Exhibit 10(a)

                           BUSINESS LOAN AGREEMENT

<TABLE>
<CAPTION>
 Principal      Loan Date       Maturity      Loan No.     Call/Coll     Account     Officer     Initials
 ---------      ---------       --------      --------     ---------     -------     -------     --------

<S>             <C>            <C>
$500,000.00     11-15-2000     12-01-2007
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</TABLE>

  References in the shaded area are for Lender's use only and do not limit
     the applicability of this document to any particular loan or item.

        Any item above containing "***" has been omitted due to text
                             length limitations.

Borrower:  Westerbeke Corporation      Lender:  Massachusetts Development
           150 John Hancock Road                 Finance Agency
           Taunton, MA 02780                    MassDevelopment
                                                75 Federal Street, 10th Floor
                                                Boston, MA 02110

===============================================================================

THIS BUSINESS LOAN AGREEMENT dated November 15, 2000, is made and executed
between Westerbeke Corporation ("Borrower") and Massachusetts Development
Finance Agency ("Lender") on the following terms and conditions.  Borrower
has received prior commercial loans from Lender or has applied to Lender
for a commerical loan or loans or other financial accommodations, including
those which may be described on any exhibit or schedule attached to this
Agreement ("Loan").  Borrower understands and agrees that: (A) in granting,
renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements as set forth in this Agreement,
and (B) all such Loans shall be and remain subject to the terms and
conditions of this Agreement.

TERM.  This Agreement shall be effective as of November 15, 2000, and shall
continue in full force and effect until such time as all of Borrower's
Loans in favor of Lender have been paid in full, including principal,
interest, costs, expenses, attorneys' fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate this
Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender's obligation to make the
initial Advance and each subsequent Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the
conditions set forth in this Agreement and in the Related Documents.

      Loan Documents.  Borrower shall provide to Lender the following
      documents for the Loan: (1) the Note; (2) Security Agreements
      granting to Lender secruity interests in the Collateral; (3)
      financing statements perfecting Lender's Security Interests; (4)
      evidence of insurance as required below; (5) together with all such
      Related Documents as Lender may require for the Loan; all in form and
      substance satisfactory to Lender and Lender's counsel.

      Borrower's Authorization.  Borrower shall have provided in form and
      substance satisfactory to Lender properly certified resolutions, duly
      authorizing the execution and delivery of this Agreement, the Note
      and the Related Documents.  In addition, Borrower shall have provided
      such other resolutions, authorizations, documents and instruments as
      Lender or its counsel, may require.

      Payment of Fees and Expenses.  Borrower shall have paid to Lender all
      fees, charges, and other expenses which are then due and payable as
      specified in this Agreement or any Related Document.

      Representations and Warranties.  The representations and warranties
      set forth in this Agreement, in the Related Documents, and in any
      document or certificate delivered to Lender under this Agreement are
      true and correct.

      No Event of Default.  There shall not exist at the time of any
      Advance a condition which would constitute an Event of Default under
      this Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to
Lender, as of the date of this Agreement, as of the date of each
disbursement of loan proceeds, as of the date of any renewal, extension or
modification of any Loan, and at all times any Indebtedness exists:

      Organization.  Borrower is a corporation for profit which is, and at
      all times shall be, duly organized, validly existing, and in good
      standing under and by virtue of the laws of the State of Delaware.
      Borrower is duly authorized to transact business in the Commonwealth
      of Massachusetts and all other states in which Borrower is doing
      business, having obtained all necessary filings, governmental
      licenses and approvals for each state in which Borrower is doing
      business.  Specifically, Borrower is, and at all times shall be, duly
      qualified as a foreign corporation in all states in which the failure
      to so qualify would have a material adverse effect on its business or
      financial condition.  Borrower has the full power and authority to
      own its properties and to transact the business in which it is
      presently engaged or presently proposes to engage.  Borrower
      maintains an office at 150 John Hancock Road, Taunton, MA 02780.
      Unless Borrower has designated otherwise in writing, the principle
      office is the office at which Borrower keeps its books and records
      including its records concerning the Collateral.  Borrower will
      notify Lender of any change in the location of Borrower's principle
      office.  Borrower shall do all things necessary to preserve and to
      keep in full force and effect its existence, rights and privileges,
      and shall comply with all regulations, rules, ordinances, statutes,
      orders and decrees of any governmental or quasi-governmental
      authority or court applicable to Borrower and Borrower's business
      activities.

      Assumed Business Names.  Borrower has filed or recorded all documents
      or filings required by law relating to all assumed business names
      used by Borrower.  Excluding the name of Borrower, the following is a
      complete list of all assumed business names under which Borrower does
      business:  None.

      Authorization.  Borrower's execution, delivery, and performance of
      this Agreement and all the Related Documents have been duly
      authorized by all necessary action by Borrower and do not conflict
      with, result in a violation of, or constitute a default under (1) any
      provision of Borrower's articles of incorporation or organization, or
      bylaws, or any agreement or other instrument binding upon Borrower or
      (2) any law, governmental regulation, court decree, or order
      applicable to Borrower or to Borrower's properties.

      Financial Information.  Each of Borrower's financial statements
      supplied to Lender truly and completely disclosed Borrower's
      financial condition as of the date of the statement, and there has
      been no material adverse change in Borrower's financial condition
      subsequent to the date of the most recent financial statement
      supplied to Lender.  Borrower has no material contingent obligations
      except as disclosed in such financial statements.

      Legal Effect.  This Agreement constitutes, and any instrument or
      agreement Borrower is required to give under this Agreement when
      delivered will constitute legal, valid, and binding obligations of
      Borrower enforceable against Borrower in accordance with their
      respective terms.

      Properties.  Except as contemplated by this Agreement or as
      previously disclosed in Borrower's financial statements or in writing
      to Lender and as accepted by Lender, and except for property tax
      liens for taxes not presently due and payable, Borrower owns and has
      good title to all of Borrower's properties free and clear of all
      Security Interests, and has not executed any security documents or
      financing statements relating to such properties.  All of Borrower's
      properties are titled in Borrower's legal name, and Borrower has not
      used, or filed a financing statement under, any other name for at
      least the last five (5) years.

      Hazardous Substances.  Except as disclosed to and acknowledged by
      Lender in writing, Borrower represents and warrants that: (1) During
      the period of Borrower's ownership of Borrower's Collateral, there
      has been no use, generation, manufacture, storage, treatment,
      disposal, release or threatened release of any Hazardous Substance by
      any person on, under, about or from any of the Collateral.  (2)
      Borrower has no knowledge of, or reason to believe that there has
      been (a) any breach or violation of any Environmental Laws; (b) any
      use, generation, manufacture, storage, treatment, disposal, release
      or threatened release of any Hazardous Substance on, under, about or
      from the Collateral by any prior owners or occupants of any of the
      Collateral; or (c) any actual or threatened litigation or claims of
      any kind by any person relating to such matters.  (3) Neither
      Borrower nor any tenant, contractor, agent or other authorized user
      of any of the Collateral shall use, generate, manufacture, store,
      treat, dispose of or release any Hazardous Substance on, under, about
      or from any of the Collateral; and any such activity shall be
      conducted in compliance with all applicable federal, state, and local
      laws, regulations, and ordinances, including without limitation all
      Environmental Laws.  Borrower authorizes Lender and its agents to
      enter upon the Collateral to make such inspections and tests as
      Lender may deem appropriate to determine compliance of the Collateral
      with this section of the Agreement.  In addition, Borrower represents
      and warrant that Borrower's Collateral do not contain urea
      formaldehyde foam insulation or urea formaldehyde resin in violation
      of any state laws.  Any inspections or tests made by Lender shall be
      at Borrower's expense and for Lender's purposes only and shall not be
      construed to create any responsibility or liability on the part of
      Lender to Borrower or to any other person.  The representations and
      warranties contained herein are based on Borrower's due diligence in
      investigating the Collateral for hazardous waste and Hazardous
      Substances.  Borrower hereby (1) releases and waives any future
      claims against Lender for indemnity or contribution in the event
      Borrower becomes liable for cleanup or other costs under any such
      laws, and (2) agrees to indemnify and hold harmless Lender against
      any and all claims, losses, liabilities, damages, penalties, and
      expenses which Lender may directly or indirectly sustain or suffer
      resulting from a breach of this section of the Agreement or as a
      consequence of any use, generation, manufacture, storage, disposal,
      release or threatened release of a hazardous waste or substance on
      the Collateral.  The provisions of this section of the Agreement,
      including the obligation to indemnify, shall survive the payment of
      the Indebtedness and the termination, expiration or satisfaction of
      this Agreement and shall not be affected by Lender's acquisition of
      any interest in any of the Collateral, whether by foreclosure or
      otherwise.

      Litigation and Claims.  No litigation, claim, investigation,
      administrative proceeding or similar action (including those for
      unpaid taxes) against Borrower is pending or threatened, and no other
      event has occurred which may materially adversely affect Borrower's
      financial condition or properties, other than litigation, claims, or
      other events, if any, that have been disclosed to and acknowledged by
      Lender in writing.

      Taxes.  To the best of Borrower's knowledge, all of Borrower's tax
      returns and reports that are or were required to be filed, have been
      filed, and all taxes, assessments and other governmental charges have
      been paid in full, except those presently being or to be contested by
      Borrower in good faith in the ordinary course of business and for
      which adequate reserves have been provided.

      Lien Priority.  Unless otherwise previously disclosed to Lender in
      writing, Borrower has not entered into or granted any Security
      Agreements, or permitted the filing or attachment of any Security
      Interests on or affecting any of the Collateral directly or
      indirectly securing repayment of Borrower's Loan and Note, that would
      be prior or that may in any way be superior to Lender's Security
      Interests and rights in and to such Collateral.

      Binding Effect.  This Agreement, the Note, all Security Agreements
      (if any), and all Related Documents are binding upon the signers
      thereof, as well as upon their successors, representatives and
      assigns, and are legally enforceable in accordance with their
      respective terms.

AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender that, so
long as this Agreement remains in effect, Borrower will:

      Notices of Claims and Litigation.  Promptly inform Lender in writing
      of (1) all material adverse changes in Borrower's financial
      condition, and (2) all existing and all threatened litigation,
      claims, investigations, administrative proceedings or similar actions
      affecting Borrower or any Guarantor which could materially affect the
      financial condition of Borrower or the financial condition of any
      Guarantor.

      Financial Records.  Maintain its books and records in accordance with
      GAAP, applied on a consistent basis, and permit Lender to examine and
      audit Borrower's books and records at all reasonable times.

      Financial Statements.  Furnish Lender with the following:

            Annual Statements.  As soon as available, but in no event later
            than ninety (90) days after the end of each fiscal year,
            Borrower's balance sheet and income statement for the year
            ended, compiled by a certified public accountant satisfactory
            to Lender.

            Tax Returns.  As soon as available, but in no event later than
            ninety (90) days after the applicable filing date for the tax
            reporting period ended, Federal and other governmental tax
            returns, prepared by a certified public accountant satisfactory
            to Lender.

      All financial reports required to be provided under this Agreement
      shall be prepared in accordance with GAAP, applied on a consistent
      basis, and certified by Borrower as being true and correct.

      Additional Information.  Furnish such additional information and
      statements, as Lender may request from time to time.

      Insurance.  Maintain fire and other risk insurance, public liability
      insurance, and such other insurance as Lender may require with
      respect to Borrower's properties and operations, in form, amounts,
      coverages and with insurance companies acceptable to Lender.
      Borrower, upon request of Lender, will deliver to Lender from time to
      time the policies or certificates of insurance in form satisfactory
      to Lender, including stipulations that coverages will not be
      cancelled or diminished without at least thirty (30) days prior
      written notice to Lender.  Each insurance policy also shall include
      an endorsement providing that coverage in favor of Lender will not be
      impaired in any way by any act, omission or default of Borrower or
      any other person.  In connection with all policies covering assets in
      which Lender holds or is offered a security interest for the Loans,
      Borrower will provide Lender with such lender's loss payable or other
      endorsements as Lender may require.

      Insurance Reports.  Furnish to Lender, upon request of Lender,
      reports on each existing insurance policy showing such information as
      Lender may reasonably request, including without limitation the
      following:  (1) the name of the insurer; (2) the risks insured; (3)
      the amount of the policy; (4) the properties insured; (5) the then
      current property values on the basis of which insurance has been
      obtained, and the manner of determining those values; and (6) the
      expiration date of the policy.  In addition, upon request of Lender
      (however not more often than annually), Borrower will have an
      independent appraiser satisfactory to Lender determine, as
      applicable, the actual cash value or replacement cost of any
      Collateral.  The cost of such appraisal shall be paid by Borrower.

      Other Agreements.  Comply with all terms and conditions of all other
      agreements, whether now or hereafter existing, between Borrower and
      any other party and notify Lender immediately in writing of any
      default in connection with any other such agreements.

      Loan Proceeds.  Use all Loan proceeds solely for Borrower's business
      operations, unless specifically consented to the contrary by Lender
      in writing.

      Taxes, Charges and Liens.  Pay and discharge when due all of its
      indebtedness and obligations, including without limitation all
      assessments, taxes, governmental charges, levies and liens, of every
      kind and nature, imposed upon Borrower or its properties, income, or
      profits, prior to the date on which penalties would attach, and all
      lawful claims that, if unpaid, might become a lien or charge upon any
      of Borrower's properties, income, or profits.

      Performance.  Perform and comply, in a timely manner, with all terms,
      conditions, and provisions set forth in this Agreement, in the
      Related Documents, and in all other instruments and agreements
      between Borrower and Lender.  Borrower shall notify Lender
      immediately in writing of any default in connection with any
      agreement.

      Operations.  Maintain executive and management personnel with
      substantially the same qualifications and experience as the present
      executive and management personnel; provide written notice to Lender
      of any change in executive and management personnel; conduct its
      business affairs in a reasonable and prudent manner.

      Environmental Studies.  Promptly conduct and complete, at Borrower's
      expense, all such investigations, studies, samplings and testings as
      may be requested by Lender or any governmental authority relative to
      any substance, or any waste or by-product of any substance defined as
      toxic or a hazardous substance under applicable federal, state, or
      local law, rule, regulation, order or directive, at or affecting any
      property or any facility owned, leased or used by Borrower.

      Compliance with Governmental Requirements.  Comply with all laws,
      ordinances, and regulations, now or hereafter in effect, of all
      governmental authorities applicable to the conduct of Borrower's
      properties, businesses and operations, and to the use or occupancy of
      the Collateral, including without limitation, the Americans with
      Disabilities Act.  Borrower may contest in good faith any such law,
      ordinance, or regulation and withhold compliance during any
      proceeding, including appropriate appeals, so long as Borrower has
      notified Lender in writing prior to doing so and so long as, in
      Lender's sole opinion, Lender's interests in the Collateral are not
      jeopardized.  Lender may require Borrower to post adequate security
      or a surety bond, reasonably satisfactory to Lender, to protect
      Lender's interest.

      Inspection.  Permit employees or agents of Lender at any reasonable
      time to inspect any and all Collateral for the Loan or Loans and
      Borrower's other properties and to examine or audit Borrower's books,
      accounts, and records and to make copies and memoranda of Borrower's
      books, accounts, and records.  If Borrower now or at any time
      hereafter maintains any records (including without limitation
      computer generated records and computer software programs for the
      generation of such records) in the possession of a third party,
      Borrower, upon request of Lender, shall notify such part to permit
      Lender free access to such records at all reasonable times and to
      provide Lender with copies of any records it may request, all at
      Borrower's expense.

      Compliance Certificates.  Unless waived in writing by Lender, provide
      Lender at least annually and at the time of each disbursement of Loan
      proceeds, with a certificate executed by Borrower's chief financial
      officer, or other officer or person acceptable to Lender, certifying
      that the representations and warranties set forth in this Agreement
      are true and correct as of the date of the certificate and further
      certifying that, as of the date of the certificate, no Event of
      Default exists under this Agreement.

      Environmental Compliance and Reports.  Borrower shall comply in all
      respects with any and all Environmental Laws; not cause or permit to
      exist, as a result of an intentional or unintentional action or
      omission on Borrower's part or on the part of any third party, on
      property owned and/or occupied by Borrower, any environmental
      activity where damage may result to the environment, unless such
      environmental activity is pursuant to and in compliance with the
      conditions of a permit issued by the appropriate federal, state or
      local governmental authorities; shall furnish to Lender promptly and
      in any event within thirty (30) days after receipt thereof a copy of
      any notice, summons, lien, citation, directive, letter or other
      communication from any governmental agency or instrumentality
      concerning any intentional or unintentional action or omission on
      Borrower's part in connection with any environmental activity whether
      or not there is damage to the environment and/or other natural
      resources.

      Additional Assurances.  Make, execute and deliver to Lender such
      promissory notes, mortgages, deeds of trust, security agreements,
      assignments, financing statements, instruments, documents and other
      agreements as Lender or its attorneys may reasonably request to
      evidence and secure the Loans and to perfect all Security Interests.

LENDER'S EXPENDITURES.  If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower has to
comply with any provision of this Agreement or any Related Documents,
including but not limited to Borrower's failure to discharge or pay when
due any amounts Borrower is required to discharge or pay under this
Agreement or any Related Documents, Lender on Borrower's behalf may (but
shall not be obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or
placed on any Collateral and paying all costs for insuring, maintaining and
preserving any Collateral.  All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged under
the Note from the date incurred or paid by Lender to the date of repayment
by Borrower.  All such expenses will become a part of the Indebtedness and,
at Lender's option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned among and be payable with any
installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C)
be treated as a balloon payment which will be due and payable at the Note's
maturity.

NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while
this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:

      Continuity of Operations.  (1) Engage in any business activities
      substantially different than those in which Borrower is presently
      engaged.  (2) cease operations, liquidate, merge, transfer, acquire
      or consolidate with any other entity, change its name, dissolve or
      transfer or sell Collateral out of the ordinary course of business,
      or (3) pay any dividends on Borrower's stock (other than dividends
      payable in its stock), provided, however that notwithstanding the
      foregoing, but only so long as no Event of Default has occurred and
      is continuing or would result from the payment of dividends, if
      Borrower is a "Subchapter S Corporation" (as defined in the Internal
      Revenue Code of 1986, as amended), Borrower may pay cash dividends on
      its stock to its shareholders from time to time in amounts necessary
      to enable the shareholders to pay income taxes and make estimated
      income tax payments to satisfy their liabilities under federal and
      state law which arise solely from their status as Shareholders of a
      Subchapter S Corporation because of their ownership of shares of
      Borrower's stock, or purchase or retire any of Borrower's outstanding
      shares or alter or amend Borrower's capital structure.

CESSATION OF ADVANCES.  If Lender has made any commitment of make any Loan
to Borrower, whether under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan
proceeds if:  (A) Borrower or any Guarantor is in default under the terms
of this Agreement or any of the Related Documents or any other agreement
that Borrower or any Guarantor has with Lender; (B) Borrower or any
Guarantor dies, becomes incompetent or becomes insolvent, files a petition
in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there
occurs a material adverse change in Borrower's financial condition, in the
financial condition of any Guarantor, or in the value of any Collateral
securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts
to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (E) Lender in good faith deems itself insecure,
even though no Event of Default shall have occurred.

DEFAULT.  Each of the following shall constitute an Event of Default under
this Agreement:

      Payment Default.  Borrower fails to make any payment when due under
      the Loan.

      Other Defaults.  Borrower fails to comply with or to perform any
      other term, obligation, covenant or condition contained in this
      Agreement or in any of the Related Documents or to comply with or to
      perform any term, obligation, covenant or condition contained in any
      other agreement between Lender and Borrower.

      False Statements.  Any warranty, representation or statement made or
      furnished to Lender by Borrower or on Borrower's behalf under this
      Agreement, the Note, or the Related Documents is false or misleading
      in any material respect, either now or at the time made or furnished
      or becomes false or misleading at any time thereafter.

      Insolvency.  The dissolution or termination of Borrower's existence
      as a going business, the insolvency of Borrower, the appointment of a
      receiver for any part of Borrower's property, any assignment for the
      benefit of creditors, any trust mortgage or any other type of
      creditor workout, or the commencement of any proceeding under any
      bankruptcy or insolvency laws by or against Borrower.

      Defective Collateralization.  This Agreement or any of the Related
      Documents ceases to be in full force and effect (including failure of
      any collateral document to create a valid and perfected security
      interest or lien) at any time and for any reason.

      Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
      forfeiture proceedings, whether by judicial proceedings, self-help,
      repossession or any other method, by any creditor of Borrower or by
      any governmental agency against any collateral securing the Loan.
      This includes a garnishment of any of Borrower's accounts, including
      deposit accounts, with Lender.  However, this Event of Default shall
      not apply if there is a good faith dispute by Borrower as to the
      validity or reasonableness of the claim which is the basis of the
      creditor or forfeiture proceeding and if Borrower gives Lender
      written notice of the creditor or forfeiture proceeding and deposits
      with Lender monies or a surety bond for the creditor or forfeiture
      proceeding, in an amount determined by Lender, in its sole
      discretion, as being an adequate reserve or bond for the dispute.

      Events Affecting Guarantor.  Any of the preceding events occurs with
      respect to any Guarantor of any of the Indebtedness or any Guarantor
      dies or becomes incompetent, or revokes or disputes the validity of,
      or liability under, any Guaranty of the Indebtedness.  In the event
      of a death, Lender, at its option, may, but shall not be required to,
      permit the Guarantor's estate to assume unconditionally the
      obligations arising under the guaranty in a manner satisfactory to
      Lender, and, in doing so, cure any Event of Default.

      Change in Ownership.  Any change in ownership of twenty-five percent
      (25%) or more of the common stock of Borrower.

      Adverse Change.  A material adverse change occurs in Borrower's
      financial condition, or Lender believes the prospect of payment or
      performance of the Loan is impaired.

      Insecurity.  Lender in good faith believes itself insecure.

      Right to Cure.  If any default, other than a default on Indebtedness,
      is curable and if Borrower or Grantor, as the case may be, has not
      been given a notice of a similar default within the preceding twelve
      (12) months, it may be cured (and no Event of Default will have
      occurred) if Borrower or Grantor, as the case may be, after receiving
      written notice from Lender demanding cure of such default:  (1) cure
      the default within thirty (30) days; or (2) if the cure requires more
      than thirty (30) days, immediately initiate steps which Lender deems
      in Lender's sole discretion to be sufficient to cure the default and
      thereafter continue and complete all reasonable and necessary steps
      sufficient to produce compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT.  If any Event of Default shall occur, except
where otherwise provided in this agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make further Loan Advances or disbursements), and, at
Lender's option, all Indebtedness immediately will become due and payable,
all without notice of any kind of Borrower, except that in the case of an
Event of Default of the type described in the "Insolvency" subsection
above, such acceleration shall be automatic and not optional.  In addition,
Lender shall have all the rights and remedies provided in the Related
Documents or available at law, in equity, or otherwise.  Except as may be
prohibited by applicable law, all of Lender's rights and remedies shall be
cumulative and may be exercised singularly or concurrently.  Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies.

FINANCIAL COVENANTS.  Borrower shall maintain a minimum debt service ratio
of 1.2:1, tested annually upon receipt by Lender of Borrower's annual
financial statements.

WAIVERS AND MISCELLANEOUS PROVISIONS.  The following miscellaneous
provisions are a part of this Agreement:

      Amendments.  This Agreement, together with any Related Documents,
      constitutes the entire understanding and agreement of the parties as
      to the matters set forth in this Agreement.  No alteration of or
      amendment to this Agreement shall be effective unless give in writing
      and signed by the party or parties sought to be charged or bound by
      the alteration or amendment.

      Attorneys' Fees; Expenses.  Borrower agrees to pay upon demand all of
      Lender's costs and expenses, including Lender's attorneys' fees and
      Lender's legal expenses, incurred in connection with the enforcement
      of this Agreement.  Lender may hire or pay someone else to help
      enforce this Agreement, and Borrower shall pay the costs and expenses
      of such enforcement.  Costs and expenses include Lender's attorneys'
      fees and legal expenses whether or not there is a lawsuit, including
      attorneys' fees and legal expenses for bankruptcy proceedings
      (including efforts to modify or vacate any automatic stay or
      injunction), appeals, and any anticipated post-judgment collection
      services.  Borrower also shall pay all court costs and such
      additional fees as may be directed by the court.

      Caption Headings.  Caption headings in this Agreement are for
      convenience purposes only and are not to be used to interpret or
      define the provisions of this Agreement.

      Consent to Loan Participation.  Borrower agrees and consents to
      Lender's sale or transfer, whether now or later, of one or more
      participation interests in the Loan to one or more purchasers,
      whether related or unrelated to Lender.  Lender may provide, without
      any limitation whatsoever, to any one or more purchasers, or
      potential purchasers, any information or knowledge Lender may have
      about Borrower or about any other matter relating to the Loan, and
      Borrower hereby waives any rights to privacy Borrower may have with
      respect to such matters.  Borrower additionally waives any and all
      notices of sale of participation interests, as well as all notices of
      any repurchase of such participation interests.  Borrower also agrees
      that the purchasers of any such participation interests will be
      considered as the absolute owners of such interests in the Loan and
      will have all the rights granted under the participation agreement or
      agreements governing the sale of such participation interests.
      Borrower further waives all rights of offset or counterclaim that it
      may have now or later against Lender or against any purchaser of such
      a participation interest and unconditionally agrees that either
      Lender or such purchaser may enforce Borrower's obligation under the
      Loan irrespective of the failure or insolvency of any holder of any
      interest in the Loan.  Borrower further agrees that the purchaser of
      any such participation interests may enforce its interests
      irrespective of any personal claims or defenses that Borrower may
      have against Lender.

      Governing Law.  This Agreement will be governed by, construed and
      enforced in accordance with federal law and the laws of the
      Commonwealth of Massachusetts.  This Agreement has been accepted by
      Lender in the Commonwealth of Massachusetts.

      Choice of Venue.  If there is a lawsuit, Borrower agrees upon
      Lender's request to submit to the jurisdiction of the courts of
      Suffolk County; Commonwealth of Massachusetts.

      No Waiver by Lender.  Lender shall not be deemed to have waived any
      rights under this Agreement unless such waiver is given in writing
      and signed by Lender.  No delay or omission on the part of Lender in
      exercising any right shall operate as a waiver of such right or any
      other right.  A waiver by Lender of a provision of this Agreement
      shall not prejudice or constitute a waiver of Lender's right
      otherwise to demand strict compliance with that provision or any
      other provision of this Agreement.  No prior waiver by Lender, nor
      any course of dealing between Lender and Borrower, or between Lender
      and any Grantor, shall constitute a waiver of any of Lender's rights
      or of any of Borrower's or any Grantor's obligations as to any future
      transactions.  Whenever the consent of Lender is required under this
      Agreement, the granting of such consent by Lender in any instance
      shall not constitute continuing consent to subsequent instances where
      such consent is required and in all cases such consent may be granted
      or withheld in the sole discretion of Lender.

      Notices.  Any notice required to be given under this Agreement shall
      be given in writing, and shall be effective when actually delivered,
      when actually received by telefacsimile (unless otherwise required by
      law), when deposited with a nationally recognized overnight courier,
      or, if mailed, when deposited in the United States mail, as first
      class, certified or registered mail postage prepaid, directed to the
      addresses shown near the beginning of this Agreement.  Any part may
      change its address for notices under this Agreement by giving formal
      written notice to the other parties, specifying that the purpose of
      the notice is to change the party's address.  For notice purposes,
      Borrower agrees to keep Lender informed at all times of Borrower's
      current address.  Unless otherwise provided or required by law, if
      there is more than one Borrower, any notice given by Lender to any
      Borrower is deemed to be notice given to all Borrowers.

      Severability.  If a court of competent jurisdiction finds any
      provision of this Agreement to be illegal, invalid, or unenforceable
      as to any circumstance, that finding shall not make the offending
      provision illegal, invalid, or unenforceable as to any other
      circumstance.  If feasible, the offending provision shall be
      considered modified so that it becomes legal, valid, and enforceable.
      If the offending provision cannot be so modified, it shall be
      considered deleted from this Agreement.  Unless otherwise required by
      law, the illegality, invalidity, or unenforceability of any provision
      of the this Agreement shall not affect the legality, validity or
      enforceability of any other provision of this Agreement.

      Subsidiaries and Affiliates of Borrower.  To the extent the context
      of any provisions of this Agreement makes it appropriate, including
      without limitation any representation, warranty or covenant, the word
      "Borrower" as used in this Agreement shall include all of Borrower's
      subsidiaries and affiliates.  Notwithstanding the foregoing however,
      under no circumstances shall this Agreement be construed to require
      Lender to make any Loan or other financial accommodation to any of
      Borrower's subsidiaries or affiliates.

      Successors and Assigns.  All covenants and agreements contained by or
      on behalf of Borrower shall bind Borrower's successors and assigns
      and shall inure to the benefit of Lender and its successors and
      assigns.  Borrower shall not, however, have the right to assign
      Borrower's rights under this Agreement or any interest therein,
      without the prior written consent of Lender.

      Survival of Representations and Warranties.  Borrower understands and
      agrees that in making the Loan, Lender is relying on all
      representations, warranties, and covenants made by Borrower in this
      Agreement or in any certificate or other instrument delivered by
      Borrower to Lender under this Agreement or the Related Documents.
      Borrower further agrees that regardless of any investigation made by
      Lender, all such representations, warranties and covenants will
      survive the making of the Loan and delivery to Lender of the Related
      Documents, shall be continuing in nature, and shall remain in full
      force and effect until such time as Borrower's Indebtedness shall be
      paid in full, or until this Agreement shall be terminated in the
      manner provided above, whichever is the last to occur.

      Time is of the Essence.  Time is of the essence in the performance of
      this Agreement.

      Waive Jury.  All parties to this Agreement hereby waive the right to
      any jury trial in any action, proceeding, or counterclaim brought by
      any party against any other party.

DEFINITIONS.  The following capitalized words and terms shall have the
following meanings when used in this Agreement.  Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in
lawful money of the United States of America.  Words and terms used in the
singular shall include the plural, and the plural shall include the
singular, as the context may require.  Words and terms not otherwise
defined in this agreement shall have the meanings attributed to such terms
in the Uniform Commercial Code.  Accounting words and terms not otherwise
defined in this Agreement shall have the meanings assigned to them in
accordance with generally accepted accounting principles as in effect on
the date of this Agreement:

      Advance.  The word "Advance" means a disbursement of Loan funds made,
      or to be made, to Borrower or on Borrower's behalf on a line of
      credit or multiple advance basis under the terms and conditions of
      this Agreement.

      Agreement.  The word "Agreement" means this Business Loan Agreement
      together with all exhibits and schedules attached to this Business
      Loan Agreement from time to time, if any, as amended from time to
      time.

      Borrower.  The word "Borrower" means Westerbeke Corporation, and all
      other persons and entities signing the Note in whatever capacity.

      Collateral.  The word "Collateral" means all property and assets
      granted as collateral security for a Loan, whether real or personal
      property, whether granted directly or indirectly, whether granted now
      or in the future, and whether granted in the form of a security
      interest, mortgage, collateral mortgage, deed of trust, assignment,
      pledge, chattel mortgage, crop pledge, chattel mortgage, collateral
      chattel mortgage, chattel trust, factor's lien, equipment trust,
      conditional sale, trust receipt, lien, charge, lien or title
      retention contract, lease or consignment intended as a security
      device, or any other security or lien interest whatsoever, whether
      created by law, contract, or otherwise.

      Environmental Laws.  The words "Environmental Laws" means any and all
      state, federal and local statutes, regulations and ordinances
      relating to the protection and human health or the environment,
      including without limitation the Comprehensive Environmental
      Response, Compensation, and Liability Act of 1980, as amended, 42
      U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and
      Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the
      Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
      seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
      6901, et seq., or other applicable state or federal laws, rules, or
      regulations adopted pursuant thereto.

      Event of Default.  The words "Event of Default" mean any of the
      events of default set forth in this Agreement in the default section
      of this Agreement.

      GAAP.  The word "GAAP" means generally accepted accounting
      principles.

      Grantor.  The word "Grantor" means each and all of the persons or
      entities granting a Security Interest in any Collateral for the Loan,
      including without limitation all Borrowers granting such a Security
      Interest.

      Guarantor.  The word "Guarantor" means any guarantor, surety, or
      accommodation party of any or all of the Loan.

      Guaranty.  The word "Guaranty" means the guaranty from Guarantor to
      Lender, including without limitation a guaranty of all or part of the
      Note.

      Hazardous Substances.  The words "Hazardous Substances" means
      materials that, because of their quantity, concentration or physical,
      chemical or infectious characteristics, may cause or pose a present
      or potential hazard to human health or the environment when
      improperly used, treated, stored, disposed of, generated,
      manufactured, transported or otherwise handled.  The words "Hazardous
      Substances" are used in their very broadest sense and include without
      limitation any and all hazardous or toxic substances, materials or
      waste as defined by or listed under the Environmental Laws.  The
      term "Hazardous Substances" also includes, without limitation,
      petroleum and petroleum by-products or any fraction thereof and
      asbestos.

      Indebtedness.  The word "Indebtedness" means the indebtedness
      evidenced by the Note or Related Documents, including all principal
      and interest together with all other indebtedness and costs and
      expenses for which Borrower is responsible under this Agreement or
      under any of the Related Documents.

      Lender.  The word "Lender" means Massachusetts Development Finance
      Agency, its successors and assigns.

      Loan.  The word "Loan" means any and all loans and financial
      accommodations from Lender to Borrower whether now or hereafter
      existing, and however evidenced, including without limitation those
      loans and financial accommodations described herein or described on
      any exhibit or schedule attached to this Agreement from time to time.

      Note.  The word "Note" means the Note executed by Borrower in the
      principal amount of $500,000.00 dated November 15, 2000, together
      with all renewals of, extensions of, modifications of, refinancings
      of, consolidations of, and substitutions for the note or credit
      agreement.

      Related Documents.  The words "Related Documents" means all
      promissory notes, credit agreements, loan agreements, environmental
      agreements, guaranties, security agreements, mortgages, deeds of
      trust, security deeds, collateral mortgages, and all other
      instruments, agreements and documents, whether now or hereafter
      existing, executed in connection with the Loan.

      Security Agreement.  The words "Security Agreement" mean and include
      without limitation any agreements, promises, covenants, arrangements,
      understandings or other agreements, whether created by law, contract,
      or otherwise, evidencing, governing, representing, or creating a
      Security Interest.

      Security Interest.  The words "Security Interest" mean, without
      limitation, any and all types of collateral security, present and
      future, whether in the form of a lien, charge, encumbrance, mortgage,
      deed of trust, security deed, assignment, pledge, crop pledge,
      chattel mortgage, collateral chattel mortgage, chattel trust,
      factor's lien, equipment trust, conditional sale, trust receipt, lien
      or title retention contract, lease or consignment intended as a
      security device, or any other security or lien interest whatsoever
      whether created by law, contract, or otherwise.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS.  THIS BUSINESS LOAN AGREEMENT
IS DATED NOVEMBER 15, 2000.  THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS
INTENDED THAT THIS AGREEMENT IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF
A SEALED INSTRUMENT ACCORDING TO LAW.


BORROWER:



WESTERBEKE CORPORATION

By: /s/ Gregory Haidemenos                (Seal)
    --------------------------------------
    Authorized Signer   Gregory Haidemenos
                        Assistant Secretary

LENDER:

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

By: /s/ David T. Slatery
    --------------------------------------
    Authorized Signer   David T. Slatery
                        Sr. Executive Vice President

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