ROYALTY AGREEMENT

      THIS AGREEMENT is entered into effective as of the __ day of ____________,
1998 (the "Effective Date"), by and between Celerity Systems, Inc., a Delaware
corporation (hereinafter called "Celerity"), and the undersigned individual or
entity (hereinafter called the "Lender").

                                    Recitals

A.    The Lender has made a loan (the "Loan") to Celerity as evidenced by a
      Promissory Note (the "Note") dated the same date as the Effective Date.

B.    In consideration for the Loan, Celerity has agreed to make certain royalty
      payments to the Lender with respect to sales of its T 6000 set top box (as
      defined in Section 1.E. below), subject to the terms and conditions of
      this Agreement.

      NOW, THEREFORE, in consideration of the Loan and the mutual promises and
covenants set forth herein, the parties hereto do hereby agree as follows:

1. Calculation and Payment of Royalties.

      A.    Celerity hereby agrees to pay to the Lender royalty payments (the
            "Royalty" or "Royalties") equal to the product of (i) a fraction,
            the numerator of which is the principal amount of the Note, and the
            denominator of which is $100,000, (ii) Fifty Cents ($0.50), and
            (iii) the number of T 6000 set top boxes shipped by Celerity to
            customers during the Royalty Period (as defined in Section 1.B.
            below), subject to the other provisions of this Agreement. Royalties
            shall not be paid with respect to non-revenue producing shipments of
            the T 6000, including, but not limited to, shipments of loaned
            units, beta shipments, and shipments of test and evaluation units,
            nor shall Royalties be due on units for which Celerity is only
            reimbursed for the costs of shipping and insuring the units and/or
            similar costs.

      B.    The "Royalty Period" means the period commencing on the Effective
            Date and ending at 12:01 A.M. on the third anniversary of the
            Effective Date; provided, however, that (i) if the initial term of
            the Note is two (2) years, then the Royalty Period shall end at
            12:01 A.M. on the fourth anniversary of the Effective Date, and (ii)
            if the initial term of the Note is three (3) years, then the Royalty
            Period shall end at 12:01 A.M. on the fifth anniversary of the
            Effective Date; provided, further, that if the initial term of the
            Note is for one (1) or two (2) years, then, under certain
            circumstances, the Royalty Period may be extended at the election of
            the Lender in accordance with the terms of Section 2 below and the
            Note.

      C.    Subject to the other provisions of this Agreement, the Royalty
            applicable to each T 6000 shipped by Celerity shall be deemed to be
            earned thirty (30) days following the date of 

<PAGE>

            shipment by Celerity. Celerity will issue a written report to the
            Lender within thirty (30) days following the expiration of each
            calendar quarter; provided, however, that each report with respect
            to a calendar quarter ending December 31 (other than the final such
            report due under this Agreement, as it may be extended, which shall
            be due not later than January 31 of the following year) shall be
            issued not later than December 31. Such report shall set forth the
            number (or estimated number, in the case of any report issued on
            December 31) of units shipped during such calendar quarter for which
            the Royalty has been earned and shall be accompanied by a check
            representing payment of all Royalties owed.

      D.    Royalty payments with respect to any calendar quarter will be
            subject to adjustments for refunds provided and amounts declared
            uncollectible by Celerity, in its sole discretion, during the
            applicable (or any subsequent) calendar quarter. In addition,
            Royalty payments set forth in reports issued on December 31 shall be
            subject to adjustment in subsequent calendar quarters, to the extent
            actual Royalties differ from any estimated Royalties set forth in
            such report.

      E.    For the purposes hereof, the "T 6000 set top box" shall mean the
            current version of Celerity's T 6000 digital set top box as of the
            Effective Date, all versions of the T 6000 digital set top box
            containing updates, upgrades and enhancements, and all other digital
            set top boxes developed and manufactured by Celerity that are
            derived from or based in any substantial part on the design of the
            current version of the T 6000 digital set top box as of the
            Effective Date.

2. Extension of Royalty Period.

      Under certain circumstances, the Lender may elect to extend the payment
      date of the Note by providing written notice of such election as provided
      for in the Note. If the Note has an initial term of one (1) year and (i)
      if the Lender extends the payment date of the Note for one (1) year, then
      the end of the Royalty Period will also be extended for one (1) additional
      year (from 12:01 A.M. on the third anniversary of the Commencement Date to
      12:01 A.M. on the fourth anniversary of the Commencement Date), and (ii)
      if the Lender extends the payment date of the Note for two (2) years, then
      the end of the Royalty Period will also be extended for two (2) years
      (from 12:01 A.M. on the third anniversary of the Effective Date to 12:01
      A.M. on the fifth anniversary of the Effective Date). If the Note has an
      initial term of two (2) years and the Lender extends the payment date of
      the Note for one (1) year, then the end of the Royalty Period will also be
      extended for one (1) year (from 12:01 A.M. on the fourth anniversary of
      the Commencement Date to 12:01 A.M. on the fifth anniversary of the
      Commencement Date).

3. General Provisions.

      A.    This Agreement shall be binding upon, enforceable by and shall inure
            to the benefit of the parties hereto and their respective successors
            and assigns, except that the Lender may not transfer any of its
            rights or obligations under this Agreement unless such 


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<PAGE>

            transfer is made in connection with a transfer of the Note to a
            person who is a registered holder thereof in accordance with the
            terms of the Note, and the Lender shall be required to transfer such
            rights and obligations in connection with a transfer of the Note.

      B.    This Agreement is entered into pursuant to and shall be governed by
            the laws of the State of Delaware, without regard to the conflicts
            of laws principles of such State. The Company and the Payee each
            irrevocably consent to the jurisdiction of, and venue in, the courts
            of the State of Delaware, and of the federal courts located in the
            State of Delaware, in connection with any action or proceeding
            arising out of or relating to this Note, any document or instrument
            delivered pursuant to, in connection with or simultaneously with
            this Note, or a breach of this Note or any such document or
            instrument. In the event that any provision of this Agreement shall
            be deemed to be invalid and unenforceable in whole or in part, the
            remainder of this Agreement shall remain in full force and effect.

      C.    This Agreement, the Note and the Subscription Agreement collectively
            constitute the entire agreement between the parties with respect to
            the subject matter hereof and may be amended only by a written
            instrument executed by Celerity and the Lender.

      D.    Any notice or other communication required or permitted to be given
            hereunder shall be in writing and shall be mailed by certified mail,
            return receipt requested, or by Federal Express, Express Mail or
            similar overnight delivery or courier service or delivered (in
            person or, if receipt is confirmed orally or in writing, by telecopy
            or similar telecommunications equipment) against receipt to the
            party to whom it is to be given, (i) if to Celerity, as follows:
            Celerity Systems, Inc., Attention: President, 1400 Centerpoint
            Boulevard, Knoxville, Tennessee 37932, (ii) if to the Lender, at the
            Lender's address set forth below, or (iii) in either case, to such
            other address as the party shall have furnished by notice in
            accordance with the provisions of this paragraph. Any such notice
            shall be deemed given at the time of receipt thereof.

      E.    The section headings of this Agreement are for reference purposes
            only and are to be given no effect in the construction or
            interpretation of this Agreement.

      F.    This Agreement may be executed by the parties hereto in separate
            counterparts, each of which when so executed and delivered shall be
            an original, but all such counterparts shall together constitute one
            and the same instrument.


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<PAGE>

    IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as
of the Effective Date.


                          CELERITY SYSTEMS, INC.

                          By: ____________________________

                          Title: _________________________

                          1400 Centerpoint Boulevard
                          Knoxville, Tennessee 37932

                          LENDER: ________________________

                          ________________________________
                             Print Name

                          ________________________________
                             Signature

                          ________________________________
                             Title, if applicable


                          LENDER ADDRESS:

                          ________________________________

                          ________________________________

                          ________________________________


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