PROMISSORY NOTE
                                 ---------- ----


$3,475,000     December  22,  1998

I.  Indebtedness.
    ------------
     FOR  VALUE  RECEIVED,  the  undersigned,  Chancellor  Corporation,  A
Massachusetts  Company ("Maker"), promises to pay to the order of Vestex Capital
Corporation  a  Massachusetts corporation (the "Payee"), the principal amount of
THREE  MILLION  FOUR  HUNDRED  SEVENTY  FIVE THOUSAND DOLLARS ($3,475,000), with
interest  @ two percent above the federal reserved published prime rate, payable
in  one  installment  on December 31, 2001 (the "Maturity Date"), at the Payee's
principal  address  at  405  Waltham Street Suite 304, Lexington, MA 02173 or at
such other place as the Payee shall have designated to the Maker in writing, (i)
in  lawful  money  of  the United States of America and in immediately available
funds,  or,  in  accordance  with the terms set forth in Section V of this Note.

II.  Loan  Obligations.
     ----  -----------
     This  is  a  "Promissory  Note" superceding all prior notes between the two
parities  prior  to  the execution date of this note and is deemed as payment in
full for all services provided, capital infused, equity secured, and any and all
expenses  incurred  by  the  payee  up  to  the date of this note.  This note is
secured  through  the  execution  of  the  (Loan  Reduction  and  Purchase  and
Assignment  Agreement,  dated  April  4, 1997 between the two parties) and again
through the additional security agreement executed between the parties dated the
same  as  this note.  Both agreements are attached as exhibits to this agreement
and  shall  be  deemed  in  full  force and no waiver to their enforceability is
granted  by  signature  of  this  document.

III.  Default.
     If  an  Event  of  Default  (as  hereinafter  defined)  shall  occur and be
continuing  under  the  provisions  of  this  Note, the Payee may accelerate the
entire  unpaid  principal balance outstanding under this Note, by written notice
to  the  Maker,  and  the entire unpaid principal balance outstanding under this
Note shall become immediately due and payable within ten (10) days after receipt
by  the  Maker  of  said  notice.  At  such  time the Payee shall be entitled to
exercise any remedies that it may have at law, or in equity, in order to collect
its  debt  hereunder  including,  without  limitation, the commencement of legal
proceedings  against  the  Maker.

     As  used  herein,  an "Event of Default" means the occurrence of any of the
following:

(i)     the  failure of the Maker to make any payment of principal or other
sums due     under this Note within twenty (20) days after the due date thereof;
(ii)     if  the Maker shall make an assignment for the benefit of creditors, or
if  a receiver of the property of the Maker shall be appointed, or if a petition
in  any  bankruptcy  or  other  similar  proceeding  under any law for relief of
debtors  shall  be  filed by or against the Maker, and, if against the Maker, is
not  dismissed  or  discharged  within  sixty  (60)  days;
(iii)     any breach or default by the Maker of the terms and conditions of that
certain Stock Pledge Agreement, of even date herewith, between the Maker and the
Payee,  securing  the  obligation  of the Maker under this Note, which continues
unremedied  after  notice and a cure period as specifically provided therein; or

IV.  Prepayment
     ----------
     All  or any portion of this Note may be prepaid (herein, a "Prepayment") at
any  time without premium or penalty by the Maker furnishing a written notice to
the  Payee  of  the  Maker's election to effect such a prepayment (a "Prepayment
Notice"),  which  Prepayment  Notice  shall  include the date on which the Maker
desires  to make the Prepayment (the "Prepayment Date"); provided, however, that
if the Maker desires to pay all (or any portion) of the Prepayment in the manner
described  in  Section V hereof, then the Prepayment Date shall be the fifteenth
(15th)  day  following  the  Prepayment  Notice (or the first (1st) business day
thereafter  if  such  fifteenth (15th) day is not a business day).  The payee at
his  sole discretion may accelerate the payment of this note in part or in full,
in  the  event that the maker receives additional capital in the form of debt or
equity  infused  into  the  Company.

V.  Payment  in  the  Form  of  Common  Stock
   --------  --  ---  ----  --  -------------
     A.     Exchange.  On  the  Maturity  Date  or earlier upon the a Prepayment
Date,  as  the case may be, the Payee may, but shall not be obligated to, accept
all  (or  any portion) of the outstanding principal balance owed under this Note
by  the  number of shares of Capital Stock (common or preferred) by dividing (a)
the outstanding principal amount of this Note to be so paid, by (b) the Exchange
Price  (as  hereinafter  defined).  In  order to pay all (or any portion) of the
outstanding principal balance owed under this Note by delivering shares of Stock
as  herein  above  provided,  the  Maker  shall  be  required  to:
     (i)     in  the  case  of any such payment on the Maturity Date, furnish an
Exchange Notice (as hereinafter defined) to the Maker not less than fifteen (15)
days  prior  to  the  Maturity  Date,  notifying  Maker of the Payee's desire to
exercise  the  Payee's  rights  to  receive  payment  in  such  manner;  and
     (ii)     in the case of any such payment constituting a Prepayment, furnish
an Exchange Notice to the Maker contemporaneously with the applicable Prepayment
Notice (which Exchange Notice may be incorporated into the applicable Prepayment
Notice),  notifying  the  Maker  of  the  Payee's desire to exercise the Maker's
rights  to  pay  in  such  manner.

     B.     Exchange  Mechanism.  Payment  of  all  (or  any  portion)  of  the
outstanding  principal  balance  owed under this Note in the manner herein above
described  shall  be  made  by the Maker's surrender of the stock certificate(s)
representing  the  number of shares of Capital Stock (common or preferred) to be
exchanged  by  the  Maker  determined as herein above provided, duly endorsed or
accompanied  by  a written instrument of transfer duly executed by the Maker, to
the  Payee  at  its  principal place of business (or at such other office as the
Payee  shall  designate  by  notice  in writing to the Maker from time to time),
accompanied  by  a  copy of the applicable Exchange Notice previously furnished.

     C.     Certain  Definitions.  For  all  purposes  of  this  Section  V, the
following  terms  shall  have  the  respective  meanings  set  forth  below:

     (a)     "Exchange  Notice"  shall  mean  written notice by the Maker to the
Payee  of  the  Maker's election to effect a payment with shares of Common Stock
held  by  the Maker of all (or any portion) of the outstanding principal balance
owed  under  the  Note on the Maturity Date or on a Prepayment Date, as the case
may  be;  and

     (b)     "Exchange  Price"  shall mean (i) the last reported sales price per
share  of  the  Common  Stock  on any national securities exchange or the NASDAQ
National  Market  System  or  the  over-the-counter  market  which  is  then the
principal  market for the Common Stock on the trading day immediately before the
Maturity  Date  or  a Prepayment Date, as the case may be, or (ii) if the Common
Stock  is not quoted or listed in any national securities exchange or the NASDAQ
National  Market System or the over-the-counter market, the fair market value of
a  share  of  Common Stock, as promptly determined in good faith by the Board of
Directors  of  Chancellor  or  preferred  stock  as  mutually  agreed.

VI.  Miscellaneous.
     -------------
     A.     Waiver.  The  Payee  hereby  waives, to the extent not prohibited by
provisions of applicable law, presentment, demand, protest and notice thereof or
dishonor, and waives any right to be released by reason of any extension of time
or  change  in  the terms of payment or any change, alteration or release of any
security  given  for  the payment hereof.  No course of dealing between Payee on
the  one hand, and the Payee hereof on the other hand, shall operate as a waiver
of  any  of  its rights under this Note.  No delay or omission in exercising any
right  under  this  Note  shall  operate  as a waiver of such right or any other
right.  A  waiver  on  any one occasion shall not be construed as a waiver of or
bar  to  any  right  or  remedy  on  any  other  occasion.

     B.     Expenses.  The  Maker  hereby  agrees  to pay on demand all costs of
collection,  including  reasonable  attorneys  fees  and  disbursements, paid or
incurred  by  the  Payee  in  connection  with enforcing the Maker's obligations
hereunder.

     C.     Notices.  All  notices  hereunder  shall  be  given  in  the  manner
provided  in  the  Stock  Purchase  Agreement.

     D.     Severability.  In  the  event  that  any  one more of the provisions
contained  in  this  Note  shall  be  determined  to  be  invalid,  illegal  or
unenforceable  in  any  respect  for  any  reason,  the  validity,  legality and
enforceability  of  any  such provision or provisions in every other respect and
the  remaining  provisions  of  this  Note  shall  not  in  any way be impaired.

     E.     Assignment.  The  Maker  may  not  assign  or  pledge  this  Note or
delegate  its  obligation  to  make  payment hereunder without the prior written
consent  of  the  Payee.


     THIS NOTE AND THE OBLIGATIONS OF THE MAKER HEREUNDER SHALL FOR ALL PURPOSES
BE  GOVERNED  BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF  MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
THE  MAKER  CONSENTS  TO  SERVICE  OF  PROCESS  IN  ANY SUIT WITH RESPECT TO THE
ENFORCEMENT OF THIS NOTE BEING MADE UPON THE MAKER BY MAIL AT THE ADDRESS OF THE
MAKER  AT  210  SOUTH  STREET,  BOSTON,  MA  02110  AND A COPY FORWARDED TO JOHN
COLLUCCI,  ESQUIRE,  100  CUMMINGS  CENTER,  SUITE 339C, BEVERLY, MA 01915.  THE
MAKER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF  ANY  SUCH  SUIT  OR  ANY  SUCH  COURT  OR  THAT  SUCH  SUIT IS BROUGHT IN AN
INCONVENIENT  COURT.

     IN  WITNESS  WHEREOF,  the  Maker  has  caused this Note to be signed as an
instrument  under  seal  as  of  the  day  and  year  first  above  written.




     By:  /s/  Jonathan  C.  Ezrin
          ------------------------
      Jon  Ezrin,  Chancellor  Corporation
      Chief  Accounting  Officer  &  Treasurer



     By:  /s/  Peter  J.  Mullen____________
          ---------------------- -----------
     Peter  Mullen,  Chancellor  Corporation
     Clerk



     By:  /s/  Derek  R.  Coulter___________
          -----------------------
     Witness