EMPLOYMENT AGREEMENT



      This Employment Agreement ("Agreement") is made and entered into

effective as of June 1, 2001, by and between Mystic Financial, Inc., a

publicly-held business corporation organized and operating under the laws of

the State of Delaware and having an office at 60 High Street, Medford,

Massachusetts 02155 ("Company") and John O'Donnell, an individual residing

at 14 Knollcrest Drive, Andover, Massachusetts 01810 ("Executive").  Any

reference to "Bank" herein shall mean Medford Co-Operative Bank, a wholly-

owned subsidiary of the Company, or any successor thereto.



                            W i t n e s s e t h :



      Whereas, Executive has been elected to serve the Company and the Bank

in the capacity of Executive Vice President; and



      Whereas, the Company desires to assure for itself and for the Bank the

availability of Executive's services and the ability of Executive to perform

such services with a minimum of personal distraction in the event of a

pending or threatened Change of Control (as hereinafter defined); and



      Whereas, Executive is willing to serve the Company and the Bank on the

terms and conditions hereinafter set forth;



      Whereas, this Agreement is intended to supercede any and all prior

employment agreements between the Executive and the Company or the Executive

and the Bank;



      Now, Therefore, in consideration of the premises and the mutual

covenants and conditions hereinafter set forth, the Company and Executive

hereby agree as follows:



Section 1.   Employment.



      The Company agrees to continue to employ Executive, and Executive

hereby agrees to such continued employment, during the period and upon the

terms and conditions set forth in this Agreement.



Section 2.   Employment Period; Remaining Unexpired Employment Period.



      (a)   The terms and conditions of this Agreement shall be and remain

in effect during the period of employment established under this section 2

("Employment Period").  The Employment Period shall be for an initial term

of three (3) years beginning on the date of this Agreement and ending on the

third (3rd) anniversary date of this Agreement (each, an "Anniversary

Date").  Upon each Anniversary Date of this Agreement, the Board of

Directors of the Company



{PAGE}





("Board") shall review the terms of this Agreement and the Executive's

performance of services hereunder and may, in the absence of objection from

the Executive, approve an extension of the Employment Agreement to a new

three year term.  The "Remaining Unexpired Employment Period" shall be the

remaining period of the Employment Period subject to such extensions as the

Board may determine pursuant to this paragraph unless modified by this

Agreement.



      (b)   Nothing in this Agreement shall be deemed to prohibit the

Company at any time from terminating the Executive's employment during the

Employment Period with or without notice for any reason; provided, however,

that the relative rights and obligations of the Company and Executive in the

event of any such termination shall be determined under this Agreement.



      (c)   Nothing in this Agreement shall be deemed to prohibit the

Executive at any time from terminating his employment during the Employment

Period with or without notice for any reason; provided, however, that the

relative rights and obligations of the Company and Executive in the event of

any such termination shall be determined under this Agreement.



Section 3.   Duties.



      Executive shall serve as Executive Vice President of the Company,

having such power, authority and responsibility and performing such duties

as are prescribed by or under the By-Laws of the Company and the Bank and as

are customarily associated with such positions.  Executive shall devote his

full business time and attention (other than during weekends, holidays,

approved vacation periods, and periods of illness or approved leaves of

absence) to the business and affairs of the Company and the Bank and shall

use his best efforts to advance the interests of the Company and the Bank.



Section 4.   Cash Compensation.



      In consideration for the services to be rendered by Executive

hereunder, the Company shall pay to him a salary at an initial annual rate

of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000), payable in approximately

equal installments in accordance with the  Company's or Bank's customary

payroll practices  for senior officers.  The Board shall review Executive's

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