reasonable  expenses  of the
               Trustee.

4.02      Effect of Exercise of Special Warrants

          (a)  Upon exercise by the Holder of any Special  Warrant in accordance
               with Section 4.01, or deemed  exercise of any Special  Warrant in
               accordance   with  Section  4.04  the  Common   Shares   issuable
               thereunder  shall be deemed to have been issued and the person or
               persons  to whom such  Common  Shares  are to be issued  shall be
               deemed to have  become  the  holder or  holders of record of such
               Common Shares on the Exercise  Date unless the transfer  books of
               the  Corporation  shall be closed on such date, in which case the
               Common Shares so issuable for shall be deemed to have been issued
               and such  person or  persons  shall be deemed to have  become the
               holder or holders of record of such Common  Shares on the date on
               which such  transfer  books were  reopened and such Common Shares
               will be issued on the Exercise Date.

          (b)  When the  transfer  books of the  Corporation  have been open for
               five business days after the due exercise of a Special Warrant as
               aforesaid,  the Corporation shall forthwith cause to be mailed to
               the person or persons in whose name or names the Common Shares so
               subscribed for are to be issued as specified in the  subscription
               endorsed  on such  Special  Warrant  at his or  their  respective
               addresses  specified in such  subscription or, if so specified in
               such  subscription,  cause  to be  delivered  to such  person  or
               persons at the office where such Special Warrant was surrendered,
               a  certificate  or  certificates  for the  appropriate  number of
               Common  Shares not  exceeding  those which the  Warrantholder  is
               entitled to purchase pursuant to the Special Warrant surrendered.

<PAGE>
                                      -10-

4.03      Subscription for Less than Entitlement

          (a)  The Holder of any Special  Warrant  may  exercise  their  Special
               Warrant with  respect to a number of Common  Shares less than the
               number  which  he  is  entitled  to  purchase   pursuant  to  the
               surrendered  Special Warrant.  In the event of any exercise for a
               number of Common  Shares less than the number which may be issued
               pursuant to a Special  Warrant,  the Holder thereof upon exercise
               thereof  shall in  addition  be entitled to receive a new Special
               Warrant  Certificate in respect of the balance of the unexercised
               Special Warrants.

          (b)  Notwithstanding   anything   herein   contained,   including  any
               adjustment provided for in Sections 4.06 and 4.07 the Corporation
               shall not be required, upon the exercise of any Special Warrants,
               to issue fractions of Common Shares or to distribute certificates
               which evidence  fractional  Common Shares.  In lieu of fractional
               Common Shares,  the Corporation shall pay to the Holder who would
               otherwise be entitled to receive fractional Common Shares upon an
               exercise of Special Warrants,  within ten Business Days after the
               date upon which the fractional Common Shares would otherwise have
               been  deemed to have been issued  pursuant  to Sections  4.06 and
               4.07,  an amount in lawful  money of Canada  equal to the Current
               Market Price of the Common Shares on the such date  multiplied by
               an amount equal to the fractional  interest of Common Shares such
               Holder would otherwise be entitled to receive upon such exercise,
               provided that the  Corporation  shall not be required to make any
               payment, calculated as aforesaid, that is less than $5.00.

4.04      Expiration of Warrants

          (a)  Immediately  prior  to the  Time of  Expiry,  the  rights  of all
               Holders of Special  Warrants to acquire  Common  Shares  shall be
               deemed to be exercised by the Holder  without any further  action
               by the Holder,  and the Common Shares  issuable  thereby shall be
               deemed to be issued to the Special Warrantholders at such time.

          (b)  Upon deemed  exercise of the Special  Warrants,  the  Corporation
               shall cause to be mailed to the  Warrantholders to the address on
               the registers of the Trustee,  a certificate or certificates  for
               the  appropriate  number of Common Shares  registered in the same
               manner as the applicable Special Warrant.

4.05      Cancellation of Surrendered Warrants

          All Special  Warrants  surrendered to the Trustee  pursuant to Section
2.04,  3.01 or 4.01 shall be  cancelled  and  destroyed  by the Trustee  and, if
required by the  Corporation,  the Trustee shall furnish the Corporation  with a
destruction  certificate  identifying the Special  Warrants so destroyed and the
number of Common Shares which could have been purchased pursuant to each.

4.06      Adjustment of Subscription Rights Pursuant to Special Warrants

          (a)  In case of any  reclassification of the Common Shares at any time
               outstanding or change of the Common Shares into other shares,  or
               in case  of the  consolidation,  amalgamation  or  merger  of the
               Corporation  with or into any  other  corporation  (other  than a
               consolidation,  amalgamation  or merger  which does not result in
               any

<PAGE>
                                      -11-

               reclassification  of the outstanding Common Shares or a change of
               the Common Shares into other shares),  or in case of any transfer
               of the undertaking or assets of the Corporation as an entirety or
               substantially as an entirety to another corporation,  at any time
               prior to the Time of Expiry,  the holder of any  Special  Warrant
               who thereafter  shall exercise his right to acquire Common Shares
               thereunder  shall be entitled to receive,  and shall  accept,  in
               lieu of the number of Common  Shares to which he was  theretofore
               entitled  upon such  exercise,  the kind and amount of shares and
               other  securities  or property  which such holder would have been
               entitled to receive as a result of such reclassification, change,
               consolidation,  amalgamation,  merger  or  transfer  if,  on  the
               effective date thereof,  he had been the registered holder of the
               number of Common Shares to which he was theretofore entitled upon
               exercise. If necessary,  appropriate adjustments shall be made in
               the  application  of the  provisions set forth in this Article IV
               with  respect  to the  rights  and  interests  thereafter  of the
               holders of Special  Warrants to the end that the  provisions  set
               forth  in this  Article  IV  thereafter  correspondingly  be made
               applicable  as nearly as may  reasonably  be in  relation  to any
               shares or other  securities  or property  thereafter  deliverable
               upon the exercise of any Special  Warrant.  Any such  adjustments
               shall  be made  by and set  forth  in an  indenture  supplemental
               hereto approved by the directors and by the Trustee and shall for
               all  purposes  be  conclusively   deemed  to  be  an  appropriate
               adjustment. The subdivision or consolidation of the Common Shares
               at any time outstanding into a greater or lesser number of Common
               Shares  shall  be  deemed  not  to be a  reclassification  of the
               capital of the Corporation for the purpose of this Subsection.

          (b)  If and  whenever  prior to the Time of Expiry the  Common  Shares
               shall be subdivided into a greater or consolidated  into a lesser
               number of shares, or the Corporation shall issue Common Shares or
               other participating shares as a stock dividend, any Warrantholder
               who has not  exercised his right of  subscription  on or prior to
               the record date or  effective  date,  as the case may be, of such
               subdivision,  consolidation or stock dividend,  upon the exercise
               of such right thereafter,  shall be entitled to receive and shall
               accept  in  lieu of the  number  of  Common  Shares  which  would
               otherwise  then have been  subscribed  for by him, the  aggregate
               number of Common Shares or other  participating  shares, or both,
               that such holder would have been  entitled to receive as a result
               of such subdivision,  consolidation or stock dividend if, on such
               record date or effective date, he had been the registered  holder
               of the number of Common Shares so subscribed for.

          (c)  In  any  case  in  which  this  Section  shall  require  that  an
               adjustment shall become effective immediately after a record date
               for an event referred to herein, the Corporation may defer, until
               the  occurrence  of such  event,  issuing  to the  holder  of any
               Special  Warrant  exercised after such record date and before the
               occurrence of such event the  additional  Common Shares  issuable
               upon such exercise by reason of the  adjustment  required by such
               event;  provided,  however, that the Corporation shall deliver to
               such holder an appropriate  instrument  evidencing  such holder's
               right  to  receive  such   additional   Common  Shares  upon  the
               occurrence of the event  requiring such  adjustment and the right
               to  receive  any  distributions  made on such  additional  Common
               Shares  declared in favour of holders of record of Common  Shares
               on and after the Exercise  Date or such later date as such holder
               would, but for the provisions of this Subsection, have become the
               holder of record of such  additional  Common  Shares  pursuant to
               Section 4.02;

<PAGE>
                                      -12-

          (d)  The adjustments provided for in this Section are cumulative,  and
               shall apply  (without  duplication)  to successive  subdivisions,
               consolidations,   distributions,   issuances   or  other   events
               resulting in any adjustment under the provisions of this Section,
               provided  that,  notwithstanding  any  other  provision  of  this
               Section,  no adjustment  shall be required unless such adjustment
               would  require  an  increase  or  decrease  of at least 1% in the
               number of Common Shares issuable upon the exercise of the Special
               Warrants (provided however,  that any adjustments which by reason
               of this  Subsection  are not required to be made shall be carried
               forward and taken into account in any subsequent adjustment).

          (e)  In  the  event  of  any  question  arising  with  respect  to the
               adjustments  provided  in this  Section  such  question  shall be
               conclusively  determined  by  a  firm  of  chartered  accountants
               appointed by the  Corporation  and acceptable to the Trustee (who
               may be the Corporation's  auditors);  such accountants shall have
               access  to all  necessary  records  of the  Corporation  and such
               determination shall be binding upon the Corporation,  the Trustee
               and the Warrantholders.

4.07      Adjustment if no Qualification Date

          In the event that the Qualification Date has not occurred by 4:00 p.m.
on the day that is 120 days  after  the  Issue  Date  then the  number of Common
Shares (or other  securities or property) a Warrantholder is entitled to receive
upon the  exercise of any Special  Warrant  shall be adjusted to be equal to the
number that the Warrantholder  would otherwise be entitled to receive multiplied
by 110%.

4.08      Proceedings Prior to any Action Requiring Adjustment

          As a  condition  precedent  to the  taking of any action  which  would
require an adjustment in any of the  subscription  rights pursuant to any of the
Special  Warrants,  the  Corporation  shall  take any action  which may,  in the
opinion of counsel,  be necessary in order that the  Corporation may validly and
legally issue as fully paid and  non-assessable  all the Common Shares which the
holders of such Special  Warrants  are entitled to receive on the full  exercise
thereof in accordance with the provisions hereof.

4.09      Notice of Adjustment of Subscription Rights

          Immediately  after the  occurrence  of any  event  which  requires  an
adjustment  in any of the  subscription  rights  pursuant  to any of the Special
Warrants, the Corporation shall forthwith:

          (a)  file with the Trustee a certificate of the Corporation specifying
               the particulars of such event and the required adjustment and the
               computation of such adjustment; and

          (b)  give  notice to the  Warrantholders  of the  particulars  of such
               event and the required  adjustment in accordance  with Subsection
               5.04(a) and in the manner provided in Section 3.05.

4.10      Title to Special Warrants Surrendered

          The  Corporation  and the  Trustee  shall  not be  bound  to make  any
inquiries  relative  to the  title  or  lack  thereof  of the  Special  Warrants
surrendered  by  any  person  pursuant  to  the  right  of  subscription  herein
contained. Neither the Corporation nor the Trustee shall be liable in any manner
whatsoever to any

<PAGE>
                                      -13-

person  on  account  of any  defect  or lack of  title to the  Special  Warrants
surrendered by any person aforesaid.

ARTICLE V
COVENANTS

5.01      General Covenants

          The Corporation covenants with the Trustee that so long as any Special
Warrants remain outstanding:

          (a)  it will at all times  maintain its  existence;  will carry on and
               conduct its  business  in a proper,  efficient  and  businesslike
               manner and in accordance with good business  practice;  will keep
               or cause to be kept proper  books of account in  accordance  with
               generally accepted accounting practice; and will, if and whenever
               required in writing by the Trustee,  file with the Trustee copies
               of all annual  statements  of the  Corporation  furnished  to its
               shareholders after the date hereof;

          (b)  it will reserve out of its authorized but unissued  Common Shares
               until the Time of Expiry a sufficient  number  thereof to provide
               the full exercise of the Special Warrants as contemplated herein;

          (c)  it will cause the Common Shares from time to time  subscribed for
               pursuant to the  exercise  of the Special  Warrants in the manner
               herein  provided and the  certificates  representing  such Common
               Shares to be duly issued and  delivered  in  accordance  with the
               Special Warrants and the terms hereof;

          (d)  All Common  Shares  which  shall be issued  upon  exercise of the
               right  provided for herein or in the Special  Warrants,  shall be
               fully paid and non-assessable; and

          (e)  generally it will well and truly perform and carry out all of the
               acts  or  things  to be done by it as  provided  in this  Special
               Warrant Indenture.

          (f)  it will use  reasonable  efforts to ensure that all Common Shares
               outstanding  or  issuable  from time to time  (including  without
               limitation  the Common  Shares  issuable  on the  exercise of the
               Special  Warrants)  continue  to be or are  listed and posted for
               trading on the Toronto Stock Exchange.

          (g)  it will make all  requisite  filings  under  applicable  Canadian
               securities  legislation and stock exchange rules, including (on a
               reasonable  efforts basis) those  necessary to remain a reporting
               issuer,  not in default in each of the  Qualifying  Jurisdictions
               and  those  necessary  to  report  the  exercise  of the right to
               acquire Common Shares pursuant to Special Warrants.

          (h)  it will as soon as  practicable  file with and use its reasonable
               best  efforts to obtain a receipt on or before the  Qualification
               Date from each of the  securities  commissions  in the Qualifying
               Jurisdictions  for the  Prospectus  so that  the  resale  of such
               Common Shares will not be subject to the prospectus  requirements
               nor any "hold period" under

<PAGE>
                                      -14-

               applicable    securities    legislation   in   such    Qualifying
               Jurisdictions  (except that it is not required to take such steps
               solely to enable a resale of Common Shares from the holdings of a
               "control person", as defined in applicable securities laws).

          (i)  it will  send  written  notice to the  Trustee  and,  by  prepaid
               registered mail or courier, to each Holder of Special Warrants of
               the issuance of the receipts  referred to in  subsection  5.01(h)
               together  with a  commercial  copy  of the  Prospectus,  if  any,
               specifying the date on which the Special  Warrants expire and, in
               the  case of the  Trustee,  copies  of the  receipts,  as soon as
               practicable  but,  in any event,  not later than three days after
               the  latest  date on which such a receipt is issued by any of the
               Securities Commissions.

          (j)  if the  Corporation  shall not have  received  a receipt  for the
               Prospectus on or before the  Qualification  Date, the Corporation
               will continue,  until the Expiry Date, to use its reasonable best
               efforts to obtain a receipt for the  Prospectus  from each of the
               Securities Commissions.

5.02      Trustee's Remuneration and Expenses

          The Corporation covenants that it will pay to the Trustee from time to
time  reasonable  remuneration  for  its  services  hereunder  and  will  pay or
reimburse   the  Trustee   upon  its  request  for  all   reasonable   expenses,
disbursements and advances incurred or made by the Trustee in the administration
or execution of the trusts hereby created (including the reasonable compensation
and the  disbursements  of its counsel and all other advisers and assistants not
regularly in its employ), both before any default hereunder and thereafter until
all duties of the  Trustee  under the trusts  hereof  shall be finally and fully
performed,  except any such expense,  disbursement  or advance as may arise from
its negligence or bad faith.

5.03      Securities Qualification Requirements

          If,  in  the  opinion  of  counsel,  any  prospectus  or  registration
statement  is  required to be filed with,  or any  permission  is required to be
obtained from, any governmental authority in Canada or of any other jurisdiction
or any other step is required  under any federal or provincial  law of Canada or
in any other  jurisdiction  before any Common  Shares which a  Warrantholder  is
entitled to acquire  pursuant to his Special Warrant may properly and legally be
issued upon due exercise  thereof,  the Corporation  covenants that it will take
such action so required.

5.04      Negative Covenants

          (a)  The  Corporation  covenants  with the Trustee that so long as any
               Special  Warrants remain  outstanding it will give to the Trustee
               and to holders  of Special  Warrants  in the manner  provided  in
               Section 3.05 notice of its intention to fix a record date for any
               event referred to in Section 4.06 in each case, such notice shall
               specify the particulars of such event and the record date and the
               effective  date for such  event;  provided  that the  Corporation
               shall only be required to specify in such notice such particulars
               of such event as shall have been fixed and determined on the date
               on which such notice is given. Such notice shall be given in each
               case not less than 10 days prior to the applicable record date.

<PAGE>
                                      -15-

          (b)  The Corporation covenants with the Trustee that it will not close
               its  transfer  books or take any action  which  might  deprive or
               unduly   restrict  the  holder  of  a  Special   Warrant  of  the
               opportunity of exercising his right of purchase  pursuant thereto
               during  the  period  of 10 days  after the  giving of the  notice
               required by Subsection 5.04(a).

5.05      Delivery of Special Warrants

          Unless directed  otherwise by the Corporation,  as soon as practicable
after  the  delivery  to  the  Trustee  of  forms  of  Special  Warrants  by the
Corporation and of the list of  Warrantholders,  whichever is later, the Trustee
shall  complete,  certify  and  forward  by  first  class  insured  mail to such
Warrantholders, the appropriate number of Special Warrants.

5.06      Performance of Covenants by Trustee

          If the  Corporation  shall  fail  to  perform  any  of  its  covenants
contained in this Warrant  Indenture,  the Trustee may notify the Warrantholders
of such failure on the part of the  Corporation or may itself perform any of the
said  covenants  capable  of  being  performed  by it,  but  shall  be  under no
obligation  to do so or to  notify  the  Warrantholders.  All sums  expended  or
advanced by the Trustee in so doing  shall be  repayable  as provided in Section
5.02. No such performance, expenditure or advance by the Trustee shall be deemed
to relieve the Corporation of any default hereunder.

ARTICLE VI
ENFORCEMENT

6.01      Suits by Warrantholders

          All or any of the  rights  conferred  upon the  holder of any  Special
Warrant by the terms of such Special Warrant or of this  Indenture,  or of both,
may be  enforced  by the holder of such  Special  Warrant by  appropriate  legal
proceedings  but without  prejudice to the right which is hereby  conferred upon
the Trustee to proceed in its own name to enforce each and all of the provisions
herein  contained  for the benefit of the holders of the Special  Warrants  from
time to time outstanding.

6.02      Immunity of Shareholders, etc.

          The Warrantholders and the Trustee hereby waive and release any right,
cause of action or remedy now or hereafter existing in any jurisdiction  against
any past, present or future shareholder,  director or officer of the Corporation
for the issue of Common  Shares  pursuant to any  warranty  or on any  covenant,
agreement,  representation  or  warranty  by the  Corporation  herein  or in the
Special Warrants contained.

6.03      Limitation of Liability

          The obligations  hereunder are not personally  binding upon, nor shall
resort  hereunder  be had to, the private  property of any of the  directors  or
shareholders of the  Corporation or any of the officers,  employees or agents of
the  Corporation,  but only the  property of the  Corporation  shall be bound in
respect hereof.

<PAGE>
                                      -16-

ARTICLE VII
MEETINGS OF WARRANTHOLDERS

7.01      Right to Convene Meetings

          The Trustee may at any time and from time to time and shall on receipt
of a written  request of the Corporation or of any  Warrantholders'  Request and
upon being  indemnified to its reasonable  satisfaction by the Corporation or by
the Warrantholders  signing such Warrantholders'  Request against the cost which
may be incurred  in  connection  with the  calling and holding of such  meeting,
convene a meeting of the  Warrantholders.  In the event of the  Trustee  failing
within 15 days after  receipt of such  written  request  of the  Corporation  or
Warrantholders'  Request  and  indemnity  given  as  aforesaid  to  give  notice
convening a meeting, the Corporation or such Warrantholders, as the case may be,
may  convene  such  meeting.  Every  such  meeting  shall be held in the City of
Edmonton,  the  City of  Calgary,  or such  other  place as may be  approved  or
determined by the Trustee.

7.02      Notice

          At  least  21  days'  notice  of any  meeting  shall  be  given to the
Warrantholders  in the manner provided in Section 3.05 and a copy of such notice
shall be sent by post to the  Trustee  unless the  meeting has been called by it
and to the  Corporation  unless the  meeting  has been called by it. Such notice
shall  state  the time when and the place  where the  meeting  is to be held and
shall state briefly the general nature of the business to be transacted  thereat
and it shall  not be  necessary  for  such  notice  to set out the  terms of any
resolution to be proposed or any of the provisions of this Article.

7.03      Chairman

          An individual nominated in writing by the Trustee shall be chairman of
the  meeting and if no  individual  is so  nominated,  or if the  individual  so
nominated  is not present  within 15 minutes from the time fixed for the holding
of the meeting,  the  Warrantholders  present in person or by proxy shall choose
some individual present to be chairman.

7.04      Quorum

          Subject  to  the  provisions  of  Section  7.12,  at  any  meeting  of
Warrantholders a quorum shall consist of Warrantholders  present in person or by
proxy and  entitled to purchase at least 25% of the  aggregate  number of Common
Shares which could be  purchased  pursuant to all the then  outstanding  Special
Warrants  provided  that at least  two  persons  entitled  to vote  thereat  are
personally  present.  If a quorum of the  Warrantholders  shall  not be  present
within  one-half hour from the time fixed for holding any meeting,  the meeting,
if summoned by the  Warrantholders  or on a  Warrantholders'  Request,  shall be
dissolved;  but in any other case the meeting shall be adjourned to the same day
in the next week  (unless such day is a  non-business  day) at the same time and
place and no notice need be given. At the adjourned  meeting the  Warrantholders
present in person or by proxy shall form a quorum and may  transact the business
for which the meeting was originally convened  notwithstanding that they may not
be entitled to purchase at least 25% of the  aggregate  number of Common  Shares
which can be purchased pursuant to all the then outstanding Special Warrants.

7.05      Power to Adjourn

          The Chairman of any meeting of which a quorum of the Warrantholders is
present may with

<PAGE>
                                      -17-

the  consent  of the  meeting  adjourn  any such  meeting  and no notice of such
adjournment  need be given  except  such  notice,  if any,  as the  meeting  may
prescribe.

7.06      Show of Hands

          Every  question  submitted to a meeting  shall be decided in the first
place by a majority of the votes  given on a show of hands  except that votes on
an extraordinary  resolution shall be given in the manner hereinafter  provided.
At any such  meeting,  unless a poll is duly  demanded  as  herein  provided,  a
declaration  by the  Chairman  that a  resolution  has been  carried  or carried
unanimously  or by a particular  majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.

7.07      Poll

          On every extraordinary resolution, and on any other question submitted
to a meeting and after a vote by a show of hands when  demanded by the  chairman
or by one or more  of the  Warrantholders  acting  in  person  or by  proxy  and
entitled  to acquire in the  aggregate  at least 1% of the  aggregate  number of
Common Shares which could be acquired  pursuant to all the Warrants for the time
being  outstanding,  a poll shall be taken in such manner as the chairman  shall
direct.  Questions other than  extraordinary  resolutions  shall be decided by a
majority of the votes cast on the poll.

7.08      Voting

          On a show of hands every  person who is present and  entitled to vote,
whether as a Warrantholder or as proxy for one or more absent  Warrantholders or
both,  shall have one vote.  On a poll each  Warrantholder  present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in  respect of each  whole  Common  Share  which he is  entitled  to
purchase pursuant to the Special Warrant or Special Warrants then held by him. A
proxy need not be a Warrantholder.

7.09      Regulations

          The Trustee or the  Corporation  with the  approval of the Trustee may
from time to time make and from time to time vary such  regulations  as it shall
from time to time think fit for:

          (a)  the  issue  of  instruments   appointing   proxies  to  represent
               Warrantholders at any meeting of Warrantholders;

          (b)  the deposit of instruments  appointing  proxies at such place and
               time  as the  Trustee,  the  Corporation  or  the  Warrantholders
               convening  the  meeting,  as the case may be,  may in the  notice
               convening the meeting direct;

          (c)  the deposit of instruments  appointing  proxies at some appointed
               place or places  other than the place at which the  meeting is to
               be held and enabling  particulars of such instruments  appointing
               proxies to be mailed, cabled or telegraphed before the meeting to
               the  Corporation or to the Trustee at the place where the same is
               to be held and for the voting of proxies so  deposited  as though
               the instruments themselves were produced at the meeting; and

          (d)  the form of the instrument of proxy.

<PAGE>
                                      -18-

Any  regulations  so made shall be binding and  effective and the votes given in
accordance  therewith  shall  be  valid  and  shall  be  counted.  Save  as such
regulations may provide, the only persons who shall be recognized at any meeting
as the holders of any Special Warrants,  or as entitled to vote or be present at
the meeting in respect thereof, shall be persons who produce Special Warrants at
the meeting.

7.10      Corporation and Trustee may be Represented

          The Corporation and the Trustee,  by their respective  directors,  and
the  counsel of the  Corporation  and the  Trustee may attend any meeting of the
Warrantholders, but shall have no vote as such.

7.11      Powers Exercisable by Extraordinary Resolution

          In  addition  to all  other  powers  conferred  upon them by any other
provisions of this  Indenture or by law, the  Warrantholders  at a meeting shall
have  the  following  powers  exercisable  from  time to  time by  extraordinary
resolution:

          (a)  power  to  agree  to any  modification,  abrogation,  alteration,
               compromise or arrangement of the rights of  Warrantholders or the
               Trustee in its capacity as Trustee  hereunder or on behalf of the
               Warrantholders  against the Corporation whether such rights arise
               under  this  Special   Warrant   Indenture  or  the  Warrants  or
               otherwise;

          (b)  power to direct or  authorize  the  Trustee to enforce any of the
               covenants  on the  part  of the  Corporation  contained  in  this
               Indenture or the Special Warrants or to enforce any of the rights
               of  the   Warrantholders   in  any  manner   specified   in  such
               extraordinary  resolution  or to refrain from  enforcing any such
               covenant or right;

          (c)  power to waive and direct the Trustee to waive any default on the
               part of the  Corporation in complying with any provisions of this
               Indenture or the Special Warrants either  unconditionally or upon
               any conditions specified in such extraordinary resolution;

          (d)  power to restrain any  Warrantholder  from taking or  instituting
               any suit,  action or proceeding  against the  Corporation for the
               enforcement   of  any  of  the  covenants  on  the  part  of  the
               Corporation  contained in this Indenture or the Special  Warrants
               or to enforce any of the rights of the Warrantholders; and

          (e)  power to direct any  Warrantholder  who, as such, has brought any
               suit,  action or proceeding in connection with the enforcement of
               rights arising  pursuant to this Indenture to stay or discontinue
               or  otherwise  deal  with the same  upon  payment  of the  costs,
               charges and expenses  reasonably  and  properly  incurred by such
               Warrantholder in connection therewith.

7.12      Meaning of "Extraordinary Resolution"

          (a)  The  expression  "extraordinary  resolution"  when  used  in this
               Indenture  means,  subject as  hereinafter in this Section and in
               Section  7.15 and  7.16  provided,  a  resolution  proposed  at a
               meeting of Warrantholders duly convened for that purpose and held
               in accordance  with the  provisions of this Article  contained at
               which  there are  present  in  person or by proxy  Warrantholders
               entitled to acquire at least 51% of the

<PAGE>
                                      -19-

               aggregate number of Common Shares which can be acquired  pursuant
               to all the then  outstanding  Special  Warrants and passed by the
               affirmative votes of Warrantholders  entitled to acquire not less
               than 75% of the  aggregate  number of Common  Shares which can be
               acquired  pursuant to all the then  outstanding  Special Warrants
               represented  at the  meeting  and  voted  on the poll  upon  such
               resolution.

          (b)  If, at any such  meeting  called  for the  purpose  of passing an
               extraordinary resolution,  Warrantholders entitled to acquire 51%
               of the  aggregate  number of Common  Shares which can be acquired
               pursuant to all the then  outstanding  Special  Warrants  are not
               present in person or by proxy within one-half hour after the time
               appointed  for the  meeting,  then the  meeting,  if  convened by
               Warrantholders  or  on  a  Warrantholders'   Request,   shall  be
               dissolved; but in any other case it shall stand adjourned to such
               day,  being not less than 15 or more than 60 days  later,  and to
               such place and time as may be appointed by the chairman. Not less
               than 10 days' notice shall be given of the time and place of such
               adjourned  meeting in the manner  provided in Section 3.05.  Such
               notice   shall   state  that  at  the   adjourned   meeting   the
               Warrantholders  present in person or by proxy shall form a quorum
               but it shall not be necessary to set forth the purposes for which
               the meeting was originally  called or any other  particulars.  At
               the adjourned meeting the Warrantholders  present in person or by
               proxy shall form a quorum and may transact the business for which
               the meeting was originally  convened and a resolution proposed at
               such  adjourned  meeting  and  passed  by the  requisite  vote as
               provided in Subsection 7.12(a) of this Indenture  notwithstanding
               that  Warrantholders  entitled  to acquire  51% of the  aggregate
               number of Common Shares which may be acquired pursuant to all the
               then outstanding Special Warrants are not present in person or by
               proxy at such adjourned meeting.

          (c)  votes on an  extraordinary  resolution shall always be given on a
               poll  and no  demand  for a poll on an  extraordinary  resolution
               shall be necessary.

7.13      Powers Cumulative

          It is hereby declared and agreed that any one or more of the powers or
any combination of the powers in this Indenture  stated to be exercisable by the
Warrantholders  by  extraordinary  resolution or otherwise may be exercised from
time  to time  and the  exercise  of any  one or  more  of  such  powers  or any
combination or powers from time to time shall not be deemed to exhaust the right
of the  Warrantholders to exercise such power or powers or combination of powers
then or any power or powers or  combination  of powers  thereafter  from time to
time.

7.14      Minutes

          Minutes of all  resolutions  and  proceedings  at every  such  meeting
aforesaid  shall  be made  and duly  entered  in  books to be from  time to time
provided for that purpose by the Trustee at the expense of the Corporation,  and
any such minutes as aforesaid, if signed by the chairman of the meeting at which
such  resolutions were passed or proceedings had, or by the chairman of the next
succeeding meeting of the  Warrantholders,  shall be prima facie evidence of the
matters therein stated and, until the contrary is proved, every such meeting, in
respect of the  proceedings  of which  minutes  shall  have been made,  shall be
deemed to have been duly passed and taken.

<PAGE>
                                      -20-

7.15      Instruments in Writing

          All actions which may be taken and all powers that may be exercised by
the  Warrantholders  at a meeting held as hereinbefore in this Article  provided
may also be taken and exercised by Warrantholders entitled to acquire 75% of the
aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding  Special  Warrants by an instrument in writing signed in one or more
counterparts by such  Warrantholders  in person or by attorney duly appointed in
writing  and  the  expression  "extraordinary  resolution"  when  used  in  this
Indenture shall include an instrument so signed.

7.16      Binding Effect of Resolutions

          Every  resolution  and  every   extraordinary   resolution  passed  in
accordance  with the  provisions of this Article at a meeting of  Warrantholders
shall be binding upon all the Warrantholders,  whether present at or absent from
such  meeting,  and every  instrument  in writing  signed by  Warrantholders  in
accordance  with  Section  7.15  shall be binding  upon all the  Warrantholders,
whether  signatories  thereto or not, and each and every  Warrantholder  and the
Trustee (subject to the provisions for its indemnity herein  contained) shall be
bound to give effect  accordingly  to every such  resolution  and  instrument in
writing.

ARTICLE VIII
SUPPLEMENTAL INDENTURES

8.01      Provision for Supplemental Indentures for Certain Purposes

          From time to time the Corporation  (when authorized by a resolution of
its directors) and the Trustee may, subject to the provisions of these presents,
and they shall, when so directed by these presents, execute and deliver by their
proper officers, indentures or instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more or all of the following purposes:

          (a)  setting forth adjustments in the application of the provisions of
               Article IV pursuant to section 4.06;

          (b)  adding to the  provisions  hereof such  additional  covenants and
               enforcement  provisions  as,  in  the  opinion  of  counsel,  are
               necessary or advisable in the  premises,  provided  that the same
               are  not  in  the  opinion  of  the  Trustee  prejudicial  to the
               interests of the Warrantholders;

          (c)  giving effect to any extraordinary  resolution passed as provided
               in Article VII;

          (d)  making such provisions not inconsistent with this Special Warrant
               Indenture  as may be  necessary  or  desirable  with  respect  to
               matters or  questions  arising  hereunder  or for the  purpose of
               obtaining a listing or quotation  of the Special  Warrants on any
               stock exchange or bourse,  provided that such  provisions are not
               in the opinion of the Trustee  prejudicial to the interest of the
               Warrantholders;

          (e)  adding to or  altering  the  provisions  hereof in respect of the
               registration and transfer of Special  Warrants,  making provision
               for the exchange of Special Warrants, and making any modification
               in the form of the  Special  Warrants  which  does not affect the
               substance thereof;

<PAGE>
                                      -21-

          (f)  modifying any of the  provisions  of this  Indenture or relieving
               the  Corporation  from  any of  the  obligations,  conditions  or
               restrictions herein contained, provided that no such modification
               or relief  shall be or become  operative  or  effective if in the
               opinion of the Trustee such modification or relief impairs any of
               the rights of the Warrantholders or of the Trustee,  and provided
               that the Trustee may in its  uncontrolled  discretion  decline to
               enter into any such  supplemental  indenture which in its opinion
               may not afford  adequate  protection to the Trustee when the same
               shall become operative; and

          (g)  for  any  other  purpose  not  inconsistent  with  terms  of this
               Indenture,  including  the  correction  or  rectification  of any
               ambiguities,  defective  provisions,  errors or omissions herein,
               provided  that in the  opinion of the  Trustee  the rights of the
               Trustee  and of  the  Warrantholders  are  in no  way  prejudiced
               thereby.

ARTICLE IX
CONCERNING THE TRUSTEE

9.01      Trust Indenture Legislation

          (a)  In this  Article,  the term  "Applicable  Legislation"  means the
               provisions,  if any, of the Business  Corporations  Act (Alberta)
               and any other  statute  of Canada or a province  thereof,  and of
               regulations  under any such named or other  statute,  relating to
               trust  indentures  or to the  right,  duties and  obligations  of
               trustees  and of  corporations  under  trust  indentures,  to the
               extent  that  such  provisions  are  at the  time  in  force  and
               applicable to this Indenture.

          (b)  If and to the  extent  that  any  provisions  of  this  Indenture
               limits,  qualifies or conflicts  with a mandatory  requirement of
               Applicable Legislation, such mandatory requirement shall prevail.

          (c)  The Corporation and the Trustee agree that each will at all times
               in  relation  to  this  Indenture  and  any  action  to be  taken
               hereunder observe and comply with and be entitled to the benefits
               of Applicable Legislation.

9.02      Rights and Duties of Trustee

          (a)  In the exercise of the rights and duties  prescribed or conferred
               by the terms of this  Indenture,  the Trustee shall exercise that
               degree of care,  diligence  and skill that a  reasonable  prudent
               trustee would exercise in comparable circumstances.

          (b)  Subject only to Subsection 9.02(a), the obligation of the Trustee
               to commence or continue  any act,  action or  proceeding  for the
               purpose  of   enforcing   any  rights  of  the   Trustee  or  the
               Warrantholders   hereunder   shall   be   conditional   upon  the
               Warrantholders furnishing,  when required by notice in writing by
               the Trustee,  sufficient  funds to commence or continue such act,
               action or proceeding and indemnity reasonably satisfactory to the
               Trustee to protect  and hold  harmless  the  Trustee  against the
               costs,  charges  and  expenses  and  liabilities  to be  incurred
               thereby and any loss and damage it may suffer by reason  thereof.
               None of the provisions

<PAGE>
                                      -22-

               contained in this  Indenture  shall require the Trustee to expend
               or risk its own funds or otherwise incur  financial  liability in
               the performance of any of its duties or in the exercise of any of
               its rights or powers unless indemnified as aforesaid.

          (c)  The  Trustee  may,  before  commencing  or at any time during the
               continuance of any such act,  action or  proceeding,  require the
               Warrantholders at whose instance it is acting to deposit with the
               Trustee  the Special  Warrants  held by them,  for which  Special
               Warrants the Trustee shall issue receipts.

          (d)  Every  provision of this  Indenture that by its term relieves the
               Trustee of  liability  or entitles  it to rely upon any  evidence
               submitted  to it, is  subject  to the  provisions  of  Applicable
               Legislation, of this Section and of Section 9.03.

9.03      Evidence, Experts and Advisers

          (a)  In  addition to the  reports,  certificates,  opinions  and other
               evidence  required  by  this  Indenture,  the  Corporation  shall
               furnish to the Trustee  such  additional  evidence of  compliance
               with any provision hereof, and in such form, as may be prescribed
               by  Applicable  Legislation  or as  the  Trustee  may  reasonably
               require by written notice to the Corporation.

          (b)  In the exercise of its rights and duties,  the Trustee may, if it
               is acting in good faith,  rely as to the truth of the  statements
               and  the  accuracy  of  the  opinions  expressed  therein,   upon
               statutory declarations,  opinions, reports, certificates or other
               evidence  furnished  to the Trustee  pursuant to a request of the
               Trustee,  provided  that such evidence  complies with  Applicable
               Legislation and the Trustee examines the same and determines that
               such evidence  complies with the applicable  requirements of this
               Indenture.

          (c)  Whenever Applicable  Legislation  requires that evidence referred
               to  in  Subsection   9.03(a)  be  in  the  form  of  a  statutory
               declaration, the Trustee may accept such statutory declaration in
               lieu  of  a  certificate  of  the  Corporation  required  by  any
               provision hereof.  Any such statutory  declaration may be made by
               one or  more  of the  chairman  or  vice-chairman  of the  board,
               president, executive vice-presidents, vice-presidents, secretary,
               treasurer,  assistant  secretary  or  assistant  treasurer of the
               Corporation.

          (d)  Proof of the execution of an  instrument in writing,  including a
               Warrantholders'  Request, by any Warrantholder may be made by the
               certificate  of a notary  public,  or other  officer with similar
               powers,  that the person signing such instrument  acknowledged to
               him the  execution  thereof,  or by an  affidavit of a witness to
               such  execution  or in any other  manner  which the  Trustee  may
               consider adequate.

          (e)  The  Trustee  may  employ or retain  such  counsel,  accountants,
               engineers,  appraisers  or other  experts or  advisers  as it may
               reasonably  require  for the  purpose of  discharging  its duties
               hereunder and may pay reasonable remuneration for all services so
               performed  by any of  them,  without  taxation  of  costs  of any
               counsel,  and shall not be responsible  for any misconduct on the
               part of any of them.

<PAGE>
                                      -23-

9.04      Documents, Moneys, etc., Held by Trustee

          Any securities,  documents of title or other  instruments  that may at
any time be held by the  Trustee  subject to the trusts  hereof may be placed in
the deposit vaults of the Trustee or of any Canadian chartered bank or deposited
for safekeeping with any such bank. Unless herein otherwise  expressly provided,
any moneys so held  pending the  application  or  withdrawal  thereof  under any
provisions of this Indenture, may be deposited in the name of the Trustee in any
Canadian chartered bank at the rate of interest (if any) then current on similar
deposits or, with the consent of the  Corporation,  may be (i)  deposited in the
deposit  department of the Trustee or any other loan or trust company authorized
to accept  deposits  under the laws of Canada  or a  province  thereof,  or (ii)
invested in securities  issued or  guaranteed  by the  Government of Canada or a
province  thereof or in  obligations,  maturing  not more than one year from the
date of  investment,  of any Canadian  chartered  bank or loan or trust company.
Unless the  Corporation  shall be in default  hereunder,  all  interest or other
income received by the Trustee in respect of such deposits and investments shall
belong to the Corporation.

9.05      Action by Trustee to Protect Interests

          The Trustee shall have power to institute and to maintain such actions
and proceedings as it may consider  necessary or expedient to preserve,  protect
or enforce its interest and the interests of the holders of Special Warrants.

9.06      Trustee not Required to Give Security

          The  Trustee  shall not be  required  to give any bond or  security in
respect of the execution of the trusts and powers of this Indenture or otherwise
in respect of the premises.

9.07      Protection of Trustee

          By way of supplement  to the  provisions of any law for the time being
related to trustees, it is expressly declared and agreed as follows:

          (a)  The  Trustee  shall  not  be  liable  for  or by  reason  of  any
               statements  of  fact or  recitals  in  this  Indenture  or in the
               Special Warrants (except the representation  contained in Section
               9.10  or in  the  certificate  of  the  Trustee  on  the  Special
               Warrants) or required to verify the same, but all such statements
               or  recitals   are  and  shall  be  deemed  to  be  made  by  the
               Corporation.

          (b)  Nothing  herein  contained  shall  impose any  obligation  on the
               Trustee  to see to or require  evidence  of the  registration  or
               filing (or renewal  thereof) of this  Indenture or any instrument
               ancillary or supplemental hereto.

          (c)  The  Trustee  shall not be bound to give  notice to any person or
               persons of the execution hereof.

          (d)  The  Trustee  shall  not incur any  liability  or  responsibility
               whatever or be in any way  responsible for the consequence of any
               breach  on the part of the  Corporation  of any of the  covenants
               herein  contained or of any acts of the agents or servants of the
               Corporation.

<PAGE>
                                      -24-

9.08      Replacement of Trustee by Warrantholders

          The  Trustee may resign its trust and be  discharged  from all further
duties and  liabilities  hereunder by giving to the Corporation not less than 90
days' notice in writing or such shorter notice as the  Corporation may accept as
sufficient.  The Warrantholders by extraordinary  resolution shall have power at
any time to remove the  Trustee to  appoint a new  trustee.  In the event of the
Trustee  resigning or being  removed as aforesaid or being  dissolved,  becoming
bankrupt,  going into  liquidation  or  otherwise  becoming  incapable of acting
hereunder,  the Corporation  shall forthwith  appoint a new trustee unless a new
trustee  has  already  been  appointed  by  the  Warrantholders;   failing  such
appointment by the Corporation  the retiring  Trustee or any  Warrantholder  may
apply to a Justice of the Court of Queen's  Bench of Alberta,  on such notice as
such  justice may direct,  for the  appointment  of a new  trustee;  but any new
trustee so  appointed  by the  Corporation  or by the Court  shall be subject to
removal as aforesaid by the Warrantholders.  Any new trustee appointed under any
provision  of this Section  shall be a  corporation  authorized  to carry on the
business of a trust company in the Province of Alberta.  On any such appointment
the new  trustee  shall be  vested  with the same  powers,  rights,  duties  and
responsibilities  as if it had been  originally  named herein as Trustee without
any further assurance,  conveyance,  act or deed; but there shall be immediately
executed,  at the  expense of the  Corporation,  all such  conveyances  or other
instruments as may, in the opinion of counsel, be necessary or advisable for the
purpose of assuring the same to the new trustee.

9.09      Replacement of Trustee by Corporation

          The  Corporation  may,  upon giving  notice to the Trustee of not less
than 90 days' notice in writing,  discharge the Trustee from all further  duties
and liabilities hereunder.  The Corporation shall, within a reasonable period of
time from such discharge,  appoint a new trustee and failing such  appointment a
Warrantholder  may apply to a Justice of the Court of Queen's  Bench of Alberta,
on such notice as the Justice may direct,  for the appointment of a new trustee;
but a new trustee so appointed by the  Corporation or the Court shall be subject
to removal by the  Warrantholders  in the manner  described in Section 9.08. Any
new  trustee  appointed  under  the  provisions  of  this  Section  shall  be  a
corporation  authorized  to  carry on the  business  of a trust  company  in the
Province of Alberta.  On any such  appointment  the new trustee  shall be vested
with the same  powers,  rights,  duties and  responsibilities  as if it had been
originally  named herein as Trustee without any further  assurance,  conveyance,
act or deed;  but there  shall be  immediately  executed,  at the expense of the
Corporation,  all such conveyance or other  instruments as may in the opinion of
counsel be necessary  or  advisable  for the purpose of assuring the same to the
new trustee.

9.10      Conflict of Interest

          (a)  The Trustee represents to the Corporation that at the time of the
               execution  and delivery  hereof no material  conflict of interest
               exists in the Trustee's role as a fiduciary  hereunder and agrees
               that in the event of a  material  conflict  of  interest  arising
               hereafter it will, within 90 days after  ascertaining that it has
               such material conflict of interest,  either eliminate the same or
               resign its trust hereunder.

          (b)  Subject to subsection 9.10(a) the Trustee, in its personal or any
               other capacity,  may buy, lend upon and deal in securities of the
               Corporation  and generally may contract any enter into  financial
               transactions  with  the  Corporation  or  any  Subsidiary  of the
               Corporation  without  being liable to account for any profit made
               thereby.

<PAGE>
                                      -25-

9.11      Acceptance of Trust

          The Trustee hereby  accepts the trusts in this Indenture  declared and
provided for and agrees to perform the same upon the terms and conditions herein
set forth.

9.12      Indemnity to the Trustee

          Except  for its act of gross  negligence  or  wilful  misconduct,  the
Trustee  shall not be liable  for any act done or step taken or omitted by it in
good  faith,  or for any  mistake  of fact or law  and  the  Company  agrees  to
indemnify  and save  harmless the Trustee from and against all claims,  demands,
action, suits or other proceedings by whomsoever made, prosecuted or brought and
from  all  losses,  costs,  damages  and  expenses  in any  manner  based  upon,
occasioned by or  attributable to any act of the Trustee in the execution of its
duties hereunder.  It is understood and agreed that this  indemnification  shall
survive the termination of this indenture.

9.13      Trustee not required to give notice of default

          The  Trustee  shall not be bound to give any  notice or do or take any
act, action or proceeding by virtue of the powers  conferred on it hereby unless
and until it shall have been required so to do under the terms hereof; nor shall
the Trustee be required  to take  notice of any  default  hereunder,  unless and
until notified in writing of such default, which notice shall distinctly specify
the  default  desired to be brought to the  attention  of the Trustee and in the
absence of any such notice the Trustee  may for all  purposes of this  Indenture
conclusively  assume  that  no  default  has  been  made  in the  observance  or
performance of any of the representations,  warranties, covenants, agreements or
conditions  contained  herein.  Any  such  notice  shall  in no  way  limit  any
discretion  herein given to the Trustee to determine  whether or not the Trustee
shall take action with respect to any default.

ARTICLE X
NOTICE

10.01     Notice to the Corporation and the Trustee

          (a)  Unless  herein  otherwise  expressly  provided,  any notice to be
               given hereunder to the Corporation or the Trustee shall be deemed
               to be validly given if delivered or if sent by registered letter,
               postage prepaid:

               To the Corporation:      Brocker Technology Group Ltd.
                                        1103 Toronto Dominion Tower
                                        10088 - 102 Avenue
                                        Edmonton, Alberta   T5J 2Z1
                                        ATTENTION:    CORPORATE SECRETARY

               To the Trustee:          Montreal Trust Company of Canada
                                        710, 530 - 8th Avenue S.W.
                                        Calgary, Alberta
                                        ATTENTION:    MANAGER
                                                      CORPORATE TRUST DEPARTMENT

<PAGE>
                                      -26-

          and any such notice  delivered in accordance  with the foregoing shall
          be deemed to have been received on the date of delivery or, if mailed,
          on the second  business day following the date of the postmark on such
          notice.

          (b)  The Corporation or the Trustee, as the case may be, may from time
               to time  notify the other in the manner  provided  in  Subsection
               11.01(a) of a change of address which, from the effective date of
               such  notice  and  until  changed  by like  notice,  shall be the
               address of the  Corporation  or the Trustee,  as the case may be,
               for all purposes of this Indenture.

          (c)  If, by reason of a strike, lockout or other work stoppage, actual
               or threatened, involving postal employees, any notice to be given
               to the Trustee or to the Corporation  hereunder could  reasonably
               be  considered  unlikely  to reach its  destination,  such notice
               shall  be  valid  and  effective  only if it is  delivered  to an
               officer  of  the  party  to  which  it is  addressed  or if it is
               delivered to such party at the  appropriate  address  provided in
               Subsection 11.01(a) by cable,  telegram,  telex or other means of
               prepaid, transmitted, recorded communication.

10.02     Time of the Essence

          Time shall be of the essence of this Special Warrant Indenture.

10.03     Counterparts and Formal Date

          This Indenture may be simultaneously executed in several counterparts,
each  of  which  so  executed  shall  be  deemed  to be  an  original  and  such
counterparts   together  shall  constitute  one  and  the  same  instrument  and
notwithstanding  their  date of  execution  shall be  deemed  to bear date as of
January 21, 2000

          The  Corporation  and the  Trustee  have caused  these  presents to be
executed by affixing their respective corporate seals, where required,  attested
by the signatures of their proper officers in that behalf.

                                      BROCKER TECHNOLOGY GROUP LTD.

                                      Per:  ____________________________________
                                            (Corporate Seal)

                                      MONTREAL TRUST COMPANY OF CANADA

                                      Per:  ____________________________________

                                      Per:  ____________________________________
                                            (Corporate Seal)Exhibit 10.1

     Employment Agreement Between Bay State Bancorp, Inc. and John F. Murphy

<PAGE>

                             BAY STATE BANCORP, INC.
                              EMPLOYMENT AGREEMENT
                            (As amended and restated)

     This AGREEMENT ("Agreement")  originally entered into on February 13, 1998,
is amended and restated in its  entirety,  effective as of October 21, 1999,  by
and between Bay State  Bancorp,  Inc.  (the  "Holding  Company"),  a corporation
organized  under the laws of Delaware with its principal  offices at 1299 Beacon
Street,  Brookline,  Massachusetts 02146 and John F. Murphy  ("Executive").  Any
reference to  "Institution"  herein shall mean Bay State Federal Savings Bank or
any successor thereto.

     WHEREAS,  the Holding  Company  wishes to continue to assure  itself of the
services of Executive for the period provided in this Agreement; and

     WHEREAS,  Executive  is willing to  continue  to serve in the employ of the
Holding Company on a full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of Executive's employment hereunder,  Executive agrees to
serve as President and Chief Executive Officer of the Holding Company. Executive
shall render  administrative and management services to the Holding Company such
as are  customarily  performed  by  persons  in a  similar  executive  capacity.
Executive  further  agrees to serve on the  Board of  Directors  of the  Holding
Company  and  during  the term of this  Agreement  , also  agrees to  serve,  if
appointed  or  elected,  as the case may be, as an  officer or  director  of any
subsidiary of the Holding Company.  Failure to reelect or reappoint Executive as
President and Chief Executive Officer of the Holding Company without the consent
of Executive shall constitute a breach of this Agreement.

2.   TERMS.

     (a) The period of  Executive's  employment  under this  Agreement  shall be
deemed to have  commenced as of the date first above written and shall  continue
for a period of sixty (60) full calendar  months from the effective date of this
Agreement, as amended and restated.  Commencing on the date of execution of this
Agreement, the term of this Agreement shall be extended for one day each day, so
that a constant  sixty (60)  calendar  month term shall remain in effect,  until
such time as the board of  directors  of the Holding  Company  (the  "Board") or
Executive  elects  not to extend  the term of the  Agreement  by giving  written
notice to the other party in  accordance  with Section 8 of this  Agreement,  in
which case the term of this Agreement  shall be fixed and shall end on the fifth
anniversary of the date of such written notice.

                                       1

<PAGE>

     (b) During  the  period of  Executive's  employment  hereunder,  except for
periods of absence occasioned by illness, reasonable vacation periods, and other
reasonable  leaves of absence,  Executive  shall  devote  substantially  all his
business time, attention,  skill, and efforts to the faithful performance of his
duties hereunder, including activities and services related to the organization,
operation  and  management  of the  Holding  Company  and its direct or indirect
subsidiaries,  including the Institution  ("Subsidiaries")  and participation in
community,  professional and civic organizations;  provided, however, that, with
the approval of the Board, as evidenced by a resolution of the Board,  from time
to time,  Executive may serve,  or continue to serve, on the boards of directors
of, and hold any other  offices or positions  in,  companies  or  organizations,
which, in the Board's  judgment,  will not present any conflict of interest with
the Holding Company or its Subsidiaries, or materially affect the performance of
Executive's duties pursuant to this Agreement.

     (c)  Notwithstanding  anything in this  Agreement to the  contrary,  either
Executive or the Holding Company may terminate  Executive's  employment with the
Holding  Company at any time during the term of this  Agreement,  subject to the
terms and conditions of this Agreement.

3.   COMPENSATION AND REIMBURSEMENT.

     (a) The  compensation  specified  under  this  Agreement  shall  constitute
consideration  paid by the Holding Company in exchange for the duties  described
in Section 1 of this  Agreement.  The Holding  Company shall pay  Executive,  as
compensation, a salary of not less than $275,000.44 ("Base Salary"). Base Salary
shall  include  any amounts of  compensation  deferred  by  Executive  under any
tax-qualified   retirement  or  welfare  benefit  plan  or  any  other  deferred
compensation  arrangement maintained by the Holding Company or its Subsidiaries.
Base Salary  shall be payable  bi-weekly.  During the period of this  Agreement,
Executive's Base Salary shall be reviewed at least annually; on or about the 1st
day of April each year . Such  review  shall be  conducted  by the Board or by a
Committee of the Board delegated such responsibility by the Board. The Committee
or the Board may increase  Executive's  Base Salary at any time. Any increase in
Base Salary shall  thereafter  become the new "Base Salary" for purposes of this
Agreement. In addition to the Base Salary provided for in this Section 3(a), the
Holding Company shall also provide  Executive,  at no premium cost to Executive,
with all such other  benefits  as  provided  uniformly  to  permanent  full-time
employees of the Holding Company and its  Subsidiaries.  In addition,  Executive
shall be entitled to  incentive  compensation  and bonuses as provided for under
any plan or  arrangement  of the Holding  Company or its  Subsidiaries  in which
Executive is eligible to participate.

     (b)  Executive  shall be entitled to  participate  in any employee  benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the  beginning  of the  term of this  Agreement  or in  which  he  begins  to
participate in the future,  and the Holding  Company and its  Subsidiaries  will
not, without Executive's prior written consent,  make any changes in such plans,
arrangements or perquisites which would materially  adversely affect Executive's
rights or benefits  thereunder,  without separately providing for an arrangement
that  ensures  Executive  receives  or will  receive  the  economic  value  that
Executive would otherwise lose as a result of such changes. Without limiting the
generality of the foregoing  provisions of this Subsection (b),  Executive shall
be entitled to participate in or receive

                                       2

<PAGE>

benefits  under all plans relating to stock  options,  restricted  stock awards,
stock  purchases,  pension,  thrift,  supplemental  retirement,  profit-sharing,
employee stock  ownership,  group life  insurance,  medical and other health and
welfare  coverage,  education,  cash or stock  bonuses that are now or hereafter
made  available  by the  Holding  Company  or  its  Subsidiaries  to its  senior
executives and key management  employees,  subject to and on a basis  consistent
with  the  terms,  conditions  and  overall  administration  of such  plans  and
arrangements.  Nothing paid to Executive under any such plan or arrangement will
be deemed to be in lieu of other  compensation  to which  Executive  is entitled
under this Agreement.

     (c) The Holding Company shall pay or reimburse Executive for all reasonable
expenses  incurred  by  Executive  in  performing  his  obligations  under  this
Agreement.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the  occurrence  of an Event of  Termination  (as herein  defined)
during  Executive's term of employment  under this Agreement,  the provisions of
this Section 4 shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:  (i) the termination by
the Holding Company of Executive's full-time employment hereunder for any reason
other than  termination  governed  by  Section  5(a) of this  Agreement,  or for
Termination for Cause, as defined in Section 7 of this Agreement;  or Retirement
(as defined in paragraph (f) of this Section 4); or (ii) Executive's resignation
from the Holding Company's employ,  upon, any (A) failure to elect or reelect or
to appoint or  reappoint  Executive as President  and Chief  Executive  Officer,
unless  Executive so consents,  (B) a material  change in Executive's  function,
duties, or responsibilities with the Holding Company or its Subsidiaries,  which
change would cause Executive's position to become one of lesser  responsibility,
importance,  or scope from the  position  and  attributes  thereof  described in
Section 1 of this Agreement,  unless Executive so consents,  (C) a relocation of
Executive's  principal  place  of  employment  by more  than 25  miles  from its
location at the effective date of this Agreement,  unless Executive so consents,
(D) a material  reduction  in the  benefits,  arrangements  and  perquisites  to
Executive  pursuant to Section 3 of this Agreement,  to which Executive does not
consent  or for which  Executive  is not or will not be  provided  the  economic
benefit  pursuant  to  Section  3  of  this  Agreement,  (E)  a  liquidation  or
dissolution  of the Holding  Company or the  Institution,  or (F) breach of this
Agreement by the Holding Company.  Upon the occurrence of any event described in
clauses (A), (B), (C), (D), (E) or (F) above,  Executive shall have the right to
elect to terminate his employment  under this Agreement by resignation  upon not
less than sixty (60) days prior  written  notice given within six full  calendar
months after the event giving rise to said right to elect.

     (b)  Upon  the  occurrence  of an  Event  of  Termination,  on the  Date of
Termination,  as defined in Section 8 of this  Agreement,  the  Holding  Company
shall be obligated to pay Executive,  or, in the event of Executive's subsequent
death, his beneficiary or beneficiaries,  or his estate, as the case may be, the
amount of the remaining  payments and benefits that Executive  would have earned
if he had continued his employment with the Holding Company during the remaining
unexpired term of this Agreement,  based on Executive's Base Salary and benefits
provided at the Date of

                                       3

<PAGE>

Termination,  as set forth in Sections  3(a) and (b) of this  Agreement,  as the
case may be, and the amount still due Executive under any paragraph of Section 3
of this Agreement for service rendered  through the Date of Termination.  At the
election of Executive,  which  election is to be made within thirty (30) days of
the Date of  Termination,  such  payments  shall be made in a lump sum  (without
discount for early  payment) or paid monthly  during the  remaining  term of the
agreement following  Executive's  termination.  In the event that no election is
made,  payment to Executive  will be made in a lump sum. Such payments shall not
be reduced in the event Executive obtains other employment following termination
of employment.

     (c) Upon the  occurrence  of an Event  of  Termination,  Executive  will be
entitled to receive benefits due him under or contributed by the Holding Company
or its Subsidiaries on his behalf pursuant to any retirement,  incentive, profit
sharing,  employee  stock  ownership,  bonus,  performance,  disability or other
employee  benefit plan maintained by the Holding Company or its  Subsidiaries to
the extent such  benefits are not otherwise  paid to Executive  under a separate
provision of this Agreement.

     (d) To the extent that the Holding Company or its Subsidiaries  continue to
offer  any  life,  medical,  health,  disability  or  dental  insurance  plan or
arrangement in which Executive participates in on the last day of his employment
(each  being a  "Welfare  Plan"),  after  an  Event of  Termination  (as  herein
defined),  Executive and his  dependents  shall continue  participating  in such
Welfare  Plans,  subject  to the  same  premium  contributions  on the  part  of
Executive as were required  immediately  prior to the Event of Termination until
the earlier of (i) his death (ii) his employment by another  employer other than
one of which he is the majority  owner or (iii) the end of the remaining term of
this  Agreement.  If the Holding  Company or its  Subsidiaries  do not offer the
Welfare  Plans after the Event of  Termination,  then the Holding  Company shall
provide  Executive with a payment equal to the actuarial  value of the provision
of such  benefit  for the period  which runs until the earlier of (i) his death;
(ii)  his  employment  by  another  employer  other  than one of which he is the
majority owner; or (iii) the end of the remaining term of this Agreement.

     (e) In the event that Executive is receiving  monthly payments  pursuant to
Section  4(b)  hereof,  on an annual  basis,  thereafter,  between  the dates of
January 1 and  January 31 of each  year,  Executive  shall  elect  whether,  the
balance of the amount  payable under the Agreement at that time shall be paid in
a lump sum or on a pro rata basis.  Such election shall be  irrevocable  for the
year for which such election is made.

     (f) Termination of Executive based on "Retirement"  shall mean  termination
in accordance with the Holding Company's or the Institution's  retirement policy
or in accordance with any retirement  arrangement  established  with Executive's
consent with respect to him.  Upon  termination  of Executive  upon  Retirement,
Executive  shall be entitled to all benefits  under any  retirement  plan of the
Holding  Company or its  Subsidiaries  and other plans to which  Executive  is a
party or a participant in accordance with the terms of the plan or arrangement.

5.   CHANGE IN CONTROL.

                                       4

<PAGE>

     (a) For  purposes of this  Agreement,  a "Change in Control" of the Holding
Company or the  Institution  shall mean an event of a nature that:  (i) would be
required to be  reported in response to Item 1(a) of the current  report on Form
8-K,  as in effect on the date  hereof,  pursuant  to Section 13 or 15(d) of the
Securities  Exchange  Act of 1934 (the  "Exchange  Act");  or (ii)  results in a
Change in Control of the  Institution or the Holding  Company within the meaning
of the Home Owners' Loan Act of 1933, as amended,  the Federal Deposit Insurance
Act,  and  the  Rules  and  Regulations  promulgated  by the  Office  of  Thrift
Supervision  (or its  predecessor  agency),  as in  effect  on the  date  hereof
(provided,  that in applying  the  definition  of change in control as set forth
under the rules and  regulations  of the OTS,  the Board  shall  substitute  its
judgment  for that of the OTS);  or (iii)  without  limitation  such a Change in
Control  shall be deemed to have  occurred at such time as (A) any  "person" (as
the term is used in Sections  13(d) and 14(d) of the Exchange Act) is or becomes
the  "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
directly or indirectly,  of voting  securities of the Institution or the Holding
Company  representing 20% or more of the  Institution's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting  securities of the  Institution  purchased by the Holding Company and any
voting securities  purchased by any employee benefit plan of the Holding Company
or its  Subsidiaries,  or (B)  individuals  who constitute the Board on the date
hereof (the  "Incumbent  Board")  cease for any reason to  constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of at least  three-quarters of
the directors  comprising the Incumbent  Board, or whose nomination for election
by the  Company's  stockholders  was approved by a Nominating  Committee  solely
composed of members which are Incumbent Board members, shall be, for purposes of
this clause (B),  considered as though he were a member of the Incumbent  Board,
or  (C) a  plan  of  reorganization,  merger,  consolidation,  sale  of  all  or
substantially  all the  assets of the  Institution  or the  Holding  Company  or
similar transaction occurs or is effectuated in which the Institution or Holding
Company  is not the  resulting  entity;  provided,  however,  that such an event
listed above will be deemed to have  occurred or to have been  effectuated  upon
the receipt of all required federal regulatory approvals not including the lapse
of any statutory waiting periods,  or (D) a proxy statement has been distributed
soliciting  proxies from  stockholders of the Holding Company,  by someone other
than the current management of the Holding Company, seeking stockholder approval
of a plan of  reorganization,  merger or consolidation of the Holding Company or
Institution  with one or more  corporations as a result of which the outstanding
shares of the class of securities  then subject to such plan or transaction  are
exchanged for or converted into cash or property or securities not issued by the
Institution or the Holding Company shall be  distributed,  or (E) a tender offer
is made for 20% or more of the voting  securities of the  Institution or Holding
Company then outstanding.

     (b) If any of the  events  described  in  Section  5(a) of  this  Agreement
constituting a Change in Control have occurred, or the Board has determined that
a Change in Control has  occurred,  Executive  shall be entitled to the benefits
provided in  paragraphs  (c),  (d),  (e), (f) and (g) of this Section 5 upon his
termination  of employment on or after the date the Change in Control occurs due
to (i) Executive's dismissal at any time during the term of this Agreement, (ii)
Executive's  voluntary  resignation for any reason on or within a sixty (60) day
period following the date a Change in Control has occurred or (iii)  Executive's
resignation  following  any  demotion,  loss of  title,  office  or  significant
authority or responsibility,  reduction in the annual  compensation or reduction
in benefits

                                       5

<PAGE>

or relocation  of his  principal  place of employment by more than 25 miles from
its location immediately prior to the change in control, unless such termination
is because of his death or  Termination  for Cause (as defined  herein),  at any
time during the term of this Agreement.

     (c) Upon  Executive's  entitlement to benefits  pursuant to Section 5(b) of
this Agreement,  the Holding Company shall pay Executive, or in the event of his
subsequent death, his beneficiary or  beneficiaries,  or his estate, as the case
may be, as  severance  pay or  liquidated  damages,  or both, a sum equal to the
greater of: (i) the payments due for the remaining  term of this  Agreement;  or
(ii)  five (5)  times  Executive's  annual  compensation  for the most  recently
completed calendar year. In determining Executive's annual compensation,  annual
compensation  shall include Base Salary and any other taxable income,  including
but not  limited to amounts  related to the  granting,  vesting or  exercise  of
restricted  stock  or  stock  option  awards,  commissions,  bonuses,  severance
payments,  retirement  benefits,  director or committee fees and fringe benefits
paid or to be paid to Executive or paid for Executive's  benefit during any such
year, as well as pension,  profit  sharing plan,  employee  stock  ownership and
other  retirement  contributions  or benefits  (whether or not taxable)  made or
accrued on behalf of  Executive  for such year.  At the  election of  Executive,
which  election is to be made prior to or within thirty (30) days of the Date of
Termination  on or following a Change in Control,  such payment may be made in a
lump sum (without  discount for early payment) on or  immediately  following the
Date of Termination  (which may be the date a Change in Control  occurs) or paid
in equal monthly installments during the sixty (60) months following Executive's
termination. In the event that no election is made, payment to Executive will be
made on a monthly  basis  during  the  remaining  sixty  (60)  month term of the
Agreement.  Such payments  shall not be reduced in the event  Executive  obtains
other employment following termination of employment.

     (d) Upon the  occurrence  of a Change in Control  followed  by  Executive's
termination  of employment,  Executive will be entitled to receive  benefits due
him under or  contributed  by the  Holding  Company or its  Subsidiaries  on his
behalf pursuant to any  retirement,  incentive,  profit sharing,  employee stock
ownership,  bonus,  performance,  disability or other  employee  benefit plan or
other  arrangement  maintained  by the  Institution  or the  Holding  Company on
Executive's  behalf  to the  extent  such  benefits  are not  otherwise  paid to
Executive under a separate provision of this Agreement.

     (e) Upon the occurrence of a Change in Control and Executive's  termination
of  employment  in connection  therewith,  the Holding  Company will cause to be
continued life, medical and disability coverage  substantially  identical to the
coverage maintained by the Holding Company or its Subsidiaries for Executive and
any of his  dependents  covered under such plans prior to the Change in Control.
Such  coverage and payments  shall cease upon the  expiration of sixty (60) full
calendar  months  following the Date of  Termination.  In the event  Executive's
participation  in any such plan or program is barred,  the Holding Company shall
arrange to provide  Executive and his  dependents  with  benefits  substantially
similar to those Executive and his dependents would otherwise have been entitled
to  receive   under  such  plans  and  programs   from  which  their   continued
participation is barred or provide their economic equivalent.

                                       6

<PAGE>

     (f) The use or provision of any  membership,  license,  automobile  use, or
other perquisites shall be continued during the remaining term of this Agreement
on the same financial terms and obligations as were in place  immediately  prior
to the  Change in  Control.  To the  extent  that any item  referred  to in this
paragraph will at the end of the term of this Agreement,  no longer be available
to Executive, Executive will have the option to purchase all rights then held by
the Holding  Company or its  Subsidiaries  to such item for a price equal to the
then fair market value of the item.

     (g) In the event that Executive is receiving  monthly payments  pursuant to
Section 5(c) of this  Agreement,  on an annual  basis,  thereafter,  between the
dates of January 1 and January 31 of each year,  Executive  shall elect  whether
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis  pursuant to such  section.  Such  election
shall be irrevocable for the year for which such election is made.

6.   CHANGE OF CONTROL RELATED PROVISIONS.

     (a)  Notwithstanding  the  preceding   provisions  of  Section  5  of  this
Agreement,  for  any  taxable  year in  which  Executive  shall  be  liable,  as
determined  for the payment of an excise tax under  Section 4999 of the Code (or
any successor provision  thereto),  with respect to any payment in the nature of
the compensation  made by the Holding Company or its Subsidiaries to (or for the
benefit of)  Executive  pursuant to this  Agreement  or  otherwise,  the Holding
Company shall pay to Executive an amount determined under the following formula:

     An amount equal to: (E x P) + X

WHERE:

     X    =                E x P
               1 - [(FI x (1 - SLI)) + SLI + E + M + PO]

     E     =   the rate at which the excise tax is assessed  under  Section 4999
               of the Code;

     P     =   the amount  with  respect to which such  excise tax is  assessed,
               determined without regard to this Section 6;

     FI    =   the highest  marginal  rate of federal  income,  employment,  and
               other taxes (other than taxes  imposed  under Section 4999 of the
               Code)  applicable  to Executive  for the taxable year in question
               (including  any  effective   increase  in  Executive's  tax  rate
               attributable to the disallowance of any deduction);

     SLI   =   the sum of the highest  marginal  rates of income and payroll tax
               applicable to Executive under applicable state and local laws for
               the taxable year in question (including any effective increase in
               Executive's  tax rate  attributable  to the  disallowance  of any
               deduction);

                                       7

<PAGE>

     M     =   highest marginal rate of Medicare tax; and

     PO    =   adjustment  for  phase  out of or  loss  of  deduction,  personal
               exemption or other similar items.

With  respect to any payment in the nature of  compensation  that is made to (or
for the benefit of) Executive under the terms of this Section 6 or otherwise and
on which an excise tax under  Section  4999 of the Code may or will be assessed,
the payment  determined  under this  Section 6 shall be made to Executive on the
earliest of (i) the date the Holding  Company is required to withhold  such tax,
(ii) the date the tax is required to be paid by Executive,  or (iii) at the time
of the Change in Control.  It is the  intention  of the parties that the Holding
Company provide  Executive with a full tax gross-up under the provisions of this
Section 6, so that on a net after-tax  basis,  the result to Executive  shall be
the same as if the excise tax under Section 4999 (or any  successor  provisions)
of the  Code  had  not  been  imposed.  The  tax  gross-up  may be  adjusted  if
alternative minimum tax rules are applicable to Executive.

     (b) Notwithstanding the foregoing, if it is (i) initially determined by the
Holding Company's tax advisors that no excise tax under Section 4999 of the Code
is due with respect to any payment or benefit  described in the first  paragraph
of  Section  6(a)  and   thereafter  it  is  determined  in  a  final   judicial
determination or a final administrative  settlement that the Section 4999 excise
tax is due with  respect to such  payments  or  benefits,  or (ii)  subsequently
determined  in  a  final  judicial   determination  or  a  final  administrative
settlement to which  Executive is a party that the excess  parachute  payment as
defined in Section 4999 of the Code is due or that the excess parachute payment,
as defined in Section 4999 of the Code,  is more than the amount  determined  as
"P," above (such revised  determination  under (i) or (ii) above being hereafter
referred  to as the  "Determinative  Excess  Parachute  Payment"),  then the tax
advisors for the Holding Company (or its successors)  shall determine the amount
(the "Adjustment  Amount"),  the Holding Company (or its successors) must pay to
Executive,  in order to put  Executive in the same  position as Executive  would
have  been  if the  amount  determined  as  "P"  above  had  been  equal  to the
Determinative  Excess Parachute  Payment.  In determining the Adjustment Amount,
the tax  advisors  shall  take into  account  any and all taxes  (including  any
penalties of any nature and interest) paid or payable by Executive in connection
with such final judicial determination or administrative  settlement. As soon as
practicable  after the  Adjustment  Amount has been so  determined,  the Holding
Company shall pay the Adjustment Amount to Executive.

     (c) The  Holding  Company  (or its  successors)  shall  indemnify  and hold
Executive  harmless  from any and all  losses,  costs  and  expenses  (including
without limitation,  reasonable attorney's fees,  reasonable  accountant's fees,
interest, fines and penalties of any kind) which Executive incurs as a result of
any  administrative  or judicial  review of Executive's  liability under Section
4999 of the Code by the Internal  Revenue Service or any comparable state agency
through and including a final  judicial  determination  or final  administrative
settlement of any dispute  arising out of Executive's  liability for the Section
4999 excise tax or  otherwise  relating to the  classification  for  purposes of
Section 280G of the Code of any payment or benefit in the nature of compensation
made or provided to Executive by the Holding  Company or any successor  thereto.
Executive shall

                                       8

<PAGE>

promptly  notify the  Holding  Company in writing  whenever  Executive  receives
notice of the commencement of any judicial or administrative proceeding,  formal
or informal,  in which the federal tax treatment  under Section 4999 of the Code
of any  amount  paid or  payable  under  this  Supplemental  Agreement  is being
reviewed  or is in  dispute  (including  a notice  of  audit  or  other  inquiry
concerning  the reporting of  Executive's  liability  under Section  4999).  The
Holding  Company (and its successors) may assume control at its expense over all
legal and accounting  matters  pertaining to such federal or state tax treatment
(except to the extent necessary or appropriate for Executive to resolve any such
proceeding  with  respect to any  matter  unrelated  to amounts  paid or payable
pursuant to this contract) and Executive  shall cooperate fully with the Holding
Company in any such proceeding. Executive shall not enter into any compromise or
settlement  or  otherwise  prejudice  any rights  the  Holding  Company  (or its
successors)  may have in  connection  therewith  without  prior  consent  to the
Holding Company (or its  successors).  In the event that the Holding Company (or
any  successor  thereto)  elects not to assume  control over such  matters,  the
Holding Company (or any successor  thereto) shall promptly  reimburse  Executive
for all expenses  related  thereto as and when  incurred  upon  presentation  of
appropriate documentation relating thereto.

7.   TERMINATION FOR CAUSE.

     The  term  "Termination  for  Cause"  shall  mean  termination  because  of
Executive's  personal  dishonesty,  willful misconduct,  any breach of fiduciary
duty involving  personal profit,  intentional  failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar  offenses),  final  cease and  desist  order or  material  breach of any
provision of this Agreement.  Notwithstanding the foregoing, Executive shall not
be deemed to have been  terminated  for Cause  unless and until there shall have
been  delivered to him a Notice of  Termination  which shall include a copy of a
resolution duly adopted by the affirmative  vote of not less than  three-fourths
of the  members of the Board at a meeting of the Board  called and held for that
purpose  (after  reasonable  notice to  Executive  and an  opportunity  for him,
together with counsel,  to be heard before the Board),  finding that in the good
faith  opinion  of  the  Board,  Executive  was  guilty  of  conduct  justifying
Termination  for  Cause  and  specifying  the  particulars  thereof  in  detail.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause.  During the period beginning on the date
of the Notice of  Termination  for Cause pursuant to Section 8 of this Agreement
through the Date of  Termination,  stock options  granted to Executive under any
stock-based  incentive  plan  shall not be  exercisable  nor shall any  unvested
awards  granted  to  Executive  under  any  stock-based  incentive  plan  of the
Institution,  the Holding Company or any subsidiary or affiliate thereof,  vest.
At the Date of  Termination,  such stock  options  and any such  unvested  stock
awards shall become null and void and shall not be  exercisable  by or delivered
to Executive at any time subsequent to such Termination for Cause.

8.   NOTICE.

     (a) Any purported  termination by the Holding Company or by Executive shall
be communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement,  a "Notice of Termination"  shall mean a written notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and

                                       9

<PAGE>

circumstances  claimed  to  provide  a  basis  for  termination  of  Executive's
employment under the provision so indicated.

     (b) "Date of  Termination"  shall mean the date  specified in the Notice of
Termination  (which,  in the case of a Termination for Cause,  shall not be less
than thirty (30) days from the date such Notice of Termination is given).

     (c) If, within thirty (30) days after any Notice of  Termination  is given,
the party  receiving such Notice of Termination  notifies the other party that a
dispute  exists  concerning  the  termination,  except upon the  occurrence of a
Change in Control and voluntary  termination by Executive in which case the Date
of  Termination  shall  be  the  date  specified  in the  Notice,  the  Date  of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties,  by a binding  arbitration award, or
by a final judgment,  order or decree of a court of competent  jurisdiction (the
time for appeal  therefrom  having expired and no appeal having been  perfected)
and provided further that the Date of Termination  shall be extended by a notice
of dispute  only if such notice is given in good faith and the party giving such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  the Holding  Company  will
continue to pay Executive his full compensation in effect when the notice giving
rise to the dispute was given  (including,  but not limited to, Base Salary) and
continue him as a participant in all  compensation,  benefit and insurance plans
in which he was  participating  when the notice of dispute was given,  until the
dispute is finally  resolved in  accordance  with this  Agreement.  Amounts paid
under this Section are in addition to all other amounts due under this Agreement
and shall not be offset  against  or reduce  any other  amounts  due under  this
Agreement.

9.   POST-TERMINATION OBLIGATIONS.

     All  payments  and  benefits to  Executive  under this  Agreement  shall be
subject  to  Executive's  compliance  with this  Section 9 for one (1) full year
after  the  earlier  of the  expiration  of this  Agreement  or  termination  of
Executive's   employment  with  the  Holding  Company.   Executive  shall,  upon
reasonable  notice,  furnish  such  information  and  assistance  to the Holding
Company as may reasonably be required by the Holding  Company in connection with
any litigation in which it or any of its  subsidiaries  or affiliates is, or may
become, a party.

10.  NON-COMPETITION AND NON-DISCLOSURE.

     (a) Upon any termination of Executive's  employment  hereunder  pursuant to
Section 4 of this  Agreement,  Executive  agrees not to compete with the Holding
Company  or its  Subsidiaries  for a  period  of one  (1)  year  following  such
termination in any city,  town or county in which  Executive's  normal  business
office is located  and the  Holding  Company or any of its  Subsidiaries  has an
office or has filed an  application  for  regulatory  approval to  establish  an
office,  determined  as of the  effective  date of such  termination,  except as
agreed to pursuant to a resolution duly adopted by the Board.  Executive  agrees
that during such period and within said cities,  towns and  counties,  Executive
shall not work for or advise,  consult or  otherwise  serve  with,  directly  or
indirectly, any

                                       10

<PAGE>

entity whose business materially competes with the depository,  lending or other
business  activities  of the Holding  Company or its  Subsidiaries.  The parties
hereto,  recognizing that irreparable  injury will result to the Holding Company
or its  Subsidiaries,  its  business  and  property in the event of  Executive's
breach of this  Subsection  10(a)  agree that in the event of any such breach by
Executive,  the  Holding  Company  or its  Subsidiaries,  will be  entitled,  in
addition  to any other  remedies  and damages  available,  to an  injunction  to
restrain  the  violation  hereof by  Executive,  Executive's  partners,  agents,
servants,  employees  and all  persons  acting  for or under  the  direction  of
Executive.  Executive represents and admits that in the event of the termination
of  his  employment  pursuant  to  Section  7  of  this  Agreement,  Executive's
experience and capabilities  are such that Executive can obtain  employment in a
business  engaged in other lines  and/or of a different  nature than the Holding
Company  or its  Subsidiaries,  and that the  enforcement  of a remedy by way of
injunction will not prevent Executive from earning a livelihood.  Nothing herein
will be construed as prohibiting  the Holding Company or its  Subsidiaries  from
pursuing any other remedies available to the Holding Company or its Subsidiaries
for such breach or  threatened  breach,  including  the recovery of damages from
Executive.

     (b)  Executive  recognizes  and  acknowledges  that  the  knowledge  of the
business activities and plans for business activities of the Holding Company and
its  Subsidiaries as it may exist from time to time, is a valuable,  special and
unique  asset of the  business  of the  Holding  Company  and its  Subsidiaries.
Executive  will not,  during or after the term of his  employment,  disclose any
knowledge of the past, present, planned or considered business activities of the
Holding Company and its Subsidiaries thereof to any person,  firm,  corporation,
or other entity for any reason or purpose whatsoever unless expressly authorized
by the Board of Directors  or required by law.  Notwithstanding  the  foregoing,
Executive  may disclose  any  knowledge of banking,  financial  and/or  economic
principles,  concepts or ideas which are not solely and exclusively derived from
the business  plans and  activities  of the Holding  Company.  In the event of a
breach or threatened  breach by Executive of the  provisions of this Section 10,
the Holding Company will be entitled to an injunction restraining Executive from
disclosing,  in whole or in part, the knowledge of the past, present, planned or
considered  business  activities of the Holding  Company or its  Subsidiaries or
from rendering any services to any person,  firm,  corporation,  other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be  disclosed.  Nothing  herein will be  construed  as  prohibiting  the Holding
Company from pursuing any other  remedies  available to the Holding  Company for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11.  SOURCE OF PAYMENTS.

     (a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Holding  Company subject to Section 11(b) of
this Agreement.

     (b)  Notwithstanding  any provision  herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received by Executive under the Employment Agreement in effect between Executive
and  the  Institution,  such  compensation  payments  and  benefits  paid by the
Institution will be subtracted from any amount due  simultaneously  to Executive

                                       11

<PAGE>

under similar provisions of this Agreement.  Payments pursuant to this Agreement
and the  Institution  Agreement shall be allocated in proportion to the level of
activity and the time expended on such  activities by Executive as determined by
the Holding Company and the Institution on a quarterly basis.

12.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Holding Company or any
predecessor  of the Holding  Company and  Executive,  except that this Agreement
shall not affect or operate to reduce  any  benefit or  compensation  inuring to
Executive of a kind elsewhere provided.  No provision of this Agreement shall be
interpreted to mean that  Executive is subject to receiving  fewer benefits than
those available to him without reference to this Agreement.

13.  NO ATTACHMENT.

     (a) Except as  required  by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of,
Executive and the Holding Company and their respective successors and assigns.

14.  MODIFICATION AND WAIVER.

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) No term or  condition  of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.  SEVERABILITY.

     If, for any reason,  any  provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

                                       12

<PAGE>

16.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections  and  paragraphs  herein are  included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

17.  GOVERNING LAW.

     This  Agreement  shall be  governed  by the laws of the  State of  Delaware
without regards to principles of conflicts of law of this state.

18.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the location of the Institution, in accordance with the rules of
the American Arbitration  Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

     In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of Executive,  whether by judgment,
arbitration  or  settlement,  Executive  shall be entitled to the payment of all
back-pay,  including  salary,  bonuses and any other cash  compensation,  fringe
benefits and any compensation and benefits due Executive under this Agreement.

19.  PAYMENT OF LEGAL FEES.

     All  reasonable  legal fees paid or incurred by  Executive  pursuant to any
dispute or question of  interpretation  relating to this Agreement shall be paid
or reimbursed by the Holding Company,  if Executive is successful  pursuant to a
legal judgment, arbitration or settlement.

20.  INDEMNIFICATION.

     (a) The Holding  Company  shall  provide  Executive  (including  his heirs,
executors and  administrators)  with coverage  under a standard  directors'  and
officers'  liability  insurance  policy  at  its  expense  and  shall  indemnify
Executive (and his heirs,  executors and  administrators)  to the fullest extent
permitted  under  Delaware law against all expenses and  liabilities  reasonably
incurred  by him in  connection  with  or  arising  out of any  action,  suit or
proceeding  in which he may be  involved by reason of his having been a director
or officer of the Holding Company  (whether or not he continues to be a director
or officer at the time of incurring such expenses or liabilities), such expenses
and liabilities to include,  but not be limited to,  judgments,  court costs and
attorneys' fees and the cost of reasonable settlements.

                                       13

<PAGE>

     (b) Any payments made to Executive  pursuant to this Section 20 are subject
to and conditioned upon compliance with 12 U.S.C.  Section 1828(k) and 12 C.F.R.
Part 359 and any rules or regulations promulgated thereunder.

21.  SUCCESSOR TO THE HOLDING COMPANY.

     The Holding Company shall require any successor or assignee, whether direct
or  indirect,  by  purchase,  merger,  consolidation  or  otherwise,  to  all or
substantially  all the  business  or assets of the  Institution  or the  Holding
Company,  expressly  and  unconditionally  to assume  and agree to  perform  the
Holding Company's  obligations  under this Agreement,  in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.

                                       14

<PAGE>

                                   SIGNATURES

     IN WITNESS  WHEREOF,  Bay State  Bancorp,  Inc. has caused this amended and
restated  Agreement  to be executed  and its seal to be affixed  hereunto by its
duly  authorized  officer  and its  directors,  and  Executive  has signed  this
Agreement, on the 6th day of June 2000.

ATTEST:                                 BAY STATE BANCORP, INC.

                                        By:  __________________________________
                                             Denise M. Renaghan
                                             For the Entire Board of Directors

               [SEAL]

WITNESS:                                EXECUTIVE

                                        By:  __________________________________
                                             John F. Murphy

                                       15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]